FreshRealm - Chapter 11 Plan Terms

Plan Terms

Overview

• The Debtors and their non-Debtor affiliates (collectively, “FreshRealm” or the “Company”) are a food development, manufacturing, and fulfillment company founded in 2013 and spun off as independent companies in 2021. The Company’s largest customers are Blue Apron, LLC (“Blue Apron”) and MMM Consumer Brands, Inc. (“Marley Spoon”).
  • The Debtors’ growth accelerated with the June 2023 acquisition of Blue Apron’s production and fulfillment operations, in connection with which the Debtors entered into a 10-year production and fulfillment agreement (the “PFA”) making them the exclusive supplier of Blue Apron’s meal kits.
  • On January 30, 2024, the Debtors acquired the U.S. operational assets of Marley Spoon and integrated them into the Debtors’ U.S.-based network.
• The Debtors engaged Rothschild & Co. on February 21, 2026 to facilitate contingency planning and investment banking services for a sale of the Debtors, and Cole Schotz P.C. on March 10, 2026 to support their restructuring efforts, including contingency planning, exploration of restructuring options and, ultimately, chapter 11 planning and execution.
• The Debtors’ board of directors, consisting of independent directors Jill Frizzley and Charlie Piper (the “Independent Directors”), in conjunction with the Debtors’ advisors, determined that a chapter 11 filing was the most value-maximizing path forward. The Debtors engaged their key creditor constituencies on a holistic restructuring solution, including:
  • FaraNord (US) III Pte Ltd, as collateral agent and administrative agent for certain lenders (the “2L Lender”)
  • BGC Lender Rep LLC, as collateral agent and administrative agent for certain lenders (the “1L Lender,” and together with the 2L Lender, the “Prepetition Lenders”)
  • Blue Apron
• The Debtors — FreshRealm, Inc. (“FRI”), FreshRealm Holdings, Inc. (the “Parent”), FreshRealm HR, LLC, FreshRealm Texas, LLC, and IHEC, LLC — commenced these Chapter 11 Cases in the U.S. Bankruptcy Court for the District of New Jersey on April 27, 2026 (the “Petition Date”). On May 14, 2026, the U.S. Trustee appointed an official committee of unsecured creditors (the “Committee”).
• The Plan constitutes a separate chapter 11 plan for each Debtor and does not provide for substantive consolidation. Entry of the Confirmation Order approves, under section 105(a) of the Bankruptcy Code, a limited consolidation of the Debtors and their estates solely for voting, confirmation, and distribution purposes; that limited consolidation does not affect the Debtors’ legal and organizational structure, defenses to Causes of Action or mutuality requirements for setoff, or distributions out of insurance policies or their proceeds. Except where federal law supplies the rule, the Plan is governed by Delaware law. In the event of an inconsistency, the Plan controls over the Disclosure Statement, Plan Supplement documents control over the Plan, and the Confirmation Order controls over the Plan.
• Following consummation of the Blue Apron/Misfits Transaction and other miscellaneous sale transactions, the Debtors propose to liquidate any remaining assets and pursue any retained causes of action pursuant to the Plan, which provides for the distribution of distributable cash (including proceeds of the Sale Transactions) to Holders of Allowed Claims and Allowed Interests and the orderly Wind-Down and dissolution of the Debtors’ Estates.
  • The Plan designates a Plan Administrator to wind down the Debtors’ affairs and administer the Plan, establishes a Liquidating Trust for the benefit of Holders of Allowed General Unsecured Claims, and contemplates recoveries to Holders of Administrative Claims and Other Priority Claims as necessary to satisfy section 1129 of the Bankruptcy Code.
  • The stated primary objective of the Plan is to maximize value for all Holders of Allowed Claims and Allowed Interests and to distribute all property of the Estates available for distribution generally in accordance with the priorities established by the Bankruptcy Code.

Prepetition Capital Structure

• As of the Petition Date, the Debtors had approximately $168 million in aggregate principal amount of outstanding secured funded debt obligations, consisting of approximately $51 million under the 1L Financing Agreement and approximately $117 million under the 2L Financing Agreement.
• 1L Financing Agreement — dated March 11, 2025, as amended by Amendment No. 1 and as further amended by Amendment No. 2 dated December 4, 2025, by and among FRI, as borrower, the lenders thereto, and BGC Lender Rep LLC, as administrative agent and collateral agent (the “1L Agent”):
  • Initially provided for a $75,000,000 loan facility, consisting of a $45,000,000 initial term loan funded at closing and up to $30,000,000 in delayed draw term loans.
  • Guaranteed by IHEC LLC and FreshRealm HR, LLC (the “1L Guarantors”) pursuant to a Pledge and Security Agreement dated March 11, 2025, and secured by first-priority liens on substantially all assets of the Debtors and 1L Guarantors, other than the 2L Priority Collateral.
• 2L Financing Agreement — dated October 16, 2025, as amended by Amendment No. 1 dated December 4, 2025, by and among FRI, as borrower, and the 2L Lender:
  • Provided a credit facility of up to $50,000,000, consisting of a $20,000,000 term loan and delayed draw term loans not to exceed $30,000,000 (the “Initial 2L Credit Facility”), which was fully drawn as of the Petition Date.
  • Amendment No. 1 provided incremental delayed draw term loans of up to $70,000,000, of which $60,000,000 was drawn as of the Petition Date.
  • Guaranteed by FreshRealm Holdings, Inc., FreshRealm HR, LLC, and IHEC LLC (the “2L Guarantors”).
  • Secured, pursuant to an Amended and Restated Intercreditor Agreement dated December 4, 2025, by second-priority liens on all assets of FRI and the 2L Guarantors, other than certain collateral including all accounts, rights to payment, receivables, inventory, and all proceeds and products thereof (the “2L Priority Collateral”), on which the 2L Lender holds a first-priority lien and the 1L Lender holds a second lien.
• The First Lien Deficiency Claims and Second Lien Deficiency Claims (collectively, the “Prepetition Deficiency Claims”) shall be Allowed General Unsecured Claims under Class 6 of the Plan.

