Linqto Texas - Chapter 11 Plan Terms

Plan Terms

Overview

• The debtors, with the committee's support, seek approval of a First Modified Plan that would make BW Asset Management Ltd (BWAM), a wholly owned subsidiary of Kroll, LLC, the Liquidating Trustee in place of Forge Global, Inc. Forge withdrew after confirmation. The debtors say BWAM's economic terms match those approved at confirmation.
• The modified plan also makes these changes:
  • It adds a "Deadman Switch." If BWAM has not taken possession of the Liquidating Trust assets by Nov. 23, 2026, those assets move into the Wind-Down Trust.
  • It expands the retained causes of action to include claims that arose after confirmation, including all claims against Forge. Forge is carved out of every release, exculpation and injunction provision.
  • It sets up a segregated Holdback and distribution procedures for disputed Class 4 customer claims.
  • It conforms the original plan supplements, defined terms and cross-references to the new trustee and mechanics.
• The debtors say the changes do not alter the classification, priority, distributions or other economic treatment of any creditor or interest holder. The only change to the releases, they say, confirms that no release reaches claims against Forge. The Wind-Down Trust Waterfall, the customer rescission claims settlement, the treatment of customer claims and the Closed-End Fund elections are all left in place.
• The debtors are Linqto, Inc., Linqto Liquidshares, LLC, Linqto Liquidshares Manager, LLC and Linqto Texas, LLC.
  • They filed Chapter 11 on July 7, 2025, and the U.S. Trustee appointed the official committee of unsecured creditors on July 18, 2025.
  • On Feb. 13, 2026, the court entered the confirmation order. It confirmed the First Amended Joint Chapter 11 Plan and approved the first, second and third plan supplements.
• The confirmed plan is a liquidation that uses three vehicles:
  • A Liquidating Trust that sells and distributes the portfolio-company securities held by Linqto Liquidshares, in which platform customers hold indirect economic interests ("platform securities").
  • A publicly listed Closed-End Fund for customers who choose it.
  • A Wind-Down Trust that holds the estates' remaining assets, including litigation claims, and pays them out through a seven-tier waterfall.

Key Dates and Cost of Delay

• Without relief by Oct. 22, 2026, the debtors say they will pay an estimated $666,000 to renew their D&O insurance policy on Oct. 25, 2026. On Oct. 31, 2026, they would pay an estimated $625,000 to extend the DIP facility's maturity date again.
• The court will hold a hybrid hearing on the motion on Oct. 22, 2026 at 1:00 p.m.
• The proposed order would waive the 14-day stay under Rule 3020(e) and take effect immediately on entry; the debtors say the waiver lets BWAM's appointment, the First Modified Plan Supplement and the Holdback proceed without delay.
• BWAM's outside date to take possession of the Liquidating Trust assets is Nov. 23, 2026.
• If the Closed-End Fund exchange has not occurred by the nine-month anniversary of the effective date, electing customers go back to being ordinary Liquidating Trust beneficiaries.

