Miyoshi America - Chapter 11 Plan Terms

Plan Terms

Overview

• On April 27, 2026 (the “Petition Date”), Miyoshi America, Inc. (the “Debtor”) filed a voluntary petition for relief under chapter 11 in the United States Bankruptcy Court for the Southern District of Texas. Prior to the Petition Date, on March 13, 2026, the Debtor commenced prepetition solicitation of votes on its Prepackaged Plan of Reorganization of Miyoshi America, Inc. Pursuant to Chapter 11 of the Bankruptcy Code (as subsequently supplemented and modified, the “Plan”).
• The Debtor, as anticipated debtor and debtor in possession, together with the other Plan Proponents, propose the joint prepackaged plan for the resolution of the Claims against and Interests in the Debtor pursuant to section 1121(a) of the Bankruptcy Code. The “Plan Proponents” are, collectively, the Debtor, MKI (Miyoshi Kasei, Inc.), the Talc Claimants’ Committee, and the Future Claimants’ Representative.
• The Plan provides, among other things, for the issuance of an injunction pursuant to sections 524(g), 1123(b)(6), and/or 105(a) of the Bankruptcy Code that will channel all existing and future-filed talc personal injury claims against Miyoshi America, Inc. and the other Protected Parties in Class 4 to a trust, as well as other injunctions described in Article VIII of the Plan.
• The Chapter 11 Case was filed, and the Plan was proposed, with the legitimate purpose of providing a fair and equitable resolution of the Debtor’s Talc Personal Injury Claims and maximizing the returns available to creditors and other parties in interest, which the Plan accomplishes by channeling the Talc Personal Injury Claims to the Talc Personal Injury Trust.
  • The Plan is the result of an extensively negotiated settlement, which avoids costly and time-consuming litigation that would deplete the funds available for creditors. The record demonstrates that the Debtor engaged in extensive good-faith, arm’s length negotiations with the Ad Hoc Committee, MKI, and the Future Claimants’ Representative, which led to the Plan’s formulation.

Talc Personal Injury Trust

• On the Effective Date, the Talc Personal Injury Trust shall be created in accordance with the Plan and the Talc Personal Injury Trust Agreement. The Trust is established pursuant to section 524(g) of the Bankruptcy Code and shall constitute a “qualified settlement fund” under section 468B of the Internal Revenue Code.
• The purpose of the Talc Personal Injury Trust shall be to assume all liabilities and responsibility for all Talc Personal Injury Claims, and, among other things, to:
  • Direct the processing, liquidation, and payment of all compensable Talc Personal Injury Claims in accordance with the Plan, the Talc Personal Injury Trust Agreement, the Talc Personal Injury Trust Distribution Procedures, and the Confirmation Order;
  • Preserve, hold, manage, and maximize the assets of the Trust for use in paying and satisfying Talc Personal Injury Claims; and
  • Qualify at all times as a qualified settlement fund.
• As of the Effective Date, liability for all Talc Personal Injury Claims shall automatically, and without further act, deed, or court order, be channeled solely and exclusively to and assumed by the Talc Personal Injury Trust. On the Effective Date, all liabilities, obligations, and responsibilities relating to all present and future Talc Personal Injury Claims, including Demands, shall be transferred and channeled to the Trust and shall be satisfied solely by the assets held by the Trust. Each Talc Personal Injury Claim shall be resolved in accordance with the terms, provisions, and procedures of the Talc Personal Injury Trust Agreement and the Talc Personal Injury Trust Distribution Procedures.

Trust Funding and the Miyoshi Contribution

• On the Effective Date, the Talc Personal Injury Trust is to be funded by contribution of the Talc Personal Injury Trust Assets, which mean, collectively: (a) the Miyoshi Effective Date Cash Contribution (which shall be funded with the MKI Cash Contribution); (b) the Miyoshi Promissory Note; (c) the Talc Personal Injury Insurance Assets; (d) the Assigned Causes of Action; (e) all other assets, rights, and benefits assigned, transferred, or conveyed to the Trust in connection with the Plan or any Plan Documents; and (f) all proceeds of the foregoing.
• The Miyoshi Contribution includes, among other things:
  • A one-time cash payment in the amount of $19 million (the “Miyoshi Effective Date Cash Contribution”); and
  • The issuance of a non-interest bearing promissory note issued by the Reorganized Debtor to the Talc Personal Injury Trust in the stated principal amount of $1 million (the “Miyoshi Promissory Note”).
• On the Effective Date, the Debtor (or the Reorganized Debtor, as applicable) will transfer, or cause to be transferred, to the Trust the Miyoshi Effective Date Cash Contribution and the Talc Personal Injury Insurance Assets, and Reorganized Miyoshi shall issue and deliver the Miyoshi Promissory Note to the Trust.
• The Miyoshi Promissory Note shall have a maturity date of six months following the Effective Date, and shall be secured by a first-priority lien on 50.1% of the equity interests in the Reorganized Debtor pursuant to the Miyoshi Promissory Note and Pledge and Security Agreement.
  • Under the Pledge and Security Agreement, which the Reorganized Debtor will execute and deliver on the Effective Date, the Talc Personal Injury Trust will be entitled to own the pledged shares if a “Payment Default” (as defined in the Miyoshi Promissory Note) occurs.

