Republic National Distributing Company - Chapter 11 Plan Terms

Plan Terms

Overview

• Republic National Distributing Company, LLC (“RNDC”) and its debtor subsidiaries (collectively, the “Debtors”) filed a joint chapter 11 plan (the “Plan”) with the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, on Aug. 3, 2026, providing for the resolution of Claims against, and Interests in, the Debtors. The Debtors commenced the chapter 11 cases, jointly administered as Case No. 26-90737 (CML), on July 26, 2026.
  • Although proposed jointly for administrative purposes, the Plan constitutes a separate plan for each Debtor and does not provide for substantive consolidation.
  • The Voting Deadline is [●], 2026, at [4:00 p.m. prevailing Central Time].
• The Plan provides for and implements the Equityholder Settlement, consisting of separate settlements with the Debtors’ equityholders:
  • The NBG Settlement, with New BG Distribution Partners, LLC (“NBG”), embodied in a term sheet dated July 26, 2026 and annexed to the Plan as Exhibit A.
  • The NDC Settlement, with National Distributing Company, Inc., NDC Leasing Company, LLC, Atlanta Wines International, Inc., and NDC Partners, LLC (collectively, “NDC”), embodied in a term sheet dated July 26, 2026 and annexed to the Plan as Exhibit B.
  • RNDC and National Distributing Company, Inc. are simultaneously entering into a separate term sheet regarding Specified Services and Transferred Technology Services.
  • The settling equityholders hold claims against the Debtors in multiple capacities. National Distributing Company, Inc. is the subordinated creditor under the Second Lien Credit Agreement dated Dec. 19, 2024, with RNDC as borrower, and certain NBG Released Parties hold participation interests in that facility. Certain NBG Released Parties are also payees under the Owner Notes; the NDC Settlement contains no corresponding Owner Notes waiver.
• The Wind-Down Transactions will be consummated through (a) Sales, if any, of some, all, or substantially all of the Debtors’ assets pursuant to section 363 of the Bankruptcy Code, and (b) a Wind-Down pursuant to the Plan.
  • The Debtors’ Unencumbered Real Property located at 229 Distribution Drive, Lafayette, La., may be sold pursuant to section 363 of the Bankruptcy Code (the “Real Property Sale”).
• All Definitive Documents, including the Litigation Trust Documents, the Plan and Plan Supplement, the Disclosure Statement and Solicitation Materials, the Confirmation Order, the DIP Documents, and any Sale Documents, shall be acceptable to Wells Fargo Bank, N.A., as DIP agent (the “DIP Agent”).
• New York law governs the Plan and any agreements executed in connection with it, except that corporate governance matters are governed by the law of each Debtor’s state of incorporation or formation. The bankruptcy court retains exclusive jurisdiction over matters arising out of or related to the chapter 11 cases and the Plan, provided that it shall not retain jurisdiction over disputes concerning Plan Supplement documents that contain a jurisdictional, forum selection, or dispute resolution clause referring disputes to a different court.

Equityholder Settlement

• Pursuant to the Equityholder Settlement, the Equityholder Settlement Parties have agreed to the terms of the Plan, including the treatment of Claims and Interests and the releases of Claims and Causes of Action set forth therein. The compromises included in the Equityholder Settlement are described as necessary and integral to the Plan and the success of the chapter 11 cases.
• The Plan serves as a motion to approve the Equityholder Settlement pursuant to Bankruptcy Rule 9019, and entry of the Confirmation Order will constitute the court’s approval of the compromises and its determination that they are in the best interests of the Debtors, their estates, holders of Claims and Interests, and other parties in interest, and are fair, equitable, and reasonable.
• Under each term sheet, in exchange for the settlement consideration, the Debtors shall (a) agree to the Fiduciary Trust Construct, subject to the Fiduciary Trust Limitations, with respect to the NBG Covered Claims and NDC Covered Claims, as applicable, and (b) provide the NBG Released Parties and NDC Released Parties with full and final releases from the Debtor Releasing Parties with respect to the NBG Non-Covered Claims and NDC Non-Covered Claims, as applicable.

NBG Settlement Consideration

• Following good-faith, arm’s-length negotiations, and in exchange for the releases and other consideration provided under the Plan, NBG, on behalf of itself and the other NBG Released Parties, agreed to provide the following (collectively, the “NBG Settlement Consideration”):
  • A cash payment of $10.25 million to the Debtors on the Plan Effective Date, with the agreement that none of the NBG Released Parties shall seek to have any portion of the $10.25 million, or the professional fees associated with negotiating the NBG Settlement, reimbursed from the D&O Liability Insurance Policies or indemnified by any Debtor or Wind-Down Debtor.
  • Waiver of any right to recover from any Debtor, directly or indirectly, on account of amounts related to their Second Lien Facility Claims. Under the term sheet, the waiver of amounts related to the 2L Facility is subject to confirmation from the RNDC credit facility agent and confirmation of tax or other issues to govern form.
  • Waiver of any right to recover from any Debtor, directly or indirectly, on account of amounts related to their Deferred Compensation Plan Claims. Under the term sheet, this waiver is given by Marc Sachs, Grant Sechler, and Josh Zeller, subject to confirmation of tax, penalty, or similar issues to govern form.
  • Waiver of any right to recover from any Debtor, directly or indirectly, on account of amounts related to their Owner Notes Claims, arising under unsecured promissory notes each dated as of Aug. 1, 2019 issued by certain Debtors to the Owner Noteholders. Under the term sheet, the waiver extends to any amounts related to the Aug. 1, 2019 subordinated promissory notes with RNDC as payor and any NBG Released Party as payee, and to any other promissory notes between RNDC and an NBG Released Party, however denominated and whenever dated.
  • Subject to the limitations set forth in the Plan and the Litigation Trust Documents, agreement to the formation of the Litigation Trust with respect to the NBG Covered Claims.
• For U.S. federal and applicable state and local income tax purposes, the Debtors and the NBG Released Parties agree to treat the $10.25 million cash payment as, first, a contribution of cash to NBG by the equityholders of NBG that are NBG Released Parties and, second, a capital contribution to RNDC by NBG governed by section 721(a) of the IRC.
  • The Debtors, the NBG Released Parties, and their respective affiliates shall file all tax returns in accordance with, and not take any tax-related action inconsistent with, the intended tax treatment, unless otherwise required by a “determination” within the meaning of section 1313(a) of the IRC.

