On the Effective Date, each holder of an Allowed Other Secured Claim will receive at the option of the
Reorganized Debtor: (i) Cash in an amount equal to the Allowed amount of such Claim, (ii) Reinstatement or such other treatment sufficient to render such holders Allowed Other Secured Claim Unimpaired pursuant to section 1124 of the
Bankruptcy Code, or (iii) return of the applicable Collateral in satisfaction of the Allowed amount of such Other Secured Claim.
Plan meets the fair and equitable test with respect to secured creditors.
The Bankruptcy Code provides that either (i) each holder of an impaired unsecured
claim receives or retains under the plan of reorganization, property of a value equal to the amount of its allowed claim or (ii) the holders of claims and equity interests that are junior to the claims of the dissenting class will not receive
any property under the plan of reorganization.
The Plan provides that the holders of General Unsecured Claims in Class 7 will receive a full
Accordingly, the Plan meets the fair and equitable test with respect to unsecured creditors.
CONSUMMATION OF PLAN
The Debtor has evaluated several alternatives to the Plan. After studying these alternatives, the Debtor has concluded that the Plan is the best alternative
and will maximize recoveries to parties in interest, assuming confirmation and consummation of the Plan. If the Plan is not confirmed and consummated, the alternatives to the Plan are (i) the preparation and presentation of an alternative plan
of reorganization, (ii) a sale of some or all of the Debtors assets pursuant to section 363 of the Bankruptcy Code, or (iii) a liquidation under chapter 7 of the Bankruptcy Code.
||Alternative Plan of Reorganization |
If the Plan is not confirmed, the Debtor (or if the Debtors
exclusive period in which to file a plan of reorganization has expired, any other party in interest) could attempt to formulate a different plan. Such a plan might involve either a reorganization and continuation of the Debtors business or an
orderly liquidation of its assets. The Debtor, however, submits that the Plan, as described herein, enables its creditors to realize the most value under the circumstances.
||Sale Under Section 363 of Bankruptcy Code |
If the Plan is not confirmed, the
Debtor could seek from the Bankruptcy Court, after notice and a hearing, authorization to sell its assets under section 363 of the Bankruptcy Code. Upon analysis and consideration of this alternative, the Debtor does not believe a sale of its assets
under section 363 of the Bankruptcy Code would yield a higher recovery for holders of Claims than the Plan.
||Liquidation Under Chapter 7 or Applicable Non-Bankruptcy Law |
If no plan can be confirmed, the Chapter 11 Case may be converted to a case under chapter 7 of the Bankruptcy Code in which a trustee would be elected or
appointed to liquidate the assets of the Debtor for distribution to its creditors in accordance with the priorities established by the Bankruptcy Code. The effect a chapter 7 liquidation would have on the recovery of holders of Allowed Claims and
Interests is set forth in the Liquidation Analysis attached hereto as Exhibit J.