First Brands Group - Chapter 11 Plan Terms

Plan Terms

Overview

• First Brands Group Holdings, LLC (“FBGH”), FBGH’s direct and indirect Debtor subsidiaries, and Viceroy Private Capital, LLC (collectively, the “FBG Debtors”) propose a joint chapter 11 plan (the “Plan”) pursuant to section 1121(a) of the Bankruptcy Code.
  • The Plan’s provisions, including Articles II-IV, apply only to Claims against and Interests in the FBG Debtors and not to any Claims against or Interests in the SPV Debtors.
• The Plan embodies a compromise and settlement among the FBG Debtors, the Ad Hoc Group, and the Creditors’ Committee (the “Plan Settlement”) pursuant to sections 105(a), 361, 363, 364, 1123(b)(3)(A), and 1123(b)(6) of the Bankruptcy Code and Bankruptcy Rule 9019.
  • The compromises and settlements included in the Plan Settlement are integrated with and dependent on all other compromises and settlements contemplated in connection with the Plan and are necessary and integral to the Plan; the compromises, settlements, and releases are deemed non-severable from each other and from all other terms of the Plan.
  • Entry of the Confirmation Order constitutes the Bankruptcy Court’s approval of the Plan Settlement, as well as a finding that it is fair, equitable, reasonable, and in the best interests of the FBG Debtors’ Estates.
• The Plan implements the restructuring through three liquidating trusts—the Litigation Trust, the DIP Collateral Trust, and the ABL Collateral Trust—together with a Wind Down of the FBG Debtors’ remaining assets.
• Solely for purposes of distributions under the Plan, (i) each Claim filed or to be filed against any FBG Debtor is deemed filed as a single Claim against, and a single obligation of, the FBG Debtors; (ii) Claims on account of intercompany guarantees are treated as eliminated, such that a Claim and any guarantee-based Claim are treated as one Claim against a single consolidated Estate; and (iii) any joint or joint and several liability is treated as one obligation and one Claim against a single consolidated Estate.

Rationale for the Plan Settlement

• The DIP Secured Parties hold superpriority liens on (i) all prepetition and postpetition property of the FBG Debtors, including the DIP Loan Parties and Parent Guarantors, and all proceeds thereof, including all Estate Claims (excluding Avoidance Actions but including Avoidance Proceeds); (ii) all Additional Unencumbered Property; and (iii) all Prepetition Collateral (other than ABL Priority Collateral, on which the liens of the DIP Secured Parties, the First Lien Secured Parties, and the Second Lien Term Loan Secured Parties are junior to those of the ABL Secured Parties).
• The DIP Secured Parties have alleged that various events of default have occurred and are continuing under the DIP Documents, and the DIP Loan Parties and Parent Guarantors do not have sufficient funds to indefeasibly pay the DIP Obligations in full in Cash.
• The Plan Settlement incorporates a consensual arrangement to (i) permit the DIP Secured Parties to accelerate the DIP Obligations and enforce remedies against the FBG Debtors without the costs, expenses, and risks of attendant litigation, and (ii) provide recoveries to junior creditors of the FBG Debtors, allowing such creditors to participate in recovery prior to satisfaction in full of the DIP A Claims and Roll-Up Claims.
• The Challenge Period is deemed to expire against the Creditors’ Committee and all other parties in interest, unless already expired under the DIP Order, upon the (i) establishment of the Litigation Trust, (ii) consummation of the Estate Claims Credit Bid Transaction, and (iii) funding of the Litigation Trust Cash Funding to the Litigation Trust.
• The Plan Settlement is conditioned upon the FBG Debtors’, Ad Hoc Group SteerCo’s, and Creditors’ Committee’s agreement to a budget for amounts payable by the FBG Debtors from the date of entry of the order conditionally approving the Disclosure Statement to the Confirmation Date (the “Agreed Budget”).
  • No Allowed Professional Fees may be paid from the Litigation Trust Cash Funding, the Litigation Trust, or the DIP Collateral Trust.
  • All Professionals waive their right to any Post-Carve Out Amount (as defined in the DIP Order), which shall not act as a waiver of any condition precedent set forth in Section 12.1 of the Plan.
  • Professionals must file final fee applications within ninety calendar days after the Confirmation Date, with objections due twenty-one calendar days after filing. Five Business Days before the Confirmation Date, holders of Professional Fee Claims shall provide reasonable estimates of unpaid amounts, which the Debtors shall fund into the Professional Fees Escrow Account; provided that the Debtors may not fund amounts that would cause the FBG Debtors to have in the aggregate less than $25 million in Cash on their balance sheet on the Confirmation Date without the consent of the Ad Hoc Group SteerCo. When all Allowed Professional Fee Claims have been paid in full, any remaining escrow amount is released and vests in the DIP Collateral Trust.

Credit Bid Transactions

• On the Confirmation Date or as soon as reasonably practicable thereafter, the FBG Debtors shall consummate the Estate Claims Credit Bid Transaction and the DIP Collateral Credit Bid Transaction. The Plan serves as a motion seeking entry of a Bankruptcy Court order approving each transaction under sections 105, 363(b) and (f), and 1123(a)(5)(D) of the Bankruptcy Code, including findings that each transaction is (a) in exchange for good and valuable consideration, (b) in the best interests of the FBG Debtors and their Estates, (c) fair, equitable, reasonable, and free and clear, and (d) effected after due notice and opportunity for hearing, and that the relevant parties are afforded the protections of section 363(m) of the Bankruptcy Code.
• Estate Claims Credit Bid Transaction:
  • The FBG Debtors are conducting a marketing and sale process for the Estate Claims.
  • Unless the FBG Debtors determine the Estate Claims Credit Bid Transaction is not the highest or best offer (with the consent of the Creditors’ Committee, not to be unreasonably withheld, conditioned, or delayed), the FBG Debtors shall sell and transfer the Litigation Trust Assets to the DIP Secured Parties, with such assets then transferring to the Litigation Trust free and clear of all Liens, Claims, encumbrances, and Interests.
  • The aggregate consideration to be paid by the DIP Secured Parties shall be the Estate Claims Credit Bid—a credit bid and equivalent release of the DIP Loan Parties of all or a portion of the Allowed DIP A Claims—as the same may be increased at any auction.
• DIP Collateral Credit Bid Transaction:
  • The FBG Debtors shall sell and transfer the DIP Collateral Trust Assets to the DIP Secured Parties, pursuant to the DIP Collateral Credit Bid APA (if applicable), with such assets then transferring to the DIP Collateral Trust free and clear of all Liens, Claims, encumbrances, and Interests.
  • The aggregate consideration to be paid by the DIP Secured Parties shall be the DIP Collateral Credit Bid—a credit bid and equivalent release of the DIP Loan Parties of all or a portion of the Allowed DIP A Claims.

Litigation Trust

• On the Confirmation Date, or as soon thereafter as reasonably practicable, the Litigation Trust shall be established to hold and liquidate the Litigation Trust Assets and make distributions to the Litigation Trust Beneficiaries. Upon establishment, the Litigation Trust Assets transfer automatically and without further action of the Bankruptcy Court, and each holder of Litigation Trust Interests is deemed a party to the Litigation Trust Agreement without the need for execution.
  • The Litigation Trust’s primary purpose is liquidating the Litigation Trust Assets, with no objective to continue or engage in the conduct of a trade or business except to the extent reasonably necessary to conserve and protect the assets and provide for their orderly liquidation.
  • The Litigation Trust is intended to be treated for U.S. federal income tax purposes as a “liquidating trust” described in Treasury Regulation section 301.7701-4(d) that is a “grantor trust,” except to the extent any assets allocable to, or held on account of, Disputed Claims are treated as a “disputed ownership fund” within the meaning of Treasury Regulations section 1.468B-1 et seq. or other separate taxable entity.
  • In the event of any inconsistency between the Plan and the Litigation Trust Agreement, the Litigation Trust Agreement shall control.
• Litigation Trust Assets, to be identified in a schedule annexed to the Litigation Trust Agreement, include:
  • The Litigation Trust Cash Funding, consisting of $25 million in Cash from the FBG Debtors’ balance sheet provided upon establishment of the Litigation Trust and received on the Confirmation Date.
  • All Estate Claims, including all 506(c), 552(b), and other surcharge rights, claims, and causes of action, together with all related rights, privileges, and defenses of the FBG Debtors.
  • The FBG Debtors’ and Creditors’ Committee’s rights, privileges, and defenses in respect of the D&O Proceeds Appeals.
  • All Insurance Rights of the FBG Debtors with respect to Insurance Policies that provide or may provide coverage for the Estate Claims, including the rights to the proceeds of the D&O Policies.
  • All Direct Creditor Claims of Preference Settlement Electing Creditors, which are contributed by such creditors and are not assets transferred in connection with the Estate Claims Credit Bid Transaction.
  • All books, records, and investigative and discovery findings of the FBG Debtors, including records owned or controlled by advisors to the FBG Debtors, any independent director or manager, the Examiner and his advisors (subject to mutual agreement on cooperation/transfer), and advisors to the Creditors’ Committee; provided that such professionals, the independent directors or managers, and the Examiner and his advisors shall not be required to turn over all work product and communications, but each may, in its sole discretion, compile its material findings, information, and records and provide such compilation to the Litigation Trust and/or enter into common interest or other agreements sufficient to facilitate turnover.
  • All Litigation Trust SPV Recoveries.
  • All assets or other interests in property made payable to or otherwise acquired by any of the FBG Debtors or their Estates as a result of any government enforcement action, including any forfeiture proceeding, order of restitution, or governmental settlement agreement.
  • Litigation Trust Assets shall not include any assets determined by Final Order to be property of the SPV Debtors or their Estates, any of the Factors, or any of the SPV Lenders.
• Gerard Uzzi of Uzzi & Lall shall serve as Litigation Trustee, appointed upon the establishment of the Litigation Trust.
  • On the Confirmation Date, the Litigation Trustee shall be substituted as the party in interest for the Creditors’ Committee, without the need for any court order, with respect to any (i) motion filed by the Creditors’ Committee seeking standing to assert any cause of action on behalf of the FBG Debtors not released or waived under the Plan, and (ii) complaint filed by the Creditors’ Committee on behalf of the FBG Debtors pursuant to a grant of standing by the Bankruptcy Court.
  • The Litigation Trustee shall inherit all “challenge” rights possessed by the Creditors’ Committee not otherwise waived in the Plan, on the same terms and with the same deadlines as possessed by the Creditors’ Committee on the Confirmation Date, and shall not be bound by any FBG Debtor stipulation to the extent the Creditors’ Committee is not so bound pending resolution of such challenge; provided that nothing in this provision modifies or affects the expiration of the Challenge Deadline (as defined in the DIP Order).
• Litigation Trust Oversight Committee:
  • Appointed on the Confirmation Date, the initial committee shall be comprised of four members—three AHG Members appointed by the Ad Hoc Group SteerCo and one UCC Member appointed by the Creditors’ Committee. Following satisfaction of the Final Return Threshold, the committee shall be comprised of three members—one AHG Member and two UCC Members.
  • The UCC Member must be a Preference Settlement Electing Creditor and shall be entitled to compensation of $125,000 per year, paid by the Litigation Trust. If the initial UCC Member does not timely opt in to being a Preference Settlement Electing Creditor (as such deadline may be extended), the Litigation Trustee may remove such member in its sole discretion. Any replacement shall be selected by the prior members of the Creditors’ Committee from a pool of eligible candidates set forth in the Litigation Trust Agreement, in a process coordinated by the Claims Ombudsman; if they do not make a selection within seven days of the removal, they may instead select either the Claims Ombudsman or an independent person who was not a Professional retained by the Creditors’ Committee and who otherwise satisfies the criteria for serving as Claims Ombudsman. The Claims Ombudsman shall inform the Litigation Trustee of the ultimate selection.
  • Major Decisions require, before satisfaction of the Final Return Threshold, the affirmative vote of at least two AHG Members and a majority of the committee, and, thereafter, the affirmative vote of a majority of the committee.
  • Sacred Rights require, before satisfaction of the Final Return Threshold, the affirmative vote of at least two AHG Members and the UCC Member, and, thereafter, the affirmative vote of the AHG Member and at least one UCC Member.
• The Litigation Trust shall indemnify and hold harmless the Litigation Trustee and the members of the Litigation Trust Oversight Committee for any losses incurred in such capacities, except to the extent such losses were the result of such party’s fraud, bad faith, gross negligence, willful misconduct, or criminal misconduct.
• Distributions owed to holders of Class 1, Class 2, Class 3(a), and Class 3(c) Litigation Trust Interests shall be made by one or more distribution agents selected by the Ad Hoc Group SteerCo (the “Lender Distribution Agent”), whose reasonable costs shall be paid by the Litigation Trust, subject to a budget to be agreed by the Litigation Trustee and the Lender Distribution Agent.
• The Litigation Trust Interests shall not be certificated and shall be nontransferable and non-assignable except by will, intestate, succession, or operation of law. No fractional interests shall be issued, and no Cash shall be distributed in lieu of fractional amounts. No Litigation Trust Interests shall be issued to a holder of an Allowed Lender Claim if the entitlement is for less than $1,000 in principal amount of such Claim, and no Cash or other distribution shall be made as a result of such adjustment.
• If the DIP Collateral Trust or the ABL Collateral Trust receives or obtains possession or ownership of Litigation Trust Assets, such assets shall be assigned, turned over, or otherwise transferred to (or held in trust for the benefit of) the Litigation Trust.
• The Litigation Trust shall not be dissolved later than five years from its establishment unless the Bankruptcy Court, upon motion made within the six-month period before such fifth anniversary (and, for further extensions, within the six-month period before the end of the preceding extension), determines that a fixed period extension is necessary to facilitate or complete the recovery on, and liquidation of, the Litigation Trust Assets. Any such extension may not exceed three years, together with any prior extensions, absent a favorable IRS private letter ruling or an opinion of counsel satisfactory to the Litigation Trustee that further extension would not adversely affect the trust’s status as a liquidating trust for U.S. federal income tax purposes.