NDC Settlement Consideration

• Following good-faith, arm’s-length negotiations, and in exchange for the releases and other consideration provided under the Plan, NDC, on behalf of itself and the other NDC Released Parties, agreed to provide the following (collectively, the “NDC Settlement Consideration”):
  • A cash payment of $40 million to the Debtors on the Plan Effective Date, with the agreement that none of the NDC Released Parties shall seek to have any portion of the $40 million, or the professional fees associated with negotiating the NDC Settlement, reimbursed from the D&O Liability Insurance Policies or indemnified by any Debtor or Wind-Down Debtor.
  • Waiver of any right to recover from any Debtor, directly or indirectly, on account of amounts related to their Second Lien Facility Claims. Under the term sheet, the waiver of amounts related to the 2L Facility is subject to confirmation from the RNDC credit facility agent and the New BG participants with respect to their participation in the 2L Facility, and confirmation of tax or other issues to govern form.
  • Waiver of any right to recover from any Debtor, directly or indirectly, on account of amounts related to their Deferred Compensation Plan Claims. Under the term sheet, this waiver is given by Richard J. Davis, Elizabeth A. Davis, Kenneth Rosenberg, and H. Alan Rosenberg, subject to confirmation of tax, penalty, or similar issues to govern form.
  • Subject to the limitations set forth in the Plan and the Litigation Trust Documents, agreement to the formation of the Litigation Trust with respect to the NDC Covered Claims.
• For U.S. federal and applicable state and local income tax purposes, the Debtors and the NDC Released Parties agree to treat the $40 million cash payment as, first, a contribution of cash to NDC Partners, LLC made directly or indirectly by the direct and indirect equityholders of NDC Partners, LLC that are NDC Released Parties and, second, a capital contribution to RNDC by NDC Partners, LLC governed by section 721(a) of the IRC.
  • The Debtors, the NDC Released Parties, and their respective affiliates shall file all tax returns in accordance with, and not take any tax-related action inconsistent with, the intended tax treatment, unless otherwise required by a “determination” within the meaning of section 1313(a) of the IRC.

Binding Effect and Milestones

• Although each settlement remains subject to bankruptcy court approval of a Conforming Plan — meaning a confirmed chapter 11 plan incorporating the terms of the applicable settlement — each settlement became binding on the NBG Released Parties and the NDC Released Parties, as applicable, upon signing of the respective term sheet.
  • The settlements shall not be binding if a Conforming Plan is not confirmed within 120 days of the term sheets and effective within 30 days after such 120 days elapse, unless the NBG Released Parties and RNDC, or NDC and RNDC, as applicable, mutually agree to extend the period.
• If a settlement is not approved and no Conforming Plan is confirmed, (a) each of the Debtors and the applicable released parties reserve all rights and defenses to any claims that would otherwise be subject to the settlement, (b) the applicable released parties shall have no obligation to provide any portion of the settlement consideration, and (c) the Debtors shall have no obligation to agree to the Fiduciary Trust Construct or provide any releases of the applicable Non-Covered Claims.
• Pursuant to Federal Rule of Evidence 408, the term sheets and all related negotiations shall not be admissible into evidence in any proceeding on the validity or amount of any potential claims that would otherwise be the subject of the settlements. The parties agree that the terms were reached without any admission or concession as to any matters of fact or law.

Plan Support

• The NBG Released Parties and the NDC Released Parties each agree to use commercially reasonable efforts to cooperate with and assist in obtaining support for their respective settlements and a Conforming Plan from the Debtors’ other stakeholders.
• Each group further agrees not to directly or indirectly propose, file, or support any chapter 11 plan that is not a Conforming Plan — that is, a plan that does not provide for the approval and implementation of the applicable settlement — or take any other action that would, or would reasonably be expected to, prevent, interfere with, delay, or impede approval or implementation of the settlement or the Conforming Plan.

