House Canary New Jersey - Chapter 11 Plan Terms

Plan / RSA Terms

Overview

• The debtors filed a combined disclosure statement and Chapter 11 plan of reorganization on Oct. 4, 2026 that would reorganize HouseCanary as a going concern and, as the debtors describe it, either pay in full or assume or reinstate every class; the DIP lender would take a first-lien exit note and 20% of the reorganized equity in satisfaction of its claim, plus two board seats whose holders must approve any action that may adversely affect the Texas litigation, the Texas assets, a future bankruptcy filing, or a liability management transaction that could adversely affect the DIP lender's entitlements.
• HouseCanary, founded in 2013 and headquartered in San Francisco, operates an artificial-intelligence-powered real estate data and analytics platform covering more than 136 million U.S. residential properties, providing valuation, analytics, forecasting, data, and data visualization services to financial institutions, government-sponsored enterprises, mortgage lenders, investment banks, whole loan buyers, single-family rental REIT operators, and real estate agents through two lines of business, a self-service data subscription and a report-driven service delivering HouseCanary's interpretation of the data; it also runs a licensed brokerage in all 50 states and the District of Columbia under the HouseCanary and ComeHome trade names.
• The debtors are House Canary New Jersey, Inc., HouseCanary, Inc., HouseCanary (CT), Inc., ComeHome, Inc., HC Certified Analytics, Inc., and HouseCanary R&D, LLC, which filed Chapter 11 on Sept. 22, 2026 in New Jersey. The plan is a separate plan for each debtor and does not substantively consolidate the estates.
• The debtors filed to stop what they characterize as a commercially unreasonable foreclosure sale by Ocean II PLO LLC, the prepetition administrative and collateral agent, which threatened immediate operational harm. Ocean II issued a notice of disposition of collateral on Sept. 8, 2026 setting a public auction for Sept. 22, 2026; the debtors say that sale would have destroyed HouseCanary as a going concern by dispersing its customer contracts, equipment, accounts, inventory, and workforce with no practical mechanism to reassemble the business. HouseCanary sued in California Superior Court for San Mateo County on Sept. 17, 2026 seeking to enjoin the auction and applied ex parte for a temporary restraining order the following day; the San Mateo court denied the TRO on Sept. 21, 2026, and the debtors filed the next day.
• Throughout the summer of 2026 the debtors explored capital raises and sale transactions and negotiated with key stakeholders out of court. Those efforts failed, which the debtors attribute to the lenders' conduct, and the debtors concluded Chapter 11 was the only viable path to preserve the estates, the operations and workforce, and their ability to prosecute and preserve the Texas litigation verdict and related Texas assets.
• The debtors have filed or will file retention applications for Dentons US LLP as counsel and Getzler Henrich & Associates LLC for financial advisory and interim management services, including the designation of Getzler Henrich managing director Jeffrey C. Perea as chief restructuring officer.
• The court has granted the wages, customer programs, and cash management motions on an interim basis, capping employee compensation and benefits at $410,000 per biweekly pay period (with any relief implicating section 503(c) reserved for a separate motion) and prepetition customer-program obligations at $2,722; it also authorized a consolidated creditor matrix on an interim basis, designated the cases complex, and extended the deadline to file schedules and statements of financial affairs to Oct. 26, 2026.

Key Dates

• Voting record date: Oct. 20, 2026.
• The solicitation and confirmation dates are proposed and depend on entry of the conditional approval and procedures order, which the debtors expect on Oct. 21, 2026; solicitation packages must be served, and notice published, within five business days after that order is entered.
• Combined hearing on Oct. 20, 2026 at 2 p.m. ET on conditional approval of the disclosure statement, the final DIP order, and final orders on the creditor matrix, wages, customer programs, and cash management motions; objections to conditional approval and to those four first-day motions are due Oct. 13, 2026 at 4 p.m. ET, with a disclosure statement reply deadline of Oct. 16, 2026. The court is also scheduled to consider the Structural claim estimation and cash collateral motions on Oct. 20, and the hearings on the interim compensation procedures and ordinary course professionals motions have been adjourned to that date.
• Plan supplement filing deadline: Nov. 11, 2026, with the definition requiring filing no later than seven calendar days before the voting deadline.
• Rule 3018 motions: Nov. 17, 2026 at 4 p.m. ET.
• Voting deadline and plan objection deadline: Nov. 18, 2026 at 4 p.m. ET; release opt-out forms must also reach the balloting agent by the voting deadline.
• Voting tabulation affidavit: Nov. 20, 2026 at 4 p.m. ET; confirmation brief and supporting evidence: Nov. 25, 2026 at 4 p.m. ET.
• Confirmation hearing: Dec. 1, 2026 at 2 p.m. ET, covering both final approval of the disclosure statement and confirmation. The debtors may adjourn it by announcement or notice.
• Final fee applications are due 45 days after the effective date; notice of the effective date must be filed within five business days of its occurrence.

