Crosby Marine Transportation - Chapter 11 Plan Terms

Plan Terms

Overview

• Crosby Marine Transportation, LLC and its 17 affiliated debtors filed a first amended combined disclosure statement and Chapter 11 plan of liquidation. The plan projects a 10.95% to 31.21% recovery for general unsecured creditors, compared with 5.86% to 14.69% in a Chapter 7 liquidation. Recoveries depend mainly on litigation claims that the debtors value at $77.1 million to $141.9 million gross.
• The plan follows court-approved sales of substantially all of the debtors' assets to four purchasers in early September 2026. The two largest were Breakwater Buyer, LLC's $126.2 million going-concern purchase and Luhr Bros., Inc.'s $70 million purchase of the debtors' 49.99% stake in the Luhr Crosby joint venture. The debtors stopped operating on Sept. 15, 2026, and have had no employees since.
• Secured lenders are paid from the share of the remaining Breakwater sale proceeds that the court allocates to their collateral. Remaining Breakwater sale proceeds means the cash sale proceeds left after paying or reserving for DIP claims and Raymond James's fees. The debtors have asked the court to decide the allocation alongside confirmation.
• $40.8 million of priority tax claims are paid with interest in semi-annual installments through March 23, 2031. General unsecured and insider claims receive pro rata interests in a liquidating trust that will hold the retained causes of action, available cash and unencumbered sale proceeds; the insider claims are exposed to subordination. The estates are substantively consolidated for plan purposes, and the debtors receive no discharge.
• The combined hearing on final approval of the disclosure statement and on confirmation is set for Nov. 17, 23 and 24, 2026. The same hearing will consider the debtors' amended allocation motion and M C Bank & Trust's motion to convert the cases to Chapter 7. The debtors and the committee each filed expert reports in support of confirmation on Oct. 30, 2026.
• The amended plan is dated Nov. 6, 2026. It replaces the version filed Oct. 12, 2026, which the court conditionally approved for solicitation on Oct. 13, and it was filed within the debtors' extended exclusive periods.
• Advisers:
  • Debtors: Lugenbuhl, Wheaton, Peck, Rankin & Hubbard as counsel; SierraConstellation Partners, which provides chief restructuring officer Lawrence Perkins; and Raymond James & Associates as investment banker
  • Committee: Fishman Haygood and Seward & Kissel as co-counsel, and FTI Consulting as financial adviser

Background and Path to Chapter 11

• The debtors are based in Galliano, La., and describe themselves as one of the largest privately owned transportation businesses in the marine industry. They ran a tug business through Crosby Tugs and a coastal restoration and oilfield dredging business through Crosby Dredging. Tug customers included TPC Group, Cantium, Arena Offshore, SpaceX, Heerema and Chevron. Dredging customers included the U.S. Army Corps of Engineers, the Louisiana state government, Louisiana parish governments and private businesses.
• The business began in 1977 with the M/V PADDY CROSBY and grew through acquisitions. At the petition date the fleet included about 90 offshore, inshore and assist tugs, plus barges, crew boats, dredges, dragline cranes, a floating drydock and other equipment.
  • Crosby Marine Transportation owned about 80% of the fleet but had no employees; Crosby Tugs or Crosby Dredging crewed its vessels.
  • The fleet was maintained at drydock facilities in Houma, La., owned by Crosby Marine Repairs.
  • In 2021, debtor Bertucci Contracting Company formed the Luhr Crosby joint venture with Luhr Bros. and held a 49.99% interest.
• Several pressures created a liquidity shortfall: a high and complex debt load, shrinking offshore energy activity in the Gulf, cuts to Louisiana dredging projects and volatile fuel costs. The national average diesel price nearly doubled between September 2025 and September 2026, rising sharply after the U.S. war with Iran began in February 2026. The debtors covered the gap with about $65 million of merchant cash advance (MCA) funding. The cost and debt service on those advances, sometimes above 200%, made the shortfall worse.
• Raymond James was first hired to explore a sale of the Luhr Crosby stake, and in February 2026 was also hired to advise on a recapitalization and sale process. Sierra was hired for restructuring advice in late February 2026.
• The crisis became acute when certain MCA lenders wrote to the debtors' customers trying to seize receivables that were subject to Hancock Whitney's priming lien. JMB Capital Partners Lending bought Hancock Whitney's position on March 20, 2026.
• Four original debtors (Crosby Marine Transportation, Crosby Tugs, Crosby Dredging and Bertucci) filed in the Eastern District of Louisiana on March 23, 2026. Ten affiliates filed on July 16, 2026, and four more on Aug. 5, 2026.
• After stabilizing operations with DIP financing, the debtors ran a marketing process of about six months. The four resulting sales have been substantially completed, and the businesses moved to the buyers along with their employees; the debtors say this preserved hundreds of jobs in South Louisiana. What remains is cash, unencumbered sale proceeds, four retained vessels and causes of action.

