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Full title: Motion to Approve Compromise under Rule 9019 Motion of the Debtor Pursuant to Bankruptcy Rule 9019, Local Rule 9013-1 and 11 U.S.C. Section 105(A) and 363(B) for Entry of an Order Authorizing and Approving that Certain Settlement Agreement By and Between Klausner Lumber One LLC and Deloitte Financial Advisory GMBH Filed by Klausner Lumber One LLC. Hearing scheduled for 8/11/2021 at 10:00 AM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. Objections due by 7/28/2021. (Attachments: # 1 Notice # 2 Exhibit A # 3 Exhibit B # 4 Exhibit C) (Butz, Daniel) (Entered: 07/14/2021)

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Hearing Date: August 11, 2021 at 10:00 a.m. (E MOTION OF THE DEBTOR PURSUANT TO BANKRUPTCY RULE 9019, LOCAL RULE 9013-1 AND 11 U.S.C. §§ 105(A) AND 363(B) FOR ENTRY OF AN ORDER AUTHORIZING AND APPROVING THAT CERTAIN SETTLEMENT AGREEMENT BY AND BETWEEN KLAUSNER LUMBER ONE LLC AND DELOITTE FINANCIAL ADVISORY GMBH Klausner Lumber One LLC, the debtor and debtor-in-possession (the “Debtor,” or “KL1”) in the above-captioned chapter 11 case (the “Chapter 11 Case”), by and through its undersigned counsel, moves this Court for entry of a form of order, substantially in the form attached hereto as Exhibit A, authorizing and approving that certain settlement agreement (the “Settlement Agreement”) by and between the Debtor and Deloitte Financial Advisory GMBH(“ Deloitte” and, together with the Debtor, the “Parties”), a true and correct copy of which is attached hereto as Exhibit B, and, in support of this motion (this “Motion”), the Debtor relies on the Declaration of Nat Wasserstein in Support of the Motion of the Debtor Pursuant to Bankruptcy Rule 9019, Local Rule 9013-2 and 11 U.S.C. §§ 105(a) and 363(b) for Entry of an Order Authorizing and Approving 1 The last four digits of the Debtor’s federal EIN are 4897.LLC (“KL2”), Klausner Holding USA Inc. (“Klausner Holding”), and Klausner Nordamerika Beteiligungs GmbH (“Nordamerika,” and collectively with KL1, KL2, and Klausner Holding, the “Klausner Entities”) dated September 30, 2019, Deloitte was to “support the management of Klausner Lumber with M&A Advisory Services in connection with the current refinancing of the financial obligations of Klausner Lumber.”In the Objection, the Debtor objected to the Claim on numerous grounds, including on the basis that: (a) the Claim was not factually supportable; (b) the Success Fee should be denied or substantially reduced for factual reasons and asserted conflicts of interest which the Debtor contended should reduce, if not eliminate, the Success Fee; and (c) there were other entities besides the Debtor (and KL2) from which Deloitte could have received payment.Mutual General Release: Upon entry of the Order, the Debtor Parties and the Deloitte Parties (as those terms are defined in the Settlement Agreement), will absolutely release, forever discharge and acquit each other of and from any and all claims, demands, causes of action, damages, choses in action and all other claims, counterclaims, defenses, objections, setoff rights,

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 KLAUSNER LUMBER ONE LLC Case No. 20-11033 (KBO) Debtor.1 Obj. Deadline: July 28, 2021 at 4:00 p.m. (ET) Hearing Date: August 11, 2021 at 10:00 a.m. (E MOTION OF THE DEBTOR PURSUANT TO BANKRUPTCY RULE 9019, LOCAL RULE 9013-1 AND 11 U.S.C. §§ 105(A) AND 363(B) FOR ENTRY OF AN ORDER AUTHORIZING AND APPROVING THAT CERTAIN SETTLEMENT AGREEMENT BY AND BETWEEN KLAUSNER LUMBER ONE LLC AND DELOITTE FINANCIAL ADVISORY GMBH Klausner Lumber One LLC, the debtor and debtor-in-possession (the “Debtor,” or “KL1”) in the above-captioned chapter 11 case (the “Chapter 11 Case”), by and through its undersigned counsel, moves this Court for entry of a form of order, substantially in the form attached hereto as Exhibit A, authorizing and approving that certain settlement agreement (the “Settlement Agreement”) by and between the Debtor and Deloitte Financial Advisory GMBH (“ Deloitte” and, together with the Debtor, the “Parties”), a true and correct copy of which is attached hereto as Exhibit B, and, in support of this motion (this “Motion”), the Debtor relies on the Declaration of Nat Wasserstein in Support of the Motion of the Debtor Pursuant to Bankruptcy Rule 9019, Local Rule 9013-2 and 11 U.S.C. §§ 105(a) and 363(b) for Entry of an Order Authorizing and Approving 1 The last four digits of the Debtor’s federal EIN are 4897. The Debtor’s mailing address is P.O. Box C, Redding Ridge, CT 06876.