DIP Financing

• The DIP Lenders provided $3 million in protective advances as bridge financing and agreed to provide a debtor-in-possession term loan facility of $15 million in postpetition new money loans (the “DIP Facility”). The Debtors filed the DIP Motion on the Petition Date [Docket No. 17], and the Bankruptcy Court entered a final order approving the DIP Motion on June 2, 2026 [Docket No. 210] (the “DIP Order”).
  • The protective advances comprise the 1L Protective Advance of $1,800,000, provided by the First Lien Agent to the DIP Borrower on April 14, 2026, and the 2L Protective Advance of $1,200,000, provided by the Second Lien Agent on April 15, 2026, in each case as a “Collateral Agent Advance” constituting “Obligations” under the applicable prepetition credit agreement.
• The DIP Order authorized senior secured postpetition financing on a superpriority basis in the form of a senior secured, superpriority multiple draw term loan facility in an aggregate principal amount of $18 million in new money loans ($3 million of which consists of the prepetition protective advance), plus a roll-up of $38 million of prepetition Term Loans, and continued use of the Prepetition Lenders’ cash collateral.
  • DIP Borrower: FreshRealm, Inc.; DIP Agent: BGC Lender Rep LLC, as administrative agent and collateral agent for the DIP Lenders, pursuant to the Super-Priority Senior Secured Debtor-In-Possession Financing Agreement dated as of June 1, 2026.
  • DIP New Money Loans are currently outstanding in the principal amount of $18 million; the DIP Roll-Up Loans (the 1L Roll-Up DIP Loans and the FaraNord Roll-Up DIP Loans) are currently outstanding in the principal amount of $38 million.
  • The DIP Facility contains case milestones intended to avoid a prolonged stay in chapter 11 and promptly close on the contemplated transactions.
• The DIP Facility and access to Cash Collateral provided liquidity to consummate the Blue Apron/Misfits Transaction, fund business operations and administrative expenses during the Chapter 11 Cases, and fund a wind-down of remaining estate assets and liabilities in accordance with an agreed wind-down budget. The Debtors describe the DIP Facility as the culmination of extensive, arm’s-length negotiations with the DIP Lenders.
• Treatment of DIP Claims — on the Effective Date, except to the extent a Holder agrees to less favorable or alternative treatment, each Holder of an Allowed DIP Claim (inclusive of interest, fees, and all other amounts due under the DIP Facility) has consented to receive, in full satisfaction of such claims:
  • Cash in an amount necessary to pay the reasonable and documented fees, expenses, and disbursements of the Lender Professionals, to the extent outstanding
  • Cash proceeds of the Sale Transactions
  • The Deemed DIP Paydown Amount
  • The Distributable Value under the Distributable Waterfall, until such Allowed DIP Claim is indefeasibly paid in full, at all times subject to the Distributable Waterfall
• The “Deemed DIP Paydown Amount” is $27,200,000, representing the Blue Apron Deferred Payment discounted at a rate of 15%, and shall be deemed remitted to the DIP Agent as a paydown of the DIP Loans as of the Effective Date. The DIP Liens shall remain in place until the Allowed DIP Claims are indefeasibly paid in full.

Unclassified Claims

• Administrative Claims, Professional Fee Claims, DIP Claims, and Priority Tax Claims are not classified under section 1123(a)(1) of the Bankruptcy Code.
• Administrative Claims — each Holder of an Allowed Administrative Claim (other than Professional Fee Claims, DIP Claims, and section 1930 fees) receives Cash equal to the unpaid portion of its Claim on the Effective Date if then Allowed; if not then Allowed, no later than 30 days after the Allowance order becomes a Final Order or the Plan Administrator and Holder agree on the amount; or as otherwise set forth in a Final Order. The Administrative Claims Bar Date is 30 days after the Effective Date; the Administrative Claims Objection Bar Date is the later of 60 days after the Effective Date and 60 days after the request is Filed. Holders that fail to file timely requests are forever barred, and such Claims are deemed discharged as of the Effective Date. The Administrative Claims Reserve Amount is stated as not less than [$•] of the funds available under the Wind-Down Budget — left blank in the Plan as filed.
• Priority Tax Claims — treated in accordance with section 1129(a)(9)(C) of the Bankruptcy Code.
• Professional Fee Claims — final fee applications for services through the Confirmation Date must be Filed no later than 60 days after the Effective Date; Allowed amounts are paid in Cash from the Professional Fee Escrow Account or the Wind-Down Debtor Account, with the Debtors’ and Wind-Down Debtors’ payment obligations not limited to escrowed funds. Professionals must deliver good-faith estimates no later than 5 days before the anticipated Effective Date. Escrowed funds are held in trust, are not property of the Estates, and are free of Liens; any residual reverts to the Wind-Down Debtors. The Plan does not alter the A&M Order or the requirement to seek approval of the Completion Fee thereunder.
• Statutory fees — Quarterly Fees due prior to the Effective Date are paid by the Debtors on the Effective Date; thereafter the Wind-Down Debtors and the Liquidating Trust are severally (but not jointly and severally) liable for fees on their own disbursements. The Liquidating Trust Contribution disbursed to the Liquidating Trust on the Effective Date is included in the Debtors’ Quarterly Fee calculation for the quarter in which the Effective Date occurs, and no party is responsible for statutory fees on the Trust’s subsequent distribution of that Cash. The U.S. Trustee need not file any proof of claim and is not treated as providing any release under the Plan.

