SpiriTrust Lutheran - Chapter 11 Plan Terms

Plan Terms

Overview

• SpiriTrust Lutheran ("STL"), SpiriTrust Lutheran Home Care & Hospice ("HCH") and SpiriTrust Lutheran Life ("Life," and collectively, the "Debtors" or "Plan Proponent") filed a Second Amended Combined Joint Disclosure Statement and Joint Plan of Liquidation on July 31, 2026, proposed pursuant to sections 1125 and 1129 of the Bankruptcy Code.
  • The Debtors commenced their jointly administered Chapter 11 Cases by voluntary petitions on Nov. 21, 2025 in the U.S. Bankruptcy Court for the Middle District of Pennsylvania at Case Nos. 1:25-bk-03341, 1:25-bk-03343 and 1:25-bk-03344, respectively.
  • STL, a non-profit organization formed in approximately 1951 as Lutheran Welfare Services of York District, operates six continuing care retirement community facilities (defined in the Plan as "Complete Care Retirement Communities" or the "CCRC Facilities") across York, Adams and Franklin Counties, including skilled nursing facilities at four of the six locations. HCH and Life are wholly owned subsidiaries of STL; Life ceased operating in 2023 and HCH ceased operating in 2025.
  • The CCRC Facilities operate on a model under which incoming residents pay an entrance fee, with the level of care—independent living, assisted living or skilled nursing—determined by the resident's health at the time of entrance. Entrance fees are amortized over time as a resident remains in a facility; if a resident leaves or is deceased before the fee is fully amortized, the unamortized portion may become payable to the resident or his or her family or heirs, but only once the unit or place in the facility in question is filled. Schedule F attached to the Plan as Exhibit "A" lists a large number of individual resident claims among STL's scheduled unsecured creditors.
• The Plan contemplates the establishment of a liquidating trust through which a Liquidating Trustee will liquidate the Liquidating Trust Assets, whether by sale or through litigation and collection, for distribution to holders of Allowed Claims.
  • Because the Plan is a liquidating plan and none of the Debtors intend to continue in business, no discharge will be granted as to any Debtor pursuant to section 1141 of the Bankruptcy Code. No projections have been filed.
• The Debtors filed various First Day Pleadings, including the DIP Financing and Cash Collateral Motion, a Payroll Motion and a Utilities Motion relating to deposits to utility providers, all of which the Court ultimately approved on a final basis.
• The Debtors are requesting conditional approval of the Disclosure Statement, permitting the combined Plan and Disclosure Statement to be sent to creditors for voting without an additional Disclosure Statement.

Events Leading to the Chapter 11 Cases

• Beginning with the onset of the Covid-19 pandemic in 2020, the CCRC Facilities' census declined as prospective residents grew reluctant to enter the facilities, particularly the skilled nursing facilities, while competition for labor drove costs higher. STL began to suffer financial losses, and both the Life and HCH businesses subsequently closed.
• In February 2024, the Debtors entered into the LSMNJ Management Agreement, pursuant to which Lutheran Social Ministries of New Jersey, Inc. provided accounting, human relations and other services. The Debtors retained FTI Consulting in March 2025 to provide financial advisory services until its retention was terminated in May 2025.
• Following Events of Default under the M&T Prepetition Loans, the Debtors and M&T Bank entered into a Forbearance Agreement in August 2025, pursuant to which Novo Advisors was engaged as financial advisor and Kevin Neuman was hired as Chief Restructuring Officer. The Debtors negotiated with M&T as to the Chapter 11 filing and its funding, with M&T ultimately agreeing to provide DIP Financing of $12.2 million.

Sale Transaction

• Shortly after the case commenced, STL and the non-Debtor HUD Entities entered into a Stalking Horse Sale Agreement with Concordia Lutheran Ministries, a non-profit Pennsylvania corporation, pursuant to which Concordia agreed to acquire substantially all of STL's and the HUD Entities' assets and to serve as stalking horse bidder. The Debtors filed the Bid Procedures Motion on Dec. 9, 2025, which the Court approved by order entered Dec. 19, 2025.
• In accordance with the Bid Procedures Order, and in consultation with the Committee and M&T, STL designated two qualified bids: Concordia's stalking horse bid and a bid submitted by LSMNJ, which asserted that it was exercising a right of first refusal under its Management Agreement.
  • Concordia's initial bid of $41 million was increased to $44 million prior to the start of the auction.
  • Following a lengthy auction in which both LSMNJ and Concordia participated, STL, in consultation with the Committee and M&T, determined Concordia to be the highest and best bidder at a final bid of $51 million, of which $250,000 is allocated to the HUD Facilities and related assets and the remainder to STL's Assets.
  • Concordia also agreed to assume all obligations under the Life Agreements entered into by various residents of the Debtors.
• The terms of Concordia's final bid were documented in the Amended and Restated Asset Purchase Agreement dated Jan. 28, 2026, which the Court approved by Sale Order entered Jan. 29, 2026.
  • The sale of substantially all of STL's assets, including the Warfel Judgment Lien Parcel, closed on April 30, 2026, with the transfer and conveyance becoming effective May 1, 2026, for $50.75 million. An allocation of the sale price will occur between the Real Property and Personal Property; a value of $100,000 was allocated to STL's approximately 51 vehicles.
  • The sale did not include the HUD Facilities or various Excluded Assets under the Stalking Horse Agreement. Closing on the sale of the HUD properties remains pending.
  • The DIP Financing is to be paid in full from proceeds of the Sale.
• Under the APA, Concordia is acquiring the HUD Facilities and the operations of the three HUD Entities—Chambersburg Housing Inc., Shrewsbury Housing Inc. and West Manheim Housing Inc.—in exchange for the $250,000 in consideration. Shrewsbury Housing and West Manheim Housing each own the Real Property upon which they operate; Chambersburg Housing leases its Real Property from STL under the Chambersburg Lease.
  • Any secured debt of the HUD Entities will be assumed or otherwise paid by Concordia, and neither the Debtors nor the HUD Entities will have further obligations for any debts or liabilities of the HUD Facilities.
• Upon approval of the Sale, the Debtors rejected the LSMNJ Management Agreement, and LSMNJ ceased providing services after Jan. 29, 2026. Prior to that date, the Debtors entered into a Transition Services Agreement under which Concordia agreed to take over certain management services, particularly accounting and HR services, in support of day-to-day operations until the Closing Date.

