Simply Interior Homes - Chapter 11 Plan Terms

Plan Terms

Overview

• The Bankruptcy Court confirmed the combined disclosure statement and Chapter 11 plan of liquidation of Simply Interior Homes, LLC and six debtor affiliates on Sept. 21, 2026, approving the disclosures as containing adequate information and confirming the plan and each of its provisions under section 1129.
• The debtors, a home textiles and décor wholesaler carved out of Keeco, LLC in early 2025 by sponsor Centre Lane Partners, filed Chapter 11 on June 8, 2026 after an undercapitalized opening balance sheet, inherited fill rates of roughly 30% to 40% against the 95% or greater expected by retail partners, the loss of major customer programs including Wal-Mart, reciprocal tariffs effective April 15, 2025, failed CLP-led recapitalization and M&A efforts, and a transition services dispute with Live Comfortably, the rebranded Keeco entity, that threatened to shut down substantially all back-office operations.
  • With their advisors, the debtors concluded value would be best preserved by an orderly liquidation of inventory and other working capital assets alongside a sale of the business or assets as a going concern or otherwise.
  • The plan liquidates the debtors' remaining assets, distributes proceeds to holders of allowed claims through a liquidating trust, and provides for the dissolution of the debtors; it is the only plan filed in these cases.
• The debtors wholesale bedding, window treatments, bath products, and furniture and décor to department stores, off-price and e-commerce retailers, and home centers, on a brand portfolio built around Eclipse light-blocking window treatments carried at Walmart, HomeGoods and Amazon, patented hook-free Hookless shower curtains carried at Lowe's and Home Depot, Historic Charleston bedding, and licensed Kate Spade Home bath accessories; they employed approximately 27 people at filing, sourced through offices in China, Pakistan and India, and used third-party warehousing in Reno, Nevada and Whitestown, Indiana.
• The carve-out ran in two steps: the collateral agent under Keeco's defaulted term loan conducted a partial strict foreclosure under Article 9 of the Uniform Commercial Code on the soft goods collateral and transferred it to CLP-designated entities, vesting it in Simply Interior Homes, LLC; the parties then closed a membership interest purchase agreement on Feb. 21, 2025, roughly four months after the late-October 2024 target, with most of the cash purchase price used to satisfy subordinated notes issued in the foreclosure.
• CLP projected the new company would open with $5 million of cash and approximately $49 million of finished goods inventory; the debtors say they opened with no cash, approximately $29 million of inventory of which roughly $22 million was excess and obsolete, and approximately $32 million of assumed payables against a projected $25 million, and that CLP's pre-funding of the purchase price let Live Comfortably book approximately $21 million of soft goods revenue for January and February 2025 before the debtors began operating. Management cut the 2025 revenue plan from $185 million to $86 million, and fiscal 2025 produced approximately $84.7 million of gross revenue and approximately $3.4 million of adjusted EBITDA.
• Live Comfortably collected more than 75% of the debtors' customer remittances from January to May 2026, ranging from $300,000 to $1.5 million per week, and, the debtors say at CLP's direction, repeatedly delayed remitting them; on April 28, 2026 Live Comfortably noticed a breach asserting approximately $5.1 million of unpaid transition services charges, which ran to more than $2.5 million a year, and reserved the right to terminate and suspend services.
• By the petition date the debtors had gone more than 12 weeks without material payments to suppliers, including customs and duties, leaving inventory held at ports and in transit and most of the supplier base on stop-ship, and the prepetition lenders had been funding payroll, leases and logistics in their permitted discretion since December 2025 against an overadvanced borrowing base and multiple events of default.
• After CLP repeatedly declined to provide liquidity or capital support, the prepetition agent delivered a notice of exercise of proxy rights on April 27, 2026, removing non-debtor SIH Intermediate as sole member of Simply Interior Homes AcquisitionCo and installing Stuart Kaufman of Arete Capital Partners as independent manager with sole decision-making authority; new management replaced counsel, directed CLP and Live Comfortably to stop dealing with the debtors' counterparties, and demanded continued performance under the transition services agreement. The U.S. Trustee appointed the committee on June 18, 2026.
• The plan is a joint plan providing for limited substantive consolidation of the debtors' estates solely for plan purposes, including voting and distributions; the confirmation order approves that consolidation on the same limited basis and controls over the plan in the event of any inconsistency.