Prepetition Capital Structure

• The debtors put prepetition secured debt at about $175.1 million at the March 23, 2026 petition date. It was owed to 15 lenders secured mainly by the fleet, and to mortgage lender BankPlus:
  • JMB, as purchaser of the Hancock Whitney debt: $29.2 million
  • PNC Bank: $25.4 million
  • Regions Commercial Equipment Finance: $19 million
  • City National Bank of Florida (CNB): $18 million
  • BankPlus: $11.6 million
  • Arba Credit Investors III: $11.4 million
  • J.J. Astor & Co.: $10.8 million
  • Kompass Kapital Funding: $9.9 million
  • M C Bank & Trust: $9.7 million
  • South Lafourche Bank & Trust (SLB): $8.3 million
  • Atlantic Union Equipment Finance: $7.2 million
  • Banc of America Leasing & Capital (BALC): $6.3 million
  • Citizens Asset Finance: $2.8 million
  • State Bank & Trust: $2.4 million
  • ELGA One, LLC – Series III: $2.2 million
  • Post Road Equipment Finance: $880,581
• The debtors also took about $65 million of MCA funding. The court has since recharacterized those advances as disguised loans, a ruling now on appeal. MCA claims are estimated at $31.6 million in Class 19.
• The debtors estimate priority tax debt at about $40.8 million. They estimate Class 21 unsecured claims at about $221.3 million, including estimated deficiency claims. That figure excludes insider claims, convenience claims and the unsecured claims of maritime lien claimants, which the debtors expect insurance to cover.

DIP Financing

• The DIP facility from JMB Capital Partners Lending has been funded and repaid. JMB, which bought the prepetition Hancock Whitney facility on March 20, 2026, was paid in full at the sale closing.
• Size: $77 million as upsized ($47 million of new money and a $30 million roll-up of the Hancock Whitney facility).
  • After a second interim order, the debtors moved to increase the facility by $17 million from the original $60 million ($30 million of new money and a $30 million roll-up) to deal with liquidity constraints caused by the MCA dispute; the court approved the upsized facility on a final basis.
  • The March 25, 2026 interim order had authorized $10 million of new money and the full roll-up.
• Rate and maturity: as first proposed, 12% per year, maturing Sept. 30, 2026, with customary fees and a carve-out for professional fees.
• Use of proceeds: a liquidity cushion for operations, plus professional fees through the marketing and sale process.
• After an April 21, 2026 hearing, the court approved the upsized facility and continued use of cash collateral on a final basis. It overruled objections from, among others, the committee and certain equity holders.
• The Guidry Trusts, which hold equity in Bertucci and in non-debtor Luhr Crosby, have appealed the final financing orders. The debtors have moved to dismiss the appeal as statutorily moot under section 364 because the facility has been funded and repaid.

Asset Sales

• Breakwater Buyer, LLC bought substantially all of the debtors' assets for $126.2 million, up from its $75 million stalking horse bid, after an auction that began Aug. 13, 2026. The price is made up of:
  • $116.1 million in cash
  • A $3.75 million credit bid of Breakwater's approved bid protections
  • A $6.35 million credit for the M/V KURT J. CROSBY, for which PNC was the successful bidder
• After a two-day hearing on Aug. 31 and Sept. 1, 2026, the court approved the going-concern sale over secured lenders' objections.
  • It approved the sale free and clear of liens under section 363(f)(5). Its reasoning was that a possible cramdown of liens through a plan under section 1129(b) is a proceeding in which the objecting lenders could be forced to accept a money satisfaction.
  • It found Breakwater to be a good-faith purchaser.
  • It left the allocation of proceeds, distributions and lien attachment for a separate proceeding.
• The orders approving the going-concern sale were entered Sept. 3, 2026. The sale closed Sept. 15, 2026, under an amended and restated purchase agreement dated Aug. 28, 2026.
• ELGA filed its own Chapter 11 case on Sept. 14, 2026, and as a result, at the Sept. 15 closing the debtors held back title to the four vessels subject to ELGA's asserted liens, as well as to one Mexican-flagged vessel, and escrowed about $1.9 million of proceeds. After the Illinois bankruptcy court granted stay relief on Oct. 9, 2026, title to the ELGA vessels passed to Breakwater and the escrow was released to the debtors.
• The court found that Luhr Bros. held an enforceable right of first refusal. Luhr Bros. used it to buy the debtors' 49.99% Luhr Crosby interest for $70 million in cash, with JMB as backup bidder. The court approved that sale Sept. 1, 2026, and it closed Sept. 3, 2026.
• PNC acquired the M/V KURT J. CROSBY through its designee on a $6.35 million credit bid (order entered Sept. 4, 2026). BankPlus acquired certain real estate on a $1 million credit bid (order entered Sept. 3, 2026).
• Raymond James's $2.5 million transaction fee was paid at the Breakwater closing. It was spread pro rata across all transaction value, including the credit bids, at about 2.02%.