Blue Apron/Misfits Transaction

• On the Petition Date, the Debtors filed a motion to approve a settlement agreement, transition services agreement, and asset purchase agreement (the “Sale and Settlement Motion”), which the Debtors describe as a key component of a successful transition into the Chapter 11 Cases. The Bankruptcy Court entered the Sale and Settlement Order on June 2, 2026 [Docket No. 209], and the transaction closed and the agreements went effective on June 4, 2026 [Docket No. 217]. The transaction comprises:
  • Settlement Agreement — a settlement agreement and mutual release with Blue Apron under which Blue Apron agreed to provide approximately $47 million in cash consideration (a portion paid on the effective date of the Settlement Agreement and a portion paid in installments over a subsequent 15-month period), waivers of certain claims in excess of $8 million, and other financial accommodations of approximately $7 million to $10 million, in exchange for termination of the PFA and related agreements and the transition of Blue Apron’s exclusive fulfillment business to Misfits Market, Inc. (“Misfits Market”).
  • TSA — a transition services agreement with Misfits Market for the provision of transition services through August 31, 2026, dated April 27, 2026, by and between the DIP Borrower, Misfits Market, and, solely for purposes of Sections 2.4, 3.2(e) and 3.6, Blue Apron.
  • APA — an asset purchase agreement with Misfits Market for the sale of certain working capital, inventory, and equipment, plus assumed liabilities, to enable Misfits Market to assume fulfillment services for Blue Apron.
• The transaction further provided the Debtors with liquidity through net zero payment terms and an immediate payment of approximately $5.1 million in contractual “end of life payments,” provided for Blue Apron to address substantial remediation costs at the end of the lease term for the Debtors’ Linden, NJ facility, and provided for waivers of administrative claims against the Estates.
• The Settlement Agreement also provided for a cash payment of $500,000 to the Debtors, to be held solely for purposes of funding a liquidation trust or equivalent structure pursuant to a plan (the “Trust Payment” or “Liquidating Trust Contribution”), which has been paid and is currently held by the Debtors in a segregated account.
• The “Blue Apron Deferred Payments” consist of $32,000,000 in cash that Blue Apron shall pay, or cause to be paid, to the DIP Agent for the benefit of the DIP Lenders, beginning on the first business day of the first month following the Service Transfer Date (as defined in the TSA), guaranteed by Wonder Group, Inc.

Marketing Process for Remaining Assets

• In parallel with the Blue Apron/Misfits Transaction, the Debtors pursued a process to maximize value for assets not related to that transaction, including certain inventory, accounts receivable, contracts, leases, intellectual property rights, and other residual assets, pursuant to the Bidding Procedures Order [Docket No. 160].
  • Rothschild, with the assistance of the Debtors, identified numerous parties, including strategic and financial partners, as potential bidders.
  • No person or entity submitted a qualifying bid by the June 10, 2026 bid deadline, and on June 11, 2026 the Debtors filed a Notice of Cancellation of Auction [Docket No. 240].
  • As the process did not result in an actionable bid, the Debtors pursued other value-maximizing actions, including liquidation sales, sales pursuant to de minimis asset procedures, and sales in the ordinary course of business.

Classification and Treatment of Claims and Interests

• The Debtors are soliciting votes only from Holders of Claims in Class 4 (First Lien Claims), Class 5 (Second Lien Claims), and Class 6 (General Unsecured Claims), each of which is Impaired. Classes 1 (Secured Tax Claims), 2 (Other Secured Claims), and 3 (Other Priority Claims) are Unimpaired and presumed to accept; Classes 7 (Intercompany Claims) and 8 (Intercompany Interests) are Unimpaired/Impaired and not entitled to vote; and Classes 9 (Existing Equity Interests) and 10 (Section 510(b) Claims) are Impaired and deemed to reject.
• Allowed amounts fixed by the Plan:
  • Class 4 First Lien Claims shall be Allowed in an amount equal to $34,955,008.32; the Plan notes that this Allowed amount excludes the 1L Roll-Up DIP Loans, which are part of the DIP Facility. The First Lien Loan Obligations were not less than $51,327,785.56 as of the Petition Date.
  • Class 5 Second Lien Claims shall be Allowed in an amount equal to [$•] — left blank in the Plan as filed. The Second Lien Loan Obligations were not less than $117,400,000.00 as of the Petition Date.
  • Solely for purposes of voting under Bankruptcy Rule 3018, the First Lien Deficiency Claim Amount is $19,009,660.85 and the Second Lien Deficiency Claim Amount is $[•] — likewise left blank. For distribution purposes, each Deficiency Claim equals its respective Deficiency Claim Amount. The First Lien and Second Lien Deficiency Claims are each Allowed as General Unsecured Claims in Class 6.
• First Lien Claims and Second Lien Claims — except to the extent a Holder agrees to less favorable treatment, each Holder shall receive, on or as soon as reasonably practicable after the Effective Date, its pro rata share of Distributable Value pursuant to the Distributable Waterfall, if any; provided that in no event shall any such Holder receive a recovery greater than 100% of the Allowed amount of its Claim.
• General Unsecured Claims — except to the extent a Holder and the Debtors or the Liquidating Trustee agree to less favorable treatment, each Holder will receive its pro rata share of the Liquidating Trust Interests on or as soon as reasonably practicable after the Effective Date.
• Existing Equity Interests — cancelled, released, and extinguished on the Effective Date, with Holders of Interests receiving no recovery or distribution.
• In accordance with section 1141(d)(3) of the Bankruptcy Code, the Plan does not discharge the Debtors.

Executory Contracts and Unexpired Leases

• On the Effective Date, except as otherwise provided in the Plan or the Sale Orders, each Executory Contract or Unexpired Lease not previously assumed, assumed and assigned, or rejected is deemed automatically rejected under sections 365 and 1123 of the Bankruptcy Code, unless it is: (1) the TSA; (2) the subject of a motion to assume pending on the Confirmation Date; (3) a contract or other document entered into in connection with the Plan; (4) an Insurance Policy; (5) an Asset Purchase Agreement; or (6) to be assumed and assigned to a Purchaser in connection with any Sale Transactions. Entry of the Confirmation Order constitutes a Final Order approving such assumptions and rejections.
• Proofs of Claim arising from rejection must be Filed within 30 days after the later of entry of the order approving rejection, the effective date of the rejection, and the Effective Date (the “Rejection Damages Claims Bar Date”); untimely rejection claims are automatically disallowed and forever barred. All Allowed rejection damages Claims are classified as General Unsecured Claims.
• Upon the Effective Date, each of the Insurance Policies shall be assumed by the Debtors and assigned to the Wind-Down Debtors, and coverage for defense and indemnity under the D&O Liability Insurance Policies remains available to all individuals within the definition of “Insured.” The automatic stay and the Article VIII injunction are deemed lifted to permit direct-action claimants to proceed and Insurers to administer, defend, settle, pay, or cancel policies in the ordinary course.
• If a Claim is covered by an Insurance Policy, payments are first made from policy proceeds; any amount within a self-insured retention or deductible constitutes an Allowed General Unsecured Claim, and neither the Debtors nor the Liquidating Trust is required to pay amounts within an SIR or deductible other than through allowance of such a Claim.