Committee Settlement and Liquidating Trust Funding

• The Committee Settlement is a stipulation entered into between the Official Committee of Unsecured Creditors—appointed by the United States Trustee on Dec. 3, 2025 pursuant to section 1102—and M&T Bank, dated as of April 30, 2026. Approval of the Committee Settlement is pending; if approved, no claims against M&T will occur, as the Committee has agreed that no challenge shall be brought against M&T.
• The M&T Contribution consists of $2 million from net sale proceeds of the CCRCs otherwise payable to M&T, 50% of the net sale proceeds of the HUD Entities, and 50% of the HUD unencumbered cash, each to be assigned and transferred to the Liquidating Trust consistent with the Committee Settlement.
• The Liquidating Trust will be established on the Effective Date and, consistent with the Committee Settlement, funded as follows:
  • $2 million of the sale proceeds (the "Sale Proceeds Carveout"), allocated and transferred upon closing of the Sale of the CCRC Facilities to Porzio, Bromberg & Newman, P.C., to be held in escrow for the exclusive benefit of general unsecured creditors and transferred to the Liquidating Trust upon its establishment.
  • The "Other Asset Carveout," to be set aside and escrowed immediately upon the closing of the Sale of the CCRC Facilities for the exclusive benefit of general unsecured creditors, with M&T waiving any interest therein, consisting of (i) avoidance actions, (ii) D&O claims, (iii) commercial tort claims or any other affirmative claims against third parties, including vendors, and (iv) all residual unencumbered assets of the Debtors' estates, if any.
    • Excluded from the Other Asset Carveout are any assets purchased pursuant to the Sale Order, any assets disposed of in accordance with the Plan, and any assets that are collateral of or assigned to M&T, including the Debtors' accounts receivable, the Collateral Account, the Project Fund Amount and any motor vehicles.
  • The Committee's share of the HUD Entity Sale Proceeds and HUD Entities Unencumbered Cash.
• The Sale Proceeds Carveout and the Other Asset Carveout are collectively the "GUC Carveout." The GUC Carveout and the Committee's share of any HUD Entity proceeds constitute Liquidating Trust Assets and will be transferred to and vest in the Liquidating Trust upon its establishment.
  • In connection with the Plan and any proposed distribution from proceeds of the GUC Carveout, M&T consents to waive any deficiency claim on account of its Prepetition Obligations, for purposes of distribution only.
  • No funds set aside for Class 1 Professionals, whether in escrow or otherwise, on account of unpaid Class 1 Claims shall be placed into the Liquidating Trust. Any Debtor Professional Escrow and Professional Fee Reserve likewise will not be transferred to the Liquidating Trust and do not constitute Liquidating Trust Assets.
• Subject to the terms of the Committee Settlement and Court approval of a Motion to Approve the Committee Settlement, to the extent the Debtors receive any funds from the sale of the HUD Entities, such funds shall be split 50% to M&T Bank and 50% to the Committee, to the extent not utilized for payment of any payables of the HUD Entities.
  • No sum owed by any HUD Entity to STL shall be paid.
  • M&T's share of any HUD Entities Unencumbered Cash will be transferred directly to M&T. The Committee's share will be transferred to Porzio, Bromberg & Newman, P.C. to be held in escrow for the exclusive benefit of general unsecured creditors if prior to establishment of the Liquidating Trust, or directly to the Liquidating Trust if after.
• On the Effective Date, the provisions of the Plan and the Committee Settlement shall constitute a good-faith compromise and settlement of the Claims, Interests, Causes of Action and controversies resolved thereunder, with entry of the Confirmation Order constituting the Court's approval pursuant to Bankruptcy Rule 9019 and section 1123.
  • Any derivative actions may be settled, dismissed or compromised only with Court approval pursuant to Fed. R. Civ. P. 23.1(c).
  • Nothing in the Plan prevents the Debtors or the Liquidating Trustee from objecting to any Claim, except the Claims of M&T.
• Pursuant to the Committee Settlement, M&T has funded the Wind-Down Budget pursuant to a budget presented to M&T by Novo and approved by M&T. The Wind-Down Budget covers the costs and expenses of winding down and dissolving the Debtors and their estates and is to be approved by M&T, the Debtors and the Committee.

