Simply Interior Homes - Chapter 11 Plan Terms

Plan Terms

Overview

• The Debtors propose a Combined Disclosure Statement and Chapter 11 Plan of Liquidation (the “Combined Disclosure Statement and Plan”) providing for the liquidation of the Debtors’ remaining Assets and the distribution of the proceeds of such assets to Holders of Allowed Claims against the Debtors.
  • The Debtors are the proponents of the Combined Disclosure Statement and Plan.
• The Debtors operate a home textiles and home décor business that designs, sources, and supplies fashion bedding, window treatments, bath products, decorative textiles, and related home furnishings (“soft goods”) for major retailers.
  • The Debtors were formed in early 2025 in connection with the carve-out of the soft goods business divisions from Keeco, LLC (“Keeco”), a portfolio company of Centre Lane Partners (“CLP”), and related affiliates (the “Carve Out Transaction”).
• The Debtors are Simply Interior Homes, LLC; Simply Interior Homes AcquisitionCo, LLC; SIH Beckham Buyer, LLC; SIH-HSD Holdings, LLC; SIH-BB Holdings, LLC; SIH-DMD Holdings, LLC; and SIH-SR Holdings, LLC.
• The Debtors commenced their Chapter 11 Cases by filing voluntary petitions on June 8, 2026 (the “Petition Date”). On June 18, 2026, the U.S. Trustee appointed the Official Committee of Unsecured Creditors (the “Committee”). No trustee or examiner has been appointed.
• After careful consideration of all available alternatives and deliberation with their advisors, the Debtors determined that filing these Chapter 11 Cases and pursuing a value-maximizing sale and liquidation process is in the best interest of the Debtors, their estates, and all of their stakeholders.

Sale Process

• Together with their advisors, the Debtors determined that preservation of value for all stakeholders would be best accomplished by: (1) commencing an orderly liquidation of the Debtors’ inventory and other working capital assets; and (2) pursuing a sale of the Debtors’ business and/or assets as a going concern or otherwise.
• The Debtors engaged Rock Creek to serve as their sales agent to develop and implement a comprehensive sale and marketing process designed to maximize the value of the Debtors’ business and assets on a going-concern basis, and to conduct lender outreach to ensure the Debtors had access to competitive debtor-in-possession financing.
  • In parallel with SB360’s Liquidation Process, Rock Creek reached out to approximately 200 parties (65 strategic and 135 financial), sent marketing materials, established a comprehensive data room, offered advisor and management calls, and made itself available to answer diligence questions.
• On June 23, 2026, the Court entered the Bidding Procedures Order, setting the timeline for the sale process, including:
  • July 1, 2026 at 4:00 p.m. (ET) as the deadline for selection of a Stalking Horse Bidder (subsequently extended by notice to July 13, 2026 at 4:00 p.m. (ET));
  • July 27, 2026 at 5:00 p.m. (ET) as the deadline to submit Qualified Bids; and
  • July 29, 2026 as the deadline to designate Qualified Bids or to cancel the Auction, as applicable.
• The Debtors did not designate a Stalking Horse Bidder.
• The Plan defines a potential “Sale” as the sale of substantially all of the Debtors’ Assets to the Purchaser pursuant to the Asset Purchase Agreement and the Sale Order; as of the filing, no purchaser had been identified, the Asset Purchase Agreement remained undated, and no Sale Order had been entered. The Cash proceeds from a Sale, if any, and the Liquidation Process will form the preliminary basis for the Distributions contemplated under the Combined Disclosure Statement and Plan, to be augmented by the monetization of other Liquidating Trust Assets.

Liquidation Process

• Prior to the Petition Date, and after soliciting proposals from four liquidation firms, the Debtors engaged SB360 Capital Partners, LLC (“SB360”) to serve as their liquidation consultant to conduct liquidation sales of the Debtors’ Inventory, Receivables, FF&E, and Intellectual Property, subject to Court approval (the “Liquidation Process”).
• Proceeds from the Asset Sales have been critical to the success and ongoing funding of the Debtors’ Chapter 11 Cases and will remain so until the Closing of any Sale.