Plan Funding

• The Debtors shall fund or make distributions under the Plan with: (i) proceeds from the Settlement Agreement with Blue Apron; (ii) proceeds from sales or liquidations of remaining assets not sold pursuant to the Blue Apron/Misfits Transaction; (iii) the Debtors’ Cash on hand; (iv) proceeds from the Wind Down, including the Wind-Down Debtor Assets; and (v) proceeds from the Liquidating Trust Assets.
• Distributions on account of DIP Claims, First Lien Claims, and Second Lien Claims shall be funded by the Debtors and the Wind-Down Debtors, as applicable; provided that to the extent any such Claims are satisfied in whole or in part from the Blue Apron Deferred Payments, such Claims shall be funded by Blue Apron or Wonder Group, Inc., or an affiliate thereof.
• The applicable Purchaser shall be responsible for payment of all Allowed Claims that constitute Assumed Liabilities under any Purchase Agreement. Administrative Claims, Priority Tax Claims and Secured Tax Claims, Other Secured Claims, and Other Priority Claims not assumed by any Purchaser shall be funded by the Debtors with Cash on hand or through the Administrative Claims Reserve Amount under the Wind-Down Budget, on or shortly after the Effective Date.
• The Liquidating Trustee shall fund distributions to all other Holders of Allowed General Unsecured Claims with the Liquidating Trust Assets.
• As soon as reasonably practicable after the Confirmation Date and no later than the Effective Date, and in consultation with the DIP Lenders, the Debtors shall establish and fund the Professional Fee Escrow Account with Cash equal to the Professional Fee Amount.
• On the Effective Date, pursuant to sections 1141(b) and 1141(c) of the Bankruptcy Code, the Liquidating Trust Assets shall vest in the Liquidating Trust free and clear of all Claims, Liens, encumbrances, charges, and other interests, and the Plan Administration Assets shall vest in the Wind-Down Debtors free and clear of the same, except for those concerning the DIP Claims, the First Lien Claims, and the Second Lien Claims, or as otherwise expressly provided in the Plan.

Distributable Waterfall

• “Distributable Waterfall” means proceeds of Collateral (subject to the Carve Out, except that the proceeds of the Blue Apron Deferred Payment shall not be subject to the Carve Out), applied in the following priorities:
  • First, the DIP New Money Loans shall be repaid, pro rata, from (i) all Excess Cash and (ii) all proceeds from the sale of Collateral, including the proceeds of the Blue Apron Deferred Payment; provided that the proceeds of the Blue Apron Deferred Payment shall only be applied to repay the DIP New Money Loans in an amount equal to the Deemed DIP Paydown Amount.
  • After repayment in full of the DIP New Money Loans:
    • Proceeds of all Collateral other than the Directed 1L Priority Collateral and the 2L Priority Collateral, including Excess Cash, shall be applied in an allocation to be agreed to the 1L and 2L Roll-Up DIP Loans until an aggregate principal amount of $7,000,000 of the 2L Roll-Up DIP Loans is repaid (the “Initial 2L Roll-Up DIP Repayment”), after which such proceeds shall be applied solely to the 1L Roll-Up DIP Loans and, to the extent those are paid in full, to any outstanding First Lien Obligations until discharge thereof. Proceeds of the Blue Apron Deferred Payment shall only be applied to repay 1L and 2L Roll-Up DIP Loans in an amount equal to the Deemed DIP Paydown Amount.
    • Proceeds of the 2L Priority Collateral shall be applied to the 2L Roll-Up DIP Loans and, to the extent paid in full, to any outstanding prepetition Second Lien Obligations.
    • Proceeds of the Directed 1L Priority Collateral — all of the Debtors’ rights in, to and under all Business Interruption Insurance Policies and Business Interruption Insurance Claims, all claims outstanding thereunder, and all products and proceeds thereof — shall be applied to repay any remaining 1L Roll-Up DIP Loans or as otherwise agreed and, to the extent those are paid in full, to any outstanding prepetition First Lien Obligations in accordance with the Prepetition Intercreditor Agreement or as otherwise agreed.
  • Any proceeds of Collateral remaining after discharge of the First Lien Obligations shall be applied consistent with the Prepetition Intercreditor Agreement.
• “Distributable Value” is the amount of proceeds available for distribution to the DIP Secured Parties, First Lien Secured Parties, and Second Lien Secured Parties on account of their respective obligations after giving effect to the treatment and satisfaction of the DIP Obligations under the Plan, including the DIP Paydown, minus:
  • The amount necessary to fund the Wind-Down Debtor Account with the Wind-Down Debtor Account Amount
  • The amount necessary to satisfy in full all Claims required to be satisfied pursuant to section 1129 of the Bankruptcy Code to confirm the Plan, including Allowed Administrative Claims, Priority Tax Claims, and Other Priority Claims
  • Subject to the reasonable consent of the Required DIP Lenders, the amount necessary to make any other required payments to implement the terms of the Plan
  • Subject to the consent of the Required DIP Lenders, any other fees, costs, or expenses in excess of the Wind-Down Budget reasonably necessary to liquidate, monetize, or collect the Wind-Down Debtor Assets