Privileges and Preservation of Claims

• All attorney-client privileges, work product protections, joint client, mediation, common interest, and joint defense privileges, and all other privileges, immunities, or protections from disclosure held by any FBG Debtor or by any prepetition or postpetition committee or subcommittee of an FBG Debtor’s board of managers or equivalent governing body, relating in any way to the Litigation Trust Assets or the purpose of the Litigation Trust, together with all information, documents, and materials covered by them, are deemed transferred, assigned to, and vested in the Litigation Trust and its authorized representatives.
  • Where such privileges or privileged information relate both to the Litigation Trust Assets and to a matter in which the FBG Debtors, the ABL Collateral Trust, or the DIP Collateral Trust have an interest, they vest jointly. In litigations concerning matters in which an FBG Debtor or the ABL or DIP Collateral Trust has an interest as a potential defendant, that party maintains the privilege and may waive or disclose only with the Litigation Trust’s prior written consent; in litigations concerning the Litigation Trust Assets where such a party is a potential defendant, the Litigation Trust maintains the privilege and may waive or disclose only with that party’s prior written consent. The parties do not intend a general waiver and will take commercially reasonable steps to avoid one.
  • Pursuant to Federal Rules of Evidence 502(d) and 502(c), no privilege is waived by the transfer, by production to the Litigation Trust, or by inadvertent disclosure to a third party; the disclosing party must promptly notify the Litigation Trust and demand return or confirmed destruction. The Litigation Trustee has no obligation to waive privilege when fulfilling its duty to meet and confer with any party in interest.
• Causes of Action transferred to the Litigation Trust from each FBG Debtor’s Estate and from each Preference Settlement Electing Creditor remain separate and distinct, and the Litigation Trust holds and prosecutes them on behalf of each contributing Estate or creditor as though held independently. Consolidation within the Litigation Trust does not merge those claims or permit any party to assert cross-Debtor or cross-creditor defenses, setoffs, recoupments, or counterclaims, or to reduce its liability by reference to dealings with a different FBG Debtor or creditor.
• Nothing in the Plan impairs a defendant’s ability to assert, in response to any Cause of Action, any defense or legal argument, including recoupment, setoff, or offset, arising from its dealings with any FBG Debtor, or any defense based on substantive consolidation, veil piercing, alter ego, or similar doctrines, including the argument that subsequent new value provided to one Debtor or related entity should be treated as value provided to another or to the FBG Debtors in the aggregate; the FBG Debtors and the Litigation Trustee retain the right to contest any such defense.

Litigation Trust Funding

• On the Confirmation Date, the Litigation Trust Class 1 Funding Contributors will provide the Initial Litigation Trust Funding Commitments—commitments to fund Cash contributions in a principal amount of $50 million—available to pay litigation costs, costs of administration, and costs of monetizing the Litigation Trust Assets.
  • No holder of Allowed DIP A Claims may provide Initial Litigation Trust Funding Commitments unless such holder holds at least $1,000 in principal amount of Allowed DIP A Claims.
  • Litigation Trust Class 1 Funding Contributors consist of holders of Allowed DIP A Claims that commit to provide the Initial Litigation Trust Funding Commitments on or before the Confirmation Date and, if applicable, holders of Class 1 Litigation Trust Interests that commit to provide Additional Class 1 Litigation Trust Funding following the Confirmation Date.
• The Litigation Trust Backstop Parties—holders of DIP A Claims that are members of the Ad Hoc Group SteerCo and sign a backstop commitment letter on or before the Confirmation Date—shall provide a backstop commitment on the Confirmation Date, on a pro rata basis, to ensure adequate capitalization of the Litigation Trust notwithstanding the rate of participation from holders of DIP A Claims.
  • To the extent any Litigation Trust Class 1 Funding Contributor fails to fund, declines to fund, or is otherwise unable to fund all or any portion of its pro rata share of the Initial Litigation Trust Funding Commitments (the “Unfunded Amount”), the Litigation Trust Backstop Parties shall subscribe for and fund such Unfunded Amount on a pro rata basis based on their respective commitments (or as otherwise agreed), and shall be entitled to receive Class 1 Litigation Trust Interests in respect of any Unfunded Amount actually funded.
• Key commitment terms:
  • Commitment Period: five years.
  • Minimum Funding: available in one or more draws, equal to the lesser of (i) $10 million and (ii) the undrawn commitment amount.
  • Consequences of breach: if a Litigation Trust Class 1 Funding Contributor elects to provide an Initial Litigation Trust Funding Commitment but fails to fund when requested by the Litigation Trustee at any point during the Commitment Period, the Litigation Trustee shall be entitled to seek enforcement of any applicable commitment agreement, the Plan, the Litigation Trust Agreement, or the Litigation Trust Funding Agreement, or take other actions allowed under applicable law.
• Entry of the Confirmation Order constitutes approval of the Initial Litigation Trust Funding Commitments and Litigation Trust Backstop Commitments, which are bargained-for and integral parts of the restructuring transactions contemplated under the Plan and are necessary and incidental to the liquidating purpose of the Litigation Trust.
  • Subject only to the provision of such commitments, their terms and conditions are satisfied and earned as of entry of the Confirmation Order.
  • Upon execution of the Litigation Trust Agreement or any Litigation Trust Funding Agreement, the commitments constitute legal, valid, and binding obligations enforceable in accordance with their terms and shall not be enjoined or subject to discharge, impairment, release, avoidance, recharacterization, usury, or subordination under applicable law, the Plan, or the Confirmation Order.
• Additional Litigation Trust Funding:
  • The Litigation Trust may obtain all or a portion of the Additional Class 1 Litigation Trust Funding as Additional Class 1 Litigation Trust Interests if such commitments are (a) on the same terms as the Initial Litigation Trust Funding Commitments (including Section 6.5(b)(i)-(iv) of the Plan) and (b) approved by the Litigation Trust Oversight Committee as a Major Decision.
  • Additional Class 1 Litigation Trust Funding is capped at up to $37.5 million.
  • If the Litigation Trust has already obtained all Additional Class 1 Litigation Trust Funding, it may obtain Additional Waterfall Litigation Trust Funding if such funding is (a) approved by a unanimous vote of the Litigation Trust Oversight Committee, including the UCC Member(s), or (b) approved by the Bankruptcy Court pursuant to the Court-Approved Additional Waterfall Litigation Funding. The Bankruptcy Court may approve such funding upon a finding that it is reasonably necessary to adequately monetize the Litigation Trust Assets or is otherwise in the best interests of Litigation Trust Beneficiaries.
  • All Additional Litigation Trust Funding is subject to the following conditions: (i) the Litigation Trustee shall conduct an Agreed Market Check; (ii) at the time of seeking such funding, the Litigation Trust has, or the Litigation Trustee reasonably expects it will have in the near term, less than $7.5 million on a pro forma basis; and (iii) if provided by an insider, including an existing holder of Class 1 Litigation Trust Interests, the funding must be on economic terms no more expensive for the Litigation Trust than those set forth in Section 6.5(b)(i)-(iii) of the Plan.
  • Any additional funding of the Litigation Trust, including any Additional Litigation Trust Funding, shall be offered first to holders of Class 1 Litigation Trust Interests on a pro rata basis pursuant to the Litigation Trust Agreement and applicable law. Each such holder is deemed to have declined the offer if it has not committed to provide such funding within ten business days of a request therefor.
  • The Litigation Trustee may nonetheless decide, in its sole discretion, not to obtain or cause the funding of the Additional Class 1 Litigation Trust Funding if it determines that doing so may result in the Litigation Trust or the Litigation Trust Interests being or having been subject to registration and/or reporting requirements under the Securities Act, the Exchange Act, the Trust Indenture Act, or the Investment Company Act.
  • Any Additional Class 1 Litigation Trust Interests issued shall participate pro rata in the Class 1 Litigation Trust Waterfall solely with respect to distributions made after closing of such funding, and providers shall be entitled to distributions only with respect to their own undrawn or backstopped commitments.
  • Additional Waterfall Litigation Trust Funding may be structurally and contractually senior to the Litigation Trust Waterfall; providers of such funding shall not receive any Class 1 Litigation Trust Interests or Additional Class 1 Litigation Trust Interests on account thereof.
  • The Litigation Trust Class 1 Funding Contributors may decline to fund a requested contribution in the reasonable discretion of the Required Litigation Trust Funding Contributors if they determine, based on a written valuation or status report from the Litigation Trustee, that the remaining liquidation value of the Litigation Trust Assets would be insufficient to repay the outstanding Class 1 Litigation Trust Interests; provided that, upon declining, the Litigation Trust shall be prohibited from obtaining any future Additional Waterfall Litigation Trust Funding from such holder or its Affiliates.

