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Full title: Memorandum of Points and Authorities in Support of Confirmation of Second Amended Joint Chapter 11 Plan of Professional Financial Investors, Inc. and its Affiliated Debtors Proposed by the Debtors and Official Committee of Unsecured Creditors and Supported by the Ad Hoc LLC Members Committee and the Ad Hoc DOT Noteholders Committee (Dated May 20, 2021) (RE: related document(s)575 Order on Motion to Approve Document, Order on Motion to Set Hearing, Order on Motion for Miscellaneous Relief, 649 Notice). Filed by Debtor Professional Financial Investors, Inc. (Attachments: # 1 Declaration of John Burlacu of Donlin, Recano & Company, Inc. Regarding the Solicitation and Tabulation of Votes Cast on the Second Amended Joint Chapter 11 Plan of Professional Financial Investors, Inc. and its Affiliated Debtors (Dated May 20, 2021) # 2 Declaration of Andrew Hinkleman) (Katz, Ori) (Entered: 05/20/2021)

Document posted on May 19, 2021 in the bankruptcy, 43 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

Claims in Class 6 are impaired under the Plan and the11 claimants in Class 6 shall receive, in full satisfaction, settlement, and release of and in exchange 12 for such Claims, one (1) Class A PFI Trust Interest for each dollar of Allowed TIC Claims held b13 the applicable Holder. These claims are impaired under the Pla19 and claimants in Class 7 shall receive, in full satisfaction, settlement, and release of and in 20 exchange for such Claims, one (1) Class A PFI Trust Interest for each dollar of Allowed Other 21 The “best interests” test set forth in Section 1129(a)(7) requires that the plan proponent 17 demonstrate that: 18 with respect to each impaired class of claims or interests – 19 (A) each holder of a claim or interest of such class – 20 (i) has accepted the plan, or 21 (ii) will receive or retain under the plan on account of such claim or interest property of a value, as of the effective date of the plan, that 22 is not less than the amount that such holder would so receive or retain if the debtor were liquidated under chapter 7 of this title on 23 such date . . . .Except as 24 specifically provided in the Plan or this Order, in accordance with Bankruptcy Code section 1141,25 the PFI Trust Assets, the OpCo Assets and any other assets shall automatically vest in the PFI 26 Trust and the OpCo, as applicable, free and clear of all Claims, Liens, or interests (including, 27 without limitation, any and all DOT Noteholders’ Deeds of Trust), subject only to the PFI Trust 1 vesting shall be exempt from any stamp, real estate transfer, other transfer, mortgage reporting, 2 sales, use, or other similar tax.Unless a PFI Trust Action is expressly waived, 9 relinquished, released, compromised, or settled in the Plan or any Final Order (including this 10 Order), the Debtors have expressly reserved such PFI Trust Actions for later resolution by the PFI11 Trust (including any Avoidance Actions or Causes of Action not specifically identified or of 12 which the Debtors may presently be unaware or that may arise or exist by reason of additional 13 facts or circumstances unknown to the Debtors at this time or facts or circumstances that may 14 change or be different from those the Debtors now believe to exist).

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1 Ori Katz (CA Bar No. 209561) Debra I. Grassgreen (CA Bar No. 169978) J. Barrett Marum (CA Bar No. 228628) John D. Fiero (CA Bar No. 136557) 2 Matt Klinger (CA Bar No. 307362) Cia H. Mackle (admitted pro hac vice) SHEPPARD, MULLIN, RICHTER & HAMPTON PACHULSKI STANG ZIEHL & JONES 3 LLP LLP Four Embarcadero Center, 17th Floor 150 California Street, 15th Floor 4 San Francisco, CA 94111-4019 San Francisco, CA 94111 Telephone: (415) 434-9100 Telephone: (415) 263-7000 5 Facsimile: (415) 434-3947 Facsimile: (415) 263-7010 Email: okatz@sheppardmullin.com E-mail: dgrassgreen@pszjlaw.com 6 bmarum@sheppardmullin.com jfiero@pszjlaw.com mklinger@sheppardmullin.com cmackle@pszjlaw.com 7 Counsel to the Official Committee of Counsel to Debtors and Debtors in Possession Unsecured Creditors 8 9 UNITED STATES BANKRUPTCY COURT 10 NORTHERN DISTRICT OF CALIFORNIA 11 SAN FRANCISCO DIVISION 12 Chapter 11 In re: 13 Case No. 20-30604 PROFESSIONAL FINANCIAL INVESTORS, INC., et al., 14 (Jointly Administered) 15 MEMORANDUM OF POINTS AND Debtors. AUTHORITIES IN SUPPORT OF 16 CONFIRMATION OF SECOND AMENDED JOINT CHAPTER 11 PLAN OF 17 PROFESSIONAL FINANCIAL INVESTORS, INC. AND ITS AFFILIATED DEBTORS 18 PROPOSED BY THE DEBTORS AND OFFICIAL COMMITTEE OF UNSECURED 19 CREDITORS AND SUPPORTED BY THE A HOC LLC MEMBERS COMMITTEE AND 20 THE AD HOC DOT NOTEHOLDERS COMMITTEE (DATED MAY 20, 2021) 21 Plan Confirmation Hearing: 22 Date: May 27, 2021 Time: 10:00 a.m. (Pacific Time) 23 Place: Telephonic/Video Appearances Only 450 Golden Gate Avenue, 16th Floor 24 San Francisco, CA 94102 Judge: Hon. Hannah L. Blumenstiel 25 26 27

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1 TABLE OF CONTENTS Pag 2 I. INTRODUCTION ......................................................................................................................... 3 II. FACTUAL BACKGROUND ....................................................................................................... 4 III. ARGUMENT .............................................................................................................................. 5 A. The Plan Complies With Bankruptcy Code Section 1129(a)(1). .............................. 6 1. The Plan Complies With The Classification Requirements Of Bankruptcy 7 Code Section 1122. ....................................................................................... 8 2. The Plan Contains All Mandatory Provisions And Certain Permissive Provisions Set Forth In Bankruptcy Code Section 1123. .............................. 9 a. Compliance With Bankruptcy Code Section 1123(a)(1) 10 (Classification of Claims). ................................................................. 11 b. Compliance With Bankruptcy Code Section 1123(a)(2) (Specification of Unimpaired Classes and Interests). ....................... 12 c. Compliance With Bankruptcy Code Section 1123(a)(3) 13 (Specification of Treatment of Impaired Classes and Interests). .... 114 d. Compliance With Bankruptcy Code Section 1123(a)(4) (Provide Same Treatment For Each Claim or Interest Within a Class). ........ 115 e. Compliance With Bankruptcy Code Section 1123(a)(5) (Adequate 16 Means for Implementation of Plan). ............................................... 117 f. Compliance With Bankruptcy Code Section 1123(a)(6) (Amendment to Corporate Charter). ............................................... 118 g. Compliance With Bankruptcy Code Section 1123(a)(7) (Selection o19 Trustee). ........................................................................................... 120 h. Section 1123(a)(8) Does Not Apply. ............................................... 121 i. Compliance With Bankruptcy Code Section 1123(b) (Permissive Plan Provisions). .............................................................................. 122 B. The Plan Proponents Have Complied With The Requirements Of Bankruptcy Cod23 Section 1129(a)(2) (Compliance With Applicable Provisions of Title 11). ........... 124 1. Compliance With Bankruptcy Code Section 1121(a) (Who May File a Plan). ........................................................................................................... 125 2. Compliance With Bankruptcy Code Section 1125 (Post-petition Disclosure26 and Solicitation). ......................................................................................... 127 C. The Plan Satisfies the Other Consensual Plan Requirements of Section 1129(a), with the Exception of Section 1129(a)(8) as to Certain Subclasses of Class 1. ...... 1

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1 1. The Plan Has Been Proposed In Good Faith In Compliance With Bankruptcy Code Section 1129(a)(3). ......................................................... 12 2. The Plan Complies With The Requirements Of Bankruptcy Code 3 Section 1129(a)(4) (Payment for Services or Costs in Connection With the Case). ........................................................................................................... 14 3. The Plan Complies With Bankruptcy Code Section 1129(a)(5) Regarding 5 the Identity and Affiliations of Officers, Directors, and Insiders. ............... 16 4. The Plan Complies With Bankruptcy Code Section 1129(a)(6) Regarding Governmental Regulatory Approval of Rates. ............................................ 17 5. The Plan Satisfies the Requirements Of Bankruptcy Code Section 8 1129(a)(7) (“Best Interests” Test). .............................................................. 19 6. Each Class of Claims and Interests has Accepted the Plan, is Unimpaired, oMay be Crammed Down – Sections 1129(a)(8) and 1129(b). .................... 110 7. The Plan Complies With Bankruptcy Code Section 1129(a)(9). ................ 211 8. The Plan Has Been Accepted By At Least One Impaired Class in 12 Compliance With Bankruptcy Code Section 1129(a)(10). ......................... 213 9. The Plan is Feasible and in Compliance with Bankruptcy Code Section 1129(a)(11). .................................................................................... 214 10. The Debtor Will Pay on or Before the Effective Date All Fees Payable 15 Under 28 U.S.C. § 1930 in Compliance With Bankruptcy Code Section 1129(a)(12). .................................................................................... 216 11. Section 1129(a)(13) Regarding Retiree Benefits Does Not Apply. ............ 217 12. Section 1129(a)(14) Regarding Domestic Support Obligations Does Not 18 Apply. .......................................................................................................... 219 13. Section 1129(a)(15) Does Not Apply. ......................................................... 220 14. The Plan Complies With Bankruptcy Code Section 1129(d) Because The Principal Purpose Of The Plan Is Not To Avoid Taxes Or Applicable 21 Securities Laws. .......................................................................................... 222 D. Substantive Consolidation is Appropriate and Necessary to the Plan .................... 223 IV. CONCLUSION ......................................................................................................................... 2 24 25 26 27

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1 TABLE OF AUTHORITIES 2 Page( Cases 3 In re Acequia, Inc. 4 787 F.2d 1352 (9th Cir. 1986) ....................................................................................................25 Alexander v. Compton (In re Bonham) 6 229 F.3d 750 (9th Cir. 2000) ......................................................................................................27 Barclay v. Mackenzie (In re AFI Holding, Inc.) 525 E3d 700, 708-09 (9th Cir. 2008) ...................................................................................13, 18 Brady v. Andrew (In re Commercial Western Fin. Corp.) 9 761 F.2d 1329 (9th Cir. 1985) ..................................................................................................5, 10 In re Drexel Burnham Lambert Group 11 138 B.R. 723 (Bankr. S.D.N.Y. 1992) .......................................................................................112 In re Eagle-Picher Indus., Inc. 203 B.R. 256 (Bankr. S.D. Ohio 1996) ......................................................................................113 In re Haardt 14 65 B.R. 697 (Bankr. E.D. Pa. 1986) ............................................................................................. 15 In re Hoff 54 B.R. 746 (Bankr. D.N.D. 1985) ............................................................................................116 17 In re Jeppson 66 B.R. 269 (Bankr. D. Utah 1986) ...........................................................................................118 JPMCC 2007-C1 Grasslawn Lodging, LLC v. Transwest Resort Props. (In re 19 Transwest Resort Props.) 881 F.3d 724 (9th Cir. 2018) ......................................................................................................220 Kane v. Johns-Manville Corp. (In re Johns-Manville Corp.) 21 843 F.2d 636 (2d Cir. 1988) ......................................................................................................... 22 In re Montclair Retail Ctr., L.P. 23 177 B.R. 663 (B.A.P. 9th Cir. 1995) ............................................................................................ 24 In re Patrician St. Joseph Partners 169 B.R. 669 (Bankr. D. Ariz. 1994) .........................................................................................225 Resorts Int’l., Inc. v. Lowenschuss (In re Lowenschuss) 26 67 F.3d 1394 (9th Cir. 1995) ........................................................................................................ 27 In re Rexford Properties LLC