Replacement Liquidating Trustee

• BWAM would take Forge's place on compensation and other economic terms that the debtors say match the Forge bid disclosed in the original plan supplements and approved at confirmation. The debtors say the change will not raise the cost of running the Liquidating Trust or reduce any beneficiary's distribution.
  • The motion is not consistent on this point. One passage calls the terms the same as Forge's, another calls them substantially the same, and the proposed order calls them substantially similar.
• How Forge was chosen:
  • Jefferies LLC, the debtors' investment banker, ran the original selection process. It launched the week of Nov. 24, 2025, and final bids were due Jan. 5, 2026.
  • The process was subject to a settlement among the debtors, the committee, John E. Deaton and the creditors Deaton represents. The court approved its term sheet at Docket No. 704.
  • The committee and the debtors' CRO, Jeffrey S. Stein, chose Forge, which was disclosed in the first plan supplement [Docket No. 1315].
• Forge's withdrawal:
  • On July 15, 2026, Forge told Jefferies it was withdrawing.
  • The debtors and the committee dispute that Forge had any basis to withdraw. They are pursuing that dispute in an adversary complaint against Forge Global Holdings, Inc. and Does 1-10 (Adv. No. 26-32665; BK Docket No. 2061).
  • The motion and the proposed order both say they are not meant to decide any issue in that suit.
• The replacement process:
  • The debtors and Jefferies launched it on or about the week of Aug. 17, 2026, under the court-approved management selection procedures [Docket No. 1142].
  • They contacted 22 parties: self-directed IRA custodians and trust companies with retail customer platforms, final bidders from the first process, parties that reached out after the Forge developments, and other private marketplaces and restructuring administrators.
  • Bidders were asked to match or beat the terms presented at confirmation. They received the transaction documents, including those approved under the court's 1142(b) order [Docket No. 2047], described below.
  • Stein led the review of the proposals. The Special Subcommittee of Linqto, Inc.'s board oversaw it; its voting members are Alison Kutler, Norman Reed and Jeremy Rosenthal, and Stein is a non-voting ex officio member.
  • The proposals were judged on consistency with the confirmed plan, cost allocation, time to the effective date and to distributions, platform capabilities and financial strength.
  • After a round of bid refinement and consultation with the committee and the Special Subcommittee, the debtors and the committee jointly chose BWAM. The debtors and the Special Subcommittee cited its ability to move quickly toward emergence, its customer-facing platform and its experience with private securities.
• Kroll agreed to accept the documents approved by the 1142(b) order [Docket No. 2047] substantially in their approved form.
  • That order authorized a plan support and indemnity agreement and a transition services agreement, and approved related changes to the liquidating trust and wind-down trust agreements.
  • The debtors call Kroll's agreement critical because the bargain struck with Van Eck and the Closed-End Fund over those documents could not be disturbed.
  • The proposed order would bar changes to those documents except as needed to substitute BWAM or carry out the order. The modified plan leaves the choice of Closed-End Fund manager unchanged.
• The debtors will file the First Modified Plan Supplement before the effective date.
  • It replaces the Forge-specific trustee identification, qualifications, conditions, engagement terms and ancillary documents with BWAM provisions. The rest of the original plan supplements stays in effect.
  • The modified plan also authorizes transition services agreements or similar arrangements to support the handover.
  • The modification order must be reasonably acceptable to the committee and the debtors. All plan supplement documents must be reasonably satisfactory to the committee.

Deadman Switch

• Outside date: BWAM must take possession of the Liquidating Trust assets by Nov. 23, 2026, which allows the effective date to occur. The parties expect BWAM to take possession soon after an order approving the motion is entered.
• The Liquidating Trust assets are the Liquidshares series equity issued to the trust (including the Closed-End Fund series until the exchange), the cash funding for the Liquidating Trust, and any other assets expressly vested in it.
• If the deadline is missed:
  • The Liquidating Trust assets move automatically and temporarily into the Wind-Down Trust, either directly or through another lawful vehicle. They are kept segregated on its books solely for Liquidating Trust beneficiaries.
  • Those assets do not become Wind-Down Trust assets. Except as the plan provides, they cannot be used to pay any claim against or obligation of the Wind-Down Trust.
• The Wind-Down Trustee then takes over the search for a new trustee:
  • Using its sole business judgment, the Wind-Down Trustee must find a replacement Liquidating Trustee on the best terms reasonably available and transfer the assets to it. The motion describes a broader mandate, letting the Wind-Down Trustee either pick a replacement or use any other lawful means of implementing the Liquidating Trust; the plan text provides only for a replacement.
  • It must file a notice on the docket naming the replacement and its engagement terms.
  • In the meantime, every reference in the plan to the Liquidating Trustee also means the Wind-Down Trustee, with all of the Liquidating Trustee's rights, privileges and duties.
• The Wind-Down Trustee must try to recover the replacement costs borne by Liquidating Trust beneficiaries from whoever caused the switch to trigger, whether Forge or another party. Any such claims vest in the Wind-Down Trust. If the switch triggers, proceeds of the Forge claims first repay the Liquidating Trust assets for any costs charged against them.