Litigation Trust Waterfall

• Except as may be altered by the provisions of Additional Waterfall Litigation Trust Funding, proceeds from the monetization of the Litigation Trust Assets, net of fees, costs, or other expenses, shall be distributed as follows:
  • First, to holders of Class 1 Litigation Trust Interests (or, if applicable, Additional Class 1 Litigation Trust Interests), the amounts to which they are entitled in respect of principal and investment return from the Litigation Trust Class 1 Funding Commitments, Contributions, and any Additional Class 1 Litigation Trust Funding (the “First Return Threshold”).
  • Second, following satisfaction of the First Return Threshold until aggregate distributions from the Litigation Trust (including distributions pursuant to Section 6.5(b) of the Plan) equal $350 million (the “Second Return Threshold”): 15% to holders of Class 1 Litigation Trust Interests (and Additional Class 1 Litigation Trust Interests, if applicable) and 85% to holders of Class 2 Litigation Trust Interests.
  • Third, following satisfaction of the Second Return Threshold until aggregate distributions to holders of Class 2 Litigation Trust Interests equal the amount of the Allowed DIP A Claims as of the Confirmation Date, excluding any reduction for the Credit Bid Claims (the “Final Return Threshold”): 10% to holders of Class 1 Litigation Trust Interests (and Additional Class 1 Litigation Trust Interests, if applicable), 74% to holders of Class 2 Litigation Trust Interests, and 16% to holders of Class 3 Litigation Trust Interests, subject to payment in full of Allowed Settled Administrative Expense Claims, Allowed Administrative Expense Claims, Allowed Priority Tax Claims, and Allowed Other Priority Claims.
  • Fourth, following satisfaction of the Final Return Threshold: 10% to holders of Class 1 Litigation Trust Interests (and Additional Class 1 Litigation Trust Interests, if applicable) and 90% to holders of Class 3 Litigation Trust Interests, subject to payment in full of the foregoing administrative and priority claims.
• Class 1 Litigation Trust Interests Distributions shall be paid as follows:
  • First, to the Litigation Trust Class 1 Funding Contributors, pro rata in accordance with their respective contributions, until each has received an amount equal to the greater of (a) a 20.0% internal rate of return on such contributions and (b) a 1.75x multiple on invested capital, with such returns measured from the date of each contribution.
  • Second, to the Litigation Trust Class 1 Funding Contributors, in an amount accrued on the daily undrawn amounts of their respective commitments at a rate of 5.0% per annum; provided that no such distribution shall be made in respect of undrawn commitments for any period during which such contributor is a Defaulting Contributor.
  • Third, to the Litigation Trust Backstop Parties until each has received an amount equal to 5.0% of the amount of such party’s Litigation Trust Class 1 Funding Commitment backstopped by it, whether drawn or undrawn; provided that (1) no such distribution shall be made for any period during which such party is a Defaulting Contributor and (2) if a Backstop Party becomes a Defaulting Contributor, its backstop commitments and related fees may be terminated or reallocated in the Litigation Trustee’s reasonable discretion.
  • Fourth, to the Litigation Trust Class 1 Funding Contributors, pro rata in accordance with the amounts of their respective Litigation Trust Class 1 Funding Commitments (whether drawn or undrawn, and whether or not the Commitment Period has lapsed), for the life of the Litigation Trust; provided that no such distribution shall be made for any period during which such contributor is a Defaulting Contributor. Note that the First Return Threshold is measured by reference only to the first three tiers, so this fourth tier lies outside it.
  • Any payment of principal, interest, fees, or other amounts received by the Litigation Trustee for the account of, or from, a Defaulting Contributor shall be applied: first, to amounts owing by such contributor to the Litigation Trustee; second, to funding the contribution such contributor failed to fund; third, to amounts owing under any judgment against such contributor arising from its failure to fund; and fourth, to such contributor or as otherwise directed by a court of competent jurisdiction.
• Class 2 Litigation Trust Interests Distributions shall be paid pro rata based on the Class 2 Litigation Trust Interests held by such holders.
• Class 3 Litigation Trust Interests Distributions (together with distributions to holders of Settled Administrative Expense Claims, Administrative Expense Claims, Priority Tax Claims, and Other Priority Claims) shall be paid as follows:
  • First, to holders of Settled Administrative Expense Claims, pro rata, until each has received distributions equal to its Allowed Settled Administrative Expense Claim.
  • Second, to holders of Allowed Administrative Expense Claims (other than Settled Administrative Expense Claims), pro rata, until each has received distributions equal to its Allowed Administrative Expense Claim.
  • Third, to holders of Allowed Other Priority Claims, pro rata, until each has received distributions equal to its Allowed Other Priority Claim.
  • Fourth, to holders of Priority Tax Claims, pro rata, until each has received distributions equal to its Allowed Priority Tax Claim.
  • Fifth, to holders of Allowed Roll-Up Claims, Allowed First Lien Claims, Allowed Second Lien Claims, and Allowed General Unsecured Claims, pro rata based on the aggregate amount of the $3.3 billion of Allowed Roll-Up Claims (the amount at which Roll-Up Claims are deemed Allowed solely for purposes of the Litigation Trust Waterfall), Allowed First Lien Claims as of the Confirmation Date, Allowed Second Lien Claims as of the Confirmation Date, and Allowed General Unsecured Claims, until each holder has received distributions equal to its respective Claim amount.
  • Sixth, to holders of Allowed Subordinated Claims, pro rata, until each has received distributions equal to its Allowed Subordinated Claim.
  • Following aggregate distributions equal to the amount of all Allowed Subordinated Claims, any residual value shall be paid as directed by the Litigation Trust Oversight Committee, subject to Bankruptcy Court approval; provided that no residual value shall be distributable to or for the benefit of the FBG Debtors.

DIP Collateral Trust

• On the Confirmation Date, or as soon thereafter as reasonably practicable, the DIP Collateral Trust shall be established to hold, transfer, sell, monetize, or abandon the DIP Collateral Trust Assets and make distributions to the DIP Collateral Trust Beneficiaries. The DIP Collateral Trust is intended to be treated for U.S. federal income tax purposes as a “liquidating trust” described in Treasury Regulation section 301.7701-4(d) that is a “grantor trust.”
• DIP Collateral Trust Assets, to be identified in a schedule annexed to the DIP Collateral Trust Agreement, include:
  • All DIP Collateral (other than the Litigation Trust Assets) for which, on the date the trust is established, (x) no bona fide dispute exists as to whether the DIP Secured Parties, the First Lien Secured Parties, or the Second Lien Term Loan Secured Parties have a validly perfected Lien senior in priority to the Liens securing the ABL Claims, or (y) if such a dispute exists, it is subsequently determined by a court of competent jurisdiction pursuant to a Final Order or settlement that such parties have such a Lien.
  • All reversionary interests and/or second lien interests of the DIP Secured Parties, the First Lien Secured Parties, or the Second Lien Term Loan Secured Parties in the ABL Priority Collateral.
  • All Ultinon Claims and Interests, any DIP Collateral Trust SPV Recoveries, and the DIP Collateral Trust Additional Payments.
• The identity of the initial DIP Collateral Trustee will be disclosed in the Plan Supplement. On the Confirmation Date, the DIP Collateral Trust Oversight Committee—an unpaid committee consisting of three holders of DIP Claims selected by the Ad Hoc Group SteerCo—shall be appointed.
  • The DIP Collateral Trust shall indemnify and hold harmless the DIP Collateral Trustee and the DIP Collateral Trust Oversight Committee for any losses incurred in such capacity, except to the extent such losses were the result of such party’s fraud, bad faith, gross negligence, willful misconduct, or criminal misconduct.
• DIP Collateral Trust Funding, consisting of the Primary and Secondary DIP Collateral Trust Funding, will be provided by the DIP Collateral Trust Funding Contributors and shall be available to pay costs of the trust, costs of administration, and costs of monetizing the DIP Collateral Trust Assets.
  • The Primary DIP Collateral Trust Funding is the use of DIP Collateral Sale Proceeds—proceeds from any sale of FBG Debtor assets allocated but not yet distributed to holders of DIP A Claims on or before the Confirmation Date—by members of the Ad Hoc Group SteerCo that agree to withhold their pro rata share of such proceeds and direct them to fund the trust, in an amount up to $20 million.
  • The Secondary DIP Collateral Trust Funding Contributors are the holders of DIP A Claims on the Confirmation Date that are not Primary DIP Collateral Trust Funding Contributors.
  • The DIP Collateral Trust Funding is necessary and incidental to the liquidating purpose of the trust and is a bargained-for and integral part of the restructuring transactions contemplated under the Plan. Entry of the Confirmation Order constitutes approval of the funding, and, subject only to its provision, its terms and conditions are satisfied and earned as of entry of the Confirmation Order.
• Proceeds of the DIP Collateral Trust Assets, net of expenses, shall be distributed as follows, with distributions to each class of DIP Collateral Trust Interests made pro rata:
  • First, to the Primary DIP Collateral Trust Funding Contributors, pro rata, until each has received an amount equal to the greater of (a) a 20.0% internal rate of return on such funding and (b) a 1.75x multiple on invested capital, measured from the date of the Primary DIP Collateral Trust Funding.
  • Second, to the Secondary DIP Collateral Trust Funding Contributors, pro rata, until each has received an amount equal to the greater of (a) a 20.0% internal rate of return on such funding and (b) a 1.75x multiple on invested capital, measured from the date of the Secondary DIP Collateral Trust Funding.
  • Third, to holders of Class 2 DIP Collateral Trust Interests until such holders receive aggregate distributions equal to the amount of the Allowed DIP A Claims as of the Confirmation Date, excluding any reduction for the Credit Bid Claims.
  • Fourth, to the extent that at any time (a) aggregate distributions to holders of Class 2 DIP Collateral Trust Interests and Class 2 Litigation Trust Interests equal the amount of the Allowed DIP A Claims as of the Confirmation Date, excluding any reduction for the Credit Bid Claims, and (b) all Allowed Administrative Expense Claims, including Allowed Settled Administrative Expense Claims, have not been repaid in full from the proceeds of the Litigation Trust Assets, to holders of Allowed Administrative Expense Claims until such Claims are paid in full.
  • Following aggregate distributions equal to the amount of Allowed DIP A Claims as of the Confirmation Date, any residual value shall be paid as directed by the DIP Collateral Trust Oversight Committee, subject to Bankruptcy Court approval; provided that no residual value shall be distributable to or for the benefit of the FBG Debtors.
• The DIP Collateral Trust Interests shall not be certificated and shall be nontransferable and non-assignable except by will, intestate, succession, or operation of law. If the Litigation Trust or the ABL Collateral Trust obtains possession or ownership of DIP Collateral Trust Assets, such assets shall be assigned, turned over, or otherwise transferred to (or held in trust for the benefit of) the DIP Collateral Trust.
• The DIP Collateral Trust shall not be dissolved later than five years from its establishment, subject to the same extension mechanics and limitations applicable to the Litigation Trust.
• The DIP Collateral Trustee, on behalf of the DIP Collateral Trust, shall have the right under section 363(k) of the Bankruptcy Code to credit bid up to the full amount of the Remaining DIP A Claims in any sale of DIP Collateral, whether effectuated through sections 363, 1123, or 1129(b) of the Bankruptcy Code, by a chapter 7 trustee under section 725, or otherwise. No provision of the Plan, the Confirmation Order, or any Definitive Document shall be construed to limit, restrict, or otherwise impair that right.
• Maintenance of the lender registers for holders of any Allowed Lender Claims shall vest in the DIP Agent upon the Confirmation Date, with associated post-Confirmation Date costs paid by the DIP Collateral Trust. Upon the Confirmation Date, the lender registers maintained by the agents under the DIP Credit Agreement, First Lien Term Loan Agreement, and Second Lien Term Loan Agreement shall be and remain frozen and non-transferable, other than to facilitate (i) transfers among Affiliates; (ii) transfers required in connection with the termination, wind-down, or expiration of a collateralized loan obligation vehicle, collateralized debt obligation, or similar structured finance vehicle holding such claims, including transfers to a liquidating trust, warehouse facility, or similar entity; (iii) transfers required in connection with a replacement of, or succession to, the investment manager or collateral manager of any such vehicle; and (iv) transfers required by applicable law or by the holder’s organizational or governing documents in effect as of the Confirmation Date.
• If any advisors or professionals are hired, requested, or directed by the DIP Collateral Trust Oversight Committee to litigate or otherwise act in furtherance of preserving DIP Collateral Trust Assets and/or any Allowed Lender Claims, such advisors shall be directed, paid, and funded by the DIP Collateral Trust.
• With respect to any DIP Claims, First Lien Claims, and Second Lien Claims not contributed into the DIP Collateral Trust, the Required Lenders under the DIP Order, the Side-Car Term Loan Agreement, the First Lien Term Loan Agreement, and the Second Lien Term Loan Agreement shall delegate all voting and economic rights to the DIP Collateral Trust Oversight Committee and the DIP Collateral Trust.
• The DIP Collateral Trustee, in consultation with the Ad Hoc Group, may form one or more wholly owned domestic C corporations (“U.S. Holding Corporations”) to hold designated assets constituting “U.S. real property interests” within the meaning of section 897(c) of the Internal Revenue Code or otherwise appropriate for such a structure, and may form other holding entities on such terms as it determines in consultation with the Ad Hoc Group.