Prepetition Capital Structure

• Prepetition loan facility: HouseCanary, Inc. is borrower under a March 25, 2021 loan and security agreement with Ocean II as administrative and collateral agent and Structural as lenders, establishing up to $30 million in total commitments. "Structural" means Structural Capital Investments III, LP, Series Structural DCO II series of Structural Capital DCO, LLC, CEOF Holdings LP, and Ocean II itself. As of the petition date, obligations were at least $43 million, of which the debtors estimate only $85,061.56 is secured, plus other fees, expenses, and obligations. The collateral excludes HouseCanary's intellectual property and any claims or proceeds of the Texas litigation collateral.
• Litigation funding: HouseCanary, Inc. is also party to the prepetition Texas agreements funding the Texas litigation, namely an amended and restated litigation funding agreement dated Jan. 8, 2026 with Crane 2 FundingCo 23, LLC, and a June 6, 2018 litigation funding agreement among HC 1 LLC, Security Finance 1 LLC, and HouseCanary. Those three entities are collectively the Texas assets lender, holding valid, perfected, first-priority liens on the Texas assets. As of the petition date the secured obligations were no less than the respective Investment Return defined in each agreement, plus accrued interest, fees, premium, expenses and disbursements, costs, charges, indemnities, and other obligations of whatever nature.
• Unsecured claims, as estimated by the debtors at the petition date: approximately $27.5 million of convertible notes claims issued under a July 10, 2023 note purchase agreement; approximately $3.4 million of general unsecured trade claims, including unsecured notes other than the convertible notes, among them a $2 million promissory note issued by HouseCanary, Inc. to California Regional Multiple Listing Services, Inc. dated March 9, 2026; and approximately $42.9 million of Structural deficiency claims.
• Equity: common and preferred equity interests in HouseCanary, Inc. outstanding at the petition date. The disclosure statement's risk factors state the preferred currently carries an aggregate liquidation preference of approximately $143 million.
• HouseCanary, Inc.'s Aug. 31, 2026 balance sheet, attached as Exhibit A, carries $1.7 million of cash and total assets of $3.9 million against total current liabilities of $43.9 million and total long-term liabilities of $105 million, the latter including litigation financing of $75.2 million and convertible notes of $23 million plus $5.1 million of accrued interest and fees; total equity is negative $143.5 million. The exhibit does not balance: its total liabilities and equity line reads $5.4 million against total assets of $3.9 million.

DIP Financing

• Size: up to $15 million in new money from Condor FundingCo 26, LLC, with up to $3 million available on an interim basis, under a super-priority senior secured facility with HouseCanary, Inc. and House Canary New Jersey, Inc. as borrowers and the other debtors as guarantors; the plan's class summary estimates the DIP claim at approximately $15 million plus accrued interest, fees, expenses, and indemnification obligations.
• The debtors filed the DIP motion on Sept. 23, 2026 to obtain critical liquidity to continue operations, stating that they and their advisors could not obtain sufficient unsecured credit or secured credit on terms more favorable than the DIP term sheet and that no party offered financing on better terms. The court entered the interim DIP order on Sept. 25, 2026 [Docket No. 34]; the final hearing is set for Oct. 20, 2026 at 2 p.m. ET.
• Use of proceeds at emergence: the plan term sheet contemplates that any undrawn DIP commitments will be advanced on the effective date to fund effective-date payments and working capital.
• Treatment: the DIP claim is unclassified and deemed allowed in the full amount due under the DIP agreement as of the effective date, comprising outstanding principal, interest accrued and unpaid through the effective date, and all accrued fees, expenses, and indemnification obligations payable under the DIP documents. It is satisfied in full by issuance of the DIP exit note and the DIP lender equity interests, an estimated 100% recovery.
• DIP exit note: a secured note issued by the reorganized company on the effective date, carrying a first-priority lien on all assets of the reorganized company, the pledged stock of the reorganized company, and the DIP collateral as defined in the DIP orders. The principal amount is left blank in the plan and its terms will be set in the plan supplement, in form and substance acceptable to the DIP lender. The liens granted under the DIP documents survive and are retained by the DIP lender upon issuance of the exit note.