DIP Financing

• The DIP Facility is provided pursuant to the ABL DIP Financing Term Sheet, dated as of July 1, 2026, and the DIP Order entered by the Bankruptcy Court on July 2, 2026 (Docket No. 214).
  • The DIP Lenders are GRC SPV Investments, LLC and Wingspire Capital, LLC, and the DIP Agent is Great Rock Capital Partners Management, LLC, in its capacity as sole and exclusive administrative agent (collectively with the DIP Lenders, the “DIP Secured Parties”).
• Prior to the Petition Date, Rock Creek reached out to several parties, in addition to the eventual DIP Secured Parties, regarding the potential provision of debtor-in-possession financing, as the Debtors did not otherwise have the necessary liquidity to continue their business in the ordinary course while funding these Chapter 11 Cases.
  • None of these parties were willing to provide such financing on both better and executable terms than the DIP Secured Parties.
  • Without the proceeds of the DIP Facility, the Debtors would be unable to fund payroll obligations or services from vendors, run the necessary sale process, or administer these Chapter 11 Cases, thereby dissipating value to the detriment of the Debtors’ Estates and stakeholders.
• On the Effective Date, except to the extent that a Holder of an Allowed DIP Claim agrees to less favorable or alternative treatment, each Holder of an Allowed DIP Claim (including interest, fees, and all other amounts due and owing under the DIP Facility) has consented to receive, and shall receive, the treatment the Plan characterizes as payment in full in Cash, in the amount of such Holder’s pro rata share of the Distributable Value in accordance with the Waterfall Recovery, applied in accordance with the terms of the DIP Documents.
  • For the avoidance of doubt, the provisions of the DIP Order survive the entry of the Confirmation Order.

Chapter 11 Plan of Liquidation

• The Combined Disclosure Statement and Plan is a joint plan for each of the Debtors and presents together Classes of Claims against, and Interests in, the Debtors.
  • It provides for the limited substantive consolidation of the Debtors’ Estates, solely for purposes of the Combined Disclosure Statement and Plan, including voting by the Holders of Claims and making any distributions to Holders of Claims.
• Because the Combined Disclosure Statement and Plan is a liquidating plan, the “liquidation value” in the hypothetical chapter 7 liquidation analysis for purposes of the “best interests” test is substantially similar to the estimates of the results of the chapter 11 liquidation contemplated by the Combined Disclosure Statement and Plan.
• All consideration necessary to make all monetary payments under the Combined Disclosure Statement and Plan shall, as applicable, be obtained from the Liquidating Trust Assets to be monetized by the Liquidating Trustee.
• Distributable Value shall be paid to Holders of Allowed Claims, until paid in full, on a pro rata basis in accordance with the following Waterfall Recovery priority:
  • First, Allowed Administrative Claims and Allowed Priority Tax Claims;
  • Second, Allowed Other Secured Claims;
  • Third, Allowed Priority Non-Tax Claims;
  • Fourth, Allowed Prepetition Secured Claims;
  • Fifth, Allowed Subordinated Sponsor Secured Note Claims; and
  • Sixth, Allowed General Unsecured Claims and Allowed Deficiency Claims (subject, in the case of any Subordinated Sponsor Note Deficiency Claims, to the outcome of litigation, whether by Final Order or by settlement approved by the Bankruptcy Court, including with respect to the Retained Causes of Action).