Sale Proceeds Allocation

• Each secured lender's recovery depends on the court's valuation of its collateral under the debtors' amended allocation motion, which the debtors have asked to be heard with confirmation. The debtors are asking the court to decide finally:
  • The value of each individual Breakwater asset
  • How the remaining sale proceeds are allocated to each asset
  • How each secured lender's and maritime lien claimant's lien attaches to the allocated value
• The motion was filed after the court reserved allocation when it approved the sale, and it was amended Sept. 22, 2026. It seeks only a relative valuation and allocation of the $126.2 million; it does not decide whether any lien is valid or authorize immediate distributions.
• The dispute comes from the debtors' fragmented capital structure: about 205 vessels and pieces of equipment financed through 14 separate secured facilities, each with its own collateral. Objecting lenders contend the proposed allocation undervalued their collateral.
• The debtors' projections use the allocation method the committee proposed, as amended, which the debtors adopted in the amended motion. The committee's expert, Scott Cockerham of FTI, addresses how the proceeds should be allocated among vessels and collateral pools for section 506(a) purposes.
• Court-ordered mediation produced a partial settlement on allocation among the debtors, the committee and 12 maritime lenders. After an Oct. 9, 2026 status conference, the debtors withdrew their motion to approve it on Oct. 12, 2026. The same day, they moved to have the amended allocation motion heard with confirmation.

Pending Appeals and Contested Matters

• M C Bank, ELGA, J.J. Astor and SLB appealed the Breakwater sale order to the district court on Sept. 10, 2026 (Civil Action No. 26-CV-02042). They argue that cramdown under section 1129(b) does not count as a proceeding under section 363(f)(5), and that the sale improperly stripped their maritime liens. The court denied a stay pending appeal on Sept. 11, 2026.
• An April 9, 2026 preliminary injunction barred the MCA lenders from contacting the debtors' customers or pursuing their receivables, restoring the debtors' access to them. On June 17 and 18, 2026, the court granted the debtors summary judgment in part, recharacterizing the advances as disguised loans, declaring the receivables estate property and barring direct collection from customers; its final judgments hold that each MCA agreement is a disguised loan.
  • Fourteen separate appeals of those rulings are pending in the district court; the MCA lenders maintain the advances were true sales.
  • The court has not ruled on the validity, amount, secured status or priority of MCA claims.
  • The debtors' projected MCA litigation recoveries depend on how those appeals come out.
• The committee's members are Kirby Inland Marine LP, Retif Oil & Fuel LLC, CGBM 100 LLC, Marshland Equipment Rentals LLC, Hydroterra Technologies LLC, Elite Diesel Performance LLC and Masse Contracting Inc. The committee got derivative standing on Sept. 10, 2026, and on Oct. 1, 2026 sued 13 secured lenders (Adv. No. 26-01082). Among other things, it seeks:
  • A ruling under section 552(a) that postpetition vessel earnings are after-acquired property cut off from the prepetition liens
  • Avoidance of liens asserted by Regions, J.J. Astor and SLB as unperfected
  • Avoidance, as a preference, of a State Bank vessel mortgage recorded within 90 days of the petition date
• ELGA was not named because its own bankruptcy stayed claims against it, and the committee's challenge deadline as to ELGA has been extended to Dec. 1, 2026.
  • ELGA filed for Chapter 11 in the U.S. Bankruptcy Court for the Northern District of Illinois on Sept. 14, 2026.
  • On Oct. 9, 2026, that court granted the debtors stay relief and declined to hear disputes between ELGA and the debtors that fall within this court's jurisdiction.
  • That court also indicated the debtors may bring a bad-faith filing claim against ELGA by separate motion there; the debtors reserve that right.
• M C Bank moved on Sept. 18, 2026 to convert the cases to Chapter 7 under section 1112(b). It argues that after the sale the debtors have no operations or employees, and that staying in Chapter 11 is shrinking the estates. The Guidry Interests joined the motion and the debtors oppose it. The evidentiary hearing will be held together with confirmation.

Unclassified Claims

• Administrative claims (unclassified): estimated at $0, because the debtors expect to pay them before the effective date through the wind-down budget. Some vendors, including GM Financial, have not sent invoices on time. Any remaining allowed claims are paid in full in cash without interest, and requests are due 60 days after the effective date.
• Professional fee claims (unclassified): paid from the professional fees account created under the final DIP order once final fee applications are approved. Applications are due 30 days after the effective date, and the liquidating trustee may not object to them.
• Priority tax claims (unclassified): estimated at $40.8 million and paid in full with interest under the installment terms described below.

