Searles Valley Minerals - Chapter 11 Plan Terms

Plan / RSA Terms

Overview

• Searles Valley Minerals Inc. and two affiliates, Trona Railway Company LLC and Searles Domestic Water Company LLC, filed the combined disclosure statement and Chapter 11 plan of liquidation on Sept. 29, 2026, built around two asset sales, one closed and one pending, and a settlement among the debtors, the DIP lender, the parent sponsor, Nirma Limited, and the official committee of unsecured creditors.
• The plan is predicated on the going concern closing, expected on or around Oct. 1, 2026, and the soda ash closing, which occurred Sept. 11, 2026. It contemplates substantive consolidation of the debtors solely for distribution purposes and creates two post-effective-date vehicles: a wind-down trust for all claims other than general unsecured claims, and a GUC liquidating trust for the sole benefit of general unsecured creditors.
• The corporate and lender stack is closely held: Searles Valley Minerals is wholly owned by Karnavati Holdings, Inc., which is both the DIP lender and the holder of approximately $135.2 million in unsecured parent loans, and Karnavati in turn is wholly owned by the sponsor, Nirma Limited, which acquired the predecessor mining business in 2007. HSBC Bank USA, National Association serves as prepetition secured lender under both prepetition facilities.
• The debtors operate a vertically integrated mining and processing complex at Searles Lake in Trona, California, employing approximately 280 people, on one of only four known water-soluble borate reserves globally and one of five natural soda ash mining locations in the United States. The debtors state the transactions preserve operations and hundreds of jobs and keep a potable water source in place for the town of Trona.

Key Dates

• Voting procedures objection deadline: Oct. 6, 2026, at 4 p.m. ET. This and the solicitation and confirmation dates that follow are the debtors' proposed timeline, subject to the court's availability and approval.
• Voting procedures and interim disclosure statement hearing: Oct. 13, 2026, at 10 a.m. ET; voting record date the same day.
• Solicitation packages mail within three business days after entry of the interim approval and procedures order.
• Plan supplement filing deadline: Nov. 6, 2026.
• Rule 3018 motions: Nov. 7, 2026, at 4 p.m. ET, with responses due Nov. 13, 2026.
• Voting deadline and plan/disclosure objection deadline: Nov. 13, 2026, at 4 p.m. ET.
• Voting tabulation affidavit, confirmation brief and replies: Nov. 16, 2026, at 4 p.m. ET.
• Combined hearing on final approval of the disclosures and confirmation: Nov. 18, 2026, at 2 p.m. ET.
• The effective date must occur no later than 14 days after entry of the confirmation order unless extended by written agreement of the debtors, the DIP lender and the committee.
• Bar dates under the Sept. 21, 2026, bar date order: general bar date, Oct. 21, 2026; interim administrative claims bar date, Oct. 21, 2026, for administrative claims arising from the petition date through Sept. 1, 2026; governmental bar date, Dec. 14, 2026; final administrative claims bar date, 30 days after the effective date, for claims arising after Sept. 1, 2026. Rejection damages claims are due on the later of the applicable general or governmental bar date and 30 days after service of the rejection order. Separately, the plan requires final professional fee applications within 30 days after the effective date.