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that Certain Settlement Agreement by and between Klausner Lumber One LLC and Deloitte Financial Advisory GMBH attached hereto as Exhibit C and respectfully states as follows: JURISDICTION AND VENUE 1. This Court has jurisdiction to consider this Motion pursuant to 28 U.S.C. §§ 157 and 1334, and the Amended Standing Order of Reference from the United States District Court for the District of Delaware, dated February 29, 2012. 2. This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2) and, pursuant to Local Rule 9013-1(f), the Debtor consents to the entry of a final order by the Court in connection with this Motion to the extent that it is later determined that the Court, absent consent of the parties, cannot enter final orders or judgments consistent with Article III of the United States Constitution. 3. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. 4. The statutory and other legal predicates for the relief requested herein are Bankruptcy Code sections 105(a) and 363(b), Rule 9019 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and Rule 9013-1 of this Court’s Local Rules of Bankruptcy Practice and Procedure (the “Local Rules”). FACTUAL PREDICATES TO MOTION I. General Background 5. On April 30, 2020 (the “Petition Date”), the Debtor filed a voluntary petition under chapter 11 of the Bankruptcy Code (the “Bankruptcy Case”). 6. The Debtor continues to operate its business and manage its properties as debtor in possession pursuant to §§ 1107(a) and 1108 of the Bankruptcy Code. 2

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7. On May 21, 2020, the United States Trustee (the “U.S. Trustee”) for the District of Delaware appointed an official committee of unsecured creditors (the “Creditors’ Committee”). No party has requested the appointment of a trustee or examiner in the Case. 8. The Debtor was the owner-operator of a state-of-the-art Southern Yellow Pine sawmill located in Suwannee County, Florida. Additional detail regarding the Debtor, its business, the events leading to the commencement of this case is set forth in the Declaration of Michael Freeman in Support of Debtor’s Bankruptcy Filing [Docket No. 18]. II. Background to Settlement A. The Deloitte Engagement Letter 9. Prior to the commencement of the Bankruptcy Case and pursuant to a certain engagement letter (the “Deloitte Engagement Letter”) by and among Deloitte and the Debtor, Klausner Lumber Two LLC (“KL2”), Klausner Holding USA Inc. (“Klausner Holding”), and Klausner Nordamerika Beteiligungs GmbH (“Nordamerika,” and collectively with KL1, KL2, and Klausner Holding, the “Klausner Entities”) dated September 30, 2019, Deloitte was to “support the management of Klausner Lumber with M&A Advisory Services in connection with the current refinancing of the financial obligations of Klausner Lumber.” (Deloitte Engagement Letter at 1). The Deloitte Engagement Letter further described the work that Deloitte was to perform in an attached Annex 1 to the Deloitte Engagement Letter. (Id., at 8). 10. Pursuant to the Deloitte Engagement Letter, in exchange for the work to be performed by Deloitte, Deloitte was to earn fixed retainers in the total amount of €125,000, and in the event of a successful sale or refinancing of “Klausner Lumber,” Deloitte would be paid a success fee of €500,000-€700,000, which amount would depend on “measures and criteria regarding the successful conduct of negotiations to the benefit of Klausner.” (Id., at 2-3). 3