Classification and Treatment of Claims and Interests

• Class 1, priority non-tax claims (unimpaired, deemed to accept): estimated at $1.1 million and paid in full in cash, without interest, from available cash. The estimate includes a $1 million claim by a litigation claimant that the debtors believe is not properly a priority claim; the liquidation analysis carries only about $63,000 of non-tax priority claims, excluding that $1 million claim as an insured personal injury claim.
• Class 2, senior statutory maritime lien claims (impaired, entitled to vote; each vessel subclass counts as a separate class): these are maritime liens that rank ahead of the secured lender's lien on the same vessel.
  • Each claim is paid from its vessel's senior maritime lien reserve once a final order allows it at the end of the claim resolution process.
  • The secured portion is capped at the remaining Breakwater sale proceeds attributable to the vessel. Any unpaid balance of the underlying tort claim becomes a Class 21 claim.
  • Insured claims receive nothing until insurance remedies are exhausted.
  • A lien asserted against several vessels must first be allocated among them by final order.
  • The plan's summary table instead caps the allowed amount of each claim, not just its secured portion, at the proceeds attributable to the vessel.
  Alleged amounts, based on proofs of claim and not reflecting collateral value:
  • Class 2A, M/V MYLES FRANCIS, and Class 2B, M/V LAUREN MARIE: $1.9 million each; these are duplicate claims by one claimant asserting the same amount against both vessels
  • Class 2C, M/V DELTA BUCK: $4 million
  • Class 2D, M/V CROSBY ENDEAVOR: $111.25 million
  • Class 2E, M/V CROSBY EXPRESS: $1.4 million
  • Class 2F, M/V SUSAN CROSBY: $4 million
  • Class 2G, M/V LADY JUNE: $3.5 million
• Classes 3 through 17, the secured lender claims, share one treatment.
  • Each lender's allowed secured claim equals the value of its collateral as fixed by an unstayed court order, minus any senior maritime lien claims against that collateral.
  • It is paid from the remaining Breakwater sale proceeds after the later of the effective date and that order, once the relevant part of the senior maritime lien reserve has been escrowed.
  • The lender also receives any reserve proceeds left on its vessels after senior lien claims are resolved, and any insurance reimbursement of senior lien payments made from its collateral's reserve. Both reduce its Class 21 deficiency claim dollar for dollar.
  • The treatment of Classes 3 through 19 is subject to the committee's lien challenge and the MCA litigation. If a lien is avoided or subordinated, the claim becomes a Class 21 claim and the related proceeds go to the trust.
  Estimated claims:
  • Class 3, Arba Credit Investors III (impaired, entitled to vote): $11.5 million
  • Class 4, Atlantic Union Equipment Finance (impaired, entitled to vote): $7.4 million
  • Class 5, BALC (impaired, entitled to vote): $6.5 million
  • Class 6, BankPlus (impaired, entitled to vote): $12.8 million, which reflects a $1 million reduction for its real estate credit bid. BankPlus may also set off and sweep cash, deposit balances and certificates of deposit it holds or controls, with these limits:
    • Only accounts and property that are its collateral, and only up to its allowed secured claim
    • Not the debtors' or the trust's operating, wind-down and distribution accounts, the remaining Breakwater sale proceeds, the senior maritime lien reserve or the professional fees account
    • Subject to the outcome of the committee's lien challenge
  • Class 7, Citizens Asset Finance (impaired, entitled to vote): $3.7 million
  • Class 8, CNB (impaired, entitled to vote): $19.1 million
  • Class 9, ELGA (impaired, entitled to vote): $2.6 million; ELGA is a sale order appellant and a Chapter 11 debtor in Illinois
  • Class 10, J.J. Astor (impaired, entitled to vote): $11.5 million; a sale order appellant whose liens the committee seeks to avoid as unperfected
  • Class 11, Kompass Kapital Funding (impaired, entitled to vote): $10.2 million
  • Class 12, M C Bank (impaired, entitled to vote): $9.7 million; a sale order appellant and the party seeking conversion
  • Class 13A, PNC (impaired, entitled to vote): $16.1 million, under a Nov. 21, 2018 credit agreement with $38 million of original principal lent to debtor and non-debtor borrowers
  • Class 13B, PNC Kurt J. Crosby deficiency claim (impaired, entitled to vote as part of Class 21): $2.5 million. That equals $8,859,035.86 of prepetition debt under a June 28, 2018 loan agreement ($9.4 million original principal), as stipulated in the final cash collateral order, minus PNC's $6.35 million credit bid for the M/V KURT J. CROSBY. It is added to any Class 13A deficiency as a Class 21 claim.
  • Class 14, Post Road Equipment Finance (impaired, entitled to vote): $812,013
  • Class 15, Regions (impaired, entitled to vote): $19.6 million; it has the same setoff and sweep rights as BankPlus, and the committee seeks to avoid its liens as unperfected
  • Class 16, SLB (impaired, entitled to vote): $8.3 million. SLB holds a $7.6 million claim secured only by vessels and a $726,209 claim secured only by certificate of deposit accounts. It has the same setoff and sweep rights as BankPlus, is a sale order appellant, and the committee seeks to avoid its liens as unperfected.
  • Class 17, State Bank & Trust (impaired, entitled to vote): $2.5 million; the committee seeks to avoid its vessel mortgage as a preference
• Class 18, junior statutory maritime lien claims (impaired, entitled to vote): estimated at $1.4 million. The allowed secured portion is paid from the remaining Breakwater sale proceeds tied to the collateral after a final order, and any deficiency goes to Class 21.
• Class 19, MCA claims (impaired, entitled to vote): estimated at $31.6 million. Any allowed secured portion is paid from the remaining Breakwater sale proceeds tied to the collateral after a final order, and any deficiency goes to Class 21. All subordination rights are preserved.
• Class 20, other secured claims (unimpaired, deemed to accept): estimated at $707,144. At the trustee's option, the holder either keeps its lien until the collateral is sold and receives the net proceeds, is paid in full in cash, or receives the collateral. The liquidation analysis carries the same $707,144 as secured tax claims paid in full on the effective date.
• Class 21, unsecured claims (impaired, entitled to vote): estimated at $221.3 million, including all deficiency claims and excluding convenience and insider claims. Holders receive pro rata liquidating trust interests, with a projected recovery of 10.95% to 31.21%. All subordination rights against these claims are preserved.
• Class 22, convenience claims (impaired, entitled to vote): estimated at $1.3 million.
  • The class covers allowed unsecured claims of $25,000 or less in total per holder that arise from goods or services provided to the debtors.
  • Holders receive 25% in cash, without interest, on or soon after the effective date. Claims may not be split to qualify.
  • The class has 215 holders, which is 56.43% of unsecured holders by number but 0.58% of the unsecured class by amount. Total cost is about $321,500.
• Class 23, insider claims (impaired, entitled to vote): estimated at $266.5 million ($266.6 million as filed). The claims are unliquidated and contingent and will be the subject of claim objections. Holders share pro rata in trust interests alongside Class 21 unless the claims are subordinated; if they are not subordinated, the general unsecured recovery will be lower. The trust keeps the subordination claim, and the debtors' projections assume it succeeds.
• Class 24, interests (impaired, deemed to reject): cancelled with no distribution.
• Because Class 24 is deemed to reject, the debtors will seek cramdown under section 1129(b). They will do the same for any other class that rejects; they say this may include one or more of the secured lender classes, some of whose holders appealed the sale order, as well as Class 2, Class 19 and Class 23.