Fiduciary Trust Construct and Limitations

• Under each term sheet, the Fiduciary Trust Construct consists of the Debtors’ conveyance under a chapter 11 plan of both (a) the NBG Covered Claims or NDC Covered Claims, as applicable, and (b) the Debtor D&O Policies to a post-confirmation liquidating trust for the benefit of the Debtors’ general unsecured creditors, to be managed by a trustee or other entity with fiduciary obligations (the “Fiduciary Entity”), subject in all cases to the Fiduciary Trust Limitations. The Plan implements the construct through the Litigation Trust, whose beneficiaries include holders of Allowed DIP Claims and Allowed Prepetition ABL/FILO Deficiency Claims in addition to holders of Allowed General Unsecured Claims.
• The Covered Claims consist of any claims and causes of action assertable by the Debtors, whether directly or derivatively and however styled, concerning or arising out of any matter prior to the Plan Effective Date that (a) are assertable against any NBG or NDC Released Party that is an insured under a D&O Liability Insurance Policy and (b) assert a theory of recovery or alleged damages or loss ultimately covered by such a policy. The Non-Covered Claims consist of claims and causes of action assertable against any such released party that are not Covered Claims.
• The Fiduciary Trust Limitations consist of provisions in a chapter 11 plan and implementing documents providing that:
  • Any recovery by the Fiduciary Entity and its beneficiaries on account of a Covered Claim, whether by settlement or judgment, shall be satisfied solely by and to the extent of the proceeds of the Debtor D&O Policies, after payment from such policies of all covered costs and expenses incurred by the applicable released parties in connection with the defense of the Covered Claims.
  • Any party, including any trustee or beneficiary of the Fiduciary Entity — including any litigation trustee or oversight committee — seeking to execute, garnish, or otherwise collect on any settlement or judgment shall do so solely upon available insurance coverage.
  • No party shall (a) record any judgment against any released party or (b) otherwise attempt to collect, directly or indirectly, from the individual, personal, marital, or joint interests or assets of any released party, whether held through a corporation, limited liability company, trust, or otherwise.
• For the avoidance of doubt, the provision does not release any released party from liability with respect to any Covered Claim or absolve any released party of any legal obligation to pay on account of liability incurred in relation to a Covered Claim; it is intended only to identify the specific assets that would be used to satisfy such liability and to limit recovery to those assets.

Litigation Trust

• In connection with the Equityholder Settlement, on the Plan Effective Date the Debtors shall execute the Litigation Trust Agreement and establish the Litigation Trust as one or more standalone trusts and/or sub-trusts for the benefit of the Litigation Trust Beneficiaries, comprising holders of Allowed DIP Claims, Allowed Prepetition ABL/FILO Deficiency Claims, and Allowed General Unsecured Claims.
• The Debtors and Wind-Down Debtors shall irrevocably transfer all rights, title, and interest in the Litigation Trust Assets to the Litigation Trust, free and clear of any liens or encumbrances pursuant to section 1141 of the Bankruptcy Code, with the Debtors retaining no reversionary or further interest therein.
  • The Litigation Trust is established for the primary purpose of liquidating the Litigation Trust Assets, reconciling claims expressly assigned to it, and distributing the proceeds, with no objective to continue or engage in the conduct of a trade or business except as reasonably necessary and consistent with its purpose.
  • Any insurance proceeds paid pursuant to an insurance claim asserted by or on behalf of the Litigation Trust must be paid into the Litigation Trust.
• The Permitted Litigation Claims to be vested in the Litigation Trust consist of:
  • The NBG Covered Claims and the NDC Covered Claims, in each case subject to the provisions concerning recoveries embodied in the respective settlement term sheets and incorporated into the Plan and the Litigation Trust Documents.
  • All of the estates’ rights, titles, and interests in any Causes of Action against Young’s Holdings, Inc., YHI Spirits, LLC, and each of their Related Parties, and in any Avoidance Actions.
  • Subject to bankruptcy court approval of the Equityholder Settlement via the Confirmation Order, the NBG Non-Covered Claims and NDC Non-Covered Claims shall not be Permitted Litigation Claims and shall be settled and released in full under the Plan.
• The Litigation Trust shall be administered by a Litigation Trustee to be selected jointly by the Debtors and the DIP Agent, whose powers shall include hiring and compensating professionals in consultation with the Litigation Trust Advisory Board, investigating, prosecuting, and settling Permitted Litigation Claims, and making distributions to the Litigation Trust Beneficiaries.
  • The Litigation Trustee shall report to and be overseen by a four-member oversight committee (the “Litigation Trust Advisory Board”), initially consisting of two members selected by the DIP Agent, one member selected by the Special Committee, and one member selected by the Creditors’ Committee. Each member shall owe a fiduciary obligation to the trust’s beneficiaries.
  • Subject to the unanimous vote of the Litigation Trust Advisory Board, the Litigation Trustee may initiate, prosecute, settle, release, withdraw, or litigate to judgment any Permitted Litigation Claims without third-party consent or further court approval.
  • With respect to Permitted Litigation Claims that constitute Equityholder Covered Claims, recoveries shall be satisfied solely from the proceeds of the D&O Liability Insurance Policies, after payment of covered defense costs and expenses of the Equityholder Released Parties, and no party may record any judgment against, or collect from the individual, personal, marital, or joint interests or assets of, any Equityholder Released Party.
  • The Litigation Trustee owes a fiduciary duty of care and loyalty to all beneficiaries of the Litigation Trust, but not to the Debtors or Wind-Down Debtors, and shall not be liable for good-faith actions absent a final determination of fraud, gross negligence, or willful misconduct. The Litigation Trustee may be removed by the bankruptcy court for cause upon application by any party in interest, with a successor designated by the Litigation Trust Advisory Board.
• No holder shall be entitled to receive a distribution on account of recoveries from Permitted Litigation Claims where such holder is the defendant in connection with such claims.
• To the extent reasonably practicable, the Debtors intend to treat the Litigation Trust as a “liquidating trust” for U.S. federal income tax purposes under Treasury Regulation section 301.7701-4(d), with the Litigation Trust Beneficiaries treated as grantors and deemed owners of the assets. No IRS ruling will be sought on the classification, and the Litigation Trust shall in no event be dissolved later than five years from its creation absent a court-approved extension.