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11. Pursuant to the terms and conditions of the Deloitte Engagement Letter, this success fee would purportedly remain payable even if a transaction occurred in the 12 months after termination of the Deloitte Engagement Letter, provided that Deloitte would only be entitled to 50% of such success fee if a “transaction” closed between 6 and 12 months after termination of the Deloitte Engagement Letter. 12. KL1 and KL2 assert that Deloitte did not perform any services for KL1 or KL2 at any time following their respective chapter 11 filings. 13. During the course of KL1’s chapter 11 case, KL1 was able to complete the sale of its assets to Timber One Acquisition Holdings LLC, an affiliate of Binder Beteiligungs AG (“Binder”). 14. Likewise, during the course of this Bankruptcy Case, KL2 was able to complete the sale of its assets to a separate affiliate of Binder. B. Deloitte’s Asserted Claim 15. On September 23, 2020, before the sale of either KL1 or KL2’s assets had even closed, Deloitte filed a claim (the “Claim”) in the amount of €736,0002 against KL1 and an identical claim against KL2,3 asserting that the basis for its claims was a success fee “relating to refinancing of the Debtor’s financial obligations pursuant to an engagement letter.” 16. On May 3, 2021, the Debtor filed an objection to the Claim at docket No. 884 (the “Objection”). 2 Upon information and belief, the Claim is composed of the sum of €36,000, representing the unpaid portion of Deloitte’s retainer, and €700,000, representing Deloitte’s claim for a success fee, apparently at the highest range provided for in the Deloitte Engagement Letter (the “Success Fee”). 3 Deloitte filed and then amended Claim Nos. 2 and 25 against KL2. The latest amended claim filed against KL2 is Claim No. 103. 4

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17. In the Objection, the Debtor objected to the Claim on numerous grounds, including on the basis that: (a) the Claim was not factually supportable; (b) the Success Fee should be denied or substantially reduced for factual reasons and asserted conflicts of interest which the Debtor contended should reduce, if not eliminate, the Success Fee; and (c) there were other entities besides the Debtor (and KL2) from which Deloitte could have received payment. 18. On June 1, 2021, Deloitte filed a response to the Objection (the “Response”) denying the assertions set forth in the Objection. 19. On June 22, 2021, the Court entered the Agreed Order (I) Appointing Mediator, (II) Referring Certain Matters to Mediation, (III) Scheduling Certain Matters, and (IV) Granting Related Relief [Docket No. 984] the “Mediation and Scheduling Order”) referring the Claim, the Objection and the Response to the Honorable Kevin J. Gross (Ret.) for mediation (the “Mediation”). 20. On June 25, 2021, Deloitte and the Debtor appeared before the Honorable Kevin J. Gross (Ret.) and, at the conclusion of the Mediation, the parties reached an amicable resolution of their issues that is embodied in the Settlement Agreement and described in more detail below. RELIEF REQUESTED 21. Pursuant to sections 105(a) and 363(b) of the Bankruptcy Code, Bankruptcy Rule 9019, and Local Rule 9013-1, the Debtor seeks entry of an order substantially in the form attached hereto as Exhibit A (the “Order”) approving the Settlement Agreement. 5

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SUMMARY OF SETTLEMENT AGREEMENT TERMS 22. The Settlement Agreement provides for the following:4 (a) Allowed Claim: In full and complete settlement of the Claim, the Objection and the Response, the Parties, upon entry of the Order, agree and acknowledge that: (i) as of the Petition Date, Deloitte shall have a general unsecured claim in the amount Two Hundred and Fifty Thousand Dollars ($250,000.00) (the “Allowed Claim”); (ii) the Allowed Claim shall be paid in accordance with the terms and conditions of the Debtor’s Second Amended Joint Chapter 11 Plan for Klausner Lumber One LLC proposed by the Debtor and the Official Committee of Unsecured Creditors (the “Plan”) as an Allowed Class 5 General Unsecured Claim; (iii) Deloitte shall not be required to file any additional proof of claim in the Bankruptcy Case to memorialize or document the Allowed Claim; and (iv) the Debtor shall be entitled to adjust the claims register in the Bankruptcy Case to reflect the terms of the Settlement Agreement and the Allowed Claim. (b) Mutual General Release: Upon entry of the Order, the Debtor Parties and the Deloitte Parties (as those terms are defined in the Settlement Agreement), will absolutely release, forever discharge and acquit each other of and from any and all claims, demands, causes of action, damages, choses in action and all other claims, counterclaims, defenses, objections, setoff rights, subordination rights, recharacterization rights, deductions, challenges and other liabilities whatsoever, including, without limitation, those claims, counterclaims and defenses relating to or set forth in the Claim, the Objection and the Response, of every kind, name, nature and description, whether known or unknown, at law or equity, that they may now or hereafter own, hold, have or claim against each other arising at any time prior to the entry of the Order (for the avoidance of doubt, the Parties do not waive, release or discharge any rights, claims or causes of action that arise under the terms and provisions of 4 Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Settlement Agreement. The following summary is qualified in its entirety by the terms of the Settlement Agreement. 6

