Eddie Bauer LLC, et al. - Chapter 11 Plan Terms

Plan Terms

Overview

• Eddie Bauer LLC and its affiliated debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code on February 9, 2026.
• On March 16, 2026, the United States Bankruptcy Court for the District of New Jersey entered the Disclosure Statement Order:
  • Authorizing the Debtors to solicit acceptances for the First Amended Joint Plan of Reorganization of Eddie Bauer LLC and Its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code
  • Conditionally approving the Disclosure Statement as containing adequate information pursuant to section 1125 of the Bankruptcy Code
  • Approving the solicitation materials and voting procedures

Voting Classes

• Class 3 consists of all Allowed ABL Claims
• Class 6 consists of all Allowed General Unsecured Claims
• The Voting Record Date is March 16, 2026, for purposes of determining which Holders of Claims in Class 3 ABL Claims and Class 6 General Unsecured Claims are entitled to vote on the Plan
• A Voting Class shall be deemed to have accepted the Plan if Holders of at least two-thirds in amount and more than one-half in number of Claims that submit votes in such Voting Class vote to accept the Plan

Treatment of Claims

• Class 3 ABL Claims:
  • On the Effective Date, except to the extent that a Holder of an Allowed ABL Claim agrees to less favorable treatment, each Holder of an Allowed ABL Claim shall receive, in full and final satisfaction of such Claim, its pro rata share of:
    • If Class 6 (General Unsecured Claims) votes to reject the Plan, 100% of Net Proceeds
    • If Class 6 (General Unsecured Claims) votes to accept the Plan, 100% of the Net Proceeds less the GUC Contingent Recovery Pool
  • All ABL Claims shall be reserved and preserved as against all Persons or Entities other than the Debtors
• Class 6 General Unsecured Claims:
  • On the Effective Date, except to the extent that a Holder of an Allowed General Unsecured Claim agrees to less favorable treatment, each Holder of an Allowed General Unsecured Claim shall receive:
    • If Class 6 votes to accept the Plan, its pro rata share of the GUC Contingent Recovery Pool
    • If Class 6 votes to reject the Plan, all Allowed General Unsecured Claims shall be canceled, released, and extinguished and will be of no further force or effect, and Holders of Allowed General Unsecured Claims shall not receive any distribution, property, or other value under the Plan on account of such Allowed General Unsecured Claims
• Net Proceeds means all Cash, if any, held by the Debtors or the Wind-Down Debtors, as applicable, on or after the Effective Date in accordance with the Cash Collateral Order, after (a) funding the Professional Fee Escrow Account, (b) funding the Wind-Down Account, and (c) paying or reserving amounts for Allowed Administrative Claims as set forth in Article II.A of the Plan
• GUC Contingent Recovery Pool means the greater of (a) $250,000 and (b) 10% of Net Proceeds in excess of the ABL Threshold Recovery Amount
• ABL Threshold Recovery Amount means (a) an amount equal to 60% of the cost value of all retail inventory, wholesale inventory, credit card accounts receivable, and wholesale receivables of the Debtors, based on the levels of such assets in the Approved Budget (as defined in the Cash Collateral Order) as of the Petition Date less (b) the aggregate amount of all Weekly Paydowns actually paid as of the Effective Date

Voting and Objection Procedures

• The Voting Deadline is April 14, 2026, at 4:00 p.m. (prevailing Eastern Time)
• The Combined Objection Deadline for filing objections to confirmation of the Plan and final approval of the Disclosure Statement is April 14, 2026, at 4:00 p.m. (prevailing Eastern Time)
• The Combined Hearing to consider confirmation of the Plan and final approval of the Disclosure Statement will commence on April 16, 2026, at 10:00 a.m. (prevailing Eastern Time)
• The Opt-Out Deadline for all opt-out elections with respect to the Third-Party Release is May 7, 2026, at 4:00 p.m. (prevailing Eastern Time)