ABL Collateral Trust

• On the Confirmation Date, or as soon thereafter as reasonably practicable, the ABL Collateral Trust shall be established to hold, transfer, sell, monetize, or abandon the ABL Collateral Trust Assets and make distributions to holders of Allowed Claims. The ABL Collateral Trust is intended to be treated for U.S. federal income tax purposes as a “liquidating trust” described in Treasury Regulation section 301.7701-4(d) that is a “grantor trust,” except to the extent any assets allocable to, or held on account of, Disputed Claims are treated as a “disputed ownership fund” or other separate taxable entity.
• ABL Collateral Trust Assets consist of (i) all ABL Priority Collateral for which, on the date the trust is established, (x) no bona fide dispute exists as to whether the ABL Secured Parties hold a validly perfected first-priority Lien senior in priority to the Liens securing the DIP Claims, or (y) if such a dispute exists, it is subsequently determined by a court of competent jurisdiction pursuant to a Final Order or settlement that they hold such a Lien; and (ii) the rights, title, and interests of holders of ABL Deficiency Claims in any amounts or proceeds realized on account of such claims, which are contributed by such holders and are not assets of the FBG Debtors transferred in the foreclosure. They also include (a) amounts in the Factored Receivables Account determined by Final Order to be property of an FBG Debtor’s Estate, excluding amounts in which the Bankruptcy Court determines by Final Order that a Factor holds a validly perfected first-priority security interest, (b) the ABL Reserved Claims, and (c) all Insurance Rights of the FBG Debtors in respect of ABL Priority Collateral, solely to the extent such rights result from insured assets that constituted ABL Priority Collateral prior to the event giving rise to them.
  • In no event shall assets constituting Litigation Trust Assets or DIP Collateral Trust Assets be ABL Collateral Trust Assets, and ABL Collateral Trust Assets shall not include assets determined by Final Order to be (a) property of the SPV Debtors or their Estates, any of the Factors, or any of the SPV Lenders, or (b) subject to a validly perfected first-priority Lien asserted by a Factor, the SPV Lenders, or the DIP Secured Parties.
• The ABL Collateral Trust Assets will be identified in a schedule annexed to the ABL Collateral Trust Agreement, prepared in consultation with the ABL Agent. To the extent the ABL Agent disagrees with the scope of such assets, it may seek appropriate relief from the Bankruptcy Court.
  • The ABL Reserved Claims shall vest in the ABL Collateral Trust and consist of (i) all claims, Causes of Action, and rights (excluding any Estate Claims or Recovery Action Proceeds) against any customer, Account, Debtor, or other Person arising from any prepetition credits, rebates, chargebacks, deductions, or offsets applied or asserted against accounts or other ABL Priority Collateral of any FBG Debtor; and (ii) all claims, Causes of Action, and rights (excluding any Estate Claims or Recovery Action Proceeds) against any SPV Lender, SPV Debtor, or other Person arising from any competing or adverse claim to ownership, priority, or possession of any ABL Priority Collateral or the proceeds thereof.
• Unless otherwise disclosed in the Plan Supplement, the ABL Collateral Trustee shall be the ABL Agent (or its designee). The initial trustee shall be selected and appointed by the ABL Agent, which shall have the sole right to remove and replace the ABL Collateral Trustee.
  • The ABL Collateral Trust shall indemnify and hold harmless the ABL Collateral Trustee and the ABL Agent for any losses incurred in such capacity, except to the extent such losses were the result of such party’s fraud, bad faith, gross negligence, willful misconduct, or criminal misconduct.
• Proceeds of the ABL Collateral Trust Assets, net of expenses, shall be distributed 100% to the ABL Collateral Trust Beneficiaries in accordance with the waterfall under the ABL Credit Agreement until aggregate distributions equal the Allowed amount of the ABL Claims; any proceeds in excess of that amount shall be deemed DIP Collateral Trust Assets, turned over to the DIP Collateral Trust, and distributed in accordance with the Plan.
• The ABL Collateral Trust Interests shall not be certificated and shall be nontransferable and non-assignable except by will, intestate, succession, or operation of law. If the DIP Collateral Trust or the Litigation Trust obtains possession or ownership of ABL Collateral Trust Assets, such assets shall be assigned, turned over, or otherwise transferred to (or held in trust for the benefit of) the ABL Collateral Trust.
• Following the foreclosure of the ABL Collateral Trust Assets by the ABL Collateral Trust, the ABL Agent, for itself and on behalf of the ABL Secured Parties, shall have the right under section 363(k) of the Bankruptcy Code to credit bid up to the full amount of the ABL Deficiency Claim in any sale of any ABL Priority Collateral by the FBG Debtors that has not been foreclosed upon, whether effectuated through sections 363, 1123, or 1129(b) of the Bankruptcy Code, by a chapter 7 trustee under section 725, or otherwise.

Intercreditor Matters and Disputes Among the Trusts

• Nothing in the Plan, the Confirmation Order, or any Definitive Document shall modify, amend, waive, reject, or impair the rights of the DIP Secured Parties or the Prepetition Secured Parties under the Intercreditor Agreements (as defined in the DIP Order) and the DIP Order, except to the extent expressly agreed to in writing by the ABL Agent and the DIP Agent.
  • Subject to the terms of the Plan, Confirmation, and the DIP Order, the Intercreditor Agreements and the DIP Order shall remain in full force and effect following the Confirmation Date and shall not be rejected, modified, supplemented, or otherwise altered without the prior written consent of the ABL Agent and the DIP Agent.
  • The DIP Collateral Trust (and any trustee or fiduciary thereof) shall be deemed a successor to the Term Collateral Agents and the Term Claimholders for purposes of the Intercreditor Agreements and shall be bound by all restrictions and obligations applicable to the Term Claimholders thereunder.
• Disputes as to whether an asset is a Litigation Trust Asset, DIP Collateral Trust Asset, or ABL Collateral Trust Asset shall be resolved either by mutual consent of the DIP Secured Parties, the ABL Secured Parties, and/or the Litigation Trust, or by the Bankruptcy Court, with the asset automatically vesting in the applicable trust upon entry of a Final Order or mutual agreement. This provision applies only to assets subject to a dispute between the ABL Secured Parties and DIP Secured Parties.
  • Until such a bona fide dispute is resolved, the DIP Secured Parties and the ABL Secured Parties may determine that the FBG Debtors shall hold the asset in trust pending adjudication or settlement, or that the asset shall remain in the estates of the FBG Debtors.
  • A dispute exists with respect to whether amounts recovered by the Debtors that were unlawfully collected under the International Emergency Economic Powers Act are Litigation Trust Assets, DIP Collateral Trust Assets, or ABL Collateral Trust Assets. Until the Litigation Trustee, the DIP Secured Parties, and the ABL Secured Parties resolve the dispute, all such amounts shall be placed in a segregated escrow account maintained by the FBG Debtors and shall vest in the applicable trust only pursuant to a Final Order or consensual agreement of the parties.
  • The agreed $3 million of tariff refunds currently in the FBG Debtors’ possession is not subject to dispute and constitutes ABL Priority Collateral.