Asset Sale Transactions

• Soda ash sale: following an auction on Aug. 25, 2026, at which TATA Chemicals North America Inc., or TCNA, and American Soda Ash LLC competed, TCNA submitted the final overbid and was declared successful bidder at $21.5 million, consisting of $17 million in cancellation of the debtors' outstanding balance under the soda ash supply and liquidity agreement, $4.16 million in cash, and waiver of the $340,000 termination fee any other bidder would have had to pay to terminate that agreement. The court entered the soda ash sale order on Aug. 28, 2026 (D.I. 341), approving the assumption and assignment of the soda ash contracts to TCNA; TCNA cancelled all liquidity advances outstanding as of that date and simultaneously terminated the sponsor's corporate guarantee. The sale closed Sept. 11, 2026.
• Going concern sale: after the soda ash sale hearing the debtors negotiated with two remaining bidders, 5E SVM, LLC and one other, over several weeks, with the bidders requesting additional DIP financing support from the sponsor and the prepetition secured lender to bridge signing to closing. The 5E SVM bid was the only actionable option carrying that support, so the auction was cancelled and the debtors signed a private purchase agreement with 5E SVM on Sept. 14, 2026. The court entered the going concern sale order (D.I. 399) after the Sept. 15, 2026, sale hearing, and the filing expects the going concern closing on or around Oct. 1, 2026. 5E SVM is a subsidiary of 5E Advanced Materials, Inc., a publicly traded, development-stage company with a market capitalization of over $100 million focused on refined borates, advanced boron derivative materials and critical materials; its stock trades on Nasdaq under FEAM and was priced at $2.94 per share on Sept. 22, 2026.
• Going concern consideration, valued at approximately $34 million as of Sept. 22, 2026:
  • Cash: $3,357,906 payable at closing, which includes $357,906 for prepaid expenses.
  • Stock: 8,300,000 shares of 5E Advanced Materials common stock, approximately $24.4 million based on the Sept. 22, 2026, closing price.
  • Note: a $6.22 million senior unsecured promissory note bearing 14.5% payable-in-kind interest, on terms set out in a term sheet attached to the purchase agreement.
  • Assumption of certain liabilities and cure costs, with the buyer separately paying approximately $0.5 million of cure costs on transferred contracts.
• The buyer has committed to offer employment to the vast majority of the debtors' existing employees.
• Sponsor support accompanying the going concern sale consists of a $10 million senior secured bridge facility bearing 8% payable-in-kind interest with a nine-month maturity and a $1 million fee payable on the earlier of repayment in full or maturity, plus financial backing for certain surety bonds for up to 12 months, worth approximately $7.5 million.
• Proceeds allocation under the going concern purchase agreement pays the Lazard banker's fees in full and gives the DIP lender and the prepetition secured lender each a 50% interest in the note consideration and 50% of the stock consideration. Liens of both lenders continue to attach to going concern proceeds, and any proceeds remaining after closing are segregated in a separate interest-bearing account pending further court order directing distribution.
• Free-and-clear relief was the gating item on the going concern bid: no going concern bidder was willing to take the assets burdened by legacy compliance obligations under California's cap-and-trade regulation or exposed to successor liability for them.
• Creditors whose contracts or liabilities the buyers or their designees assume under either purchase agreement are unimpaired, are not solicited and receive no plan distribution; creditors whose unsecured claims are not assumed are impaired and vote.

Marketing Process

• Searles Valley Minerals and Karnavati engaged Lazard in February 2024, and the debtors launched a prepetition sale process with Lazard in August 2025; by April 2026 an out-of-court transaction was no longer viable given legacy liabilities that would travel with the business and buyer unwillingness to transact outside a court-supervised process. Across the prepetition process and the postpetition continuation, Lazard contacted over 140 parties, 50 of which executed confidentiality agreements and accessed the data room, with several attending management meetings.
• The court entered the bidding procedures order on July 7, 2026 (D.I. 140). The debtors ran a dual-track process monetizing the soda ash contracts while preserving a going concern sale of the remaining assets. Six indications of interest arrived by the July 10, 2026, non-binding LOI deadline; by the Aug. 17, 2026, bid deadline, extended from Aug. 6, the debtors received two bids for substantially all assets and three for discrete assets.

