Shannon Wind - Chapter 11 Plan Terms

Plan Terms

Overview

• Shannon Wind, LLC is the proponent of the Plan within the meaning of section 1129 of the Bankruptcy Code, which provides for, among other things, the resolution of the outstanding Claims against, and Existing Equity Interests in, the Debtor.
  • The Debtor owns a 204.1-megawatt wind farm in Clay County, Texas (the "Project"), consisting of 119 General Electric 1.7-103 wind turbines, which began commercial operations in December 2015.
• Pursuant to Bankruptcy Court-approved Bidding Procedures, the Debtor is soliciting offers for either (a) all or substantially all of the Debtor's assets pursuant to a Sale Transaction or (b) the Debtor's New Equity to be acquired pursuant to a New Equity Transaction.
  • The Debtor reserves the right, subject to Bankruptcy Court approval, to select the highest or otherwise best offer as the Successful Bid and to proceed with and consummate a Sale Transaction, a New Equity Transaction, or any alternative restructuring transaction, or to abandon any such transaction, as the Debtor determines in the exercise of its business judgment is in the best interests of its estate and stakeholders.
  • The "Successful Bid" means the bid(s) the Debtor determines to be the highest and otherwise best offer for either (i) all or substantially all of the Debtor's assets pursuant to a Sale Transaction or (ii) the New Equity to be acquired pursuant to a New Equity Transaction.
  • Pursuant to the Bidding Procedures Order, the Bankruptcy Court approved certain Assumption and Assignment Procedures for the assumption and assignment of Executory Contracts and Unexpired Leases to a Successful Bidder.

Restructuring Transactions

• Sale Transaction:
  • A "Sale Transaction" means a sale of all or substantially all of the Debtor's assets, which may be through one or more sales, pursuant to the terms of the Plan, the Sale Documents, and the other applicable Definitive Documents.
  • In the event the Successful Bid proposes a Sale Transaction, it will be consummated pursuant to the terms of the Sale Order and as a condition to the Effective Date. In exchange for the Successful Bidder's payment of the Restructuring Transaction Proceeds to the Debtor, the Debtor's assets shall be sold to the Successful Bidder.
  • On the closing date of the Sale Transaction, the Debtor shall satisfy the Allowed Prepetition Secured Obligations from the proceeds of the Sale Transaction.
  • The Debtor is proceeding with a Sale Transaction and, accordingly, the Plan does not provide for the issuance of equity or other securities of the Debtor, including non-voting equity securities.
  • The Debtor and its professionals continue to actively market the Debtor's assets consistent with the schedule provided in the Bidding Procedures; as of the date of the Combined Disclosure Statement and Plan, the Debtor is in active negotiations with multiple potential bidders and expects at least one to pursue a stalking horse bid.
• New Equity Transaction:
  • A "New Equity Transaction" means the sale of 100% of the New Equity to the Successful Bidder pursuant to the terms of the Plan, the New Organizational Documents, and the other applicable Definitive Documents.
  • In the event the Successful Bid proposes a New Equity Transaction, and conditioned upon Confirmation of the Plan, it will be consummated as a condition to the Effective Date. In exchange for the Successful Bidder's payment of the Restructuring Transaction Proceeds to the Debtor, the membership interests in the Reorganized Debtor shall be sold to the Successful Bidder.
  • On the Effective Date, the Reorganized Debtor shall be authorized to and shall issue the New Equity to the Successful Bidder in accordance with the terms of the Plan without the need for any further corporate action.

Classification and Treatment of Claims and Interests

• Article III of the Plan provides for the separate classification of Claims and Interests into six Classes:
  • Classes 1 and 2 are unimpaired and are deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code.
  • Class 3 (Prepetition Secured Obligations Claims) and Class 4 (General Unsecured Claims) are impaired and voted to accept the Plan.
  • Class 5 (510(b) Claims) is vacant and, pursuant to Section 6.3 of the Plan, is eliminated for purposes of voting and for determining acceptance or rejection of the Plan.
  • Class 6 (Existing Equity Interests) abstained from voting.
• Because the Plan has not been accepted by all Classes, the Debtor seeks confirmation of the Plan under section 1129(b), solely with respect to Class 6 (Existing Equity Interests), rather than section 1129(a)(8) of the Bankruptcy Code.
• Prepetition Secured Obligations Claims (Class 3):
  • The "Prepetition Secured Obligations" means any Claim on account of the Energy Hedge Obligations and Senior Secured Promissory Note Obligations under or pursuant to the Credit Documents, including (i) prepetition accrued and unpaid principal, interest, and fees and expenses (including professional fees) payable under the Credit Documents, and (ii) to the extent of the value of collateral securing such obligations, postpetition interest and professional fees.
  • The Prepetition Secured Obligations are impaired Claims. The Credit Documents shall continue in effect solely to the extent necessary to permit Holders of the Prepetition Secured Obligations Claims to receive distributions under the Plan.
• General Unsecured Claims (Class 4):
  • The General Unsecured Claims are impaired Claims.
  • The "GUC Recovery Contribution" means the lesser of (a) $150,000 or (b) Cash sufficient to satisfy all General Unsecured Claims, which amount shall be funded from the Debtor's Cash on hand and Restructuring Transaction Proceeds on the Effective Date and contributed to the Liquidation Trust.
    • The GUC Recovery Contribution is a contribution by the Prepetition Secured Parties to the Liquidation Trust from the proceeds of Collateral securing the Prepetition Secured Obligations.

