Aleon Metals - Chapter 11 Plan Terms

Plan Terms

Overview

• Aleon Metals, LLC, Aleon Renewable Metals, LLC, and Gladieux Metals Recycling, LLC (collectively, the "Debtors") and the Official Committee of Unsecured Creditors (the "Committee") jointly proposed a Combined Disclosure Statement and Joint Plan of Liquidation (the "Plan") for the liquidation of the Debtors' remaining assets and resolution of outstanding claims and interests.
• The Debtors filed voluntary chapter 11 petitions on Aug. 17, 2025 (the "Petition Date"), in the U.S. Bankruptcy Court for the Southern District of Texas. Since the Petition Date, the Debtors have operated their business and managed their properties as debtors in possession. No trustee or examiner has been appointed.
• On Aug. 28, 2025, the U.S. Trustee appointed the Committee, which is currently comprised of five members: (i) Hoover Ferguson/Hoover Circular Solutions; (ii) CCKX, LLC d/b/a Flo-Bin Rentals; (iii) Cenovus Energy Inc.; (iv) Reagent Chemical and Research LLC; and (v) Dacon Corporation.
• Ankura Consulting Group, LLC serves as the Debtors' restructuring advisor. Timothy Pohl serves as independent manager of the Debtors (the "Released Director"), and Roy Gallagher serves as the Debtors' Chief Restructuring Officer.

Debtors' Business and Ownership Structure

• Aleon Metals is a wholly owned subsidiary of non-Debtor GM-FTAI HoldCo LLC, a joint venture between FTAI and Gladieux Metals. Aleon Metals is a Texas limited liability company that owns 100% of ARM and GMR and has no other assets or employees.
• ARM is a Delaware limited liability company that owned, among other assets, the ARM Facility, and had no employees as of the Petition Date. GMR is a Texas limited liability company that owned, among other assets, the GMR Facility. All of the Debtors' employees were employed by GMR.
• The GMR Facility consists of multiple hearth furnaces, hydrometallurgical circuits, and other equipment used to recycle spent catalyst and extract vanadium, molybdenum, and other valuable metals. These metals are sold into specialty markets, including battery manufacturing and steelmaking, and the Debtors credit a portion of the proceeds from such sales back to the original refiners.
• The ARM Facility is located adjacent to the GMR Facility and owns the electric arc furnace located on the GMR Facility. Though not operational, the ARM Facility was established to develop a process for converting end-of-life lithium-ion battery and alumina tailings into battery-grade nickel and cobalt. ARM owns the intellectual property relating to such process.