Liquidating Trust

• On the Effective Date, the Liquidating Trust will be established pursuant to the Liquidating Trust Agreement, to be filed with the Plan Supplement and executed by the Debtors on the Effective Date, subject to the reasonable consent of the DIP Agent and the First Lien Agent. Nonmaterial modifications made by the Debtors, subject to the reasonable consent of the First Lien Agent and the Second Lien Agent, will be ratified.
• Upon establishment, title to the Liquidating Trust Assets shall be deemed transferred to the Liquidating Trust without further action by the Debtors or their representatives, and, pursuant to section 1141 of the Bankruptcy Code, all property transferred to the Liquidating Trust shall be free and clear of all Claims, Liens, encumbrances, charges, and other interests, except as otherwise provided in the Plan.
• The Liquidating Trust is established for, among other purposes: (a) receiving and holding the Liquidating Trust Assets; (b) administering, disputing, objecting to, compromising, or otherwise resolving all Claims and Interests other than DIP Claims, First Lien Claims, Second Lien Claims, Administrative Claims, Secured Claims, Priority Tax Claims, and Prepetition Deficiency Claims; (c) making distributions to the Liquidating Trust Beneficiaries; (d) maximizing recoveries for the benefit of the Liquidating Trust Beneficiaries; and (e) commencing and pursuing the Liquidating Trust Retained Causes of Action, with no objective to continue or engage in the conduct of a trade or business in accordance with Treas. Reg. § 301.7701-4(d).
• The Liquidating Trust Interests shall not constitute “securities” under applicable securities laws, shall represent only the right to receive distributions from the Liquidating Trust in accordance with the Liquidating Trust Agreement, and shall be non-transferable except as required by law or as provided in the Liquidating Trust Agreement.
• Liquidating Trust Interests are allocable to applicable Holders of Allowed Claims and expressly include the First Lien Deficiency Claims and the Second Lien Deficiency Claims (but not Allowed Secured Claims or Interests). Accordingly, the Prepetition Secured Parties’ deficiency claims share pro rata in the Liquidating Trust alongside all other Allowed General Unsecured Claims. The Liquidating Trust Assets consist of the $500,000 Liquidating Trust Contribution and the Liquidating Trust Retained Causes of Action, the schedule of which is to be filed with the Plan Supplement; “Liquidating Trust Distributable Proceeds” means the Liquidating Trust Assets or their Cash proceeds, minus Liquidating Trust Expenses.
• The Liquidating Trust is intended to qualify as a “grantor trust” for U.S. federal income tax purposes and, to the extent permitted by applicable law, for state and local income tax purposes, with the Liquidating Trust Beneficiaries treated as grantors and owners.
• The Liquidating Trustee — designated by the Debtors and the Committee, subject to the consent of the Prepetition Secured Parties — shall be deemed appointed as trustee and administrator of the Liquidating Trust upon the occurrence of the Effective Date.
• The Liquidating Trust shall in no event be dissolved later than five years from its creation, unless the Bankruptcy Court, on motion within the six-month period prior to the fifth anniversary (or prior to the end of any extension period), determines that a fixed-period extension not to exceed five years is necessary to facilitate or complete the recovery and liquidation of the Liquidating Trust Assets — with any further extension requiring a favorable IRS private letter ruling or a satisfactory opinion of counsel that the extension would not adversely affect the trust’s liquidating trust status. Assets subject to disputed ownership claims may instead be treated as a disputed ownership fund under Treasury Regulation section 1.468B-9.

Wind-Down

• The Debtors shall continue in existence after the Effective Date as the Wind-Down Debtors solely for the purposes of, among other things:
  • Winding down the Debtors’ businesses and affairs as expeditiously as reasonably possible and liquidating all Wind-Down Debtor Assets
  • Performing any remaining obligations under the TSA and complying with continuing obligations under the Asset Purchase Agreements, if any
  • Enforcing and prosecuting the Wind-Down Debtor Retained Causes of Action, only to the extent the benefits of such enforcement are reasonably believed by the First Lien Lenders and Second Lien Lenders to outweigh the associated costs
  • Resolving any Disputed non-General Unsecured Claims and paying or otherwise satisfying Allowed non-General Unsecured Claims
  • Filing appropriate tax returns, including pursuing any refunds, credits, or other tax benefits to which the Debtors and/or the Wind-Down Debtor are entitled
  • Otherwise administering the Plan and undertaking any restructuring transactions necessary or advisable in connection with the foregoing
• On the Effective Date, the Wind-Down Debtor Assets shall vest in the Wind-Down Debtors primarily for administering their Estates, with no objective to continue or engage in the conduct of a trade or business other than performance under the TSA. In consultation with the DIP Agent, the First Lien Agent, and the Second Lien Agent, the Wind-Down Debtors will, in an expeditious but orderly manner, liquidate and convert the Wind-Down Debtor Assets to Cash and make timely distributions pursuant to the Plan and Confirmation Order; provided that the DIP Agent and the First Lien Agent shall have sole discretion over the Wind-Down Debtors’ and Plan Administrator’s pursuit, settlement, or compromise of the Directed 1L Priority Collateral, and only after the First Lien Obligations have been paid in full shall the Second Lien Agent have sole discretion over any residual Directed 1L Priority Collateral.
• On the Effective Date, the authority, power, and incumbency of the Debtors’ directors and officers shall be deemed terminated and such persons deemed to have resigned, and the Plan Administrator shall be appointed by each Debtor, subject to the consent of the DIP Agent, the First Lien Agent, and the Second Lien Agent, as sole director and sole officer of such Wind-Down Debtor, succeeding to the powers of such Debtor’s directors and officers. (The Disclosure Statement describes the same appointment as made “with the consent of the Required DIP Lenders”; the Plan controls in the event of any inconsistency.) The Plan Administrator shall also serve as an appointed agent of the designated operator or as the operator of the Debtors for purposes of fulfilling any obligations under the TSA.
• The Debtors shall execute a Plan Administrator Agreement in substantially the form set forth in the Plan Supplement prior to or on the Effective Date; nonmaterial modifications made prior to the Effective Date, subject to the consent of the DIP Agent, the First Lien Agent, and the Second Lien Agent, are ratified.
  • The Plan Administrator shall administer the Wind-Down Debtors and the Plan in accordance with the Wind-Down Budget and shall use commercially reasonable efforts to adhere to (or outperform) that budget, with authority to reallocate funding between line items without further order of the Court, in all cases in consultation with the DIP Agent, the First Lien Agent, and the Second Lien Agent; provided that if the Directed 1L Priority Collateral is a Wind-Down Debtor Asset, the Plan Administrator must obtain the consent of the DIP Agent and the First Lien Agent before reallocating any funding relating to recovery of that collateral.
  • The Plan Administrator shall be compensated pursuant to the Plan Administrator Agreement and shall be permitted to use the Wind-Down Amount, as allocated and approved pursuant to the Approved Budget, to pay its fees and expenses, and to obtain and pay for all reasonably necessary insurance coverage for itself, its agents, representatives, employees or independent contractors, and the Wind-Down Debtors.
  • Upon conclusion of the Plan Administrator’s post-Effective Date obligations, the Plan Administrator shall remit any remaining balance of the Wind-Down Account Amount to the DIP Lenders or Prepetition Secured Parties, as applicable, for distribution pursuant to the Plan.
• The Wind-Down Budget is stated in an amount no more than [$•] million — left blank in the Plan as filed — and shall be acceptable to the Debtors and the Required DIP Lenders, as may be amended by the Debtors, Wind-Down Debtors, or the Plan Administrator with the consent of the Required DIP Lenders. The Wind-Down Debtor Account will be funded on the Effective Date with Available Cash in the amount of the Wind-Down Debtor Account Amount, which is likewise capped at an unspecified amount acceptable to the Required DIP Lenders.
• The Wind-Down Debtor Assets consist of all remaining assets of the Debtors’ Estates following consummation of the Sale Transactions, including the Wind-Down Debtor Account Amount but excluding the DIP Paydown Amount and the Liquidating Trust Assets. Following the Wind Down, any remaining amounts in the Wind-Down Debtor Account shall be distributed in accordance with Article III of the Plan.
• On the Effective Date, the Debtors’ obligations under the Prepetition Loan Documents and other instruments evidencing indebtedness or ownership interests are cancelled solely as to the Debtors and their Affiliates (subject to exceptions for Reinstated instruments and certain indemnification obligations), and related obligations under governing documents are released and discharged; provided that the liens supporting the First Lien Obligations and the Second Lien Obligations remain in place until those obligations are paid in full or, to the extent no further collateral remains, satisfied in accordance with the Plan. No assumed executory contract or unexpired lease is terminated, and no Prepetition Loan Document is cancelled to the extent it evidences indebtedness or grants a Prepetition Secured Party a security interest in the Debtors’ or Wind-Down Debtors’ property.
• On the Effective Date, any statutory committee appointed in the Chapter 11 Cases, including the Committee, shall dissolve, and its members shall be released and discharged from all rights and duties from or related to the Chapter 11 Cases, except in connection with applications for compensation and objections thereto.