Classification and Treatment of Claims and Interests

• Allowed DIP Claims shall receive payment in full in cash or such other terms as agreed by the holders of DIP Claims. To the extent not fully satisfied as of the Plan Effective Date, DIP Claims shall be Allowed Administrative Claims in the full outstanding amount under the DIP Credit Agreement and satisfied from (i) cash in the Wind-Down Reserve and, solely to the extent necessary, (ii) the Distributable Proceeds in accordance with the Waterfall Recovery and a pro rata share of Litigation Trust Interests.
• Allowed Administrative Claims (other than Professional Fee Claims and DIP Claims) shall be paid from the Wind-Down Reserve, and Allowed Priority Tax Claims shall be treated in accordance with section 1129(a)(9)(C) of the Bankruptcy Code, with any such claim that is not an Assumed Liability satisfied in full from the Wind-Down Reserve. Allowed Administrative Claims arising in the ordinary course of the Wind-Down Debtors’ businesses that are required for the Wind-Down shall instead be paid in the ordinary course after the Plan Effective Date, and no request for payment need be filed or served.
• Class 1 (Other Secured Claims) — Unimpaired; deemed to accept. Each holder shall receive, at the Debtors’ option, payment in full in cash, the collateral securing its claim, Reinstatement, or other treatment rendering the claim Unimpaired.
• Class 2 (Other Priority Claims) — Unimpaired; deemed to accept. Each holder shall be satisfied in full in cash or otherwise receive treatment consistent with section 1129(a)(9) of the Bankruptcy Code.
• Class 3 (Prepetition ABL/FILO Claims) — Impaired; entitled to vote. Each holder shall receive its pro rata share of the Distributable Proceeds pursuant to the Waterfall Recovery. The claims shall be Allowed in the aggregate amount of $[●] plus accrued but unpaid interest, fees, and other amounts due under the Prepetition Credit Agreement.
• Class 4 (Second Lien Claims) — Impaired; deemed to reject. All Allowed Second Lien Claims, including any participation interests therein held by the NBG Released Parties, shall be waived, set off, settled, distributed, contributed, cancelled, or released without any distribution.
• Class 5 (Owner Notes Claims) — Impaired; deemed to reject. All Allowed Owner Notes Claims shall be waived, set off, settled, distributed, contributed, cancelled, or released without any distribution.
• Class 6 (Prepetition ABL/FILO Deficiency Claims) — Impaired; entitled to vote. Each holder shall receive (i) its pro rata share of the Distributable Proceeds pursuant to the Waterfall Recovery and (ii) its pro rata share of the Litigation Trust Interests.
• Class 7 (General Unsecured Claims) — Impaired; entitled to vote. Each holder shall receive (i) its pro rata share of the Distributable Proceeds pursuant to the Waterfall Recovery, (ii) its pro rata share of the Litigation Trust Interests, and (iii) its pro rata share of the GUC Cash Consideration, defined as no less than $2.5 million of the cash component of the Equityholder Settlement. Because the GUC Cash Consideration is excluded from the definition of Distributable Proceeds, it is not subject to the Waterfall Recovery and is allocated to Class 7 outside that priority scheme.
• Class 8 (Intercompany Claims) and Class 9 (Intercompany Interests) — Unimpaired/Impaired; not entitled to vote. Each shall be, at the Debtors’ or Wind-Down Debtors’ option, (i) Reinstated, (ii) set off, settled, addressed, distributed, contributed, merged, cancelled, or released without any distribution, or (iii) otherwise addressed at the Debtors’ option. Intercompany Claims assumed under the terms of an applicable Sale Order, or transferred to a Purchaser under the Sale Documents, are excluded from this treatment and are to be satisfied by the applicable Purchaser following the Plan Effective Date.
• Class 10 (Interests in RNDC) — Impaired; deemed to reject. Each Allowed Interest shall be cancelled, released, and extinguished, with no distribution, property, or other value provided to holders.
• Class 11 (Section 510(b) Claims) — Impaired; deemed to reject. All such claims shall be canceled, released, discharged, and extinguished without any distribution.
• Section 1129(a)(10) shall be satisfied by acceptance of the Plan by at least one Impaired Class of Claims, and the Debtors shall seek confirmation under section 1129(b) with respect to any rejecting classes.

Distributable Proceeds and Waterfall Recovery

• Distributable Proceeds — subject only to funding the Professional Fee Escrow Account and the Wind-Down Reserve on the Plan Effective Date — comprise (a) cash of the Debtors or Wind-Down Debtors, (b) cash proceeds generated from the use, sale, lease, liquidation, or other disposition of estate property, including the Sales or the Real Property Sale, (c) cash proceeds generated from property belonging to the Wind-Down Debtors, excluding the Wind-Down Reserve, and (d) the cash component of the Equityholder Settlement less the GUC Cash Consideration.
• Distributable Proceeds shall be paid to holders of Allowed Claims until paid in full, in each case on a pro rata basis, in the following priority (the “Waterfall Recovery”):
  • First, on account of any unpaid DIP Claims, in cash unless holders agree to alternative treatment.
  • Second, on account of Allowed Administrative Claims and Priority Tax Claims, other than DIP Claims and Professional Fee Claims.
  • Third, on account of Allowed Other Secured Claims, solely to the extent such proceeds are on account of collateral for such claim.
  • Fourth, on account of Allowed Other Priority Claims.
  • Fifth, on account of Allowed Prepetition ABL/FILO Claims.
  • Sixth, on account of Allowed Prepetition ABL/FILO Deficiency Claims and Allowed General Unsecured Claims.