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1 In re Smith 123 B.R. 863 (Bankr. C.D. Cal. 1991) .......................................................................................12 Steelcase Inc. v. Johnston (In re Johnston) 3 21 F.3d 323 (9th Cir. 1994) .......................................................................................................... 4 In re Sullivan 5 26 B.R. 677 (Bankr. W.D.N.Y. 1982) .......................................................................................... 6 In re Texaco Inc. 84 B.R. 893 (Bankr. S.D.N.Y. 1988), appeal dismissed 92 B.R. 38 (S.D.N.Y. 7 1988) ............................................................................................................................................. 8 In re Toy & Sports Warehouse, Inc. 37 B.R. 141 (Bankr. S.D.N.Y. 1984) .........................................................................................19 United States v. Energy Resources Co. 10 495 U.S. 545 (1990) ...................................................................................................................211 In re WCI Cable, Inc. 12 282 B.R. 457 (Bankr. D. Or. 2002) ............................................................................................213 Statutes 14 11 U.S.C. ................................................................................................................1, 2, 3, 4, 5, 11, 115 11 U.S.C. § 1126(c) ..............................................................................................................................17, 116 § 1126(f) .....................................................................................................................................117 § 1128(a)(7) ................................................................................................................................1§ 1129(a)(9)(A) ............................................................................................................................ 18 § 1129(b)(1) ..........................................................................................................................18, 1§ 1129(b)(2)(A) ..........................................................................................................................119 § 1129(b)(2)(B) ..........................................................................................................................120 § 1129(b)(2)(C) ..........................................................................................................................221 28 U.S.C. § 1930 .........................................................................................................................................222 Bankruptcy Code ......................................................................................................................3, 5, 123 24 25 26 27

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1 Bankruptcy Code Chapter 7 ..............................................................................................................................16, 12 § 365(b)(2) .................................................................................................................................... § 507(a)(2) .................................................................................................................................... 3 § 507(a)(3) .................................................................................................................................... 4 § 507(a)(8) .................................................................................................................................... § 1121 .........................................................................................................................................15 § 1121(a) ....................................................................................................................................1§ 1121(c) ....................................................................................................................................16 § 1122 .......................................................................................................................................5, §§ 1122 and 1123 ......................................................................................................................... 7 § 1122(a) ..................................................................................................................................5, 8 § 1123 ........................................................................................................................................... § 1123(a) ...................................................................................................................................... 9 § 1123(a)(1) .................................................................................................................................. § 1123(a)(2) ............................................................................................................................9, 110 § 1123(a)(3) ................................................................................................................................1§ 1123(a)(3) ................................................................................................................................111 § 1123(a)(4) ................................................................................................................................112 § 1123(a)(5) ................................................................................................................................1§ 1123(a)(6) ................................................................................................................................113 § 1123(a)(7) ................................................................................................................................1§ 1123(a)(8) ................................................................................................................................114 §§ 1123(a) and (b) ........................................................................................................................ § 1123(b) ................................................................................................................................9, 115 § 1123(b)(1) ................................................................................................................................116 § 1123(b)(2) ................................................................................................................................1§ 1123(b)(3) ................................................................................................................................117 § 1123(b)(4) ................................................................................................................................1§ 1123(b)(5) ................................................................................................................................118 § 1124(2) ...................................................................................................................................... § 1125 .........................................................................................................................................119 § 1125 .........................................................................................................................................120 § 1125(b) ....................................................................................................................................1§ 1129 .....................................................................................................................................5, 221 § 1129(a) ....................................................................................................................................1§ 1129(a)(1) .................................................................................................................................. 22 § 1129(a)(1) .................................................................................................................................. § 1129(a)(2) ..........................................................................................................................13, 123 § 1129(a)(3) ................................................................................................................................124 § 1129(a)(4) ................................................................................................................................1§ 1129(a)(5) ................................................................................................................................125 § 1129(a)(5)(A)(i) ......................................................................................................................1§ 1129(a)(6) ................................................................................................................................126 § 1129(a)(7) ..........................................................................................................................15, 1§ 1129(a)(8) ..........................................................................................................................14, 127 §§ 1129(a)(8) and 1129(b) .........................................................................................................1

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1 § 1129(a)(10) ..............................................................................................................................2§ 1129(a)(11) ........................................................................................................................20, 22 § 1129(a)(12) ..............................................................................................................................2§ 1129(a)(13) ..............................................................................................................................23 § 1129(a)(14) ..............................................................................................................................24 § 1129(a)(15) ..............................................................................................................................2§ 1129(b) ....................................................................................................................................15 § 1129(d) ....................................................................................................................................26 Other Authorities 7 Bankruptcy Rule 3017(d) .................................................................................................................18 www.donlinrecano.com/pfi ................................................................................................................ 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

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1 I. INTRODUCTION 2 This Plan1 is the product of unprecedented cooperation between a highly-organized 3 investor body and the Debtors2 and is overwhelmingly supported by the creditors who cast ballots4 Nearly 2,200 votes, representing over $461 million in claims, were received prior to the May 13, 5 2021 voting deadline. Nearly 99.8% of those votes, representing over $457 million in claims, 6 voted in favor of the Plan.3 In total, only five (5) ballots rejected the Plan, representing less than 7 $1.5 million in claims. 8 This incredible level of Plan support is a testament to the hard work of numerous intereste9 parties in these Chapter 11 Cases. Perhaps most notably, since even before the commencement of10 the Chapter 11 Cases, the investor body has played a critical role by organizing themselves to 11 ensure their interests were well-represented. In addition, the Official Committee of Unsecured 12 Creditors (the “OCUC”), and the Ad Hoc LLC Members Committee and Ad Hoc Committee of 13 Deed of Trust Holders (together the “Ad Hoc Committees” and, collectively with the OCUC, the 14 “Committees”) made extensive efforts to communicate with the respective constituencies 15 regarding the Plan and the voting process. These efforts included participating in several Zoom 16 meetings open to all Investors and in numerous other communications responding to Investor 17 inquiries regarding the Plan and the voting procedures. The Debtors themselves also fielded 18 1 The “Plan” shall refer to the Second Amended Joint Plan of Professional Financial Investors, Inc. and its Affiliated Debtors Proposed by the Debtors and Official Committee of Unsecured Creditors and Supported by th19 Ad Hoc LLC Members Committee and the Ad Hoc DOT Noteholders Committee (Dated May 20, 2021) filed concurrently with this Memorandum. All capitalized terms used but not defined in this Memorandum shall have20 the meaning given to them in the Plan. On March 21, 2021, the Proponents filed their Joint Plan of ProfessionalFinancial Investors, Inc. and its Affiliated Debtors Proposed by the Debtors and Official Committee of Unsecure21 Creditors and Supported by the Ad Hoc LLC Members Committee and the Ad Hoc DOT Noteholders Committee as Dkt. No. 489 (the “Original Plan”). The Original Plan was superseded on April 9, 2021, when the Proponents22 filed their Amended Joint Plan of Professional Financial Investors, Inc. and its Affiliated Debtors Proposed by the Debtors and Official Committee of Unsecured Creditors and Supported by the Ad Hoc LLC Members 23 Committee and the Ad Hoc DOT Noteholders Committee as Dkt. No. 554 (the “First Amended Plan”). Later, theFirst Amended Plan was superseded by the Plan. 24 2 A complete list of the Debtors and their respective chapter 11 case numbers may be found at www.donlinrecano.com/pfi. The federal tax identification numbers of each of the Debtors is also available in th25 bankruptcy petitions of each Debtor, also available at the Donlin Recano website. 3 As of May 20, 2021, twenty-nine (29) total ballots have been received after the voting deadline and such ballots 26 are summarized on Exhibit B to the Burlacu Declaration (defined below). The Proponents believe that at least several of these ballots likely would have arrived before the voting deadline but for delays in their delivery that 27 were outside of the sender’s control. The Proponents request that the Court permit all of these ballots to be counted pursuant to the Tabulation Rules approved by this Court and that any election indicated on such ballots

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1 numerous questions from Investors and other claimants and, through their conflicts counsel, 2 communicated extensively with the Debtor’s bank lenders to explain the details of the Plan and th3 voting process. Ultimately, all those lenders that cast a ballot voted in favor of the Plan. 4 Meanwhile, only one (limited) objection to the Plan (the “Limited Objection”) was lodged5 and the Proponents have addressed the bases of that objection through revisions to the Plan that 6 are discussed below. No other plan of reorganization or liquidation has been proposed in the 7 Chapter 11 Cases. 8 The Plan provides built-in flexibility in order to achieve a value-maximizing result. In tha9 regard, the Plan provides an option to place the Real Properties owned by the Debtors, either 10 directly or indirectly, into an operating company called “OpCo” (short for Operating Company) 11 which will, in turn, be owned by the PFI Trust, and managed by experts retained by the trustee of 12 the PFI Trust. 13 A second option under the Plan contemplates the Debtors’ selling the Real Properties prio14 to the Effective Date, in which case there will be no need for an OpCo (and consequently an OpC15 will not be established) and the post-Effective Date corporate governance will be greatly 16 simplified. 17 As it stands the Debtors intend to pursue a sale of all or a substantial portion of their Real 18 Properties pursuant to proposed sale procedures that will soon be submitted to this Court for 19 approval. As such, the Proponents do not presently anticipate that the PFI Trust will be 20 overseeing the operation of a large number of the Real Properties as part of an OpCo structure 21 once the Effective Date occurs. 22 Investors and other unsecured creditors of the Debtors will, in exchange for their allowed 23 claims against any of the Debtors, become beneficiaries of the PFI Trust and will be entitled to 24 distributions on their allowed claims as set forth in the Plan. Under either option (i.e., an OpCo o25 a pre-Effective Date sale) a “Board of Advisors” (composed of investors in the Debtors) will have26 certain duties and rights as the PFI Trustee attempts to best monetize the PFI Trust’s assets. 27 The Plan should be confirmed so that the PFI Trust (and, only in the unlikely event it is

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1 commence. The Proponents request the Court to issue an order confirming the Plan in the form 2 attached hereto as Exhibit B. 3 This Memorandum is supported by the concurrently filed Declaration of Andrew 4 Hinkelman and Declaration of John Burlacu (the “Burlacu Declaration”), including the Final 5 Tabulation Results attached as Exhibit A to the Burlacu Declaration (the “Final Tabulation 6 Results”), as well as the facts, evidence, and pleadings of record in this case. 7 By this Memorandum, the Proponents respectfully request that the Court find that the Plan8 meets all of the requirements of the Bankruptcy Code and enter an order confirming the Plan over9 the Limited Objection. 10 II. FACTUAL BACKGROUND 11 Originally founded by Ken Casey (“Casey”), the Debtors comprise a group of related 12 entities that directly or indirectly own, manage and/or otherwise control various real properties in 13 California, including Marin and Sonoma Counties.4 Although touted and marketed to Investors a14 a premier real estate investment and management firm, in fact, while the Real Properties do indee15 exist, the business was nothing more than a Ponzi scheme. After Casey’s death in May 2020, new16 management was installed, and the Debtors’ prior fraudulent scheme was uncovered. 17 On July 16, 2020, certain creditors commenced an involuntary chapter 11 bankruptcy 18 action against PISF, Case No. 20-30579 (the “PISF Case”) and this Court entered an order for 19 relief in the PISF Case on July 27, 2020. 20 Also on July 26, 2020, PFI commenced its bankruptcy case by filing a voluntary chapter 21 11 petition. On November 20, 2020, under authority granted by this Court, PFI commenced 22 involuntary petitions against 29 of its limited liability company and limited partnership affiliates 23 (collectively, the “November 2020 Debtors”). On December 11, 2020, this Court entered orders 24 for relief against the November 2020 Debtors. Between February 3-4, 2021, PFI filed involuntar25 chapter 11 petitions against ten additional limited liability company affiliates (the “February 202126 Debtors”), and this Court subsequently entered orders for relief against the February 2021 Debtor 27 4 Overall, the Debtors own either direct or indirect interests in approximately seventy (70) real property locations (collectively, the “Real Properties”), primarily consisting of apartment buildings and office parks. A Schedule of