Treatment of Claims and Interests

• Administrative claims, priority claims, and the DIP claim are unclassified and not entitled to vote. The debtors estimate 100% recoveries for the unclassified claims and for Classes 1 through 4 and 6; Class 5's expected recovery is stated in liquidation-preference terms.
  • Administrative claims (estimated amount undetermined, to be updated in the plan supplement): paid in cash without interest at the allowed amount, on or as soon as practicable after the later of the effective date or entry of a final order determining the claim; on the terms of any agreement with the holder; on ordinary-course payment terms for ordinary-course obligations; or, for statutory fees under 28 U.S.C. § 1930(a)(6), as and when due.
  • Professional fee claims are paid first from a professional fee reserve funded on the effective date in an amount sufficient to cover accrued and unpaid fees both approved and not yet approved, held in trust solely for allowed professional fee claims, with the debtors or reorganized company covering any shortfall.
  • Priority claims (estimated amount undetermined): assumed by the reorganized company and paid in full on the later of the effective date or when otherwise due. On sales taxes, the debtors note that the amount actually due may differ from what they reported where delivery to a customer did not occur as estimated or a customer did not remit consistent with the debtors' reporting, that reconciliation continues, and that taxing authorities may dispute the reconciliation or assert a different figure.
• Class 1, the prepetition Texas secured claim in the amount of outstanding prepetition litigation financing obligations as defined in the interim DIP order, to be updated in the plan supplement (unimpaired, deemed to accept): reinstated by the reorganized company, with the Texas assets lender retaining its first-priority lien on the Texas assets.
• Class 2, the Structural prepetition secured claim, estimated at approximately $85,061.56 (unimpaired, deemed to accept): on the effective date or the later date the court estimates or determines the maximum amount of the claim, the holder receives, at the option of the debtors and the DIP lender, either cash equal to the allowed amount as determined by the court or transfer of the prepetition Structural collateral; all liens securing the claim are released and extinguished on satisfaction. If Structural timely appeals the estimation order, the debtors or reorganized company must either transfer the collateral or fund an interest-bearing escrow equal to the court-determined maximum amount, and while the appeal is pending Structural's liens attach solely to the escrowed funds with all other liens deemed extinguished.
• Class 3(a), general unsecured trade claims, estimated at approximately $3.4 million (unimpaired, deemed to accept, not entitled to vote): either reinstated under section 1124 or given other treatment rendering the claim unimpaired. These claims are allowed in the ordinary course under applicable non-bankruptcy law or court order, subject to counterclaims, defenses, setoff, or objections, and disputes are determined as if the cases had not been commenced.
• Class 3(b), the Structural prepetition deficiency claim, estimated at approximately $42.9 million (impaired, entitled to vote): the holder receives the Structural deficiency claim note, an unsecured note in the amount of the claim bearing simple interest at the five-year U.S. Treasury rate in effect on the effective date plus 250 basis points, capped at 7.5% per annum, payable in kind, maturing on the fifth anniversary of the effective date. The reorganized company may prepay in whole or part at any time without premium or penalty.
• Class 4, the convertible notes claim, estimated at approximately $27.5 million (impaired, entitled to vote): the reorganized company assumes the convertible notes in the same amount and with the same rights as before the filing, with the maturity extended to Dec. 31, 2030, and issues amended and restated convertible notes and a related indenture on the effective date, in forms to be filed with the plan supplement and acceptable to the DIP lender. Holders may not convert on account of any transaction occurring on the effective date, and any later conversion into reorganized common equity dilutes only the retained equity interests, never the DIP lender's stake.
• Class 5, prepetition preferred equity interests (impaired, entitled to vote): holders receive the reorganized common equity to which they would be entitled on an as-converted basis within the retained equity interests, in separate modified classes or series that preserve their existing liquidation preference solely within those retained interests, subject to later dilution by Class 4 holders who convert. All other rights, preferences, privileges, and corresponding agreements of the preferred are cancelled on the effective date. The debtors anticipate holders will receive value through their reorganized common equity as of the effective date equal to the value of their existing liquidation preference, though the risk factors state there can be no assurance the value of that equity will cover the full preference.
• Class 6, prepetition common equity interests (unimpaired, deemed to accept; estimated recovery 100%): holders receive reorganized common equity in the same percentage as their petition-date holdings, within the retained equity interests, diluted first by the equity distributed to preferred holders on an as-converted basis, second by any conversion of the amended and restated convertible notes, and third by the management incentive plan. Voting shares of reorganized common equity, including the converted preferred, the existing voting shareholders, and the DIP lender to the extent it elects equity, vote as a single class with one vote per share, except as the new governance documents provide for the DIP lender's governance and consent rights.
• Class 7, intercompany claims, and Class 8, intercompany interests (each either impaired with no distribution or unimpaired; not entitled to vote, presumed to accept or deemed to reject): each is reinstated, including as amended, distributed, contributed, set off, settled, cancelled and released, or otherwise addressed at the debtors' election with the DIP lender's consent.
• Voting classes are 3(b), 4, and 5. Classes 1, 2, 3(a), and 6 are unimpaired and deemed to accept. Acceptance requires a majority in number and two-thirds in dollar amount of claims voting in an impaired claim class, two-thirds in amount of interests voting in an impaired interest class, and at least one impaired creditor class excluding insiders. Any class not occupied at the commencement of the confirmation hearing by an allowed or temporarily allowed claim or interest is deemed eliminated for voting purposes.
• Omni Agent Solutions, Inc. serves as claims, noticing, and balloting agent, appointed by order entered Oct. 1, 2026 effective as of the petition date [Docket No. 81], with plan materials posted at omniagentsolutions.com/HouseCanary. Solicitation packages to the voting classes include the combined plan and disclosure statement, the conditional approval and procedures order, notice of the confirmation hearing, a ballot with voting instructions, and a release opt-out election form; all other creditors and parties in interest receive only the confirmation hearing notice and an opt-out form.
• Because the plan either pays claims and interests in full or assumes or reinstates them for every class, the debtors assert it is superior to a hypothetical Chapter 7 liquidation. A liquidation analysis will be filed with the plan supplement.

