Republic National Distributing Company - Chapter 11 APA Summary

Control State Brokerage Business Sale Summary

Posture

• The court entered the sale order on Sept. 18, 2026, approving a private sale of the debtors' "control state" beverage brokerage business to the Martignetti entities without any postpetition auction; the order authorizes the debtors to close immediately upon entry, waiving any stay of effectiveness, and cautions that any objector must diligently seek an appeal and stay before closing or risk mootness.
• No bidding procedures, bid protections, overbid increments, or auction mechanics are part of this transaction. The court found that the debtors and their advisors ran a robust prepetition marketing process that afforded a full and fair opportunity for higher or better offers, that the purchase agreement is the highest and best offer, and that a postpetition public sale process or auction would have decreased value by creating uncertainty and deteriorating supplier relationships, which are essential to the value of the assets.

Purchase Price

• Consists of the sum of:
  • $14.5 million in cash;
  • plus the estimated laid-in cost of all saleable vendor-of-record inventory as of closing, with the estimate to be agreed by the parties at least three business days before closing (together with the fixed amount, the cash payment); and
  • the assumption of the assumed liabilities.
• Laid-in cost is the original purchase price based on actual cost to the sellers, plus freight, fuel, taxes due on purchase, customs charges and duties, and brokerage charges, less all discounts, rebates, and special purchase allowances, established by supplier and seller invoices and records.
• The purchaser pays the cash payment less the deposit at closing by wire transfer.
• Inventory true-up: the escrow agent retains 25% of the estimated inventory price at closing as the VOR adjustment escrow. Within 30 days after closing the parties close the books on the inventory and negotiate in good faith over the difference between actual and estimated inventory price, with either party able to petition the chosen courts if they cannot agree within that period. Any shortfall is released to the purchaser and any excess to the sellers out of the escrow, with the balance released to the other side, and either party pays the difference in cash to the extent it exceeds the escrowed amount.
• The purchase price is allocated among the acquired assets under section 1060 of the tax code per an agreed allocation methodology, with the purchaser to propose an allocation within 75 days after the final purchase price is determined.

Deposit

• 10% of the cash payment, funded with SRS Acquiom as escrow agent on or before the Sept. 4, 2026, effective date and not subject to any lien, attachment, or judicial process of any creditor of either side.
• The sellers retain the deposit, plus any investment income, if they terminate for the purchaser's breach (or if the purchaser terminates in circumstances where the sellers could have terminated for its breach), which the agreement characterizes as liquidated damages rather than a penalty; on any other termination the deposit returns to the purchaser. Release instructions are due within five business days of termination in either case.
• At closing the full deposit, less the VOR adjustment escrow amount, is released to the sellers and credited against the cash payment.

Parties

• Sellers: Republic National Distributing Company, LLC; RNDC New Hampshire, LLC; RNDC General, LLC; K&L Beverage Company, LLC; Young's Market Company of Oregon, LLC; RNDC-NWS, LLC; NWS Michigan, LLC; National Wine & Spirits, LLC; and L&L Wine and Liquor, LLC. Only RNDC, RNDC New Hampshire, K&L, and Young's Market are debtors.
• Purchaser: Martignetti Companies Control State, LLC; Martignetti Companies of New Hampshire, LLC; and Martignetti Companies of Utah, LLC.
• The court found the purchaser is a good-faith purchaser entitled to section 363(m) protection, is not an insider or affiliate of any seller, and shares no common incorporators, directors, members, or controlling stockholders with the sellers.
• RNDC acts as seller representative with unilateral authority to bind every seller, including waiving conditions and agreeing to amendments, and the purchaser is entitled to rely on its actions.

Non-Debtor Sellers

• RNDC-NWS, NWS Michigan, National Wine & Spirits, and L&L Wine and Liquor are the only entities operating and owning the business in Michigan, and RNDC General is the only such entity in Ohio; none is a debtor in any bankruptcy proceeding, and RNDC General represents that it is and will remain solvent after closing. Certain supplier contracts relating to the Ohio and Michigan business may have been entered into by RNDC, and RNDC makes available to those sellers certain services, systems, and assets necessary to operate the business there.
• The sale order expressly does not reach the non-debtor sellers: none of their assets are being sold under section 363, none of their contracts or leases are being assigned under section 365, and none of the order's findings or conclusions apply to them. The debtors have no obligation to pay cure costs or pre-closing liabilities on those assignments, though the non-debtor sellers' own obligations under the agreement to pay pre-closing liabilities are preserved. Each non-debtor seller is receiving a portion of the purchase price representing fair value for the portion of the business it sells.
• The debtors are authorized to take all corporate actions necessary to cause the non-debtor sellers to monetize substantially all of their assets under the agreement, and the automatic stay is lifted to the extent necessary to allow the purchaser, the non-debtor sellers, and the non-debtor owners of the Michigan and Ohio joint ventures to act under the agreement.

Assets Being Sold

• All right, title, and interest of each seller in the assets, properties, goodwill, and rights related primarily to or used primarily in the operation of the control-state brokerage business, other than excluded assets, free and clear of encumbrances except permitted encumbrances, including:
  • the sellers' commercial relationships with the suppliers in the territories with respect to the brands;
  • leasehold and subleasehold estates in the leased real property, but only the leases scheduled as assigned leases;
  • acquired IT, consisting of office furniture, furnishings and equipment at the leased premises, employee cell phones, laptops and tablets on the sellers' company plan for employees who join the purchaser, and computer and telecommunications equipment located at the assigned-lease premises;
  • all saleable vendor-of-record inventory, meaning in-code inventory from purchaser-identified continuing suppliers that can be processed and received by a retail account in its existing packaging at closing and is not damaged, spoiled, discontinued, obsolete, or otherwise unmerchantable;
  • tangible personal property located in the territory, including point-of-sale and promotional materials, and copies of non-privileged customer, sales, route, vendor, financial, compliance, and product-development records, with originals of business records transferred at closing and the sellers permitted to keep copies;
  • transferable intangible property, including transferred permits, guaranties, warranties and indemnities in favor of the sellers relating to other acquired assets, and telephone and facsimile numbers used primarily in the business; and
  • the leases and other contracts listed on the assigned-contracts schedule.
• Tangible or intangible property held under a contract does not transfer unless that contract is an assigned contract.
• Territory by seller: RNDC covers Maine, Vermont, Alabama, Iowa, Mississippi, North Carolina, Pennsylvania, Utah, West Virginia, Wyoming, Montana, and Virginia; RNDC New Hampshire, New Hampshire; RNDC General, Ohio; K&L, Idaho; Young's Market, Oregon; and the Michigan non-debtor sellers, Michigan. Each territory is limited to control-state brokerage business.

Excluded Assets

• Cash and cash equivalents, bank accounts (other than any the parties agree to include), deposits, prepaid expenses and rights to credits, refunds or rebates, professional retainers, and all accounts and notes receivable, including supplier receivables and amounts due from employees and related parties.
• All avoidance claims and causes of action under chapter 5 of the Bankruptcy Code or applicable law and their proceeds; all other claims, causes of action, rights of recovery, set-off, and recoupment arising out of events on or before closing, including those against suppliers, vendors, and contract counterparties; and all claims related to excluded assets or excluded liabilities.
• All contracts other than assigned contracts; all rights under employee benefit plans; income tax refunds, attributes, and assets; equity interests of any seller or other person; and amounts owing from seller affiliates.
• All current and prior insurance policies, including D&O policies, together with all recoveries and rights to assert claims under them.
• All intellectual property other than acquired IT, including the sellers' logos, websites, social media accounts, domain names, and email addresses, and all licenses, permits, authorizations and orders other than the transferred permits.
• Contracts, inventory, and assets relating to the brokerage, sale, or distribution of non-alcoholic beverage products in New Hampshire and, absent mutual written agreement before closing, Pennsylvania; tangible assets located outside the territory; assets used primarily in a business other than the business; and assets listed on the excluded-assets schedule, which the parties may amend by mutual consent through closing.

Assumed and Excluded Liabilities

• The purchaser assumes only liabilities under the assigned contracts arising from and after closing; liabilities arising out of its own conduct of the business or ownership of the acquired assets from and after closing, including environmental, health, and safety matters attributable to its post-closing ownership or operation; amounts it is required to pay under the agreement, including all transfer taxes; and taxes on the acquired assets, assumed liabilities, or business for taxable periods beginning after closing, excluding taxes of the sellers.
• Everything else is an excluded liability, expressly including all liabilities arising from the sellers' pre-closing supplier relationships; accounts payable and other liabilities related to saleable VOR inventory arising before closing; all liabilities of NWS Michigan, RNDC-NWS, and L&L Wine and Liquor under financing or leasing arrangements with Wells Fargo Capital Finance, LLC, Wells Fargo Bank, N.A., or Banc of America Leasing & Capital, LLC; and all cure costs. The sale order confirms that nothing in it obligates the purchaser to pay or discharge any excluded liability, including cure costs.

Credit Bid

• No credit bid was made; the lenders gave it up as part of the deal. The DIP credit agreement, the prepetition first lien credit agreement, and paragraph 26 of the final DIP order each gave the DIP agent and the prepetition agent, acting at the direction of their respective required lenders, the unqualified right to credit bid up to the full amount of the DIP facility loans and prepetition loans in any sale of their collateral, subject to paragraph 16 of the final DIP order, section 363(k), the carve-out, and any court-approved bidding procedures, and in the prepetition agent's case subject to satisfaction of all DIP obligations and obligations secured by permitted prior senior liens.
• Section 6.3 of the DIP credit agreement barred any disposition of the debtors' assets without the prior written consent of the required lenders. The required DIP lenders consented to the sale and, together with the required lenders under the prepetition first lien credit agreement, waived the applicability of those sections and paragraph 26, including waiving the agents' and their designees' right to credit bid for the purchased assets.
• The court found that consent and waiver a material component of the overall consideration the sellers provided to the purchaser and a material inducement to the purchaser's entry into the agreement, payment of the purchase price, and consummation of the sale, and that the purchaser would not have signed without it.

Free and Clear; Successor Liability

• The debtors' purchased assets transfer free and clear of all encumbrances other than permitted encumbrances and assumed liabilities under sections 105(a) and 363(f), with valid and perfected encumbrances attaching to the net sale proceeds attributable to the affected property in the same order of priority, validity, force, and effect, subject to the estates' rights, claims, and defenses. The court found each standard of section 363(f)(1)–(5) satisfied as to every lienholder and that holders who did not object, or who withdrew objections, are deemed to have consented under section 363(f)(2).
• Permitted encumbrances, the principal carve-out from that transfer, are real estate taxes not yet due, being contested in good faith, or whose nonpayment the Bankruptcy Code permits; ordinary-course mechanics' and similar liens not yet due; zoning, building-code, and land-use laws not violated by the current use; easements, covenants, and restrictions of record that do not materially impair use of the property in the business; the lessors' and sublessors' interests under the leases; and, only before closing, encumbrances the sale order removes or releases.
• Wells Fargo Bank, as prepetition agent and DIP agent, consents to the free-and-clear sale as to all claims and liens under the prepetition credit facilities and the DIP facility loans and to the release and termination of those liens; the purchaser is authorized to execute and file termination statements for the DIP and prepetition liens, as are the debtors and the DIP agent.
• The assets are also sold free and clear of reclamation rights, and the parties waive bulk-sales compliance, with the transfer intended to be free of any encumbrance arising under bulk-sales laws.
• The purchaser and a broadly defined group of purchaser parties, including its affiliates, equityholders, lenders, funds, agents, insurers, attorneys, and their respective directors, officers, and employees, are not successors to the debtors or their estates under any theory of law or equity, and the sale is not a consolidation, merger, or de facto merger. All persons are enjoined from pursuing encumbrances against the purchaser or the purchased assets and from asserting fraudulent transfer or conveyance claims against them with respect to the purchased assets. Direct claims of the debtors, their estates, the committee, or any successor estate representative against the purchaser are preserved except to the extent they arise out of or relate to the debtors, the purchased assets, or the purchaser's acquisition of them.
• After the closing date the debtors have no further liability with respect to the purchased assets, and post-closing claims relating to those assets asserted against the debtors are deemed disallowed.
• The order and the agreement bind the debtors, their estates and creditors, the other sellers, holders of encumbrances, counterparties to the assigned contracts and leases, and any trustee, examiner, or receiver later appointed, including on conversion to Chapter 7; the agreement is specifically enforceable without bond and is not subject to rejection or avoidance; and its terms survive confirmation of any plan, dismissal, or conversion, with no later plan or order permitted to change, supersede, or conflict with them.

Assumption and Assignment

• The order approves assumption and assignment only of the debtors' assigned contracts and leases identified on Exhibit 2, free and clear of encumbrances other than assumed liabilities and permitted encumbrances, effective at closing or such later date as the agreement or a separate order provides. Anti-assignment, termination, recapture, penalty, renewal-conditioning, and change-of-control provisions in those contracts are void and unenforceable, and the debtors are relieved of further liability under section 365(k) upon assignment.
• Every counterparty is deemed to have consented, and the purchaser is deemed to have demonstrated adequate assurance of future performance under sections 365(b)(1)(C) and 365(f)(2)(B). No rent or payment accelerations, assignment fees, increases, or similar charges may be imposed on the debtors or the purchaser, counterparties may not charge for documents needed to effect the transfers, and counterparties are barred from asserting pre-closing indemnity or warranty defaults or any counterclaim, defense, or setoff against the purchaser.
• Designation rights: through the designation deadline, one business day before closing, the purchaser may add any available contract that is an excluded asset as an assigned contract or strike any contract from the schedule so that it becomes an excluded asset, in each case with no adjustment to the purchase price, with the schedule deemed automatically amended. The debtors may correspondingly amend Exhibit 2 until the designation deadline on prompt notice to any affected counterparty, which retains a reasonable opportunity to object on any grounds.
• Disputed contracts: where a cure or assumption objection is unresolved at the designation deadline, the deadline extends automatically, including past closing, until the earliest of deemed or consented rejection, 10 business days after the court finally determines the dispute, or 10 business days after consensual resolution. The sellers may not reject or consent to deemed rejection of a disputed contract without the purchaser's written consent, and if the purchaser does not designate the contract within that extended period it becomes an excluded asset. A disputed contract is not assumed or assigned at closing and will not be until the dispute is resolved and cure costs are paid, though a dispute over one contract delays neither the assumption of others nor the closing. The debtors reserve the right to reject any disputed contract post-closing.
• Objection resolution: the parties must use best efforts to resolve cure and assumption objections; the sellers may not settle an adequate-assurance objection without the purchaser's prior written consent but are solely responsible for, and may settle without consent, all cure-cost and other objections; and unresolved objections go to the court on an expedited basis. Timely filed objections unresolved at entry of the sale order are continued to a future noticed hearing.

Cure Costs

• The sellers, not the purchaser, pay all cure costs; cure costs are excluded liabilities and are not assumed.
• The debtors pay cure costs for their assigned contracts and leases on or as soon as practicable after the closing date, but may not pay cure on any contract subject to an unresolved counterparty objection. For a disputed contract, the debtors pay only as consensually agreed or after the court enters an order fixing the amount, at which point the contract is deemed assumed and assigned. The sellers must give the purchaser reasonable evidence of payment.
• A counterparty that failed to timely file and serve an assignment objection is barred from objecting to assumption or assignment, and the amount on the cure schedule is the only amount necessary to cure defaults under section 365. A counterparty noticed of a cure amount, or of the absence of one, that did not object is deemed to have consented and to have waived any right to assert or collect other cure amounts arising before closing.

Supplier Relationships and Rejected Contracts

• At closing each seller must discontinue and terminate its supplier relationships in the territory with respect to all applicable brands and, where applicable, reject contracts relating solely to the debtors and covering only the territory. The order authorizes and directs the debtors to do so and rejects all rejected contracts under the agreement effective as of the closing date.
• The court found this machinery an integral component of the sale, necessary to allow the purchaser to establish direct relationships with suppliers in the territory and to maximize the value of the purchased assets.
• From the effective date forward, no seller may assign, convey, transfer, or dispose of any distribution or brokerage rights with any supplier in the territory to anyone other than the purchaser.

Use of Proceeds

• On the closing date the debtors must transfer the net proceeds of the sale for application to the DIP new money loans and related DIP obligations, as required by paragraph 5 of the final DIP order and the DIP loan documents and subject in all respects to the carve-out and paragraph 16 of the final DIP order, with the debtors free to reborrow any amounts so repaid consistent with the DIP loan documents and DIP budget.
• Proceeds the final DIP order permits the debtors to retain, including proceeds from the sale of unencumbered property, are not swept. Net proceeds from the non-debtor sellers' assets include only distributions made to the debtors on account of their interests in those entities.
• The debtors must provide the committee with the final funds flow, including the gross cash payment and inventory price, the amounts payable to each debtor and each non-debtor seller, and the proposed application of proceeds received by the debtors.