Committee Investigation and Pending Challenges

• Pursuant to the Final DIP Order, the Committee was granted a Challenge Period to investigate and, if appropriate, commence Challenges to the stipulations in the Final DIP Order regarding the validity, extent, perfection, and priority of the Prepetition Liens and the Prepetition Obligations. As of the date of the Disclosure Statement, the Challenge Period remains open as to both the First Lien Secured Parties, for certain limited purposes, and the Second Lien Agent and Second Lien Secured Parties (FaraNord (US) III Pte Ltd, including its affected affiliates, the “FaraNord Parties”).
• The Committee has conducted an extensive investigation and identified the following potential claims and Challenges:
  • Fraudulent Transfer Claims — potential constructive (and actual) fraudulent transfer claims against the FaraNord Parties
  • Lien Challenges — potential bases to challenge the validity, extent, and priority of the Prepetition Secured Parties’ liens as to certain categories of assets, including commercial tort claims, certificated goods, Chapter 5 avoidance actions, and a foreign patent
  • Equitable Subordination — potential equitable subordination of the FaraNord Parties’ debt claims
  • Recharacterization — potential recharacterization of the FaraNord Parties’ equity and debt claims
• The Committee and BGC Lender Rep LLC and Birch Grove Investments LLC (collectively, “BGC”), on behalf of the First Lien Secured Parties, have agreed in principle on a potential settlement of the Committee’s Challenges as to the First Lien Secured Parties (the “Potential First Lien Settlement”).
  • The Potential First Lien Settlement has not been approved by the Bankruptcy Court, is not yet effective, and remains subject to documentation and to the terms of a Plan being acceptable to the First Lien Secured Parties in all respects.
  • If approved, its material terms would resolve the Committee’s lien challenges as to the First Lien Secured Parties and include mutual releases among the Committee, the Debtors, BGC, and the First Lien Secured Parties, while expressly preserving the Committee’s claims against the FaraNord Parties in full.
• The Committee’s Challenge against the FaraNord Parties remains pending and unresolved. If successful, it could result in a material increase in the assets available for distribution to holders of General Unsecured Claims. The FaraNord Parties dispute the Committee’s claims.