Prepetition Capital Structure

• The prepetition credit facility is a revolving facility with $30 million of commitments maturing Feb. 21, 2029 and secured by a first-priority lien on substantially all of the debtors' assets, with Great Rock Capital Partners Management, LLC as agent and GRC SPV Investments, LLC and Wingspire Capital, LLC as lenders, the same agent and lenders that provided the DIP facility.
• The plan states funded obligations under the facility of not less than $17.9 million plus accrued interest and fees at the petition date and a paydown of approximately $582,000 as of July 31, 2026, but puts outstanding prepetition secured obligations at approximately $7.7 million as of that same date; the plan does not reconcile the difference.
• Centre Lane Partners IV, L.P. and Centre Lane Partners V, L.P. hold the subordinated sponsor secured notes, each dated Feb. 8, 2024, each accruing 12% per annum compounded annually as payment-in-kind interest and each maturing Aug. 21, 2029: the CLP IV note, issued at $5 million of original principal, carried approximately $8 million of principal and accrued interest at filing, and the CLP V note, issued at $42 million, carried approximately $61.7 million, together $69.6 million on the debtors' books. Both are purportedly secured by second-priority liens on substantially all assets under Feb. 21, 2025 second lien security agreements and are subordinated in payment and lien priority to the prepetition facility under the subordination and intercreditor agreement.
• 11th Lane Holdings SG, LLC, a Centre Lane affiliate, holds an unsecured note dated Sept. 13, 2024 in an original principal amount of $17 million and due Sept. 19, 2028; the debtors' books record the advances as an equity contribution rather than debt, the debtors hold no executed copy of the note, and an unsigned amendment dated Nov. 26, 2025 in their possession records CLP IV paying $1,952,362 to 11th Lane on Simply Interior Homes AcquisitionCo's behalf, cutting the note to $15,047,638, with the debtors saying on information and belief that the same amount was then added to the secured CLP IV note without their consent and for no consideration.
• Unsecured liabilities at filing were principally trade payables, including approximately $12 million of aged payables owed to vendors the debtors were not carrying forward, together with disputed transition services amounts asserted by Live Comfortably, lease obligations and disputed 11th Lane note amounts; the schedules show aggregate unsecured liabilities of approximately $45 million. The debtors held approximately $274,000 of cash as of Aug. 3, 2026, swept daily under the cash management system and the DIP documents.

Asset Sales and Liquidation Process

• The debtors anticipate generating approximately $3 million of cash to the estates following the closing of the approved sales and payment of the minimum guaranteed royalty payments, with closings expected no later than Aug. 21, 2026; as of the beginning of August 2026, the liquidation process run by SB360 Capital Partners had generated and collected approximately $2 million in gross sales and receivables.
• Rock Creek Advisors, the debtors' sales agent, contacted approximately 200 parties (65 strategic and 135 financial), circulated marketing materials, opened a data room, and offered advisor and management calls. The Court entered the bidding procedures order on June 23, 2026, setting July 1, 2026 at 4:00 p.m. ET as the stalking horse designation deadline (extended by notice to July 13, 2026 at 4:00 p.m. ET), July 27, 2026 at 5:00 p.m. ET as the qualified bid deadline, and July 29, 2026 as the deadline to designate qualified bids or cancel the auction. No stalking horse bidder was designated.
• The debtors received six qualified bids and held an auction on July 30, 2026, declaring successful bidders and a backup bidder.
  • Eclipse brand intellectual property: YMF Carpets, Inc. d/b/a Creative Home Ideas, for an upfront cash payment of $2.3 million plus a 2% royalty on net sales through Dec. 31, 2029 including guaranteed minimum royalties totaling $600,000 payable in equal quarterly installments from 2027 to 2029, valued by the debtors in consultation with the consultation parties at $2,963,600. S. Lichtenberg & Co., Inc. is the backup bidder at $2.4 million upfront plus a 2% royalty on net sales through Dec. 31, 2029 including guaranteed minimum royalties totaling $150,000 in $50,000 annual installments from 2027 to 2029, valued at $2,924,700.
  • Historic Charleston brand intellectual property: Beatrice Home Fashions, Inc., for an upfront cash payment of $40,000, valued at $40,000.
  • Hookless brand intellectual property: Elegant Home Interiors Inc., for an upfront cash payment of $100,000 plus a 3% royalty on net sales capped at $900,000, including guaranteed minimum royalties of $100,000 each year from 2027 to 2029, valued at $403,000.
• After the sale hearing the Court entered two sale orders, approving the bill of sale with Beatrice and the asset purchase agreement with YMF. Citing concerns about Elegant Home Interiors' ability to close, the debtors did not seek approval of a Hookless sale order, and no proceeds from a sale of the Hookless brand intellectual property are included in the assets underlying the plan's estimated recoveries.
• Cash proceeds from the sales and the liquidation process form the preliminary basis for distributions, to be augmented by monetization of the other liquidating trust assets.