Retained Causes of Action and Forge Claims

• The retained causes of action that vest in the Wind-Down Trust now include claims that arose after confirmation, including all claims against Forge.
  • The Forge claims are any causes of action against Forge arising before, on or after the effective date, including claims related to the Liquidating Trust and Forge's obligations.
  • They come with the related defenses, offsets, and rights of recoupment, disallowance, recharacterization and equitable subordination.
• Forge is defined broadly. It includes Forge Global, Inc., Forge Global Holdings, Inc., Forge Trust Company, LLC and their affiliates and related parties, expressly including Charles Schwab Corporation and its affiliates and related parties.
• Forge is excluded from the released parties for all purposes. The debtor release, the third-party release, the exculpation and the injunction are all written so that none of them reaches the Forge claims. Nothing in the confirmation order, the plan, the plan supplement or the modification order impairs those claims.
• Proceeds of the Forge claims flow through the Wind-Down Trust Waterfall, after any Deadman Switch reimbursement.
• The Wind-Down Trustee has exclusive authority to prosecute, settle, abandon or litigate retained causes of action without court approval. Confirmation does not trigger any preclusion doctrine against them.

Holdback and Disputed Claim Procedures

• On the effective date, a segregated Holdback is set up for funding securities and/or cash that would otherwise go to disputed Class 4 customer claims.
  • The debtors set the amount in consultation with the committee.
  • Under the plan text, the Liquidating Trustee establishes and funds the Holdback and the Wind-Down Trustee maintains it. The motion instead says the Wind-Down Trustee receives the Holdback assets from the estates.
• Each disputed claim is reserved at its full asserted amount, or at any lower amount the court estimates.
• Nothing is paid on a disputed Class 4 claim until it is allowed or resolved, and there are no partial distributions. A holder with both an allowed claim and a disputed Class 4 claim gets nothing on the allowed claim until every objection to the disputed claim is resolved.
• Holdback releases and income work as follows:
  • Within 30 days after a disputed claim is allowed, the holder receives its distribution plus any catch-up distributions, without postpetition interest.
  • Reserves for disallowed amounts, and excess reserves for partially allowed claims, are released and redistributed pro rata to allowed holders in the class.
  • Investment income on Holdback cash is treated as a Wind-Down Trust asset.
  • After all disputed claims are resolved, whatever remains is distributed pro rata and the Holdback ends.
• Notice and status conferences:
  • The Wind-Down Trustee must notify each holder whose platform securities are withheld. The notice identifies the claim, the basis for the dispute, the securities and distributions withheld, and how to contest the dispute.
  • A holder may request a status conference no earlier than the later of 90 days after the effective date and 30 days after notice.
  • A holder may not request one if an objection to its claim has been filed or an adversary proceeding has been brought against it.
• Under the modified plan, a claim is disputed if it is held by a party against whom a retained cause of action exists, whether or not that cause of action has been asserted.
• The plan calls the Holdback an administrative mechanism only and treats it as a restructuring transaction already authorized under Article IV.H. That article also allows platform securities to be held back for liquidation or financing to repay allowed DIP claims and fund the wind-down budget.

Modification Standard, Voting and Proposed Order

• The debtors ask the court to find that the plan has not been substantially consummated, so the modification is timely under section 1127(b). They note that no liquidating trust agreement or wind-down trust agreement has been signed and the Liquidating Trust assets have not vested; the plan itself deems substantial consummation to occur on the effective date, which has not occurred.
• The proposed order would:
  • Approve and confirm the First Modified Plan as the controlling plan.
  • Approve BWAM's appointment, including the compensation structure summarized in the First Modified Plan Supplement.
  • Find that the modifications do not materially or adversely change any holder's treatment. It would describe the Deadman Switch, the preservation of the Forge claims and related carve-outs, and the Holdback procedures as non-substantive and/or immaterial.
  • Treat each holder that accepted or rejected the plan as having accepted or rejected the modified plan under section 1127(d), with no period to change votes.
  • Require no new disclosure statement, ballot or resolicitation.
  • Reaffirm the confirmation order, the plan, the 1142(b) order and the original plan supplements except where expressly modified. Forge-specific provisions would be superseded to the extent they are inconsistent.