Liquidation Trust

• On the Effective Date, the Liquidation Trust will be formed to hold legal and equitable title to the Liquidation Trust Assets, with the primary purpose of liquidating those assets and making distributions to Holders of Allowed General Unsecured Claims on account of their Liquidation Trust Interests.
  • The Liquidation Trust will have no objective to continue or engage in the conduct of a trade or business, except to the extent reasonably necessary to, and consistent with, its liquidating purpose.
  • Termination of the Liquidation Trust will occur no later than three years after the Effective Date, provided that, upon a Bankruptcy Court finding that an extension is necessary to complete its liquidating purpose, the term may be extended one or more times for a finite period not to exceed six months (and such extensions shall not exceed a total of four unless the Plan Administrator receives a favorable IRS ruling that any further extension would not adversely affect the Liquidation Trust's status as a grantor trust for U.S. federal income tax purposes).

Plan Administrator and Wind Down

• Accordion Partners, LLC will serve as the Plan Administrator and sole manager of the Wind Down Debtor, as well as trustee for the Liquidation Trust, and shall be responsible for reconciling Claims after the Effective Date, effectuating distributions from the Liquidation Trust Assets, and providing all related services.
• The "Wind Down" means the administration and wind down of any remaining affairs of the Estate, as well as the dissolution and liquidation of the Wind Down Debtor's Estate, if applicable, after the Effective Date.
  • The "Wind Down Amount" will be funded from the Debtor's Cash on hand and Restructuring Transaction Proceeds on the Effective Date in an amount sufficient to fund (a) the payment in full of Allowed Administrative Expense Claims, Allowed Priority Tax Claims, and Allowed Other Priority Claims to the extent not otherwise assumed by the Successful Bidder or Reorganized Debtor, and (b) the costs to wind down the Estate and Chapter 11 Case and administer the Liquidation Trust in accordance with the Wind Down Budget.

Sources of Consideration

• Subject to the provisions concerning the Professional Fee Escrow Account and Wind Down Account, distributions under the Plan shall be funded by, among other things: (a) Cash on hand; (b) proceeds from the Sale Transaction; (c) the proceeds, if any, from prosecution or settlement of the Retained Causes of Action; and (d) proceeds from any other assets of the Debtor's estate or the Liquidation Trust.
• Cash distributions shall be funded with the Debtor's Cash on hand as of the Effective Date, including Cash from operations, and the Restructuring Transaction Proceeds in accordance with the terms of the Definitive Documents and the Plan.

Plan Support

• As a result of the Debtor's negotiations with CEI and Citibank, those parties have agreed to allow Restructuring Transaction Proceeds to be used under the Plan to fund distributions to General Unsecured Creditors and to fund the Wind Down.
  • CEI and Citibank have agreed to allocate recoveries in this manner to facilitate a smooth transaction and chapter 11 process, and have conditioned this recovery on the Debtor's ability to consummate the Restructuring Transactions on the terms set forth in the Plan.
• The Prepetition Secured Parties have also contributed to the Debtor's restructuring efforts through consensual use of cash collateral and agreement to the terms of the Plan, which includes using the proceeds of their collateral to fund distributions to General Unsecured Creditors.
  • The Debtor filed the Cash Collateral Motion on January 26, 2026; the Bankruptcy Court granted interim relief by order dated January 28, 2026 and entered the Final Cash Collateral Order on February 18, 2026.
• The Released Parties and the Exculpated Party, including the CRO and the Independent Manager, have made substantial and valuable contributions to the Debtor's restructuring through efforts to negotiate and implement the Plan, which maximizes and preserves the value of the Debtor for all parties in interest and optimizes recoveries.