Prepetition Capital Structure

• M&T Bank is the Debtors' primary secured creditor, owed not less than $83,310,455.39 as of the Petition Date. The M&T Prepetition Loans comprise:
  • A term loan in the original principal amount of $10 million.
  • A standby letter of credit in the stated amount of $67,642,465.75 with respect to obligations to holders of the Variable Rate Demand Revenue Bonds (SpiriTrust Lutheran Project), Series of 2019.
  • A term loan in the original principal amount of $5.5 million.
  • A line of credit in the maximum principal amount of $1 million.
  • A line of credit in the maximum principal amount of $5.5 million.
  • Various vehicle loans in the aggregate principal amount of $115,078.
  • Certain treasury management and automated clearinghouse services.
  • HCH is an obligor to M&T under all of the M&T Prepetition Loans and has a $1 million line of credit and a $5.5 million line of credit granted by M&T. As a result of the Forbearance Agreement, Life is a co-borrower under all of the other M&T Prepetition Loans and has a $5.5 million line of credit granted by M&T.
• The M&T obligations are secured by mortgage liens encumbering certain parcels of the Debtors' Real Property in York, Adams and Franklin Counties and by security interests in personal property, gross revenues, investment property maintained with BNY Mellon and a pledged deposit account, among other collateral. The Pre-Petition Lender holds a blanket security interest in all assets of the Debtors. The Plan states that M&T's Claim is secured upon the Real Property of the three Debtors except for the Warfel Judgment Lien Parcel, and a footnote notes that, based on the parcel description provided to the Pre-Petition Lender, the Warfel Judgment Lien Parcel may not be included in the lien of the M&T Mortgages.
  • Post-petition, the Bonds were redeemed and paid in full on demand by the bond trustee through a draw on the M&T standby letter of credit. M&T succeeds to the rights of the bondholders, and such Bond debt is included in the $83,310,455.39 total.
• Warfel Construction Company obtained a judgment against STL in June 2025, filed among other places in the Court of Common Pleas of Adams County, giving rise to a judgment lien encumbering the previously unencumbered Warfel Judgment Lien Parcel adjacent to the Gettysburg Facility. Warfel is believed to be owed approximately $1,073,027.10.
  • Warfel's judgment lien is believed to be a first priority lien on the Warfel Judgment Lien Parcel but is junior to M&T as to all other parcels of Real Property.
• Additional prepetition claims include:
  • An IRS claim in the STL case in excess of $800,000, believed to be for excise taxes and partially filed on an estimated basis.
  • A claim by the Commonwealth of Pennsylvania, Department of Human Services, in the amended amount of $764,994.21, asserted as a priority unsecured claim under section 507(a)(8)(E) for nursing facility assessments.
  • STL scheduled unsecured claims in excess of $36 million and priority claims in excess of $4 million, consisting for the most part of real estate taxes.
  • HCH scheduled $2,488,000 in unsecured claims, with very few unsecured claims filed in its case, and $5,586 owed to the Pennsylvania Unemployment Compensation Tax Bureau.
  • Life scheduled $772,394 in unsecured claims; no unsecured claims were filed in the Life case.
• The general bar date is Feb. 4, 2026, and the governmental bar date is May 20, 2026. The Debtors will file a motion for an administrative claim bar date.

Prepetition Assets

• STL's major asset is the real estate on which its CCRC Facilities operate—approximately 26 parcels across six general locations, four in York County, one in Adams County and one in Franklin County—which STL valued at $50 million on its Schedules. All of STL's Assets, including the Warfel Judgment Lien Parcel, sold for $50.75 million.
• STL's other assets as of the Petition Date included approximately 51 vehicles; moveable medical equipment with a scheduled value of approximately $400,000; office fixtures and furniture of approximately $25,000; Accounts Receivable of approximately $2.5 million under 90 days and approximately $3 million over 90 days; and cash in its various bank accounts of approximately $2.7 million.
• HCH, which ceased operations in 2025 prior to the Petition Date, retained few assets: approximately $46,000 in cash on hand, vendor deposits of approximately $35,000, Accounts Receivable of approximately $28,000, and equipment and furniture of approximately $48,000. Life, which stopped operating in 2023, had approximately $17,000 in cash on hand.