Global Settlement

• The plan implements a global settlement among the debtors, the official committee of unsecured creditors, the DIP secured parties, and the prepetition secured parties, resolving all potential issues and claims among them except as otherwise provided in the plan or confirmation order, and approved on confirmation under Bankruptcy Rule 9019 and sections 1123 and 363.
• The settlement resolves potential challenges the committee believed it could bring against the DIP and prepetition secured parties as to the validity, perfection, enforceability, priority, and extent of the prepetition liens with respect to the non-released parties causes of action; the secured parties maintain their liens on those retained causes of action are properly perfected, non-avoidable, and not subject to challenge. Rather than litigate, the parties settled. The challenge period under the DIP order is deemed to have expired on Sept. 8, 2026.
• On entry of the confirmation order, the committee will not pursue, support, or join any person in pursuing any challenge or objection regarding:
  • the DIP obligations, including the roll-up, and the prepetition secured obligations and prepetition liens, with waivers of the equities-of-the-case exception under section 552(b), any right to surcharge collateral under section 506(c), and any marshalling doctrine;
  • any asset purchase agreements and sales;
  • payment of fees and expenses of the debtors' professionals and professionals engaged by the DIP and prepetition secured parties; and
  • confirmation of the plan.
• In exchange, the prepetition and DIP secured parties consent to the contribution of their contributed assets to the liquidating trust for monetization for the benefit of holders of liquidating trust interests, deemed contributed on entry of the confirmation order without any assignment; the funding of the trust in accordance with the wind-down budget, funded in part by the wind-down DIP draw; the sharing and distribution of distributable value in accordance with the global settlement recovery, which is the distributable value payable to liquidating trust beneficiaries at the fourth level of the waterfall recovery; the release of certain avoidance actions against non-insider trade vendors and service providers; the release of prepetition and DIP liens on intercompany claims; and the establishment of a trust oversight board.
• The DIP secured parties' contributed assets are the cash proceeds of the wind-down DIP draw deposited into the wind-down account on the effective date; proceeds from the sale of any DIP collateral approved by the DIP lenders and disposed of after the effective date; all retained causes of action; and remaining cash and any assets on which the prepetition secured parties do not hold prepetition liens, including cash and accounts receivable as of the effective date.
• The prepetition secured parties' contributed assets are proceeds from the sale of any prepetition collateral approved by the prepetition lenders and disposed of after the effective date; all retained causes of action; their direct claims against directors and officers; their contributed causes of action against Keeco, its lenders and other financing sources, their related parties, and the non-released parties; and remaining cash and other assets on which they hold prepetition liens, including cash, accounts receivable, and royalties from the sale of the debtors' assets.
• The prepetition secured parties will vote all claims and interests they hold to accept the plan, and all global settlement parties will support confirmation; the committee and the secured parties agreed to prosecute the settlement through the plan.

Releases of Avoidance Actions and Intercompany Claims

• On the effective date, the debtors and estates forever release and waive all preference actions under section 547 and similar federal, state, or common law causes of action solely against non-insider trade and service providers.
• Also on the effective date, the prepetition secured parties and the DIP secured parties each consent to the release and extinguishment of intercompany claims among the debtors and release their respective liens on those claims, with the intercompany claims fully extinguished under the plan.

DIP Facility and Treatment of Unclassified Claims

• Great Rock Capital Partners Management, LLC serves as sole and exclusive administrative agent, with GRC SPV Investments, LLC and Wingspire Capital, LLC as DIP lenders, the same agent and lenders that hold the prepetition revolving facility, under an ABL DIP financing term sheet dated July 1, 2026; the DIP obligations include a roll-up of prepetition obligations. The Court entered the final DIP order on July 2, 2026 at Docket No. 214, and its provisions survive entry of the confirmation order.
• Each holder of an allowed DIP facility claim, including interest, fees, and all other amounts due under the facility, has consented to receive payment in full in cash of its pro rata share of distributable value in accordance with the waterfall recovery, applied per the DIP documents, absent agreement to less favorable or alternative treatment. All DIP facility claims and prepetition secured claims are deemed allowed.
• Prepetition, Rock Creek solicited debtor-in-possession financing from several parties beyond the eventual DIP secured parties; none were willing to provide financing on both better and executable terms. Without the DIP proceeds the debtors could not have funded payroll or vendor services, run the sale process, or administered the cases.
• Holders of allowed administrative claims, including allowed professional fee claims, receive from the liquidating trust assets either cash equal to the allowed amount or such other treatment agreed in writing; holders of allowed priority tax claims receive the same election within the period provided in Article X.
• The debtors fund and hold a professional fee reserve under the DIP documents until all allowed professional fee claims are paid, and the reserve may not be used for secured, priority or administrative claims or any other distribution until those claims are satisfied or reserved for; any shortfall is paid by the liquidating trustee as an allowed administrative claim to the extent the DIP order permits. Allowed professional fee claims are payable from remaining cash, the reserve, the liquidating trust assets or any combination, and objections to a professional fee claim are due 21 days after service of the applicable final fee application.
• The debtors, post-effective date debtors, and liquidating trustee will pay all statutory fees under Section 6.2(d) of the plan.

Treatment of Claims and Interests

• Class 1, other secured claims (unimpaired, deemed to accept): at the option of the debtors or liquidating trustee, return of the collateral, payment in full in cash, or other treatment rendering the claim unimpaired, absent agreement to less favorable treatment.
• Class 2, priority non-tax claims (unimpaired, deemed to accept): payment in full in cash or other treatment consistent with section 1129(a)(9), absent agreement to less favorable treatment.
• Class 3, prepetition secured claims (impaired, entitled to vote): a pro rata share of liquidating trust interests entitling the holder to its pro rata distribution of distributable value under the waterfall recovery, in full and final satisfaction, settlement, and release of the claim.
• Class 4, subordinated sponsor secured note claims (impaired, entitled to vote): a pro rata share of liquidating trust interests entitling the holder to its pro rata distribution of distributable value under the waterfall recovery.
• Class 5, general unsecured claims (impaired, entitled to vote): a pro rata share of liquidating trust interests entitling the holder to its pro rata distribution of distributable value under the waterfall recovery.
  • No subordinated sponsor note deficiency claim is included in the aggregate amount of allowed general unsecured claims for purposes of calculating pro rata shares of liquidating trust interests and distributable value unless and until finally determined by the outcome of litigation, whether by final order or court-approved settlement, including with respect to the retained causes of action.
• Class 6, intercompany claims (impaired, deemed to reject): canceled on the effective date with no recovery, subject to tax considerations minimizing the debtors' tax liabilities.
• Class 7, intercompany interests (impaired, deemed to reject): canceled and extinguished on the effective date with no distribution.
• Class 8, 510(b) claims (impaired, deemed to reject): canceled and extinguished on the effective date with no distribution.
• Class 9, interests (impaired, deemed to reject): canceled and extinguished on the effective date with no distribution.
• The plan estimates other secured claims at $1.5 million and priority non-tax claims as de minimis, each recovering 100%; prepetition secured claims at $7.9 million recovering 1% to 35%; subordinated sponsor secured note claims at $0 to $69.6 million with recovery unknown; and general unsecured claims at $28.4 million to $123.6 million recovering 0% to 37%. The estimates ascribe no value to the retained causes of action, whose realization the debtors call inherently unknowable and speculative.
• The Court found the liquidation analysis attached to the plan establishes that each holder of an allowed claim or interest recovers at least as much under the plan as it would in a Chapter 7 liquidation, where a trustee's and its professionals' costs and the delay of conversion would reduce distributions, and found the methodology and assumptions reasonable.
• The plan's discussion of the global settlement describes the beneficiaries of the global settlement recovery as holders of allowed general unsecured claims in Class 4, while the plan's own classification places general unsecured claims in Class 5 and subordinated sponsor secured note claims in Class 4.