Priority Tax Installment Terms

• Amount: $40.8 million of priority tax claims plus the debtors' estimated $703,890 share of 2026 property taxes, for a total of $41.5 million. It is paid in full with interest from trust assets before any distribution to trust beneficiaries. By taxing authority:
  • IRS: $16.9 million
  • Louisiana Department of Revenue: $23.4 million
  • Parishes: $1.2 million, including the 2026 property taxes
• Rate: 7% compounded daily for IRS claims, 10.5% for Louisiana Department of Revenue claims and 12% for parish and municipal claims under the plan. The liquidation analysis models the IRS rate as 7.25% simple and says all rates will be updated to those in effect in the month of confirmation.
• Schedule: semi-annual payments starting six months after the effective date (June 1, 2027, on the assumed effective date).
  • The first two payments are interest only.
  • After that, level payments of about $2.3 million each, based on a 20-year amortization.
  • All remaining principal and interest is due in a balloon payment on March 23, 2031, five years after the original petition date.
• Recovery sweep: each payment from the third through the eighth is the greater of the scheduled amount and 80% of the trust's net litigation proceeds for the prior six months, after trustee fees and trust operating costs. Any excess is credited against the next payment.
• Surplus cash: on each payment date, trust cash above a $3 million operating reserve goes to the tax claims, with principal repaid pro rata.
• Prepayment: allowed at any time, including on the effective date, without premium or penalty.
• 2026 taxes: 2026 taxes on the Breakwater assets are limited to the debtors' pro rata share under section 5.11 of the Breakwater purchase agreement. The debtors' estimate prorates them through Sept. 15, 2026, after which Breakwater is responsible. The 2026 property taxes are paid through the installment plan rather than when due on Dec. 31, 2026.
• Projected cost: about $46.6 million in the low case, including $5.1 million of post-effective date interest, and $45.4 million in the high case, including $3.9 million. All tax claims are paid in full by June 1, 2029 in the low case and Dec. 1, 2028 in the high case.
• The debtors' position is that this treatment meets section 1129(a)(9)(C) without the taxing authorities' consent. Another $15.1 million of general unsecured tax claims, mostly penalties, sits in the general unsecured pool.