Reorganized Equity and New Securities

• The equity split is 20% to the DIP lender and 80% retained by existing shareholders.
  • DIP lender equity interests: 20% of the reorganized common equity, or at the DIP lender's sole election a preferred instrument with the economic equivalent of that 20%. The stake is immune from dilution by conversion of the amended and restated convertible notes, any management carveout, the MIP, or other bankruptcy-related issuances or allocations affecting the retained interests, but is subject to pro rata dilution from post-effective-date equity issuances and financings for cash, excluding issuances under the MIP or other employee and management bonus or compensation plans, in accordance with the new governance documents.
  • Retained equity interests: 80% of the reorganized common equity held by existing shareholders, and the sole source of dilution for the convertible note conversion, any management carveout, the MIP, and other bankruptcy-related issuances.
• The reorganized company is authorized to issue the reorganized common equity and the amended and restated convertible notes under the plan and the amended and restated charter, without further corporate action. All shares or comparable units issued are duly authorized, validly issued, fully paid, and non-assessable, and acceptance of the equity, including any awards reserved for the MIP, constitutes deemed acceptance of and consent to the amended and restated charter and the other new governance documents without execution by any party.
• The reorganized company emerges as a private company; the reorganized common equity will not be listed on a public stock exchange, the company will not voluntarily subject itself to SEC reporting requirements, and it will not be required to list the equity on a recognized U.S. exchange, except as the new governance documents may require.
• Securities law treatment: the reorganized common equity and the DIP exit note are offered, issued, and distributed under section 1145, and to that extent will not be restricted securities under Rule 144(a)(3) and will be freely tradeable by recipients that are not and have not been within 90 days of transfer an affiliate of the debtors, subject to section 1145(b)(1), applicable securities laws, and any transfer restrictions in the new governance documents or exit note documents. Where section 1145 is unavailable, the offering relies on section 4(a)(2), Regulation D, and/or Regulation S. MIP interests are issued in reliance on section 4(a)(2), Regulation D and Rule 701, Regulation S, and/or other exemptions, and will be restricted securities.
• Transfers under the plan are exempt under section 1146(a) from document recording, stamp, conveyance, intangibles, mortgage, real estate transfer, personal property transfer, mortgage recording, UCC filing, and regulatory filing taxes and fees, with recording officials directed to accept the instruments without collecting them.