Waterfall Recovery

• Distributable value equals the aggregate proceeds of the liquidating trust net assets, which are the proceeds of the trust assets less all liquidating trust expenses, minus the amounts required to pay in full all allowed claims that must be satisfied to confirm the plan under section 1129, including administrative, priority tax, and other priority claims to the extent allowed, and to make other payments required to implement the global settlement, the global settlement recovery or the waterfall recovery, and the plan.
• Distributable value is paid to holders of allowed claims until paid in full, on a pro rata basis, in the following priority: first, allowed administrative claims and allowed priority tax claims; second, allowed other secured claims; third, allowed priority non-tax claims; and fourth, to liquidating trust beneficiaries, after giving effect to the subordination and intercreditor agreement and its requirement that all distributable value distributable on account of the subordinated sponsor secured note claims and subordinated sponsor note deficiency claims be turned over to the prepetition secured parties until the prepetition secured obligations are repaid in full.
• At the fourth level, distributable value is allocated in tranches:
  • Tranche 1: 100% to the DIP lenders, pro rata on their allocable share of the DIP obligations, until repayment in full of the sum of (i) outstanding DIP obligations, including all unpaid fees and expenses of the DIP secured parties in these cases, the wind-down DIP draw, any amounts funded to pay ITS Logistics LLC for postpetition amounts in excess of the initial DIP budget without duplication of liquidating trust loans, and amounts funded under the DIP facility to pay the expenses of the debtors' professionals and DIP lender professionals up to $300,000 collectively to draft complaints, and for committee professionals to review and comment on them, in respect of non-released parties retained causes of action transferred to the trust; (ii) liquidating trust loans; and (iii) 15% of the amounts actually funded for those four items. If the DIP secured parties incur additional post-effective date expenses in these cases, they must notice the liquidating trustee and trust oversight board, and subject to the trustee's approval, deemed given absent objection within five business days, the DIP obligations increase dollar for dollar.
  • Tranche 2: the next $6.5 million of distributable value, first up to $4.5 million to the prepetition lenders pro rata on their allocable share of the prepetition secured obligations; the balance of the prepetition secured obligations after those distributions constitutes the prepetition deficiency claims paid in Tranches 3 and 4. Post-effective date expenses of the prepetition secured parties increase the prepetition secured obligations dollar for dollar on the same notice-and-approval mechanic. Second, up to $2 million to holders of allowed general unsecured claims excluding the prepetition deficiency claims, pro rata.
  • Tranche 3: the next $5 million of distributable value, first, 20% of the amounts actually funded for the four Tranche 1 items to the prepetition lenders as a premium; second, after that premium, 70% pro rata to the prepetition lender trust interests on account of the prepetition deficiency claims, with any additional proceeds allocated under Tranche 4 if those claims are repaid in full; third, 30% to holders of allowed general unsecured claims excluding the prepetition deficiency claims, pro rata.
  • Tranche 4: all further distributable value pro rata to holders of allowed general unsecured claims, which for this purpose includes the prepetition deficiency claims until repaid in full.
• The general unsecured allocations in Tranche 2 level second, Tranche 3 level third, and Tranche 4 are escrowed and reserved by the liquidating trustee and not distributed unless and until the subordinated sponsor secured note claims, subordinated sponsor note deficiency claims, 11th Lane unsecured note claims, and the Live Comfortably claim have been adjudicated or settled, whether by final order or court-approved settlement, including with respect to the retained causes of action; those four claims are treated as disputed claims pending that outcome. Any allowed subordinated sponsor secured claims are paid up to the value of the collateral securing the claim under section 506(a) before distributions are made at the Tranche 2 and Tranche 3 general unsecured levels.
• No distributions on allowed general unsecured claims are made unless and until all allowed claims of higher priority under the Bankruptcy Code have been paid in full or reserved for and all liquidating trust expenses have been paid in full or reserved for. The liquidating trustee will not distribute cash or other property where the amount to be distributed on a claim is less than $100.
• On each distribution date the liquidating trustee reserves cash or property equal to 100% of what would be distributed on disputed claims as if each were allowed, held in trust for those holders pending determination of their entitlement, absent a contrary court order.