Senior Maritime Lien Reserve and Claim Resolution

• Senior maritime lien claimants are paid only from a segregated reserve that the liquidating trust holds in a custodial capacity. The reserve is funded from the remaining Breakwater sale proceeds in an amount equal to the court-determined value of the senior-liened vessels, and is kept separate vessel by vessel. Preserved maritime liens stay attached to those proceeds after they move to the trust, with the same validity and priority.
• After the effective date, maritime tort claimants may liquidate their claims outside the bankruptcy court, including on appeal, and collect from insurance, including through any direct action rights.
  • The allowed amount is set by final order, or by a trustee settlement that the applicable insurer or club consents to.
  • The process must follow the insurer's or club's rules of cover, including its claims-control, notice and prior-approval provisions.
• Reserve proceeds stay segregated until the underlying claims are liquidated and lien disputes are resolved. Disputes over a lien's validity or priority are resolved by agreement or by the bankruptcy court after notice and a hearing.
• The trustee must seek insurance reimbursement for any payment made from the reserve and pass reimbursements on to the affected secured lender.
• The debtors, the trustee or a secured lender may show that a senior lien claim is adequately protected by other means, such as a written agreement with the claimant, insurance, a letter of undertaking, a bond, a limitation of liability or proof that the insurance deductible has been met. In that case:
  • Once a final order approves that protection, the vessel's reserve is released to the secured lender free and clear.
  • The claim does not have to be liquidated first.
  • The lien then attaches only to the substitute protection.
• No allowed claim payable under an insurance policy receives a distribution until the holder has exhausted its insurance remedies. Where a policy has a deductible or self-insured retention, the holder receives a Class 21 claim of at least that amount as its only recovery from the estate. Neither the debtors nor the trustee must fund the deductible or retention.

Liquidating Trust

• A liquidating trust for holders of allowed unsecured claims will receive the debtors' available cash, remaining assets and retained causes of action, plus their proceeds. It pays allowed priority tax claims before any distribution to beneficiaries. The trustee will be named in the plan supplement. The committee is to prepare the trust agreement, which must be acceptable to the debtors.
• Available cash is unrestricted cash on the effective date, net of:
  • The remaining Breakwater sale proceeds and other collateral proceeds
  • The senior maritime lien reserve
  • The professional fees account
  • Any other restricted or escrowed funds
  Collateral proceeds pass through the trust only in a custodial capacity, are applied according to each lender's lien, and are not trust assets.
• The trustee acts as the estate's representative, with the powers of a trustee under sections 704 and 1106 and under Rule 2004.
  • The trustee has the exclusive right to pursue or settle the retained causes of action without further court order, and takes the place of the debtors and the committee in pending litigation.
  • The trustee may not bring avoidance actions for affirmative recoveries against general unsecured creditors, except insiders, the MCA lenders and the defendants in the committee's lien challenge.
  • Any tolling in favor of the estates carries over to the trustee, who is treated as a trustee under section 108.
• The trustee runs claims reconciliation, with a claim objection deadline 180 days after the effective date. Late-filed claims are treated as disputed and are paid only after timely allowed unsecured claims and trust expenses are paid in full.
• On the effective date, the trustee becomes sole manager of the post-effective date debtors and existing managers and officers are terminated. The committee dissolves except for final fee matters. The trust may have an oversight committee and may hire the debtors' or the committee's professionals.
• The trust ends on the fifth anniversary of the effective date unless the court extends it on a motion filed within 30 days of expiration. Trust interests cannot be transferred except on death or by operation of law. The trustee and its professionals are liable only for gross negligence, fraud or willful misconduct, and are indemnified to the fullest extent Louisiana law allows.