DIP Facility

• Size: a senior secured superpriority facility of up to $25 million from Sandton Capital Solutions Master Fund VI, LP, approved by the final DIP order [Docket No. 712]. DIP claims are superpriority administrative claims under section 364(c).
• Treatment: DIP claims are allowed and paid in full in cash on the effective date, unless the DIP Lender agrees in writing to other treatment. Payment is a condition to the effective date that only the DIP Lender can waive, in writing.
• Until the DIP claims are paid:
  • The DIP claims, liens and documents, including the confession of judgment, stay in place.
  • The DIP orders remain in force against all Wind-Down Trust assets.
  • The first proceeds of any liquidation or financing of held-back platform securities go to the DIP Lender until it is paid in full.

Treatment of Claims and Interests

• The debtors say the modification does not change the treatment of any class, and the proposed order would so find.
• Unclassified claims:
  • Allowed administrative claims are paid in full in cash. Unpaid fees of independent directors Jeremy Rosenthal and Alison Kutler are deemed allowed administrative claims against Linqto, Inc.
  • Priority tax claims receive the treatment required by section 1129(a)(9)(C).
  • Canceled equity customer claims get no recovery. These are claims tied to canceled securities for which the debtors received nothing, including Thrasio Holdings, Inc., Linqto Inc. and BlockFi, Inc.
• Class 1, other secured claims (unimpaired, deemed to accept): at the debtor's option, payment in full in cash, reinstatement, return of collateral or other treatment that leaves the claim unimpaired.
• Class 2, other priority claims (unimpaired, deemed to accept): payment in full in cash or other treatment that leaves the claim unimpaired.
• Class 3, exited customer claims (unimpaired, deemed to accept): a pro rata share of a cash pool equal to the allowed claims, enough to leave holders unimpaired. These claims belong to customers whose platform securities were acquired, merged or sold during the cases, where the debtors received cash that has not been paid to the customer.
• Class 4, customer claims (impaired, entitled to vote):
  • Each holder chooses to put its interest in platform securities into the Liquidating Trust, the Closed-End Fund or both. It receives Liquidating Trust interests based on its customer interest as of the petition date.
  • Holders who do not vote go to the Closed-End Fund if the minimum fund conditions are met, and to the Liquidating Trust if not. Those conditions are customer participation that meets the manager's minimum amount of platform securities (including any per-security caps), plus the filing of governing documents and notice of SEC registration.
  • Holders who vote but make no choice go to the Liquidating Trust.
  • Fund-linked trust interests are automatically exchanged for Closed-End Fund shares on the exchange date.
• Class 5, convenience trade claims of $60,000 or less (impaired, entitled to vote): a beneficial interest in the Wind-Down Trust.
• Class 6, unsubordinated governmental claims (impaired, entitled to vote): a beneficial interest in the Wind-Down Trust.
• Class 7, other general unsecured claims (impaired, entitled to vote): a beneficial interest in the Wind-Down Trust. Allowed rejection damages claims also fall in this class.
• Class 8, customer deficiency claims (impaired, entitled to vote): a beneficial interest in the Wind-Down Trust.
  • A deficiency claim arises when funding securities in which a customer holds an interest are sold to pay the expenses of the cases and the trusts. Funding securities are the platform securities set aside for those sales.
  • The claims are valued from a table that reflects values as of Nov. 30, 2025.
  • For example, a customer holding 100 shares whose position is cut 5% by a funding sale keeps 95 shares and gets a deficiency claim for the value of five shares.
• Class 9, customer rescission claims (impaired, entitled to vote): a beneficial interest in the Wind-Down Trust, subject to the rescission settlement's 33% class cap described below.
• Class 10, intercompany claims (impaired, not entitled to vote): the debtors may assume, set off, settle, cancel or otherwise address these claims, but nothing is distributed on them.
  • The classification table treats the class as deemed to reject. The class's own voting provision says it is deemed to accept or reject.
• Class 11, subordinated governmental claims (impaired, deemed to reject): a beneficial interest in the Wind-Down Trust.
• Class 12, other subordinated claims (impaired, deemed to reject): a beneficial interest in the Wind-Down Trust.
• Class 13, existing equity interests (impaired, deemed to reject): a beneficial interest in the Wind-Down Trust. Intercompany interests are extinguished or otherwise addressed, with no distribution.