Prepetition Capital Structure

• As of the Petition Date, the Debtors had approximately $403.2 million in aggregate funded debt, as well as approximately $10.7 million of other unsecured debt.
• Both GMR and ARM have from time to time issued tax-exempt revenue bonds to municipal bond investors, including:
  • Senior Secured ARM Bonds: Solid Waste Disposal Facilities Revenue Bonds (Aleon Renewable Metals, LLC Project) issued in the amount of $75 million (Series 2022) and $100 million (Additional Series 2023).
  • Senior Secured GMR Bonds: Solid Waste Disposal Facilities Revenue Bonds (Gladieux Metals Recycling, LLC Project) issued in the amount of $25 million (Series 2019), $25 million (Additional Series 2019A), and $50 million (Additional Series 2019B).
  • Subordinate Secured GMR Bonds: Solid Waste Disposal Facilities Subordinate Revenue Bonds (Gladieux Metals Recycling, LLC Project) issued in the amount of $38.5 million (Series 2020).
• UMB Bank, N.A. serves as Prepetition Trustee for the Senior Secured ARM Bonds, the Senior Secured GMR Bonds, and the Subordinate Secured GMR Bonds.
• Bridge Financing: On May 7, 2025, Prepetition Superpriority Lenders agreed to make term loans to GMR and ARM in the aggregate amount of $15 million. On July 25, 2025, the Prepetition Superpriority Lenders agreed to provide additional term loans of $2,812,500. The Bridge Financing was repaid in full upon the second draw of the DIP Facility.
• FTAI Loans: Pursuant to the FTAI Credit Agreement, an affiliate of FTAI agreed to make up to $20 million of term loans to Aleon Metals, which was increased from time to time. As of the Petition Date, the aggregate amount outstanding was approximately $42.7 million, including accrued and unpaid interest. Amounts due under the FTAI Credit Agreement are classified as General Unsecured Claims under the Plan.
• GM Loans: On May 21, 2018, GMR issued the GM Note Payable in the amount of $7.5 million, with approximately $12.9 million outstanding as of the Petition Date. Pursuant to the GM Loan Agreement, Gladieux Metals agreed to provide GMR with up to $100 million of term loans, with approximately $14 million outstanding as of the Petition Date. Amounts due under the GM Note Payable and GM Loan Agreement are classified as General Unsecured Claims.
• EAF Note: ARM purchased the electric arc furnace from GMR using a combination of cash and the EAF Note in the principal amount of approximately $21.5 million. The EAF Note is classified as an Intercompany Claim under the Plan.
• Mason Metals Repo Loan: Pursuant to the Mason Metals Repo Agreement, Mason Metals provided GMR with short-term financing secured by calcine, an intermediate metal product generated at the GMR Facility. As of the Petition Date, the aggregate amount outstanding was approximately $12.8 million. Amounts due are classified as General Unsecured Claims.
• Total unsecured debt as of the Petition Date was: (a) Aleon Metals, $159,720,704.69; (b) ARM, $13,492,455.67; and (c) GMR, $194,298,467.68.

Events Leading to Bankruptcy

• The Debtors' decision to commence chapter 11 cases was the culmination of a series of operational, financial, and market-driven challenges that emerged over the past several years, including significant volatility in commodity prices, particularly for vanadium and molybdenum.
• The Debtors faced persistent operational disruptions. In late 2024 and early 2025, the Facilities experienced significant downtime due to various equipment failures, most notably the malfunctioning of their SO2 scrubber, which led to a material reduction in production volumes.
  • The Debtors were unable to process any material amount of catalyst between February and July 2025. On average, throughput at the GMR Facility dropped to approximately 178 tons per month of processed catalyst (or 2,131 tons in total) over the twelve months preceding the Petition Date, well below the GMR Facility's permitted capacity of 55,000 tons per year.
• The Debtors also faced challenges in securing reliable supply of HDS and RDS catalyst, essential feedstocks for their recycling operations.
• Beginning in Spring 2025, the Debtors' management and advisors undertook a comprehensive review of strategic alternatives, including a potential recapitalization, refinancing, or asset sale. However, the complexity of the Debtors' capital structure, the need for substantial new investment, and ongoing operational challenges made an out-of-court solution impracticable.
• The Debtors and their advisors began negotiating with a group of Prepetition Bondholders holding a supermajority of their outstanding municipal bond indebtedness regarding a bridge financing facility. The Prepetition Superpriority Lenders then agreed to provide additional bridge financing to fund a marketing process for the Debtors' assets and prepare for a chapter 11 filing.

DIP Financing

• On the Petition Date, the Debtors filed a DIP Motion seeking authority to enter into a DIP Facility consisting of up to $62,502,000 of new money loans and $125,004,000 of roll-up loans, and to consensually use the Prepetition Secured Parties' cash collateral.
  • UMB Bank, National Association serves as DIP Agent.
  • On Aug. 19, 2025, the Bankruptcy Court entered the Interim DIP Order approving the DIP Motion on an interim basis.
  • On Sept. 16, 2025, the Bankruptcy Court entered the Final DIP Order approving the DIP Motion on a final basis, including certain modifications agreed to by the DIP Agent, the Debtors, and the Committee.
• The proceeds of the DIP Facility and the consensual use of cash collateral have been used to fund the Bankruptcy Cases, including the postpetition sale process.
• The Debtors sold substantially all of their assets to the Purchaser through a credit bid in the amount of $187,506,000 in full and final satisfaction of the DIP Claims. Therefore, the DIP Claims are fully satisfied, settled, released, and discharged, and no distribution on account of the DIP Claims is required under the Plan.