Classification and Treatment of Claims

• Classes 1, 2 and 3 are unimpaired or unclassified and are not entitled to vote. Classes 4, 5 and 6 are impaired and entitled to vote. The Plan serves as a motion for all intercompany claims among the Debtors to be eliminated and extinguished, provided that nothing in that provision affects (i) the legal and organizational structure of the Debtors, (ii) the rights of any creditor under any insurance policy or applicable non-bankruptcy law, or (iii) the validity, priority or enforceability of any liens that are not affected by the Plan.
• Class 1 – Professional Administrative Claims: comprising fees and expenses of professionals retained by the Debtors or the Committee as allowed by the Court. To be paid in cash on or before the Effective Date or as otherwise agreed in writing.
  • Any Class 1 Claims unpaid during the case shall be paid pro rata and prior to Class 2 Administrative Claims from funds remaining after payment from the sale proceeds of M&T Bank and all costs of the sale. Such funds may come from the DIP Loan in accordance with the DIP Order and the Debtors' budgets. Cunningham, Chernicoff & Warshawsky, PC and Polsinelli may also utilize any retainer paid to each firm.
  • For purposes of voting and distribution, the Debtors' estates are deemed substantively consolidated such that all Class 1 Claims are paid from the consolidated assets of the Debtors without regard to which Debtor entity engaged the professional.
  • Class 1 claimants are believed to include Cunningham & Chernicoff, P.C. as general counsel; Novo Advisors as financial advisors; Kevin Neuman as CRO; formerly Polsinelli PC and now Lowenstein Sandler LLP; Latsha, Davis and Marshall as special counsel; SLIB II, Inc. d/b/a Senior Living Investment Brokerage as investment banker; Pillar Aught, LLC and Porzio, Bromberg & Newman, P.C. as Committee co-counsel; and Solic Capital Advisors as Committee financial advisors.
  • To the extent Court approval of any professional services has not been entered as of the Effective Date, an amount is to be escrowed and set aside on the Effective Date. Services performed by professionals of the Liquidating Trust after the Effective Date, and any professionals the Liquidating Trust employs post-confirmation, will not be subject to the review and approval of the Court. All reasonable fees for professionals are to be paid in the ordinary course by the Debtors.
• Class 2 – Administrative Claims: to be paid in full in cash on or before the Effective Date or as otherwise agreed, pari passu with all other Class 2 Claims "after payment of M&T and Warfel Class 1 Claims in a Case" (as stated in the Plan; M&T and Warfel are classified in Classes 4 and 5, respectively).
• Classes 3A, 3B and 3C – Priority Tax Claims of STL, HCH and Life, respectively: limited to prepetition taxes and interest accrued to the Petition Date, excluding penalties, and consisting of real estate taxes owed to municipal taxing authorities together with allowed claims of the IRS and the Commonwealth of Pennsylvania for non-real estate taxes.
  • Real estate taxes are to be paid upon closing of the Sale from sale proceeds to the extent accrued on a particular parcel. All other allowed tax claims will be paid from any liquidation of remaining assets after payment of Class 1 and Class 2 Claims, to the extent not otherwise paid to a secured creditor in Class 4. The Plan's treatment table adds that non-real estate priority tax claims are paid from liquidated Assets to the extent any Class 4 or Class 5 holder does not have a lien on the particular Asset.
  • To the extent unpaid as of the Effective Date, Class 3A, 3B and 3C Tax Claims shall receive interest at 7% per annum on the unpaid taxes beginning as of the Effective Date.
• Class 4 – M&T Bank (impaired, entitled to vote): to receive the net proceeds from the Sale of the Debtors' Assets, including the Warfel Judgment Lien Parcel, after allowed costs of the Sale, except for those proceeds set aside for the Liquidating Trust pursuant to the Committee Settlement. Anticipated recovery of $37,918,860.28 in net proceeds from the Sale.
  • Proceeds shall be net of allowed costs, transfer taxes, real estate taxes and all other allowed costs, and net of sums used to pay Class 1, Class 2, Classes 3A, 3B and 3C, and Class 6A, 6B and 6C General Unsecured Claims of STL as may be set forth in the Committee Settlement.
  • To the extent any assets sold are those of HCH or Life, proceeds after payment of Sale costs, M&T (which holds a blanket lien on all assets of the Debtors, including HCH and Life) and Class 1, 2 and 3 Claims shall be contributed to the Liquidating Trust and used to pay allowed Class 6 General Unsecured Claims.
• Class 5 – Warfel Construction Company (impaired, entitled to vote): to receive $525,000 on the Closing Date from the sale proceeds in full and final satisfaction, settlement and release of its secured Claim. The balance of Warfel's Claim shall be treated as a general unsecured Claim under Class 6, subject to any approved claim objection.
• Class 6 – General Unsecured Claims (impaired, entitled to vote): each holder of an allowed general unsecured Claim shall receive, in full and final satisfaction, a pro rata share of distributable proceeds from the Liquidating Trust Assets after payment of all costs and expenses of the Liquidating Trust. Anticipated recovery of approximately 5% to 12%.
  • For purposes of voting and distribution, all Class 6 Claims, regardless of the Case in which they exist, shall be paid from the consolidated assets of the Liquidating Trust.
  • HCH will liquidate its assets, consisting of minimal furniture and equipment and collection of remaining accounts receivable; M&T holds a blanket lien on all HCH assets.
• Class 7 – Equity Holders: there are no equity holders of any of the Debtors, each of which is a non-stock, non-profit entity. Upon closing of the case, the Board of Directors of STL and the Boards of HCH and Life—whose members are the same as STL's—shall be dissolved.