Prepetition Financing

• The “Prepetition Financing Facility” means the secured loan facility by and between MKI, as lender, and the Debtor, as borrower, made pursuant to a Loan and Security Agreement, dated August 1, 2025, as amended, supplemented, or modified from time to time prior to the Petition Date.
• The “Prepetition Financing Amount” means the entire outstanding amount (inclusive of principal and accrued interest) owed by the Debtor to MKI based on the amounts funded from MKI to the Debtor under the Prepetition Financing Facility prior to and as of the Petition Date.
• Treatment: To the extent not previously allowed and/or satisfied pursuant to the DIP Financing Orders, MKI shall have an Allowed Claim for the Prepetition Financing Amount, which shall be treated in accordance with Article IV.B.1 of the Plan.

DIP Financing

• The “DIP Financing Facility” means the debtor-in-possession loan from MKI to the Debtor on terms consistent with the DIP Financing Credit Agreement, subject to Bankruptcy Court approval pursuant to the DIP Financing Orders. The “DIP Financing Obligations” means all principal, interest, and other amounts owed by the Debtor under the DIP Financing Facility, including the Roll-Up Loans.
• On the Effective Date, $15 million of the DIP Financing Obligations will be satisfied by a deemed advance of Exit Financing, with the balance to be satisfied through a deemed exchange for Reorganized Debtor Stock.
  • On or prior to the Effective Date, MKI will be deemed to have advanced to the Reorganized Debtor the Exit Financing in an amount sufficient to satisfy $15 million of the outstanding DIP Financing Obligations and (to the extent outstanding) the Prepetition Financing Amount.
  • To the extent that the Reorganized Debtor issues new Reorganized Debtor Stock to MKI specifically in exchange for the amount of the outstanding DIP Financing Obligations not refinanced by the Exit Financing (the “Equitized DIP Amount”), such Reorganized Debtor Stock shall be treated as having a fair market value equal to the Equitized DIP Amount for U.S. federal income tax purposes.

Exit Financing

• The “Exit Financing” means financing provided by MKI to the Reorganized Debtor on the Effective Date pursuant to the Exit Financing Credit Agreement for the purpose of refinancing $15 million of the DIP Financing Obligations and outstanding Prepetition Financing Amount (if any) on the Effective Date.
• Upon entry of the Confirmation Order, the Debtor is authorized to enter into the Exit Financing Credit Agreement, the effectiveness of which shall be subject to the occurrence of the Effective Date. The Exit Financing Credit Agreement was negotiated in good faith and at arm’s-length and reflects the best fair market terms available to the Debtor under the circumstances.
• Upon the occurrence of the Effective Date, MKI, as lender under the Exit Financing Credit Agreement, shall automatically have a first priority lien on and security interest in all assets of the Reorganized Debtor, whether then existing or thereafter acquired, to secure repayment of the Exit Financing, subject only to the Permitted Liens and the Unreleased Legacy Mortgage.
  • Neither the Exit Financing nor the liens and security interests granted in connection therewith shall be subject to avoidance, recharacterization, or subordination, and shall not constitute voidable transfers.
  • The Reorganized Debtor shall be prohibited from making any principal, interest, or other repayments on the Exit Financing until all of the Reorganized Debtor’s monetary obligations to the Talc Personal Injury Trust have been fully and finally satisfied.

Reorganized Debtor and Equity

• On the Effective Date, MKI shall retain 100% of the Reorganized Debtor Stock, subject only to the security interest in 50.1% of such stock granted to the Talc Personal Injury Trust pursuant to the Pledge and Security Agreement to secure the obligations under the Miyoshi Promissory Note. MKI shall receive 100% of the Reorganized Debtor Stock on account of the MKI Contribution, and the Reorganized Debtor Stock shall be deemed issued (or reissued) to MKI, subject to the terms of the Miyoshi Promissory Note and Pledge and Security Agreement.
• Tim (Kaoru) Takagi, the current Chief Executive Officer of the Debtor, will continue as Chief Executive Officer of the Reorganized Debtor, and Edward Houlihan, the current Vice President of the Debtor, will continue as Vice President of the Reorganized Debtor.
• After the Effective Date, the Reorganized Debtor will continue to own, manage, and operate its business, which business will be positioned to generate positive net income as set forth in the Financial Projections contained in the Disclosure Statement.