Sale Transaction

• After the Petition Date and pursuant to the Bidding Procedures Order, Jefferies assisted the Debtors in marketing their assets. Since June 2025, Jefferies contacted over 107 parties, including approximately 58 financial buyers and approximately 49 strategic buyers.
• The bid deadline was Sept. 29, 2025, nearly three months after the Debtors and Jefferies initially began soliciting interest. Despite best efforts, the Debtors received no additional qualified bids prior to the bid deadline, other than the Stalking Horse Bid submitted by AM BidCo Holdings, LLC (the "Stalking Horse Bidder").
• On Oct. 1, 2025, the Debtors cancelled the auction and declared AM BidCo Operations LLC (as designee of the Stalking Horse Bidder, the "Purchaser") as the successful bidder. On Oct. 8, 2025, the Bankruptcy Court entered the Sale Order.
• Pursuant to the APA, the Purchaser acquired substantially all of the Debtors' assets, including all of the Debtors' cash, accounts receivable, fixtures and equipment, inventory, and certain Avoidance Actions. The Purchaser also agreed to assume the Assumed Contracts and various liabilities of the Debtors, including certain Cure Costs. The Closing Date was Oct. 21, 2025.
• The Sale Order authorized the sale of substantially all of the Debtors' assets free and clear of all liens, claims, encumbrances, and interests, and contemplated the establishment of a trust (the "GUC Trust") for the benefit of unsecured creditors to oversee the administration of claims against the Debtors' Estates and investigate and, if appropriate, prosecute certain claims belonging to the Estates.

Global Settlement

• The APA and Sale Order incorporated the terms of a global settlement reached by and among the Debtors, the Committee, the DIP Secured Parties, and the Purchaser, pursuant to which such parties agreed that Cash Consideration under the APA would include:
  • Agreed and allowed administrative expense claims incurred through the Closing Date;
  • Allowed Professional Fees through the Closing Date;
  • 2025 pro-rated property taxes;
  • Outstanding U.S. Trustee Fees; and
  • An amount equal to $1,100,000 (the "Wind-Down Amount").
• The Wind-Down Amount consists of:
  • $440,000 earmarked for distribution to general unsecured creditors, excluding Deficiency Claims;
  • $250,000 to fund the GUC Trust for the benefit of all allowed general unsecured claims, including the Deficiency Claims;
  • $67,500 for Allowed Professional Fees of Committee Professionals incurred after the Closing Date; and
  • $342,500 for Allowed Professional Fees for Debtor Professionals incurred after the Closing Date.
• The provisions of the Plan constitute a good faith compromise of all claims, interests, and controversies. The Global Settlement is in the best interests of the Debtors, their Estates, and all holders of claims and interests, and is fair, equitable, and reasonable.