Governance and DIP Lender Control

• The DIP lender appoints two of the eight directors on the new board, and the amended and restated charter requires the affirmative vote of both for any transaction or action that may adversely affect the Texas litigation, the Texas assets, any bankruptcy filing by the reorganized company, or any liability management transaction that could adversely affect the DIP lender's entitlements. The plan's definition of the charter frames the right more broadly, as the designees' consent to any future decision with respect to the Texas litigation, the Texas assets, any future bankruptcy filing, and any future financial restructuring, including liability management transactions, that could adversely affect the DIP lender's entitlements, plus any additional governance and consent rights the debtors and the DIP lender agree.
• The board composition schedule identifying all eight members will be filed with the plan supplement in form and substance acceptable to the DIP lender. As of the effective date the current directors of each debtor are deemed to have resigned and their terms expire, and the initial new board is appointed under the new governance documents.
• The new governance documents comprise the board composition schedule, the amended and restated charter, and any other documents the DIP lender requests, including stockholders', investors' rights, voting, and/or right of first refusal and co-sale agreements, each acceptable to the DIP lender and filed with the plan supplement. They will authorize the issuance of the amended and restated convertible notes and the reorganized common equity, provide for the DIP lender's governance rights, and prohibit the issuance of non-voting equity securities as required by section 1123(a)(6).
• After the effective date the reorganized company may amend its constituent documents as permitted by its jurisdiction of formation, but no new governance document may be amended, modified, or waived, whether by merger or otherwise, in any manner adverse to the DIP lender without its prior written consent.
• The reorganized company may raise additional capital, including issuing new equity interests and obtaining additional financing, without further court order, subject to the new governance documents and as the new board deems appropriate.
• The reorganized company must execute indemnification agreements with each DIP lender designee on terms at least as favorable as those available to any other director, providing indemnification to the fullest extent permitted by law, advancement of expenses, D&O coverage, and survival of the director's rights after service ends.
• The reorganized company is deemed to assume all of the debtors' D&O liability insurance policies under section 365(a) as of the effective date and may not terminate or adversely affect coverage under any such policy, including any tail policy, in effect on or after the petition date with respect to prior conduct; all directors and officers who served at any time before the effective date keep the full benefit of those policies for their full terms regardless of whether they remain in office.

Management Incentive Plan

• The MIP, if any, provides for a stock pool of reorganized common equity, with terms and conditions described in the plan supplement in form and substance acceptable to the DIP lender. MIP interests dilute solely the retained equity interests and never the DIP lender equity interests.

Means of Implementation

• Distributions are funded with the debtors' cash on hand at the effective date, including DIP proceeds and cash generated from the business during the projected period, the amended and restated convertible notes, the DIP exit note, and the reorganized common equity. A sources and uses schedule for the effective date will be included in the plan supplement.
• On the effective date the transactions necessary to reorganize the businesses as a single going concern and vest the debtors' assets in the reorganized company are consummated as provided in the plan and plan supplement, and all contemplated corporate actions are deemed authorized without further corporate or equity holder action, including adoption or assumption of the MIP, selection of directors and officers per the board composition schedule, adoption of the new governance documents, issuance and distribution of the reorganized common equity, issuance of the DIP exit note, and assumption or assumption and assignment of executory contracts and unexpired leases.
• The debtors and the reorganized company may transfer funds among themselves as necessary to satisfy plan obligations, with resulting intercompany account changes settled under historical practices.
• Plan supplement contents, each in form and substance acceptable to the DIP lender: the amended and restated charter, the amended and restated convertible notes, the board composition schedule, the DIP exit note, the MIP, the new governance documents, the schedule of retained causes of action, and the Structural deficiency claim note. Financial projections and the liquidation analysis will also be filed with it.