Closing Conditions

• Closing occurs on the third business day after the conditions are satisfied or waived, by telephone conference and electronic exchange of documents, and is deemed effective as of 11:59 p.m. Central time on the closing date.
• Conditions to the purchaser's obligation include:
  • the sellers' Article III representations true and correct except where the failure has not had a material adverse effect, with the fundamental representations, meaning organization and good standing, authority and enforceability, title to the acquired assets, and no illegal payments, true and correct in all material respects, plus the sellers' material performance of their covenants, confirmed by an officer's certificate;
  • no material adverse effect between the effective date and closing;
  • receipt by closing of all federal and state licenses and permits for the sale and distribution of alcoholic beverages in the territory listed on the applicable schedule, and receipt of the scheduled third-party consents;
  • entry of the sale order as a final order, not stayed, vacated, reversed, or modified without the purchaser's consent;
  • a supplier threshold: neither side has received written notice from any supplier on the applicable schedule that it will not do business with the purchaser in the territory after closing, or will move to a competitor, where the affected suppliers represent in the aggregate more than 10% of the business's commission revenue plus VOR gross profit for the twelve months ended Dec. 31, 2025;
  • delivery of an executed transition services agreement, bills of sale, and assignments of the assigned leases, along with a 90-day license for the premises at 13000 Eckles Road, Livonia, Mich.; and
  • evidence from NWS Michigan, RNDC-NWS, and L&L Wine and Liquor of the release of scheduled encumbrances, including UCC-3 terminations, to the extent not covered by the sale order, which does not address encumbrances of non-debtor sellers.
• Conditions to the sellers' obligation mirror the core items: accuracy of the purchaser's representations in all material respects and its material performance of covenants, an officer's certificate, an executed assumption agreement, executed lease assignments and the Livonia license, and entry of a sale order not stayed, vacated, or modified without their consent. Any condition unsatisfied at closing is deemed waived by the benefited party, and neither side may rely on a failed condition it caused.
• Material adverse effect is measured against the business, acquired assets, and assumed liabilities taken as a whole and excludes general economic, political, and social conditions, force majeure and health events, changes in the price of equipment or supplies used in the business, financial, banking, and securities market conditions, changes in GAAP or law, the negotiation, announcement, or pendency of the transaction and the purchaser's identity or plans, any failure to hit projections, anything publicly known or within the purchaser's knowledge at the effective date, and the matters set forth on the schedules; only the first five of those may be counted, and then only to the extent they hit the sellers disproportionately relative to similarly situated participants in their industries and geographies.

Termination

• Outside date: Sept. 22, 2026, with the purchaser holding sole discretion to extend up to an additional 60 calendar days on notice. Neither side may terminate on that ground if its own failure to perform caused the delay.
• Either side may also terminate on mutual written consent or upon a final, binding, non-appealable order prohibiting the closing or declaring the transactions unlawful.
• Buyer and seller breach rights run in parallel: each may terminate for the other's covenant breach or untrue representation that would cause the corresponding bring-down condition to fail, subject in each case to a cure period running to the earlier of two business days before the outside date and 15 business days after notice of the breach, and neither may terminate while itself in material breach. The purchaser's failure to consummate the closing is expressly not curable.
• Any debtor may terminate if its governing body determines that proceeding, or failing to terminate, would be inconsistent with its fiduciary duties.
• Termination voids the agreement and ends all obligations, but does not relieve a party of liability for a willful breach occurring before termination, and the purchaser's failure to consummate the closing when obligated to do so is itself deemed a willful breach; specific performance and other equitable remedies remain available to enforce surviving provisions.

Restrictive Covenants

• Non-competition: for five years from closing, each seller and its controlled affiliates may not own an interest in, operate, join, control, or participate in any person providing, soliciting orders for, selling, warehousing, distributing, or marketing beverage products in the territory that compete with the products of the business, or interfere with the purchaser's supplier arrangements. Non-alcoholic beverage activity in New Hampshire, and in Pennsylvania absent mutual agreement to include those assets, is carved out.
• Confidentiality runs for the same restricted period and covers customer lists and requirements, license and customer contract terms, pricing, marketing and sales techniques, and planning and financial information of the business, subject to carve-outs permitting the purchaser to confer with suppliers, business employees, and licensing authorities.
• Non-disparagement binds both sides. Breach of any of these covenants entitles the damaged party to injunctive relief without proving actual damage and, if it prevails, to its costs and reasonable attorneys' fees, and the restricted period tolls for the duration of any breach.

Employee Matters

• The sellers cease operating the business in the territory on the closing date. The purchaser sets the initial terms and conditions of employment for anyone it hires and, on request, provides a list of identified employees whose responsibilities relate primarily to the business together with potential roles at the purchaser.
• The sellers remain solely responsible for all compensation and amounts payable to current and former employees, officers, directors, contractors, and consultants for service on or before closing, including hourly pay, commissions, bonuses, salary, accrued but unused vacation and paid time off, fringe, pension and profit-sharing benefits and severance, plus the employer portion of related taxes; for all severance, retention bonuses, and other amounts triggered by the transaction; and for all employer notice obligations, including under the WARN Act and the National Labor Relations Act, and any liability associated with a WARN notice arising in connection with the business through closing.
• The purchaser represents that it does not currently plan any plant closings, reductions in force, or terminations affecting business employees that, aggregated with pre-closing seller conduct, would trigger WARN obligations. From and after closing the purchaser may offer employment to and hire any seller employees providing services to it or the business, including under the transition services agreement, notwithstanding any other provision of either agreement, though no such employment may commence before the services involving that employee under the transition services agreement are complete.
• Pension plans: the debtors are the contributing sponsor or a member of the contributing sponsor's controlled group for the Retirement Plan for Employees of Block Distributing Company, Ltd. and the Retirement Income Plan for Nonbargaining Unit Employees of Young's Market Company, LLC. The debtors must store and preserve all pension plan documents until the PBGC completes its investigation, retain copies of any transferred under the order, may not abandon or destroy them, and must make them available to the PBGC for inspection and copying.

Indemnification by the JV Sellers

• Only the JV sellers, RNDC General, NWS Michigan, and L&L Wine and Liquor, indemnify, individually and severally rather than jointly, and only for the first year after closing. Coverage runs to breaches of their Article III representations, breaches of fundamental representations, their excluded liabilities, and non-fulfillment of their post-closing covenants. No JV seller is liable for any other seller's breach or excluded liability.
• Purchaser indemnification runs in parallel to each JV seller for the same one-year period, covering breaches of the purchaser's representations, breaches of its fundamental representations, meaning its organization, its authorization of the agreement, and its brokers representation, and non-fulfillment of its post-closing covenants.
• Basket: $225,000, with recovery only above that amount on representation-breach claims. Per-claim threshold: $25,000, below which an individual loss or series of related losses does not count toward the basket. Neither applies to fundamental-representation breaches or fraud.
• Caps: each JV seller's maximum aggregate liability is 50% of the aggregate cash proceeds it actually receives; the purchaser's is the purchase price. Neither cap applies to fraud. Indemnification is the exclusive post-closing remedy other than fraud and specific enforcement of post-closing covenants, and indemnity payments are treated as purchase price adjustments for tax purposes.
• Outside that indemnity, the representations and the pre-closing covenants terminate at closing and no claim on them may be brought afterward; post-closing covenants survive on their own terms, or for 12 months where none is stated. The purchaser acknowledges it relies solely on the Article III representations as qualified by the schedules and on the sellers' closing certificate, not on the data room, the projections, or any other information furnished, with claims for fraud preserved.
• Recoveries run net of any tax benefit realized and any insurance or other reimbursement actually collected, less collection costs, and are subject to a duty to mitigate; no purchaser indemnified party may recover consequential, incidental, or indirect damages, lost profits, diminution in value, or special, exemplary, or punitive damages, other than punitive damages paid to an unrelated third party under a final non-appealable judgment, and no multiple-of-profits or multiple-of-cash-flow methodology may be used to compute losses.

Post-Closing Arrangements

• A transition services agreement in agreed form is a condition to closing.
• The purchaser is authorized as of the closing date to operate under the sellers' licenses, permits, registrations, and governmental authorizations with respect to the debtors' purchased assets to the maximum extent permitted by law; where it cannot, those licenses remain in effect while the purchaser, with seller assistance, works promptly to secure new issuances. Subject to section 525(a), no governmental unit may revoke or suspend any right, license, trademark, or permission relating to the purchased assets on account of the filing or pendency of the cases or the sale. No seller may cancel its existing federal basic permits, or its state or county wholesaler and importer licenses, until the purchaser has obtained its own.
• Books and records: the purchaser must give each seller reasonable access to acquired books and records and to identified employees, officers, and advisors as needed for the seller's wind-down, tax filings, and responses to governmental inquiries, may not dispose of those records for two years after closing without notice and an opportunity for the seller to take possession, and must provide reasonable assistance with wind-down activities such as locating documents for tax returns, claims reconciliation, and insurance and benefit claims processing. Access runs both ways: each seller must give the purchaser comparable access to its retained records and accounting ledgers relating to the business and may not dispose of them for two years after closing, or until it dissolves if sooner, without the same notice and opportunity to take possession.
• Misdirected funds are forwarded both ways: a seller receiving money on a purchaser account debtor from post-closing sales forwards it to the purchaser, and the purchaser receiving money on a seller account debtor from pre-closing sales, which is an excluded asset, forwards it to the seller.
• Assignment of the agreement requires the other side's consent, with two exceptions: the sellers may assign to a wind-down trustee, liquidation trust, or similar vehicle under a confirmed Chapter 11 plan of liquidation, and that vehicle may transfer, assign, and sell its right to receive the purchase price proceeds; and the purchaser may assign to a subsidiary or affiliate, or to its lenders as security, without release from its own obligations.
• Insurance coverage maintained by the sellers or their affiliates ceases to cover the business, acquired assets, and assumed liabilities at closing, and no further coverage is available to the purchaser under those policies, which are themselves excluded assets. For pre-closing periods the purchaser may still make claims and take the proceeds on matters relating to the acquired assets or assumed liabilities, and on request the applicable seller must use commercially reasonable efforts to pursue or permit recovery under its occurrence-based policies and remit what it collects, net of its reasonable documented out-of-pocket collection costs.

Preserved Rights

• Nothing in the sale order modifies, supersedes, or impairs the final DIP order [Docket No. 275], the preserved challenge claims, or any rights under paragraph 16 of that order. Preserved challenge claims are the claims, causes of action, objections, and defenses that are the subject of a challenge or standing motion timely asserted on or before the investigation termination date under paragraph 16 of the final DIP order, together with all rights and remedies available under that order, and the committee's rights and those of any successor under paragraph 16 are expressly preserved against entry of the order, approval or consummation of the sale, closing, and any application or distribution of sale proceeds.
• Where the sale order and the final DIP order conflict, the final DIP order controls, including as to the rights, obligations, priorities, and remedies in paragraph 16; the sale order otherwise controls over the sale documents and any prior order or pleading related to the motion.
• The order is not an admission as to the amount, basis, priority, or validity of any claim or lien, and the rights of all parties in interest to contest the extent, validity, or perfection of, or to seek avoidance of, any lien are reserved, as are the debtors' rights in and interests in the non-debtor sellers. All other unresolved objections are overruled with prejudice, except that unresolved assignment and rejection objections are deferred to a later date.

Amendments

• The parties may modify, amend, supplement, or restate the purchase agreement and related documents in a signed writing without further court order, but must promptly provide any such change to the committee; any modification with a material or adverse effect on the estates requires notice to the court and the committee and a further court order while the cases remain pending.

Governing Law and Forum

• Delaware law governs except where mandatory Bankruptcy Code provisions apply. Disputes go to the bankruptcy court and any federal court hearing an appeal from it, or, if the bankruptcy court is unwilling or unable to hear the matter, the Delaware Court of Chancery or another Delaware court. The court retains exclusive jurisdiction to interpret, implement, and enforce the sale order and the purchase agreement and to adjudicate disputes relating to the sale.

Key Dates

• Petition Date: July 26, 2026
• APA Effective Date: Sept. 4, 2026 (the sale order recites the agreement as dated Sept. 5, 2026)
• Assignment Objection Deadline: the date of the sale hearing; for contracts or leases added to the cure schedule after the motion was filed, 14 days after service of notice on the counterparty
• Sale Order Entered: Sept. 18, 2026
• Designation Deadline: one business day before closing, subject to automatic extension for disputed contracts
• Inventory Estimate Agreed: at least three business days before closing
• Closing: third business day after satisfaction or waiver of the closing conditions
• Inventory True-Up: within 30 days after closing
• Outside Date: Sept. 22, 2026, extendable by the purchaser by up to 60 additional calendar days

RNDC Alaska Sale Summary

Posture

• On Oct. 1, 2026, the debtors moved [Docket No. 524] for approval of a private going-concern sale of substantially all of the assets of RNDC Alaska, LLC, together with certain Washington inventory bound for Alaska, to CoHo Distributing, LLC, dba Columbia Distributing, free and clear of all encumbrances and without an auction. The motion also seeks authority to assume and assign any contracts the purchaser later designates and approval under Bankruptcy Rule 9019 of a mutual claim release. Objections are due 21 days after filing. The sale order is proposed and has not been entered; it would be effective immediately on entry, waiving the Bankruptcy Rule 6004(h) and 6006(d) stays, and cautions that any objector must seek an appeal and stay before closing or risk mootness.
• The debtors project that they will lack the liquidity to sustain Alaska operations if the sale does not close by Oct. 30, 2026. They also state that any delay risks further loss of suppliers, many of which have no long-term agreements with the debtors.
• No bidding procedures, bid protections, or auction are proposed. Lazard ran the prepetition marketing process, contacting more than 50 parties and signing confidentiality agreements with more than 25. Four parties, including Columbia, expressed interest in Alaska, and two submitted indications of interest that included it. The other bidder wanted only the beer distribution business, packaged with non-debtor joint venture markets in Idaho, Kentucky, and Michigan, which would have left the debtors to wind down or separately sell the Alaska wine and spirits business.
• The debtors and Columbia signed a non-binding letter of intent for Alaska, Oregon, and Washington on April 16, 2026. Licensing requirements and operational complexity led the parties to carve out Alaska, and the Washington and Oregon sale closed out of court on June 30, 2026. No alternative proposal for Alaska has been received, including after exclusivity ended in June 2026. The debtors describe the Alaska operations as dependent on Washington for suppliers, warehousing, infrastructure, and employees, which they say makes Columbia uniquely suited as buyer. The lenders and the debtors' Alaska joint venture partner support the sale.
• Under the proposed order, the court would find that the debtors ran a robust prepetition marketing process, that the purchase price is the highest or otherwise best offer, and that a postpetition public sale process or auction would decrease value by creating uncertainty with the debtors' Alaska suppliers and partners. The debtors filed the Declaration of Ryan Murphy in support of the motion.

Purchase Price

• Consists of the sum of:
  • the aggregate laid-in cost of all inventory and dunnage (the inventory price), which the motion puts in excess of $10.0 million; inventory subject to an assigned purchase order is not counted as inventory;
  • plus $2.1 million for the equipment; and
  • the assumption of the assumed liabilities, including payment of supplier payables and cure costs by the purchaser.
• The purchaser's payment of approximately $2.0 million in supplier payables reduces the net cash proceeds. The debtors estimate the estates will realize approximately $3.0 million of net proceeds at or around closing, after transaction expenses and mandatory withholdings. A further approximately $2.0 million will be held in escrow pending the final cash payment.
• Laid-in cost is the actual invoiced cost paid or owed by the seller to qualifying suppliers for the inventory, plus freight, excise taxes, and delivery costs to take physical possession, under the transaction accounting principles. It excludes storage and handling costs after receipt. For dunnage, laid-in cost is the amount of reimbursable deposits held by qualifying suppliers.
• Estimates: at least five business days before closing, the seller delivers its estimate of the inventory price from its ERP system. On the same timeline, the purchaser delivers its estimate of the post-July supplier liability amount.
• Closing payments are made by wire transfer:
  • To the seller, the estimated cash payment, which equals 75% of the estimated inventory price plus the equipment price, less the July supplier liability amount, the estimated post-July supplier liability amount, the cure costs, and the deposit.
  • To each qualifying supplier, directly, its July supplier liability amount under its supplier payoff letter.
  • To contract counterparties, directly, the cure costs.
  • Into escrow, the remaining 25% of the estimated inventory price as the adjustment escrow.
• Inventory true-up: the parties take an itemized physical count. The Alaska inventory is counted at the Alaska facilities, and the Washington inventory is counted as it is staged and removed after closing. The parties work toward agreement on the inventory price within 60 days after closing. The post-July supplier liability amount is fixed from actual supplier invoices covering Aug. 1, 2026, through closing. Remaining disputes go to Kroll, LLC (or a mutually acceptable substitute) as accounting firm. The firm must adopt one side's position on each item in full and rule within 30 days. Its fees are allocated by the share of the contested amount each side lost, and its determination is final and binding absent fraud or manifest error. This process is the parties' exclusive remedy for adjustment disputes.
• The final cash payment equals the final inventory price plus the equipment price, less the final supplier liability amounts, the cure costs, the deposit, and out-of-code return costs. If it falls below the estimate, the shortfall is released to the purchaser from escrow, capped at the escrow amount, and the balance goes to the seller. If it exceeds the estimate, the purchaser pays the difference, capped at the escrow amount, and the full escrow is released to the seller. In either case the escrow is the sole source of recovery. Within five business days after the final cash payment is determined, the purchaser pays any unpaid post-July supplier liability amount directly to each qualifying supplier.
• The purchase price is allocated among the acquired assets under section 1060 of the tax code per an agreed methodology. The purchaser proposes an allocation within 75 days after the final purchase price is determined. The seller has 30 days to object, and unresolved disputes go to the accounting firm. Adjustment payments are treated as purchase price adjustments for tax purposes.