Releases

• The "Released Parties" include: (a) the Debtor, its Estate, and the Reorganized Debtor; (b) the Plan Administrator, including as trustee on behalf of the Liquidation Trust; (c) the Prepetition Secured Parties; (d) the CRO; (e) the Independent Manager; (f) Professional Persons retained by the Debtor; and (g) solely with respect to (b) through (f), each of such parties' Affiliates and Related Parties.
• The "Releasing Parties" include: (a) the Debtor, its Estate, and the Reorganized Debtor; (b) the Plan Administrator, including as trustee on behalf of the Liquidation Trust; (c) the Prepetition Secured Parties; (d) the CRO; (e) the Independent Manager; (f) the Successful Bidder; and (g) all Holders of Claims or Interests that do not timely make the Third-Party Release Opt-Out Election or, as applicable, do not file a Release Objection.
  • Unlike the Released Parties, the Releasing Parties do not include a standalone category for the Affiliates and Related Parties of the foregoing, and substitute the Successful Bidder (item (f)) for the Professional Persons retained by the Debtor.
  • A "Non-Debtor Releasing Party" means any Releasing Party that is not the Debtor.
• The Debtor Release, described in Section 13.2 of the Plan, represents a valid exercise of the Debtor's business judgment.
  • The Debtor Release for the CRO, Independent Manager, and Professional Persons retained by the Debtor is appropriate because these parties share an identity of interest with the Debtor, supported the Debtor through the bankruptcy process, actively participated in meetings and negotiations during the Chapter 11 Case, and provided other valuable consideration.
• The Third-Party Release, described in Section 13.3 of the Plan, was consensually provided after due notice and an opportunity for a hearing and is a critical and integral component of the Released Parties' agreement to support the Plan.
  • The Debtor received at least three opt-out elections, all of whom shall be recognized as not granting the Third-Party Releases.
  • Neither the Third-Party Release nor any other provision of Section 13.3 of the Plan shall apply to any Person or Entity that makes the Third-Party Release Opt-Out Election.

Exculpation

• The "Exculpated Party" means the Debtor, to the maximum extent permitted by law.
• The Exculpation, described in Section 13.4 of the Plan, is narrowly tailored to protect the Debtor from inappropriate litigation and to exclude actions found to have constituted bad faith, fraud, willful misconduct, or gross negligence.
  • The Exculpation does not operate to waive or release (i) any Causes of Action arising from willful misconduct, actual fraud, or gross negligence of the applicable Exculpated Party, or (ii) the rights of any Person or Entity to enforce the Plan or a Final Order of the Bankruptcy Court.

Injunction and Gatekeeper Provision

• The injunction provision set forth in Section 13.5 of the Plan and the Gatekeeper Provision in Section 13.6 are essential to the Plan and necessary to preserve and enforce the settlement of Claims and Interests, the Debtor Release, the Third-Party Release, and the Exculpation.
  • The Gatekeeper Provision is limited in scope to matters directly related to the Chapter 11 Case and necessary to ensure finality to the Chapter 11 Case and the matters resolved by the Plan.

Retained Causes of Action

• The "Retained Causes of Action" means all Causes of Action, rights, and claims described in the Schedule of Retained Causes of Action filed with the Plan Supplement.
• The Liquidation Trust shall retain, and the Plan Administrator may enforce, all rights to commence and pursue any and all Retained Causes of Action and Causes of Action of the Debtor not otherwise transferred or sold pursuant to the Sale Transaction, other than those Causes of Action released by the Debtor pursuant to the releases and exculpations contained in the Plan, which shall be deemed released and waived as of the Effective Date.

Conditions Precedent to the Effective Date

• The occurrence of the Effective Date is subject to the satisfaction or waiver of certain conditions, including:
  • the Confirmation Order having become a Final Order that has not been stayed, reversed, vacated, amended, supplemented, or otherwise modified;
  • in the event of a Sale Transaction, the Sale Documents not having been terminated in accordance with their terms;
  • in the event of a Sale Transaction, the Sale Order having become a Final Order that has not been stayed, reversed, vacated, amended, supplemented, or otherwise modified; and
  • the Liquidation Trust having been established and validly existing and the Liquidation Trust Agreement having been executed.

Key Dates

• Petition Date: January 25, 2026, on which the Debtor filed a voluntary chapter 11 petition in the U.S. Bankruptcy Court for the Southern District of Texas.
• Claims Bar Date: April 20, 2026, at 5:00 p.m. (prevailing Central Time), for each claimant other than a governmental unit, including requests for payment under section 503(b)(9) of the Bankruptcy Code.
• Governmental Bar Date: July 24, 2026, at 5:00 p.m. (prevailing Central Time), solely as to governmental units.
• Voting Deadline: May 27, 2026, at 4:00 p.m. (prevailing Central Time), for Holders of Claims in Classes 3, 4, 5, and 6.
• Confirmation Hearing: held on June 3, 2026, at 9:00 a.m. (prevailing Central Time).