GUC Trust

• On the Effective Date, the GUC Trust shall be established for the purpose of maximizing the value of the GUC Trust Assets and effectuating distributions to holders of Allowed General Unsecured Claims, including Deficiency Claims (the "GUC Trust Beneficiaries").
  • The GUC Trust is intended to qualify as a liquidating trust pursuant to Treasury Regulation Article 301.7701-4(d), with no objective to continue or engage in the conduct of a trade or business.
  • On the Effective Date, the GUC Trust Assets shall vest automatically in the GUC Trust.
• GUC Trust Assets shall initially consist of any cash remaining in the Debtors' Estates that is an Excluded Asset under the APA, which cash shall not be less than $757,500, plus the Debtors' commercial tort claims, Avoidance Actions not acquired by the Purchaser, and current and prior directors' and officers' insurance policies (collectively, the "GUC Trust Claims"). The $757,500 in cash shall be earmarked as follows:
  • $440,000 for GUC Trust Beneficiaries, excluding holders of Deficiency Claims;
  • $250,000 for all GUC Trust Beneficiaries, including holders of Deficiency Claims; and
  • $67,500 for Allowed Professional Fees for Committee Professionals incurred post-Closing.
• GUC Trust Distributable Assets means $250,000 in cash (or any portion of the $250,000 not utilized to pursue the GUC Trust Claims), plus any proceeds from pursuing the GUC Trust Claims.
• Patricia Missal shall serve as the GUC Trustee as of the Effective Date. The initial GUC Trustee shall receive compensation at her standard hourly rate of $500 per hour, which shall be a charge against and paid out of the GUC Trust Assets.
• The GUC Trust Oversight Committee shall be comprised of three members: (i) UMB Bank, National Association; (ii) Hoover Ferguson/Hoover Circular Solutions; and (iii) Dacon Corporation.
• The GUC Trustee shall have standing to pursue or not pursue any and all Causes of Action that constitute GUC Trust Assets, as she determines are in the best interests of the GUC Trust Beneficiaries. In pursuing GUC Trust Claims, the GUC Trustee shall be entitled to the tolling provisions under section 108 of the Bankruptcy Code and shall succeed to the Debtors' rights with respect to the periods in which any of the GUC Trust Claims may be brought under section 546.
• Any attorney-client privilege, work-product privilege, joint interest privilege, or other privilege or immunity attaching to any prepetition documents or communications relating to the GUC Trust Claims shall be transferred to and vest in the GUC Trust.
• The GUC Trust Interests are not intended to constitute "securities" and shall be non-transferable and non-assignable during the term of the GUC Trust except by operation of law.
• The GUC Trust shall be terminated at such time as: (i) all GUC Trust Assets have been liquidated or allowed claims have been satisfied, all duties and obligations fulfilled, and all distributions made; or (ii) the GUC Trustee determines in her reasonable judgment that the GUC Trust lacks sufficient assets and financial resources to complete the duties assigned under the GUC Trust Agreement and/or the Plan.

Classification and Treatment of Claims and Interests

• The Plan provides for the separate classification of claims and interests into six classes:
  • Class 1 (Other Priority Claims) – Unimpaired; deemed to accept the Plan. The Debtors believe all Allowed Other Priority Claims have been satisfied in full via first-day orders or were assumed by the Purchaser under the APA.
  • Class 2 (Other Secured Claims) – Unimpaired; deemed to accept the Plan. Each holder of an Allowed Other Secured Claim shall receive one of the following: (i) payment in full in cash; (ii) delivery of the collateral securing such claim; or (iii) treatment rendering the claim Unimpaired.
  • Class 3 (General Unsecured Claims) – Impaired; entitled to vote on the Plan. Each holder of an Allowed General Unsecured Claim shall receive a GUC Trust Interest entitling such holder to a pro rata distribution of GUC Trust Distributable Assets.
  • Class 4 (Intercompany Claims) – Impaired; deemed to reject the Plan. On the Effective Date, all Intercompany Claims shall be settled, discharged, cancelled, or released without any distribution.
  • Class 5 (Intercompany Interests) – Impaired; deemed to reject the Plan. Shall receive no distribution.
  • Class 6 (Interests in Aleon Metals) – Impaired; deemed to reject the Plan. On the Effective Date, all interests in Aleon Metals shall be automatically cancelled, released, and extinguished. Holders shall neither retain nor receive any property under the Plan.
• Administrative Claims: Each holder of an Allowed Administrative Claim shall be paid in full in cash on the Effective Date, except to the extent such holder agrees to less favorable treatment.
• Priority Tax Claims: Each holder of an Allowed Priority Tax Claim shall receive cash in an amount equal to the amount of such Allowed Priority Tax Claim.
• All U.S. Trustee Fees shall be paid in full in cash on or before the Effective Date. All U.S. Trustee Fees arising after the Effective Date shall be paid in full by the GUC Trustee when due.
• All final requests for payment of Professional Fee Claims must be filed and served no later than thirty days after the Effective Date. A Professional Fee Reserve Amount of $342,500 has been established for Debtor Professionals for Allowed Professional Fees incurred post-Closing.