Deposit

• $0.6 million, funded with SRS Acquiom as escrow agent promptly after the Sept. 19, 2026, effective date.
• The deposit is applied to the purchase price at closing. If the seller terminates for the purchaser's breach, the deposit is released to the seller within two business days. It is deemed fully earned and is the seller's sole and exclusive remedy, and the purchaser's monetary liability is capped at the deposit amount. On any other termination, including the seller's fiduciary out, the deposit returns to the purchaser.
• Under the proposed order, the deposit and the adjustment escrow are not estate property and are not subject to any encumbrance, including DIP liens, until disbursed to the seller. Any amount disbursed to the seller is then applied in accordance with the DIP orders.

Parties

• Seller: RNDC Alaska, LLC. Young's Market Company of Washington, LLC, dba Republic National Distributing Company of Washington, is a seller solely as to the Washington inventory. K&L Beverage Company, LLC is party as license holder, solely for the licensing covenant. Republic National Distributing Company, LLC is party as RNDC owner, solely for the restrictive covenants, further assurances, and the claim release. The APA recitals identify the seller, the license holder, and the RNDC owner as debtors.
• Purchaser: CoHo Distributing, LLC, dba Columbia Distributing, an Oregon limited liability company. The motion describes it as having more than 90 years of beverage distribution experience in Washington and Oregon. The APA references Meritage Group as an equity sponsor or investor of the purchaser.
• The proposed order would find the purchaser a good-faith purchaser entitled to section 363(m) protection, not an insider or affiliate of any debtor, and sharing no common incorporators, directors, members, or controlling stockholders with the debtors. The motion describes the negotiations as spanning five months.

Assets Being Sold

• All of the seller's right, title, and interest in the acquired assets, free and clear of encumbrances except permitted encumbrances, consisting of:
  • Alaska inventory: undamaged, unopened inventory in Alaska of the scheduled brands from any qualifying supplier, meeting the inventory conditions:
    • package beer and non-alcoholic product must have at least 45 days of code life after closing, and draft at least 30 days;
    • wine must be one of the following: of the supplier's two most recent vintages and saleable to a retail account in its existing packaging; non-vintaged wine received within one year before closing; wine with a laid-in cost above $450 per nine-liter case that the parties agree to include; or wine on the applicable schedule;
    • spirits, package beer, and non-alcoholic product must carry current labels and be saleable to a retail account in existing packaging;
  • Alaska dunnage: functional and undamaged dunnage, pallets, slip boards, and kegs for the brands, together with related deposits with designated suppliers;
  • Washington inventory: undamaged, unopened inventory and dunnage meeting the inventory conditions, located in Washington, solely to the extent discretely bound for Alaska and expressly designated for receipt by the applicable qualifying supplier;
  • equipment: warehouse and delivery equipment in Alaska, including forklifts, floor cleaners, motor vehicles, trailers, automated warehouse systems, and office and computer equipment and furniture, together with the related equipment leases on the contract and cure schedule;
  • other tangible personal property in Alaska, plus point-of-sale materials in Washington relating to the Washington inventory. This includes packaging, draft tapping equipment, supplies, fuel and oil, promotional materials, tap handles, and non-privileged customer, sales, route, vendor, financial, compliance, and product-development records;
  • the assigned contracts; and
  • the assigned purchase orders, meaning outstanding product purchase orders submitted before closing to qualifying suppliers that have not shipped or remain in transit at closing.
• A qualifying supplier is a supplier that has delivered to the purchaser, by closing, both an executed new supplier contract and an executed supplier payoff letter. The territory is Alaska.

Excluded Assets

• Everything other than the acquired assets. Leased equipment whose lease is not on the contract and cure schedule at closing is an excluded asset and does not transfer. The seller has 30 days after closing to remove excluded assets.

Assumed and Excluded Liabilities

• The purchaser assumes only the following:
  • liabilities under the assigned contracts arising or due from and after closing;
  • liabilities from its own ownership of the acquired assets that arise from facts first occurring on or after the closing date;
  • 50% of transfer taxes;
  • liabilities under the assigned purchase orders;
  • taxes on the acquired assets and assumed liabilities for periods beginning after the closing date; and
  • the limited obligation to pay qualifying suppliers the July supplier liability amount and the finally determined post-July supplier liability amount, in each case only to the extent it reduced the purchase price otherwise payable to the seller.
  These supplier payments are not an assumption of any supplier contract or other supplier liability of the seller.
• Everything else is an excluded liability, expressly including the following:
  • affiliated plan liabilities, and all liabilities under collective bargaining agreements, benefit plans, Title IV and section 302 of ERISA, multiemployer plans, and COBRA;
  • all employment, compensation, and termination liabilities, including those tied to the seller's identification of business employees or an employee's failure to accept an offer;
  • all indebtedness of the seller or its affiliates, including debt secured by the acquired assets;
  • the seller's transaction expenses and broker fees;
  • liabilities under non-assigned contracts, and pre-closing liabilities under assigned contracts other than cure costs paid under the APA;
  • pre-closing operating and environmental liabilities;
  • 50% of transfer taxes, and taxes for periods ending on or before closing; and
  • all supplier contracts and supplier liabilities beyond the specified supplier payments.

Supplier Payments

• The purchaser pays each qualifying supplier directly. It pays the July supplier liability amount, meaning amounts the seller owed for the acquired assets as of July 31, 2026, per the supplier payoff letter, at closing. It pays the post-July supplier liability amount, meaning invoices from Aug. 1, 2026, through closing, after the true-up. Each payoff letter provides for automatic release of the supplier's encumbrances on the acquired assets upon full payment and authorizes filing of the related terminations.
• The seller must review proposed payoff letters within three business days or is deemed to consent. The window shortens to one business day for later material deviations from the agreed form for a supplier already reviewed.
• Under the proposed order, the following protections apply:
  • The supplier payments and cure costs are not net sale proceeds, estate property, or DIP collateral, and are not avoidable or recoverable under chapter 5 or otherwise from the purchaser parties, any qualifying supplier, or any counterparty.
  • After closing, no supplier has any claim against the purchaser parties or the acquired assets on account of the debtors' liabilities.
  • Each qualifying supplier consents to the free-and-clear sale and the release of its encumbrances upon payment under its payoff letter.
  • Each supplier may enter a new supplier contract with the purchaser for the brands in the territory effective at closing. Provisions in the debtors' supplier contracts that restrict that appointment or require the seller's notice or consent are unenforceable by the debtors, their estates, or any bound party.
  • New supplier contracts are not an assumption or assignment of any debtor supplier contract.

Credit Bid

• No credit bid is proposed. Section 6.3 of the DIP credit agreement bars any disposition of the debtors' assets without the required lenders' prior written consent. Section 6.3 of the DIP credit agreement, section 6.3 of the prepetition first lien credit agreement, and paragraph 26 of the final DIP order each give the DIP agent and the prepetition agent, at the direction of their required lenders, the unqualified right to credit bid the full amount of their loans.
• Under the proposed order, the required DIP lenders consent to the sale. Together with the required prepetition first lien lenders, they waive those provisions, including the agents' right to credit bid for the acquired assets. Wells Fargo Bank, as prepetition agent and DIP agent, consents to the free-and-clear sale and to the release and termination of its liens on the acquired assets. The court would find the consent and waiver a material component of the transaction and a material inducement to the purchaser, which would not have signed the APA without it. The motion states the debtors obtained Wells Fargo's consent before filing.

Free and Clear; Successor Liability

• The acquired assets would transfer free and clear of all encumbrances other than permitted encumbrances and assumed liabilities under sections 105(a) and 363(f). Valid and perfected encumbrances would attach to the net proceeds attributable to the affected property, with the same priority, validity, force, and effect, subject to the estates' rights, claims, and defenses. The proposed order would find section 363(f) satisfied as to every lienholder. Holders that do not object, or that withdraw their objections, are deemed to consent under section 363(f)(2).
• Permitted encumbrances are limited to the interests of lessors and sublessors under equipment leases.
• The free-and-clear relief expressly covers the following, whether assessed before, at, or after closing:
  • WARN Act, ERISA, and COBRA liabilities;
  • multiemployer plan withdrawal liability (complete, partial, or mass, including any triggered by the sale or the debtors' cessation of covered operations), together with reallocation liability, delinquent contributions, interest, liquidated damages, and fees;
  • reclamation rights; and
  • bulk-sales compliance, which the parties waive.
• The purchaser and a broadly defined group of purchaser parties are not successors, alter egos, successor or joint employers, or continuations of the debtors, and the sale is not a merger or de facto merger. The purchaser parties are not employers under ERISA sections 4001(b)(1) or 4212(a) with respect to any multiemployer plan, and are not in a controlled group with any debtor. No liability is imposed under ERISA section 4212(c), and the sale is not a transaction described in ERISA section 4204. No collective bargaining agreement is an assigned contract or assumed liability, and hiring the debtors' employees does not adopt any such agreement or any contribution obligation.
• All persons, including multiemployer plans and their fiduciaries, are enjoined from pursuing encumbrances against the purchaser parties or the acquired assets and from asserting fraudulent transfer claims with respect to the acquired assets. After closing the debtors have no further liability for the acquired assets, and post-closing claims relating to them asserted against the debtors are deemed disallowed.
• The order and the APA would bind the following, and would survive confirmation of any plan, dismissal, or conversion, with no later plan or order permitted to conflict with them:
  • the debtors, their estates, creditors, and equityholders;
  • encumbrance holders, counterparties to assigned contracts and assigned purchase orders, the suppliers, and each multiemployer plan;
  • any later-appointed trustee, examiner, or receiver; and
  • the wind-down debtors, plan administrator, litigation trust, and litigation trustee under the debtors' plan.
  The APA is specifically enforceable without bond and not subject to rejection or avoidance.

Assumption and Assignment

• As of the motion, no contracts have been designated as assigned contracts, and the Exhibit 2 cure schedule lists none. Before the closing date, the purchaser may, in its sole discretion, add any available contract to the contract and cure schedule or remove any contract from it. A removed contract becomes an excluded asset with no purchaser liability. These designations do not affect the purchase price, though they change cure costs and therefore the final cash payment. No collective bargaining agreement may be an assigned contract. To the extent an assigned purchase order is executory, it is treated as an assigned contract under the proposed order.
• Each assigned contract is deemed assumed and assigned on the later of the closing date and resolution of any assignment or cure objection, subject to payment of cure. The seller serves a cure notice on each counterparty, the U.S. Trustee, and the committee. Objections are due 14 days after service, or a later date agreed by the debtors and the purchaser. A counterparty that does not timely object is barred from objecting, and the scheduled cure amount is the only amount needed to cure defaults. If a finally determined cure exceeds the scheduled amount, the purchaser may accept it or remove the contract.
• Disputed contracts are not assumed or assigned at closing. Cure on a disputed contract is paid only as agreed by the purchaser and the counterparty, or after the court fixes the amount. A dispute over one contract delays neither the others nor the closing. Unresolved objections are continued to a later noticed hearing, and the debtors reserve the right to reject any disputed contract after closing.
• Under the proposed order, the following apply to the assigned contracts:
  • anti-assignment, termination, recapture, penalty, renewal-conditioning, and change-of-control provisions are void;
  • counterparties are deemed to consent, and the purchaser is deemed to have shown adequate assurance under sections 365(b)(1)(C) and 365(f)(2)(B);
  • the debtors are relieved of further liability under section 365(k);
  • no rent accelerations, assignment fees, or similar charges may be imposed, and counterparties may not charge for documents needed to effect the transfers; and
  • counterparties are barred from asserting pre-closing indemnity or warranty defaults, or any counterclaim, defense, or setoff, against the purchaser parties.

Cure Costs

• The purchaser pays cure costs directly to counterparties at closing, and the amount is deducted from the cash payment to the seller. The motion states that the purchaser will cure all defaults under the assigned contracts. The proposed order separately states that nothing in it obligates the purchaser to pay any excluded liability, including any cure costs. No cure is paid on a contract with an unresolved counterparty objection.
• A counterparty that was noticed of a cure amount, or of the absence of one, and did not object is deemed to consent and to waive any right to collect other cure amounts arising on or before closing.

Claim Release

• The seller, each debtor and its estate, and their related parties release the purchaser and its related parties from all claims arising from the beginning of time through the closing date, including unknown claims; the release expressly waives California Civil Code section 1542 and similar laws. The purchaser and its related parties give a parallel release to the seller, each debtor and its estate, and their related parties. Any releasing party that asserts a released claim must indemnify the released parties for resulting losses.
• Each release excepts claims for fraud, claims under the express terms of the APA, and claims related to the two Brand Purchase Agreements of June 30, 2026, between the purchaser and Young's Market Company of Oregon LLC and Young's Market Company of Washington LLC, respectively (the Oregon and Washington sales).
• The debtors state they do not believe they hold material viable claims against the purchaser, that pursuing any such claims would not be a prudent use of estate resources, and that the purchaser required the release as a condition of the deal. Under the proposed order, the court would approve the release under sections 105(a) and 363(b) and Bankruptcy Rule 9019, effective at closing. It would bind the debtors' estates, the wind-down debtors, the plan administrator, the litigation trust and trustee, and any trustee.

Use of Proceeds

• On the closing date, the debtors must transfer the net proceeds for permanent application against the DIP secured obligations, in accordance with the DIP orders and loan documents and subject to the carve-out and paragraph 16 of the final DIP order [Docket No. 275]. The debtors may reborrow repaid amounts consistent with the DIP loan documents and budget. The motion states the proceeds will pay down the new money revolving DIP loans and fund administration of the cases while the debtors close sales of their remaining markets and pursue an orderly wind-down.
• Net proceeds exclude the supplier payments, the cure costs, the deposit, and the adjustment escrow, the last two until released to the seller. Any such amount released to the debtors is applied under the DIP orders. The debtors must provide the committee with the final funds flow, including the gross cash payment and inventory price, the amounts payable to each debtor, and the proposed application of proceeds.

Closing Conditions

• Closing occurs on the third business day after the conditions are satisfied or waived, by telephone conference and electronic exchange of documents. It may not occur before Oct. 26, 2026, without the purchaser's written consent, and is deemed effective as of 12:01 a.m. Pacific time on the closing date.
• Conditions to the purchaser's obligation include:
  • the seller's Article III representations true and correct, disregarding materiality qualifiers, except where the failure has not had a material adverse effect;
  • the fundamental representations (organization and good standing, authority and enforceability, no conflict with organizational documents, title to the acquired assets, and brokers) true and correct to the heightened standards specified, plus the seller's material performance of its covenants, confirmed by an officer's certificate;
  • no law making the transaction illegal, and no order or pending action restraining the closing;
  • receipt of the scheduled federal, state, and local alcoholic beverage licenses and approvals for Alaska;
  • a supplier threshold: executed new supplier contracts and supplier payoff letters from scheduled suppliers accounting in the aggregate for at least 85% of the gross profit attributable to all suppliers for the twelve months ended June 30, 2026;
  • executed lease agreements for 6307 Arctic Spur Road, Anchorage; 8420 Airport Boulevard, Juneau; and 945 Elizabeth Street, Fairbanks;
  • entry of the sale order, in form and substance acceptable to the purchaser, as a final order; and
  • delivery of the final assigned purchase order schedule.
• Conditions to the seller's obligation are the accuracy of the purchaser's representations in all material respects, its material performance of covenants, no order or pending action restraining the closing, and an officer's certificate. Any condition unsatisfied at closing is deemed waived by the benefited party.
• Material adverse effect is measured against the business in Alaska, the acquired assets, and the assumed liabilities taken as a whole. It excludes:
  • industry economic conditions;
  • political and social conditions, including tariffs and hostilities;
  • natural disasters and health events;
  • financial market conditions;
  • changes in GAAP or law;
  • actions required by the APA, and the announcement or pendency of the transaction and the purchaser's identity or plans;
  • any failure to meet projections or to win or keep customers; and
  • actions or breaches by the purchaser.
  The first four exclusions may be counted to the extent they affect the seller disproportionately relative to other participants in its industries and geographies.

Termination

• Outside date: Nov. 30, 2026. Neither side may terminate on that ground if its own breach caused the failure to close.
• Either side may also terminate on mutual written consent, or upon a final, non-appealable order prohibiting the closing or declaring the transaction unlawful, unless its own breach caused the order.
• Buyer and seller breach rights run in parallel. Each may terminate for the other's breach that would cause the corresponding bring-down condition to fail, including the purchaser's failure to close. Each is subject to a cure period running to the earlier of two business days before the outside date and 30 days after notice. Neither may terminate while itself in material breach.
• The purchaser may also terminate if the sale order has not been entered and become a final order by 11:59 p.m. Eastern time on Nov. 30, 2026, unless the parties extend that deadline in writing.
• The seller may terminate if its governing body determines that proceeding, or failing to terminate, would be inconsistent with its fiduciary duties. In that case, joint instructions to return the deposit to the purchaser are due within one business day.
• Termination voids the agreement and ends all obligations, subject to survival of certain provisions. Specific performance remains available to enforce surviving terms, but the purchaser may not use it in respect of a termination by the seller for the purchaser's breach.