Liquidating Trust

• The liquidating trust is established on the effective date for the sole purpose of liquidating and distributing the liquidating trust assets, structured as a grantor trust for U.S. federal income tax purposes under Treasury Regulation section 301.7701-4(d) and sections 671 through 679 of the Internal Revenue Code, excluding any disputed claims reserve, with no objective to continue a trade or business beyond what the liquidating purpose reasonably requires.
• The liquidating trust assets comprise remaining cash; after payment of allowed professional fee claims, cash in the professional fee reserve and any retainers, deposits, or similar instruments held by the debtors' professionals; the excluded assets; the retained causes of action and their proceeds; all cash in the wind-down account; the debtors' rights under the asset purchase agreements; the Hookless brand intellectual property and associated licenses; the DIP secured parties' and prepetition secured parties' contributed assets; and all other assets, including inventory, other than acquired assets. Those assets vest immediately in the trust for the benefit of the liquidating trust beneficiaries and, under section 1141, transfer free and clear of all claims, interests, liens, encumbrances, charges, and other interests except as expressly provided in the plan.
• The liquidating trustee is selected by the committee with the consent of the debtors and the DIP secured parties, and is identified in the plan supplement along with affiliations and compensation; compensation is to be reasonable and consistent with similar functionaries in similar proceedings. The form of effective date notice attached to the confirmation order identifies the trustee as Dundon Advisors, LLC, acting through Joshua Nahas. On the effective date all directors, officers, members, and managers of the debtors are terminated and deemed to have resigned without further action, and the liquidating trustee becomes the sole manager, director and officer of the post-effective date debtors and serves as successor-in-interest to the debtors and representative of the estates with respect to the retained causes of action and the non-released parties causes of action.
• Governance sits with a three-member trust oversight board: Great Rock Capital Partners Management, LLC and Wingspire Capital, LLC appoint two lender representatives and the committee appoints one GUC representative, with actions subject to majority vote.
  • Once the DIP obligations, prepetition secured obligations, and prepetition deficiency claims are paid in full, the lender representatives automatically resign and the board consists solely of the GUC representative; if those claims are later required by final court order to be disgorged or returned to the trust, the claims and applicable trust interests are reinstated in full and the secured lender representatives rejoin the board.
  • The trustee must seek board approval for material decisions, including any change to trustee compensation; settlement of claims or causes of action asserted in the Hookless litigation and against Keeco, its lenders and other financing sources, their related parties, and the non-released parties, and any other retained causes of action; and replacement of trust professionals or modification of their engagement terms as of the effective date.
  • The committee, DIP secured parties, and prepetition secured parties consent to the engagement at or after the effective date of Lowenstein Sandler, Foresight Restructuring and/or Dundon Advisers or Reflect Advisors.
• The liquidating trust has sole authority to investigate, prosecute, settle, or abandon the retained causes of action.
• Great Rock Capital Partners Management, LLC and Wingspire Capital, LLC, as liquidating trust lenders, commit to fund $1.5 million to the trust under a promissory note entered into on the effective date, for the sole purpose of paying the allowed administrative claim of ITS Logistics LLC; the commitment is reduced dollar-for-dollar for amounts paid to ITS Logistics before the effective date in excess of the amounts budgeted for it in the initial DIP budget. The trust may draw only after a final order determining the allowed amount of that claim or, with the prior written consent of the trust oversight board, upon a settlement with ITS Logistics.
• The trust dissolves when all liquidating trust assets have been liquidated and all required distributions made, and in no event later than five years from the effective date unless the Court, on motion filed within the six months before the fifth anniversary (or, for any extension, within six months before that extension ends), determines a fixed-period extension not exceeding three years together with prior extensions is necessary, absent a favorable IRS letter ruling permitting a longer term.

Wind-Down Budget and Account

• The wind-down account is funded on the effective date with cash in the amount of the wind-down DIP draw, the debtors' final draw under the DIP facility, and is used to fund all expenses and payments required of the post-effective date debtors and the liquidating trust.
• The wind-down budget is a 13-week forecast satisfactory in form and substance to the debtors, the committee, and the DIP secured parties, funded by the wind-down DIP draw and the monetization of liquidating trust assets, projecting uses for prosecution of the retained causes of action, claims and interest reconciliation, the wind-down and dissolution of the debtors, and plan implementation.
  • After the effective date, the budget may not be superseded except with prior written approval of the trust oversight board, and an approved superseding budget governs.
  • The liquidating trustee submits an updated 13-week budget quarterly with the other quarterly reporting and may submit an interim proposed budget to address unforeseen expenses.
• The wind-down DIP draw is a line item in the budget used to fund the professional fee reserve, the disputed claims reserve, and the prosecution and monetization of liquidating trust assets, including the trustee's initial costs.
• Liquidating trust expenses, covering the fees, costs, and obligations of the trustee and its professionals arising after the effective date through entry of a final decree, are payable solely from the wind-down DIP draw and the liquidating trust assets, subject to the trust agreement and DIP documents, in accordance with the wind-down budget and before any distribution to creditors.
• The liquidating trustee is authorized to take all actions necessary to effect the debtors' dissolution, termination, or cancellation under applicable state law.

