Marcel Contraband Pointe - Plan / RSA Terms

RSA Terms

Overview

• The plan provides for a court-supervised liquidation of substantially all of the debtor’s assets through a competitive auction process, with First Federal Bank of Louisiana (“First Federal”) serving as the stalking horse bidder.

Sale Transaction

• The debtor intends to sell substantially all of its assets, which consist primarily of real property in Calcasieu Parish, La. (the “Property”), through a court-supervised competitive bidding process.
• First Federal will serve as the stalking horse bidder with an initial bid of $15 million, subject to higher and better offers.
  • Pursuant to a stalking horse asset purchase agreement, First Federal has the right to credit bid up to the full amount of its allowed secured claim at the auction.
• The sale of the Property will be free and clear of all liens, claims, and encumbrances, with such interests attaching to the sale proceeds in their existing priority.

Settlement Fund and Releases

• The plan contemplates a Settlement Fund, a pool of money contributed by the debtor’s current equity holders for the benefit of general unsecured creditors in Class 3 who elect to participate.
  • In exchange for providing third-party releases, participating creditors will receive distributions from the fund.
  • The contribution from equity holders represents new value, as their interests are set to be canceled with no distribution under the plan.
• The total contribution to the Settlement Fund is variable and will be equal to 10% of the total allowed Class 3 claims held by creditors who affirmatively opt into the settlement (the “Opt-In Creditors”).
• Minimum Participation Threshold: The Settlement Fund is conditioned upon Opt-In Creditors holding at least 70% of the total dollar amount of allowed Class 3 supplier and subcontractor claims.
  • If this threshold is not met, the Settlement Fund provisions will be null and void, no contribution will be made, and no third-party releases will be granted.
  • In that event, the plan would proceed to confirmation under the cramdown provisions of the Bankruptcy Code, and general unsecured creditors would receive no distribution but would preserve their rights against the Released Parties.
• Releases: The plan features a consensual, opt-in release structure designed to comply with the Supreme Court’s ruling in Harrington v. Purdue Pharma L.P.
  • To participate in the Settlement Fund, creditors must affirmatively opt in by returning an executed release within 30 days of the plan’s confirmation date.
  • Creditors who do not opt in will not receive a distribution from the fund but will retain any claims they may have against the Released Parties.
  • The “Released Parties” include the debtor’s current equity holders, affiliates, and other related parties. First Federal Bank of Louisiana is not a Released Party.

Plan Treatment and Distributions

• Class 1 - First Federal Secured Claim: First Federal will receive all net proceeds from the sale of the Property after the deduction of an administrative expense carve-out of $130,000 and other court-approved sale costs.
  • Any deficiency claim will be treated as a Class 3 general unsecured claim; however, First Federal is not eligible to participate in the Settlement Fund.
• Class 2 - Other Secured Claims: The debtor asserts there is no equity in the Property to secure these claims. Any unsecured portion of a Class 2 claim will be treated as a Class 3 claim and will be eligible to participate in the Settlement Fund.
• Class 3 - General Unsecured Claims: Holders have two mutually exclusive options:
  • Opt-In Creditors: Will receive a pro rata distribution from the Settlement Fund in full satisfaction of their claims, provided the minimum participation threshold is met.
  • Non-Opt-In Creditors: Will receive a pro rata share of any funds remaining after payment of all senior claims and the funding of the Settlement Fund. The debtor does not anticipate any funds will be available for this group.
• Class 4 - Equity Interests: All equity interests in the debtor will be canceled on the effective date and will receive no distribution.