Classification and Treatment of Claims and Interests

• Administrative Expense Claims, DIP A Claims, Professional Fee Claims, and Priority Tax Claims are unclassified.
  • Holders of Claims in Classes 3 (Roll-Up Claims), 4 (First Lien Claims), 5 (Second Lien Claims), 6 (ABL Claims), 7 (General Unsecured Claims), and 8 (Subordinated Claims) are entitled to vote on the Plan.
  • Classes 1 (Other Priority Claims) and 2 (Other Secured Claims) are Unimpaired, and holders are conclusively presumed to accept the Plan pursuant to section 1126(f) of the Bankruptcy Code. Class 9 (Intercompany Claims) is designated Impaired in the Plan’s classification table, but holders are conclusively presumed to accept because they are either plan proponents or controlled by plan proponents. Holders in Classes 1, 2, and 9 are not entitled to vote and their votes will not be solicited.
  • Holders of Interests in Class 10 (FBG Debtor Interests) are deemed to reject the Plan pursuant to section 1126(g) of the Bankruptcy Code.
• DIP A Claims: On the Confirmation Date, DIP A Claims shall be deemed Allowed against the FBG Debtors in the full amount then outstanding under the DIP Credit Agreement and DIP Order, with the Allowed amount set forth in the notice of entry of the Confirmation Order.
  • Each holder shall receive, in full and final satisfaction of such Allowed DIP A Claim (other than the Remaining DIP A Claims): (i) on account of the Estate Claims Credit Bid, its Pro Rata Share of the Class 2 Litigation Trust Interests; (ii) on account of the DIP Collateral Credit Bid, its Pro Rata Share of the Class 2 DIP Collateral Trust Interests; (iii) if applicable, on account of any Initial Litigation Trust Funding Commitments, its pro rata share of the Class 1 Litigation Trust Interests; and (iv) if applicable, on account of any DIP Collateral Trust Funding, its pro rata share of the Class 1 DIP Collateral Trust Interests.
  • The Remaining DIP A Claims—Allowed DIP A Claims not included in the Estate Claims Credit Bid or the DIP Collateral Credit Bid—shall not be discharged or released on the Confirmation Date, shall remain enforceable against the DIP Loan Parties, Parent Guarantors, and/or the SPV Debtors, as applicable, and shall continue to accrue interest (including default interest), fees, charges, expenses, indemnities, premiums (including any Extension Premiums and Exit Premiums), other amounts, and/or deficiency Claims in accordance with the DIP Order; provided that such post-Confirmation Date accruals shall not increase amounts distributable to holders of Class 2 Litigation Trust Interests.
• Class 1 — Other Priority Claims (Unimpaired; presumed to accept): By no later than the later of (i) the Effective Date and (ii) the first Business Day after the date that is 45 calendar days after such Claim becomes Allowed, each holder shall receive (i) Cash distributions from the Litigation Trust in accordance with the Litigation Trust Waterfall in an amount equal to such Allowed Claim, or (ii) such other treatment necessary to satisfy section 1129 of the Bankruptcy Code.
• Class 2 — Other Secured Claims (Unimpaired; presumed to accept): At the option of the Claims Ombudsman, each holder shall receive (i) payment in full in Cash, payable on the later of the Effective Date and the first Business Day after 45 days from the date the Claim becomes Allowed; (ii) transfer of the collateral securing such Claim or the proceeds thereof; or (iii) such other treatment as renders the Claim Unimpaired.
• Class 3 — Roll-Up Claims (Impaired; entitled to vote): On the Confirmation Date, Roll-Up Claims shall be deemed Allowed in the full amount then outstanding under the DIP Credit Agreement and DIP Order; solely for purposes of the Litigation Trust Waterfall, the Allowed amount shall be $3.3 billion.
  • Each holder shall receive its Pro Rata Share of the Class 3(a) Litigation Trust Interests.
  • The Remaining Roll-Up Claims—Roll-Up Claims in excess of the aggregate anticipated distributions to holders under the Litigation Trust Waterfall, as determined by the Litigation Trustee pursuant to Section 6.19(d)(ii) of the Plan—shall not be discharged or released on the Confirmation Date, shall remain enforceable against the DIP Loan Parties, Parent Guarantors, and/or the SPV Debtors, and shall continue to accrue interest, fees, and expenses in accordance with the DIP Order; provided that such accruals shall not increase amounts distributable to holders of Class 3(a) Litigation Trust Interests.
• Class 4 — First Lien Claims (Impaired; entitled to vote): On the Confirmation Date, First Lien Claims shall be deemed Allowed in the full amount then outstanding.
  • Each holder shall receive its Pro Rata Share of the Class 3(c) Litigation Trust Interests.
  • The Remaining First Lien Claims—First Lien Claims in excess of the aggregate anticipated distributions under the Litigation Trust Waterfall, as determined by the Litigation Trustee pursuant to Section 6.19(d)(ii) of the Plan—shall remain outstanding until the Effective Date, at which point they shall be deemed released.
• Class 5 — Second Lien Claims (Impaired; entitled to vote): On the Confirmation Date, Second Lien Claims shall be deemed Allowed in the full amount then outstanding.
  • Each holder shall receive its Pro Rata Share of the Class 3(c) Litigation Trust Interests.
  • The Remaining Second Lien Claims—Second Lien Claims in excess of the aggregate anticipated distributions under the Litigation Trust Waterfall, as determined by the Litigation Trustee pursuant to Section 6.19(d)(ii) of the Plan—shall remain outstanding until the Effective Date, at which point they shall be deemed released.
• Class 6 — ABL Claims (Impaired; entitled to vote): On the Confirmation Date, ABL Claims shall be deemed Allowed against the FBG Debtors in the full amount then outstanding under the ABL Credit Agreement and the DIP Order, other than with respect to the U.S. Bank Obligations. Upon a determination by the Bankruptcy Court, or mutual agreement of the applicable parties, that the U.S. Bank Obligations are Allowed Secured Claims, they shall be treated as ABL Claims against the FBG Debtors under the Plan; if the Bankruptcy Court determines they are not Allowed Secured Claims, any provision regarding contributions to the ABL Collateral Trust shall be deemed inapplicable to them.
  • On the Confirmation Date, pursuant to sections 105, 363(b) and (f), and 1123(a)(5)(D) of the Bankruptcy Code, the ABL Agent, by and on behalf of the ABL Secured Parties, shall be deemed to have foreclosed upon the ABL Collateral Trust Assets of the FBG Debtors and transferred all such assets to the ABL Collateral Trust. Each holder shall receive its Pro Rata Share of the ABL Collateral Trust Interests.
  • The ABL Deficiency Claims—ABL Claims against the ABL Loan Parties in excess of the fair market value of the ABL Collateral Trust Assets, as determined pursuant to Section 8.11(d)(ii) of the Plan—shall remain outstanding and enforceable against such ABL Loan Parties; provided that they shall not be secured by the ABL Collateral Trust Assets, which shall be held free and clear of such claims; provided further that, immediately following the foreclosure, holders of ABL Deficiency Claims shall be deemed to have contributed all of their rights, title, and interests in any amounts or proceeds realized on account of such claims to the ABL Collateral Trust.
  • To the extent the ABL Secured Parties hold Allowed ABL Claims that are oversecured, as determined by the Bankruptcy Court, such holders shall be entitled to postpetition interest at the applicable contractual rate under the ABL Credit Agreement to the extent permitted by section 506(b) of the Bankruptcy Code, payable from the ABL Collateral Trust Assets prior to any turnover of excess proceeds to the DIP Collateral Trust.
• Class 7 — General Unsecured Claims (Impaired; entitled to vote): Each holder shall receive its Pro Rata Share of the Class 3(b) Litigation Trust Interests on the Confirmation Date.
• Class 8 — Subordinated Claims: All Subordinated Claims, if any, shall be cancelled, released, and extinguished and shall be of no further force or effect, and holders of Allowed Subordinated Claims shall receive their Pro Rata Share of the Class 3(b) Litigation Trust Interests.
• Class 9 — Intercompany Claims (Impaired; presumed to accept): On or prior to the Effective Date or as soon as practicable thereafter, all Intercompany Claims shall be adjusted, reinstated, or released as reasonably determined to be appropriate by the Wind Down Administrator; no distributions will be made on account of Intercompany Claims.
• Class 10 — FBG Debtor Interests: On the date an FBG Debtor’s Chapter 11 Case is closed—which, in the case of FBGH and Viceroy, shall not occur until all distributions under the Plan with respect to the FBG Debtors have been made—all FBG Debtor Interests in such Debtor shall be cancelled without any further corporate or limited liability company action. Holders shall not receive distributions unless and until any Allowed Claims for which such FBG Debtor has a continuing obligation to pay following the Confirmation Date are satisfied in full, in which case each holder shall receive its Pro Rata Share of any residual distributable value of such FBG Debtor.
• Administrative Expense Claims: By no later than the later of (i) the Effective Date and (ii) the first Business Day after the date that is 45 calendar days after such Claim becomes Allowed, each holder shall receive (i) Cash payable by the Litigation Trust and/or the DIP Collateral Trust in accordance with the applicable waterfall in an amount equal to such Allowed Claim, or (ii) such other treatment consistent with section 1129(a)(9) of the Bankruptcy Code.
• Priority Tax Claims: At the option of the Claims Ombudsman, each holder shall receive (i) Cash payable by the Litigation Trust in accordance with the Litigation Trust Waterfall by no later than the later of the Effective Date (to the extent then Allowed) and the first Business Day after 45 calendar days following allowance; (ii) equal annual Cash payments payable by the Litigation Trust, together with interest at the applicable rate under section 511 of the Bankruptcy Code, over a period not exceeding five years from the Petition Date, with a reserved right to prepay without penalty or premium; or (iii) such other treatment consistent with section 1129(a)(9). Distributions on account of Allowed Administrative Expense Claims and Allowed Priority Tax Claims may be paid prior to the Effective Date.
• Restructuring Expenses incurred, or estimated to be incurred, up to and including the Confirmation Date shall be paid in full in Cash on the Confirmation Date or as soon as reasonably practicable thereafter, without any requirement to file a fee application or obtain Bankruptcy Court review or approval, subject to the FBG Debtors’ receipt of a summary-form invoice, which need not include itemized time detail and may be redacted.
• The Remaining Lender Claims and ABL Deficiency Claims against the Estates of the FBG Debtors are preserved and may continue to be asserted, and shall not be reduced by the amount of any Trust distributions made on or after the Confirmation Date; for the avoidance of doubt, no Allowed Claims shall be reduced by any Trust distributions on or after the Confirmation Date.
  • Any property recovered on account of the Remaining Lender Claims, other than any Litigation Trust SPV Recoveries, shall be deemed contributed to the DIP Collateral Trust and shall constitute DIP Collateral Trust Assets.

Administrative Expense Claims Consent Program

• Holders of Administrative Expense Claims against the FBG Debtors may elect, on the Administrative Expense Claims Consent Program Opt-In Form approved under the Disclosure Statement Order, to compromise the Allowed amount of their Claims in exchange for the treatment provided to Settled Administrative Expense Claims.
  • Holders who affirmatively elect to participate on or before the applicable deadline are deemed to have an Allowed Administrative Expense Claim equal to 50% of the reconciled amount set forth in the opt-in form or otherwise agreed to by the FBG Debtors or Claims Ombudsman and such holder.
  • Allowed Settled Administrative Expense Claims receive distributions from the Litigation Trust before payment of other Allowed Administrative Expense Claims.
  • The Claims Ombudsman shall not be required to reserve on account of distributions to holders of Claims junior in priority to Administrative Expense Claims, including distributions to holders of Administrative Expense Claims who do not opt in.
  • In the event the Litigation Trust is unable to make distributions sufficient to satisfy Allowed Administrative Expense Claims in full, payments made to holders of Settled Administrative Expense Claims are not subject to clawback or disgorgement.