Committee Settlement

• The debtors, the DIP lender, the sponsor and the committee resolved disputes over the scope of releases to the Nirma released parties, the committee's investigation and challenge rights against the prepetition secured lender, and the establishment and funding of the GUC liquidating trust. The settlement was read into the record at the Sept. 15, 2026, going concern sale hearing. Its material terms:
  • The committee agreed not to oppose entry of the going concern sale order, including approval of the sellers Nirma release effective at closing and the sale-proceeds allocation in section 2.7 of the purchase agreement, and the application of sale consideration to the prepetition and DIP loan obligations is not subject to any committee challenge.
  • The committee suspended all work investigating the prepetition secured lender's liens and claims and on any challenge under the final DIP order until at least the earlier of the going concern closing or termination of the purchase agreement; the challenge deadline is extended for the committee alone to the earlier of the going concern closing and two weeks after any termination, unless the committee and the prepetition secured lender agree to end it sooner, having already expired for everyone else. There is no cap on fees for investigation work performed to date, subject to the committee's overall budget.
  • So long as no challenge or claim is brought by or with the committee against the prepetition secured lender or any Nirma released party and the work suspension continues, the DIP lender, the debtors and the committee will use commercially reasonable good-faith efforts to negotiate a consensual plan, and the DIP lender will not support a plan without committee consent unless that plan establishes the GUC liquidating trust for the sole benefit of general unsecured creditors, excluding the prepetition secured lender, the sponsor, the DIP lender and their affiliates, with the trustee and oversight board selected by the committee, funded only with the $3 million provided under the purchase agreement as consideration for the sellers Nirma release, the remaining Chapter 5 actions and any unused extended committee budget, with those assets used solely to pay committee professional fees above the committee professionals' budget, the trust's costs including claims administration, distributions on general unsecured claims and U.S. Trustee fees on trust disbursements, and transfers all remaining Chapter 5 actions to that trust for prosecution, settlement or waiver in the trustee's sole discretion.
  • The Nirma released parties include all present and former officers, directors and managers of the debtors, and under any such plan the debtors and committee will support broad general releases for those individuals and for the prepetition secured lender, its affiliates and related persons covering claims not released under the purchase agreement, including Chapter 5 avoidance claims, as well as allowance of the prepetition secured lender's secured claims as provided in the final DIP order.
  • The extended committee budget is carried in the DIP budget for committee professionals for Sept. 11 through Nov. 13, 2026, bringing the aggregate committee professionals' budget to $3 million for the period from the petition date through Nov. 13, 2026. Any amount by which allowed committee professional fees for Sept. 11 through Nov. 13, 2026, fall below $500,000 flows to the GUC liquidating trust as extended committee budget savings.

CARB Settlement

• The California Air Resources Board moved on Aug. 12, 2026, for a ruling that a section 363 sale could not extinguish the debtors' cap-and-trade compliance obligations (D.I. 273); the court overruled and denied that motion on the merits at an Aug. 26, 2026, hearing. CARB then filed a request for a stay pending appeal on Sept. 10, 2026 (D.I. 366), which the debtors opposed as premature, and the parties settled before the court ruled.
• Under the settlement, at the going concern closing Searles Valley Minerals surrenders all the compliance instruments it currently holds, approximately 16,048, to CARB. CARB agreed the surrender satisfies the debtors' obligations under the CARB programs arising after the petition date and before the going concern closing, other than pre-closing reporting obligations, and that it will hold no postpetition administrative expense claims against or interests in the debtors or their estates.
• CARB further agreed not to file or assert any proof of claim and to withdraw existing filings with prejudice, to withhold any free allocation of vintage-2027 allowances otherwise released into Searles Valley Minerals' account in the compliance instrument tracking system service, and to withdraw its motion and stay request and not pursue any appeal of the going concern sale order or the CARB ruling. The buyer may establish a new tracking-system account after closing and remains subject to environmental laws of general applicability, including post-closing reporting obligations under the CARB programs.