Releases, Exculpation, and Injunction

• The Debtors characterize the Debtor releases, third-party releases, and exculpation provision as an integral part of their overall chapter 11 efforts and an essential element of the negotiations with key constituencies in obtaining support for the Plan, noting that all Released Parties and Exculpated Parties have made substantial and valuable contributions to the restructuring. The Debtors believe the releases and exculpations meet the requisite legal standard promulgated by the U.S. Court of Appeals for the Third Circuit.
• Releasing Parties: (a) the Debtors; (b) the Committee and its members; (c) the DIP Secured Parties; (d) the First Lien Secured Parties; (e) the Second Lien Secured Parties; (f) all Holders of Claims; (g) all Holders of Interests; (h) each current and former Affiliate of each of the foregoing; and (i) each Related Party of each of the foregoing that such Entity is legally entitled to bind.
  • Any Holder of a Claim or Interest that elects to opt out of the Third-Party Release, or that timely objects and whose objection is not withdrawn or otherwise resolved before entry of the Confirmation Order, shall not be a Releasing Party.
• Under the proposed solicitation procedures and forms of ballot, a Holder that votes to accept the Plan consents to the Third-Party Release and may not opt out; if such a Holder both accepts and checks the opt-out box, the opt-out election is disregarded. A Holder that votes to reject the Plan, or that does not vote, and that does not properly check the opt-out box and timely submit its ballot or Opt-Out Form is deemed to have consented to the Third-Party Release. A Holder that opts out forgoes the benefit of becoming a Released Party but receives the same treatment on account of its Claim.
• Released Parties: (a) the Debtors; (b) the Committee and its members; (c) the DIP Secured Parties; (d) the First Lien Secured Parties; (e) the Second Lien Secured Parties; (f) each Releasing Party; (g) each current and former Affiliate and each Related Party of the foregoing; (h) the current members of the Board or Boards of the Debtors, Jill Frizzley and Charlie Piper; and (i) the Released Officers.
  • “Released Officers” means current and former officers of the Debtors who served in such capacity on or after October 16, 2025, other than Mr. Carlos Iniguez and Ms. Snow Le, who are expressly excluded.
  • An Entity shall not be a Released Party if it opts out of the Third-Party Release or timely objects and such objection is not withdrawn or resolved before entry of the Confirmation Order. No former director (in such capacity) or non-Releasing Party shall be a Released Party.
• Exculpated Parties: (a) each of the Debtors; (b) the Independent Directors; (c) the Committee and its members; and (d) with respect to the Debtors and the Committee, their respective current and former directors, managers, officers, attorneys, financial advisors, consultants, or other professionals or advisors that served in such capacity between the Petition Date and the Effective Date.
  • Exculpation applies solely to acts or omissions occurring between the Petition Date and the Effective Date, and excludes claims related to any act or omission determined in a Final Order to have constituted actual fraud, willful misconduct, or gross negligence.
• The Debtor release, granted as of the Effective Date upon entry of the Confirmation Order by the Debtors and their Estates, the Wind-Down Debtors and their Estates, and the Liquidating Trustee, covers all Claims and Causes of Action, whether known or unknown, including derivative claims, arising from or relating to, among other things, the Debtors and their capital structure, management, ownership, or operation; the transactions or events giving rise to any Claim or Interest treated in the Plan; the Debtors’ in- or out-of-court restructuring efforts; intercompany transactions; the First Lien Credit Agreement, the Second Lien Credit Agreement, the DIP Facility and DIP Facility Documents; the Disclosure Statement Order, Confirmation Order, Sale Order(s), Sale Transactions, TSA, and Sale and Settlement Order; the First Day Pleadings and the Chapter 11 Cases; and the formulation, negotiation, and implementation of the Plan.
  • The releases do not release (i) any post-Effective Date obligations under the Plan, the Confirmation Order, or any implementing document; (ii) any Causes of Action specifically retained pursuant to the Schedule of Retained Causes of Action to be attached to the Plan Supplement; or (iii) any Claims or Causes of Action arising out of any act or omission of a Released Party determined by Final Order to have constituted actual fraud, gross negligence, or willful misconduct.
• Insurance and D&O carve-outs — nothing in the Plan or Confirmation Order affects, impairs, or diminishes the Business Interruption Insurance Claims or any rights under the Business Interruption Insurance Policies. To the extent D&O Claims are designated as Liquidating Trust Retained Causes of Action or Wind-Down Debtor Retained Causes of Action, nothing in the Plan (including the Article VIII releases) prohibits the Plan Administrator or the Liquidating Trustee from initiating or continuing an action through entry of judgment or settlement against any D&O Party; no D&O Party is released or absolved from the legal obligation to pay on account of D&O Claims for which it is responsible for an insurable loss under the D&O Liability Insurance Policies, provided that no D&O Party shall be liable to the extent such D&O Claims exceed the amounts paid by the Insurer under the applicable policies. “D&O Party” means current and former directors, officers, or managers of the Debtors who are not Released Parties. The Wind-Down Debtors, Plan Administrator, and Liquidating Trust must use commercially reasonable efforts to cooperate with the DIP Agent and First Lien Agent in pursuing proceeds under the Insurance Collateral.
• The third-party release provides that, as of the Effective Date, each Releasing Party releases each Debtor, Wind-Down Debtor, the Liquidating Trustee, and each Released Party from all Claims and Causes of Action, whether known or unknown, including derivative claims, based on or relating to substantially the same subject matter as the Debtor release.
• Injunction — to the fullest extent permissible under applicable law, all Persons or Entities holding Claims, Interests, or Causes of Action that have been released or are subject to exculpation are permanently enjoined, from and after the Effective Date, from taking any of the following actions against the Exculpated Parties (including the Debtors and Wind-Down Debtors) or the Released Parties: (a) commencing or continuing any action or proceeding on account of such Claims, Interests, or Causes of Action; (b) enforcing, attaching, collecting, or recovering on any judgment, award, decree, or order; (c) creating, perfecting, or enforcing any encumbrance against such Entities or their property; (d) asserting any right of setoff or subrogation, unless the Holder has Filed a motion requesting that right on or before the Effective Date; and (e) commencing or continuing any action on account of Claims, Interests, or Causes of Action released or settled under the Plan.
  • No Person or Entity may commence or pursue any Claim or Cause of Action against the Debtors, Wind-Down Debtors, Exculpated Parties, or Released Parties relating to (or reasonably likely to relate to) a matter subject to the Debtor release, third-party release, or exculpation without the Bankruptcy Court first determining, after notice and a hearing, that the Claim or Cause of Action is colorable and specifically authorizing the Person or Entity to bring it.
  • Upon entry of the Confirmation Order, all Holders of Claims and Interests and their respective current and former employees, agents, officers, directors, managers, principals, and direct and indirect Affiliates shall be enjoined from taking any actions to interfere with the implementation or Consummation of the Plan. Each Holder of an Allowed Claim or Interest that accepts, or is eligible to accept, distributions or Reinstatement under the Plan is deemed to have consented to the injunction.
• The Disclosure Statement advises Holders that the Plan’s release and injunction provisions (Article VIII), if confirmed as currently drafted, would release the FaraNord Parties and the First Lien Secured Parties from all Claims and Causes of Action, including the Committee’s pending Challenges. Absent a resolution, the Committee anticipates objecting to the scope of these release provisions as they apply to the FaraNord Parties and the First Lien Secured Parties.
  • The Debtors further disclose, as a risk factor, that if the Committee’s Challenges are not resolved prior to Confirmation, the Plan’s release provisions could extinguish those Challenges, which the Committee believes are potentially the largest source of recovery available to Holders of General Unsecured Claims, and that recoveries to such Holders may be materially affected by the resolution of the Challenges, including whether the Potential First Lien Settlement is approved and whether any recovery is obtained from the FaraNord Parties.