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the Settlement Agreement, including without limitation with respect to enforcement thereof). 23. For the reasons set forth herein, the Debtor believes that the Settlement Agreement is in the best interest of its estate, and should be approved by this Court. THE SETTLEMENT AGREEMENT SHOULD BE APPROVED PURSUANT TO BANKRUPTCY RULE 9019 AND THE MARTIN FACTORS 24. Bankruptcy Rule 9019(a) provides, in pertinent part, that “[o]n motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement.” Fed. R. Bankr. P. 9019(a). 25. Bankruptcy Rule 9019 empowers bankruptcy courts to approve settlements that are “fair and equitable” and in the best interest of a debtor’s estate. In re Energy Future Holdings Corp., 648 F. App’x 277, 281 (3d Cir. 2016) (citing In re Nutraquest, Inc., 434 F.3d 639, 644 (3d Cir. 2006)); Vaughn v. Drexel Burnham Lambert Grp., Inc. (In re Drexel Burnham Lambert Grp., Inc.), 134 B.R. 499, 505 (Bankr. S.D.N.Y. 1991) (finding that Bankruptcy Rule 9019 “empowers bankruptcy courts to authorize settlements if they are in the best interests of the estate”) (citation omitted). 26. To meet this standard, a settlement agreement need not be the best possible outcome, but must fall above the “lowest point in the range of reasonableness.” In re Capmark Fin. Grp. Inc., 438 B.R. 471, 475-76 (Bankr. D. Del. 2010); In re Sea Containers Ltd., No. 06-11156 (KJC), 2008 WL 4296562, at *5 (Bankr. D. Del. Sept. 19, 2008). 27. In the Third Circuit, courts consider the Martin factors in determining whether a settlement falls above the lowest point in the range of reasonableness, which consist of: “(1) the probability of success in litigation; (2) the likely difficulties in collection; (3) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it; and (4) 7

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the paramount interest of the creditors.” Capmark, 438 B.R. at 476 (citing Myers v. Martin (In re Martin), 91 F.3d 389, 393 (3d Cir. 1996)). 28. By its terms, the Settlement Agreement will maximize value for the Debtor’s estate by (a) reducing the asserted €736,000 claim to an allowed $250,000 general unsecured claim (a reduction of nearly seventy percent (70%)) and (b) avoiding the unnecessary delays, uncertainty, and expense associated with negotiating and/or litigating any further and/or piecemeal resolution of the Claim. 29. Resolution of the Claim through traditional litigation likely would have involved significant discovery, the interpretation of Austrian law (and the necessary retention of Austrian law experts), substantial translation fees (and possibly the retention of an expert translation witness), and the determination of necessary contributions from third parties. 30. Indeed, pursuant to the Mediation and Scheduling Order, the Debtor and Deloitte had agreed to a lengthy litigation schedule, with dispositive deadlines set more than 200 days in the future. 31. The Settlement Agreement will provide for full finality of the Claim without the otherwise attendant and expensive litigation costs, in an amount that the Debtor believes is reasonable under the circumstances and maximizes the value of its estate for all stakeholders. 32. The Settlement Agreement is the product of months of negotiations, briefing, and ultimately a successful Mediation (a mediation which lasted nearly nine hours), and represents an arm’s-length settlement that avoids delays and uncertainty and maximizes value for all parties, including the Debtor’s estate. 8