Restrictive Covenants

• Non-competition: for five years from the closing date, the seller and the RNDC owner, and their controlled affiliates, may not own an interest in, operate, join, control, finance, or participate in any person providing, soliciting orders for, selling, warehousing, distributing, or marketing beverage products in Alaska that compete with the purchaser's business there.
• Non-recruitment: for the same period, the seller and the RNDC owner may not solicit or hire continuing employees. General advertising not targeted at them, and hiring individuals whose employment with the purchaser ended at least nine months earlier, are carved out.
• Confidentiality runs for the same period. It covers customer lists and requirements, license and customer contract terms, pricing, marketing and sales techniques, and planning and financial information of the Alaska business. Carve-outs apply for public, independently developed, or legally compelled information, routine regulatory examinations, and wind-down activities.
• A breach entitles the damaged party to injunctive relief without proving actual damage and, if it prevails, to its costs and reasonable attorneys' fees. The restricted period tolls for the duration of any breach.

Employee Matters

• The purchaser may meet with business employees and, in its sole discretion, extend employment offers effective at and contingent on closing. It has no obligation to hire any particular number. The motion states the sale is expected to provide employment opportunities for nearly all of the debtors' Alaska employees.
• The seller may not interfere with hiring. Immediately before closing, the seller must terminate all continuing employees and waive any restrictive covenants binding employees or consultants the purchaser hires.
• The purchaser has no liability under the WARN Act or any WARN notice arising in connection with the business through closing. It is responsible for the seller's WARN liability to the extent the purchaser causes an employment loss for any continuing employee within 90 days after closing.
• COBRA: the seller's selling group remains responsible for M&A qualified beneficiaries while it maintains a group health plan. The purchaser is responsible for continuing employees whose qualifying event occurs after the closing date. The purchaser assumes no affiliated plan liabilities under Title IV of ERISA or with respect to any multiemployer plan.

Survival and Reliance

• The APA contains no indemnification. The representations and pre-closing covenants terminate at closing, and no claim on them may be brought afterward except for fraud. Post-closing covenants survive on their own terms, or for 12 months where none is stated.
• The purchaser acknowledges it relies solely on the Article III representations and the seller's closing certificate. It does not rely on the "Project Arrow MA" data room, the projections, or any other information furnished. Fraud is narrowly defined as intentional common-law fraud under Delaware law in the express representations or the certificate.
• The purchaser waives set-off against the purchase price and other APA payments based on matters outside the transaction documents, including the Oregon and Washington Brand Purchase Agreements.

Post-Closing Arrangements

• Licenses: as of the closing date, the purchaser is authorized to operate under the license holder's and the seller's licenses, permits, and governmental authorizations to the maximum extent permitted by law. Where it cannot, those licenses remain in effect while the purchaser, with their assistance, secures new issuances. The license holder and the seller must take all actions needed to facilitate the purchaser's alcoholic beverage licensing in Alaska, including relinquishing their licenses on the purchaser's written request, without further court order. Subject to section 525(a), no governmental unit may revoke or suspend any right, license, trademark, or permission relating to the acquired assets on account of the cases or the sale.
• Washington inventory: after closing, the purchaser may access the debtors' Washington facilities to inspect, stage, and remove the Washington inventory.
• Out-of-code returns: if product is returned to the purchaser within 30 days after closing and found to have been out of code at or before closing, the seller reimburses the purchaser within 10 business days after notice. Reimbursement covers credits issued on pre-closing sales and the laid-in cost of returned product included in the inventory price.
• Books and records: the purchaser must give the seller reasonable access to acquired records for its wind-down, tax filings, and responses to governmental inquiries. It may not dispose of those records for two years after closing without notice and an opportunity for the seller to take possession. The seller must give the purchaser comparable access to its retained records relating to the Alaska business or the Washington inventory. It may not dispose of them for six years, or before dissolution if sooner, without the same notice and opportunity. Each side must reasonably cooperate in litigation over pre-closing matters involving the acquired assets or assumed liabilities.
• Misdirected funds are forwarded both ways. Under the proposed order, amounts the debtors receive that are owed to the purchaser are held in trust for it and are not estate property. Other amounts the seller owes the purchaser under the sale documents, apart from amounts payable only from escrow, are allowed administrative expenses under sections 503(b) and 507(a)(2).
• Non-assignable assets: where a required third-party consent has not been obtained, the parties pursue the consent and cooperate on a pass-through arrangement for up to six months after closing.
• Assignment of the APA requires the other side's consent. The purchaser may assign to a subsidiary or affiliate, or to its lenders as security, without release from its own obligations.

Preserved Rights

• Application of the net proceeds is subject in all respects to the carve-out and paragraph 16 of the final DIP order. The proposed order is not an admission as to the amount, basis, priority, or validity of any claim or lien. The rights of all parties in interest to contest the extent, validity, or perfection of, or to seek avoidance of, any lien are reserved, without limiting the purchaser parties' rights under the sale documents.
• The sale order controls over the sale documents and any prior order or pleading related to the motion. Unresolved objections are overruled with prejudice, except that unresolved assignment objections are deferred to a later date.

Amendments

• The parties may modify, amend, supplement, or restate the APA and related documents in a signed writing without further court order. Any modification with a material adverse effect on the estates requires notice to the court and a further court order while the cases remain pending.

Governing Law and Forum

• Delaware law governs except where mandatory Bankruptcy Code provisions apply. Disputes go to the bankruptcy court and any federal court hearing an appeal from it. After the cases close, or if the bankruptcy court is unwilling or unable to hear the matter, disputes go to the Delaware Court of Chancery or another Delaware court. The parties waive jury trial.
• The court would retain exclusive jurisdiction to interpret, implement, and enforce the sale order and the APA. Two exceptions apply: actions by the parties under the APA go to the chosen courts, and the accounting firm has exclusive jurisdiction over purchase price adjustment disputes.

Key Dates

• Letter of Intent (Pacific Northwest): April 16, 2026
• Washington and Oregon Sale Closed (out of court): June 30, 2026
• Petition Date: July 26, 2026
• APA Effective Date: Sept. 19, 2026
• Sale Motion Filed: Oct. 1, 2026 [Docket No. 524]
• Objection Deadline: 21 days after filing of the motion
• Assignment Objection Deadline: 14 days after service of the cure notice, or a later date agreed by the debtors and the purchaser
• Estimated Inventory Price and Estimated Post-July Supplier Liability Amount: at least five business days before closing
• Assigned Purchase Order Schedule: three to five business days before closing
• Earliest Closing: Oct. 26, 2026, absent the purchaser's written consent
• Debtors' Stated Liquidity Deadline for Alaska Operations: Oct. 30, 2026
• Closing: third business day after satisfaction or waiver of the closing conditions
• Out-of-Code Return Window: 30 days after closing
• Inventory Count Period: 60 days after closing
• Outside Date and Sale Order Final Order Deadline: Nov. 30, 2026

Non-Debtor JV RNDC-NWS Sale Summary

Transaction Overview

• The debtors estimate they will receive approximately $20 million of net proceeds at or around closing, and possibly approximately $10 million more, from a sale by their 50%-owned non-debtor Michigan joint venture, RNDC-NWS, LLC (the JV). The JV is selling substantially all of its business under an APA dated Oct. 7, 2026.
• Three Michigan distributors are dividing the purchase. Great Lakes Wine and Spirits, LLC (GLWAS), Imperial Beverage Company and Vintage Wine Company are buying the JV's Michigan wine distribution business assets. GLWAS alone is also buying 100% of the equity of NWS Michigan, LLC (the ADA entity), which runs the JV's spirits brokerage business as an authorized distribution agent (ADA), and 50% of a newly formed entity that will hold the JV's owned real property in Livonia, Michigan.
• The cash price is built from four components:
  • $31 million for the wine distribution rights
  • inventory at laid-in cost, adjusted by inventory factors
  • $30 million plus closing cash for the ADA entity
  • $23 million for the Livonia real estate interest
  Specified closing debt, current liabilities and transaction expenses are deducted, and the wine purchasers also take on specified wine business liabilities.
• None of the assets are estate property and no seller is a debtor, so the debtors say the sale itself does not need court approval. Instead, they ask for authority for Debtor Republic National Distributing Company Michigan Holdings, LLC (RNDC Michigan Holdings), which owns 50% of the JV, to:
  • consent to the sale as member and/or manager of the selling entities
  • sign the APA solely for sections 1.6(c), 5.4, 5.16, 7.1(d) and article IX
  • comply with restrictive covenants
  • provide transition services
  • assume and assign, or reject, contracts needed for those services under a set of procedures
• The emergency motion [Docket No. 618] was filed Oct. 16, 2026, and is set for hearing on Oct. 22, 2026, at 9 a.m. (prevailing Central Time). The debtors say the sale must close by the week ending Oct. 30, 2026, to maintain minimum liquidity, and their DIP facility matures Oct. 29, 2026.

Purchase Price

• The gross cash price is the sum of:
  • $31 million for the distribution rights
  • The inventory price. For all inventory other than dunnage, this is quantity multiplied by laid-in cost per unit multiplied by the applicable inventory factor, calculated separately by brand, SKU and factor tranche for wine inventory. Reimbursable dunnage deposits held by the wine suppliers are added.
  • $30 million for the ADA entity, which includes the value of its Escanaba, Michigan, owned real property, plus the ADA entity's closing cash
  • $23 million for 50% of the Livonia real estate entity
• The cash payment is that sum less three deductions:
  • the closing indebtedness of the ADA entity and the real estate entity
  • their unpaid closing current liabilities, plus the other sellers' current liabilities tied to transferred or ADA business employees
  • their unpaid transaction expenses
  The wine purchasers also assume the wine business assumed liabilities.
• Inventory factor: 1.0 for most inventory, 0.85 for aging inventory and zero for unsalable inventory. For inventory on a designated schedule, the factor is 1.0 up to nine times the SKU's monthly run rate and 0.85 on any quantity above that. The monthly run rate is unit sales over the trailing 12 complete months divided by 12.
• Aging inventory: beer, low-proof, non-alcoholic and boxed-wine product, and anything with an expiration or "best before" date within 60 days after closing. It also includes non-wine product received more than 365 days before closing. Scheduled items are excepted.
• Unsalable inventory: inventory GLWAS elects not to acquire because it:
  • is out of compliance with supplier code-date or vintage standards
  • is not lawfully packaged or labeled, or has materially defective labels, packaging or tops that make it unsaleable
  • is damaged, spoiled, expired, discontinued, recalled or obsolete
  • was returned by customers
• Laid-in cost: actual invoiced supplier cost plus freight, excise taxes and delivery costs, less discounts, rebates and special purchase allowances. For dunnage, laid-in cost is the reimbursable deposits held by suppliers.
• Allocation among the wine purchasers: GLWAS, as wine purchaser representative, must deliver a designation notice at least five business days before closing that splits all wine assets, liabilities and price among the three buyers.
  • GLWAS has first right to wine assets other than brands and their inventory.
  • Each buyer takes the inventory of the brands it acquires.
  • Imperial and Vintage pay only their allocated share of the wine price, and GLWAS pays the rest of the cash payment.
  • If the notice is not delivered on time, GLWAS acquires all the wine assets, assumes all wine liabilities and pays the entire wine price.
• Funds flow: at closing, the estimated cash payment funds the escrow and pays off the closing indebtedness of the ADA entity and the real estate entity, plus any debt secured by the wine assets and owned real property. It also pays transaction expenses, and the remainder, net of the escrow amount, goes to the sellers.
• If a supplier approval is not obtained within a reasonable period after closing, the parties will cooperate on an alternative sale of the remaining distribution rights and related inventory. The proceeds go to the applicable wine purchasers as a purchase price adjustment.
• Each wine purchaser represents that it will have enough cash at closing to pay its share of the purchase price and cash payment, and that it is and will remain solvent. The APA contains no financing condition.

Expected Proceeds to the Debtors

• Approximately $20 million of net proceeds at or around closing on account of RNDC Michigan Holdings' 50% interest in the JV. This figure is after the JV's funded debt, transaction-related expenses and amounts reserved to wind down the Michigan wine business.
• A possible additional approximately $10 million. This depends on the company's ability to maximize the value of Republic National Distributing Company of Indiana, LLC, the Indiana joint venture, and to address that entity's secured funded debt, on which the JV, the ADA entity, National Wine & Spirits, LLC and L&L Wine and Liquor, LLC are obligors.
• At closing, simultaneously with and conditioned on the ADA entity sale and payment of the cash payment, the JV makes two distributions under the JV operating agreement: cash equal to the $23 million Livonia price to RNDC Michigan Holdings, and the remaining 50% of the real estate entity to NWS.
• NWS reserved the right to review and approve the form of approval order. Its advance consent to the deal does not cover the sellers' proposed allocation or use of sale proceeds.
• The debtors say the proceeds are needed to pay down the DIP before maturity, including the DIP new money loans, and to fund the continued administration of the cases.

Parties Involved

• Sellers, all Michigan limited liability companies:
  • RNDC-NWS, LLC, which also acts as seller representative
  • NWS Michigan, LLC, the ADA entity, a wholly owned subsidiary of the JV. It is a seller only as to its wine business assets and stops being a seller at closing.
  • National Wine & Spirits, LLC (NW&S), a wholly owned subsidiary of the ADA entity
  • L&L Wine and Liquor, LLC, an indirect wholly owned subsidiary of the JV, through which the wine business is primarily conducted
  None of the sellers is a debtor.
• Purchasers: GLWAS is the buyer of the ADA entity and the Livonia interest, a wine purchaser and the wine purchaser representative. Imperial Beverage Company and Vintage Wine Company are wine purchasers.
  • The motion describes the purchasers as leading Michigan alcoholic beverage distributors with long histories of distributing wine, beer and spirits in the state.
  • The proposed order would find that no purchaser is an insider or affiliate of the debtors or the sellers.
  • GLWAS signed a confidentiality agreement with Republic National Distributing Company, LLC on April 13, 2026.
• JV members, who are parties for limited purposes only: RNDC Michigan Holdings and non-debtor National Wine & Spirits, Inc. (NWS), an Indiana corporation, each own 50% of the JV. Each is bound only by the Livonia distribution, restrictive covenant, member support and miscellaneous provisions. RNDC Michigan Holdings alone also holds a fiduciary-out termination right.

Escrow and Post-Closing True-Up

• The APA does not provide for a deposit.
• Escrow: $10 million plus 20% of the sellers' estimated inventory price, held by SRS Acquiom, to support the purchase price true-up and seller indemnification.
• Release:
  • Within three business days after the final cash payment is determined, if the true-up difference is smaller than the inventory escrow portion, the sellers receive the excess of that portion over the difference.
  • The remaining escrow is released on the business day after the 15-month anniversary of closing. Good-faith estimates of unresolved indemnity claims and any instructed but undistributed amounts are held back.
  • Held-back amounts are paid within two business days after the related claim is resolved.
• The wine purchasers' true-up recovery is not limited to the inventory escrow portion. If the amount owed exceeds that portion, the wine purchasers may choose to collect the excess directly from the sellers or from the remaining escrow.
• True-up timeline:
  • The sellers deliver an estimated closing statement at least five calendar days before closing.
  • The parties jointly count inventory starting after close of business on the closing date, excluding ADA inventory, and try to agree the inventory price within five business days.
  • GLWAS delivers an adjustment statement within 30 days after closing and may not amend it.
  • The sellers have 30 days to dispute it, and the parties then have 30 days to resolve disputes.
• Unresolved items go to Kroll, LLC, or a replacement independent firm. Its ruling is due within 30 days, must fall within the range of the parties' positions, and is final and non-appealable. Its fees are split according to the share of the contested amount each side lost.
• Settlement: within three business days after the final cash payment is fixed, any shortfall owed to the wine purchasers is paid from the escrow, and the sellers pay anything beyond the escrow. Any excess owed to the sellers is paid by the wine purchasers. Differences between dunnage deposits collected from retail customers after closing and supplier-held dunnage deposits are settled through credits.
• Receivables stay with the sellers. The wine purchasers help with collections for 35 days after closing and remit proceeds collected through day 35 within five business days afterward.