Contested Matter: Process Equipment Mechanic's Lien

• Process Equipment, Inc. dba Process Baron filed a limited objection on Aug. 18, 2026 (D.I. 292), asserting a mechanic's lien of approximately $3.18 million for work on the Trona Boiler ID & FD Fan Electrification Project in Trona, California, under a Dec. 5, 2024, master work agreement and a Dec. 19, 2024, purchase order. The debtors dispute the extent of the lien and have objected to the underlying claim (D.I. 409).
• On the record at the Sept. 28, 2026, hearing, the court ordered the debtors to reserve stock consideration valued at $4 million as an adequate-protection lienholder reserve, with a further hearing to determine the validity, extent and priority of the lien and what value, if any, Process ultimately receives. Any stock consideration remaining in the reserve after payment in full of an allowed Process secured claim is distributed 50% to the prepetition secured lender or its designee and 50% to the DIP lender. Class 3 and DIP recoveries in stock are subject to dilution by any stock distributed to Process from the reserve.

Prepetition Capital Structure

• As of the June 15, 2026, petition date, funded secured debt was approximately $85.5 million: approximately $47.4 million of term loans and $12.1 million of letters of credit under the demand line facility, and approximately $26 million under the receivables facility.
• Demand line facility: an up-to-$59.5 million working capital line from HSBC under an Aug. 29, 2025, facility letter, with a letter of credit sublimit, bearing either 8% on prime term loans or SOFR plus 2.25% on floating term loans, secured by a first-priority lien on all of the borrower's personal property and guaranteed by the sponsor, and renewable annually at the lender's sole discretion each April 30. Approximately $47.4 million of principal and approximately $12.1 million of letters of credit were outstanding at filing.
• Receivables facility: a receivables purchase facility under a March 29, 2024, recourse receivables purchase agreement through which HSBC advanced against substantially all eligible trade receivables, secured pari passu with the demand line on substantially all personal property and bearing SOFR plus 2.25%, subject to automatic one-year renewals terminable by either party on 30 days' notice. Approximately $26 million was outstanding at filing. The sponsor provided a guarantee of up to $30 million in connection with the consensual cash collateral agreement, and the facility has continued in effect during the cases under the final DIP order.
• Unsecured parent loans: a series of shareholder loans from Karnavati between 2019 and 2026 plus a Jan. 12, 2026, term loan agreement adding a $10 million term loan at SOFR plus 2.25%, with approximately $135.2 million outstanding at filing. These loans take no distribution from the GUC liquidating trust and are subordinated to allowed Class 4 claims.
• Other unsecured exposure: approximately $47.2 million of general unsecured claims as of the petition date excluding rejection damages, and an estimated net financial obligation of approximately $76.3 million under California's cap-and-invest program based on recent allowance prices, resolved through the going concern sale order and CARB settlement described above.

Postpetition Financing

• Supply and liquidity agreement: under the June 7, 2026, soda ash supply and liquidity agreement, TCNA provided $20 million of unsecured, interest-free liquidity advances and fulfilled the debtors' soda ash requirements to end users, taking payments on soda ash receipts at an agreed price per metric ton plus superpriority administrative expense claims. The sponsor guaranteed the obligations and received non-priming postpetition liens and superpriority claims on its contingent reimbursement claims. The filing states the $20 million has been satisfied in full through the soda ash sale, in which TCNA cancelled the $17 million balance then outstanding.
• DIP facility: a $20 million junior facility from Karnavati under a June 15, 2026, DIP credit agreement, with the DIP lender taking a junior lien on all assets subject to HSBC's liens and a first-priority lien on unencumbered assets such as real property, subject to limits on liens over avoidance action and commercial tort recoveries set out in the final DIP order. HSBC consented to cash collateral use and continued receivables facility access of up to $30 million in exchange for additional liens on assets unencumbered as of the petition date and superpriority administrative expense claims.
• Interim orders entered June 16, 2026, authorized an initial $7 million liquidity advance and $7.5 million of initial DIP financing. Sisecam Chemical Resources LLC and the committee objected to the DIP motion (D.I. 110, 161), and the debtors replied (D.I. 215). Negotiated revisions before final approval carved out of the DIP collateral 25% of proceeds of avoidance actions and commercial tort claims against certain debtor-affiliated entities and the prepetition lender and 50% of proceeds from all other such actions, increased the budget for committee professional fees and the committee's investigation budget, and eliminated certain obligations to supply the sponsor with V-BOR, the debtors' borax pentahydrate product. The court entered the final DIP order and granted the supply and liquidity motion on a final basis on July 22, 2026 (D.I. 231).
• The court approved a modified DIP credit agreement on Sept. 24, 2026 (D.I. 412) by stipulation between the debtors and the DIP lender, providing an additional $5 million of funding, a revised budget and modified milestones. The debtors state that the nature of the business and the DIP milestones make an efficient Chapter 11 process essential.
• DIP facility claims, which are unclassified, receive on the effective date a 50% interest in the note consideration and 50% of the stock consideration to the extent not distributed at closing, subject only to dilution by stock distributed to Process from the lienholder reserve. DIP liens continue to attach to all going concern sale proceeds with the same validity, extent and priority as before closing, and to the wind-down trust assets in the same priority as they attached to the debtors' assets before the effective date.