Wind-Down

• On the Plan Effective Date, all property of the estates other than the Litigation Trust Assets shall vest in the Wind-Down Debtors for the purpose of liquidating the estates, free and clear of all liens, claims, charges, or other encumbrances, provided that until the DIP Claims are paid in full in cash, the DIP Agent shall continue to maintain its liens in accordance with the DIP Orders.
  • To the extent property disposed of pursuant to the Plan constitutes Inventory, such disposition shall be conducted in compliance with all applicable state and local laws governing the disposal or transfer of such Inventory.
• On the later of the Plan Effective Date and the date distributions are made under the Plan, all notes, bonds, indentures, certificates, securities, shares, purchase rights, options, warrants, collateral agreements, subordination agreements, intercreditor agreements, and other instruments evidencing indebtedness of, or ownership interests in, the Debtors shall be deemed cancelled without further action by any holder, and the related duties and obligations of the Debtors, the Wind-Down Debtors, and any non-Debtor affiliates deemed satisfied in full, cancelled, released, and discharged, except as necessary to evidence a right to receive distributions.
• The Wind-Down Debtors shall continue in existence to, among other things, wind down the Debtors’ business and affairs as expeditiously as reasonably possible, resolve Disputed Claims, make distributions on Allowed Claims, fund the Distribution Reserve Accounts, enforce Causes of Action other than the Permitted Litigation Claims, file tax returns, comply with continuing obligations under any Purchase Agreements, and liquidate all assets.
• As of the Plan Effective Date, the existing boards of directors or managers of the Debtors shall be dissolved and remaining officers, directors, managers, or managing members shall be deemed to have resigned. The Debtors shall be dissolved as soon as practicable on or after the Plan Effective Date, and in no event later than the closing of the chapter 11 cases.
• A Plan Administrator, to be selected jointly by the Debtors and the DIP Agent and disclosed in the Plan Supplement, will be authorized to implement the Plan and take any action necessary to wind down and dissolve the estates, including causing compliance with the Plan, Confirmation Order, Litigation Trust Documents, and any Purchase Agreements, and filing certificates of dissolution.
  • All costs, liabilities, and expenses reasonably incurred by the Plan Administrator and its personnel shall be paid from the Wind-Down Debtors’ assets in accordance with the Wind-Down Budget.
  • Upon a certification filed with the bankruptcy court that all distributions have been made and all duties completed, and entry of a final decree closing the last of the chapter 11 cases, the Wind-Down Debtors shall be deemed dissolved without further action.
  • The Plan Administrator and all professionals it retains shall be deemed exculpated and indemnified in all respects by the Wind-Down Debtors, except for fraud, willful misconduct, or gross negligence, and the Plan Administrator shall have no liability to any party for the liabilities or obligations of the Debtors. The Plan Administrator may obtain commercially reasonable liability insurance at the Wind-Down Debtors’ expense from the Wind-Down Reserve and may rely on written information previously generated by the Debtors.

Wind-Down Reserve and Professional Fee Escrow

• On and after the Plan Effective Date, the Plan Administrator shall establish and administer the Wind-Down Reserve, funded solely from cash on hand in the Debtors’ estates as of the Plan Effective Date in the amount set forth in the Wind-Down Budget, which shall be delivered by the Debtors to the DIP Agent no later than [●] days prior to the Plan Effective Date and shall be acceptable to the Debtors and the DIP Agent.
  • All funds in the Wind-Down Reserve constitute property of the estate, free and clear of liens, claims, or encumbrances upon payment in full of the DIP Obligations; until such payment, the reserve shall be subject to first-priority, perfected liens and security interests belonging to the DIP Agent.
  • The reserve shall be used to pay holders of DIP Claims not paid in full prior to the Plan Effective Date, Allowed Other Priority Claims, Allowed Priority Tax Claims, Allowed Administrative Claims other than Professional Fee Claims, and Allowed Other Secured Claims their respective pro rata shares, and to satisfy the expenses of the Wind-Down Debtors and the Plan Administrator as set forth in the Wind-Down Budget, including costs associated with winding up and the storage of records and documents.
  • Amounts remaining after payment of all such expenses and claims, or in excess of what is reasonably needed to reserve for Disputed Claims, shall be transferred to the DIP Agent and, if the DIP Obligations have been paid in full in cash, to the General Account for distribution according to the Waterfall Recovery.
• On the Plan Effective Date, the Wind-Down Debtors shall establish and fund the Professional Fee Escrow Account with cash equal to the Professional Fee Reserve Amount, which comprises the aggregate Professional Fee Claims and other unpaid fees and expenses set forth in the Wind-Down Budget that professionals estimate they have incurred or will incur through the Plan Effective Date, including amounts budgeted for prior months not yet invoiced and amounts invoiced but not yet paid, including holdbacks.

Claims Bar Dates and Administration

• The Administrative Claims Bar Date is 30 days after the Plan Effective Date for Administrative Claims other than Professional Claims, and 45 days after the Plan Effective Date for Professional Claims. Holders required to but failing to timely request payment shall be forever barred, estopped, and enjoined from asserting such claims, which shall be deemed satisfied, settled, and released as of the Plan Effective Date.
• All final requests for payment of Professional Fee Claims incurred from the Petition Date through the Confirmation Date must be filed no later than 45 days after the Plan Effective Date. Professionals must deliver their estimates of unpaid fees and expenses to the Debtors no later than five business days before the anticipated Plan Effective Date, failing which the Debtors or Wind-Down Debtors may estimate them. To the extent the Professional Fee Escrow Account is insufficient, professionals shall hold Allowed Administrative Claims for the deficiency.
• The Claims Objection Bar Date is the later of 180 days after the Plan Effective Date and such other period fixed by order of the bankruptcy court. Proofs of claim filed after the earlier of the Plan Effective Date and the applicable Claims Bar Date shall be disallowed and forever barred without any objection or further court order.
• After the Plan Effective Date, the Plan Administrator, the Wind-Down Debtors, or the Litigation Trustee (solely with respect to the Permitted Litigation Claims) shall have sole authority to file, withdraw, or litigate objections to claims, to settle or compromise Disputed Claims without further court approval, and to adjust the Claims Register accordingly.
• Claims held by entities from which property is recoverable under sections 542, 543, 550, or 553 of the Bankruptcy Code, or that are transferees of avoidable transfers, shall be deemed disallowed under section 502(d) until the related causes of action are resolved and all sums owed are turned over. A claim expunged from the Claims Register that remains subject to appeal, or that has not been the subject of a Final Order, shall be deemed estimated at zero dollars absent a contrary court order.