Assets Being Sold

• Wine business assets:
  • Michigan exclusive distribution rights and related contracts for scheduled brands from wine suppliers that grant approval
  • Inventory of approved brands, including wine, aging and unsalable inventory, and functional dunnage, pallets, slip boards and kegs, together with supplier-held deposits
  • Warehouse and delivery equipment located in Michigan, including forklifts, vehicles, trailers, automated warehouse systems, office and computer equipment, and furniture. Leased equipment transfers only if its lease is an assigned contract.
  • Packaging, supplies, point-of-sale materials, and copies of wine business records, customer lists and route records
  • Scheduled contracts, to the extent they relate to Michigan
  • Goodwill and going-concern value
• Supplier approval can take the form of a new exclusive appointment, a new distribution agreement or a consent to assignment. A wine purchaser may replace an existing distribution agreement with a new one, in which case the old agreement drops out of the assigned contracts.
• The wine purchasers may not, without the sellers' consent, enter into any supplier arrangement that:
  • makes a seller a party
  • imposes or increases a seller's liability
  • settles or waives seller claims
  • shifts assumed liabilities back to the sellers
• For an ADA supplier, approval is a written acknowledgment of the ADA entity sale and a waiver of the supplier's rights under its contract with the ADA entity with respect to that sale.
• ADA entity: 100% of NWS Michigan, LLC, which warehouses, transports, delivers, promotes, markets and brokers spirits as an authorized distribution agent in Michigan.
  • Before or at closing, it distributes its NW&S equity, and with it L&L, up to the JV.
  • It receives the JV's Escanaba owned real property and the leased real property.
  • Liabilities the ADA entity retains after closing are not excluded liabilities.
• Livonia real estate: the JV will form 13000 Investments LLC and contribute the Livonia owned real property to it, including buildings, improvements and fixtures. GLWAS buys 50%, the other 50% goes to NWS, and the entity will have no indebtedness at closing. Until closing, the real estate entity may not:
  • conduct any business beyond holding the Livonia property
  • issue equity to anyone other than the JV
  • incur debt
  • hold other assets
• Excluded assets:
  • Cash and bank accounts
  • Deposits other than dunnage deposits
  • Prepaids, credits, refunds and rebates
  • All accounts and notes receivable
  • Inventory outside the defined inventory
  • Seller benefit plans
  • Tax refunds and attributes
  • Contracts other than assigned contracts
  • All intellectual property, including the "Republic National Distributing Company" and "RNDC" names, logos, websites and IT assets
  • Insurance policies and recoveries
  • Equity interests other than the ADA and Livonia interests
  • Pre-closing claims against suppliers, vendors and counterparties to non-assigned contracts
  • Licenses and permits other than transferred permits
  • Assets used primarily in other businesses, and tangible assets outside Michigan
  • Sale-process records, bids and privileged materials

Assumed and Excluded Liabilities

• Each wine purchaser assumes only the liabilities allocated to it:
  • Liabilities for retail customer dunnage deposits, and other liabilities, as listed on a schedule
  • On-order or in-transit inventory received on or after closing
  • Post-closing obligations under assigned contracts that do not arise from a pre-closing breach or a failed consent
  • Liabilities, including environmental liabilities, from its own ownership or operation after closing that were not caused by the sellers before closing
  • Amounts it is required to pay under the APA
  • Taxes for periods beginning after closing
  If the assumed and excluded liability provisions conflict, the assumed liability provision controls.
• The sellers keep all other liabilities, including:
  • Pre-closing operations, including supplier payables and other accounts payable
  • Pre-closing environmental matters
  • Liabilities tied to excluded assets
  • Pre-closing taxes
  • Employment, termination, workers' compensation and benefit plan liabilities through closing, including under any collective bargaining agreement
  • Their own transaction expenses
• Under the proposed order, the purchasers would have no liability for claims against the debtors as a result of acquiring the assets. It would also find that the purchasers are not successors to the debtors and that the sale is not a de facto merger. The proposed order contains no section 363(f) free-and-clear relief. The parties waive bulk-sales compliance.

Closing Mechanics

• Closing takes place on the third business day after the conditions are satisfied or waived, or on another agreed date, by telephone conference and electronic exchange of documents. It is deemed effective as of 11:59 p.m. Eastern Time on the closing date, and the steps occur in the following order:
  • The ADA entity distributes its NW&S equity to the JV, and the JV contributes the Escanaba owned real property and assigns the leases for the leased real property to the ADA entity
  • The JV contributes the Livonia owned real property to the real estate entity
  • The sellers convey the wine business assets to the wine purchasers, which assume their allocated liabilities
  • The sellers surrender and terminate all wholesaler, importer, warehouse and other licenses held under the Michigan Liquor Control Code
  • The JV sells the ADA entity equity to GLWAS
  • The JV sells 50% of the real estate entity to GLWAS
  • The wine purchasers pay the estimated cash payment
  • The JV distributes the remaining real estate entity equity to NWS and cash equal to the Livonia price to RNDC Michigan Holdings
• Some assets other than the distribution rights and inventory may need a third-party consent that has not been obtained by closing. For those, the parties keep pursuing the consent and cooperate on arrangements that pass the economics through to the buyer, until the earliest of the consent, six months after closing, or the seller's dissolution.
• If a supplier withholds approval, closing still proceeds as long as the supplier approval thresholds are met. The sellers use best efforts after closing to help obtain the remaining approvals. The wine purchasers must give the sellers access to the facilities to retrieve inventory of non-approving suppliers for transfer to their new distributors.

Debtors' Limited Obligations

• Restrictive covenants: for three years after closing, each seller other than the ADA entity, RNDC Michigan Holdings and NWS, together with their controlled affiliates, agree to:
  • Not compete in Michigan in beverage products that compete with the business
  • Not hire or solicit transferred or ADA business employees. General advertising and people whose employment ended at least six months earlier are excepted.
  • Not disparage the business or the buyers. This obligation is mutual with the wine purchasers.
  • Keep confidential information about the business confidential, with exceptions for routine regulatory inquiries and for winding up and dissolving the sellers
• Covenant remedies: injunctive relief without proof of actual damage, recovery of fees by a successful enforcing party, and tolling of the restricted period while a breach continues. A court may narrow an overbroad covenant. The debtors say the covenants were a condition of the purchasers' price and will not materially burden the estates, because the debtors are selling all remaining assets and winding down.
• Member support: RNDC Michigan Holdings, subject to the approval order, and NWS agree to vote their JV equity and deliver consents in favor of the deal, not hinder the closing conditions or closing, and cooperate on required consents.
  • NWS's commitment lasts until the earliest of closing, termination, or an amendment that hurts NWS disproportionately relative to RNDC Michigan Holdings based on their ownership.
  • RNDC Michigan Holdings' consent is required as member and/or manager of the selling entities.
• Transition services: the JV relies on the debtors for IT infrastructure, support and back-office services.
  • The purchasers require a transition services agreement if closing occurs on or before Nov. 13, 2026. If closing happens later, the condition is deemed satisfied.
  • Its terms are still being negotiated, and the form exhibit to the proposed order is marked "to come."
  • The debtors and purchasers agree that any services will end no later than Nov. 30, 2026.
  • The debtors say the expected net proceeds will far exceed the cost of providing the services.
  • Under the proposed order, amendments to the agreement would not need further notice to, or approval from, the court.

Designatable Contracts

• The designation period runs from closing until the earlier of 5 p.m. (prevailing Central Time) on the 90th day after closing or the end of the applicable transition services. During it, each purchaser may designate any executory contract of RNDC needed to provide those services for assumption and assignment, subject to the debtors' reasonable consent.
• Procedure:
  • The debtors file and serve a cure notice within three business days after a designation.
  • Counterparties have 14 days to object, or a later date the debtors agree to.
  • Unopposed contracts are assigned as of the effective date in the notice, and counterparties who do not object are deemed to consent and are bound by the scheduled cure amount.
  • The purchaser pays all cure costs. Disputed cure amounts are paid only as agreed or as fixed by the court.
• A purchaser may withdraw a contract before its assignment date, including when the cure amount finally set by the court exceeds the scheduled amount. The debtors may end the designation period if a purchaser is not making its payments under the transition services agreement.
• The debtors may reject, at their discretion, contracts that are not designated or assumed by the end of the period, or that a purchaser excludes. Rejection is effective at the end of the period. For an excluded contract that still supports services a purchaser is receiving, the debtors must give that purchaser five business days' notice.

Closing Conditions

• The wine purchasers' obligation to close is conditioned on, among other things:
  • Entry of the approval order in a form reasonably acceptable to each wine purchaser, and the order not being stayed, vacated or modified without their consent
  • Supplier approvals from wine suppliers representing at least 90% of the wine business's dollar sales volume for the year ended Dec. 31, 2025, and from ADA suppliers representing at least 70% of ADA business revenue for the 12 months ended July 31, 2026
  • A signed transition services agreement, but only if closing would otherwise occur on or before Nov. 13, 2026
  • No material adverse effect since signing; fundamental representations true in all material respects; other representations true except where failures have not had a material adverse effect; and material compliance with covenants
  • No law making the deal illegal, and no order or pending action restraining the closing
  • Payoff letters and lien releases freeing the wine assets, the ADA interest, the Livonia interest and the owned real property
  • Completion of the NW&S distribution and the Escanaba and Livonia contributions, with special warranty deeds
  • A side letter on certain obligations of the ADA entity
  • Written agreement on the form and substance of all schedules, which were not final when the APA was signed
• The sellers' obligation to close requires an approval order covering four items:
  • RNDC Michigan Holdings' exercise of its JV governance and consent rights
  • its participation in the deal
  • its signing and performance of the transaction documents
  • the release of any liens, including DIP order liens, on its JV equity or its rights to JV proceeds
  The sellers' conditions also include the wine purchasers' representations and covenants holding up, the escrow agreement, assumption agreements and the designation notice.
• If the approval order contains or requires a material change to the APA, the parties may agree to amend the APA. Otherwise, RNDC Michigan Holdings (under the sellers' condition) or GLWAS as wine purchaser representative (under the purchasers' condition) may terminate it at its sole discretion.
• After the schedules are agreed, the sellers may update them for later-arising matters, but updates do not count for the bring-down condition or indemnification.
• The definition of material adverse effect excludes the Chapter 11 cases, the DIP financing, and any objection or challenge filed in the cases against the APA, the transactions or the approval order.

Termination and Remedies

• Outside date: Dec. 31, 2026. It is extended automatically while a specific performance action is pending, plus 10 business days, or as the court hearing that action sets. A party whose failure to perform caused the missed date cannot terminate on that basis.
• Either side may terminate by mutual consent or upon a final, non-appealable order prohibiting the closing.
• The wine purchasers may terminate for a seller breach that would cause the representations-and-covenants condition to fail, or upon a material adverse effect. The breach must remain uncured by the earlier of two business days before the outside date or 30 days after notice.
• The sellers may terminate for a wine purchaser breach on the same cure terms, except that a purchaser's failure to close cannot be cured. A party in material breach cannot terminate for the other side's breach.
• Fiduciary out: RNDC Michigan Holdings may terminate before closing if its governing body decides in good faith, after consulting its financial advisors and outside bankruptcy counsel, that not terminating would be inconsistent with its fiduciary duties.
• Termination voids the APA without liability, except for willful breach before termination. All parties may obtain specific performance without proving damages or posting a bond.
• The APA is governed by Delaware law, except that Michigan law applies to matters under the Michigan Liquor Control Code. Exclusive venue is the Delaware Court of Chancery, and the parties waive jury trial. The proposed order would give the bankruptcy court exclusive jurisdiction over the order and over the sale documents as they relate to the debtors' rights and obligations.

Indemnification

• The sellers other than the ADA entity indemnify jointly and severally for:
  • Breaches of representations
  • Breaches of post-closing covenants
  • Excluded liabilities
  • Pre-closing taxes of the sellers, the ADA entity and the real estate entity, and transfer taxes the sellers owe
  • Scheduled matters
  Each wine purchaser indemnifies, severally rather than jointly, for its own representations and post-closing covenants and for any unlawful actions in selecting or hiring wine business employees.
• Deductible: $500,000, with recovery only above that amount, applying to general representation claims on both sides.
• Per-claim threshold: $25,000. Smaller losses are not recoverable and do not count toward the deductible. Neither the deductible nor the threshold applies to fundamental representations, excluded or assumed liabilities, post-closing covenants or fraud.
• Caps:
  • The sellers' liability for general representation breaches is capped at $50 million. That cap does not apply to fundamental representations, excluded liabilities, covenant breaches or fraud.
  • The sellers' total indemnity liability is capped at 100% of the cash payment they receive.
  • The APA carves excluded liabilities and fraud out of the cap.
• Survival: six years for fundamental representations, which cover organization and authority, title to the wine assets, ownership of the ADA interest, the real estate entity and brokers. Other representations survive until the final escrow release date. Post-closing covenants survive for their stated term or, if none is stated, 15 months. Timely notice is a condition precedent to recovery.
• The wine purchasers must first seek recovery from the escrow before going directly to the sellers. Indemnification is the exclusive post-closing remedy except for fraud and specific performance of post-closing covenants. Punitive damages are excluded unless paid to an unrelated third party. Materiality qualifiers in the sellers' representations are disregarded in determining breach and losses, with limited exceptions.
• Each wine purchaser relies solely on the Article III representations, as qualified by the schedules, and the sellers' closing certificate. It does not rely on the "Project Arrow MA" data room, the projections or any other information furnished. Fraud is narrowly defined as intentional common-law fraud under Delaware law in those representations or the certificate.

Employee Matters

• The JV has hundreds of employees. The wine purchasers may make transfer offers to wine business employees at least 10 business days before closing but are not required to hire anyone, and employees who are not hired remain the sellers' responsibility.
• At GLWAS's request, the sellers will terminate ADA business employees effective no later than immediately before closing and bear the related severance and WARN Act obligations.
• WARN Act: the sellers have delivered the WARN Act notices required for the deal and keep WARN liability through closing. Each wine purchaser is responsible for WARN liability from employment losses it causes for transferred or ADA business employees within 90 days after closing.
• Transferred employees and continuing ADA employees become fully vested in their seller 401(k) balances, and the buyers' plans must accept rollovers. GLWAS and the ADA entity take on the ADA benefit plans, including COBRA obligations for the ADA business.
• For the wine business, the sellers' selling group handles COBRA for qualifying events on or before closing while it maintains a group health plan. The wine purchasers handle COBRA for qualifying events after closing. If the selling group stops maintaining a plan, the sellers indemnify the purchasers for the resulting COBRA costs.

DIP Financing, Liquidity and Liens

• The DIP facility matures Oct. 29, 2026, unless the DIP lenders extend it. Unless the lenders agree otherwise, the DIP credit agreement requires either the plan effective date or the closing of sales of substantially all of the debtors' assets by Oct. 29, 2026. The DIP lenders also require sale orders for substantially all going-concern sales to be entered by the plan confirmation date.
• The debtors say that if the sale does not close by month-end, they will not have the liquidity to keep operating, provide transition services or pay down the DIP. They also say delay risks losing more suppliers, many of which have no long-term agreements with the JV. The DIP lenders support the sale, and its timing is built into the DIP budget.
• The proposed order provides that the debtors hold no liens on the acquired assets. It also provides that the DIP liens do not attach to the acquired assets, including assets moved into the ADA entity or the real estate entity, or to the debtors' equity interests in or rights to proceeds from the sellers.
• The proposed order authorizes the debtors to release any liens, including DIP liens, on the acquired assets or on RNDC Michigan Holdings' equity in, or rights to proceeds from, the sale, and authorizes the debtors and the DIP agent to file UCC terminations. It also states that it does not modify the final DIP order [Docket No. 275], including rights under paragraph 16 of that order, without affecting the purchasers' rights.
• The sellers represent that, once the approval order is entered, no bankruptcy case, DIP order, lien, stay or other bankruptcy-related restriction will impair the transfers or the release or distribution of proceeds. Liens of the sellers' secured lenders are permitted only until closing.

Marketing Process and Background

• Republic National Distributing Company, LLC was, at its height, the nation's second-largest alcoholic beverage distributor. It operated in 40 states and had relationships with more than 2,000 suppliers and 170,000 customers.
• The debtors, headquartered in Atlanta, operated in 21 states with approximately 1,460 employees when they filed Chapter 11 on July 26, 2026. They are pursuing sales of their remaining markets and an orderly wind-down. An official committee of unsecured creditors was appointed Aug. 6, 2026.
• Before the filing, the company and its advisors ran a nationwide sale process and contacted more than 50 financial and strategic parties. Fourteen parties, including GLWAS, expressed interest in the Michigan wine and ADA businesses, 13 signed confidentiality agreements, and five, including GLWAS, submitted indications of interest under various structures.
• After the filing, the company went back to those and other parties. Three of the five reaffirmed their interest. Because two proposals were materially better than the third, the company kept negotiating with those two, including GLWAS, and exchanged multiple draft purchase agreements with each; both materially improved their offers during July and August 2026.
• In late September 2026, the other finalist dropped the wine business and offered to buy only the ADA business, at a price materially below GLWAS's value for it. A deal without the wine business would have forced either a piecemeal sale or a costly wind-down of that business.
• The company, after consulting its advisors and NWS, chose GLWAS's proposal together with Imperial and Vintage, and the parties signed the APA on Oct. 7, 2026.
• The JV previously sold its "control" business to Martignetti in the debtors' control states sale [Docket No. 437]. The APA permits a license agreement relating to the owned real property, to be dated on or about Sept. 30, 2026, between the JV and Martignetti Companies Control State, LLC.
• Under the Fifth Generation settlement described in the RNDC Kentucky summary, Fifth Generation will acknowledge in writing the sale of the company's equity in NWS Michigan, LLC to GLWAS and waive its contract rights with NWS Michigan with respect to that sale.