Wind-Down Trust Waterfall and Rescission Settlement

• Proceeds of Wind-Down Trust assets, other than the cash pool reserved for Class 3, are paid pro rata in this order:
  • Wind-Down Trust costs and expenses
  • Allowed administrative claims not paid before the effective date
  • Allowed convenience trade claims
  • Equally ranked: allowed other general unsecured claims, customer deficiency claims, customer rescission claims (as modified by the rescission settlement) and unsubordinated governmental claims
  • Interest on the fourth-tier claims
  • Allowed subordinated governmental claims and other subordinated claims, if proceeds remain
  • Allowed existing equity interests, if proceeds remain
• Rescission settlement:
  • A rescission security is a platform security that lost value between purchase and the petition date, as shown in the rescission security table.
  • Each customer holding an interest in a rescission security automatically holds an allowed rescission claim for each such security, whether or not it filed a proof of claim.
  • In exchange, the rescission class as a whole is capped at 33% of any aggregate Wind-Down Trust distribution. It can recover more than the cap only if every other senior and equally ranked holder is paid 100%.
  • The automatic allowance and the cap are two parts of a single settlement.
• Wind-Down Trust assets include:
  • The retained causes of action, including the Forge claims
  • Reserved securities, meaning securities held by Liquidshares in which customers had no economic interest
  • The professional fee reserve
  • The Class 3 cash pool
  • All other estate property that is not a Liquidating Trust asset
  • Cash funding for the Wind-Down Trust, raised by selling funding securities and reduced by any amounts allocated to the Holdback

Liquidating Trust and Closed-End Fund

• Liquidating Trust structure:
  • On the effective date, the Liquidating Trust becomes the sole owner of Linqto Liquidshares. The Liquidating Trustee becomes its sole manager, with authority to sell platform securities.
  • The trust must distribute platform securities that are free of transfer restrictions pro rata, no more than once per fiscal quarter.
  • It ends at the earlier of five years after the effective date (subject to court-approved extensions) or completion of all required distributions.
  • Trust interests are uncertificated and can be transferred only by will, intestate succession or operation of law.
• The trust also acts as disbursing agent for Circle, Chime and CoreWeave shares. It distributes them pro rata to the relevant customers on or after the effective date, except shares in which electing customers hold interests.
• Liquidity and funding:
  • Beneficiaries may direct sales of their platform securities through registered secondary-trading platforms and bear the sale costs. The trustee's role is administrative only and it charges beneficiaries no other fee.
  • The trust pays its expenses by selling funding securities at the trustee's discretion, using valuation methods approved by an oversight board. Those sale costs are borne by the trust, and each sale gives the affected customers a deficiency claim.
• The Closed-End Fund:
  • It will be a new Delaware statutory trust or corporation registered under the Investment Company Act and listed on a national exchange, with no fixed term.
  • Registration is not a condition to the effective date.
  • Its manager is chosen by the committee and the debtors' CRO and approved by the fund's board. If the manager is external, it works under an advisory agreement that can be ended without penalty on 60 days' notice and, after an initial two-year term, must be renewed annually.