Retained Causes of Action

• Further investigation and prosecution of the retained causes of action by the liquidating trust is a critical and integral component of the plan; the Court found these causes of action are highly material to creditor recoveries, that the carve-out transaction and the circumstances underlying them were the primary reasons for the Chapter 11 filings and the plan, and that they are critical to compensating holders of allowed claims, establishing at a minimum a close nexus to the plan.
• The retained causes of action are all of the debtors' and estates' causes of action, including avoidance actions, that do not constitute acquired assets or are not waived, released, compromised, or settled under the plan or a final order, including the DIP order. They include all claims and proceeds of avoidance actions; claims against directors and officers who are not released parties for breach of fiduciary duty; rights and claims under D&O insurance policies and their proceeds; all other commercial tort claims; all claims under the Hookless litigation; the prepetition secured parties' direct rights, claims, and causes of action against Keeco, its lenders and other financing sources, their related parties, and the non-released parties, and all proceeds; and all non-released parties causes of action. They do not include any purported claim against the DIP secured parties or the prepetition secured parties, or any avoidance actions against non-insider trade and service providers.
• The retained causes of action relate to, among other things, the carve-out transaction and transactions between the debtors and Live Comfortably, including the transition services agreement, the subordinated sponsor secured notes, and the 11th Lane unsecured note. A non-exclusive schedule identifying them, including the non-released parties causes of action, was filed with the plan supplement.
• The Hookless litigation is two patent, trademark and trade dress actions in the Southern District of New York against Kartri Sales Company, Inc. and Marquis Mills, International, Inc. over hook-free shower curtains. In the first, brought in 2015 with debtor Simply Interior Homes among the plaintiffs, the court ruled for the plaintiffs in December 2022 and entered final judgment in June 2023 enjoining the defendants; the Federal Circuit affirmed in part, reversed in part and remanded, and the parties have completed two rounds of remand briefing and await a ruling. The second, filed in March 2023 by Keeco, now Live Comfortably, with the other plaintiffs to redress further infringement and violation of the first case's injunction, awaits a ruling on the defendant's pending motion to dismiss.
• The debtors expect favorable outcomes in both actions with the potential for a net recovery of approximately $2 million, say approximately 90% of counsel's fees are covered by assigned royalties from an earlier infringement action rather than out of any recovery, and say SIH is the successor-in-interest to the Hookless licensing rights notwithstanding that Live Comfortably is the named plaintiff in the second action. CLP asserts that it, and not the debtors, holds the entire right, title and interest in the Hookless litigation, which the debtors say no documentation they have seen supports.
• CLP and Live Comfortably dispute and deny the plan's allegations about them and will contest any claims, causes of action, equitable subordination, recharacterization or disallowance proceedings brought by the debtors, the estates, the committee or the trust; the plan cautions that its allegations are contested and are not established facts or an indication of the merits or of any potential recovery.
• On the effective date, the non-released parties causes of action remain property of the estates under section 1141(b) in the first instance and, as to the DIP secured parties' contributed assets and the prepetition secured parties' contributed causes of action, are contributed to the estates without any assignment; if not property of the estates for any reason or at any time, they are deemed transferred to and vested in the trust as of the effective date. The estates' existence continues after the effective date to the extent necessary for the Court to retain jurisdiction over them, and the trustee may prosecute them under section 1123(b)(3)(B). The confirmation order expressly retains jurisdiction over the non-released parties causes of action as defined in the plan supplement.
• The non-released parties are Centre Lane Partners, LLC; 11th Lane Holdings SG, LLC; Centre Lane Partners IV, L.P.; Centre Lane Partners V, L.P.; Mayank Singh; Quinn Morgan; Live Comfortably Borrower, LLC; Live Comfortably LLC; Live Comfortably Holdings LLC; Live Comfortably Inc.; Live Comfortably Bedding Canada ULC; and the related parties of each, other than the debtors. Stuart Kaufman, the independent manager installed through the prepetition agent's proxy exercise, Adam Zalev, the chief restructuring officer, the debtors' professionals, and their related parties are released parties notwithstanding that carve-out.

Releases

• The released parties are each debtor and post-effective date debtor; each prepetition lender and the prepetition agent; the DIP lenders and DIP agent; the committee and its current and former members solely in that capacity; and the related parties of each. No non-released party is a released party.
  • The inclusion of any prepetition lender, the prepetition agent, any DIP lender, or the DIP agent, 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; if a challenge is timely commenced and a final order sustains it in whole or in part, those parties are not released parties as to the claims and causes of action that are the subject of the successful challenge.
• The debtor releases discharge the released parties from all claims and causes of action of any nature, whether direct or derivative, arising on or before the effective date in connection with the debtors, their operations, assets, estates, in- or out-of-court restructuring efforts, the prepetition loan documents, DIP documents, related agreements, 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 Court found these releases a valid exercise of business judgment supported by good and valuable consideration, including services rendered during the cases.
• The third-party releases run from the releasing parties to the released parties on substantially the same scope, other than the rights of holders of allowed claims to enforce obligations under the confirmation order and the plan. The Court found them consensual: the releasing parties received due and adequate notice and the opportunity to opt in, and were informed that checking the opt-in box on a timely ballot or opt-in form would constitute consent.
• The releasing parties are each debtor and post-effective date debtor; each prepetition lender and the prepetition agent; the DIP lenders and DIP agent; the committee and its current and former members solely in that capacity; all holders of claims that vote to accept, are deemed to accept, abstain from voting, or vote to reject the plan and affirmatively opt into the releases; all holders of interests that affirmatively opt in; and each related party of the foregoing that the entity is legally entitled to bind.
• Nothing in either release provision releases, waives, or impairs the retained causes of action, including those the trust or trustee may assert, or any claims, rights, causes of action, or defenses held against any non-released party; all are expressly preserved and, subject to Section 9.8 of the plan, vest in the trust. No releasing party is deemed to have released any claim against a non-released party.