Key Dates

• GLWAS Confidentiality Agreement: April 13, 2026
• Petition Date: July 26, 2026
• Committee Appointed: Aug. 6, 2026
• APA Signed: Oct. 7, 2026
• Motion Filed: Oct. 16, 2026 [Docket No. 618]
• Hearing: Oct. 22, 2026, at 9 a.m. (prevailing Central Time)
• DIP Maturity and Sale Closing Milestone: Oct. 29, 2026
• Closing Required for Minimum Liquidity: week ending Oct. 30, 2026
• Targeted Closing: as soon as the end of October 2026
• Transfer Offers: at least 10 business days before closing
• Designation Notice: at least five business days before closing
• Estimated Closing Statement: at least five calendar days before closing
• Last Closing Date for Which the TSA Is a Condition: Nov. 13, 2026
• Latest End of TSA Services: Nov. 30, 2026
• Outside Date: Dec. 31, 2026
• Closing: third business day after satisfaction or waiver of the closing conditions
• Adjustment Statement: within 30 days after closing
• Receivables Collection Assistance: 35 days after closing
• End of Contract Designation Period: earlier of 5 p.m. (prevailing Central Time) on the 90th day after closing or the end of the applicable TSA services
• Purchase Price Allocation: within 75 days after the final purchase price is set
• Final Escrow Release: business day after the 15-month anniversary of closing
• Restricted Period: three years after closing
• Fundamental Representations Survival: six years after closing

Proposed Order Provisions

• The proposed order would authorize the debtors to:
  • sign the APA for its limited provisions
  • consent to the sellers' completion of the sale
  • enter into and perform under the transition services agreement and comply with the restrictive covenants
  • take corporate and LLC actions to have the sellers monetize substantially all of their assets
  It would also ratify actions the debtors have already taken.
• The APA and transition services agreement could not be rejected or avoided by the debtors, their estates, creditors, equity holders or any trustee. The order and the APA would survive plan confirmation, dismissal or conversion, and would bind the plan administrator, litigation trustee and wind-down debtors under the first amended joint plan [Docket No. 369]. No plan or confirmation order could modify them.
• APA amendments would not need a further court order but must be promptly provided to the committee. Amendments with a material adverse effect on the estates would require notice and a further court order before any plan effective date.
• The automatic stay would be lifted as needed to complete the sale, and the order would be effective immediately upon entry, waiving the Bankruptcy Rule 4001(a)(4), 6004(h) and 6006(d) stays. Objectors would have to appeal and seek a stay before the sale closes or risk their appeal being dismissed as moot.
• The proposed order would also include the following:
  • a good-faith, arm's-length finding
  • a finding that the APA was not entered into to hinder, delay or defraud creditors
  • a statement that the order is not an admission as to any claim or lien
  • a provision that unresolved objections are overruled with prejudice
• The debtors filed the Declaration of Ryan Murphy and the Declaration of John R. Castellano in support of the motion.

Other Provisions

• Transfer taxes are split 50/50: between the sellers and the wine purchasers for the wine assets, and between the sellers and GLWAS for the ADA and Livonia steps.
• The parties intend the ADA entity sale to be treated as a taxable asset purchase under section 1001, the Livonia interest sale under Revenue Ruling 99-5, Situation 1, and the JV distributions under section 731. A section 1060 purchase price allocation is due within 75 days after the final purchase price is set.
• GLWAS must use reasonable efforts to replace seller guarantees, letters of credit and similar support obligations, and it indemnifies the sellers for post-closing liabilities under them. GLWAS waives set-off against the purchase price, except for indemnity set-off against the escrow.
• Seller insurance coverage for the business ends at closing. The wine purchasers may pursue pre-closing claims under occurrence-based policies, net of the sellers' collection costs.
• Books and records: each side gives the other reasonable access to records relating to the business for wind-down, tax and governmental purposes. Neither may dispose of them for seven years after closing (or, for the sellers, until dissolution if sooner) without notice and an opportunity to take possession. Misdirected funds and assets are forwarded both ways and held in trust until transferred.

RNDC Kentucky Sale Summary

Posture

• On Oct. 13, 2026, the debtors filed an emergency motion [Docket No. 572] concerning the sale of substantially all of the assets of non-debtor RNDC Kentucky to KEG1 River City, LLC. RNDC, which owns 68.75% of RNDC Kentucky, seeks authority to consent to the sale and take related corporate action, to comply with the APA's restrictive covenants, and to enter into and perform under a transition services agreement. The motion also seeks approval under Bankruptcy Rule 9019 of a settlement with Fifth Generation, the supplier of Tito's Handmade Vodka and Lalo Tequila. Relief is requested by 4:00 p.m. Central time on Oct. 22, 2026.
• The debtors state that none of the acquired assets are estate property and that the sale itself does not require court approval, so they do not seek approval of it. KEG1 requires court approval of the debtors' consent and their undertakings as a condition of the deal. Under the RNDC Kentucky operating agreement, NWS's consent is also required for any sale of substantially all of RNDC Kentucky's assets, and NWS holds a right of first refusal on any sale of RNDC Kentucky's equity.
• The proposed order would be effective immediately on entry, waiving the Bankruptcy Rule 4001(a)(4) and 6004(h) stays. It cautions that any objector must appeal and seek a stay before consummation of the sale or the settlement, as applicable, or risk mootness. The debtors filed the Declaration of Ryan Murphy and the Declaration of John R. Castellano in support of the motion.
• Prepetition marketing: the company contacted more than 50 potential financial and strategic purchasers. Fourteen parties, including KEG1, expressed interest in Kentucky, signed confidentiality agreements, and received diligence access, and six submitted indications of interest.
• In May 2026 the company signed a letter of intent with Breakthru Beverage Group, LLC for an equity sale of the company's interests in both its Kentucky and Indiana joint ventures, with NWS retaining its equity. The debtors state they chose Breakthru because its proposal was expected to reduce supplier attrition and included a going-concern sale of Indiana, and because it was the only proposal NWS supported at the time. Breakthru said it would not proceed if the debtors filed for chapter 11 and terminated the letter of intent after the filing.
• The company then re-engaged prior bidders and other potential purchasers and received three indications of interest, including KEG1's. According to the debtors, the other parties attributed materially lower value to RNDC Kentucky's distribution rights and to its real estate relative to appraised value. The parties signed a non-binding letter of intent with KEG1 on Aug. 8, 2026.
• Timing: the debtors state they will lack the liquidity to sustain operations, provide the TSA services, and pay down the DIP facility by maturity if the sale does not close by Oct. 30, 2026. The DIP facility matures on Oct. 29, 2026, unless the DIP lenders extend it. The DIP credit agreement also requires the plan effective date or the closing of sales of substantially all assets by Oct. 29, 2026, unless the DIP lenders agree otherwise. The debtors, with the DIP lenders' consent, expect to close on or before Oct. 30, 2026.
• The debtors also cite the risk of losing suppliers, many of which lack long-term agreements with RNDC Kentucky. Fifth Generation will appoint a different Kentucky distributor if the sale does not close by Nov. 9, 2026. The DIP lenders support the sale and the debtors' performance.
• Under the proposed order, the court would find the following:
  • the sale documents were negotiated in good faith and at arm's length;
  • the purchaser is not an insider or affiliate of the debtors or the seller and shares no common incorporators, directors, members, or controlling stockholders with them;
  • the APA was not entered into to hinder, delay, or defraud creditors; and
  • the debtors' consent and performance are a sound exercise of business judgment and a proper exercise of their fiduciary duties.

Purchase Price

• Consists of the sum of:
  • for the distribution rights, $50,045,341, less 1.5 times the gross profit of brands from material suppliers that are not approved brands and 0.5 times the gross profit of all other non-approved brands, each for the twelve months ended May 31, 2026 (the distribution rights price). Approved brands are those whose supplier gives supplier approval;
  • plus the inventory price, which is the laid-in cost of inventory other than dunnage multiplied by the applicable inventory factor, plus reimbursable deposits held by approved-brand suppliers for dunnage;
  • minus the supplier liability amount as of the calculation time, netted against supplier receivables for each supplier and never below zero for any supplier;
  • plus prepaid expenses as of the calculation time;
  • plus customer accounts receivable, net of reserves, as of the calculation time;
  • plus $6.0 million for the equipment, adjusted to the actual net book value of the owned equipment at closing, and $43.0 million for the owned real property; and
  • the assumption of the assumed liabilities.
• The debtors state that approximately $7.8 million of the expected purchase price is tied to RNDC Kentucky's exclusive distribution of Tito's and Lalo, and that KEG1 has also agreed to buy approximately $1.4 million of Tito's and Lalo inventory. Fifth Generation is a material supplier.
• Gross profit for a brand is gross sales dollars (including service-based revenue such as split case and delivery fees), plus supplier brokerage commissions and rebates, less supplier investments as reflected on the seller's internal P&L, laid-in cost, and excise taxes not already in laid-in cost. No LIFO adjustment is applied.
• Laid-in cost is the actual invoiced cost paid or owed to suppliers for the inventory, plus freight, excise taxes, and delivery costs to take physical possession, using the "latest value" accounting method under the transaction accounting principles and without any LIFO adjustment. For dunnage, laid-in cost is the reimbursable deposits held by suppliers.
• Inventory factors:
  • 100% for standard inventory;
  • 25% for aging inventory, meaning volume that expires or goes out of code within 60 days after the calculation time;
  • 75% for tier 1 excess inventory: spirits between 12 and 18 times the depletion rate, and wine between 9 and 18 times;
  • 50% for tier 2 excess inventory: spirits above 18 times the depletion rate, and wine between 18 and 24 times;
  • 25% for tier 3 excess inventory: wine above 24 times the depletion rate, and beer, ready-to-drink, and non-alcoholic products above 9 times;
  • 0% for unsalable inventory, which includes out-of-code, damaged, recalled, or customer-returned product and product with a zero depletion rate (other than new products); and
  • for scheduled inventory, the factor set opposite it on the inventory schedule, which controls over any other category.
  Where non-scheduled inventory falls into more than one category, the lowest factor applies. The depletion rate is average monthly sales to unaffiliated retail customers over the six months ended Aug. 31, 2026, subject to agreed adjustments for seasonality and new or discontinued products.
• The calculation time is 11:59 p.m. Central time on the closing date. Calculations are made without giving effect to the transaction.
• Estimates: the seller delivers a draft supplier-by-supplier estimate of the supplier liability amount at least 10 calendar days before the anticipated closing. It delivers an estimated closing statement covering each price component at least five calendar days before closing. If the parties disagree, the estimated closing statement reflects the seller's good-faith estimates.
• Closing payments are made as follows:
  • Into escrow with SRS Acquiom, $5.0 million plus 10% of the estimated inventory price (the motion's term summary states five percent).
  • To RNDC Kentucky's lenders, directly, the amounts needed to pay off the closing indebtedness under the payoff letters.
  • To the seller, the balance of the estimated cash payment.
• True-up:
  • The parties jointly take an itemized physical inventory count after the close of business on the closing date and work to agree on the inventory price within five business days after closing.
  • The purchaser delivers an adjustment statement within 60 days after closing. The seller has 30 days to dispute it, followed by a 30-day resolution period.
  • Remaining disputes go to Kroll, LLC (or a mutually acceptable substitute) as accounting firm. Its ruling is due within 30 days and must fall between the two sides' positions. Its fees are allocated by the share of the contested amount each side lost, and its determination is final and non-appealable.
  • This process is the parties' exclusive remedy for adjustment disputes. For the supplier liability amount, the parties may take into account supplier information exchanged after closing about transactions before the calculation time.
• If the final cash payment falls below the estimate, the shortfall is paid to the purchaser from escrow. The seller pays any amount by which the shortfall exceeds the escrow fund within three business days. If the final cash payment exceeds the estimate, the purchaser pays the difference.
• The purchase price is allocated among the acquired assets under section 1060 of the tax code per an agreed methodology. The purchaser proposes an allocation within 75 days after the final purchase price is determined. The seller has 30 days to object and the parties 30 days to negotiate, after which disputes go to the accounting firm. Adjustment and escrow payments are treated as purchase price adjustments for tax purposes.

Deposit and Escrow

• The APA does not provide for a deposit.
• The escrow supports the post-closing true-up and the seller's indemnification obligations, and it is the sole source of recovery for the purchaser's indemnification claims. On the business day after the six-month anniversary of closing, the escrow agent releases the remaining fund to the seller. Amounts covered by pending good-faith indemnification claims and undistributed joint instructions are held back. Held-back amounts are released within two business days after the related claim is resolved.

Parties

• Seller: Republic National Distributing Company, LLC, a Kentucky limited liability company (RNDC Kentucky), a non-debtor joint venture owned 68.75% by RNDC, with NWS holding the minority interest.
• RNDC (Republic National Distributing Company, LLC, a Delaware limited liability company, referred to in the APA as RNDC Parent) is a party solely for the restrictive covenants, the bankruptcy court approval covenant, and its fiduciary termination right. It is not a seller.
• National Wine & Spirits, Inc., an Indiana corporation (NWS), is a party solely for the restrictive covenants and the NWS support covenants. It is not a seller.
• Purchaser: KEG1 River City, LLC, a Delaware limited liability company. The motion describes KEG1 as a leading alcoholic beverage distributor in Kentucky and six other states.
• The purchaser may designate affiliates to buy assets, assume liabilities, or take title, on notice at least five business days before closing, and remains primarily liable until the transfer. It may also substitute an affiliate or commonly controlled entity as purchaser before closing. That requires an assumption agreement, no material delay or impairment of required approvals, and credit support reasonably satisfactory to the seller. Once those conditions are met, the original purchaser is released.

Debtors' Approvals and Undertakings

• Under the proposed order, the debtors would be authorized to:
  • execute the APA solely for the restrictive covenants, bankruptcy court approval, and fiduciary termination provisions;
  • consent to and approve the seller's consummation of the sale;
  • take all corporate actions necessary to cause the seller to monetize substantially all of its assets; and
  • enter into and perform under the TSA, including providing the TSA services.
  Actions the debtors took before entry of the order would be ratified.
• RNDC must use reasonable best efforts to obtain, as promptly as practicable, an approval order acceptable to the purchaser. The order must approve RNDC's exercise of its voting and consent rights, its participation in the sale, its performance of the TSA, and the release of any liens or claims affecting the acquired assets or RNDC's equity in or proceeds from the seller. That release expressly includes DIP liens.
• The automatic stay would be lifted to the extent necessary for the purchaser and the seller to implement and consummate the sale.
• The APA and the TSA would not be subject to rejection or avoidance by the debtors, their estates, creditors, equity holders, or any trustee, examiner, or receiver. Any trustee would be authorized to operate the debtors' businesses as needed to comply with the order.
• The debtors characterize their obligations as limited. They state that, because they are selling all remaining assets and winding down, the restrictive covenants will not materially burden the estates.

NWS Matters

• Until the earliest of closing, valid termination, or any amendment or other material change to the transaction terms, NWS must:
  • approve, consent to, and support the sale, and exercise all of its voting, consent, and governance rights under the RNDC Kentucky operating agreement in favor of it;
  • not withdraw or adversely condition that support;
  • not solicit, negotiate, support, or enter into any competing acquisition proposal;
  • not exercise any consent right, right of first refusal, matching right, or similar right to support a competing proposal or impede the sale; and
  • reasonably cooperate on supplier retention, regulatory approvals, transition matters, documentation, and bankruptcy court approval.
• The purchaser is entitled to specific performance of these obligations. NWS reserves the right to review and approve the form of approval order. Its advance consent does not extend to the seller's proposed allocation or use of sale proceeds.

Assets Being Sold

• All of the seller's right, title, and interest in the assets, properties, goodwill, and rights related primarily to or used primarily in the business of distributing beverage products, including the brands, from the suppliers in Kentucky, other than excluded assets. The assets transfer free and clear of encumbrances except permitted encumbrances, and include:
  • the exclusive distribution rights for the scheduled brands from the scheduled suppliers in Kentucky, to the extent supplier approval is obtained;
  • inventory of approved brands, including aging, excess, scheduled, and unsalable inventory, plus functional and undamaged dunnage, pallets, slip boards, and kegs for approved brands and the related reimbursable deposits held by suppliers;
  • retail trade accounts receivable as of the calculation time, excluding notes receivable and amounts due from employees, suppliers, or related parties;
  • transferable prepaid expenses, credits, and rebate rights relating to approved-brand suppliers or assigned contracts;
  • warehouse and delivery equipment in Kentucky, including forklifts, motor vehicles, trailers, automated warehouse systems, and office and computer equipment and furniture. Leased equipment transfers only if its lease is an assigned contract;
  • the owned real property at 2801 Blankenbaker Parkway, Louisville, with all buildings, improvements, fixtures, and appurtenant rights, together with leasehold estates under the leases, which are assigned contracts;
  • other tangible property in Kentucky used primarily in the business. This includes packaging, draft tapping equipment, supplies, fuel and oil, point-of-sale and promotional materials for approved brands, and originals or copies of customer, sales, route, vendor, financial, compliance, and product-development records;
  • other intangible property, including:
    • transferable licenses and permits, specifically including those issued by Louisville Metro Alcohol Beverage Control, Kentucky Alcoholic Beverage Control, and the Alcohol and Tobacco Tax and Trade Bureau;
    • receivables from approved suppliers;
    • guaranties, warranties, and indemnities;
    • rights to make claims under the seller's occurrence-based insurance policies for pre-closing matters relating to the acquired assets or assumed liabilities; and
    • telephone and facsimile numbers;
  • the leases and the other contracts on the assigned-contracts schedule; and
  • all goodwill and going-concern value of the business.
• Property held under a contract does not transfer unless that contract is an assigned contract. The territory is Kentucky.