Distributions

• Distributions shall be made by the Disbursing Agent to holders of record as of the Distribution Record Date, which is the Plan Effective Date or such other date designated by Final Order. On the Distribution Record Date the Claims Register shall be closed, and claims transferred 20 or fewer days before that date shall be recognized only to the extent practical and only where the transfer form contains an unconditional certification and waiver of objection by the transferor.
• Holders of Allowed Claims entitled to distributions of $100 or less shall not receive distributions, and each such claim shall be discharged and its holder forever barred from asserting it against the Wind-Down Debtors or their property.
• Undeliverable or unclaimed distributions shall be held in a segregated, interest-bearing Undeliverable Distribution Reserve. A holder that does not assert a claim for an undeliverable or unclaimed distribution within three months after the first distribution to it shall be deemed to have forfeited the distribution; distributions remaining undeliverable six months after the Plan Effective Date shall be deemed unclaimed property under section 347(b) and shall revert to the Wind-Down Debtors or Plan Administrator notwithstanding any escheat or abandoned property laws. Checks are void if not cashed within 90 days of issuance.
• Postpetition and default interest shall not accrue or be paid on any claim absent a contrary court order or requirement of applicable bankruptcy law. Distributions shall be allocated first to the principal amount of a claim and then to accrued but unpaid interest.
• The Debtors and Wind-Down Debtors may set off or recoup against distributions any claims they hold against the recipient, subject to agreement or adjudication. Where a claim is Allowed against more than one estate, there shall be only a single recovery, and no holder shall receive more than payment in full.
• No distribution shall be made on an Allowed Claim payable under one of the Debtors’ Insurance Policies until the holder has exhausted all remedies under that policy. A holder that receives payment in full from a non-Debtor third party is barred from asserting the claim against the Debtors, and a holder whose combined third-party and Plan recoveries exceed its claim must repay the excess within 14 days or accrue interest at the Federal Judgment Rate.

D&O Insurance and Indemnification

• After the Plan Effective Date, the Wind-Down Debtors, Plan Administrator, or Litigation Trustee shall not terminate or otherwise reduce coverage under any D&O Liability Insurance Policies in effect on or after the Petition Date with respect to conduct or events occurring prior to the Plan Effective Date, and all directors, officers, managers, and members who served at any time prior to the Plan Effective Date shall be entitled to the full benefits of such policies for their full term.
• To the extent executory, the D&O Liability Insurance Policies shall be deemed assumed by the Wind-Down Debtors pursuant to sections 105 and 365 of the Bankruptcy Code and shall vest in the Litigation Trust. All other Insurance Policies shall be deemed assumed and shall vest in the Wind-Down Debtors, other than Insurance Policies transferred to a Purchaser in any Sale. To the extent the Debtors are not the first named insured under a D&O Liability Insurance Policy, nothing in the Plan constitutes a rejection of that policy, which shall remain in full force and effect along with all of the Debtors’ and Wind-Down Debtors’ rights thereunder.
  • The dissolution of the Debtors shall not impact the rights of the Litigation Trust to assert claims against the Equityholder Released Parties solely with respect to the Equityholder Covered Claims or to recover the proceeds of the D&O Liability Insurance Policies with respect thereto.
• Each Indemnification Obligation — other than those that may exist in the D&O Liability Insurance Policies and, if applicable, those assumed by any Purchaser in any Sale — shall be rejected as of the Plan Effective Date, with the Litigation Trustee’s funding obligation limited to the extent of coverage available under the D&O Liability Insurance Policies. Litigation Trust Assets and proceeds therefrom, other than the D&O policies, will not be used to fund such obligations.
  • No persons or entities that are not Released Parties shall be entitled to benefit from such Indemnification Obligations.
  • The Equityholder Released Parties shall have no right to seek or recover indemnification from any current or former director, officer, manager, member, or employee of the Debtors with respect to (a) any obligations arising under or in connection with the Equityholder Settlement, including any NBG or NDC Settlement Consideration payable thereunder, or (b) any obligations arising under or in connection with the Permitted Litigation Claims transferred to the Litigation Trust.