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1 on February 18, 2021. All of the Debtors’ Chapter 11 Cases are jointly administered under Case 2 No. 20-30604. 3 Following the revelation of the massive Ponzi scheme and the resulting bankruptcy filings4 the Proponents, together with the Ad Hoc Committees, have worked diligently to maximize 5 recoveries for the Debtors’ Investors and other creditors. To this end, the Debtors and the 6 Committees, through months of open cooperation, information gathering and negotiation for the 7 benefit of all Investors, reached a global resolution, embodied in the Plan, aimed at: (i) mitigating8 the damage inflicted by Casey (and others) having operated the Debtors as a Ponzi scheme; and 9 (ii) developing a level playing field that attempts to treat all aggrieved Investors equally and fairly10 To effectuate distributions to Investors and other creditors, the Plan provides for the 11 creation of the PFI Trust, which will own the Estates’ assets (including indirectly owning any Rea12 Properties that remain in the Debtors’ portfolio as of the Effective Date through the OpCo) and 13 will sell or otherwise dispose of those assets to generate cash, and then distribute that (and other) 14 cash to creditors (including to Investors). The PFI Trust also will own litigation claims against 15 third parties that may generate cash through prosecution or settlement of those claims. Cash will 16 be distributed by the PFI Trust to Investors and other creditors over time (as the PFI Trust collects17 on the PFI Trust Assets and/or the OpCo upstreams operating profits from and/or sale proceeds 18 from the disposition of the Real Properties). 19 Critically, the Plan Proponents have ensured that Investors will continue to have an 20 advisory role in connection with certain key decisions that will be made by the PFI Trust by 21 creating the Board of Advisors (the “Board”) to serve in connection with the PFI Trust. The 22 proposed PFI Trustee (Michael Goldberg) has been jointly selected by the Committees and the 23 Committees have also jointly selected the initial members of the Board. 24 In response to the Limited Objection,5 the Plan changed the definition of “Investor” from 25 what appeared in the First Amended Plan, to ensure that PFI LLC Members that also hold TIC 26 Interests do not have their membership interests cancelled. 27 5 On May 13, 2021, Christina Hariclia Ensign, as Trustee of the Amended and Restated Christina Hariclia Ensign Trust dated August 15, 1996, and Felix Arts and Carol Sue Sproule, as Trustees of the Arts-Sproule Family Trust

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1 III. ARGUMENT 2 Under the Bankruptcy Code, a plan “shall” be confirmed if all of the applicable 3 confirmation requirements set forth in Bankruptcy Code Section 1129 are satisfied. See Brady v. 4 Andrew (In re Commercial Western Fin. Corp.), 761 F.2d 1329, 1338 (9th Cir. 1985). As 5 discussed below, the Plan satisfies all of the applicable confirmation requirements of Section 1126 and should therefore be confirmed. 7 A. The Plan Complies With Bankruptcy Code Section 1129(a)(1). 8 Bankruptcy Code Section 1129(a)(1) requires that a plan comply with the “applicable 9 provisions of this title.” See 11 U.S.C. § 1129(a)(1); Resorts Int'l., Inc. v. Lowenschuss (In re 10 Lowenschuss), 67 F.3d 1394, 1401 (9th Cir. 1995). “The legislative history of 11 Subsection 1129(a)(1) suggests that Congress intended the phrase 'applicable provisions' in this 12 Subsection to mean provisions of chapter 11 that concern the form and content of reorganization 13 plans.” Kane v. Johns-Manville Corp. (In re Johns-Manville Corp.), 843 F.2d 636, 648-49 (2d 14 Cir. 1988) (emphasis added). The two applicable provisions relating to the form and content of a 15 plan of reorganization are Bankruptcy Code Sections 1122 and 1123, which govern classification 16 of claims and interests and the contents of a plan, respectively. See In re Texaco Inc., 84 B.R. 8917 905 (Bankr. S.D.N.Y. 1988), appeal dismissed 92 B.R. 38 (S.D.N.Y. 1988) (“In determining 18 whether a plan complies with Section 1129(a)(1), reference must be made to Code §§ 1122 and 19 1123 with respect to classification of claims and the contents of a plan of reorganization.”). As 20 demonstrated below, the Plan complies with both Bankruptcy Code Sections 1122 and 1123, and 21 thus satisfies the requirements of Subsection 1129(a)(1). 22 1. The Plan Complies With The Classification Requirements Of Bankruptcy Code Section 1122. 23 Section 1122(a) of the Bankruptcy Code requires that each claim or interest within a class 24 be substantially similar to all other claims or interests within that class. See 11 U.S.C. § 1122(a). 25 Courts are afforded broad discretion to decide the propriety of classification in plans in light of th26 facts of each case. See Steelcase Inc. v. Johnston (In re Johnston), 21 F.3d 323, 327 (9th Cir. 27 1994). A plan proponent is afforded significant flexibility in classifying claims under § 1122(a)

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1 claims within a particular class are substantially similar. In re Montclair Retail Ctr., L.P., 177 2 B.R. 663, 665 (B.A.P. 9th Cir. 1995) (citing In re Johnston, supra); In re Rexford Properties LLC3 558 B.R. 352, 361 (Bankr. C.D. Cal. 2016). 4 Here, the Plan's classification of Claims satisfies the requirements of Bankruptcy Code 5 Section 1122. The Plan sets forth nine separate and distinct classes of claims and interests in the 6 following classes: 7 Class 1 Non-Investor First-Priority Class 6 TIC Claims Lender Claims 8 Class 2 Non-Investor Other Secured Class 7 Other Unsecured Claims Claims 9 Class 3 Priority Claims Class 8 Other Subordinated Claims 10 Class 4 DOT Noteholder Claims Class 9 Equity Interests 11 Class 5 Non-DOT Investor Claims 12 13 The foregoing classification scheme is appropriate because the Plan adheres to the 14 statutory requirements that the claims and interests within each class be substantially similar to all15 other claims and interests in that class. Pursuant to the Plan's classification scheme secured debt i16 classified separately from unsecured debt and each secured creditor position is placed in its own 17 sub-class (thereby reflecting its unique collateral). 18 Class 1 consists of the Non-Investor First-Priority Lender Claims, which are impaired 19 under the Plan. Each allowed Non-Investor First-Priority Lender Claim is deemed to be in its ow20 subclass. On or as soon as is reasonably practicable after the Effective Date, each Holder of a 21 Class 1 Claim will receive either: (i) in the event of a sale or refinance concerning the Collateral, 22 cash in the Allowed Amount of such Holder’s Class 1 Claim that shall be immediately paid from 23 escrow in exchange for release of such Holder’s Lien; or (ii) the return by the PFI Trust or OpCo,24 as applicable, and subject to mutual agreement or court order, by deed in lieu of foreclosure, 25 surrender, or termination of any stay, of the Collateral securing such Class 1 Claim, without 26 representation or warranty by any Person; or (iii) (A) reinstatement of the maturity of such Class 27 Claim in the Allowed Amount as the maturity existed before any default, (B) payment of any

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1 interest, and (C) continuation thereafter of payments of principal, interest and other obligations 2 when and as the same come due. Treatment for the claims in Class 1 is different and distinct than3 the treatment provided for the other secured classes of claims. 4 Class 2 consists of the Non-Investor Other Secured Claims, and each such claim is treated5 as a separate sub-Class within Class 2. The claims in Class 2 are all unimpaired under the Plan. 6 On or as soon as is reasonably practicable after the Effective Date, each Holder of an Allowed 7 Class 2 Claim shall receive, at the PFI Trust’s option: (i) Cash from the PFI Trust in the Allowed 8 amount of such Holder’s Allowed Class 2 Claim; or (ii) the return by the PFI Trust of the 9 Collateral securing such Allowed Class 2 Claim, without representation or warranty by any Perso10 (and without recourse against any Person regarding such Non-Investor Other Secured Claim); or 11 (iii) (A) the cure of any default, other than a default of the kind specified in Bankruptcy Code 12 section 365(b)(2), that Bankruptcy Code section 1124(2) requires to be cured, with respect to suc13 Holder’s Allowed Class 2 Claim, without recognition of any default rate of interest or similar 14 penalty or charge, and upon such cure, no default shall exist; (B) the reinstatement of the maturity15 of such Allowed Class 2 Claim as the maturity existed before any default, without recognition of 16 any default rate of interest or similar penalty or charge; and (C) retention of its unaltered legal, 17 equitable, and contractual rights with respect to such Allowed Clam. Treatment for the claims in 18 Class 2 is different and distinct than the treatment provided for the other secured classes of claims19 Class 3 consists of Priority Claims, which are unimpaired under the Plan. The Plan 20 provides that each claimant in this Class shall receive full satisfaction for such claim by, or as 21 soon as reasonably practicable after, the later of the Effective Date or the date such claim in this 22 Class becomes Allowed. See 11 U.S.C. § 1129(a)(9)(A); see also In re Sullivan, 26 B.R. 677, 6723 (Bankr. W.D.N.Y. 1982) (holding that it is improper to classify general unsecured claims and 24 priority claims together in the same class). 25 Class 4 consists of DOT Noteholder Claims, which are impaired under the Plan. For 26 purposes of distributions under the Plan, Holders of DOT Noteholder Claims in Class 4 are 27 considered to be in separate subclasses within Class 4 on a property by property basis (i.e., Class

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1 of all DOT Noteholder Claims relating to Real Property B, etc.), and each such subclass for each 2 applicable Real Property is deemed to be a separate Class for purposes of the Plan. 3 Class 5 consists of the Non-DOT Investor Claims. These claims are impaired under the 4 Plan and the claimants in Class 5 shall receive, in full satisfaction, settlement, and release of and i5 exchange for such Claims, (i) one (1) Class A PFI Trust Interest for each dollar of Allowed 6 Investor Restitution Claims held by the applicable Investor and one (1) Class B PFI Trust Interest 7 for each dollar of Allowed Investor Subordinated Claims, and (ii) the other consideration provide8 for in the Investor Claims Special Provisions. These claims are classified separately because they9 receive a different treatment under the Plan than the other classes comprised of unsecured claims. 10 Class 6 consists of the TIC Claims. Claims in Class 6 are impaired under the Plan and the11 claimants in Class 6 shall receive, in full satisfaction, settlement, and release of and in exchange 12 for such Claims, one (1) Class A PFI Trust Interest for each dollar of Allowed TIC Claims held b13 the applicable Holder. Alternatively, if the Holder of a TIC Claim makes a valid TIC Investor 14 Treatment Election, that Holder shall receive the treatment provided to Holders of Class 5 Non-15 DOT Investor Claims, with one important exception regarding creditor claim aggregation. Claim16 in Class 6 are classified separately from other types of Claims because they are receiving a 17 different treatment under the Plan than other types of Claims. 18 Class 7 consists of the Other Unsecured Claims. These claims are impaired under the Pla19 and claimants in Class 7 shall receive, in full satisfaction, settlement, and release of and in 20 exchange for such Claims, one (1) Class A PFI Trust Interest for each dollar of Allowed Other 21 Unsecured Claims held by the applicable Holder. Class 7 Claims are classed separately because 22 they receive different treatment under the Plan than other classes comprised of unsecured Claims. 23 Class 8 consists of Other Subordinated Claims. These claims are impaired under the Plan 24 and retain only a residual right to receive Available Cash that remains in the PFI Trust after the 25 final administration of all PFI Trust Assets and OpCo Assets, and the complete satisfaction of all 26 senior payment rights within the PFI Trust Interests Waterfall, including satisfaction of all 27 Investor Subordinated Claims.