Management Incentive Plan

• Payout:
  • The payout is $0 if the Closed-End Fund's market premium ratio is at or below 1.1x on the measurement date. The ratio is total market capitalization divided by total net asset value, and the measurement date is 180 calendar days after trading begins.
  • Above 1.1x, the payout is the lesser of one-fifth of the amount by which total market capitalization exceeds 1.1 times total fair value, and 5% of total market capitalization.
• The key employees are Francis "Dan" Siciliano, Michael Huskins, Cathy Siciliano, Jesus Ancheta and Sean Bowden. To be eligible:
  • Each must be in good standing at confirmation and when both the Liquidating Trust and the Closed-End Fund are formed.
  • The manager must not be controlled by or affiliated with them.
  • If the manager asks, each must give up to five hours a week during the measurement period.
• Payment: six equal monthly cash installments starting five business days after the measurement date, divided as Mr. Siciliano determines. At the manager's option, it can instead be paid in a single grant of listed Closed-End Fund stock.

Releases and Exculpation

• Released parties:
  • The debtors and wind-down debtors
  • The DIP Lender
  • The committee and its members
  • Current management and directors Jesus Ancheta, Sean Bowden, Michael Huskins, Alison Kutler, Jeremy Rosenthal, Cathy Siciliano, Francis Daniel Siciliano II and Jeffrey S. Stein
  • Court-retained professionals of the debtors, the Special Subcommittee and the committee
  • Related parties of the non-debtor released parties
• Forge is excluded, and no other current or former officer or director is released. The released parties are still under review, including in the Special Subcommittee's independent investigation of the debtors' potential claims.
• The third-party release binds only holders who opt in on a ballot or opt-in form.
• Carve-outs:
  • The debtor release does not cover post-effective-date obligations, plan distribution rights, retained causes of action, or claims that a final order finds involved actual fraud, willful misconduct, intentional breach of fiduciary duty or gross negligence. It also does not cover parties that are not released parties, or Forge.
  • The third-party release carves out the same misconduct, parties that are not released parties, and the Forge claims.
• Exculpated parties:
  • The parties are the debtors, the committee and its members, any other statutory committee, directors Adam Henderson, Alison Kutler, Norman Reed and Jeremy Rosenthal, and Stein as CRO. They are also still under review, and Forge is excluded.
  • A gatekeeping injunction requires the court to find a colorable claim before anyone can sue a released or exculpated party.

Conditions to the Effective Date

• The effective date requires all of the following:
  • The confirmation order has not been vacated and is not stayed pending appeal
  • The plan and plan supplement documents have been executed and delivered
  • All required governmental approvals have been obtained
  • No final order bars the plan
  • The professional fee reserve has been funded in cash
  • The DIP Lender has acknowledged in writing that it has been paid in full in cash, or has agreed in writing to other treatment
• Only the DIP Lender can waive the DIP condition, and only in writing. The debtors can waive the others.

Other Provisions

• Professional fees:
  • Final fee applications are due 60 days after the effective date, and objections 21 days after filing.
  • The reserve is funded in cash before the effective date, held in trust outside the estates, and does not cap allowed fees.
  • The plan's definition of the administrative claims bar date sets a 45-day deadline for professional fee claims, which conflicts with the 60-day deadline for final fee applications.
• Other administrative claims are due 30 days after the effective date. Rejection damages claims are due within 30 days after the later of the order approving the rejection and the rejection's effective date.
• Contracts and insurance:
  • Executory contracts and leases that are not assumed are deemed rejected.
  • The D&O policies are assumed and tail coverage may not be reduced.
  • Indemnification obligations survive for released parties who were employed on the petition date.
• Platform cash is customer money wired for purchases but never used, held in FBO accounts. It is not estate property. The Wind-Down Trustee will ask customers electronically to withdraw it and may send checks or wires 60 days after that notice.
• Distributions under $100 need not be made, except to Classes 1 and 2. Checks not cashed within 180 days become void. No postpetition interest is paid except as the plan provides.
• The Wind-Down Trust ends at the earlier of completing its distributions or five years after the effective date, subject to court-approved extensions.
• The committee dissolves on the effective date, except for fee application matters.
• The Special Subcommittee's privileged materials cannot be transferred without the consent of its chair, Jeremy Rosenthal.
• Linqto's sole director and officer after the effective date will be named in a plan supplement.