Liquidating Trust

• Provisions concerning the Liquidating Trust and the Liquidating Trustee are subject to the Confirmation Order, the Liquidating Trust Agreement and the Committee Settlement; in the event of conflict among them, the Confirmation Order controls. In the event of conflict between Article XII of the Plan and the Liquidating Trust Agreement, the Liquidating Trust Agreement controls.
• The Liquidating Trustee will be a fiduciary selected by the Committee under the Plan's definitions, though Article XII provides that the Liquidating Trustee shall be chosen by the Debtors and the Committee on or before the Effective Date. The Committee may appoint Solic, its financial advisor, as Liquidating Trustee, subject to further review by the Committee.
  • The Liquidating Trustee's duties commence as of the Effective Date, serving as a Representative of the Estates under section 1123(b) for purposes of enforcing or pursuing causes of action belonging to the Estates and otherwise winding up the Debtors' affairs, with standing to pursue any and all causes of action the Debtors would have had standing to pursue.
  • The Liquidating Trustee shall receive reasonable compensation without further Court order, and reasonable fees, costs and expenses on or after the Effective Date—including attorney and professional fees—may be paid without further Court order from reserves set aside for that purpose. Any amounts remaining in the reserves shall be distributed in accordance with the Plan.
• The Liquidating Trustee's responsibilities include making distributions in accordance with the Plan; controlling and effectuating the claims reconciliation process, including objecting to, subordinating, compromising or settling claims; employing and compensating professionals; asserting the Debtors' claims, causes of action, rights of setoff and other defenses; directing and controlling the wind-down, liquidation, sale and/or abandonment of remaining assets to maximize distributions; administering tax obligations, including filing returns and requesting expedited determinations under section 505(b); preparing and filing informational returns and reports; and winding down and dissolving all Debtor entities under Pennsylvania law.
• The Liquidating Trust qualifies as a "liquidating trust" under Treasury Regulations Section 301.7701-4(d) and Revenue Procedure 94-45 and will be treated for federal income tax purposes as a "grantor trust" under Internal Revenue Code sections 671-677.
• On the Effective Date, the Debtors shall be revested with all of their property then existing, free and clear of all Claims, liens and encumbrances arising prior to entry of the Confirmation Order, which property shall be immediately transferred to and vested in the Liquidating Trust once established, with the Liquidating Trust succeeding to all rights to the Debtors' Assets as set forth in the Plan.
• On the Effective Date, and periodically thereafter as additional assets become available, the Debtors shall be deemed to have automatically transferred to the Liquidating Trust all right, title and interest in the Liquidating Trust Assets in accordance with section 1141, including the Debtors' attorney-client privilege, free and clear of all Claims, liens and other interests. Liquidating Trust Expenses shall be paid from the Liquidating Trust Assets.
  • All preference claims under section 547, fraudulent transfer claims under section 548, post-petition transaction claims under section 549, claims recoverable under section 550, claims against third parties on account of indebtedness, and any other claims owed to or in favor of the Debtors are assigned to the Liquidating Trust upon its establishment.
  • No preclusion doctrine—including res judicata, collateral estoppel, judicial estoppel, equitable estoppel, issue preclusion, claim preclusion and laches—shall apply to such claims or causes of action as Liquidating Trust Assets on or after the Effective Date, and the failure to specifically identify any cause of action in the Plan shall not limit the Liquidating Trust's rights to pursue it.
  • Only the Liquidating Trust and the Liquidating Trustee shall have the right to pursue, compromise or settle any Liquidating Trust Assets, except as otherwise expressly provided in the Plan, the Sale Order, the Committee Settlement or the Liquidating Trust Agreement. The Liquidating Trustee shall be deemed substituted for the Debtors in any pending causes of action relating to a Liquidating Trust Asset without the need for any motion.
• Subsequent to the last Closing under the Agreement of Sale and the establishment of the Liquidating Trust, all remaining Assets of the Debtors not transferred pursuant to the Agreement of Sale shall be placed into the Liquidating Trust.
• On the Effective Date, all liens against property of any Estate will be fully released, with the right, title and interest of any holder of such liens attaching to and enforceable solely against any net proceeds of sales of the Assets. All mortgages, deeds of trust, liens, pledges and other security interests shall be fully released without further action of any party.
• The Debtors' books-and-records access rights and all evidentiary privileges, including attorney/client privilege, transfer to the Liquidating Trust and Liquidating Trustee on the Effective Date. Certain books and records have been or will be transferred to Concordia pursuant to the Sale, subject to the Debtors' rights to reasonable access to information.
• The Liquidating Trustee shall provide payments to all Class 6 Claim holders and periodic reports of distributions. Any distribution returned as undeliverable shall be retained by the Liquidating Trust after the applicable retention period expires under the Liquidating Trust Agreement. The Distribution Date will be determined by the Liquidating Trustee in his or her sole discretion pursuant to the Liquidation Trust Agreement.

Foundation Assets and Restricted Assets

• The Plan states that the charitable amount held by the Debtor is approximately $3 million, and that the Foundation may hold only $350,000 in funds in one of the accounts expressly in the Foundation's name. Any funds of the SpiriTrust Foundation, or funds specially reserved and restricted for the charitable purposes of STL and HCH, shall be transferred to Concordia or an entity to be established by Concordia on or after closing, provided that the Pennsylvania Attorney General's Office and the appropriate County Orphan's Court have approved the transfer and the designation of Concordia as beneficiary, as may be required.
  • Such funds shall continue to be utilized for the charitable purposes previously established for the Foundation and any charitable reserve funds, and may be used to assist with any remaining fiduciary obligations of the Debtors' Board of Directors. The funds may not be used for any purpose other than charitable purposes.
  • If Concordia is not approved as beneficiary of the Foundation Assets, an alternative charitable organization will be sought.

