Oaktree Ocala - Chapter 11 Plan Terms

ASAP Highline Ocala and Oaktree Ocala JV's joint reorganization plan centers on a forbearance settlement with lender CPIF MRA, whereby new investors acquire 100% of the reorganized equity via a $3 million capital injection that funds an initial $1.5 million payment on the lender's $14 million allowed claim, with the $12.5 million balance due in full by the Forbearance Termination Date, serviced at 11.5% interest and secured by deed-in-lieu and consent judgment remedies held in escrow.

Plan Terms

Overview

The Debtors, Oaktree Ocala JV, LLC ("Oaktree") and ASAP Highline Ocala, LLC ("ASAP"), filed a Joint Plan of Reorganization incorporating a Forbearance Agreement executed with:
- CPIF MRA, LLC ("Lender"); and
- Saul Horowitz and Moshe M. Wiederman (collectively, the "Guarantors").
The agreement resolves all outstanding issues regarding borrower defaults, indebtedness, and proofs of claim between the parties.

Settlement and Forbearance Terms

Allowed Claim: The Lender shall have an Allowed Claim against ASAP in the amount of $14 million, in full satisfaction of the indebtedness and proofs of claim.
Payment Structure: The Debtors agree to satisfy the Allowed Claim as follows:
- Initial Payment: A payment of $1.5 million on the Effective Date;
- Interest Payments: Monthly interest payments on the remaining balance at the non-default contract rate of 11.5%; and
- Payoff Amount: Payment of the remaining balance ($12.5 million) in cash prior to the expiration of the Forbearance Period.
Lender Forbearance: Subject to Court approval, the Lender agrees not to prosecute the foreclosure action, seek the appointment of a receiver, or enforce rights against pledged equity during the Forbearance Period.

Plan Funding and Equity

The Reorganized Debtors will fund Plan distributions using cash on hand, operations, and cash provided by "Investors."
Investor Contributions: Investors will provide up to $3 million in cash to fund:
- The $1.5 million Initial Payment to the Lender;
- Allowed Secured Tax Claims and Professional Fee Claims; and
- The Interest Reserve.
New Equity: In exchange for the investment, the Investors will receive 100% of the interests in Reorganized Oaktree, pro rata based on their investment amount.

Default Remedies and Property Transfer

To secure the agreement, ASAP and the Lender shall execute a Consent Judgment of foreclosure and a Deed in Lieu of Foreclosure Agreement to be held in escrow.
Upon the occurrence of a Termination Event or failure to pay the balance by the Forbearance Termination Date, the Lender may elect to:
- Direct the Borrower Parties to execute and deliver the Deed in Lieu documents within three business days; or
- Direct the Plan Escrow Agent to release the Consent Judgment for filing in the foreclosure action.
Under these scenarios, title to the Property will vest in the Lender (or its designee) at the Lender's option.

Termination Events

The Forbearance Covenant terminates immediately, entitling the Lender to exercise rights and remedies, upon the occurrence of certain events, including:
- Failure to make the Initial Payment;
- Failure to make any Forbearance Period Interest Payment (subject to a 5-day cure period);
- Failure to pay the full Payoff Amount by the expiration of the Forbearance Period;
- The filing of any legal action by a Borrower Party against the Lender Parties relating to the Loan or Property;
- Failure to comply with governmental authority requirements regarding the Property (subject to a 10-day cure period); or
- Material inaccuracies in representations or warranties.

Fallen Oak Settlement (per DS, Doc 107)

Fallen Oak Holdings LLC filed a Claim against the Debtors for $3,020,676.56. The Debtors and Fallen Oak reached a resolution regarding the classification of its claim (unsecured claim vs. preferred interest) and potential avoidance actions related to $405,240.02 in prepetition payments ($168,938.46 of which was received within the one-year preference period).
Fallen Oak's distribution is contingent on the satisfaction of the CPIF Secured Claim:
- If CPIF is paid in full in cash, Fallen Oak shall receive ASAP's interest in the Undeveloped Lot in full satisfaction of its claim or interest.
- If CPIF's claim is satisfied through the vesting of title to the Property (due to non-payment), Fallen Oak will not receive any distribution or property.

Releases

Borrower Releases: Effective on the Effective Date, the Borrower Parties release the Lender Parties from all claims and liabilities arising from the Loan, Loan Documents, Indebtedness, Property, and the Foreclosure Action.
Lender Releases: Reciprocally, the Lender releases the Debtor Parties from all claims and causes of action related to the Loan, Property, and associated matters, effective on the Effective Date.
Guarantor Releases (per DS, Doc 107): Upon satisfaction of CPIF's Allowed Secured Claim — achieved either through payment in full or the vesting of title to the Property — the Payment Guaranty and Recourse Guaranty shall be deemed satisfied, and releases will extend to the Guarantors. If CPIF's Allowed Secured Claim is not satisfied, the Lender reserves all rights and claims against the Guarantors.

General Settlement of Claims and Interests (per DS, Doc 107)

The Plan constitutes a good-faith compromise and settlement of all Claims, Interests, Causes of Action, and controversies released, settled, or otherwise resolved pursuant to the Plan.

Management (per DS, Doc 107)

Raphael C. Milstein shall remain employed as the manager and responsible officer for each Debtor, retaining ultimate decision-making authority from and after the Effective Date.