Liquidating Trust

• The Combined Disclosure Statement and Plan will be implemented by, among other things, the establishment of the Liquidating Trust, the appointment of the Trust Oversight Board, and the appointment of the Liquidating Trustee as of the Effective Date, and the making of Distributions to Holders of Allowed Claims from the Liquidating Trust Assets.
• The Liquidating Trust, excluding any Disputed Claims Reserve, shall be established for the sole purpose of liquidating and distributing the Liquidating Trust Assets, and is intended to qualify as a liquidating trust under Treasury Regulation section 301.7701-4(d) and generally to be treated as a “grantor trust” for U.S. federal income tax purposes, with no objective to continue or engage in the conduct of a trade or business except as reasonably necessary to, and consistent with, its liquidating purpose. Any Disputed Claims Reserve will be treated separately as a “disputed ownership fund” under Treasury Regulation section 1.468B-9, and if the Liquidating Trust is finally determined not to qualify as a grantor trust, the parties intend that it be treated as a partnership for U.S. federal income tax purposes.
  • On the Effective Date, the Liquidating Trust Assets shall immediately vest in the Liquidating Trust for the benefit of the Liquidating Trust Beneficiaries, to be liquidated over time (to the extent not already liquidated) with the proceeds distributed to Holders of Allowed Claims.
• The Liquidating Trustee will be the Person selected by the Committee, with the consent of the Debtors and the DIP Lenders, and will be overseen and managed by the Trust Oversight Board.
  • The Trust Oversight Board shall initially comprise three TOB Members, appointed one each by Great Rock Capital Partners Management, LLC (the DIP Agent), Wingspire Capital, LLC (a DIP Lender), and the Committee. (The DIP Secured Parties also include the other DIP Lender, GRC SPV Investments, LLC, which does not appoint a TOB Member.)
• The Liquidating Trustee, the Trust Oversight Board, and the Liquidating Trust shall be discharged or dissolved, as applicable, once all Liquidating Trust Assets have been liquidated and all required distributions have been made.
  • In no event shall the Liquidating Trust be dissolved later than five years from the Effective Date, unless the Bankruptcy Court—upon motion made within the six-month period before the fifth anniversary of the Effective Date (or, for any extension, within the six months before that extension ends)—determines that a fixed period extension (not to exceed three years, together with any prior extensions, absent a favorable IRS letter ruling) is necessary to facilitate or complete the recovery and liquidation of the assets of the Liquidating Trust.
• The issuance of any beneficial interests of the Liquidating Trust satisfies the requirements of section 1145 of the Bankruptcy Code and is therefore exempt from registration under the Securities Act and any state or local law requiring registration.

Retained Causes of Action

• The Combined Disclosure Statement and Plan provides for all Retained Causes of Action to vest in the Liquidating Trust, which shall have sole authority to investigate, prosecute, settle, or abandon such actions.
  • The Retained Causes of Action consist of all of the Debtors’ and the Estates’ Causes of Action, including any Avoidance Actions, that (i) do not constitute Acquired Assets, or (ii) are not waived, released, compromised, or settled pursuant to the Plan or a Final Order, including the DIP Order.
  • Causes of Action against any and all Non-Debtor Affiliates shall be Retained Causes of Action.
• The Retained Causes of Action, set forth in greater detail in the Plan Supplement, include Causes of Action against the Non-Released Parties and relate to, among other things, the Carve Out Transaction, transactions between the Debtors and Live Comfortably (including those related to the TSA), the Subordinated Sponsor Secured Notes, and the 11th Lane Unsecured Note. The schedule of Retained Causes of Action to be filed with the Plan Supplement is non-exclusive, and the inclusion or omission of any claim from that schedule shall not constitute an admission, denial, or waiver of such claim.
• The Retained Causes of Action and related rights constitute the majority of the Liquidating Trust Assets to be vested in the Liquidating Trust for the benefit of Holders of Allowed Claims entitled to the Distributable Value of the Liquidating Trust Net Assets.
  • The vesting and further investigation and prosecution of the Retained Causes of Action is a critical and integral component of the Combined Disclosure Statement and Plan; it is expected that Holders of Allowed Claims in Class 3 (Prepetition Secured Claims) and Class 5 (General Unsecured Claims) would not vote in favor of the Plan absent the Liquidating Trust’s express responsibility and authority to investigate and pursue such actions to facilitate and maximize distributions.