Releases

• Article VIII.D of the Plan provides for a Third-Party Release whereby each Released Party is conclusively, absolutely, unconditionally, irrevocably, and forever released by each Releasing Party from any and all Claims and Causes of Action
  • The releases encompass claims based on or relating to the Debtors or the Estates, the Chapter 11 Cases, the CCAA Recognition Proceedings, the Sale Process, the purchase, sale, or rescission of the purchase or sale of any Security of the Debtors, the Restructuring Transactions, the business or contractual arrangements between the Debtors and any Released Party, and other related matters arising on or before the Effective Date
• Notwithstanding anything to the contrary, the releases set forth above do not release (i) any post-Effective Date obligations of any party or Entity under the Plan, the Confirmation Order, any Restructuring Transaction, or any document executed to implement the Plan or the Restructuring Transactions, (ii) any Retained Causes of Action by the Debtors pursuant to a Schedule of Retained Causes of Action to be attached as an exhibit to the Plan Supplement, and (iii) any Claims, Causes of Action, obligations, rights, or remedies that could be asserted by the Secured Lenders against non-Debtor Loan parties arising out of or related to the Credit Agreements and related loan documents, other than to the extent such Claims arise directly or indirectly as a result of the Claims treated under the Plan
• Released Party means, each of, and in each case in its capacity as such: (a) each Debtor, (b) each Wind-Down Debtor and the Plan Administrator; (c) the Agents; (d) each Consenting Lender; (e) each Releasing Party; (f) the Information Officer; (g) the Purchaser, if any; (h) each current and former Affiliate of each Entity in clause (a) through the following clause (i); and (i) each Related Party of each Entity in clause (a) through this clause (i); provided that an Entity shall not be a Released Party if it: (i) elects to opt out of the releases contained in the Plan; or (ii) timely objects to the releases contained in the Plan, and such objection is not withdrawn or otherwise resolved before the Confirmation Order is entered
• Releasing Party means, each of, and in each case in its capacity as such: (a) each Debtor; (b) each Wind-Down Debtor and the Plan Administrator; (c) the Agents; (d) each Consenting Lender; (e) all Holders of Claims that vote to accept the Plan; (f) all Holders of Claims who are deemed to accept the Plan but who do not affirmatively opt out of the releases provided for in the Plan; (g) all Holders of Claims who abstain from voting on the Plan, other than those who were not sent a ballot or an opt out form in accordance with the Disclosure Statement Order, and who do not affirmatively opt out of the releases provided for in the Plan; (h) all Holders of Claims or Interests who vote to reject the Plan or are deemed to reject the Plan and who do not affirmatively opt out of the releases provided for in the Plan; (i) each current and former Affiliate of each Entity in clause (a) through the following clause (j); and (j) to the maximum extent permitted by law, each Related Party of each Entity in clause (a) through this clause (j); provided that an Entity in clause (f) through clause (i) shall not be a Releasing Party if it: (i) elects to opt out of the releases contained in the Plan; or (ii) timely objects to the releases contained in the Plan and such objection is not withdrawn or otherwise resolved before the Confirmation Order is entered
• Entry of the Confirmation Order shall constitute the Court's approval, pursuant to Bankruptcy Rule 9019, of the Third-Party Release, and the Court's finding that the Third Party Release is: (i) consensual; (ii) essential to the Confirmation of the Plan; (iii) given in exchange for good and valuable consideration provided by each of the Released Parties, including, without limitation, the Released Parties' contributions to facilitating the Restructuring Transactions and implementing the Plan; (iv) a good faith settlement and compromise of the Claims released by the Third-Party Release; (v) in the best interests of the Debtors and their Estates; (vi) fair, equitable, and reasonable; (vii) given and made after due notice and opportunity for hearing; and (viii) a bar to any of the Releasing Parties asserting any Claim or Cause of Action released pursuant to the Third Party Release
• Holders will be deemed to have irrevocably granted the Third-Party Release unless they (a) affirmatively opt out on or before May 7, 2026, at 4:00 p.m. (prevailing Eastern Time) by either completing and returning the Opt-Out Form or visiting the case website and following the instructions on the Opt-Out Form section of the website or (b) timely file an objection to the Third-Party Release with the Bankruptcy Court on or before the Objection Deadline
• The decision to opt out of the Third-Party Release is entirely voluntary and not a requirement under the Plan or applicable law and does not affect recoveries, if any, under the Plan
• If a Holder does not opt out of the Third-Party Release contained in Article VIII of the Plan, the Third-Party Release will be binding on such Holder