Vesting, Cancellation, and Preserved Liens

• Title to all property of the estates, including all causes of action, vests in the reorganized company on the effective date free and clear of claims, interests, liens, charges, and other encumbrances, except as set forth in the plan, the confirmation order, or plan supplement documents, and subject to three carve-outs:
  • All liens, security interests, and other rights of the Texas assets lender in the Texas assets and litigation proceeds under the prepetition Texas agreements are retained unaltered and remain valid, binding, perfected, enforceable, and unavoidable with the same extent and priority as immediately before the effective date, without further filing or recording, and are not subject to challenge, avoidance, subordination, or recharacterization.
  • No lien granted or arising under the plan, plan supplement, or confirmation order may attach to the Texas assets or litigation proceeds without the Texas assets lender's prior written consent.
  • The liens granted under the DIP documents are retained by the DIP lender upon issuance of the DIP exit note.
• All notes, instruments, certificates, credit agreements, note purchase agreements, indentures, and other documents evidencing claims and prepetition common and preferred equity interests are cancelled on the effective date, with all related obligations and liabilities of the debtors and non-debtor affiliates deemed satisfied, released, cancelled, and discharged, and holders retaining no rights except those the plan provides. The prepetition Texas agreements and the DIP documents are expressly excluded from cancellation: the Texas agreements remain in full force and binding on the reorganized company, and the DIP documents survive except to the extent satisfied by the exit note and equity issuance, with the DIP lender's rights to compensation, expense reimbursement, and indemnification continuing.
• The confirmed plan binds the debtors, the reorganized company, any entity acquiring property under it, all parties to its settlements, compromises, releases, and injunctions, and every creditor and interest holder regardless of impairment or how it voted.

Texas Litigation and Retained Causes of Action

• The Texas litigation (HouseCanary, Inc. v. Amrock, LLC in the 438th Judicial District Court, Bexar County, Texas, and HouseCanary, Inc. v. Quicken Loans Inc. in the Western District of Texas) is retained, vested in the reorganized company, and preserved under section 1123(b), and appears on the schedule of retained causes of action to be filed with the plan supplement. The Texas assets are the "Claims," "Litigation Proceeds," "Litigation IP," the "Crane 2 Proceeds Account," and other collateral as defined in the prepetition Texas agreements.
• On Sept. 29, 2026 the court entered an order granting the debtors' requested relief as to the Texas litigation [Docket No. 61], authorizing them to continue prosecuting it, including seeking entry of judgment on the jury verdict and participating in post-trial proceedings, and lifting the automatic stay to the extent necessary to permit the defendants to continue litigating. The order does not permit any defendant to enforce a monetary award or judgment against the debtors or estate property absent further stay relief. Amrock and the other defendants had responded [Docket No. 58] asking to litigate fully while acknowledging that no monetary award could be enforced without further relief.
• From the effective date the reorganized company prosecutes or settles all litigation subject to the new governance documents, which give the DIP lender's two designees a veto over actions adversely affecting the Texas litigation or Texas assets, and is deemed substituted for the debtors or estates in any pending matter without further motion practice or notice.
• A material portion of projected recoveries on the Class 1 prepetition Texas secured claim is expected to come from Texas litigation proceeds, the value and outcome of which the debtors describe as inherently uncertain and difficult to predict, with subsequent developments potentially altering projected recoveries significantly.

Pending Contested Matters

• Structural claim estimation: by a motion at Docket No. 66 under section 502(c), the debtors seek to estimate Structural's secured claim at no more than $85,061.56 and to fix the remaining unsecured deficiency at approximately $42.9 million, the determination that drives both the Class 2 and Class 3(b) treatments. The Structural secured and deficiency claims are allowed only as fixed by court order, and neither the debtors nor the reorganized company may settle, compromise, or agree to the allowance or resolution of either claim, or any other claim held by Structural, without the DIP lender's consent. The court retains jurisdiction to estimate the Structural secured claim.
• If Structural timely appeals the estimation order, the debtors or reorganized company must either deposit the court-determined maximum amount into an interest-bearing escrow or transfer the prepetition Structural collateral to Structural, at their option.
• Cash collateral: by a motion at Docket No. 67, the debtors seek authority to use Structural's cash collateral and to provide adequate protection without stipulating to the validity or enforceability of Structural's claims or liens. Both motions are set for Oct. 20, 2026.
• The debtors have also filed an expedited motion to confirm and enforce the automatic stay and the protections of sections 365(e)(1) and 525 [Docket No. 53].