Settlement and Compromise Under the Plan

• Upon the Effective Date, and in consideration of the classification, distributions, releases, and other benefits provided under the Plan, the Plan’s provisions shall constitute a good faith release, compromise, and settlement of all Claims and Interests and controversies resolved pursuant to the Plan.
• The Plan shall be deemed a motion to approve such good faith compromise and settlement, and entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval thereof and a finding that the settlement and compromise is fair, equitable, reasonable, and in the best interests of the Debtors, their Estates, and Holders of Claims and Interests.

Plan Support and Confirmation Timeline

• The Plan is supported by the Debtors, the DIP Lenders, the First Lien Lenders, and the Second Lien Lenders. The Committee does not support the Plan as of the date of the Disclosure Statement, and the Debtors are engaged in negotiations with the Committee, among other parties, regarding the terms of the Plan, which remains subject to further negotiation and finalization.
• Key dates and deadlines under the proposed Confirmation Schedule:
  • Combined/conditional Disclosure Statement hearing: August 13, 2026, at 10:00 a.m. prevailing Eastern Time, at which the Court will consider the Disclosure Statement Motion, the Plan, and the Disclosure Statement
  • Voting Record Date: August 6, 2026
  • Solicitation and publication deadlines: three business days following entry of the Disclosure Statement Order (or as soon as reasonably practicable thereafter)
  • Initial Plan Supplement deadline and Assumption Notice deadline: September 8, 2026, at 11:59 p.m. prevailing Eastern Time (the Plan defines the Plan Supplement Filing Date as seven days prior to the plan objection deadline)
  • Voting Deadline: September 15, 2026, at 5:00 p.m. prevailing Eastern Time, with ballots to be actually received by Kroll Restructuring Administration LLC, the Debtors’ notice and claims agent; ballots sent by email or facsimile are not permitted and will not be counted
  • Plan objection deadline: September 15, 2026, at 5:00 p.m. prevailing Eastern Time
  • Voting Report and confirmation brief/objection reply deadline: September 21, 2026, at 11:59 p.m. prevailing Eastern Time
  • Confirmation Hearing: September 24, 2026, at 10:00 a.m. prevailing Eastern Time, or such other date as the Court may schedule
• The Plan Supplement — which will contain the Liquidating Trust Agreement, the Plan Administrator Agreement, the Wind-Down Budget, the Schedule of Retained Causes of Action, and the Schedule of Assumed Executory Contracts and Unexpired Leases, and must be acceptable to the Required DIP Lenders — had not been filed as of the date of the Disclosure Statement. The identity of the Plan Administrator and the section 1129(a)(4) and (5) disclosures will likewise be included in the Plan Supplement.
• The Debtors state that the Plan maximizes stakeholder recoveries, that any alternative would materially reduce recoveries to Holders of Claims, and that Confirmation will avoid the lengthy delay and significant cost of a liquidation under chapter 7. The Liquidation Analysis supporting the best-interests test is designated as Exhibit B to the Disclosure Statement but is marked “To Be Filed” and was not attached to this filing. The Disclosure Statement contains no valuation analysis, and the Debtors state that they do not at this time anticipate filing one, relying instead on the marketing and sale process as the market test of value. The Plan itself was filed separately and is attached to the Disclosure Statement as Exhibit A.

Conditions Precedent to the Effective Date

• The Effective Date is the first Business Day after the Confirmation Date on which no stay of the Confirmation Order is in effect and all conditions precedent set forth in Article IX of the Plan have been satisfied or waived, including:
  • The Sale Transactions shall have been implemented and/or consummated, as applicable, in all material respects
  • The Bankruptcy Court shall have entered an order approving the Disclosure Statement, in form and substance acceptable to the Required DIP Lenders
  • The Bankruptcy Court shall have entered the Confirmation Order, consistent in all material respects with the Plan and acceptable to the Required DIP Lenders, and such order shall have become a Final Order
  • The DIP Facility shall be in full force and effect, with no continuing defaults under the DIP Facility Documents unless waived by the Required DIP Lenders
  • The Plan Supplement, Plan, and all schedules, documents, supplements, and exhibits thereto shall be acceptable to the Required DIP Lenders and shall have been filed
  • The Debtors shall have obtained all authorizations, consents, regulatory approvals, rulings, or documents necessary to implement and effectuate the Plan
  • The Debtors shall have established the Administrative Claims Reserve
  • All professional fees and expenses required to be approved by the Bankruptcy Court shall have been paid in full, or sufficient amounts funded into the Professional Fee Escrow Account pending approval
  • The Debtors shall have funded the Wind-Down Debtor Account Amount in Cash
  • The Liquidating Trust shall have been established and funded with the Liquidating Trust Assets
  • No court or governmental or regulatory authority of competent jurisdiction shall have issued a final and non-appealable order making illegal or otherwise restricting, preventing, or prohibiting consummation of the Plan
  • Any Sale Orders, such other motions, orders, agreements, and documentation necessary or desirable to consummate and document the transactions contemplated by the Plan, and all other material customary documents shall be in full force and effect and shall not have been terminated prior to the Effective Date
• The conditions to Consummation may be waived by the Debtors, subject to the consent of the Required DIP Lenders, without notice, leave, or order of the Bankruptcy Court or any formal action other than proceeding to confirm or consummate the Plan.
• If Consummation does not occur, the Plan shall be null and void in all respects, and nothing in the Plan or Disclosure Statement shall constitute a waiver or release of any Claims, prejudice the rights of any party, or constitute an admission, acknowledgment, offer, or undertaking by any party.
  • Non-Consummation shall not require or result in the voiding, rescission, reversal, or unwinding of (a) the DIP Orders, including any releases provided therein, or (b) the Sale Transaction(s) under the Asset Purchase Agreements or the revocation of the Debtors’ authority under the Sale Orders to consummate such Sale Transaction(s).