Preference Settlement

• The Preference Settlement applies only to Trade Creditors, Supply Chain Financers, and Factors that (i) do not meet the definition of Adverse Conduct, as determined by a Final Order; (ii) are not Specified Non-Released Parties; and (iii) are Preference Settlement Electing Creditors.
  • A Preference Settlement Electing Creditor is any Trade Creditor, Supply Chain Financer, or Factor that timely elects on the Preference Settlement Opt-In Form to (a) participate in and receive the benefits of the Preference Settlement, (b) grant the releases contained in Section 13.5(b) of the Plan, and (c) contribute all of its Direct Creditor Claims to the Litigation Trust; provided that any such creditor later determined ineligible for the Preference Settlement shall not be a Releasing Party.
  • Direct Creditor Claims are direct (non-derivative) Claims held by a Preference Settlement Electing Creditor against any non-Debtor Person that relate to the conduct of the Debtors and/or their Affiliates or professionals on or before the Petition Date, excluding any Claims against a Released Party released under the Plan. For the avoidance of doubt, Direct Creditor Claims do not include any Estate Claims.
• Opt-In Deadline: Trade Creditors, Supply Chain Financers, and Factors shall have until 45 days following the Confirmation Date to opt in; provided that if a Preference Action is brought against a Trade Creditor that did not timely opt in, such Trade Creditor shall have an additional 30 days following service of the Preference Action to do so.
  • Any demand or summons related to a Preference Action against a Trade Creditor that is not a Preference Settlement Electing Creditor shall reiterate in clear and conspicuous language the extended deadline to participate.
  • The Litigation Trustee is authorized to extend the UCC Member’s opt-in deadline in its sole discretion.
• No Preference Actions shall be brought against Trade Creditors who meet the eligibility criteria.
• Preference Actions against eligible Supply Chain Financers and Factors shall be brought only after the Litigation Trustee conducts reasonable due diligence and makes a good faith attempt to meet and confer with the putative defendant.
  • The meet and confer shall include providing the putative defendant with the Litigation Trustee’s analysis of its defenses under section 547(c)(4) of the Bankruptcy Code (the “New Value Defense”) and an opportunity to identify additional new value not included in that analysis.
  • Prior to commencing a Preference Action, the Litigation Trustee must consider the information timely provided and any other affirmative defenses timely articulated, and provide a report to the Litigation Trust Oversight Committee setting forth the basis for litigating the action.
  • The Litigation Trust’s authority to commence such actions exists only if this process is undertaken in good faith. Good faith is conclusively established if the Preference Action is authorized by a majority of the Litigation Trust Oversight Committee, including the affirmative vote of one UCC Member; the absence of such authorization shall not establish a lack of good faith.
  • If a Supply Chain Financer or Factor (i) meets the definition of Adverse Conduct or (ii) did not transact with the Debtors in good faith, none of these provisions shall apply to such Person.
• Modified New Value Elements: If the Litigation Trustee prosecutes a Preference Action against a Supply Chain Financer or Factor and agrees that new value includes any subsequent payment made by that defendant at the FBG Debtors’ request as part of the factoring or supply chain financing agreement — including payments to legitimate vendors and payments made at the FBG Debtors’ direction on non-legitimate or “cover” invoices, without regard to which FBG Debtor entity the payment was made on behalf of, so long as it was made on behalf of a Debtor — then proceeding is a Major Decision rather than a Sacred Right.
  • All other elements of a Preference Action and affirmative defenses thereto, including any other component of the New Value Defense, apply under applicable law, and such new value must still have been provided subsequent to the applicable alleged preferential payment.
  • Where a payment was received by a non-Debtor and the Supply Chain Financer or Factor has a right to recover it from that non-Debtor, that right must be assigned to the Litigation Trust for prosecution in order for the payment to qualify as new value and for the creditor to receive the benefit of a prosecution utilizing the Modified New Value Elements; the assignment may be conditioned on the payment being treated as new value.
  • If the Litigation Trustee seeks to prosecute without utilizing all of the Modified New Value Elements, proceeding is a Sacred Right rather than a Major Decision. The only permitted modifications are assertions that (a) the alleged new value was provided on behalf of a non-Debtor entity, or (b) the alleged new value was not received directly or indirectly by a Debtor or by Bowery Finance II.
  • Nothing in these provisions shifts the burden of proof under applicable law with respect to Preference Actions.
• With respect to a Preference Settlement Electing Creditor not expressly named in the schedule of Specified Non-Released Parties, the Preference Settlement shall be inapplicable only if the Litigation Trustee alleges or pleads facts alleging Adverse Conduct as (a) an element of the Preference Action or (b) a cause of action in a complaint or in a pleading or other filing, in each case filed prior to or substantially contemporaneously with the filing of a Preference Action.
  • If such creditor obtains a verdict in its favor on all alleged Adverse Conduct in a Final Order, or such allegations are withdrawn or the related counts are dismissed with prejudice or voluntarily by the Litigation Trustee, or dismissed without prejudice with a final determination not to refile, the creditor shall retain the benefits of the Preference Settlement, assuming all other conditions are met.
  • Nothing requires the Litigation Trustee to obtain a finding, determination, or Final Order related to Adverse Conduct prior to initiating a Preference Action.

Claims Ombudsman

• The Claims Ombudsman shall be a Person selected by the Creditors’ Committee, with the consent of the FBG Debtors and Ad Hoc Group SteerCo (not to be unreasonably withheld, conditioned, or delayed), appointed on the Confirmation Date or as soon thereafter as reasonably practicable. Its identity will be disclosed in the Plan Supplement.
• The Claims Ombudsman shall serve as the holder of record of the Class 3(b) Litigation Trust Interests and shall be responsible for reconciling all Disputed Claims—including Disputed Administrative Expense Claims, Priority Tax Claims, Other Priority Claims, and General Unsecured Claims against the FBG Debtors—and making distributions to holders of Class 3(b) Litigation Trust Interests, including all associated federal, state, and local income tax reporting obligations.
  • As of the Confirmation Date, the Claims Ombudsman shall be entitled to object to Claims against the FBG Debtors.
  • The Claims Ombudsman shall only withhold distributions where necessary and shall otherwise be required to make minimum and/or interim distributions expeditiously.
  • The Claims Ombudsman owes a fiduciary duty to all holders of Litigation Trust Interests to maximize value in connection with the reconciliation of Disputed Claims.
  • The Litigation Trust Agreement shall provide that certain settlements of Disputed Claims require approval by the Litigation Trust Oversight Committee.
• All costs of the Claims Ombudsman to reconcile Disputed Claims and make distributions to holders of Class 3(b) Litigation Trust Interests shall be paid from the distributions otherwise distributable to holders of Class 3 Litigation Trust Interests and shall not otherwise be chargeable against the Litigation Trust. The Litigation Trust shall advance funds to fund the claims reconciliation process, subject to an agreed budget to be negotiated in good faith between the Litigation Trustee and the Claims Ombudsman.

Distributions and Claims Resolution

• Unless otherwise provided in the Plan, the Confirmation Order, the DIP Order, the Trust Agreements, or other order of the Bankruptcy Court, or required by applicable bankruptcy law, postpetition interest shall not accrue or be paid on any Claim.
• The Distribution Record Date is the Confirmation Date for all Claims against the FBG Debtors other than Allowed Lender Claims, and June 22, 2026 (as may be extended by the Ad Hoc Group Advisors) for Allowed Lender Claims. As of the close of business on the applicable date, the lists of holders are deemed closed and no further changes in record holders will be recognized.
• From the Confirmation Date until each Disputed Claim is resolved, the Claims Ombudsman or applicable Trustee shall retain, for the benefit of each holder, the Pro Rata Share of distributions that would have been made if the Claim were Allowed in an amount equal to the lesser of the liquidated amount in the filed proof of claim, the amount estimated by the Bankruptcy Court under section 502, or such other amount agreed with the Claims Ombudsman. Disputed Claim Reserves shall not be used for operating expenses or any other purpose absent Bankruptcy Court order.
• Distributions unclaimed six months after the later of the Confirmation Date and ten Business Days after a Claim or Interest is first Allowed are deemed unclaimed property under section 347(b) of the Bankruptcy Code and revert to the applicable Trust, with all other claims to such distributions forever barred.
• Recipients must deliver an IRS Form W-9 or, for foreign payees, a Form W-8, and any other requested forms, upon reasonable request; failure to comply within 90 days causes the distribution to revert irrevocably to the FBG Debtors or the applicable Trust and bars any related Claim.
• Distributions on an Allowed Claim are allocated first to principal and then, to the extent consideration exceeds principal, to accrued but unpaid interest, including original issue discount.
• As of the Confirmation Date, the Claims Ombudsman may object to Claims against the FBG Debtors. Objections must be served and filed by the later of 180 days after the Effective Date and 180 days after a proof of Claim is filed, amended, or otherwise asserted in writing, or such later date as ordered by the Bankruptcy Court; the Claims Ombudsman may extend that deadline by an additional 180 days in its sole discretion upon filing a notice, with further extensions permitted after notice and a hearing. The Claims Ombudsman may also request estimation of any contingent, unliquidated, or Disputed Claim under section 502(c).

Wind Down

• The Wind Down—the process to sell, abandon, wind down, dissolve, liquidate, or distribute the assets owned by the FBG Debtors following the Confirmation Date—shall be conducted pursuant to a process to be agreed upon by the ABL Agent, the Ad Hoc Group SteerCo, and the Creditors’ Committee, and shall occur in an expeditious but orderly manner.
  • The Wind Down Administrator, appointed by the FBG Debtors, the Ad Hoc Group SteerCo, and the Creditors’ Committee, shall effectuate the Wind Down without further Bankruptcy Court approval and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, subject to the Wind Down Budget approved by the ABL Lenders, the Ad Hoc Group SteerCo, and the Creditors’ Committee.
  • Pursuant to the terms of the Wind Down Budget, the Wind Down Administrator is authorized to pay compensation for services rendered to the FBG Debtors, or reimbursement of expenses incurred on their behalf, after the Confirmation Date in the ordinary course and without the need for Bankruptcy Court approval.
  • The FBG Debtors shall indemnify and hold harmless the Wind Down Administrator, solely in its capacity as such, for any losses incurred in such capacity, except to the extent such losses were the result of bad faith, gross negligence, willful misconduct, fraud, or criminal conduct.
• On the Confirmation Date or as soon as reasonably practicable thereafter, the Wind Down Reserve—a deposit account or other Cash reserve held by the Wind Down Administrator—shall be established and funded in accordance with the Wind Down Budget and used only to satisfy costs and expenses of the Wind Down.
  • Absent the consent of the Ad Hoc Group SteerCo, the Wind Down Reserve shall not include any DIP Term Priority Collateral, First Lien Term Loan Collateral, Sidecar Term Loan Collateral, or Second Lien Term Loan Collateral.
  • Any funds remaining in the Wind Down Reserve on the date the Wind Down is completed, as determined in the Wind Down Administrator’s sole discretion, shall be turned over to the DIP Collateral Trust.
• On the Confirmation Date, the authority, power, and incumbency of the persons then acting as directors, managers, members, officers, and other authorized persons of the FBG Debtors shall be terminated and such persons deemed to have resigned; the Wind Down Administrator shall serve as the initial director or manager and sole officer of each FBG Debtor until such Debtor goes out of existence.
  • On and after the Confirmation Date, the Wind Down Administrator may complete the winding up of the FBG Debtors without further action by or on behalf of the FBG Debtors or their members, managers, directors, management, or Interest holders, other than the filing of a certificate of dissolution or cancellation with the appropriate governmental authorities, which may be filed without any authorization, signature, or other act of any Person.
• Account transfers:
  • Following the Confirmation Date, the Factored Receivables Account shall be transferred to the Wind Down Administrator, which shall administer it in accordance with the Cash Management Order, including the reporting required thereunder. The Confirmation Order shall provide that (i) the FBG Debtors shall continue to direct and segregate all prepetition collections into the account, though neither the FBG Debtors nor the Wind Down Administrator must segregate funds received on account of any postpetition sale and related invoice, and (ii) neither shall disburse such segregated funds pending further order of the Bankruptcy Court after notice to the ABL Agent and all other affected parties and an opportunity to be heard. The Wind Down Administrator is authorized to administer the account and prosecute the FBG Debtors’ interests in the funds on deposit, but shall do so at the ABL Collateral Trust’s sole cost and expense, paid in advance; the ABL Agent has the right to direct the Wind Down Administrator with respect to such prosecution, and its prior written consent is required for any settlement, compromise, or other disposition of those interests.
  • On the Confirmation Date or as soon as reasonably practicable thereafter, the FBG Debtors shall also transfer the Professional Fees Escrow Account, the Examiner Account, the Employee Liability Account, any Employee Lease Accounts, and the Segregated Accounts to the Wind Down Administrator, which shall administer each in accordance with the applicable order, purchase agreement, employee lease agreement, or stipulation. Any funds remaining in the Health Escrow Account required to be returned to the FBG Debtors shall be remitted to the Wind Down Administrator to satisfy Wind Down costs in accordance with the Wind Down Budget until transferred to the DIP Collateral Trust. The Wind Down Administrator is further authorized to administer the FBG Debtors’ tax obligations, pay statutory fees, and close the Chapter 11 Cases, subject as to closing to the consent of the Litigation Trustee and the Claims Ombudsman, not to be unreasonably withheld, conditioned, or delayed.
  • As soon as reasonably practicable following the Confirmation Date, the SPV-ABL Wind Down Account shall be transferred to the ABL Collateral Trust, and the SPV-DIP Wind Down Account shall be transferred to the DIP Collateral Trust, with each trust assuming the obligations for administering the applicable account.
• On the Confirmation Date, the Creditors’ Committee shall dissolve and its members shall be released and discharged from all rights and duties arising from or related to the Chapter 11 Cases; provided that the Creditors’ Committee shall continue to exist for the sole purpose of prosecuting any final fee applications of its Professionals; provided further that none of the FBG Debtors, the Wind Down Administrator, the Claims Ombudsman, the Trusts, or the Trustees shall be responsible for any fees or expenses incurred by the members of, or advisors to, the Creditors’ Committee after the Confirmation Date.