Executory Contracts and Leases

• All executory contracts and unexpired leases entered into before the petition date and not already expired or terminated are deemed assumed under section 365 on the effective date, except those previously assumed or rejected by order, those subject to a pending motion to assume or reject, and those scheduled in the plan supplement for assumption as of the effective date; nothing in the provision causes the rejection, breach, or termination of any insurance contract benefiting the debtors, the estates, or their officers, managers, and directors. The confirmation order constitutes approval of the assumptions.
• The debtors' insurance policies and their data licenses and related agreements in existence on the effective date are each reinstated and continued in accordance with their terms and, to the extent applicable, deemed assumed under section 365. The debtors waive no cause of action against any insurer, and the reorganized company bears no obligation to satisfy any deductible or self-insured retention tied to a disallowed, discharged, satisfied, or released claim.
• Non-debtor counterparties to rejected personal property leases bear responsibility and cost for retrieving their property.

Releases

• Released parties, each solely in its capacity as such: the debtors; the reorganized company; the DIP lender, Condor FundingCo 26; the Texas assets lender, meaning Crane 2 FundingCo 23, HC 1 LLC, and Security Finance 1 LLC; each current and former affiliate of those entities; and each related party of them. Notably, Structural and Ocean II are not among them. Any holder that opts out of or timely objects to the third-party release, where the objection is not withdrawn or resolved before entry of the confirmation order, is not a released party.
• Releasing parties: the debtors, the reorganized company, the DIP lender, and the Texas assets lender; holders of claims or interests who vote to accept, are deemed to accept, abstain, or vote to reject and who do not affirmatively opt out; holders of administrative and priority claims who do not opt out; and each current and former affiliate and, to the maximum extent permitted by law, each related party of the foregoing. Any holder in the opt-out-eligible groups that opts out, or timely objects on an unresolved basis, is not a releasing party.
• The debtor and estate release, granted under section 1123(b) by the debtors, the estates, and the reorganized company on behalf of themselves, their successors, assigns, representatives, and related parties, discharges the released parties from all claims and causes of action, including avoidance actions and derivative claims, known or unknown, arising from or relating to the debtors, the estates, or the reorganized company, their capital structure, management, ownership and operation, the reorganization and the decision to file, transfers of securities or assets, the business or contractual arrangements between any debtor and any released party, intercompany transactions, the DIP facility and DIP documents, the prepetition Texas agreements, the in- and out-of-court restructuring efforts, and the negotiation, solicitation, confirmation, consummation, and implementation of the plan, in each case through the effective date.
• The third-party release, granted by each releasing party, discharges the debtors, the estates, the reorganized company, and the released parties from substantially the same universe of claims, including derivative claims assertable on behalf of the debtors or estates, to the extent the releasing party would have been legally entitled to assert them.
• Both releases carve out causes of action identified on the schedule of retained causes of action (the debtor release expressly naming the Texas litigation, which the schedule must include); post-effective-date obligations under the plan, confirmation order, or any implementing document; and acts or omissions determined by a final order to have constituted actual fraud or willful misconduct. The third-party release additionally preserves the rights of holders of allowed claims to receive distributions, and preserves all claims, liens, security interests, obligations, rights, interests, and remedies of the DIP lender and the Texas assets lender under the DIP documents, the DIP exit note and related documents, the prepetition Texas agreements, and the Texas assets and litigation proceeds, except to the extent the DIP obligations are satisfied by the exit note and equity issuance.
• Entry of the confirmation order would approve both releases and, for the third-party release, find it consensual and essential to confirmation. The debtors caution that there is no assurance the releases will be granted and that a failure to grant them may result in a different plan or in the plan not being confirmed.
• The U.S. Trustee is not treated as providing any release under the plan, quarterly fees are allowed, and the U.S. Trustee need not file a proof of claim or other request for payment for them.

Exculpation

• Exculpated parties are the debtors; their current and former directors, managers, officers, attorneys, financial advisors, consultants, and other professionals or advisors that served between the petition date and the effective date; and the professionals retained by the debtors in the cases. The DIP lender and the Texas assets lender are not exculpated parties, though both are released parties.
• The exculpation covers acts and omissions taken or omitted in good faith from the petition date through the effective date in connection with administration of the cases, the formulation, preparation, dissemination, negotiation, or filing of the combined plan and disclosure statement or plan supplement, any agreement entered into in connection with the plan, solicitation of votes, confirmation, consummation, and administration of the plan and the property to be distributed.
• Carve-outs: criminal acts, actual fraud, willful misconduct, bad faith, or gross negligence as determined by a final order, with exculpated parties entitled to rely reasonably on counsel's advice as to their plan duties; any entity's post-effective-date rights to enforce the plan, confirmation order, DIP documents, prepetition Texas agreements, and plan supplement documents; any breach of an exculpated party's obligations thereunder; and any claim or cause of action relating to the Texas assets, the Texas litigation, or the litigation proceeds.