15

1 Class 9 consists of Equity Interests and is impaired under the Plan. Subject to any 2 Alternative Restructuring Transactions, Equity Interests will be deemed void, cancelled, and of n3 further force and effect as of the Effective Date. Holders of Equity Interests shall not be entitled 4 to, and shall not receive or retain any property or interest in property on account of such interests. 5 As explained above, valid business, factual and legal reasons exist for the Plan's claim 6 classification scheme. Based on their security position, if any, their legal priority against the 7 Debtors’ assets, and other relevant criteria, each of the stated Classes contains substantially simila8 Claims in terms of the legal or factual rights of the members within a particular Class. 9 Accordingly, the Plan meets the requirements of Bankruptcy Code section 1122(a). 10 2. The Plan Contains All Mandatory Provisions And Certain Permissive Provisions Set Forth In Bankruptcy Code Section 1123. 11 Bankruptcy Code Section 1123(a) sets forth mandatory requirements for a plan, and 12 Section 1123(b) identifies various permissive provisions that may be included in a plan, but whic13 are not required. The Plan proposed in this case complies with both Section 1123(a) and (b). 14 a. Compliance With Bankruptcy Code Section 1123(a)(1) (Classification of Claims). 15 Bankruptcy Code Section 1123(a)(1) requires a plan to designate classes of claims and 16 interests, other than claims of a kind specified in Bankruptcy Code Section 507(a)(2) 17 (administrative expense claims, including Professional Fee Claims), Bankruptcy Code 18 Section 507(a)(3) (claims arising during the “gap” period in an involuntary case), and Bankruptcy19 Code Section 507(a)(8) (priority tax claims). See 11 U.S.C. § 1123(a)(1); see also In re Haardt, 20 65 B.R. 697, 700 (Bankr. E.D. Pa. 1986); accord In re Commercial W. Fin. Corp., 761 F.2d 132921 1334 (9th Cir. 1985). 22 Section 1.1 of the Plan classifies the Claims and Equity Interests into nine separate 23 Classes. The Plan does not classify administrative claims, including professional fee claims, 24 involuntary gap claims or priority tax claims. Thus, the Plan satisfies the requirements of 25 Bankruptcy Code Section 1123(a)(1). 26 b. Compliance With Bankruptcy Code Section 1123(a)(2) (Specification of Unimpaired Classes and Interests). 27

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1 Bankruptcy Code Section 1123(a)(2) requires that a plan “specify any class of claims or 2 interests that is not impaired under the plan.” 11 U.S.C. § 1123(a)(2); see also In re Smith, 123 3 B.R. 863, 865 (Bankr. C.D. Cal. 1991). 4 Section 1.1 of the Plan sets forth the two classes whose rights are unimpaired by the Plan 5 Class 2 (Non-Investor Other Secured Claims) and Class 3 (Priority Claims). The Plan thus 6 satisfies Bankruptcy Code Section 1123(a)(2). 7 c. Compliance With Bankruptcy Code Section 1123(a)(3) (Specification of Treatment of Impaired Classes and Interests). 8 Bankruptcy Code Section 1123(a)(3) requires that a plan “specify the treatment of any 9 class of claims or interests that is impaired under the plan.” 11 U.S.C. § 1123(a)(3). In 10 accordance with Bankruptcy Code Section 1123(a)(3), Sections 2.2, 2.5, 2.6, 2.7, 2.8, 2.9, and 11 2.10 of the Plan specify the treatment of Classes 1, 4, 5, 6, 7, 8, and 9, respectively, all of which 12 are impaired under the Plan. 13 d. Compliance With Bankruptcy Code Section 1123(a)(4) (Provide Same Treatment For Each Claim or Interest Within a Class). 14 Bankruptcy Code Section 1123(a)(4) requires that a plan “provide the same treatment for 15 each claim or interest of a particular class, unless the holder of a particular claim or interest agree16 to a less favorable treatment of such particular claim or interest.” 11 U.S.C. § 1123(a)(4). As set 17 forth in Sections 2.2 – 2.10 of the Plan, each claim or interest in each of the classes set forth in the18 Plan will receive the same treatment as every other claim or interest in such class. 19 e. Compliance With Bankruptcy Code Section 1123(a)(5) (Adequate Means for Implementation of Plan). 20 Bankruptcy Code Section 1123(a)(5) requires that a plan “provide adequate means for the 21 plan's implementation” and sets forth several examples of such adequate means. 11 U.S.C. 22 § 1123(a)(5). 23 The means for implementing the Plan are set forth throughout the Plan, but are primarily 24 described in Article IV of the Plan. On the Effective Date, among other things, Michael Goldber25 will become the PFI Trustee, the PFI Trust will be established and automatically vested with the 26 PFI Trust Assets, the Board will begin to serve its advisory function, the OpCo Assets (if any) 27 shall be assigned or otherwise transferred or conveyed to the OpCo, and PFI, PISF, the LLC/LP

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1 consolidated. The PFI Trust will then begin pursuing, collecting from, and/or monetizing the PFI2 Trust Assets and the OpCo Assets and making Distributions from the proceeds of such assets to 3 the PFI Trust Beneficiaries. 4 f. Compliance With Bankruptcy Code Section 1123(a)(6) (Amendment to Corporate Charter). 5 Section 1123(a)(6) requires a reorganizing debtor to amend its corporate charter to prohibi6 the issuance of nonvoting securities. As set forth in Section 4.2.3 of the Plan, on the Effective 7 Date each of the Debtors will be dissolved automatically. Moreover, the Debtors’ property assets8 are expected to be sold within the next several months (and prior to the Effective Date). As such, 9 the requirement of Section 1123(a)(6) should not be applicable in this situation. 10 g. Compliance With Bankruptcy Code Section 1123(a)(7) (Selection of Trustee). 11 Bankruptcy Code Section 1123(a)(7) requires that a plan: 12 contain only provisions that are consistent with the interests of creditors and equity security holders and with public policy with 13 respect to the manner of selection of any officer, director, or trustee under the plan and any successor to such officer, director, or trustee. 14 15 11 U.S.C. § 1123(a)(7). The Plan proposes that Michael Goldberg serve as the Initial PFI Trustee16 Mr. Goldberg was jointly selected by the Committees as the Initial PFI Trustee. He has served as17 the court-approved sole director of Professional Financial Investors, Inc. and Professional 18 Investors Security Fund, Inc. since August 11, 2020. Mr. Goldberg chairs Akerman LLP’s Fraud 19 and Recovery Practice, an experienced team of lawyers focused on unraveling high-profile 20 investor fraud, including Ponzi schemes. He has wide-ranging experience as a counsel, receiver o21 other senior official in cases involving fraud. As such, Mr. Goldberg’s appointment as the Initial 22 PFI Trustee satisfies the requirements of section 1123(a)(7). 23 As set forth in Section 8.4 of the PFI Trust Agreement, upon the resignation, death, 24 incapacity, or removal of a PFI Trustee, and after an affirmative vote of 2/3s of the members of th25 Board of Advisors at a Non-Emergency Meeting, the Board of Advisors shall appoint a successor 26 PFI Trustee to fill the vacancy so created, subject to the approval of this Court so long as any of 27 the Chapter 11 Cases are pending. As such, the Plan’s provisions regarding the appointment of

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1 h. Section 1123(a)(8) Does Not Apply. 2 Bankruptcy Code Section 1123(a)(8) contains requirements applicable to individual debto3 cases which do not apply to this corporate debtor. 4 i. Compliance With Bankruptcy Code Section 1123(b) (Permissive Plan Provisions). 5 Bankruptcy Code Section 1123(b) describes various other provisions that are permitted in 6 a plan. The Plan contains a number of these provisions, all of which are intended to facilitate the 7 reorganization of the Debtors and payment to creditors. These include the following: 8 • In Article 1, the Plan treats the (i) Non-Investor First-Priority Lender Claims (Clas1), (ii) DOT Noteholder Claims (Class 4), (iii) Non-DOT Investor Claims (Class 59 (iv) TIC Claims, (Class 6), (v) Other Unsecured Claims (Class 7), (vi) Other Subordinated Claims (Class 8), and (vii) Equity Interests (Class (9) as impaired, b10 leaves the (i) Non-Investor Other Secured Claims (Class 2) and (ii) Priority Claims(Class (3) unimpaired, all as permitted by Section 1123(b)(1). 11 • In Article V, the Plan assumes all executory contracts and unexpired leases that ar12 listed on the Schedule of Assumed Agreements assigns such contracts and leases tthe PFI Trust or the OpCo, as appropriate, as permitted by Section 1123(b)(2) of 13 the Bankruptcy Code. 14 • In Section 10.10, the Plan provides that (i) from and after the Effective Date, the PFI Trust may compromise and settle certain disputes about any Claims or about 15 any PFI Trust Actions, without any further approval by this Court, subject to the terms and conditions of the PFI Trust Agreement and (ii) until the Effective Date, 16 the Debtors expressly reserve the right to compromise and settle (subject to the approval of this Court) any Avoidance Actions and Causes of Action belonging to 17 the Estates, as permitted by Section 1123(b)(3) of the Bankruptcy Code. 18 • Section 4.3.5(g) of the Plan provides that, under the conditions set forth therein, thPFI Trustee shall have the authority and right on behalf of the PFI Trust, without 19 the need for this Court’s approval, to, among other things, sell, monetize, assign orotherwise dispose of the PFI Trust Assets or the OpCo Assets (including, without 20 limitation, any Real Properties) or any part thereof or interest therein upon such terms as the PFI Trustee determines to be necessary, appropriate, or desirable, 21 subject to the provisions of the PFI Trust Agreement, as permitted by Section 1123(b)(4) of the Bankruptcy Code. 22 • Bankruptcy Code section 1123(b)(5) provides that a plan may “modify the rights o23 holders of secured claims . . . or of holders of unsecured claims, or leave unaffectethe rights of holders of any class of claims.” 11 U.S.C. § 1123(b)(5). As set forth 24 in Article II of the Plan, the Plan modifies the rights of the holders of allowed Claims and Interests in Classes 1, 4, 5, 6, 7, 8, and 9. The Plan leaves unaffected 25 the rights of the holders of allowed Claims in Class 2 and Class 3. Pursuant to the Plan, interests of PFI LLC Members in the PFI-Managed LLC and LP Interest 26 Holders are automatically recharacterized as Class 5 Non-DOT Investor Claims (and are not treated as Equity Interests). This is permissible as this Court has 27 entered an Order approving a stipulation that the Debtors were part of a “Ponzi scheme, see Dkt. No. 640, and limited partners or LLC members that invest in suc

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1 or LLC interest. See Barclay v. Mackenzie (In re AFI Holding, Inc.), 525 E3d 700,708-09 (9th Cir. 2008).6 2 B. The Plan Proponents Have Complied With The Requirements Of Bankruptcy Code Section 1129(a)(2) (Compliance With Applicable Provisions of Title 11). 3 4 Bankruptcy Code Section 1129(a)(2) requires that the proponent of the plan also comply 5 with “the applicable provisions” of title 11. 11 U.S.C. § 1129(a)(2). The “applicable provisions” 6 of title 11 are Bankruptcy Code Section 1121 (dealing with who may file a plan) and Bankruptcy 7 Code Section 1125 (dealing with the solicitation of acceptances of a plan). See In re Hoff, 54 B.R8 746, 750-51 (Bankr. D.N.D. 1985); In re Toy & Sports Warehouse, Inc., 37 B.R. 141, 149 (Bankr9 S.D.N.Y. 1984). 10 1. Compliance With Bankruptcy Code Section 1121(a) (Who May File a Plan). 11 Bankruptcy Code section 1121 allows a debtor to propose a plan at any time in a voluntar12 bankruptcy case or an involuntary bankruptcy case. Bankruptcy Code section 1121 also allows a 13 creditor under certain circumstances to propose a plan. Here, the Proponents of the Plan are the 14 Debtors and the OCUC. Thus the proposal of the Plan complies with Section 1121(c). 15 2. Compliance With Bankruptcy Code Section 1125 (Post-petition Disclosure and Solicitation). 16 One of the principal purposes of Bankruptcy Code Section 1129(a)(2) is to ensure that pla17 proponents have complied with the requirements of Bankruptcy Code Section 1125 in the 18 solicitation of acceptances of a plan of reorganization. See, e.g., In re Jeppson, 66 B.R. 269, 296-19 97 (Bankr. D. Utah 1986). Bankruptcy Code Section 1125(b) provides that a proponent may not 20 solicit acceptances of its plan unless, at or before the time of such solicitation, there is transmitted21 to the claimant, or the authorized representative thereof, the plan or a summary of the plan and a 22 court-approved disclosure statement. 23 The Plan Proponents have fully complied with the mandates of Section 1125. Pursuant to 24 the Solicitation Procedures Order, the Court, among other things, (i) conditionally approved the 25 Disclosure Statement as containing adequate information within the meaning of Section 1125, (ii)26 approved the Proponents’ Plan Summary, among other items, as part of the solicitation package t 27 6 The fact that the PFI LLC Members and the LP Interest Holders actually have restitution claims means that including the PFI LLC Members and LP Interest Holders’ claims in Class 5 does not raise an absolute priority