Limited Substantive Consolidation

• The Plan constitutes a motion for the limited consolidation of the Debtors and their respective Estates solely for purposes of voting on the Plan, confirming the Plan, and making distributions. Voting on the Plan shall be counted on a consolidated basis.
• On the Effective Date, solely for purposes of voting, objecting to the allowance of claims, and making distributions: (a) the assets of the Debtors will be pooled for the purpose of paying allowed claims; (b) any claim filed or asserted against any of the Debtors will be deemed a claim against all of the Debtors; (c) all claims of each Debtor against any other Debtor will be eliminated; and (d) any obligation of any of the Debtors and all guarantees thereof executed by any of the Debtors will be deemed to be an obligation of each of the Debtors.
• The limited consolidation shall not affect the legal and corporate structures of the Debtors.

Plan Funding and Distributions

• The Plan will be funded by cash held by the Debtors and the GUC Trust Assets.
• The GUC Trustee will serve without bond and shall make all distributions under the Plan. The GUC Trustee may but shall not be required to make any distribution of less than $100.00.

Executory Contracts

• On the Effective Date, all executory contracts and unexpired leases not expressly assumed or assumed and assigned to the Purchaser pursuant to the APA will be deemed rejected. Executory contracts listed in the Schedule of Assumed Contracts shall not be rejected, and the APA and any other documents related to the Sale shall be assumed.
• There are no unpaid cure costs associated with the executory contracts listed on the Schedule of Assumed Contracts, the executory contracts and unexpired leases assumed or assumed and assigned to the Purchaser, or the APA and documents related to the Sale.

Cancellation of Securities

• On the Effective Date, the obligations of the Debtors under each of the Prepetition Bond Documents, the FTAI Loans, the GM Note Payable, the GM Loan Agreement, and the EAF Note, and each certificate, share, note, bond, indenture, purchase right, option, warrant, intercreditor agreement, guaranty, indemnity, deed of trust, or other instrument evidencing or creating any indebtedness or obligation of or ownership interest in the Debtors shall be cancelled or extinguished.
• Concurrently with the applicable distributions, all mortgages, deeds of trust, liens, pledges, or other security interests against any property of the Estates shall be fully released and discharged, and all such rights, title, and interest shall revert to the GUC Trust and its successors and assigns.

Corporate Dissolution and Governance

• On the Effective Date, Debtors Aleon Metals, LLC and Aleon Renewable Metals, LLC shall be deemed dissolved. Upon entry of a final decree closing its chapter 11 case, Debtor Gladieux Metals Recycling, LLC shall be deemed dissolved.
• On the Effective Date, the directors and/or managers and officers of the Debtors shall be deemed to have resigned. The GUC Trustee shall be authorized and empowered to act on behalf of the Debtors and to take all actions necessary to implement the Plan.
• The Committee shall be dissolved automatically on the Effective Date and the members of the Committee and the Committee's Professionals shall be released from all their duties relating to the Chapter 11 Cases, except with respect to applications for Professional Fee Claims and motions seeking enforcement or implementation of the Plan or the Confirmation Order.