Injunction

• All entities holding claims, interests, causes of action, or liabilities that are released or exculpated under the plan, or that arose before the effective date, are permanently enjoined from and after the effective date from pursuing them against the debtors, the estates, the reorganized company, the exculpated parties, or the released parties by:
  • commencing or continuing any action or proceeding of any kind, directly or indirectly;
  • enforcing, attaching, collecting, or recovering any judgment, award, decree, or order;
  • creating, perfecting, or enforcing any lien or encumbrance against those entities or their property;
  • asserting any setoff, subrogation, or recoupment right, unless timely asserted in a document filed with the court explicitly preserving it; and
  • taking any act in any place that does not conform to or comply with the plan.
• Upon entry of the confirmation order, all holders of claims and interests and their current and former employees, agents, officers, directors, managers, principals, and direct and indirect affiliates are enjoined from taking actions to interfere with implementation or consummation of the plan, and the injunction extends to successors of the protected parties and their property. Accepting a distribution constitutes deemed consent to be bound by the plan and the injunction.
• No entity, including one that opted out of the third-party release, may commence or pursue a claim that relates to or is reasonably likely to relate to any act or omission covered by the exculpation or release provisions without the court first determining, after notice and a hearing, that the claim is not subject to those provisions and specifically authorizing the entity to bring it.
• The injunction does not reach enforcement of the plan, confirmation order, or implementing documents, or the exercise or enforcement by the DIP lender or the Texas assets lender of any claims, liens, security interests, obligations, rights, interests, or remedies under the DIP documents, the DIP exit note and related documents, the prepetition Texas agreements, or the Texas assets and litigation proceeds.

Conditions Precedent and DIP Lender Consent Rights

• Conditions to confirmation, any of which the debtors may waive: court approval of a disclosure statement, which may be this combined document, in form and substance acceptable to the debtors and the DIP lender; the debtors' determination that there will be sufficient cash on the effective date to pay or reserve for allowed administrative and priority claims in full and to satisfy the DIP claim; a confirmation order acceptable to the debtors and the DIP lender in form and substance; and final versions of all plan supplement and other schedules, documents, supplements, and exhibits acceptable to both.
• Conditions to the effective date, any of which the debtors may waive with the DIP lender's consent: entry of a confirmation order acceptable to the debtors and the DIP lender that has become a final order not subject to any stay of effectiveness; execution and effectiveness of all actions, documents, and agreements necessary to implement the plan, including the DIP exit note and related documents, binding on all parties; the DIP facility remaining in full force and effect, unterminated, with no event of default having occurred and continuing; and payment or reimbursement of all DIP lender fees and expenses, including the DIP professional fees. Conditions may be waived or modified in writing at any time by the debtors with the DIP lender's consent, without leave or order of the court.
• The DIP lender's consent runs through nearly every control term: the confirmation order must be acceptable to it in its sole discretion; all plan documents, including any plan support letters, must be in form and substance acceptable to it; the debtors may revoke and withdraw the plan on or before the confirmation date only with its consent; the court may sever or reinterpret an invalid provision before confirmation only with the consent of the debtors and the DIP lender; correcting defects, omissions, or inconsistencies, and any pre- or post-confirmation modification under section 1127, requires its consent; any reclassification the court may require would be sought only with its consent; extending the claims objection deadline beyond 180 days after the effective date requires its prior consent; and deeming unimpaired claims allowed, determining that a filed claim is allowed, electing the treatment of intercompany claims and interests, and settling any Structural claim each require its consent.

Feasibility and Projections

• The debtors state the reorganized company will have sufficient liquidity to satisfy its plan obligations and continue operations after the effective date, and that the plan therefore meets the feasibility requirement. The financial projections, to be filed with the plan supplement, rest on assumptions including conversion of the convertible notes before maturity, recoveries from the Texas litigation, and repayment or refinancing of the DIP exit note and the Structural deficiency claim note.
• Projected distributions depend on good-faith estimates of total allowed claims, the reorganized company's future operations and performance, litigation proceeds, Texas litigation recoveries, and proceeds of any further monetization of remaining assets. The debtors note that if allowed claims in a class exceed their estimates or available value falls short, percentage recoveries will be lower than projected.