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1 be distributed for the solicitation of votes to accept or reject the Plan (the “Solicitation Package”),2 and (iii) authorized the Proponents to post the Plan and Disclosure Statement on Donlin Recano’s3 PFI website in a dedicated location, with instructions provided in the Solicitation Package for 4 accessing them, rather than including a hard copy of each in the Solicitation Package. 5 Subsequently, in compliance with Bankruptcy Rule 3017(d), between April 22-23, 2021, the Plan6 Proponents transmitted the Solicitation Package to creditors and equity holders entitled to vote on7 the Plan. The certificate of service regarding the distribution of the solicitation package has been 8 filed with this Court as Docket No. 608. The Solicitation Package provided notice of the 9 deadlines to (i) submit a ballot on the Plan and (ii) object to confirmation of the Plan. 10 The Plan Proponents have complied with the applicable provisions of the Bankruptcy 11 Code, the Bankruptcy Rules and the solicitation procedures approved by this Court, and thus the 12 Plan complies with the requirements of Bankruptcy Code Section 1129(a)(2). 13 C. The Plan Satisfies the Other Consensual Plan Requirements of Section 1129(a), with the Exception of Section 1129(a)(8) as to Certain Subclasses of Class 1. 14 1. The Plan Has Been Proposed In Good Faith In Compliance With Bankruptcy Code15 Section 1129(a)(3). 16 Bankruptcy Code Section 1129(a)(3) requires a plan to be “proposed in good faith and not17 by any means forbidden by law.” 11 U.S.C. § 1129(a)(3). Good faith for purposes of Section 18 1129(a)(3) of the Bankruptcy Code also may be found where the plan is supported by key credito19 constituencies, or was the result of extensive arm’s-length negotiations with creditors. In re 20 Eagle-Picher Indus., Inc., 203 B.R. 256, 274 (Bankr. S.D. Ohio 1996). 21 From the facts and the circumstances of this case, it is evident that the Plan Proponents 22 have proposed the Plan in good faith. Here, the Plan is the result of extensive negotiations 23 between the Debtors and the Committees. The Plan was jointly prepared and submitted by the 24 Debtors and the OCUC and is supported by the Ad Hoc Committees. Because the Plan was 25 heavily negotiated and reflects the input of key creditor constituencies, nearly 99.8% of voting 26 creditors accepted the Plan. For these reasons, it is clear the Plan was proposed in good faith 27 under Bankruptcy Code section 1129(a)(3).

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1 2. The Plan Complies With The Requirements Of Bankruptcy Code Section 1129(a)(4) (Payment for Services or Costs in Connection With the Case). 2 Bankruptcy Code Section 1129(a)(4) requires payments to estate professionals to be 3 approved by this Court or subject to this Court’s approval. Section 10.3 of the Plan provides that 4 all final requests for payment of Professional Fee Claims “must be made by application Filed wit5 the Bankruptcy Court.” Thus the Plan complies with Section 1129(a)(4). 6 3. The Plan Complies With Bankruptcy Code Section 1129(a)(5) Regarding the Identity and Affiliations of Officers, Directors, and Insiders. 7 Pursuant to Bankruptcy Code Section 1129(a)(5)(A)(i), a proponent of a plan must disclos8 the identity and affiliations of the debtor’s post-confirmation management. Exhibit B to the Plan 9 Supplement discloses the identity and affiliations of the PFI Trustee as well as each of the 10 members of the Board. Section 1129(a)(5) is thus satisfied. 11 4. The Plan Complies With Bankruptcy Code Section 1129(a)(6) Regarding Governmental Regulatory Approval of Rates. 12 Section 1129(a)(6) requires that any regulatory commission with jurisdiction over the rate13 of the debtor approve any changes in rates provided in the plan. See 11 U.S.C. § 1129(a)(6). Thi14 is not applicable here; no such regulatory commission exists. 15 5. The Plan Satisfies the Requirements Of Bankruptcy Code Section 1129(a)(7) (“Best Interests” Test). 16 The “best interests” test set forth in Section 1129(a)(7) requires that the plan proponent 17 demonstrate that: 18 with respect to each impaired class of claims or interests – 19 (A) each holder of a claim or interest of such class – 20 (i) has accepted the plan, or 21 (ii) will receive or retain under the plan on account of such claim or interest property of a value, as of the effective date of the plan, that 22 is not less than the amount that such holder would so receive or retain if the debtor were liquidated under chapter 7 of this title on 23 such date . . . . 24 11 U.S.C. § 1128(a)(7). The “best interests” test focuses on individual dissenting creditors rather 25 than classes of claims. See, In re Drexel Burnham Lambert Group, 138 B.R. 723, 761 (Bankr. 26 S.D.N.Y. 1992). On its face, Section 1129(a)(7) only applies to impaired and classified claims or27 interests. It does not, therefore, apply to unimpaired or unclassified claims.

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1 In this case, more than ninety-nine percent (99%) of impaired claimants that voted 2 accepted the Plan, satisfying the best interests test under subpart (A)(i) above. However, some 3 claimants in Class 4 and Class 5 voted to reject the Plan and a number of impaired claimants that 4 were entitled to vote did not do so and are thus deemed to have rejected the Plan. For the 5 claimants that either voted to reject the Plan or are deemed to have rejected the Plan, the best 6 interests test needs to be satisfied under subpart (A)(ii) above. 7 Here, the liquidation analysis is simple and set forth in Exhibit C to the Disclosure 8 Statement [Docket No. 572]. The Plan assumes both the ultimate sale of the Real Properties and 9 pursuit of the Avoidance Actions, Causes of Action and Contributed Claims. Using two different10 sets of assumptions regarding the success and expense of the foregoing, the Plan Proponents 11 believe that the Plan will provide holders of Allowed Class 4 and 5 Investor Restitution Claims7 12 (which, for investors, will be their claim remaining after “netting”), Allowed Class 6 TIC Claims,13 and Allowed Class 7 Other Unsecured Claims with aggregate dividends over a period of years 14 totaling 35% for the low estimate and 50% for the high estimate.8 15 In contrast, the Proponents believe that the dividends realized in a Chapter 7 liquidation 16 would be substantially lower – primarily because of (a) the potentially accelerated pace of sales o17 the Real Properties likely to occur in a Chapter 7 liquidation; and (b) the statutory fee due to the 18 Chapter 7 trustee for services in liquidating the assets. In addition, Conversion to chapter 7 of the19 Bankruptcy Code would mean the establishment of a new claims bar date, which could result in 20 new Claims being asserted against the Estates, thereby diluting the recoveries of other Holders of 21 Allowed Claims. Significantly, the benefits of the Investor Claims Special Provisions, the terms 22 of which are substantially incorporated into the Plan, are available only under the Plan. The Plan 23 embodies a comprehensive, extensively negotiated settlement and compromise of myriad novel 24 and complex legal and factual issues relating to the Investors of the Debtors. In the event of 25 7 To the extent that any Class 5 claimants whose Claims are based on their status as a PFI LLC Member or as an LP 26 Interest Holder either voted to reject the Plan or are deemed to have rejected the Plan, such claimants have an Investor Restitution Claim. See In re AFI Holding, Inc., 525 E3d 708-09. 27 8 The foregoing estimates do not take into account the potential effect of capital gains taxes that would be due uposale of the Real Properties by the PFI Trust, as the Plan Proponents’ examination of that subject is ongoing (and

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1 conversion, the Chapter 7 trustee, Investors, and other creditors would have to confront the pursui2 of extensive litigation to resolve these and other issues, or would need to try to negotiate an 3 alternative settlement, all without the benefit of committee representation for creditors. This 4 process would be extremely time-consuming and costly, and would very likely reduce and delay 5 any recoveries available for creditors of the Estates. Accordingly, in a Chapter 7 liquidation, the 6 Proponents believe general unsecured creditors would receive substantially less over time: 25% 7 estimated low case and 35% estimated high case. 8 Another advantage of the Plan over a Chapter 7 liquidation is the likely ability of LLC an9 LP investors to avoid paying pass-through capital gains taxes when the Real Properties are sold. 10 Such taxes are generally not expected to pass through to LLC and LP investors under the Plan. 11 Accordingly, the Proponents believe the Plan is likely to produce an outcome significantly better 12 than what could be expected in a Chapter 7 liquidation. Section 1129(a)(7) is therefore satisfied. 13 6. Each Class of Claims and Interests has Accepted the Plan, is Unimpaired, or May be Crammed Down – Sections 1129(a)(8) and 1129(b). 14 Bankruptcy Code Section 1129(a)(8) requires that each class of claims and interests has 15 either accepted the plan or is not impaired under the plan. See 11 U.S.C. § 1129(a)(8). A class of16 claims accepts a plan if holders of at least two-thirds in dollar amount and more than one-half in 17 number of claims of that class vote to accept the plan, counting only those claims whose holders 18 actually vote on the plan. See 11 U.S.C. § 1126(c). If a class of creditors or interests holders doe19 not accept the Plan, then section 1129(b) of the Bankruptcy Code provides that a plan may be 20 confirmed if it does not discriminate unfairly and is fair and equitable with respect to each class 21 that is impaired under the plan and has not accepted the Plan. See 11 U.S.C. § 1129(b). 22 The following analysis demonstrates that each Class has accepted the Plan, is not impaired23 or satisfies the requirements for cram down confirmation: 24 Class 1 (Non-Investor First-Priority Lender Claims): Class 1 is impaired and entitled to 25 vote. As set forth in the Final Tabulation Results, each subclass of Class 1 that voted submitted a 26 ballot accepting the Plan. No subclass of Class 1 voted to reject the Plan, but twelve of the twent27 subclasses in Class 1 did not submit (or did not timely submit) a ballot as shown in Exhibit A to

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1 Plan can nevertheless be confirmed with respect to any such subclass(es) because it satisfies the 2 requirements of section 1129(b)(1). 3 Under the Plan, no other Class is set to receive more favorable treatment than Class 1. In 4 addition, the Holders of all Class 1 Claims are substantially oversecured, based on the mortgage 5 balance for each of the Real Properties and the broker’s opinion of value for each of the Real 6 Properties obtained by the Debtors prior to the bankruptcy cases [See Dkt. Nos. 296 and 414]. 7 The Plan, therefore, does not unfairly discriminate against Class 1. 8 The Plan also satisfies the condition that it be fair and equitable with respect to secured 9 claims, as such condition is set forth in 11 U.S.C. § 1129(b)(2)(A). Under the Plan, the Liens of 10 the Holders of Class 1 Claims will continue to attach to their respective Collateral and all Class 1 11 claimants shall, on or as soon as is reasonably practicable after the Effective Date, receive either: 12 (i) in the event of a sale or refinance concerning the Collateral, cash in the Allowed Amount of 13 such Holder’s Class 1 Claim immediately paid from escrow, (ii) the return, by deed in lieu of 14 foreclosure, surrender, or termination of any stay, of the Collateral securing such Class 1 Claim, o15 (iii) past due installments of principal or interest and the continuation thereafter of payments of 16 principal, interest, and other applicable obligations, all as more fully set forth in the Plan. 17 Class 2 (Non-Investor Other Secured Claims) and Class 3 (Priority Claims): Class 2 and 18 Class 3 are unimpaired and each is thus conclusively presumed to have accepted the Plan. See 1119 U.S.C. § 1126(f). 20 Class 4 (DOT Noteholder Claims): 21 Class 4 is impaired and entitled to vote. As set forth in the Final Tabulation Results, each 22 subclass of Class 4 that voted, submitted a ballot accepting the Plan. As set forth in Exhibit A to 23 the Burlacu Declaration, the following thirteen subclasses of Class 4, however, did not submit (or 24 did not timely submit) a ballot: 4A6, 4A8, 4A12, 4A14-4A19, 4A22, 4A32, 4B2, and 4B25. To 25 the extent any subclass of Class 4 cannot be deemed to accept, the Plan can nevertheless be 26 confirmed with respect to any such subclass(es) because it satisfies the requirements of section 27 1129(b)(1). No one has alleged that the Plan discriminates unfairly against Class 4 claims (or any