Executory Contracts

• Under the APA, Concordia designated all contracts and leases it intends to assume as part of the Sale effective upon the Closing Date, as listed on Exhibit "C" to the Plan. The Chambersburg Lease is also to be assigned to Concordia.
  • The Debtors filed Cure Notices on Dec. 22, 2025, Dec. 23, 2025 and Jan. 28, 2026 identifying contracts potentially to be assumed and assigned and the proposed cure amounts.
• To the extent not previously rejected or assumed and assigned, all of the Debtors' executory contracts shall be deemed rejected as of the Effective Date, with entry of the Confirmation Order constituting approval of such rejection under sections 365(a) and 1123.
  • Any HCH or Life contracts or leases not previously terminated or rejected shall be rejected as of the date of closing under the sale.
  • Insurance contracts covering the Debtors' Assets, business operations or employees will be rejected as of the Effective Date, provided that professional liability policies shall remain in effect until they expire by their terms, subject to any tail or similar coverage in effect as of the Effective Date.
  • Cell phone leases and agreements, licenses and utility agreements are rejected as of the Effective Date, as are any other contracts or leases not previously rejected.
  • Any contracts, leases or agreements previously rejected by Court order remain rejected.
• Any Claim based upon a rejected contract or lease must be filed on or before 21 days after the applicable rejection date or shall be deemed barred.

Claims Objections and Disputed Claims

• The Debtors and the Liquidating Trustee reserve the right to object to any Claims filed with the Court, and the Plan elsewhere provides that the Debtors, the Committee and the Liquidating Trustee reserve the right to object to any and all Claims filed in the Case, including late-filed Claims. The Claims Objection Deadline is 120 days after the Effective Date, subject to extension by Court order upon application; Article XIV of the Plan provides for a period of 120 days from the Confirmation Date.
  • Nothing limits the Liquidating Trustee's right to request to file objections after the Claims Objection Deadline pursuant to the Liquidating Trust Agreement or as otherwise permitted by law or Court order.
• Objections pending as of the Effective Date, or made thereafter, shall be prosecuted by the Liquidating Trustee, who shall have discretion to litigate to judgment, settle or withdraw objections.
• Except as otherwise agreed, no payments shall be made on account of a disputed Claim until all objections have been determined by a final order. The Liquidating Trustee may hold a pro rata distribution amount in reserve on account of a disputed Claim in order to initiate a distribution to holders of Allowed Claims. The Debtors and Liquidating Trustee reserve the right to propose a payment schedule for any disputed Claim differing from that of other unsecured Claim holders.
• Claims listed in the Schedules as disputed, contingent or unliquidated for which no proper Proof of Claim was filed prior to a claims bar date shall be disallowed and are not entitled to vote, including rejection claims. Late-filed Claims will not share in any distribution unless a Court order provides otherwise.

Injunction and Exculpation

• As of the Effective Date, the Plan acts as an injunction enjoining all holders of debt from seeking payment of such Claims from the Debtors other than as set forth in the Plan, whether or not a proof of claim was filed or deemed filed, the Claim is allowed, or the holder accepted the Plan.
  • Despite no discharge being granted, the remedy for breach of a Plan provision shall be an action in the Bankruptcy Court or, as to M&T Bank, either an action in the Bankruptcy Court or the exercise of remedies available under non-bankruptcy law.
  • The automatic stay remains in effect as to any action against the Debtors through the Effective Date, when it is replaced by the injunction and sections 524(a) and 1141 of the Code.
  • In the event of non-payment under the Plan, no default may occur until 20 days after receipt of notice of such non-payment by the Debtors, their counsel Cunningham & Chernicoff, P.C., and the Liquidating Trustee, without cure.
• The Exculpated Parties comprise (a) the Debtors, (b) Kevin Neuman in his capacity as CRO, (c) the Committee and each of its members solely in their capacities as Committee members, and (d) all Court-approved counsel, financial advisors and other professionals of the Debtors and the Committee. The redline filed with the Plan indicates that M&T Bank, and M&T Bank's professionals, were removed from the definition of Exculpated Parties in this amendment.
  • Upon and after the Effective Date, the Exculpated Parties shall have no liability to any holder of a Claim or equity interest and shall be deemed released and exculpated from any claims, causes of action, debts, demands, charges or liabilities arising from any act or omission occurring between the Petition Date and the Effective Date in connection with the Debtors' restructuring, liquidation and/or sale efforts; the Chapter 11 Cases; the formulation, preparation, dissemination, negotiation, filing, approval or confirmation of the Disclosure Statement and/or Plan; the pursuit of approval of the Disclosure Statement or solicitation of votes; the consummation or administration of the Plan or property to be distributed thereunder; or any related agreement, instrument or document.
  • The exculpation does not apply to acts or omissions constituting actual fraud, willful misconduct or gross negligence as determined by a Final Order of a court of competent jurisdiction. Any Exculpated Party is entitled to reasonably rely on advice of counsel with respect to its duties under the Plan, and such reliance forms a defense to any such claims.
  • Each Exculpated Party is entitled to and granted the protections of section 1125(e). The exculpation is intended generally to be with respect to the Plan and Disclosure Statement process.
• Notwithstanding anything in the Plan, no discharge shall occur as to the HUD Entities, and no tax exemption under section 1146(a) shall be granted as to the sale, lease or other transfer of the HUD Entities' assets. The U.S. Trustee shall not be treated as providing any release under the Plan.