Wind-Down

• Following the Closing of the Sale, if any, and the conclusion of the Liquidation Process, the Debtors will be focused on efficiently winding down their business, preserving Cash, and monetizing their remaining Assets.
• The Wind-Down DIP Draw is the Debtors’ final draw under the DIP Facility, which shall occur on the Effective Date, and the Wind-Down Account will be funded on the Effective Date with Cash in the amount of the Wind-Down DIP Draw to fund all expenses and payments required to be made by the Post-Effective Date Debtors and the Liquidating Trust.
  • The funding of the Wind-Down DIP Draw into the Wind-Down Account is a condition precedent to the Effective Date.

Classification and Estimated Recoveries

• The projected recoveries are estimates only, are subject to material change based on claims reconciliation, and ascribe no value to the Retained Causes of Action (whose value is described as inherently unknowable and speculative).
• Class 1 (Other Secured Claims): estimated ~$1.5 million; Unimpaired; deemed to accept (not entitled to vote); projected recovery 100%.
• Class 2 (Priority Non-Tax Claims): estimated de minimis; Unimpaired; deemed to accept (not entitled to vote); projected recovery 100%.
• Class 3 (Prepetition Secured Claims): estimated ~$7.9 million; Impaired; entitled to vote; projected recovery Unknown.
• Class 4 (Subordinated Sponsor Secured Note Claims): estimated $0.00 to $69.6 million (subject to the outcome of litigation, including the Retained Causes of Action); Impaired; entitled to vote; projected recovery Unknown.
• Class 5 (General Unsecured Claims): estimated $22.4 million to $122.5 million (subject to the outcome of litigation, including the Retained Causes of Action); Impaired; entitled to vote; projected recovery Unknown.
• Classes 6 (Intercompany Claims), 7 (Intercompany Interests), 8 (510(b) Claims), and 9 (Interests): amount N/A; Impaired; deemed to reject (not entitled to vote); projected recovery 0%.

Executory Contracts and the TSA

• On the Effective Date, all Executory Contracts will be deemed rejected under Bankruptcy Code sections 365 and 1123, except those the Debtors previously assumed, assumed and assigned, or rejected; those subject to a pending motion; or those specifically identified for assumption (including on the Schedule of Assumed Executory Contracts in the Plan Supplement). Claims arising from such rejection must be Filed within thirty (30) days after service of notice of the Effective Date.
• Notwithstanding the foregoing, the Post-Effective Date Debtors and the Liquidating Trustee, as applicable, shall have up to 180 days from the Effective Date to decide whether to assume, assume and assign, or reject the TSA with Live Comfortably; if no Cure Notice is served on Live Comfortably before that deadline, the TSA is deemed rejected. Any modification of the TSA’s terms requires the express approval of the Trust Oversight Board.

Conditions Precedent to the Effective Date

• The Confirmation Order shall have become a Final Order in full force and effect, and no stay of the Confirmation Order is then in effect.
• All actions, documents, and agreements necessary to implement the Plan shall have been effectuated or executed.
• The Wind-Down DIP Draw shall have been funded into the Wind-Down Account.
• The schedule of Retained Causes of Action shall be in form and substance reasonably acceptable to the DIP Secured Parties and the Committee.
• The Liquidating Trust Agreement shall be executed in form and substance reasonably acceptable to the DIP Secured Parties and the Committee, and the Liquidating Trustee shall have been selected.
• The Debtors may waive any or all conditions in writing without Bankruptcy Court authorization, except that certain conditions (per Section 13.3, the Final Order condition and the conditions relating to the Retained Causes of Action schedule and the Liquidating Trust Agreement/Liquidating Trustee) may not be waived without the Committee’s prior written consent. If the conditions are not satisfied or waived within sixty (60) days after the Confirmation Date (or a later date the Debtors reasonably agree in their business judgment), then the Confirmation Order is vacated and of no further force or effect, no Plan Distributions are made, the Debtors and all Holders of Claims and Interests are restored to the status quo as of the day immediately preceding the Confirmation Date, and the Combined Disclosure Statement and Plan is deemed withdrawn.