25

1 Plan clearly shows that Class 4 claimants do not feel they are the subject of such discrimination.9 2 The Plan also treats Class 4 claimants fairly and equitably. For those Class 4 claimants that have 3 not released their Lien, the Plan provides a means for their Lien to be preserved if such claimants 4 take the steps to do so set forth in the Plan. For those 762 Class 4 claimants that have released 5 their Lien, their claims are treated pari passu with the other classes of unsecured claims. 6 Class 5 (Non-DOT Investor Claims): Class 5 is impaired and entitled to vote. As set fort7 in the Final Tabulation Results, Class 5 voted to accept the Plan pursuant to 11 U.S.C. § 1126(c). 8 Class 6 (TIC Claims): Class 6 is impaired and entitled to vote. As set forth in the Final 9 Tabulation Results, Class 6 voted to accept the Plan pursuant to 11 U.S.C. § 1126(c). 10 Class 7 (Other Unsecured Claims): Class 7 is impaired and entitled to vote. As set forth i11 the Final Tabulation Results, Class 7 voted to accept the Plan. As such, Class 7 has accepted the 12 Plan pursuant to 11 U.S.C. § 1126(c). 13 Class 8 (Subordinated Claims): Class 8 is impaired and deemed to reject the Plan. The 14 Plan can nevertheless be confirmed because it satisfies the requirements of section 1129(b)(1) wit15 respect to Class 8. The Plan does not unfairly discriminate against Class 8 claimants because ther16 is no class of the same priority that receives better treatment under the Plan. Moreover, under the 17 Plan, (i) the Holders of Allowed Class 8 Claims retain a residual right to receive Available Cash 18 that remains in the PFI Trust after the final administration of all PFI Trust Assets and OpCo 19 Assets, and the complete satisfaction of all senior payment rights within the PFI Trust Interests 20 Waterfall, including satisfaction of all Investor Subordinated Claims and (ii) the only Class that is21 junior to Class 8 under the Plan (Class 9 Equity Interests), receives nothing and all Equity Interest22 are deemed void, cancelled, and of no further force and effect. As such, the Plan is fair and 23 equitable with respect to Class 8 Claims under the terms of 11 U.S.C. § 1129(b)(2)(B). 24 Class 9 (Equity Interests): Class 9 is impaired and deemed to reject the Plan. The Plan ca25 nevertheless be confirmed because it satisfies the requirements of section 1129(b)(1) with respect 26 to Class 9. The Plan does not unfairly discriminate against Class 9 claimants because there is no 27 other class of interests that receives better treatment under the Plan. Moreover, there is no class

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1 junior to Class 9 under the Plan and, as such, the Plan is fair and equitable with respect to Class 9 2 Claims under the terms of 11 U.S.C. § 1129(b)(2)(C). 3 7. The Plan Complies With Bankruptcy Code Section 1129(a)(9). 4 Bankruptcy Code Section 1129(a)(9) provides generally that (i) administrative claims and 5 involuntary gap claims must be paid in full on the effective date of a plan, and (ii) priority tax 6 claims may be paid in full on the effective date of the plan or in installments over a period not 7 greater than five years. See 11 U.S.C. § 1129(a)(9). 8 The Plan satisfies the requirements of Section 1129(a)(9). Sections 2.1.1 and 2.1.3 of the 9 Plan provide that administrative claims and involuntary gap claims are to be paid in full on the 10 Effective Date. Meanwhile, Section 2.1.4 provides that priority tax claims shall be paid either on 11 the Effective Date or in regular installments over a period not exceeding five years. 12 8. The Plan Has Been Accepted By At Least One Impaired Class in Compliance WitBankruptcy Code Section 1129(a)(10). 13 Bankruptcy Code Section 1129(a)(10) requires at least one class of impaired claims to 14 have accepted the Plan, determined without including any acceptance of the Plan by an insider 15 holding a claim in such class. See 11 U.S.C. § 1129(a)(10). Once a single impaired class accepts 16 a plan, section 1129(a)(10) is satisfied as to the entire plan, even in jointly-administered cases 17 involving a plan covering multiple debtors. JPMCC 2007-C1 Grasslawn Lodging, LLC v. 18 Transwest Resort Props. (In re Transwest Resort Props.), 881 F.3d 724, 729 (9th Cir. 2018). As 19 discussed above and as set forth in the Final Tabulation Results, Classes 5, 6, and 7 are all 20 impaired and have accepted the Plan. In addition, Classes 1 and 4 are impaired and all subclasses21 in Classes 1 and 4 that voted have voted to accept the Plan. Section 1129(a)(10) is thus satisfied. 22 9. The Plan is Feasible and in Compliance with Bankruptcy Code Section 1129(a)(11). 23 Bankruptcy Code Section 1129(a)(11) requires that “[c]onfirmation of the plan is not likel24 to be followed by the liquidation, or need for further financial reorganization, of the debtor or any25 successor to the debtor under the plan, unless such liquidation is proposed in the plan.” 11 U.S.C. 26 § 1129(a)(11). This is sometimes referred to as the “feasibility test,” and requires the Court to 27 determine whether the Plan is workable and has a reasonable likelihood of success. See In re

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1 can it, require the certainty that a reorganized company will succeed. See, e.g., United States v. 2 Energy Resources Co., 495 U.S. 545, 549 (1990); In re WCI Cable, Inc., 282 B.R. 457, 486 3 (Bankr. D. Or. 2002) (“Guaranteed success in the stiff winds of commerce without the protection 4 of the Code is not the standard under § 1129(a)(11).”). The feasibility standard merely requires 5 the Court to determine whether a plan is workable and has a reasonable likelihood (i.e., more 6 likely than not) of success. In re Acequia, Inc., 787 F.2d 1352, 1364 (9th Cir. 1986). 7 Here, the Plan is feasible because it does not make pie in the sky promises, but instead onl8 provides for payment to creditors from the Available Cash and any additional proceeds from the 9 PFI Trust Assets with a projected potential dividend in excess of 30 cents on the dollar. Thus, 10 confirmation of the Plan is not likely to be followed by the need for further reorganization. 11 10. The Debtor Will Pay on or Before the Effective Date All Fees Payable Under 28 U.S.C. § 1930 in Compliance With Bankruptcy Code Section 1129(a)(12). 12 Bankruptcy Code Section 1129(a)(12) requires the payment of “[a]ll fees payable under 13 Section 1930 of title 28 [of the United States Code], as determined by the court at the hearing on 14 confirmation of the plan.” 11 U.S.C. § 1129(a)(12). The Plan complies with Section 1129(a)(12)15 by providing in Section 10.4 that all U.S. Trustee fees payable pursuant to 28 U.S.C. Section 19316 shall be paid in full on or before the Effective Date. 17 11. Section 1129(a)(13) Regarding Retiree Benefits Does Not Apply. 18 Bankruptcy Code Section 1129(a)(13) requires a corporate debtor with a retirement plan t19 continue funding retiree benefits. This does not apply in this case, where the Debtors did not hav20 a retirement plan pre-petition. 21 12. Section 1129(a)(14) Regarding Domestic Support Obligations Does Not Apply. 22 Bankruptcy Code Section 1129(a)(14) sets forth certain requirements with respect to the 23 payment of domestic support obligations by individual debtors. This does not apply here as the 24 Debtors are corporations, limited liability companies or limited partnerships. 25 13. Section 1129(a)(15) Does Not Apply. 26 Bankruptcy Code Section 1129(a)(15) sets forth certain requirements with respect to the 27 distributions to unsecured claimants in the event that a holder of an allowed unsecured claim

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1 objects to the plan in an individual case. This section does not apply as the Debtors are 2 corporations, limited liability companies or limited partnerships. 3 14. The Plan Complies With Bankruptcy Code Section 1129(d) Because The PrincipalPurpose Of The Plan Is Not To Avoid Taxes Or Applicable Securities Laws. 4 Bankruptcy Code Section 1129(d) provides: 5 Notwithstanding any other provision of this Section, on request of a party in interest that is a governmental unit, the court may not 6 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 7 Securities Act of 1933 (15 U.S.C. § 77e). 8 11 U.S.C. § 1129(d). Here, the principal purpose of the Plan is not to avoid taxes or the securities laws. 9 No governmental party in interest has requested the denial of confirmation on any of the foregoin10 grounds (or indeed on any grounds). Accordingly, the Plan satisfies Section 1129(d). 11 D. Substantive Consolidation is Appropriate and Necessary to the Plan 12 The Plan provides for substantive consolidation of the Debtors’ and their non-debtor 13 affiliates’ assets and liabilities for the purposes of distributions under the Plan. To help 14 accomplish this, on April 29, 2021, the Debtors filed their Motion for Order of Substantive 15 Consolidation of Non-Debtor Affiliates Professional Investors 28, LLC and PFI Glenwood, LLC 16 with Debtors (the “Subcon Motion”), which motion seeks to substantively consolidate LLC 28 an17 PFI Glenwood with the Debtors’ bankruptcy estate pursuant to the terms set forth in the Plan. No18 objection to the Subcon Motion was filed prior to the May 13, 2021 deadline to do so. 19 Here, substantive consolidation of the Debtors with each other and of the Debtors with 20 LLC 28 and PFI Glenwood is clearly warranted. The primary purpose of substantive 21 consolidation "is to ensure the equitable treatment of all creditors." Alexander v. Compton (In re 22 Bonham), 229 F.3d 750, 764 (9th Cir. 2000). Courts have permitted the consolidation of non-23 debtor and debtor entities in furtherance of the equitable goals of substantive consolidation. Id. at24 765. Two broad themes have emerged from substantive consolidation case law: in ordering 25 substantive consolidation, courts must (1) consider whether there is a disregard of corporate 26 formalities and commingling of assets by various entities; and (2) balance the benefits that 27 substantive consolidation would bring against the harms that it would cause. Id.