Plan Funding and Liquidation Structure

• The plan is funded primarily from the wind-down trust assets and the purchase agreement proceeds, including the cash, note and stock consideration to the extent not previously distributed, the GUC liquidating trust cash received under the going concern purchase agreement, and soda ash sale proceeds not previously distributed.
• Distributions on allowed Class 4 claims, and on any allowed committee professional fee claims exceeding $3 million in the aggregate, come solely from the GUC liquidating trust and are funded solely from GUC liquidating trust assets. All other claims are paid by the wind-down trust from wind-down trust assets.
• GUC liquidating trust: established and effective on the effective date, with an initial two-year term extendable by the trustee, holding GUC liquidating trust cash, defined as the $3 million received under section 2.9(f) of the going concern purchase agreement plus any extended committee budget savings, and the GUC Chapter 5 actions, which are all avoidance actions other than causes of action sold or released under the purchase agreement, section 549 and related section 550 actions, and any avoidance actions against the prepetition secured lender or its affiliates and related parties. Assets vest free and clear of liens, claims and interests. The committee selects the trustee and the GUC oversight board, both disclosed in the plan supplement.
• Wind-down trust: established and effective on the effective date, with an initial two-year term extendable by the trustee, holding all other estate property including the wind-down amount and the wind-down trust retained causes of action, but excluding GUC liquidating trust assets and any permit required to remain in a debtor's name. Assets vest free and clear except for the liens, claims and interests of the prepetition secured lender and the DIP lender, which attach with the same priority they held against the debtors' property. The DIP lender selects the initial members of the one-to-three-member wind-down trust oversight board, disclosed in the plan supplement, which supervises the wind-down trustee and may remove and replace it without cause. The plan defines the wind-down trust retained causes of action to include the non-GUC Chapter 5 actions, which cover section 549 claims and any avoidance actions against the prepetition secured lender, though the disclosure statement's wind-down discussion says those actions remain in the estates.
• After the effective date the debtors stay in existence to keep the permits in place, transfer them to the buyer and perform under the transition services agreement, with the wind-down trustee as sole director and officer of each debtor; each debtor dissolves on entry of a final decree in its case or earlier as the wind-down trustee determines. If Class 4 accepts, all interests in Searles Valley Minerals vest in the wind-down trust once every debtor's permit transfer date has occurred, leaving ownership of the other debtors unchanged; if Class 4 does not accept, each debtor's interests vest in the wind-down trust after that debtor's permit transfer date. The wind-down trustee must use reasonable efforts to collect the debtors' accounts receivable for remittance to the prepetition secured lender and may not settle any receivable without its written consent.
• Wind-down amount: $1.5 million to $2 million, to fund the wind down, pay the reasonable fees and expenses of the wind-down trustee and the wind-down debtors, and satisfy plan obligations in accordance with a wind-down budget to be filed with the plan supplement. Funding of the wind-down amount in accordance with that budget is a condition to the effective date.
• Trust expenses are paid from the respective trusts' assets: wind-down trust expenses in cash from wind-down trust assets, and GUC liquidating trust expenses from GUC liquidating trust cash, the latter expressly including allowed committee professional fees above $3 million in the aggregate and U.S. Trustee fees on GUC trust disbursements.