Talc Personal Injury Channeling Injunction

• Pursuant to sections 524(g) and 105(a) of the Bankruptcy Code, from and after the Effective Date, the sole recourse of any Holder of a Talc Personal Injury Claim on account of such claim shall be to the Talc Personal Injury Trust pursuant to Article VIII.C.1 of the Plan and the Talc Personal Injury Trust Distribution Procedures, and such Holder shall have no right whatsoever at any time to assert its claim against any Protected Party or any property or interest in property of any Protected Party.
• On and after the Effective Date, all present and future Holders of Talc Personal Injury Claims shall be permanently and forever stayed, restrained, barred, and enjoined from taking any action for the purpose of, directly, indirectly, or derivatively, collecting, recovering, or receiving payment of any Talc Personal Injury Claim other than from the Trust pursuant to the Talc Personal Injury Trust Agreement and the Talc Personal Injury Trust Distribution Procedures.
• The Channeling Injunction will effectively redirect the liability and responsibility of the Debtor for Talc Personal Injury Claims (including Demands) to the Trust from and after the Effective Date, enabling the Reorganized Debtor to operate without further responsibility for such liabilities.

Protected Parties

• Article VIII.C of the Plan provides that, in addition to protecting the Debtor and the Reorganized Debtor, the Channeling Injunction will be extended to protect certain third parties. Each Protected Party is identifiable from the terms of the Channeling Injunction by name or as part of an identifiable group, and the alleged liability of each Protected Party arises by virtue of such party’s prior or current relationship with the Debtor.
• MKI, Miyoshi Europe (Miyoshi Europe S.A.S., a wholly-owned subsidiary of MKI), and Miyoshi China (Miyoshi Suzhou Co., Ltd, a wholly-owned subsidiary of MKI) qualify for protection under section 524(g)(4)(A)(ii) based on:
  • MKI’s ownership of 100% of the equity interests in the Debtor;
  • Their involvement in the management of the Debtor, including MKI’s representatives serving as officers and directors; and
  • MKI’s financing through the Prepetition Financing Facility, DIP Financing Facility, Exit Financing, and MKI Contribution, on its own behalf and on behalf of the other Protected Parties.

Trust Governance and Appointments

• The appointment of Hon. Clare McWilliams (Ret.) as the initial Talc Personal Injury Trustee is approved.
• The Plan provides for the nomination of eight individuals to serve as the initial members of the Talc Personal Injury Trust Advisory Committee, with their appointment effective as of the Effective Date. The initial members will be attorneys associated with Simmons Hanley Conroy LLC, Meirowitz & Wasserberg, LLP, Levy Konigsberg LLP, Simon Greenstone Panatier, PC, Dean Omar Branham Shirley, LLP, Maune Raiche Hartley French & Mudd, LLC, Belluck Law, LLP, and SWMW Law, LLC.
• Hon. Shelley C. Chapman (Ret.), who served as the Future Claimants’ Representative prior to and during the Chapter 11 Case, will continue to serve as the Post-Effective Date Future Claimants’ Representative pursuant to the terms of the Talc Personal Injury Trust Agreement. In accordance with sections 524(g)(4)(B)(i) and 105(a) of the Bankruptcy Code, the Future Claimants’ Representative was appointed by the Bankruptcy Court for the purpose of, among other things, protecting the rights of Future Demand Holders.
• Wilmington Trust, N.A. will serve as the initial Delaware Trustee in accordance with the terms of the Talc Personal Injury Trust Agreement.

Settlement

• The MKI Contribution will be deemed to be made by MKI, on its own behalf and on behalf of the other Non-Debtor Affiliates and their respective Representatives:
  • In settlement of any and all causes of action the Debtor may have against MKI or the MKI Related Parties;
  • In consideration for the issuance (or re-vesting) of the Reorganized Debtor Stock on the Effective Date; and
  • In consideration for the Non-Debtor Affiliates (and their Representatives) being included as Protected Parties in connection with the Channeling Injunction.
• The assignment, transfer, and conveyance of the Talc Personal Injury Trust Assets to the Trust on the Effective Date and the occurrence of the MKI Contribution supports the imposition of the Channeling Injunction in favor of all of the Protected Parties as of the Effective Date.
• Pursuant to section 1123(b) of the Bankruptcy Code, and in consideration of the classifications, Distributions, releases, and other benefits provided under the Plan, the provisions of the Plan shall constitute a good faith compromise and settlement of certain Claims, Interests, and controversies resolved pursuant to the Plan, effective upon the occurrence of the Effective Date.