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1 Although creditors generally may not have treated all of the Debtors and their non-debtor 2 affiliates as one legal entity, there is very substantial scrambling and commingling of assets and 3 liabilities between and among the Debtors themselves and between and among the Debtors and th4 two non-debtor affiliates – Professional Investors 28, LLC (“LLC 28”) and PFI Glenwood LLC 5 (“PFI Glenwood”). As more fully described in the Declaration of David Alfaro filed on April 29,6 2021 as Dkt. No. 595 (the “Alfaro Declaration”), (i) funds were transferred to-and-from based on 7 cash needs across the overall PFI Enterprise (as defined in the Alfaro Declaration, which 8 definition encompasses LLC 28 and PFI Glenwood) and every individual property within the PFI 9 Enterprise periodically received transfers to its bank accounts from PFI/PISF bank accounts and 10 periodically transferred cash to PFI/PISF bank accounts, (ii) the organizational structure and 11 movements of cash within the PFI Enterprise involved pervasive transfers of cash between and 12 across the property specific entity bank accounts and the PFI/PISF corporate bank accounts—13 rendering the segregation of each investor’s dollars impossible, (iii) intercompany activity was 14 generally not transacted directly between the individual properties, but rather through the pooling 15 of funds at the PFI/PISF corporate level and then redistributing the cash needed to the individual 16 properties, (iv) funds were commonly commingled during the property purchasing cycle and 17 during each property’s operating cycle, and (iv) the investments and financial transactions specifi18 to LLC 28 and PFI Glenwood are inextricably entangled with those of the other entities within the19 PFI Enterprise.10 These circumstances clearly show a disregard of corporate formalities and the 20 commingling of the assets of the Debtors, LLC 28, and PFI Glenwood. 21 Similarly, the evidence is overwhelming that the benefits of substantive consolidation 22 outweigh any harm that might be caused. The Plan represents a negotiated settlement between th23 Debtors’ key Investor constituencies and substantive consolidation is a key component of that 24 settlement. Such consolidation is broadly supported by the Investors and the Debtors other 25 creditors as shown by the fact that no party objected to the SubCon Motion and that nearly 99.8%26 of ballots cast voted to accept the Plan. 27

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1 In addition, the only outside Investor in LLC 28 (The Belline Family Trust dated February2 20, 2015) is party to a stipulation with the Debtors and the OCUC filed on May 12, 2021 as Dkt. 3 No. 628 (the “Stipulation”) in which it agrees, among other things, that it would not oppose 4 confirmation of the Plan and that it would vote its ballots pertaining to investments in the Debtors5 in favor of the Plan. This Court entered an order approving the Stipulation on May 12, 2021 as 6 Dkt. No. 630 and the The Belline Family Trust timely voted its ballots to accept the Plan. 7 Similarly, the only outside Investor in PFI Glenwood, Peter Zabelin, timely voted his 8 ballots pertaining to investments in the Debtors in favor of the Plan. 9 This level of support for the Plan by all the key Investors that would be most affected by 10 substantive consolidation is resounding evidence that the benefits that substantive consolidation 11 outweigh its potential harms. 12 IV. CONCLUSION 13 For the reasons stated above, the Plan meets all of the requirements of Bankruptcy Code 14 section 1129 and should be confirmed. The Plan Proponents request the Court to issue an order 15 confirming the Plan in the form attached hereto as Exhibit A. 16 Dated: May 20, 2021 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP 17 18 By /s/ Ori Katz 19 Ori Katz J. Barrett Marum 20 Attorneys for the Debtors 21 22 Dated: May 20, 2021 PACHULSKI STANG ZIEHL & JONES LLP 23 24 By /s/ Debra Grassgreen 25 Debra Grassgreen John D. Fiero 26 Cia H. Mackle 27 Attorneys for the Official Committee of Unsecured Creditors

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1 EXHIBIT A 2 (Proposed Order Confirming Plan) 3 Ori Katz (CA Bar No. 209561) Debra I. Grassgreen (CA Bar No. 169978) J. Barrett Marum (CA Bar No. 228628) John D. Fiero (CA Bar No. 136557) 4 Matt Klinger (CA Bar No. 307362) Cia H. Mackle (admitted pro hac vice) SHEPPARD, MULLIN, RICHTER & HAMPTON PACHULSKI STANG ZIEHL & JONES 5 LLP LLP Four Embarcadero Center, 17th Floor 150 California Street, 15th Floor 6 San Francisco, CA 94111-4019 San Francisco, CA 94111 Telephone: (415) 434-9100 Telephone: (415) 263-7000 7 Facsimile: (415) 434-3947 Facsimile: (415) 263-7010 Email: okatz@sheppardmullin.com E-mail: dgrassgreen@pszjlaw.com 8 bmarum@sheppardmullin.com jfiero@pszjlaw.com mklinger@sheppardmullin.com cmackle@pszjlaw.com 9 Counsel to the Official Committee of Counsel to Debtors and Debtors in Possession Unsecured Creditors 10 11 UNITED STATES BANKRUPTCY COURT 12 NORTHERN DISTRICT OF CALIFORNIA 13 SAN FRANCISCO DIVISION 14 Chapter 11 In re: 15 Case No. 20-30604 PROFESSIONAL FINANCIAL INVESTORS, INC., et al., 16 (Jointly Administered) 17 [PROPOSED] ORDER CONFIRMING Debtors. SECOND AMENDED JOINT CHAPTER 11 18 PLAN OF PROFESSIONAL FINANCIAL INVESTORS, INC. AND ITS AFFILIATED 19 DEBTORS PROPOSED BY THE DEBTORS AND OFFICIAL COMMITTEE OF 20 UNSECURED CREDITORS AND SUPPORTED BY THE AD HOC LLC 21 MEMBERS COMMITTEE AND THE AD H DOT NOTEHOLDERS COMMITTEE (DAT 22 MAY 20, 2021) 23 Plan Confirmation Hearing: Date: May 27, 2021 24 Time: 10:00 a.m. (Pacific Time) Place: Telephonic/Video Appearances Only 25 450 Golden Gate Avenue, 16th Floor San Francisco, CA 94102 26 Judge: Hon. Hannah L. Blumenstiel 27

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1 2 On May 27, 2021, at approximately 10:00 a.m., this Court held a hearing (the 3 “Confirmation Hearing”) on confirmation of the Second Amended Joint Plan of Professional 4 Financial Investors, Inc. and its Affiliated Debtors Proposed by the Debtors and Official 5 Committee of Unsecured Creditors and Supported by the Ad Hoc LLC Members Committee and 6 the Ad Hoc DOT Noteholders Committee (Dated May 20, 2021) filed on May 20, 2021 (as 7 amended or modified to date, the “Plan”) by plan proponents Professional Financial Investors, Inc8 (“PFI”) and its affiliated debtors and debtors in possession (collectively, with PFI, the 9 “Debtors”)11 and the Official Committee of Unsecured Creditors (the “OCUC” and together with 10 the Debtors, the “Proponents”). 11 The Court, having considered the Plan, all declarations, pleadings, and evidence submitted12 in support of the Plan; the Limited Objection of Christina Ensign, Felix Arts and Carol Sue 13 Sproule to Confirmation of Chapter 11 Plan filed on May 13, 2021, as Docket No. 636 (the 14 “Limited Objection”); all other relevant facts, pleadings, and evidence of record in the Chapter 1115 Cases; and the arguments of counsel at the Confirmation Hearing, issued detailed findings of fact 16 and conclusions of law on the record at the Confirmation Hearing, which constitute the Court’s 17 findings of fact and conclusions of law for the purposes of Federal Rule of Bankruptcy Procedure18 7052, as made applicable to this contested matter by Federal Rule of Bankruptcy Procedure 9014,19 and which findings of fact and conclusions of law are incorporated herein by this reference. 20 For the reasons stated by the Court on the record at the Confirmation Hearing, and for 21 good cause appearing therefore, 22 IT HAS BEEN DETERMINED BY THE COURT THAT: 23 A. Jurisdiction and Venue. This Court has jurisdiction to confirm the Plan pursuant24 to 28 U.S.C. §§ 1334 and 157. The Confirmation Hearing is a core proceeding under 28 U.S.C. § 25 157(b)(2)(L) and venue of the Bankruptcy Case in the Northern District of California is proper 26 under 28 U.S.C. § 1408. 27 11 A complete list of the Debtors and their respective chapter 11 case numbers may be found at www.donlinrecano.com/pfi. The federal tax identification numbers of each of the Debtors is also available in th

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1 B. Notice of Confirmation Hearing. Due and sufficient notice of the Confirmation 2 Hearing has been provided under the circumstances and under applicable rules and consistent wit3 the requirements imposed by this Court in its Order (I) Approving the Plan Summary and 4 Conditionally Approving Disclosure Statement; (II) Scheduling Combined Hearing on Approval o5 Disclosure Statement and Confirmation of Plan and Approving the Form and Manner of Service 6 of the Combined Hearing Notice; (III) Establishing Non-Investor Bar Dates for Filing Proofs of 7 Claim; (IV) Approving Form and Manner of Notice of Non-Investor Bar Dates; (V) Establishing 8 Procedures for the Solicitation and Tabulation of Votes on Plan; and (VI) Approving Related 9 Matters entered on April 9, 2021, as Docket No. 575 (the “Solicitation Procedures Order”). 10 C. Voting on Plan. The Solicitation Procedures Order fixed May 13, 2021, at 4:00 11 p.m. Pacific Time as the deadline to submit ballots to accept or reject the Plan. The Proponents 12 have tabulated the ballots received, as evidenced by the Declaration of John Burlacu filed on May13 20, 2021 as Dkt. No. [_____] (the “Burlacu Declaration”) and the Final Tabulation Results 14 attached as Exhibit A thereto (the “Final Tabulation Results”). As set forth in the Burlacu 15 Declaration, out of 2,193 timely ballots cast, a total of 2,188 voted to accept the Plan and only fiv16 (5) voted to reject the Plan. 17 D. Objections. No formal objections to the Plan other than the Limited Objection 18 were filed. 19 E. Compliance with Confirmation Requirements of Bankruptcy Code Sections 20 1123, 1129, 1181, 1190 and 1191. The Plan, as modified by this Order, complies with the 21 applicable requirements of sections 1123, 1129, 1181, 1190, and 1191 of the Bankruptcy Code, 22 which set forth the conditions necessary for confirmation. In particular, the Plan is fair and 23 equitable pursuant to Bankruptcy Code sections 1191(b) and (c). 24 F. Settlement of Claims and Controversies. Pursuant to Bankruptcy Code sections 25 1123(a)(5), 1123(b)(3), and 1123(b)(6), as well as Bankruptcy Rule 9019, and in consideration fo26 the Distributions and other benefits provided under the Plan, the provisions of the Plan constitute 27 good faith compromise and settlement of all claims and controversies relating to the rights that a

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1 Equity Interest, or any Distribution on account thereof, as well as of all potential Intercompany 2 Claims, Intercompany Liens, and Causes of Action against any Debtor. The compromise and 3 settlement of all such claims or controversies are (i) in the best interest of the Debtors, the Estates4 and their respective property and stakeholders; and (ii) fair, equitable, and reasonable 5 G. Based upon the record of the Confirmation Hearing, all the proceedings held befor6 this Court in these Bankruptcy Cases, and the foregoing findings of fact and conclusions of law, 7 IT IS HEREBY ORDERED THAT: 8 A. Confirmation of the Plan 9 1. The Plan and each of its provisions (whether or not specifically approved herein) i10 hereby APPROVED and CONFIRMED in all respects, as modified herein; provided, however, 11 that if there is any direct conflict between the terms of the Plan and the terms of this Order, the 12 terms of this Order shall control. All objections and responses to, and statements regarding, the 13 Plan, to the extent that they have not been withdrawn, waived, or settled prior to the entry of this 14 Order or are not cured by the relief granted herein, are hereby expressly overruled. 15 2. The Limited Objection is OVERRULED in its entirety. 16 B. Conditions Precedent 17 3. The Effective Date shall not occur and the Plan shall not be consummated unless 18 and until each of the conditions set forth in Section 8.1 of the Plan have been satisfied or duly 19 waived pursuant to Section 8.2 of the Plan 20 4. Notwithstanding Bankruptcy Rule 3020(e), and to the extent applicable, 21 Bankruptcy Rules 7062 and 9014, this Order is not subject to any stay, and the Plan shall become 22 effective at the option of the Debtors at any time in their sole discretion following (i) entry of this 23 Order, and (ii) satisfaction of the requirements set forth in the preceding paragraph 3 of this Order24 C. Successors and Assigns 25 5. The terms of this Order are binding on the Debtors, any and all holders of Claims 26 and Interests (irrespective of whether such Claims or Interests are impaired under the Plan or 27 whether the holders of such Claims or Interests accepted, rejected or are deemed to have acted or