Executory Contracts and Insurance

• As of and subject to the occurrence of the Confirmation Date, all executory contracts and unexpired leases to which any FBG Debtor is a party shall be deemed rejected, except for any contract or lease that: (i) was previously assumed, rejected, or assumed and assigned pursuant to a Final Order of the Bankruptcy Court; (ii) previously expired or terminated pursuant to its own terms or by agreement of the parties; (iii) is the subject of a separate assumption or rejection motion or request filed on or before the Confirmation Date; (iv) was entered into in connection with the Plan; or (v) was transferred to the FBG Debtors in connection with the Estate Claims Credit Bid Transaction or DIP Collateral Credit Bid Transaction and subsequently transferred to the DIP Collateral Trust or Litigation Trust on or before the Confirmation Date.
  • The FBG Debtors may seek to assume, assume and assign, or reject any executory contract or unexpired lease at any time prior to the Confirmation Date, including pursuant to the Contracts Procedure Order; provided that they shall not assume and assign any contract or lease to the DIP Collateral Trust or Litigation Trust without the consent of the Ad Hoc Group SteerCo, not to be unreasonably withheld, conditioned, or delayed.
• All obligations of the FBG Debtors to indemnify, defend, reimburse, or limit the liability of current and former officers, directors, members, managers, agents, or employees, as provided in the FBG Debtors’ corporate charters, bylaws, other organizational documents, other agreements, or applicable law, shall survive confirmation and be assumed by the applicable FBG Debtors, effective as of the Confirmation Date pursuant to sections 365 and 1123 of the Bankruptcy Code, solely to the extent necessary to recover and have access to insurance proceeds. Any indemnification claims against the FBG Debtors arising under those documents shall be treated as General Unsecured Claims to the extent Allowed and not subordinated.
• Each of the FBG Debtors’ Insurance Policies and related agreements, documents, or instruments shall be deemed non-executory contracts as of the Confirmation Date and shall neither be assumed nor rejected.
  • All officers, managers, directors, agents, or employees who served in such capacity at any time before the Confirmation Date shall be entitled to the full benefits of the D&O Policies in effect as of, or purchased on or before, the Confirmation Date for the full term of such policies, regardless of whether they remain in such positions as of the Confirmation Date.
  • On the Confirmation Date, all rights and obligations of the FBG Debtors under the D&O Policies shall transfer to the Litigation Trust, which shall assume the obligations for administering such policies. The transfer of Insurance Rights to recover proceeds from D&O Policies shall not hinder the ability of any beneficiaries or insureds to submit claims and otherwise pursue and obtain coverage under the D&O Policies.
  • On the Confirmation Date, the Wind Down Administrator shall assume the FBG Debtors’ obligations, if any, for administering the Independent Manager Policies, subject to the Wind Down Budget.
  • Subject to the Bankruptcy Code and applicable law, nothing in the Plan shall be deemed to alter the terms of any Insurance Policy.

Conditions Precedent to the Effective Date

• Conditions to the Effective Date include, among others:
  • The Disclosure Statement Order shall have been entered.
  • The closings of the Estate Claims Credit Bid Transaction and DIP Collateral Credit Bid Transaction shall each have occurred.
  • The Confirmation Order shall have been entered by the Bankruptcy Court and shall not be subject to any stay or injunction.
  • All actions, documents, certificates, and agreements necessary or appropriate to implement the Plan shall have been effected or executed and delivered to the required parties and, to the extent required, filed with the applicable Governmental Units.
  • All authorizations, consents, regulatory approvals, rulings, or documents necessary or appropriate to implement and effectuate the Plan shall have been received.
  • The Professional Fees Escrow Account shall have been fully funded as provided in the Plan.
  • The Restructuring Expenses and all other fees, expenses, and amounts due and payable to the Ad Hoc Group Advisors pursuant to the DIP Order and the Plan shall have been paid in full.
  • The Litigation Trust and/or the DIP Collateral Trust shall have sufficient Cash on hand to (i) satisfy all Allowed Administrative Expense Claims against the FBG Debtors in accordance with section 1129(a)(9)(A) of the Bankruptcy Code and all Allowed Priority Tax Claims and Allowed Other Priority Claims required to be paid on the Effective Date (the “Effective Date Priority Claims”), unless the applicable holder consents to different treatment, and (ii) reserve for all Disputed Administrative Expense Claims and Disputed Effective Date Priority Claims actually asserted in a timely filed proof of claim; provided that no amounts need be reserved for any such Claims disallowed by order of the Bankruptcy Court, whether or not subject to appeal.
  • The Definitive Documents shall have been filed and/or executed, as applicable, in form and substance acceptable to the Debtors, the Ad Hoc Group SteerCo, and the Creditors’ Committee.
• Each condition precedent, other than the condition relating to sufficient Cash on hand for administrative and priority claims, may be waived, in whole or in part, by the FBG Debtors with the consent of the Ad Hoc Group SteerCo and the Creditors’ Committee or the Claims Ombudsman, as applicable (not to be unreasonably withheld, conditioned, or delayed), without leave of or order of the Bankruptcy Court.
• The stay of the Confirmation Order pursuant to Bankruptcy Rule 3020(e) shall be deemed waived by and upon entry of the Confirmation Order, and the Confirmation Order shall take effect immediately upon entry.
• If the Effective Date does not occur, the Plan shall be null and void in all respects, and nothing in the Plan or Disclosure Statement shall (i) constitute a waiver or release of any Claims by or against or any Interests in the FBG Debtors, (ii) prejudice in any manner the rights of any Entity, or (iii) constitute an admission, acknowledgement, offer, or undertaking by the FBG Debtors or any other Entity; provided that the protections afforded under sections 363(m) or 364(e) of the Bankruptcy Code shall not be altered as to any transactions consummated in connection with the Plan following entry of the Confirmation Order.

Releases

• Released Parties include, in each case solely in their capacities as such: (i) the FBG Debtors and their Estates; (ii) Neal Goldman, William Transier, and Benjamin Duster, as members of one or more of the Special Committees; (iii) Neal Goldman and William Transier, as Independent Managers of one or more of the FBG Debtors; (iv) the Specified Executives; (v) the Professionals; (vi) the Creditors’ Committee and each of its members; (vii) the Ad Hoc Group and members thereof, including the Ad Hoc Group SteerCo; (viii) the DIP Secured Parties; (ix) the Prepetition Secured Parties; (x) the ABL Parties; (xi) the Litigation Trust Backstop Parties; (xii) the Litigation Trust Class 1 Funding Contributors and the DIP Collateral Trust Funding Contributors; and (xiii) solely with respect to clauses (vii)-(xii), their Affiliates and Representatives.
  • No Specified Non-Released Party shall be a Released Party, and no Estate Claims shall be released against any Specified Non-Released Party.
  • Any Person given the opportunity to grant the releases and that does not grant them shall not be a Released Party solely with respect to the third-party release.
• Releasing Parties consist of: (i) holders of Claims that vote to accept the Plan and opt in to the releases; (ii) holders of Claims presumed to accept the Plan that opt in; (iii) holders of Claims that vote to reject the Plan but opt in; (iv) holders of Claims whose vote is solicited but that do not vote and opt in; (v) Persons that receive the Preference Settlement Opt-In Form and opt in; and (vi) holders of DIP A Claims given notice of the ability to opt in that do so. None of the Debtors, including the SPV Debtors, shall be Releasing Parties.
• Specified Non-Released Parties consist of: (i) any Person (or Affiliate thereof) against which an action has been commenced on behalf of a Debtor or its Estate prior to the Confirmation Hearing, including any defendants named or to be named by the Debtors in the James Complaint or named in the Onset Complaint; (ii) any Person (or Affiliate thereof) identified as a defendant or potential defendant of a Cause of Action in the Plan Supplement (the “Schedule of Specified Non-Released Parties”); (iii) any Person (or Affiliate thereof) charged with a crime, whether before or after the Confirmation Date, based on conduct related to the Debtors; (iv) any Person (or Affiliate thereof) that meets the definition of Adverse Conduct, as determined by a Final Order; and (v) any subsequent transferee of the foregoing with respect to any assets of or transfers by the Debtors or their Affiliates or Representatives. Notwithstanding the foregoing, none of the FBG Debtors and their Estates, any member of the Ad Hoc Group, the Ad Hoc Group Advisors, the Creditors’ Committee and each of its members, any Special Committee member, Independent Manager, Specified Executive, Professional, Prepetition Secured Party, DIP Secured Party, or the ABL Parties, solely in their capacities as such, shall be construed or deemed to be a Specified Non-Released Party unless expressly identified in the Schedule of Specified Non-Released Parties or an Affiliate of such a Person.
• Debtor Releases: As of the Confirmation Date and Effective Date, as applicable, the FBG Debtors, their Estates, and successors and assigns—including the Wind Down Administrator, the Claims Ombudsman, the Litigation Trust and Litigation Trustee, the DIP Collateral Trust and DIP Collateral Trustee, and the ABL Collateral Trust and ABL Collateral Trustee—shall be deemed to have released and discharged each Released Party from all Claims, Interests, obligations, rights, suits, damages, Causes of Action, remedies, and liabilities whatsoever, including derivative claims, whether known or unknown, based on or relating to any act or omission, obligation, transaction, transfer, agreement, event, or other occurrence taking place on or before the Confirmation Date or Effective Date, as applicable.
  • The Debtor Releases shall not be construed as releasing (a) any Released Party from Claims or Causes of Action arising from an act or omission judicially determined by a Final Order to have constituted gross negligence, willful misconduct, or actual fraud committed by such Released Party; provided that this exception for gross negligence or willful misconduct shall not preserve or retain any Claim or Cause of Action for breach of fiduciary duty against a Released Party; (b) any post-Effective Date obligations of any Person under the Plan, the Confirmation Order, any Definitive Document, or any implementing document; (c) prior to the Effective Date, any post-Confirmation Date obligations of any Person under those same documents; (d) any Intercompany Claims against the FBG Debtors; or (e) any Claims in respect of the U.S. Bank Obligations.
  • The Debtor Releases are binding on successors to the FBG Debtors.
• Third-Party Releases: As of the Effective Date, each Releasing Party is deemed to have released and discharged each Released Party from all Claims, Interests, obligations, rights, suits, damages, Causes of Action, remedies, and liabilities whatsoever, including derivative Claims or Causes of Action, whether known or unknown, based on or relating to any act or omission, obligation, transaction, transfer, agreement, event, or other occurrence taking place on or before the Effective Date.
  • The third-party releases shall not be construed as releasing (a) any Released Party from Claims or Causes of Action arising from an act or omission judicially determined by a Final Order to have constituted gross negligence, willful misconduct, or actual fraud committed by such Released Party, or (b) any post-Effective Date obligations of any Person under the Plan, the Confirmation Order, any Definitive Document, or any document, instrument, or agreement executed to implement the Plan or the transactions contemplated by the Confirmation Order.
  • A Releasing Party is not releasing any Allowed or allowable Claims against the FBG Debtors, nor forfeiting, by granting the release, any entitlements under the Plan or Litigation Trust.
  • Nothing contained in the Plan, nor the release of any claims pursuant to the Plan, is evidence of the merit, or lack of merit, of the Claims or Causes of Action released.
• None of the Specified Non-Released Parties shall be Released Parties under the Plan. The Releasing Parties are preserving and transferring, vesting, and/or selling to the Litigation Trust, and not releasing, any such Claims and Causes of Action, including any Estate Claims, which may be brought by the Litigation Trust.
• Any Claim of an FBG Debtor against (i) an SPV Debtor or (ii) an Affiliate or subsidiary of an FBG Debtor shall not be released under the Plan.
• Each Releasing Party expressly acknowledges that, although ordinarily a general release may not extend to claims which the Releasing Party does not know or suspect to exist in its favor, and which if known may have materially affected its settlement with the released party, it has carefully considered and taken into account the possible existence of such unknown losses or claims in determining to enter into the releases. Each Releasing Party further expressly waives any and all rights conferred upon it by any statute or rule of law providing that a release does not extend to unknown claims, including California Civil Code section 1542. The releases are effective regardless of whether the released matters are presently known, unknown, suspected or unsuspected, foreseen or unforeseen.