Releases

• The “Released Parties” include the Debtors, the Wind-Down Debtors, the DIP Lenders, the Prepetition Lenders, the Prepetition Agent, and the Equityholder Released Parties solely with respect to Equityholder Released Claims, together with each current and former affiliate and Related Party of the foregoing.
  • An entity shall not be a Released Party if it opts out of the releases or timely objects and such objection is not resolved before confirmation.
  • No Equityholder Released Party shall be a Released Party with respect to any Equityholder Covered Claims.
• The “Releasing Parties” include the Debtors, the Wind-Down Debtors, the DIP Lenders, the Prepetition Lenders, the Prepetition Agent, the Equityholder Released Parties, and all holders of Claims or Interests that vote to accept, are deemed to accept, abstain from voting on, vote to reject, or are deemed to reject the Plan, together with their affiliates and Related Parties to the maximum extent permitted by law.
  • Holders in the voting and non-voting categories shall not be Releasing Parties if they affirmatively opt out by checking the box on the applicable ballot or notice of non-voting status, or timely object and such objection is not resolved before confirmation.
  • The Equityholder Released Parties shall not be Releasing Parties if the Equityholder Settlement is not approved by the bankruptcy court.
• The Equityholder Released Parties comprise the NBG Released Parties and the NDC Released Parties, including NBG and NDC and their respective identified individuals, trusts, and entities, together with their respective spouses, children, trustees, beneficiaries, and owners, the estates of any deceased individuals identified, and any trust established by, for the benefit of, or holding an interest on behalf of any such individual or entity.
• The Debtor release provides that each Released Party is released and discharged by the Debtors, the Wind-Down Debtors, and their estates from all Claims and Causes of Action, whether known or unknown, including Avoidance Actions and derivative claims, relating to or arising from, among other things, the Debtors and their estates, the Debtors’ in- or out-of-court restructuring efforts, intercompany transactions, the Equityholder Settlement and Equityholder Settlement Term Sheets, the Definitive Documents, the Prepetition DDTL Facility, the Prepetition ABL/FILO Facility, the Prepetition ABL/FILO Deficiency Claims, the Second Lien Facility, the Owner Notes, any Sale, and the Plan.
  • To the extent the Debtor release covers the topics of the Additional Special Committee Investigation, such releases are subject to, and determined following, the completion of that investigation, conducted by the Additional Special Committee comprised of Jill Frizzley.
• The third-party release provides substantially parallel releases of the Released Parties by each of the Releasing Parties other than the Debtors and the Wind-Down Debtors. Entry of the Confirmation Order shall constitute the court’s finding that the third-party release is consensual, essential to confirmation, given in exchange for good and valuable consideration, a good-faith settlement and compromise, in the best interests of the Debtors and their estates, and fair, equitable, and reasonable.
• The releases do not release any post-Plan Effective Date obligations of any party under the Plan, the Equityholder Settlement, the Equityholder Settlement Term Sheets, the Confirmation Order, any Sale, or any implementing document, and nothing in the Plan releases, compromises, or impairs any Retained Causes of Action or the Permitted Litigation Claims.
• On the Plan Effective Date, concurrently with the applicable distributions and, in the case of a Secured Claim, satisfaction in full of the Allowed portion of that claim, all mortgages, deeds of trust, liens, pledges, and other security interests against property of the estates or of any Non-Debtor Subsidiary shall be fully released and discharged — other than Other Secured Claims the Debtors elect to Reinstate and, until the DIP Obligations are paid in full, the DIP Agent’s liens — with all right, title, and interest reverting to the Wind-Down Debtors. Holders and their agents shall release any collateral held, at the Wind-Down Debtors’ sole cost, and take such steps as are necessary to record the cancellation, and the Wind-Down Debtors are authorized to make such filings on their behalf. Presentation of the Confirmation Order shall constitute sufficient evidence of, but shall not be required to effect, termination of such liens.

Exculpation and Injunction

• The “Exculpated Parties” consist of each of the Debtors and each of the Disinterested Directors — Scott D. Vogel, Charles T. Piper, and John T. Young, Jr. — and the Additional Disinterested Director, Jill Frizzley, solely in their capacities as such. The Disinterested Directors and the Additional Disinterested Director serve as independent and disinterested managers and directors of each of the Debtors other than RNDC, Alaska, LLC, and the Special Committee and Additional Special Committee are constituted accordingly.
• Effective as of the Plan Effective Date, no Exculpated Party shall have or incur liability for any act or omission in connection with the chapter 11 cases prior to the Plan Effective Date, including the formulation, preparation, dissemination, negotiation, or filing of the Equityholder Settlement, the Equityholder Settlement Term Sheets, the Disclosure Statement, the Plan, the Wind-Down Transactions, the DIP Facility, the prepetition facilities, and the Definitive Documents.
  • The exculpation is in addition to, and not in limitation of, all other releases, indemnities, and applicable law protecting the Exculpated Parties from liability.
  • No person or entity may commence or pursue a claim against the Exculpated Parties relating to any exculpated act or omission without the bankruptcy court first determining, after notice and a hearing, that the claim is colorable and not released or exculpated, and specifically authorizing the claim to be brought.
  • Nothing in the exculpation releases, compromises, or impairs any Retained Causes of Action or the Permitted Litigation Claims.
• All entities holding Claims, Interests, Causes of Action, or liabilities released, settled, discharged, satisfied, stayed, or terminated under the Plan, or subject to exculpation, are permanently enjoined from commencing or continuing any action, enforcing any judgment, creating or enforcing any encumbrance, or asserting any right of setoff, subrogation, or recoupment against the Debtors, the Wind-Down Debtors, the Released Parties, or the Exculpated Parties on account of such claims.
  • Upon entry of the Confirmation Order, all holders of Claims and Interests and their respective employees, agents, officers, directors, managers, principals, and direct and indirect affiliates shall be enjoined from taking any action to interfere with the implementation or consummation of the Plan.
  • Nothing in the injunction affects any Retained Causes of Action or Permitted Litigation Claim.