Releases and Exculpation

• On the Effective Date, each of the Debtors and their estates shall completely and forever release the Released Parties from any and all Claims and Causes of Action taking place or existing on or prior to the Effective Date in connection with or related to the Debtors, their operations, their Assets, the Estates, the restructuring efforts, the Prepetition Loan Documents, the DIP Documents, any prepetition transactions, or the Chapter 11 Cases, except for any act or omission determined by Final Order to have constituted fraud, gross negligence, or willful misconduct.
• The inclusion of any Prepetition Lender, the Prepetition Agent, any DIP Lender, or the DIP Agent (and their respective Related Parties) as Released Parties—and any releases, exculpations, or injunctions inuring to their benefit—is subject to and limited by the challenge-period and related provisions of the DIP Order. To the extent a challenge is timely commenced and results in a Final Order sustaining it in whole or in part, the applicable party shall not be a Released Party with respect to the Claims and Causes of Action that are the subject of that successful challenge and Final Order.
• As of the Effective Date, the Releasing Parties shall be deemed to forever release and waive comparable Claims and Causes of Action against the Released Parties.
  • The Releasing Parties include each Debtor and Post-Effective Date Debtor, each Prepetition Lender, the Prepetition Agent, the DIP Lenders, the DIP Agent, and the Committee and each of its current and former members. Holders of Claims and Interests are Releasing Parties only to the extent they affirmatively opt into the releases via the Opt-In Form—this opt-in requirement applies across the accepting, rejecting, abstaining, and deemed-accepting Claim categories and the Interest-holder category alike.
  • For the avoidance of doubt, no Releasing Party shall be deemed to have released any claim or cause of action against any Non-Released Party.
• The Non-Released Parties are, collectively: Centre Lane Partners, LLC; 11th Lane; CLP IV; CLP V; Mayank Singh; Quinn Morgan; Live Comfortably Borrower, LLC; and the Related Parties of each of the foregoing (other than the Debtors).
  • Notwithstanding the foregoing, the following Related Parties of the Debtors shall be Released Parties: Stuart Kaufman; Adam Zalev; the Debtors’ Professionals; and their respective Related Parties.
• The Exculpated Parties shall not have or incur any liability for any act or omission occurring between the Petition Date and the Effective Date relating to or arising from the Chapter 11 Cases—including the formulation and implementation of the Plan, the Sale and/or Liquidation Process, the review of strategic alternatives, and the solicitation, confirmation, consummation, and administration of the Plan—except for their fraud, gross negligence, or willful misconduct as determined by a Final Order.
  • For the avoidance of doubt, no Non-Released Party shall be an Exculpated Party.

Voting and Plan Support

• Except as otherwise ordered by the Bankruptcy Court, only Holders of Claims in Class 3 (Prepetition Secured Claims), Class 4 (Subordinated Sponsor Secured Note Claims), and Class 5 (General Unsecured Claims)—the Voting Classes—are entitled to vote on the Combined Disclosure Statement and Plan pursuant to Bankruptcy Code section 1126.
• Holders of Claims in Class 1 (Other Secured Claims) and Class 2 (Priority Non-Tax Claims) are Unimpaired and conclusively presumed to have accepted the Plan; they are not entitled to vote.
• Holders of Class 6 (Intercompany Claims), Class 7 (Intercompany Interests), Class 8 (510(b) Claims), and Class 9 (Interests) are Impaired, receive no Distribution, are conclusively presumed to have rejected the Plan, and are not entitled to vote. The Debtors reserve the right to seek confirmation over such non-accepting Classes under the “cramdown” provisions of Bankruptcy Code section 1129(b).
• The Debtors believe that the Combined Disclosure Statement and Plan is in the best interests of all stakeholders.