Exculpation

• Exculpated Parties consist of, in their capacity as such: (i) the FBG Debtors; (ii) Neal Goldman, William Transier, and Benjamin Duster, as members of one or more of the Special Committees; (iii) Neal Goldman and William Transier, as Independent Managers of the FBG Debtors; and (iv) the Creditors’ Committee and each of its members in their official capacity.
  • The Persons in clauses (ii) and (iii) shall receive exculpation solely in their capacities as officers, directors, or managers of one or more FBG Debtors, and not in their capacities as officers, directors, or managers of any SPV Debtor.
• To the fullest extent permitted by applicable law, no Exculpated Party shall have or incur liability for, and each is released and exculpated from, any Cause of Action based on, relating to, or arising from the Debtors or their Estates; the Wind Down Administrator; the Claims Ombudsman; the three Trusts and their respective Trustees; the Chapter 11 Cases; the Wind Down; the Disclosure Statement; the DIP Order; the negotiation, formulation, preparation, dissemination, or consummation of the transactions contemplated by the Definitive Documents or any related contract, instrument, release, or document; any other debt or Security of the Debtors and the ownership thereof; the purchase, sale, or rescission of the purchase or sale of any debt or Security of the Debtors; the business, contractual, or other arrangements or interactions between any Debtor and any Exculpated Party; the restructuring of any Claim or Interest during the Chapter 11 Cases or on the Effective Date; any intercompany obligations, transactions, or transfers; the formulation, preparation, negotiation, dissemination, solicitation, filing, confirmation, and consummation of the Plan and the transactions contemplated by the Confirmation Order, including the formation of the Trusts and the issuance of the Trust Interests; the funding of the Plan; and the administration and implementation of the Plan or Confirmation Order, including the distribution of property—in each instance, solely to the extent such Cause of Action took place from the Petition Date through the Effective Date.
  • The exculpations shall not release or exculpate (a) any Exculpated Party from Claims or Causes of Action arising from an act or omission judicially determined by a Final Order to have constituted gross negligence, willful misconduct, or actual fraud committed by such Exculpated Party, or (b) any post-Effective Date obligations of any party or Entity under the Plan, the Confirmation Order, any Definitive Document, or any document, instrument, or agreement executed to implement the Plan.

Injunctions

• Upon entry of the Confirmation Order, all holders of Claims and Interests and all other parties in interest, along with their respective present and former Affiliates, Representatives, employees, agents, officers, directors, and principals, shall be enjoined from taking any action to interfere with the implementation or consummation of the Plan or the occurrence of the Effective Date, including exercising or attempting to exercise control over the Litigation Trust Assets, including the Estate Claims.
• Except as expressly provided in the Plan, or for distributions required to be paid or delivered under the Plan or the Confirmation Order, all Entities that have held, hold, or may hold Claims, Interests, or Causes of Action released under the Plan or subject to exculpation, and all other parties in interest, are permanently enjoined from and after the Effective Date, with respect to such Claims, Interests, and Causes of Action, from: (A) commencing, conducting, or continuing any suit, action, or proceeding of any kind in any judicial, arbitral, administrative, or other forum; (B) enforcing, levying, attaching, collecting, or otherwise recovering on any judgment, award, decree, or order; (C) creating, perfecting, or otherwise enforcing any Lien or encumbrance; (D) asserting any right of setoff, unless timely asserted in a filed proof of Claim or another filing with the Bankruptcy Court expressly preserving it, or unless the right arises under a postpetition agreement or under an executory contract or unexpired lease assumed as of the Confirmation Date; (E) acting in any manner that does not conform to or comply with the Plan and Confirmation Order; (F) commencing or continuing any action on account of Claims, Interests, or Causes of Action released, settled, treated, entitled to a distribution, or cancelled under the Plan; and (G) exercising or attempting to exercise control over the Litigation Trust Assets, including the Estate Claims. The injunction runs in favor of the FBG Debtors and their Estates, the Wind Down Administrator, the Claims Ombudsman, the three Trusts and their assets, the Released Parties, and the Exculpated Parties, and does not preclude any Person from exercising rights and remedies, or obtaining benefits, solely pursuant to and consistent with the Plan.
• Subject to the Plan’s retention-of-jurisdiction provisions, no Entity may commence or pursue a Claim or Cause of Action of any kind against any Exculpated Party arising from the matters covered by the exculpation without the Bankruptcy Court first (i) determining, after notice and a hearing, that the Claim or Cause of Action represents a colorable claim that has not been exculpated under the Plan, and (ii) specifically authorizing that Entity to bring it. The Bankruptcy Court has sole and exclusive jurisdiction to determine whether such a Claim is colorable and not exculpated, subject to applicable law regarding its subject matter jurisdiction.
• As of the Effective Date, all Persons other than the Litigation Trust are permanently enjoined from commencing, conducting, or continuing, directly or indirectly, any litigation or prosecution of an Estate Claim, including in any judicial, arbitral, administrative, or other forum.
  • If any Person other than the Litigation Trust does so without a prior determination by the Bankruptcy Court that the claim or cause of action is not an Estate Claim, the Litigation Trust may make an emergency application to the Bankruptcy Court for a determination that the claim is an Estate Claim and that the injunction has been violated. Upon such determination, damages may be awarded in the amount of attorneys’ fees and other litigation costs and expenses incurred by the Litigation Trust. For the avoidance of doubt, no Person other than the Litigation Trust, including a defendant in such an action, is entitled to enforce this injunction.
• The Confirmation Order shall permanently enjoin the commencement or prosecution by any Person, including any Affiliate thereof, whether directly, derivatively, or otherwise, of any Claims, obligations, suits, judgments, damages, demands, debts, rights, Causes of Action, losses, or liabilities released or exculpated pursuant to the Plan or the Confirmation Order.
• The injunctions extend to any successors of the FBG Debtors, the Wind Down Administrator, the Claims Ombudsman, the Litigation Trust and Litigation Trustee, the DIP Collateral Trust and DIP Collateral Trustee, and the ABL Collateral Trust and ABL Collateral Trustee, and each of their respective property and interests in property.
• Unless otherwise provided in the Plan or a Final Order, all injunctions and stays arising under or entered during the FBG Debtors’ Chapter 11 Cases, whether under sections 105 or 362 of the Bankruptcy Code or otherwise, and in existence on the Confirmation Date, shall remain in full force and effect until the later of the Effective Date and the date indicated in the order providing for such injunction or stay; provided that no injunction or stay shall interfere with the administration of the Litigation Trust or the prosecution of claims owned by it.

Consent Rights and Plan Modifications

• Any and all consent, approval, and consultation rights of the Ad Hoc Group SteerCo, the DIP Secured Parties, the ABL Agent, or the Creditors’ Committee set forth in the Plan or the DIP Order—including with respect to the form and substance of the Plan, the Plan Supplement, and all other Definitive Documents, and any amendments, restatements, supplements, modifications, consents, waivers, or other deviations thereunder—are incorporated by reference and fully enforceable as if stated in full in the Plan. The Debtors may accept and rely on emails from counsel for any required consents or approvals.
• Through the Confirmation Date, the FBG Debtors shall have the right to amend any schedules, exhibits, or amendments to any of the documents contained in, and exhibits to, the Plan Supplement.
• The Plan may be amended, supplemented, or otherwise modified by the FBG Debtors, with the consent of the Ad Hoc Group SteerCo, the Creditors’ Committee (or the Claims Ombudsman), and the ABL Agent, not to be unreasonably withheld, conditioned, or delayed, in the manner provided by section 1127 of the Bankruptcy Code or as otherwise permitted by law, without additional disclosure pursuant to section 1125 of the Bankruptcy Code, except as otherwise ordered by the Bankruptcy Court.
  • Prior to the Effective Date, the FBG Debtors, with the same consents, may make appropriate technical adjustments and modifications to the Plan without further order or approval of the Bankruptcy Court, so long as such adjustments do not adversely affect in a material way the Litigation Trust, the DIP Collateral Trust, the ABL Collateral Trust, the rights or responsibilities of the UCC Member, or the treatment of holders of Claims or Interests against the FBG Debtors.
• The FBG Debtors reserve the right to seek an order from the Court revoking or withdrawing the Plan prior to the Effective Date.

Other Provisions

• To the fullest extent permitted by section 1146(a) of the Bankruptcy Code, the issuance, distribution, transfer, or exchange of any debt, equity security, or other interest in the FBG Debtors, and the making, delivery, or recording of any deed or instrument of transfer under, in furtherance of, or in connection with the Plan, including transfers to or by any of the three Trusts, shall not be subject to any document recording, stamp, conveyance, mortgage, real estate transfer, mortgage recording, intangibles, sales, use, UCC filing, regulatory filing, or similar tax or governmental assessment.
• Subject to the treatment of FBG Debtor Interests, and except to evidence a right to a distribution under the Plan, on the Effective Date all notes, instruments, other securities, and other evidence of debt issued by the FBG Debtors, and any rights of holders in respect thereof, are deemed cancelled and of no force or effect, and the FBG Debtors’ obligations thereunder are deemed fully satisfied, settled, and released; provided that this does not apply to the DIP Documents, the Remaining DIP A Claims, or the Remaining Roll-Up Claims.
• If the Confirmation Order is vacated, no distributions shall be made under the Plan, the FBG Debtors and all holders of Claims and Interests shall be restored to the status quo ante as of the day immediately preceding the Confirmation Date, and all of the FBG Debtors’ obligations with respect to Claims and Interests shall remain unchanged, without waiver or release of any Claims and without prejudice to any party’s rights, and without altering the protections afforded under sections 363(m) or 364(e) of the Bankruptcy Code.
• The Bankruptcy Court retains exclusive jurisdiction over matters arising in, arising under, or related to the Chapter 11 Cases, including disputes among the Trusts regarding ownership of assets, disputes concerning the Factored Receivables Account and the SPV-ABL and SPV-DIP Wind Down Accounts, Professional Fee Claims, reserves for Disputed Claims, and all disputes involving the existence, nature, scope, or enforcement of the exculpations, injunctions, and releases granted in the Plan.
• The Claims and Noticing Agent is authorized to destroy all paper and hardcopy records related to the Chapter 11 Cases two years after the Effective Date.