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1 the Debtors and any and all entities who are parties to or are subject to the settlements, 2 compromises, releases, discharges and injunctions set forth in the Plan and the respective heirs, 3 executors, administrators, successors or assigns, if any, of any of the foregoing. 4 D. Substantive Consolidation 5 6. On the Effective Date, PFI, PISF, the LLC/LP Debtors, Professional Investors 28, 6 LLC, and PFI Glenwood LLC (collectively, the “Consolidated Estates”) shall be substantively 7 consolidated pursuant to sections 105(a), 541, 1123, and 1129 of the Bankruptcy Code. As a 8 result of such substantive consolidation, on the Effective Date, all property, rights and claims of 9 the Consolidated Estates and all Claims against the Consolidated Estates shall be deemed to be 10 pooled for purposes of distributions under the Plan and, in the PFI Trustee’s discretion, other 11 purposes. Further, as a result of such substantive consolidation, all claims between and among the12 Consolidated Estates shall be cancelled, subject to any Alternative Restructuring Transactions; 13 provided, however, that (i) while all Debtors shall be substantively consolidated for purposes of 14 distribution to creditors, such that all Investors shall have claims against a single pool of the 15 Debtors’ consolidated assets, the actual substantive consolidation of entities, particularly for tax 16 purposes, shall be at the option of the Debtors or the PFI Trust, and subject to any Alternative 17 Restructuring Transactions, and (ii) any and all TIC Interests in the Real Properties that are held 18 by any Debtor shall not be substantively consolidated. 19 E. Vesting of Assets 20 7. On the Effective Date, and subject to Section 2.2 of the Plan, the PFI Trust shall be21 automatically vested with all of the Debtors’ and the Estates’ respective rights, title, and/or interes22 in and to all PFI Trust Assets, and the OpCo shall be automatically vested with all of the Debtors’23 and the Estates’ respective rights, title and/or interest in and to all OpCo Assets. Except as 24 specifically provided in the Plan or this Order, in accordance with Bankruptcy Code section 1141,25 the PFI Trust Assets, the OpCo Assets and any other assets shall automatically vest in the PFI 26 Trust and the OpCo, as applicable, free and clear of all Claims, Liens, or interests (including, 27 without limitation, any and all DOT Noteholders’ Deeds of Trust), subject only to the PFI Trust

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1 vesting shall be exempt from any stamp, real estate transfer, other transfer, mortgage reporting, 2 sales, use, or other similar tax. The PFI Trustee shall be the exclusive trustee of the PFI Trust 3 Assets (including all ownership interests in the OpCo) for purposes of 31 U.S.C. § 3713(b) and 24 U.S.C. § 6012(b)(3), as well as the representative of the Estates appointed pursuant to Bankruptcy5 Code section 1123(b)(3) regarding all PFI Trust Assets, the OpCo and the OpCo Assets. The PFI6 Trust shall hold and distribute the PFI Trust Assets and shall collect and distribute all proceeds 7 from the operations and/or sale of the OpCo and the OpCo Assets in accordance with the 8 provisions of the Plan and the PFI Trust Agreement. 9 F. Expungement of DOT Noteholder Liens 10 8. The liens of the DOT Noteholders shall be expunged from the record of the Real 11 Properties, or the sale proceeds thereof, with such expungement to become effective with respect 12 to each Real Property, or the sale proceeds thereof, on the later of the thirtieth (30th) day after 13 entry of this Order or the date of entry of a final order adjudicating an Avoidance Action with 14 respect to a lien on any given Real Property or the sale proceeds thereof. Any DOT Noteholder 15 that wishes to challenge the expungement of its lien shall file an objection with this Court and 16 serve its objection on the PFI Trustee and counsel for the Proponents and Ad Hoc Committees no 17 later than twenty (20) days after entry of this Order. The Debtors or PFI Trustee, as applicable, 18 shall file the Avoidance Action no later than thirty (30) days after service of any such objection. 19 G. Executory Contracts and Unexpired Leases 20 9. On the Effective Date, the Debtors shall assume all executory contracts and 21 unexpired leases that are listed on the Schedule of Assumed Agreements, and shall assign such 22 contracts and leases to the PFI Trust or the OpCo, as appropriate. The Debtors shall have the righ23 to amend the Schedule of Assumed Agreements at any time prior to the Effective Date, in the 24 Debtors’ reasonable discretion after consultation with each of the Committees. The Debtors shall25 provide notice of any amendment to the Schedule of Assumed Agreements to the party or parties 26 to those agreements affected by the amendment. 27 10. On the Effective Date all executory contracts and unexpired leases of the Debtors

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1 assumed or rejected by the Debtors, (ii) all executory contracts and unexpired leases specified as 2 to be assumed in paragraph 7 above (including all contracts and leases set forth in the Schedule of3 Assumed Agreements, as may be amended), and (iii) any agreement, obligation, security interest, 4 transaction, or similar undertaking that the Debtors believe is not executory or a lease, but that is 5 later determined by this Court to be an executory contract or unexpired lease that is subject to 6 assumption or rejection under Bankruptcy Code section 365. 7 11. Any Rejection Claim or other Claim for damages arising from the rejection under 8 the Plan of an executory contract or unexpired lease must be Filed and served no later than the 9 Rejection Claims Bar Date. Any such Rejection Claims that are not timely Filed and served will 10 be forever disallowed, barred, and unenforceable, and Persons holding such Claims will not 11 receive and be barred from receiving any Distributions on account of such untimely Claims. If 12 one or more Rejection Claims are timely Filed pursuant to the Plan, the PFI Trust may object to 13 any Rejection Claim on or prior to the Claim Objection Deadline. For the avoidance of doubt, the14 Rejection Claims Bar Date established by the Plan does not alter any rejection claims bar date 15 established by a prior order of this Court with respect to any executory contract or unexpired 16 leases that was previously rejected in these Chapter 11 Cases. 17 H. Preservation of Causes of Action 18 12. Except as otherwise provided in the Plan or the Order (including in the Investor 19 Claims Special Provisions), from and after the Effective Date, the PFI Trust will retain all rights t20 institute, commence, file, pursue, prosecute, enforce, abandon, settle, compromise, release, waive,21 dismiss, or withdraw, as appropriate, (a) any and all of the Debtors’ or Estates’ Causes of Action, 22 (b) Causes of Action that are Contributed Claims (whether existing as of the Petition Date or 23 thereafter arising), and (c) all Avoidance Actions, all as PFI Trust Actions, in each case in any 24 court or other tribunal, including in an adversary proceeding Filed in the Chapter 11 Cases, subjec25 to the requirements set forth in the Plan and the PFI Trust Agreement. 26 13. The PFI Trust shall have the exclusive right, power, and interest on behalf of itself,27 the Debtors, the Estates, and the Contributing Claimants to, enforce, sue on, settle, compromise,

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1 without notice to or approval from this Court, subject to the PFI Trust Agreement. In accordance 2 with the Plan, without any further notice to or action, order, or approval of this Court, from and 3 after the Effective Date, the PFI Trust may compromise and settle PFI Trust Actions, subject to 4 the PFI Trust Agreement. 5 14. The failure to specifically identify in the Disclosure Statement (including the 6 exhibits and schedules thereto) or the Plan any potential or existing Avoidance Actions or Causes 7 of Action as a PFI Trust Action shall not limit the rights of the PFI Trust to pursue any such 8 Avoidance Actions or Causes of Action. Unless a PFI Trust Action is expressly waived, 9 relinquished, released, compromised, or settled in the Plan or any Final Order (including this 10 Order), the Debtors have expressly reserved such PFI Trust Actions for later resolution by the PFI11 Trust (including any Avoidance Actions or Causes of Action not specifically identified or of 12 which the Debtors may presently be unaware or that may arise or exist by reason of additional 13 facts or circumstances unknown to the Debtors at this time or facts or circumstances that may 14 change or be different from those the Debtors now believe to exist). As such, no preclusion 15 doctrine, including the doctrines of res judicata, collateral estoppel, issue preclusion, claim 16 preclusion, waiver, estoppel (judicial, equitable, or otherwise), or laches will apply to any such 17 Avoidance Actions or Causes of Action upon or after Confirmation of the Plan based on the 18 Disclosure Statement, the Plan, or this Order, except when such Avoidance Actions or Causes of 19 Action have been expressly released. In addition, the right to pursue or adopt any claims alleged i20 any lawsuit in which any Debtor, the PFI Trust, or the OpCo is a plaintiff, defendant, or an 21 interested party is fully reserved as against any Person that is not a Released Party, including the 22 plaintiffs or co-defendants in such lawsuits. 23 I. Actions in Furtherance of the Plan 24 15. The Proponents and the PFI Trustee are authorized to: (a) take any and all such 25 actions as may be necessary or appropriate to implement, effectuate, and consummate the Plan in 26 accordance with its terms as modified by this Order; and (b) execute any and all such documents 27 and instruments as may be required to effectuate the Plan.

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1 J. Releases 2 16. Any releases contained in the Plan are approved in all respects. The 3 commencement or prosecution by any entity, whether directly, derivatively or otherwise, of any 4 claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action or 5 liabilities released pursuant to the Plan are permanently enjoined. 6 K. Non-Discharge of the Debtors; Property Free and Clear 7 17. In accordance with Bankruptcy Code section 1141(d)(3)(A), the Plan does not 8 discharge the Debtors. Bankruptcy Code section 1141(c) nevertheless provides, among other 9 things, that the property dealt with by the Plan, including, without limitation, the Real Properties, 10 is free and clear of all Claims and Equity Interests against the Debtors, except as otherwise 11 provided with respect to the Non-Investor First-Priority Lenders in Section 2.2 of the Plan. As 12 such, no Person holding a Claim (other than the Non-Investor First-Priority Lenders as provided i13 Section 2.2 of the Plan) or an Equity Interest may receive any payment from, or seek recourse 14 against, any assets that are to be distributed under the Plan other than assets required to be 15 distributed to that Person under the Plan. 16 L. Injunction 17 18. As of the Effective Date, all Persons are precluded and barred from asserting 18 against any property to be distributed under the Plan any Claims, rights, Causes of Action, 19 liabilities, Equity Interests, or other action or remedy based on any act, omission, transaction, or 20 other activity that occurred before the Effective Date except as expressly provided in the Plan or 21 this Order. The foregoing discharge, release and injunction are an integral part of the Plan and ar22 essential to its implementation. 23 19. Notwithstanding any provision in the Plan to the contrary or an abstention from 24 voting on the Plan, no provision of the Plan, or this Order: (i) releases any non-debtor person or 25 entity from any claim or cause of action of the SEC; or (ii) enjoins, limits, impairs, or delays the 26 SEC from commencing or continuing any claims, causes of action, proceedings, or investigations 27 against any non-debtor person or entity in any forum.

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1 M. Term of Injunctions or Stays 2 20. Unless otherwise provided in the Plan, all injunctions or stays in the Chapter 11 3 Cases under Bankruptcy Code sections 105 or 362 or otherwise, and extant as of the Confirmatio4 Hearing (excluding any injunctions or stays contained in or arising from the Plan or the Order), 5 shall remain in full force and effect through and inclusive of the Effective Date and thereafter shal6 automatically terminate unless otherwise ordered by this Court, at which time they are replaced 7 with the injunction set forth in Section J above. 8 N. Payment of Statutory Fees 9 All fees payable pursuant to 28 U.S.C. § 1930, shall be paid by the Debtors on or before 10 the Effective Date. All such fees that arise after the Effective Date shall be paid by the PFI Trust. 11 O. Reference to and Validity and Enforceability of the Plan Provisions 12 21. The failure to reference any particular provision in the Plan in this Order shall hav13 no effect on the binding effect, enforceability or legality of such provision and such provision 14 shall have the same binding effect, enforceability or legality as every other provision of the Plan. 15 Each term and provision of the Plan, as modified or interpreted by the Court, is valid and 16 enforceable pursuant to its terms. 17 P. Notice of Entry of Confirmation Order 18 22. Pursuant to Bankruptcy Rules 2002(f)(7) and 3020(c), the Debtors are hereby 19 directed to serve a notice of the entry of this Order, and if it has occurred, the Effective Date, on 20 all parties that received notice of the Confirmation Hearing, no later than 15 Business Days after 21 the date of this Order; provided, however, that the Debtors shall be obligated to serve the such 22 notice only on the record holders of Claims and Interests. 23 Q. SEC Related Provisions 24 23. Nothing in the Plan or this Order constitutes a determination as to whether any 25 claim by the SEC for disgorgement or civil penalties is entitled to be subordinated to payment of 26 general unsecured claims, notwithstanding the definition of Other Subordinated Claims in the 27 Plan. Further, the SEC shall retain the right, at any time after the Effective Date, to amend any

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1 R. Retention of Jurisdiction 2 24. This Court shall retain jurisdiction to the fullest extent permitted by the Plan and 3 applicable law to enforce, implement, interpret and resolve issues and disputes with respect to the4 Plan and all matters related to the Plan. 5 **END OF ORDER** 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

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1 Court Service List 2 Registered ECF Participants only. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

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