Releases

• Effective immediately and automatically upon the occurrence of the Effective Date, MKI and the other Non-Debtor Affiliates will be deemed to waive, release, and discharge any and all Claims (other than Prepetition Financing Facility Claims, DIP Financing Obligations, and other Intercompany Claims that are Allowed and will be satisfied, including as set forth in Class 5), suits, causes of action, controversies, demands, rights, Liens, indemnities, guarantees, and judgments held by one or more Non-Debtor Affiliates against the Debtor, the Talc Claimants’ Committee, the Future Claimants’ Representative, and each of their respective related parties (the “MKI Release”).
• Article VIII.F.1 of the Plan provides that, on the Effective Date, the Debtor, the Reorganized Debtor, and any Entity seeking to exercise the rights of the Estate shall completely and forever release, waive, and discharge, unconditionally, the Non-Estate Representative Released Parties from any and all claims, obligations, suits, Causes of Action, and liabilities arising on or prior to the Effective Date, provided that nothing therein is intended to operate as a release of any liability based upon gross negligence, willful misconduct, or fraud as determined by a Final Order.
• Article VIII.F.4 of the Plan provides that, on the Effective Date, the Debtor and the Reorganized Debtor are deemed to release and waive all Preference Actions.
• The “Released Parties” means each of: (a) the Debtor; (b) the Reorganized Debtor; (c) the Protected Parties; (d) the Talc Claimants’ Committee, solely in its capacity as such; (e) the Future Claimants’ Representative, solely in her capacity as such; and (f) to the fullest extent permitted by applicable law, each such Entity’s Representatives.

Discharge and Injunction

• As set forth in Article VIII.A of the Plan, pursuant to sections 524 and 1141(d)(1)(A) of the Bankruptcy Code, confirmation of the Plan shall discharge the Debtor and Reorganized Debtor on the Effective Date from any and all Claims and Demands of any nature whatsoever, including all Claims and liabilities that arose before the Confirmation Date, whether or not a Proof of Claim was filed, such Claim is or was allowed, or the Holder has voted on or accepted the Plan.
• As set forth in Article VIII.B of the Plan, all Entities who have held, hold, or may hold Claims or Demands against the Debtor are permanently enjoined, on and after the Effective Date, from commencing or continuing any action or other proceeding of any kind against the Debtor, Reorganized Debtor, or their respective property with respect to such Claim or Demand.

Exculpation

• As provided in Article VIII.E.1 of the Plan, upon the Effective Date, none of the Exculpated Fiduciaries shall have or incur any liability to any Entity based on any act or omission between the Petition Date and the Effective Date in connection with, related to, or arising out of the Chapter 11 Case, the Plan, the solicitation of votes, the consummation or administration of the Plan, the releases and injunctions contained in the Plan, or the management or operation of the Debtor during the Chapter 11 Case, except for any liability that results from such Entity’s willful misconduct, gross negligence, or fraud as determined in a Final Order.
• The “Exculpated Fiduciaries” means each of: (a) the Debtor; (b) the Talc Claimants’ Committee and its members, solely in their respective capacities as such; (c) the Future Claimants’ Representative; and (d) each such Entity’s directors, officers, and professionals, in each case solely in their respective capacity as such.

Plan Support and Voting

• The results of the Solicitation were tabulated in accordance with applicable procedures, and Holders of Claims in the Voting Classes voted overwhelmingly to accept the Plan. Holders of Claims in the Voting Classes (Class 4 Talc Personal Injury Claims and Class 5 Prepetition Financing Facility Claim) have voted to accept the Plan pursuant to section 1126(c) of the Bankruptcy Code.
• Of the Holders of Talc Personal Injury Claims in Class 4 that voted, 99.5% voted to accept the Plan in both number and amount of such Claims, using the values assigned to such claims solely for voting purposes.
• The Ad Hoc Committee and the prepetition Future Claimants’ Representative have been integral to the negotiation and development of the Plan, and they, together with the Talc Claimants’ Committee and the Future Claimants’ Representative, support its confirmation.
• The Bankruptcy Court shall be asked to issue the Channeling Injunction if the Plan has been accepted by at least two-thirds in amount of those Holders of Class 4 Claims actually voting on the Plan (such claims having been deemed to be temporarily allowed, for voting purposes only, in the amount of $1 each), in accordance with section 1126(c), and 75% in number of those Holders of Class 4 Claims actually voting on the Plan, in accordance with section 524(g)(2)(B)(ii)(IV)(bb) of the Bankruptcy Code.