Executory Contracts and Unexpired Leases

• On the Effective Date, except as otherwise provided in the Plan, each Executory Contract and Unexpired Lease not previously rejected, assumed, or assumed and assigned, shall be deemed automatically rejected by the applicable Debtor, applicable Wind-Down Debtor, or the Plan Administrator, as applicable, in accordance with the provisions and requirements of sections 365 and 1123 of the Bankruptcy Code
• The Debtors shall cause a Ballot for Class 6 to be served on all counterparties to Unexpired Leases, including previously rejected Unexpired Leases
• Any such party shall be eligible to cast a provisional vote to accept or reject the Plan by the Voting Deadline on account of a Claim in an amount equal to the greater of (a) $1.00 and (b) the amount asserted in any Proof of Claim; provided, that the Debtors shall retain the right to object to the validity of such Claim and the amount asserted in any applicable Proof of Claim
• Any monetary defaults under an Executory Contract or Unexpired Lease to be assumed, or assumed and assigned, pursuant to the Plan shall be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, by payment of the Cure Claim, as reflected on the Cure Notice or as otherwise agreed or determined by a Final Order of the Court, in Cash as soon as reasonably practicable after the entry of an order approving such assumption or assumption and assignment
• Assumption of any Executory Contract or Unexpired Lease pursuant to the Plan or otherwise shall result in the full release and satisfaction of any Claims or defaults, whether monetary or nonmonetary (solely to the extent agreed between the Debtors and the counterparty to an applicable Executory Contract or Unexpired Lease), including defaults of provisions restricting the change in control or ownership interest composition or other bankruptcy-related defaults, arising under any assumed Executory Contract or Unexpired Lease at any time before the date that the Debtors assume such Executory Contract or Unexpired Lease
• Any Proofs of Claim based upon Executory Contracts or Unexpired Leases that have been assumed in the Chapter 11 Cases, including pursuant to the Confirmation Order, and for which any Cure Claim has been fully paid pursuant to Article V.D of the Plan, shall be deemed disallowed and expunged as of the Effective Date without the need for any objection thereto or any further notice to or action, order, or approval of the Court

Plan Support and Committee Recommendation

• Eddie Bauer LLC (on behalf of itself and each of the other Debtors) has approved the filing of the Plan and the solicitation of votes to accept or reject the Plan
• The Debtors believe that the acceptance of the Plan is in the best interests of their estates, Holders of Claims and Interests, and all other parties in interest
• The Debtors believe that any alternative to confirmation of the Plan could result in extensive delays and increased administrative expenses, which, in turn, likely would result in smaller distributions on account of Claims asserted in the Chapter 11 Cases
• The Debtors strongly urge Holders of Claims in the Voting Classes to properly and timely submit Ballots casting votes to accept the Plan in accordance with the instructions on the Ballots
• The Official Committee of Unsecured Creditors is currently negotiating for improved treatment to the Plan, which if successful, will result in a far greater recovery being proposed
• The Committee believes the current Plan does not provide adequate value to Class 6 general unsecured creditors for unencumbered assets, which include avoidance actions and other potentially eligible causes of action
• The Committee estimates that unsecured creditors are owed not less than $100 million and that the current Plan proposal offers Class 6 general unsecured creditors an effective 0.00% recovery
• The Committee is conducting a comprehensive investigation of the Debtors' prepetition transfers and business operations
• The Committee urges Class 6 general unsecured creditors to vote NO on the Plan in an effort to negotiate for the best available recovery for unsecured creditors

Plan Modification

• The Debtors are authorized to make non-substantive changes to the Plan, Disclosure Statement, Solicitation and Voting Procedures, Ballots, Opt-Out Form, Solicitation Packages, Notices of Non-Voting Status, Combined Hearing Notice, Publication Notice, Cover Letter, Plan Supplement Notice, Assumption Notice, Rejection Notice, any other notice, and any related documents without further order of the Court, including formatting changes, changes to correct typographical and grammatical errors, and to make conforming changes to the Disclosure Statement, the Plan, and any other materials in the Solicitation Packages before distribution
• The Debtors' rights to modify the Plan in accordance with Article X thereof, including the right to withdraw the Plan as to an individual Debtor at any time before the Combined Hearing Date, are reserved
• The Debtors are authorized to revoke or withdraw the Plan before the Combined Hearing and to file subsequent chapter 11 plans
• If the Debtors revoke or withdraw the Plan, or if Confirmation or Consummation does not occur, then: (a) the Plan will be null and void in all respects; (b) any settlement or compromise embodied in the Plan (including the fixing or limiting to an amount certain of any Claim or Interest or Class of Claims or Interests), assumption or rejection of Executory Contracts or Unexpired Leases effected under the Plan, and any document or agreement executed pursuant to the Plan, shall be deemed null and void, provided that all provisions of the Restructuring Support Agreement that survive termination thereof shall remain in effect in accordance with the terms thereof; and (c) nothing contained in the Plan shall (i) constitute a waiver or release of any Claims or Interests, (ii) prejudice in any manner the rights of such Debtor or any other Entity, or (iii) constitute an admission, acknowledgment, offer, or undertaking of any sort by such Debtor or any other Entity