Conditions Precedent

• Consummation of the Plan is conditioned on, among other things:
  • Entry of the Confirmation Order, which shall be in full force and effect and shall not have been reversed, stayed, modified, dismissed, vacated, or reconsidered.
  • The absence of any instituted, threatened, or pending action, proceeding, or investigation, or any order, statute, rule, regulation, executive order, stay, decree, judgment, or injunction, that in the Debtors’ reasonable judgment would prohibit, prevent, or restrict consummation of the Wind-Down Transactions.
  • To the extent the Debtors consummate the Sales, entry of a Sale Order approving each such Sale, which shall be in full force and effect and shall not have been stayed, reversed, modified, or amended, and consummation of each Sale or the ability of the Plan Administrator to consummate it following the Plan Effective Date in accordance with the applicable Sale Order and Sale Documents.
  • Receipt of all authorizations, consents, regulatory approvals, rulings, or documents necessary to implement the Plan and the Wind-Down Transactions, including the Sales, if any.
  • Execution or filing of the final Plan Supplement schedules, documents, and exhibits in form and substance consistent with the Plan.
  • Satisfaction or waiver of all conditions precedent to the effectiveness of the Litigation Trust Agreement, which shall be in full force and effect.
  • Satisfaction or waiver of the conditions to effectiveness of the NBG Settlement and the NDC Settlement, including approval of each settlement and the related releases upon entry of the Confirmation Order.
  • The Final DIP Order being in full force and effect.
  • Execution and delivery of the Definitive Documents and satisfaction or waiver of any related conditions precedent.
  • Establishment and funding of the Professional Fee Escrow Account, implementation of the Wind-Down Transactions consistent in all material respects with the Plan, payment of invoiced professional fees and expenses related to the implementation of the Wind-Down Transactions to the extent authorized by the bankruptcy court, and full funding of the Wind-Down Reserve in cash.
• The Debtors may waive any condition to the Plan Effective Date at any time without notice or further court approval, provided that the conditions relating to the effectiveness of the NBG Settlement and the NDC Settlement may not be waived without the prior written consent of NBG or NDC, as applicable.
• If the Plan Effective Date does not occur, the Plan shall be null and void in all respects, and nothing in the Plan or Disclosure Statement shall constitute a waiver or release of any Claims or Interests, prejudice the rights of any party, or constitute an admission by any party.

Modification and Revocation

• The Debtors reserve the right to modify the Plan and seek confirmation consistent with the Bankruptcy Code and, as appropriate, not resolicit votes on such modified Plan, and expressly reserve their rights to alter, amend, or modify the Plan materially after confirmation, subject to section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019.
  • The Debtors shall not modify or amend the provisions of the Plan implementing, or relating to, the Equityholder Settlement without the prior written consent of NBG or NDC, as applicable.
• The Debtors reserve the right to revoke or withdraw the Plan before the Confirmation Date. If the Plan is revoked or withdrawn, or if confirmation and consummation do not occur, the Plan shall be null and void, any settlement or compromise embodied therein shall be deemed null and void, and nothing therein shall constitute a waiver or release of any Claims or Interests, prejudice any party’s rights, or constitute an admission by the Debtors or any other entity.

Executory Contracts and Unexpired Leases

• On the Plan Effective Date, each Executory Contract and Unexpired Lease not previously rejected, assumed, assumed and assigned, or included in a Rejection Notice shall be deemed automatically rejected, unless it is identified for assumption in the Plan, a Cure Notice, or the Schedule of Assumed Executory Contracts and Unexpired Leases, was assumed as part of a Sale, is subject to a pending assumption motion, was entered into in connection with the Plan, or is a D&O Liability Insurance Policy.
• Proofs of claim arising from rejection must be filed within 30 days after the later of service of notice of the order approving such rejection, the effective date of the rejection, or the Plan Effective Date. Allowed rejection damages claims shall be classified as General Unsecured Claims.
• Cure Obligations shall be satisfied by performance or payment in cash on or after the Plan Effective Date, or on such other terms as the parties may agree. Cure Notices shall be distributed at least seven days before the Confirmation Hearing, with objections due by the Cure/Assumption Objection Deadline, generally 14 days after the filing of the Schedule of Assumed Executory Contracts and Unexpired Leases and service of the Cure Notice.

Preservation of Causes of Action

• On the Plan Effective Date, all Causes of Action other than the Permitted Litigation Claims shall automatically vest in the Wind-Down Debtors, and the Plan Administrator shall have the right and authority to investigate, commence, prosecute, or settle any and all Retained Causes of Action, whether arising before or after the Petition Date.
  • Retained Causes of Action are those claims and Causes of Action the Debtors or their estates hold as of the Plan Effective Date that are listed on the Schedule of Retained Causes of Action, to be filed with the Plan Supplement on or prior to the Plan Effective Date, and exclude any claim or cause of action transferred to any Purchaser pursuant to any Sale, transferred to or vested in the Litigation Trust as a Permitted Litigation Claim, or that is an Equityholder Released Claim. The Equityholder Released Claims shall be released pursuant to the Plan.
  • The Debtors, Wind-Down Debtors, or Plan Administrator shall consult with the DIP Agent in connection with Retained Causes of Action until the DIP Obligations have been paid in full.
  • No entity may rely on the absence of a specific reference in the Plan, Plan Supplement, or Disclosure Statement to any Cause of Action as an indication that the Plan Administrator or Litigation Trustee will not pursue it.

Transfer Tax Exemption

• To the maximum extent provided by section 1146(a) of the Bankruptcy Code, any transfers of property under the Plan, including any Sale, or the issuance, transfer, or exchange of any security, shall not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, stamp act, real estate transfer tax, mortgage recording tax, or other similar tax or governmental assessment, and the appropriate state or local officials shall forgo collection of any such tax and accept the relevant instruments for filing and recordation.