Retained Causes of Action

• The debtors value the retained litigation at $77.1 million (low) to $141.9 million (high) gross, before contingency counsel fees of 33½%. The committee's expert, Matthew Greenblatt of FTI Consulting, puts total gross values at about $77.2 million to $142.1 million. The debtors' estimates by claim, high then low:
  • Preference claims against MCA lenders (90 days before the petition): $5.5 million / $3 million
  • Fraudulent transfer and usury claims against MCA lenders for cash paid within two years of the petition, less preferences: $82.2 million / $45.2 million
  • Breach of fiduciary duty, Luhr Crosby: $5 million / $2.75 million
  • Wrongful termination of the master time charter, Luhr Crosby: $31.6 million / $17.4 million
  • Port of Iberia change orders: $1.75 million / $963,000
  • Bucktown subcontract, with Luhr Crosby as general contractor: $1.15 million / $633,000
  • Sabine-Neches Navigation District unpaid receivables: $1.75 million, excluded from the low case
  • Breach of fiduciary duty and breach of contract, V. Colistra, JS Held and Phoenix Management: $5 million / $2.75 million
  • D&O claims against insiders: $8 million / $4.4 million
• The low case discounts every claim by 45%, except the Sabine-Neches claim, which it leaves out.
  • The MCA claims exclude transfers made before March 23, 2024 ($1.7 million), and their recovery depends on the outcome of the appeals.
  • The charter claim is measured as hire for the remaining charter term, with annual escalation.
  • Net recoveries are assumed to come in 10% in 2027, 35% in 2028, 40% in 2029 and 15% in 2030.
• The retained claims also include:
  • Claims against Luhr Crosby and its managers over the marketing and sale of the debtors' assets, including breach of contract, breach of fiduciary duty, fraud, tortious interference and unjust enrichment
  • Claims against all insiders, except employees transferred under the asset purchase agreement; that exception does not cover insiders included in the court-approved motion to pay Chapter 5 claims compensation to insiders
  • D&O claims under the Hartford/Pacific Insurance and Chubb Ace American policies, of which those carriers were notified on July 17, 2026
  • Avoidance and other Chapter 5 claims against MCA lenders, including Meged Funding, Libertas Funding, WebBank and OnDeck
  • All claims in the committee's lien challenge complaint
  • Crosby Tugs' Oct. 12, 2026 suit against Pelican Marine Logistics (Adv. No. 26-01083)
  • Equitable subordination claims
  • Coverage and bad-faith claims against insurers
• Insurance rights covering the retained claims are assigned to the trust, and net insurance proceeds are treated as litigation proceeds.

Projected Recoveries and Feasibility

• The debtors project general unsecured recoveries of 10.95% (low) to 31.21% (high) under the plan, compared with 5.86% to 14.69% in Chapter 7. The Chapter 7 percentages are measured against a general unsecured pool of $489.1 million, with no separate convenience or insider class, against $221.3 million under the plan. Priority claims are paid in full in both scenarios, and the convenience class receives 25%. CRO Lawrence Perkins' expert report concludes that every impaired class except Class 23 receives at least as much as it would in a hypothetical Chapter 7 liquidation.
• Distributable assets total $73.9 million (low) to $119.1 million (high):
  • Cash at the effective date of $14 million to $16 million. This includes Luhr Crosby tax distributions of $2.6 million for the fourth quarter of 2025, already held, and an estimated $6 million for 2026.
  • $8.4 million of unencumbered sale proceeds: $6.6 million of value allocated to JMB that was not needed once JMB was paid in full at closing, plus $1.8 million of value above oversecured lenders' claims
  • About $90,000 for four retained vessels
  • Gross litigation recoveries of $77.1 million to $141.9 million, minus contingency fees of $25.7 million to $47.3 million
• Secured lender and senior maritime lien claims of $141.6 million, at the amounts proposed for voting, are projected to recover $96.8 million (68.4%) from collateral on or before the effective date. Those payments fall outside the trust's cash flows. Senior maritime lien claims could add up to $8.6 million, based on vessel allocations.
• The plan's definition of remaining Breakwater sale proceeds deducts Raymond James's fee before secured distributions. Applying it would increase deficiency claims and lower the plan unsecured recovery to about 10.87% to 31.01%.
• Costs that arise only under the plan include $5.1 million (low) to $3.9 million (high) of post-effective date interest on the priority tax installments, and trust operating costs of $1.97 million to $3.52 million over five years. In Chapter 7, the trustee fee would be $2.2 million to $3.6 million, plus Chapter 7 administration costs of $675,000 to $1.35 million.
• How the liquidation analysis builds its unsecured pool:
  • It leaves out insured personal injury and maritime tort claims asserted at $185.9 million. In their place it counts the remaining uninsured layers: $1.2 million for the 2024 policy year and $1 million for 2023.
  • It includes Continental Casualty's contingent surety claim at $53.9 million.
  • It includes $15.1 million of general unsecured tax claims, mostly penalties. If those penalties were subordinated in Chapter 7, the Chapter 7 recovery would be 6.05% to 15.16%.
  • Without unsecured tax, secured lender deficiency, MCA and maritime lien claimant claims, general unsecured claims total $126 million. The liquidation analysis calls those the categories excluded from the plan's Class 21 estimate, while the plan says its $221.3 million Class 21 estimate includes deficiency claims.
• The convenience class's $1.3 million of claims recover about $321,500. The insider class is shown with no recovery, on the assumption that the trust's subordination claim succeeds.
• Assuming a Dec. 1, 2026 effective date, the feasibility analysis shows the trust making every required payment without a funding gap in both scenarios:
  • Net litigation proceeds arrive as follows: 10% in the period ending Dec. 1, 2027; 15% and 20% in the periods ending June 1 and Dec. 1, 2028; 20% in each 2029 period; and 10% and 5% in the periods ending June 1 and Dec. 1, 2030.
  • Trust operating costs are heaviest early, at $659,000 (low) and $1.23 million (high) in 2027. They include $75,000 to $150,000 a year of expert costs reimbursed to contingency counsel from 2027 through 2030.
  • Year-end cash is lowest at about $2.9 million at the end of 2027 in both scenarios, because trust cash above the $3 million operating reserve is swept to the tax claims on each payment date.
  • After the final tax payment, the 2031 final distribution to general unsecured creditors is about $24.2 million (low) to $69.1 million (high), with anything left going to the insider class.