Excluded Assets

• The "Republic National Distributing Company" and "RNDC" business names, and all other intellectual property, including logos, websites, social media accounts, domain names, and email addresses.
• Cash and cash equivalents and bank accounts (other than any the parties agree to include). Deposits other than supplier-held dunnage deposits for approved brands. Prepaid charges and professional retainers other than the acquired prepaid expenses. Accounts and notes receivable other than customer accounts receivable and approved-supplier receivables, including amounts due from employees and related parties.
• Inventory that does not qualify as inventory; contracts other than assigned contracts; employee benefit plan rights; tax refunds, attributes, and assets; equity interests; and amounts owing from seller affiliates.
• Claims relating to excluded assets or excluded liabilities. Other pre-closing claims, rights of recovery, set-off, and recoupment, except to the extent relating to an acquired asset, assigned contract, or assumed liability. Claims against suppliers, vendors, and contract counterparties arising from pre-closing events.
• All current and prior insurance policies, including D&O policies, and their recoveries. Financial, organizational, and tax records; records the seller must retain by law; privileged materials; and sale-process materials, including bids received from third parties.
• Assets used in a business other than the business; tangible assets outside Kentucky; licenses and permits other than the transferred permits; and assets on the excluded-assets schedule, which the parties may amend by mutual written consent through closing.

Assumed and Excluded Liabilities

• The purchaser assumes only the following:
  • unfulfilled retail customer purchase orders submitted before closing, and ordinary-course inventory purchase orders the purchaser accepts, including unpaid in-transit inventory;
  • liabilities for returnable supplier packaging arising from the purchaser's post-closing possession or use, customer deposits on transferred inventory and returnable containers, and retail customer dunnage deposits;
  • supplier liabilities, solely to the extent included in the finally determined supplier liability amount;
  • liabilities for in-transit inventory received on or after the closing date;
  • liabilities under the assigned contracts first arising after closing and not resulting from any pre-closing act, breach, rebate accrual, chargeback, or other pre-closing liability of the seller;
  • payables and marketing fund commitments to approved suppliers that first arise after closing;
  • liabilities from the purchaser's own post-closing conduct of the business and ownership of the acquired assets, including environmental, health, and safety matters;
  • amounts the purchaser must pay under the APA; and
  • taxes on the acquired assets, assumed liabilities, or business for periods beginning after the calculation time.
• Everything else is an excluded liability, expressly including:
  • liabilities from the seller's pre-closing ownership or operation of the business, other than the supplier liabilities;
  • liabilities relating to excluded assets;
  • retained supplier liabilities;
  • taxes for periods ending on or before the closing date, and any other seller taxes;
  • pre-closing employment and termination liabilities, pre-closing workers' compensation claims, and liabilities under employee benefit plans, including under Titles I and IV of ERISA; and
  • the seller's transaction expenses.
• Transfer taxes are split 50/50, except that real property transfer taxes and deed taxes are paid entirely by the seller.

Supplier Approvals and Supplier Liabilities

• Supplier approval is written evidence, reasonably satisfactory to the purchaser, that a supplier has approved the purchaser as its authorized distributor in Kentucky on terms acceptable to the purchaser. It may take the form of a new distribution agreement, a written appointment, an assignment or novation, or a consent. The purchaser is not required to assume any of the seller's existing distribution agreements.
• Mandatory supplier consents are a closing condition. They consist of supplier approval from a supplier whose name is blank in the filed APA, plus at least five other material suppliers.
• If any other supplier withholds approval, the closing proceeds. The seller retains that supplier's distribution rights, inventory, and point-of-sale materials, and the price components are reduced to exclude them.
• If a withholding supplier gives approval within 90 days after closing, the parties transfer its distribution rights, inventory, and related assumed liabilities, with the price components increased accordingly, effective as of the closing date.
• The purchaser must keep withholding-supplier inventory at the facilities for 90 days with reasonable care and give the seller, the supplier, and any new distributor access to retrieve it. Title and risk of loss stay with the seller. If the inventory has not been removed and approval has not been obtained by the end of that period, title passes automatically to the purchaser, which may dispose of it.
• The parties must cooperate to obtain supplier approvals. Without the purchaser's consent, the seller may not:
  • enter into supplier arrangements that would adversely affect the distribution rights or the purchaser's ability to obtain approval;
  • knowingly encourage suppliers to use the transaction to modify those rights; or
  • act to impede approvals.
  The seller is not required to litigate or arbitrate to enforce distribution rights.
• Supplier liabilities are the seller's monetary obligations to an approved supplier from ordinary-course handling of its products, for periods through the calculation time, whether invoiced or not. They include product purchases, freight, rebates, allowances, promotional and depletion programs, chargebacks, returns, credits, and supplier advances. The purchaser may contact suppliers before closing to confirm these amounts.
• Retained supplier liabilities stay with the seller. These include:
  • breach, termination, and nonrenewal claims;
  • franchise and distributor termination statutory claims;
  • indemnities, litigation, fines, and penalties;
  • fraud and willful misconduct;
  • product liability;
  • seller taxes;
  • obligations attributable to periods after the calculation time, other than under assigned contracts;
  • liabilities of RNDC, NWS, or other seller affiliates; and
  • any supplier liability not included in the finally determined supplier liability amount.

Owned Real Property

• The owned real property is the land at 2801 Blankenbaker Parkway, Louisville, priced at $43.0 million. It is conveyed by special warranty deed, subject only to real estate permitted encumbrances.
• Title process:
  • The purchaser orders an ALTA 2021 extended coverage owner's title commitment from Mercantile Title Agency, Inc. within five business days after the effective date. It may obtain an ALTA/NSPS survey, and it pays for the title policy and survey.
  • The purchaser has 15 business days after receiving the commitment, title documents, and survey to object to monetary liens, which are mandatory cure items. The seller has until closing to cure them. If the seller does not, the purchaser pays them and receives a credit against amounts due to the seller at closing.
  • Matters the purchaser does not object to, and non-monetary matters that do not materially interfere with the property's use or value, become real estate permitted encumbrances.
• Real estate taxes for the year of closing are prorated as of the closing date. If actual amounts are not known, they are estimated at 105% of the most recent amounts and later trued up, and the purchaser may collect the seller's share of the true-up from escrow. Utilities and similar charges are prorated as of the closing date.
• If a casualty or condemnation occurs before closing, the purchaser receives a credit for, or an assignment of, the insurance or condemnation proceeds.
• The purchaser may not conduct Phase II or other invasive environmental sampling. The one exception is sampling, with the seller's consent, to investigate a recognized environmental condition identified in a Phase I report under an approved sampling plan.
• The seller must provide materials on the property's eligibility under the Kentucky Brownfield Program (KRS 224.1-415). It must also cooperate after closing, at the purchaser's expense, in maintaining or transferring the program's benefits.

Liens and Credit Bid

• No credit bid is proposed. The proposed order would find that the debtors hold no liens on the seller's assets. It would also find that the DIP liens do not encumber, attach to, or otherwise affect the acquired assets or the debtors' equity interests in or rights to proceeds from the seller.
• The debtors would be authorized to release any liens or claims, including DIP liens, affecting the acquired assets or RNDC's equity interests in or rights to proceeds from the sale. The debtors and the DIP agent would be authorized to file UCC termination statements and other release documentation.
• Payoff letters for the closing indebtedness on the applicable schedule are a closing condition. They must provide that, once the stated amounts are paid at closing, the seller has no further obligations on that debt.
• Permitted encumbrances are:
  • real estate taxes not yet due or contested in good faith;
  • zoning and land-use laws not violated by the current use;
  • easements, covenants, and restrictions of record, other than mandatory cure items;
  • landlords' interests under the leases;
  • the real estate permitted encumbrances; and
  • only before closing, the encumbrances of the seller's and its affiliates' secured lenders.

Successor Liability

• The proposed order contains no section 363(f) free-and-clear relief and no injunction against claims against the purchaser. It would find that neither the purchaser nor its affiliates are successors to the debtors or their estates under any theory of law or equity, and that the sale is not a consolidation, merger, or de facto merger with the debtors. It would also provide that the purchaser has no liability for any claims or obligations of the debtors or their estates as a result of acquiring the acquired assets.
• The parties waive compliance with bulk-sales laws.

Closing Conditions

• Closing occurs on the third business day after the conditions are satisfied or waived, by telephone conference and electronic exchange of documents. It is deemed effective as of the calculation time.
• Conditions to the purchaser's obligation include:
  • the seller's non-fundamental Article III representations true and correct except where the failure has not had a material adverse effect;
  • the fundamental representations (organization and good standing, authority and enforceability, title to the acquired assets, and brokers) true and correct in all material respects, plus the seller's material performance of its covenants, confirmed by an officer's certificate;
  • no material adverse effect between the effective date and closing;
  • no law making the transaction illegal, and no order or pending action restraining the closing;
  • receipt of the scheduled federal and state alcoholic beverage licenses and permits for Kentucky;
  • an executed escrow agreement, bills of sale, deeds for the owned real property, and an assumption agreement;
  • an executed TSA substantially in the agreed form, with its schedules completed in form and substance satisfactory to the purchaser in its sole discretion;
  • entry of the approval order, not stayed, vacated, or modified without the purchaser's consent;
  • delivery of payoff letters for the closing indebtedness;
  • receipt of the scheduled consents and the mandatory supplier consents; and
  • availability of the purchaser's financing at closing in an amount sufficient, together with other available funds, to pay the purchase price. The purchaser may not rely on this condition if the failure was primarily caused by its material breach of the financing covenant.
• Conditions to the seller's obligation are:
  • the accuracy of the purchaser's representations in all material respects and its material performance of covenants;
  • no order or pending action restraining the closing;
  • an officer's certificate, an assumption agreement, and an executed escrow agreement; and
  • entry of the approval order, not stayed, vacated, or modified without the seller's consent.
  Any condition unsatisfied at closing is deemed waived by the benefited party, and neither side may rely on a failed condition it caused.
• Material adverse effect is measured against the business, acquired assets, and assumed liabilities taken as a whole. It excludes:
  • general business and economic conditions;
  • political and social conditions, including tariffs and hostilities;
  • natural disasters, health events, and other force majeure;
  • changes in the price of equipment or supplies;
  • financial market conditions;
  • changes in GAAP or law;
  • actions required by the APA, and the negotiation, announcement, or pendency of the transaction and the purchaser's identity or plans;
  • any failure to meet projections;
  • actions or breaches by the purchaser;
  • the bankruptcy cases, DIP financing, and objections filed in the cases; and
  • scheduled matters.
  The first seven exclusions may be counted to the extent they affect the seller disproportionately relative to similarly situated participants in its industries and geographies.

Financing

• The purchaser represents that it is actively pursuing financing and has not received written notice from any prospective source that financing will be unavailable on reasonably acceptable terms.
• The purchaser must use commercially reasonable efforts to obtain debt financing sufficient to pay the purchase price. It must also pursue alternative financing before the outside date if the original financing becomes unavailable, and keep the seller informed of material developments.
• The seller must provide limited financing cooperation at the purchaser's expense. It is not required to create new financial information, become an obligor, pay fees, or act in a way that would interfere with the business or the bankruptcy cases. Neither the seller nor its affiliates has any liability for a failure or delay in obtaining financing. The purchaser reimburses and indemnifies the seller for its cooperation.
• The seller may seek specific performance to compel closing only if all of the following are true:
  • all closing conditions are satisfied or waived;
  • the financing has been funded or is confirmed to fund at closing;
  • the seller has confirmed in writing that it will close; and
  • the purchaser has failed to close by the outside date.
  The purchaser's failure to close is not a breach unless all of its closing conditions are satisfied or waived.

Termination

• Outside date: Dec. 1, 2026. Neither side may terminate on that ground if its own failure to perform caused the failure to close. If either side brings a specific performance action before the outside date, the outside date extends for as long as the action is pending plus 10 business days, or as the court sets.
• Either side may also terminate on mutual written consent, or upon a final, binding, non-appealable order prohibiting the closing or declaring the transaction unlawful, unless its own failure to perform caused the order.
• Buyer and seller breach rights run in parallel. Each may terminate for the other's breach or untrue representation that would cause the corresponding bring-down condition to fail. Each is subject to a cure period running to the earlier of two business days before the outside date and 30 days after notice. Neither may terminate while itself in material breach. The purchaser's failure to consummate the closing is expressly not curable.
• The purchaser may also terminate if a material adverse effect has occurred.
• RNDC may terminate if its board or other governing body determines in good faith, after consulting its financial advisors and outside bankruptcy counsel, that failing to terminate would be inconsistent with its fiduciary duties. Separately, nothing in the APA requires the seller or its managers to act inconsistently with their fiduciary obligations.
• Termination voids the agreement and ends all obligations. It does not relieve a party of liability for a willful breach before termination. Specific performance remains available to enforce surviving provisions.

Restrictive Covenants

• Non-competition: for three years from the closing date, the seller and its controlled affiliates may not own an interest in, operate, join, control, or participate in any person providing, soliciting orders for, selling, warehousing, distributing, or marketing beverage products in Kentucky that compete with the products of the business. Prohibited participation includes acting as a joint venturer, agent, consultant, or creditor.
• Non-recruitment: for the same period, the seller and its controlled affiliates may not hire or solicit transferred employees. General advertising not targeted at them is carved out, as is hiring individuals whose employment with the purchaser ended at least six months earlier.
• Non-disparagement binds both sides. Statements needed to correct incorrect public statements, and statements made in connection with any action, are carved out.
• Confidentiality runs for the same period. It covers customer lists and requirements, license and customer contract terms, pricing, marketing and sales techniques, and planning and financial information of the business. Carve-outs apply for public, independently developed, or third-party-sourced information, legally compelled disclosure, routine regulatory examinations, and winding up and dissolving the seller.
• A breach entitles the damaged party to injunctive relief without proving actual damage and, if it prevails, to its costs and reasonable attorneys' fees. The restricted period tolls for the duration of any breach. A court may modify an overbroad covenant to make it enforceable.
• RNDC is bound by these covenants to the same extent as the seller and must cause its controlled affiliates to comply. NWS is bound to the same extent until the first anniversary of the closing date.

Employee Matters

• The purchaser may meet with business employees from the effective date. At least five business days before closing, it extends at-will offers to the business employees it selects in its sole discretion, subject to its ordinary new-hire requirements. Employees who accept become employees of the purchaser on the day after the closing date. The purchaser has no obligation to make offers to any or all business employees.
• The seller retains all liability for transferred employees' earned and unused vacation and paid time off and pays it out to the extent required by law or the applicable plan. It also retains pre-closing employment and termination liabilities.
• WARN Act: a WARN notice the seller gives is not a breach, and the seller keeps WARN liability through closing. The purchaser is responsible for WARN liability arising from aggregation of employment losses it causes for transferred employees within 90 days after closing. It is not responsible for any inadequacy or untimeliness of the seller's notice.
• COBRA: while the seller's selling group maintains a group health plan, it is responsible for M&A qualified beneficiaries whose qualifying event occurs on or before the closing date. The purchaser is responsible for those whose qualifying event occurs afterward. If the selling group ceases to maintain a plan, the seller must notify the purchaser and provide a list of affected beneficiaries. It must also indemnify the purchaser for the resulting COBRA costs.
• The seller represents that it has no multiemployer or defined benefit plan obligations for business employees. It also represents that, in the 90 days before closing, no business employees will have been terminated, laid off, or had hours cut by more than 50%, other than employees the purchaser does not hire or offer employment to and scheduled exceptions.