Treatment of Claims and Interests

• Class 1, priority claims (unimpaired, deemed to accept, not voting): payment in cash of the unpaid portion of each allowed claim, on the effective date or, for claims allowed later, within 30 days of the allowance order becoming final, with post-effective-date payments made by the wind-down trustee. Projected recovery 100% on estimated claims of $100,000 to $200,000.
• Class 2, other secured claims (unimpaired, deemed to accept, not voting): at the option of the debtors and the DIP lender, payment in full in cash, return of the collateral plus section 506(b) postpetition interest where required, or other treatment rendering the claim unimpaired under section 1124; where paid in cash, the securing liens are deemed released without further order. Projected recovery 100% on estimated claims of $200,000 to $500,000.
• Class 3, prepetition loan claims (impaired, entitled to vote): HSBC receives all proceeds from collection of the debtors' accounts receivable; a 50% interest in the note consideration and 50% of the stock consideration not distributed at closing, to the extent not previously distributed and subject to dilution by any stock distributed to Process from the lienholder reserve; and the tax refund. Residual wind-down trust assets after payment of allowed administrative expense claims, allowed priority claims and wind-down administration costs are split equally with the DIP lender until the DIP facility claims are paid in full and thereafter go entirely to HSBC. Projected recovery 43% on an estimated $82 million.
• Class 4, general unsecured claims (impaired, entitled to vote): each holder receives its pro rata share of GUC liquidating trust interests, entitling it to a pro rata share of GUC liquidating trust assets, with distributions made by the GUC liquidating trustee. Projected recovery 3.0% to 3.6% on estimated claims of $70 million to $85 million. Allowed rejection damages claims are treated as Class 4 claims, and the class includes intercompany claims among the debtors, while claims of the prepetition secured lender, the sponsor, the DIP lender and their affiliates and related parties, other than Searles Valley Minerals Europe S.A.S., are excluded.
• Class 5, subordinated claims (impaired, deemed to reject, not voting): no distribution. General unsecured claims of the sponsor and its non-debtor affiliates fall in this class, except claims of Searles Valley Minerals Europe S.A.S., the French non-debtor subsidiary, which are Class 4. The table projects 0% on an estimated $0, although the filing describes approximately $135.2 million of unsecured parent loans held by Karnavati, a non-debtor affiliate of the sponsor, as subordinated to Class 4 and excluded from GUC trust distributions.
• Class 6, interests (impaired, deemed to reject, not voting): no distribution. The treatment section deems interests cancelled on the effective date, while the recovery table and the implementation provisions vest them in the wind-down trust on timing tied to the permit transfer dates and to whether Class 4 accepts. Projected recovery 0% on $0.
• Unclassified claims are unimpaired: administrative claims and tax claims are paid in cash in the allowed amount on the timetable set out in the plan, and allowed professional fee claims are paid from the professional fees escrow account created under the final DIP order, which is held in trust for the professionals and outside estate property. Any cash remaining in that escrow after all professional fee claims are paid goes first to the GUC liquidating trust to the extent of the extended committee budget savings and otherwise to the wind-down trust.
• Classes 3 and 4 are the only voting classes; acceptance requires a majority in number and two-thirds in dollar amount of claims voting, and at least one impaired class excluding insiders must accept. Because Classes 5 and 6 are deemed to reject, the debtors will seek confirmation under section 1129(b).