Exculpation and Injunction

• The exculpated parties are the debtors; the debtors' officers and directors serving at any time between the petition date and the effective date; the committee and each of its members in that capacity; each professional, consultant, or other advisor retained by the debtors or the committee by Court order; and, to the extent provided in section 1125(e), each released party and its related parties. No non-released party is an exculpated party.
• Exculpation covers acts or omissions occurring between the petition date and the effective date relating to or arising from the cases, including formulating, negotiating, or implementing the plan and related documents; the sale and liquidation processes; the board's review of strategic alternatives leading to those processes; any other postpetition act in connection with or contemplation of the restructuring, sale, or liquidation; solicitation, pursuit, confirmation, and consummation of the plan; and administration of the plan or the property to be distributed, except for fraud, gross negligence, or willful misconduct determined by final order. The Court found the provision appropriately tailored and reasonable in scope.
• The confirmation order serves as an injunction against any entity seeking to enforce an exculpated claim or cause of action against the exculpated parties, and on entry of the order all holders of claims or interests and their current and former employees, agents, officers, directors, principals, and affiliates are enjoined from taking any action to interfere with implementation or consummation of the plan. The Court found the injunction essential to the plan and to preserving the debtor releases and exculpation provision, and appropriately tailored.
• From the effective date until the estate and liquidating trust assets have been liquidated and distributed and the plan fully administered, subject to extension or reduction by motion, all holders of claims and interests and other parties in interest, with their present and former employees, agents, officers, directors, principals and affiliates, are enjoined, as to claims, interests and causes of action the plan treats, from commencing or continuing any suit or proceeding, enforcing any judgment, award, decree or order, creating or perfecting any lien, asserting any setoff right not exercised before the petition date, and taking any action inconsistent with the plan, in each case against the debtors, the post-effective date debtors, the liquidating trustee, the exculpated parties or the released parties; the injunctions and stays granted in the sale orders are unaffected.
• The injunctions do not bar, limit, or impair the retained causes of action, including their investigation, prosecution, litigation, settlement, or other resolution by the trust or trustee; any claims, rights, causes of action, or defenses held against any non-released party; or the enforcement of any judgment, order, or settlement obtained in connection with the foregoing. No non-released party may assert or invoke any injunction, release, exculpation, or other protection under Article XIV or the confirmation order to bar, limit, or impair assertion or prosecution of any retained cause of action or any claim against it.
• Under section 1141(d)(3), the plan does not discharge the debtors. The exculpations, releases, and injunctions become effective on the effective date.

Live Comfortably Reservation

• Notwithstanding anything in the plan, including Sections 10.10 and 14.1(d), the confirmation order, or any other order, the confirmation order expressly preserves Live Comfortably, LLC's rights of setoff under section 553 or otherwise and recoupment as to all prepetition and postpetition debts, obligations, and claims arising under or related to the transition services agreement, the membership interest purchase agreement, and related agreements; its right to assert administrative-expense claims under section 503(b) or otherwise for the value of postpetition services; and all its other rights, claims, remedies, and defenses.
  • No injunction, release, exculpation, discharge, or other provision of the plan or confirmation order bars or impairs those rights, and the filing of Proof of Claim No. 10051 and any other proofs of claim filed by or on behalf of Live Comfortably, including those asserting indemnification or contribution, suffices to preserve them without further motion or filing.
  • All rights, claims, defenses, and causes of action of the debtors and their estates, including the liquidating trust and trustee, the committee, the DIP secured parties, and the prepetition secured parties, whether or not arising under or independent of the membership interest purchase agreement, the transition services agreement, or any other agreement, are unaffected, unaltered, and fully reserved.

Voting Results

• Class 3 voted to accept; Classes 4 and 5 voted to reject. Class 3's acceptance, determined without regard to insider votes, satisfies section 1129(a)(10) and supports confirmation over the rejecting classes under section 1129(b)(1).
• Classes 1 and 2 are unimpaired and deemed to accept; Classes 6, 7, 8, and 9 are deemed to reject.
• Epiq Corporate Restructuring, LLC served as claims agent and distributed the solicitation package to the voting classes; the voting record date was Aug. 10, 2026 and the voting deadline was Sept. 11, 2026 at 4:00 p.m. prevailing Eastern Time.
• All holders who voted to accept or are conclusively presumed to have accepted are deemed to accept the plan as modified after solicitation and before entry of the confirmation order. All objections not resolved or withdrawn with prejudice before or on the record at the confirmation hearing are overruled in their entirety.