Substantive Consolidation

• The confirmation order will combine the debtors' estates into a single estate for voting, confirmation and distributions. As a result:
  • Assets and liabilities are pooled.
  • Guarantees, joint liability and duplicate claims become single obligations.
  • Intercompany claims are eliminated without any distribution.
  • Equity that one debtor holds in another is cancelled.
• Consolidation does not affect any lien or its validity, perfection or priority. It also leaves untouched secured creditors' rights in their collateral, defenses and setoff rights, and the classification, treatment and distributions of Classes 2 through 20. Outside the plan, the debtors remain legally separate.
• The debtors' expert, Russell Kranzler, concluded that the debtors operated as a single economic unit with heavily commingled finances. He found that separating their assets and liabilities would be impractical and too costly, and that consolidation benefits all creditors without harming any of them. The Chapter 7 comparison also assumes consolidation.

Key Dates

• Voting record date and start of solicitation: Oct. 13, 2026
• Voting and plan objection deadline: Nov. 10, 2026, at 4 p.m. prevailing Central Time
• Plan supplement filing deadline: Nov. 13, 2026, at 12 p.m. prevailing Central Time
• Voting tabulation affidavit and confirmation brief due: Nov. 14, 2026, at 4 p.m. prevailing Central Time
• Combined hearing, also covering the amended allocation motion and the conversion motion: Nov. 17, 23 and 24, 2026, at 9 a.m. prevailing Central Time each day
• Committee's lien challenge deadline as to ELGA: Dec. 1, 2026
• Effective date assumed in the debtors' projections: Dec. 1, 2026
• Post-effective date deadlines:
  • Professional fee applications and rejection damages claims: 30 days after the effective date
  • Administrative claims: 60 days
  • Claim objections: 180 days, subject to extension
• Final priority tax balloon payment: March 23, 2031
• General claims bar dates: July 30, 2026 for the original debtors; the plan puts the bar date for the July and August debtors, including the maritime lien bar date, at Aug. 31, 2026, while the liquidation analysis says the general bar dates for the July debtors (Nov. 23, 2026) and the August debtors (Nov. 27, 2026) have not yet passed.

Exculpation and Injunction

• The plan exculpates the following parties, each only in that role:
  • The debtors
  • Their officers and managers who served during the cases, including CRO Lawrence Perkins
  • The committee and its members
  • Their respective case professionals
• The exculpation covers good-faith acts between the petition date and the effective date relating to the cases, the asset sales and the plan. It does not cover willful misconduct, fraud or gross negligence, as determined by final order. Reasonable reliance on counsel is a defense, and the exculpated parties receive section 1125(e) protection.
• Holders of claims and interests that arose before the effective date are permanently barred from pursuing the debtors, the post-effective date debtors, the estates, the trust or trust assets, except to enforce the plan. Holders of timely claims may still litigate whether their claims are allowed.
• The debtors receive no discharge under section 1141(d)(3). Confirmation does not change the debtors' insurance policies or create direct rights of action against insurers.

Conditions and Other Provisions

• Confirmation is conditioned on the following, each of which the debtors may waive:
  • Court approval of the combined plan in a form acceptable to the debtors
  • The debtors' determination that cash on the effective date will be enough to pay, or reserve for, allowed administrative and priority non-tax claims in full
  • A confirmation order acceptable to the debtors
• The effective date requires:
  • A confirmation order that is final and not subject to any stay
  • Creation of the trust, a court-appointed trustee and a signed trust agreement
  • Transfer of the trust assets
  • Completion of other implementing steps
  The debtors may waive these conditions after consulting the committee, without a court order.
• Executory contracts and unexpired leases are deemed rejected on the effective date unless already assumed or rejected or subject to a pending motion. Insurance contracts benefiting the debtors, their officers and managers, or the trust are not rejected.