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33. As such, the Debtor believes that the Settlement Agreement certainly falls within the range of reasonableness, is in the best interest of creditors, and satisfies all of the applicable Rule 9019 or Martin factors. THE SETTLEMENT AGREEMENT SHOULD BE AUTHORIZED UNDER BANKRUPTCY CODE SECTION 363(B) AS THE PRODUCT OF THE DEBTOR’S VALID EXERCISE OF SOUND BUSINESS JUDGMENT 34. Authorization of the Settlement Agreement is justified as a valid exercise of the Debtor’s business judgment pursuant to section 363(b) of the Bankruptcy Code. 35. Section 363(b)(1) of the Bankruptcy Code provides, in pertinent part, that “[t]he [debtor], after notice and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate.” 11 U.S.C. § 363(b). 36. Under section 363(b), courts only require that a debtor “show that a sound business purpose justifies such actions.” Dai-Ichi Kangyo Bank, Ltd. v. Montgomery Ward Holding Corp. (In re Montgomery Ward Holding Corp.), 242 B.R. 147, 153 (D. Del. 1999) (“In determining whether to authorize the use, sale or lease of property of the estate under [section 363(b)], courts require the debtor to show that a sound business purpose justifies such actions . . . [under the] ‘business judgment test.’”) (citations omitted); In re Ionosphere Clubs, 98 B.R. 174, 175 (Bankr. S.D.N.Y. 1989) (noting section 363(b) provides “broad flexibility” to authorize a debtor to honor prepetition claims where supported by an appropriate business justification). 37. Once a debtor has articulated a valid business justification, there “is a presumption that in making a business decision the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company.” Official Comm. of Subordinated Bondholders v. Integrated Res., Inc. (In re Integrated Res., Inc.), 147 B.R. 650, 656 (S.D.N.Y. 1992) (quoting Smith v. Van Gorkom, 488 A.2d 858, 872 (Del. 1985)). 9

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38. The Debtor submits that the Settlement Agreement satisfies the requirements of section 363(b) of the Bankruptcy Code. The terms of the Settlement Agreement were negotiated by the Debtor and Deloitte in good faith and at arm’s length, with the assistance of a mediator. 39. As described above, the Debtor believes that the Settlement Agreement will avoid unnecessary delays and uncertainty associated with protracted litigation, and provides a fair and reasonable resolution of the Claim. 40. The Debtor has thus determined in its sound business judgment and after consulting with its professionals that the proposed settlement is in the best interest of its estate. REQUEST FOR WAIVER OF STAY 41. To implement the Settlement Agreement, the Debtor seeks a waiver of any stay of the effectiveness of the order approving this Motion. Pursuant to Bankruptcy Rule 6004(h), any “order authorizing the use, sale, or lease of property other than cash collateral is stayed until the expiration of 14 days after entry of the order, unless the court orders otherwise.” 42. The Debtor submits that ample cause exists to justify a waiver of the 14-day stay imposed by Bankruptcy Rule 6004(h) to allow the Settlement Agreement to take effect immediately to enable this case to proceed expeditiously towards a successful conclusion. Accordingly, the Debtor respectfully requests a waiver of Bankruptcy Rule 6004(h) to the extent it is deemed applicable. NOTICE 43. Notice of the Motion has been given via electronic mail, to: (a) the U.S. Trustee; (b) counsel to the Debtor’s prepetition lender; (c) counsel to the Creditors’ Committee; (d) counsel to Deloitte; and (e) all parties who have requested notice in this Chapter 11 Case pursuant to Local 10

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Rule 2002-1(b). The Debtor respectfully submits that no other or further notice of this Motion is required under the circumstances. 11

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CONCLUSION For the foregoing reasons, the Debtor respectfully requests that this Court enter an order substantially in the form of the Order attached hereto as Exhibit A approving the Settlement Agreement, attached hereto as Exhibit B and attached as Exhibit 1 to the Order, and granting such other and further relief in favor of the Debtor that the Court may deem just and proper. Dated: July 14, 2021 Respectfully submitted, /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 -and- /s/ Lawrence J. Kotler Lawrence J. Kotler (No. 4181) Duane Morris LLP 1201 North Market Street, Suite 501 Wilmington, DE 19801-1160 Phone: (215) 979-1514) Telecopier: (215) 979-1020 Email: ljkotler@duanemorris.com Bankruptcy conflicts counsel for Klausner Lumber One LLC 12

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