Conditions Precedent to the Effective Date

• The effective date is the date selected by the debtors on which all Article XIII conditions have been satisfied or waived and no stay of the confirmation order is in effect. The conditions are:
  • the confirmation order has become a final order in full force and effect;
  • no stay of the confirmation order is then in effect;
  • all actions, documents, and agreements necessary to implement the plan and the transactions it contemplates have been effectuated or executed;
  • the wind-down DIP draw has been funded into the wind-down account;
  • the schedule of retained causes of action is in form and substance reasonably acceptable to the DIP secured parties and the committee; and
  • the liquidating trust agreement is executed in form and substance reasonably acceptable to the DIP secured parties and the committee, and the liquidating trustee has been selected.
• The debtors may waive any condition in writing at any time without notice or Court authorization, except that the final-order condition, the retained causes of action schedule condition, and the trust agreement and trustee selection condition may not be waived without the committee's prior written consent.
• If the conditions are not satisfied or waived within 60 calendar days after the confirmation date, or such later date as the debtors reasonably determine, the confirmation order is vacated, no distributions are made, the debtors and all holders of claims and interests are restored to the status quo as of the day before the confirmation date, the debtors' obligations on claims and interests remain unaffected, and the plan is deemed withdrawn.
• The Court found each condition has been or is reasonably likely to be satisfied or waived, and authorized the debtors to consummate the plan at any time after entry of the confirmation order. Within five business days after the effective date, the liquidating trustee must mail the effective date notice to all holders of claims and interests, identifying the effective date, the final administrative claim bar date and professional fee claim bar date, the rejection damages deadline, and such other matters as the trustee deems appropriate.

Executory Contracts

• On the effective date, each executory contract or unexpired lease not previously assumed, assumed and assigned, or rejected is automatically rejected under sections 365 and 1123; the confirmation order constitutes approval of those rejections, as well as of the assumptions and assignments provided in the plan supplement. Cure amounts, if any, are payable by the debtors or liquidating trustee on the effective date.
• Cure requests that differ from ordinary-course amounts, and requests from counterparties that received no assumption notice, must be filed with the claims agent within 30 days after the effective date or are disallowed and barred; objections to an assumption run on the same 30-day clock, and a counterparty that does not object is deemed to consent. A counterparty that disputes a cure amount stated in an assumption notice need not file a proof of claim, and proofs of claim on contracts assumed and fully cured are deemed disallowed and expunged on the effective date.
• Rejection damages claims must be filed and served on the liquidating trustee no later than 30 days after service of the effective date notice, a deadline that applies only to contracts rejected automatically under Article XII; the bar date order governs any previously rejected contract.
• The transition services agreement with Live Comfortably is deemed rejected under section 365 on the earlier of the effective date and Oct. 31, 2026. The debtors or the liquidating trust will pay in the ordinary course undisputed amounts incurred for services rendered under that agreement for September and October 2026, with all parties' rights expressly reserved.

Bar Dates and Claims Administration

• The general bar date was Aug. 10, 2026 at 5:00 p.m. prevailing Eastern Time and the governmental bar date is Dec. 7, 2026 at 5:00 p.m. prevailing Eastern Time, each as set by the bar date order.
• The final administrative claim bar date, for any unpaid administrative claim arising between the closing date and the effective date, is 30 calendar days after service of the effective date notice; holders that do not file by that date are forever barred, estopped, and enjoined from asserting those claims against the debtors or their property. Requests must be filed with the claims agent and served on the liquidating trustee. Administrative claims arising between the petition date and the closing date run instead to an initial administrative claim bar date to be set by separate notice under the bar date order.
• The professional fee claims bar date for all final fee applications covering the petition date through the effective date is 30 days after service of the effective date notice, with all applications subject to Court approval.
• The claims objection deadline is 180 days after the effective date, subject to extension by the Court on the liquidating trustee's motion with notice only to Rule 2002 parties as of the filing of the objection.

Retention of Jurisdiction and Other Provisions

• Notwithstanding entry of the confirmation order and the occurrence of the effective date, the Court retains jurisdiction under sections 105(a) and 1142 over all matters arising out of or related to the cases and the plan, including the actions specified in Article XV and, expressly, the non-released parties causes of action.
• The plan terms become immediately effective and enforceable on the effective date notwithstanding Bankruptcy Rules 3020(e), 6004(g), and 7062, binding the debtors, all holders of claims and interests whether or not deemed to have accepted, all entities party to or subject to the releases and injunctions, each entity acquiring property under the plan, and all non-debtor counterparties to executory contracts and unexpired leases. The confirmation order constitutes all state and other governmental approvals and consents required to implement or consummate the plan.
• The debtors may alter, amend, or modify the plan or its exhibits and schedules under section 1127(a) at any time before substantial consummation, provided the change does not materially and adversely affect the treatment of holders of claims or interests, and reserved the right to revoke or withdraw the plan before the confirmation hearing.
• The plan is governed by Delaware law, except where the Bankruptcy Code, Bankruptcy Rules, or other federal law applies and subject to any contract or document entered into in connection with the plan. All exhibits, schedules, and supporting documents, including the plan supplement, are incorporated into and form part of the plan.
• All contractual, legal and equitable subordination rights are implemented through the plan and their separate enforcement by holders is permanently enjoined; contractual and structural subordination remains enforceable by the liquidating trustee on the estates' behalf, and the trustee may pursue equitable subordination under section 510, rights the plan expressly preserves in the trustee.
• Confirmation and the effective date have no effect on the debtors' insurance policies, and the confirmation order enjoins insurers from denying, refusing, altering or delaying coverage on any basis related to the cases or the plan, including its treatment of insured claims.