Conditions Precedent to the Effective Date

• The Effective Date will be the date on which the last of the following conditions is satisfied, and in no event shall it occur prior to the Closing Date under the APA:
  • Entry of the Confirmation Order, which shall have become a Final Order, and the execution of documents necessary to implement the Plan.
  • The last of the Closing Dates of the Sale shall have occurred.
  • The Wind-Down Budget shall be finalized and the M&T Contribution shall be funded.
  • The Liquidating Trust shall have been formed pursuant to the terms of the Plan and the Liquidating Trustee shall be duly appointed by Order of the Bankruptcy Court, which may be the Confirmation Order, qualified and able to act in that capacity.
  • All other actions, documents, certificates and agreements necessary to implement the Plan shall have been effected or executed and delivered to the required parties and, to the extent required, filed with the applicable Governmental Units.
• From and after the Effective Date, the Debtors shall continue in existence unless and until dissolved by the Liquidating Trustee in accordance with applicable non-bankruptcy law. Upon the occurrence of the Effective Date, the Debtors, their creditors and Claim holders, and equity interest holders shall be legally bound by the Plan whether or not they accepted it.
• On the Effective Date, the Committee shall dissolve, and the retention of all professionals retained by the Committee shall cease.

Wind-Down and Post-Effective Date Administration

• Upon and after the Closing Date, the Debtors' role may be limited to wind-down activities consistent with the wind-down budget. Following the Effective Date, the Liquidating Trustee shall take all actions reasonably necessary to dissolve the Debtors under applicable law and, after the Chapter 11 Cases have been fully administered, shall promptly seek authority to close the cases.
• The Debtors will continue to collect their accounts receivable until the Closing Date and use such funds, together with other cash in the estates, to pay outstanding Class 1, 2 and 3 Claims. From and after the Closing Date, Concordia is intended to collect accounts receivable in accordance with any agreement reached among the Debtors, M&T and Concordia.
  • The cost of any such post-sale collections will be borne only out of the proceeds of collection and funds provided by M&T under the Winddown Budget and will not be borne by the Liquidating Trust.
  • Neither the Debtors, the Liquidating Trust, nor any other entity except M&T Bank is entitled to any proceeds from collections of accounts receivable generated pre-Closing.
• All UST Fees due and owing as of the Effective Date shall be paid in full in cash by the Debtors on the Effective Date. Thereafter, the Liquidating Trustee shall file post-confirmation quarterly reports and any unfiled pre-confirmation monthly operating reports and shall pay all UST Fees in full in cash when due.
  • Cash transferred from the Debtors to the Liquidating Trust and included in the calculation of disbursements in the quarter of transfer shall not be counted again when subsequently distributed to holders of Allowed Claims. Unliquidated (non-cash) assets transferred to the Liquidating Trust shall be included in the disbursement calculation in the quarter(s) in which they are reduced to cash and distributed.
  • UST Fees are Allowed, and the U.S. Trustee is not required to file any proof of claim or request for payment with respect to UST Fees.
• Transfers of assets after Confirmation constitute transfers within the purview of section 1146(a) and are not subject to transfer, stamp or similar taxes. Notwithstanding that the sale of substantially all of the STL Assets, including the Real Property and the Warfel Judgment Lien Parcel, was approved by the Court on Jan. 29, 2026 and has closed, and that the sale of the Real Property is essential to confirmation of the Plan, the Plan provides that the sale of the Real Property is not exempt from any real estate transfer tax. Any sale of one or more HUD Facilities, even if after confirmation, is likewise not exempt, as the HUD Facilities are not property of the Debtors' estates.

Voting and Confirmation

• Only impaired classes are entitled to vote; Classes 1, 2 and 3, which are unimpaired or unclassified, are not permitted to vote. Ballots must be submitted to the Claims and Noticing Agent, Stretto, Inc., via https://cases.stretto.com/SpiriTrust in accordance with the order setting the ballot deadline.
  • Ballots received after the deadline may not be counted unless the Debtors, in consultation with the Committee and M&T, determine in their discretion to count them, unless the Court orders otherwise.
  • A ballot stating a Claim amount differing from the scheduled or filed amount may, at the Plan Proponent's option, be corrected to the allowed amount, and a ballot stating the wrong classification may be corrected by the Plan Proponent in consultation with the Committee and M&T.
  • Amounts scheduled by the Debtors, if not disputed, contingent or unliquidated, or as set forth in a filed Proof of Claim as allowed by the Court, control for voting and distribution purposes. If an objection is pending as to a Claim when voting occurs, the Claim will not be considered for voting purposes until allowed by the Court.
• A Class of creditors accepts the Plan if creditors holding at least two-thirds in aggregate dollar amount and more than one-half in number of the allowed Claims of that Class voting on the Plan accept it. The Plan must be accepted by at least one impaired class, determined without considering acceptances of insiders.
  • If one or more impaired Classes fails to accept the Plan and all applicable requirements of section 1129(a) other than section 1129(a)(8) are satisfied, the Debtors request confirmation pursuant to section 1129(b).
  • The Debtors note that Class 6 is the last class of impaired Claims and that the only junior class, Class 7 Equity Holders, is receiving nothing under the Plan, with equity in its entirety essentially being cancelled. Accordingly, the Debtors believe the Plan can be confirmed consistent with the Absolute Priority Rule so long as one impaired Class votes to accept, satisfying section 1129(a)(10).
  • With respect to secured creditors, the Debtors believe the Plan satisfies section 1129(b) because each secured creditor—M&T Bank and Warfel Construction—is receiving the value of its claim in cash under the Plan.
• Objections to final approval of the Plan, including as to the adequacy of information under section 1125 and/or confirmation, must be filed in writing with the Court and served on counsel to the Debtors, M&T Bank, the Committee and the U.S. Trustee so as to be actually received on or before a date to be set by the Court. Unless timely filed and served, an objection may not be considered at the Confirmation Hearing.
• Feasibility: Because the majority of the Debtors' property is being liquidated and the Plan provides for distribution of all cash proceeds to holders of Allowed Claims, the Plan Proponent has analyzed the ability of the Debtors and the Liquidating Trust to meet their obligations and believes they will have sufficient assets to accomplish their tasks under the Plan, satisfying section 1129(a)(11).
• Best Interests Test: Because the Plan is a liquidating plan, the hypothetical Chapter 7 liquidation value is substantially similar to the estimated results of the Chapter 11 liquidation contemplated by the Plan. However, a Chapter 7 liquidation would entail additional costs and expenses, including trustee compensation and the costs of counsel and other professionals retained by the trustee, which the Plan Proponent believes would exceed the expenses of implementing the Plan and winding up the Debtors' affairs.
  • The estates would also be obligated to pay all unpaid expenses incurred during the Chapter 11 Cases that are allowed in the Chapter 7 case, and conversion would likely delay both the liquidation of assets and distributions to holders of Claims.
  • Accordingly, the Plan Proponent believes holders of Allowed Claims would receive less than anticipated under the Plan if the cases were converted, and that the classification and treatment of Claims and Interests complies with section 1129(a)(7). A Liquidation Analysis dated March 12, 2026 is attached to the Plan as Exhibit "D," estimating that sale and dissolution yields approximately $9.8 million more in net cash to creditors at the CCRC level than a Chapter 7 liquidation, together with approximately $170,000 more as to HCH and approximately $5,000 more as to Life.
  • Because this is a Liquidation Plan, creditors are receiving what they would receive in a liquidation, subject to the settlements with M&T and others, and the Plan is therefore believed to be fair and equitable.