Releases, Exculpation and Injunction

• Where the third-party releases in the going concern purchase agreement conflict with the plan, the purchase agreement releases control. The plan memorializes the debtor releases granted under the going concern sale order, and the debtors state they are not aware of any potential claims or causes of action against the released parties.
• Released parties are the debtors and their estates; current and former employees, directors and officers, agents, representatives, advisors, attorneys, investment bankers and financial advisors of the debtors; the wind-down debtors and wind-down trustee; the DIP lender; the prepetition secured lender; the Nirma released parties as defined in the going concern purchase agreement; the GUC liquidating trust and its trustee; the committee and its members in that capacity; all professionals retained by the committee and its members; and each of their related parties.
• Releasing parties are holders of claims, the committee and its members in that capacity, and their related parties to the extent bindable — excluding holders in classes deemed to reject and not entitled to vote, holders that validly opt out, holders that timely object to the releases without withdrawing before confirmation, holders that timely vote to reject, and the DIP lender and the prepetition secured lender. Opting out escapes only the Section 10.7 third-party release; the opt-out party remains bound by the other releases, exculpations and injunctions.
• Separately and without limiting the third-party release, effective on the effective date the DIP lender, the prepetition secured lender and the sponsor release the debtors' current and former directors, officers, managers and members from all claims, known or unknown, arising on or before the effective date in connection with the debtors, the estates, restructuring efforts, intercompany transactions, the Chapter 11 cases, the DIP facility, the sale transactions and the plan.
• The Section 10.7 releases do not release a holder's right to the treatment provided for its allowed claim, any claims and liens of the DIP lender or the prepetition secured lender, or any post-effective-date obligations under the plan, the confirmation order, any sale transaction or any implementing document.
• Exculpated parties are the debtors; each director or officer serving between the petition date and the effective date; all professionals retained by the debtors or the committee; the committee and each member; the wind-down trust and trustee; the GUC liquidating trust and trustee; and related parties of the professionals and committee to the extent they are estate fiduciaries. Exculpation runs from the petition date through the effective date and covers the case administration, the postpetition marketing and sale process, the negotiation and pursuit of the disclosure statement and both sale transactions, solicitation and confirmation, plan funding and consummation, the DIP credit agreement, post-effective-date plan administration and the creation of both trusts, carving out intentional fraud and willful misconduct as determined by a final order, and does not release post-effective-date obligations under the plan or implementing documents.
• From the effective date, holders of claims and interests are permanently enjoined from pursuing satisfied, treated or released claims against the debtors, the released parties and the two trusts, including litigation, enforcement of judgments, creation or enforcement of encumbrances, and setoff not formally asserted in a timely filed proof of claim or pleading before entry of the confirmation order. Under section 1141(d)(3), confirmation does not discharge claims against the debtors.

Conditions Precedent

• Confirmation conditions: entry of a final order finding the disclosure statement contains adequate information; a confirmation order in form and substance reasonably acceptable to the debtors, the DIP lender, the committee and the buyers; no material amendment to the plan except in accordance with Article XV; plan supplement documents reasonably acceptable to the debtors, the DIP lender and the committee and approved by the court; paydown of the receivables facility to no more than $2 million, waivable by the DIP lender in its sole discretion; and approval of all plan terms by the confirmation order. The filing still marks the $2 million confirmation threshold as tentative, against full paydown under the parallel effective-date condition.
• Effective date conditions include: entry of the confirmation order as a final order with no stay in effect and in form and substance reasonably acceptable to the debtors, the DIP lender and the committee, authorizing and directing the debtors and both trusts to implement the plan; execution of all implementing documents; satisfaction or waiver of the closing conditions under both purchase agreements and occurrence of both the going concern closing and the soda ash closing; paydown of the receivables facility in full, waivable by the DIP lender in its sole discretion; no material amendment to the confirmed plan except under Article XV; execution of the GUC liquidating trust agreement with the trust ready to receive its assets; appointment and acceptance by the wind-down trustee, and selection by the committee and acceptance by the GUC liquidating trustee and each GUC oversight board member, each approved in the confirmation order; funding of the wind-down amount per the wind-down budget; sufficient cash to satisfy all allowed administrative claims; filing of the notice of effective date; and occurrence of the effective date within 14 days of entry of the confirmation order absent written extension.
• Both sets of conditions may be waived in whole or in part, in writing, by each of the debtors, the DIP lender, the buyer and the committee without further court order. If the effective date does not timely occur, the debtors, the DIP lender, the committee and any other party in interest reserve all rights to seek vacatur of the confirmation order and to have the plan declared null and void.