Indemnification

• The seller indemnifies the purchaser indemnified parties for breaches of its representations, including fundamental representations, for its excluded liabilities, and for non-fulfillment of its post-closing covenants.
• The purchaser indemnifies the seller indemnified parties for the following:
  • breaches of its representations, including its fundamental representations of organization, authorization, and brokers;
  • the assumed liabilities;
  • non-fulfillment of its post-closing covenants; and
  • actions arising from its post-closing employment, terms of employment, or termination of business employees.
• Survival: fundamental representations survive for three years after closing. Other representations survive until the six-month escrow release date. Pre-closing covenants terminate at closing, and post-closing covenants survive on their own terms or for 12 months where none is stated. Notice of a claim before the applicable deadline is a condition precedent to recovery.
• Deductible: $350,000, with recovery only above that amount on non-fundamental representation claims. Per-claim threshold: $25,000, below which an individual loss or series of related losses does not count. Neither applies to fundamental representation breaches, excluded or assumed liabilities, or fraud. Materiality qualifiers in the seller's representations are disregarded in determining breach and losses, with limited exceptions.
• The escrow fund is the sole source of recovery for the purchaser's indemnification claims, and the purchaser may set off indemnification only against the escrow. Indemnification is the exclusive post-closing remedy other than fraud and specific enforcement of post-closing covenants.
• Losses are subject to the following limits:
  • recoveries are net of insurance and other third-party recoveries, and subject to a duty to mitigate;
  • no duplicate recovery, and no recovery of amounts already reflected in a purchase price adjustment or in the assumed liabilities;
  • no punitive, exemplary, special, consequential, incidental, or indirect damages, except those that are the reasonably foreseeable and direct result of the matter or that are paid to an unrelated third party; and
  • no multiple-of-profits or similar methodology, except that breaches of the gross profit by brand representation for approved brands may be measured using the applicable 1.5x or 0.5x multiple in the distribution rights price formula.
  Indemnity payments are treated as purchase price adjustments for tax purposes.
• The purchaser acknowledges it relies solely on the express representations, meaning the Article III representations as qualified by the schedules, the seller's closing certificate, and the deeds. It does not rely on the "Project Arrow MA" data room, the projections, or any other information furnished. Fraud is narrowly defined as intentional common-law fraud under Delaware law in the express representations or the certificate. The purchaser waives set-off against the purchase price except against the escrow for indemnification.

Transition Services Agreement

• The TSA is between RNDC, as provider, and the purchaser, as recipient. The motion states that the TSA terms are still being negotiated, that the purchaser currently requires IT infrastructure and support services, and that the services will end no later than Nov. 30, 2026. The debtors state that RNDC Kentucky depends on them for IT infrastructure, support, and back-office services. They also state that the expected net proceeds, together with any TSA fees, will far exceed the cost of providing the services.
• The provider performs the services on the services schedule for each service term, at a level not materially less favorable than during the baseline period, the 12 months before the TSA effective date. Excluded are installation or implementation of new systems and the services on the excluded-services schedule. The recipient may request additional services that meet all of the following:
  • the provider furnished them to the business during the baseline period;
  • they are reasonably necessary to run the business;
  • the recipient cannot reasonably obtain them elsewhere; and
  • the provider is reasonably able to provide them.
  The provider may use subcontractors but remains responsible for them.
• Fees: the recipient pays fixed monthly fees in advance and pass-through third-party costs in arrears, within 30 days of invoice and without offset. Under the APA, the purchaser bears all reasonable costs of the services and must pre-fund them if the seller reasonably requests. The recipient also bears the cost of obtaining third-party consents.
• Termination:
  • The provider may terminate for the recipient's uncured material breach (30-day cure), uncured nonpayment (15-day cure), or insolvency.
  • The recipient may terminate individual services on 30 days' notice, but not services on which other continuing services depend. It must reimburse the provider's documented early termination costs, including severance, stranded costs, and third-party breakage, unless it withdraws the notice within five business days after receiving the provider's cost notice.
• The provider must give access to and exports of business data and cooperate in an orderly transition, including making knowledgeable personnel available before their employment ends. The recipient bears material incremental third-party costs of transition assistance.
• Services are provided "as is," with warranties disclaimed. The provider's liability is capped at the fees received for the particular service in the prior 12 months, and it has no liability for consequential or similar damages. Neither limit applies to willful misconduct, gross negligence, fraud, or confidentiality breaches. Each side indemnifies the other against third-party claims arising from its willful misconduct, gross negligence, fraud, or material breach.
• Bankruptcy provisions:
  • The provider has no obligation or liability for services it cannot provide because the necessary assets, resources, or personnel have been sold, are unavailable, or were otherwise disposed of in the chapter 11 cases.
  • The provider must promptly notify the recipient of bankruptcy developments reasonably expected to impair performance and use commercially reasonable efforts to preserve its ability to perform.
  • The provider may assign the TSA to affiliates or successors, including a plan administrator. The recipient may assign it to affiliates or to its lenders as security, without release from its obligations.
  • The bankruptcy court has exclusive jurisdiction over TSA disputes, and the sale order governs any conflict.
• Confidentiality runs until three years after the TSA expires or terminates.

Fifth Generation Settlement

• Parties: RNDC and its debtor affiliates, with certain terms extending to their non-debtor affiliates other than National Distributing Company, Inc. (NDC). The Fifth Generation parties are Fifth Generation, Inc., Fifth Generation Distilled Spirits, Inc., Lalo Spirits, LLC, and their affiliates. The settlement agreement is dated Oct. 13, 2026, though the proposed order recites it as dated Oct. 12, 2026.
• Background:
  • Prepetition, Young's Market Company of Washington, LLC commenced arbitration over Fifth Generation's termination of the debtors' exclusive Washington distribution rights. The Tito's claim is JAMS Arbitration Case No. 40897, and the Lalo claim is AAA Arbitration Case No. 01-26-0004-5489, captioned Republic National Distributing Company, LLC v. Lalo Spirits, LLC.
  • The debtors assert that Fifth Generation terminated without cause, entitling them to fair-market-value compensation under the distribution agreements and Washington franchise law. They put that compensation at $22,462,196 for Tito's and $1,242,198 for Lalo.
  • According to the debtors, Fifth Generation disputes the Tito's claims, which make up over 94% of the total, but has effectively conceded that its Lalo termination was without cause. The arbitrations remain pending.
• Fifth Generation is one of RNDC Kentucky's largest suppliers. It told the debtors it would not appoint KEG1 as its Kentucky distributor of Tito's and Lalo without a comprehensive settlement. The debtors state that RNDC stands to lose more than $6.3 million in expected net proceeds, its 68.75% share of the APA value attributable to Tito's and Lalo, without the appointment. They also state that KEG1 has indicated Fifth Generation's support is critical to its willingness to proceed. The parties negotiated over six weeks, and the debtors state the cash consideration increased significantly from Fifth Generation's initial offer.
• Settlement payment: Fifth Generation pays $9.0 million in cash within three business days after the sale order becomes a final order. The payment is in full satisfaction of the arbitration claims and all other claims relating to the parties' Washington business relationship. Upon receipt, RNDC must dismiss the arbitration claims with prejudice.
• Kentucky distribution:
  • Fifth Generation will not terminate RNDC Kentucky's existing Tito's and Lalo distribution rights during the Kentucky transition period. That period is six months from entry of the sale order and may be extended by agreement of KEG1 and Fifth Generation.
  • Before closing, Fifth Generation gives KEG1 written supplier approval. RNDC continues as distributor of record in the ordinary course until closing.
  • At closing, Fifth Generation appoints KEG1 as distributor of record on terms the two agree, for the Kentucky transition period.
  • Fifth Generation has no obligation to appoint or maintain KEG1 if the sale does not close by Nov. 9, 2026.
  • Court approval of the settlement is a condition precedent to the appointment. The appointment is void if the order is later overturned or modified without Fifth Generation's written consent.
• Debtor trade amounts: Fifth Generation pays RNDC $245,513.69 within three business days after entry of the sale order. That payment is in full and final satisfaction of all trade-related amounts owed to the debtors through Aug. 31, 2026. Amounts arising from Sept. 1, 2026, are to be reconciled by Nov. 16, 2026, with any net amount Fifth Generation owes paid by Nov. 20, 2026. Amounts owed by or to NDC are not affected.
• Non-debtor trade amounts: Fifth Generation owes the company's non-debtor affiliates, excluding NDC, an estimated gross amount of approximately $6.5 million on trade amounts invoiced through Aug. 31, 2026. Fifth Generation pays all proper and undisputed invoices within three business days after entry of the sale order. September 2026 amounts are reconciled by Nov. 16, 2026, and paid by Nov. 20, 2026. October 2026 amounts are reconciled by Dec. 15, 2026, and paid by Dec. 20, 2026.
• Inventory buyback: at the company's option, Fifth Generation or its appointed distributor buys at laid-in cost, and retrieves at its own expense, all saleable Tito's and Lalo inventory from the company's warehouses by Nov. 15, 2026. Saleable inventory means full cases in good condition with the original factory seal. The company must identify the inventory by Oct. 30, 2026. Laid-in cost here is the F.O.B. price plus freight, insurance, import duties and costs, required taxes, and inland transportation.
• Michigan: the company continues as Tito's and Lalo distributor of record in its Michigan authorized distribution agent business in the ordinary course. Fifth Generation will acknowledge in writing the sale of the company's equity in NWS Michigan, LLC to Great Lakes Wine and Spirits, LLC. It also waives any rights under any contract with NWS Michigan with respect to that sale. NWS Michigan, or an affiliate designated by the buyer, continues or is appointed as distributor of record after closing, though Fifth Generation keeps its existing termination rights. The motion states that approval of the Michigan sale will be sought by separate motion.
• Mutual releases: the parties exchange comprehensive mutual releases of claims arising on or before the settlement effective date. These take effect on the later of the sale order becoming a final order and RNDC's receipt of the settlement payment and both trade payments. The releases include unknown claims and waive California Civil Code section 1542. They cover the Washington claims, the Tito's and Lalo distribution arrangements, chapter 5 claims, and trade-related amounts. Excepted are:
  • NDC payables and claims;
  • non-debtor trade amounts not satisfied by the payment;
  • other claims between Fifth Generation and the non-debtor affiliates;
  • amounts payable under the agreement; and
  • enforcement rights.
• Southern release: as a condition of the settlement, Fifth Generation required the debtors to release Southern Glazer's Wine & Spirits, LLC and its affiliates operating in Washington. Southern is Fifth Generation's successor distributor there. The release takes effect once Fifth Generation satisfies its payment and inventory buyback obligations, including the sale order becoming a final order. It covers claims relating to Southern's appointment as Washington distributor of Tito's and Lalo and the company's termination there. That includes any obligation to pay compensation as successor distributor under Washington's Wholesale Distributor/Supplier Equity Agreement Act (RCW 19.126) or under a June 2013 Brand Transfer Agreement between Young's Market Company of Washington and Southern Wine & Spirits of Washington. The release is limited to those matters, and Southern is a third-party beneficiary. Porter Hedges LLP, as conflicts counsel, negotiated the release because Kirkland & Ellis does not represent the debtors on matters adverse or related to Southern.
• The settlement becomes effective upon execution and entry of a Rule 9019 approval order, which may be the sale order. If the sale order does not become a final order, the agreement terminates, including any obligation to maintain KEG1 as distributor. The company represents that, except for affiliates that operated in New York and Illinois, it has not transferred any non-debtor trade receivables from Fifth Generation and will not do so. New York law governs, the bankruptcy court has jurisdiction over disputes, and the debtors may assign the agreement to a plan administrator or liquidating trustee.
• The debtors value the settlement at approximately $18 million in aggregate expected value, excluding net receivables. That figure consists of the settlement payment and the value attributable to Fifth Generation's consent to the Kentucky and Michigan sales. Under the proposed order, the court would approve the settlement and the releases, including the Southern release, under Bankruptcy Rule 9019 and sections 105(a), 362, and 363 of the Bankruptcy Code. The automatic stay would not apply to the settlement parties' performance.

Post-Closing Arrangements

• Licenses: the seller may not cancel its federal basic permits, or its state or county wholesaler and importer licenses, until the purchaser has obtained its own. The seller must cooperate in transferring the transferred permits and obtaining any temporary licenses, subject to limits on cost, liability, and pre-closing effect.
• Non-assignable assets: where a required third-party consent for an asset other than the distribution rights has not been obtained, the parties pursue the consent and cooperate on a pass-through arrangement. The arrangement lasts until the earliest of the consent, six months after closing, and the seller's dissolution.
• Books and records: the purchaser must give the seller reasonable access to acquired records and personnel for its wind-down, tax filings, governmental inquiries, and review of the adjustment statement. It may not dispose of those records for two years after closing without notice and an opportunity for the seller to take possession, and it must assist with wind-down activities. The seller must give the purchaser comparable access to its retained records relating to the business. It may not dispose of them for two years, or until it dissolves if sooner, without the same notice and opportunity.
• Misdirected funds are forwarded both ways.
• Insurance coverage maintained by the seller or its affiliates ceases to cover the business at closing. For pre-closing matters relating to the acquired assets or assumed liabilities, the purchaser may make claims under the seller's occurrence-based policies. The seller must remit what it collects, net of its documented costs.
• Seller support obligations: the purchaser must use reasonable efforts to replace, or substitute itself as primary obligor on, the scheduled guarantees, letters of credit, bonds, and similar arrangements supporting the business. It must obtain a full release of the seller and its affiliates and indemnify them for any liabilities under those arrangements.
• Assignment of the APA requires the other parties' consent. The purchaser may assign to a subsidiary or affiliate, or to its lenders as security, without release from its own obligations, and may substitute a purchaser as described above.

Use of Proceeds

• The debtors expect to realize approximately $30 million of net proceeds at or around closing on account of RNDC's interest in RNDC Kentucky, subject to final supplier consents. That figure is after RNDC Kentucky's funded debt obligations, transaction expenses, amounts needed to fund the orderly wind-down of the business, and net proceeds to NWS.
• The debtors intend to use the net proceeds to pay down the DIP new money loans and to fund the cases through emergence. They state that the settlement payment and the debtor trade payment will also provide liquidity as they pursue an orderly wind-down.

Preserved Rights

• Nothing in the proposed order would modify, supersede, or impair the final DIP order [Docket No. 275], including any rights under paragraph 16 of that order. The order is not an admission as to the amount, basis, priority, or validity of any claim or lien, and it is not an assumption or rejection of any contract under section 365.
• The order and the terms of the APA, the TSA, and the settlement agreement would survive confirmation of any plan, dismissal, or conversion, and no later plan or order could conflict with them. The order would bind:
  • the parties, the settlement parties, and their estates, successors, and assigns;
  • the plan administrator, litigation trustee, and wind-down debtors under the First Amended Joint Chapter 11 Plan [Docket No. 369]; and
  • any other estate representative or trustee.
• The order would govern any inconsistency with the sale documents (as they relate to the debtors' rights and obligations), the settlement agreement, and the Southern release agreement. Unresolved objections would be overruled with prejudice.

Amendments

• The parties may modify, amend, supplement, or restate the APA, the TSA, and related documents in a signed writing without further court order, but must promptly provide any such change to the committee. Any modification with a material or adverse effect on the estates requires notice to the court and the committee and a further court order while the cases remain pending.

Governing Law and Forum

• APA: Delaware law governs. Disputes go exclusively to the Delaware Court of Chancery or, if it lacks jurisdiction, another state or federal court in Delaware. The parties waive jury trial. The accounting firm has exclusive jurisdiction over purchase price adjustment disputes.
• TSA: the bankruptcy court has exclusive jurisdiction, and the APA's governing law provision is incorporated.
• Settlement agreement and Southern release agreement: New York law governs, except where mandatory Bankruptcy Code provisions apply, and disputes go to the bankruptcy court.
• The court would retain exclusive jurisdiction to interpret, implement, and enforce the order, the sale documents (as they relate to the debtors' rights and obligations), the settlement agreement, and the Southern release agreement.

Key Dates

• Letter of Intent (Breakthru Beverage Group): May 2026
• Petition Date: July 26, 2026
• Letter of Intent (KEG1): Aug. 8, 2026
• Settlement Reconciliation Period End: Aug. 31, 2026
• APA Effective Date: Sept. 25, 2026 (the motion states the parties executed the APA on Sept. 28, 2026)
• Settlement Agreement: Oct. 13, 2026 (the proposed order recites it as dated Oct. 12, 2026)
• Sale Motion Filed: Oct. 13, 2026 [Docket No. 572]
• Requested Relief Deadline: 4:00 p.m. Central time, Oct. 22, 2026
• Draft Supplier Liability Estimate: at least 10 calendar days before the anticipated closing
• Estimated Closing Statement: at least five calendar days before closing
• Transfer Offers: at least five business days before closing
• DIP Facility Maturity and DIP Sale Milestone: Oct. 29, 2026, unless extended by the DIP lenders
• Debtors' Expected Closing and Stated Liquidity Deadline: Oct. 30, 2026
• Saleable Inventory Notice to Fifth Generation: Oct. 30, 2026
• Debtor and Non-Debtor Trade Payments: within three business days after entry of the sale order
• Settlement Payment: within three business days after the sale order becomes a final order
• Fifth Generation Closing Deadline for KEG1 Appointment: Nov. 9, 2026
• Inventory Buyback Completion: Nov. 15, 2026
• September Trade Reconciliation and Payment: Nov. 16 and Nov. 20, 2026
• TSA Services End: no later than Nov. 30, 2026
• Outside Date: Dec. 1, 2026
• October Trade Reconciliation and Payment: Dec. 15 and Dec. 20, 2026
• Closing: third business day after satisfaction or waiver of the closing conditions
• Inventory Price Agreement Target: five business days after closing
• Adjustment Statement: within 60 days after closing
• Withholding Supplier Approval and Inventory Removal Window: 90 days after closing
• Kentucky Transition Period: six months from entry of the sale order, extendable by KEG1 and Fifth Generation
• Escrow Final Release Date: business day after the six-month anniversary of closing
• Restricted Period: three years after closing for the seller and RNDC; one year for NWS
• Fundamental Representations Survival: three years after closing