Releases

• Released Parties include: (i) each of the Debtors; (ii) the Released Director (Timothy Pohl); (iii) the DIP Agent; (iv) each of the DIP Lenders; (v) each of the Prepetition Secured Parties; (vi) the Purchaser; (vii) the Committee and each of its members; and (viii) each of the foregoing Entities' Related Parties. Roy Gallagher, in his capacity as Chief Restructuring Officer, and Professionals also constitute Released Parties.
• Releasing Parties include all of the foregoing, plus each Consenting Creditor and their respective Related Parties.
• Non-Released Parties include any Excluded Related Party (financial advisors, attorneys, accountants, investment bankers, consultants, representatives, and other professionals related to the negotiation, documentation, or execution of the Prepetition Bond Documents at the time of issuance) or any current or former director, manager, or officer of the Debtors other than the Released Director.
• Holders of Claims or Interests in Class 4 (Intercompany Claims), Class 5 (Intercompany Interests), and Class 6 (Interests in Aleon Metals) shall not constitute Releasing Parties and shall not be bound by the Third-Party Releases, irrespective of whether they opted out.
• The Exculpation is appropriate under applicable law and enforceable to the maximum extent allowed by In re Highland Capital Mgmt, L.P. (5th Cir. 2022 and 2025), and includes a carveout for actual fraud, gross negligence, or willful misconduct.
• The Injunction is essential to the Plan, appropriate under applicable law, and necessary to implement the Plan and to preserve and enforce the Debtor Releases, the Third-Party Releases, and the Exculpation.
• The State of Texas and its agencies opt out of any and all releases provided in the Plan. Nothing in the Plan shall be construed as a release barring the United States Government or any of its agencies, or any state and local authority, from pursuing any police or regulatory action or any criminal action.

TCEQ and Governmental Reservations

• Nothing in the Confirmation Order, the Plan, or related Plan documents discharges, releases, precludes, or enjoins: (i) any police or regulatory liability to any Governmental Unit that is not a "claim" under 101(5) of the Bankruptcy Code; (ii) any claim of a Governmental Unit arising on or after the Confirmation Date; (iii) any liability to a Governmental Unit under police and regulatory statutes as the owner or operator of property after the Confirmation Date; (iv) any liability to a Governmental Unit on the part of any Person other than the Debtors; or (v) any enforcement actions currently pending before the Texas Commission on Environmental Quality ("TCEQ"), including Docket No. 2025-0595-IWD-E.
• Nothing in the Confirmation Order or the Plan authorizes the transfer or assignment of any TCEQ license, permit, registration, authorization, or approval, or the discontinuation of any obligation thereunder, without compliance with all applicable legal requirements under police or regulatory law.

Voting

• As evidenced by the Voting Report, 94.3% by number and 97.9% by amount of holders of Class 3 General Unsecured Claims voted to accept the Plan. Under the alternative tabulation in the Amended Voting Report, 92.0% by number and 92.7% by amount voted to accept the Plan.
• Holders of Claims in Class 1 and Class 2 (Unimpaired) were not required to be solicited, as each such class is deemed to have accepted the Plan. Holders of Claims or Interests in Classes 4, 5, and 6 (Impaired) were also not required to be solicited, as each such class is deemed to have rejected the Plan.
• Notwithstanding the deemed rejecting classes, the Plan was confirmed pursuant to section 1129(b)(1) of the Bankruptcy Code. The Plan does not discriminate unfairly with respect to such classes because similarly situated holders will receive substantially similar treatment.

Conditions Precedent to Effective Date

• Each of the following is a condition precedent to the occurrence of the Effective Date:
  • The final version of the Plan Supplement and all schedules, documents, and exhibits contained therein, including the GUC Trust Agreement, shall have been filed;
  • The Bankruptcy Court shall have entered the Confirmation Order, which shall be a Final Order in full force and effect with no stay or vacation thereof then in effect;
  • All U.S. Trustee Fees shall have been paid in full; and
  • All other actions, documents, and agreements necessary to implement and consummate the Plan shall have been effectuated or executed.
• Any of the conditions may be waived in whole or in part with the prior written consent of the Debtors, the Prepetition Trustee, and the Committee without any notice to or approval of other parties in interest or the Bankruptcy Court.

Plan Confirmation

• The Plan was approved in its entirety and confirmed pursuant to section 1129 of the Bankruptcy Code. The Debtors and the Committee met their burden of proving the applicable elements of sections 1129(a) and 1129(b) by a preponderance of the evidence.
• The Plan was proposed in good faith and was the product of extensive negotiations conducted at arm's-length among the Debtors and certain of their key stakeholders, with the legitimate and honest purpose of maximizing the value of the Debtors' Estates.
• The stay of the Confirmation Order was waived, and the Confirmation Order is effective and enforceable immediately upon its entry. The period in which an appeal must be filed commences upon entry.