Amendment Thresholds

• Before entry of the confirmation order, the debtors may modify the plan with the consent of the DIP lender and the committee, in each case not to be unreasonably withheld.
• After confirmation, the same consents allow modification to cure defects or inconsistencies, subject to court approval after notice and a hearing and provided the change does not materially and adversely affect the interests, rights, treatment or distributions of the sponsor, the DIP lender or any class.
• A post-confirmation, pre-consummation modification that does materially or adversely affect a class additionally requires acceptance by at least two-thirds in amount and more than one-half in number of allowed claims or interests voting in each affected class, plus court approval and section 1125 compliance.

Executory Contracts

• Every executory contract and unexpired lease that has not already been rejected, assumed, or assumed and assigned, including in the sale transactions, is deemed rejected on the effective date, except contracts subject to a pending assumption motion, insurance policies including D&O policies, permits, and contracts listed on an assumption schedule in the plan supplement approved by the DIP lender. Cure obligations on assumed contracts are satisfied in cash on the effective date or as soon as practicable thereafter, or on other agreed terms, with cure disputes resolved by final order and settleable without further court approval.
• Rejection damages proofs of claim must be filed within 30 days after the notice of the effective date or be forever barred; the GUC liquidating trustee may object to, settle or otherwise resolve them.

Events Leading to Chapter 11

• The July 4-5, 2019, Ridgecrest earthquakes, centered roughly 25 miles from the Searles Lake facilities, caused significant above-ground and subsurface damage; extraction operations remained at approximately 50% of pre-earthquake production levels as of the petition date. The debtors incurred approximately $50 million in repair costs and lost revenue, and EBITDA fell from approximately $52 million in fiscal 2019 to $2 million in fiscal 2020.
• Global soda ash volatility compounded the damage, with net soda ash sales declining from approximately $223 million in fiscal 2023 to approximately $147 million in fiscal 2026 and operations running at a significant loss. By early 2026 the company was losing more than $5 million per month; it mothballed soda ash production in February 2026 and laid off 240 employees and contractors, approximately 46% of the workforce.
• In April 2026 the debtors pivoted to an in-court transaction, with Lazard contacting over 35 parties about financing an in-court sale process while the sponsor and advisors engaged soda ash suppliers to capture liquidity from the soda ash contracts.
• Governance steps preceded the filing: on May 26, 2026, Searles Valley Minerals appointed John S. Dubel as independent director, with authority, together with any other disinterested board members, to review, negotiate and approve related-party transactions with Karnavati and the sponsor; his approval is required for any restructuring transaction, and he is reviewing historical transactions between the debtors and their affiliates. On June 12, 2026, the board formed a special independent committee consisting solely of Dubel with exclusive authority to review, negotiate and approve transactions between the DIP lender and the debtors, including the DIP facility terms.

Plan Support

• The debtors recommend that holders entitled to vote accept the plan and support confirmation, arguing that a Chapter 7 liquidation could destroy significant value and invite delay, litigation and added cost; the Chapter 7 liquidation analysis exhibit, which assumes conversion on Nov. 19, 2026, has not yet been filed. Committee support is not yet settled in the filing: the statement that the committee supports confirmation and urges creditors to accept, and the reference to a committee solicitation letter recommending acceptance, both remain bracketed, although Article XVI states without brackets that in the opinion of the debtors and the committee the plan is superior to the alternatives.