Alternatives to the Plan

• Because the Plan is a Liquidation Plan, the only alternative would be conversion to Chapter 7 cases, which is believed to entail additional expenses including trustee's commissions, trustee's professional fees and other costs. These would result in additional administrative costs having priority over Chapter 11 Administrative Claims.
  • In a conversion, no party may be available to continue pursuing the various Medicare, Medicaid and insurance claims, the collection of which may require additional services. Where a payor contests a particular charge or claim for a resident, a Debtor representative would normally address the matter; in a Chapter 7, no party may exist to provide the additional information requested, and the claim may not be collected.
  • The Debtors therefore believe a Chapter 7 conversion would result in a lower payment to creditors than what is occurring under the Plan, and that an orderly reorganization or sale is the best available option. The Liquidation Analysis attached as Exhibit "D" sets forth very little being available to creditors other than secured creditors.

Risk Factors

• There is no guarantee that closing under the APA will occur or that closing will be funded (a risk factor retained in the Plan notwithstanding the Plan's statement that the Sale closed on April 30, 2026).
• There is no guarantee that any distribution will be made to unsecured creditors.
• There is no guarantee as to the collection of the remaining accounts receivable of any of the Debtors.
• Because payment to creditors under the Plan is based in part upon the sale of assets of a Debtor, not all payments to creditors under the Plan are certain, and any payments to be made are contingent upon sufficient value being realized by the Debtors from the sale of their assets.

Retention of Jurisdiction and Miscellaneous

• The Bankruptcy Court will retain jurisdiction until the Plan has been fully consummated, or as otherwise ordered, notwithstanding the administrative closing of the Chapter 11 Cases, for purposes including the classification and re-examination of Claims and determination of objections; determination of all questions and disputes regarding title to estate assets and all causes of action, including rights to recover accounts receivable, preferences and fraudulent conveyances; correction of defects and reconciliation of inconsistencies in the Plan or Confirmation Order; post-confirmation modification of the Plan; enforcement and interpretation of the Plan's terms; approval, if necessary, of the sale of any assets; entry of orders, including injunctions, necessary to enforce the title, rights and powers of the Debtors; and determination of all applications, motions, adversary proceedings and contested matters, whether pending on the Effective Date or instituted thereafter.
• On and after the Effective Date, the Liquidating Trustee is authorized to issue, execute, deliver, file or record such documents and take such actions as may be necessary to effectuate the Plan in the name of and on behalf of the Debtors and/or the Liquidating Trust without further approvals, authorization or consents except as expressly required by the Plan, and the Debtors and Liquidating Trustee may take such actions as necessary to effectuate the Plan without leave of Court except as required by the Plan or the Code.
• Prior orders of the Bankruptcy Court remain in full force and effect to the extent not inconsistent with the Plan. In the event of inconsistency between the Plan and the Disclosure Statement, the Plan controls, subject to any order previously entered in the case.
• Prior to confirmation, the Debtors may propose amendments or modifications at any time, provided the Plan as modified continues to meet the requirements of sections 1122 and 1123. After confirmation, the Debtors may remedy defects or omissions and reconcile inconsistencies so long as doing so does not materially or adversely affect creditors, and may modify or amend the Plan with Court approval after notice and hearing to the extent it may materially or adversely affect creditors.
• Except to the extent the Bankruptcy Code is applicable, the rights and obligations arising under the Plan shall be governed by the laws of the Commonwealth of Pennsylvania.