W/L Properties - Chapter 11 Plan Terms

Plan Terms

Overview

• W/L Properties L.L.C.'s amended plan of reorganization, dated Nov. 5, 2026, is funded by a sale of The Shoppes at Larson Farm, an approximately 8.49-acre commercial property at 1379 Farmington Avenue in Bristol, Connecticut, together with the debtor's remaining cash; the plan's effective date is the closing of that sale following the court's ruling on a motion to approve the sale and/or to disburse its proceeds.
• The company filed Chapter 11 on May 1, 2026; the amended plan is accompanied by a disclosure statement also dated Nov. 5, 2026.
• On the effective date, net sale proceeds and remaining cash are distributed in order of priority to administrative claims; a City of Bristol tax lien claim of $149,738.75; two M&T Bank mortgage claims of $8.7 million and $799,120.73 under notes that both matured April 1, 2023; general unsecured claims; and, only if all of those are paid in full, equity holders, who do not retain their interests if the plan is consummated through the sale.

Sale Process

• Jones Lang LaSalle Americas, Inc., doing business as JLL Capital Markets, continues to list the property through Dec. 31, 2026, under its exclusive listing agreement (Doc 90); after the first 30 days on the market, the debtor may modify the listing price on the broker's recommendation.
• The debtor will promptly, and on an expedited basis if necessary, move to retain Maltz Auctions, Inc., doing business as Maltz Auctions, to auction the property and will seek approval of an auction process and bid procedures if either:
  • the property is not under a duly executed contract, with a refundable or nonrefundable deposit, when the marketing period ends; or
  • a contracted buyer materially defaults or becomes unable to close on the contract's terms.
• Any auction must take place no later than 90 days after entry of the order retaining Maltz, and the auction sale must close within 45 days after entry of the order approving it.
• Once a private or auction sale is approved, the proceeds are distributed under the plan's claims treatment without further court order, net of:
  • the broker's commission, if applicable
  • real estate tax adjustments, including satisfaction of any outstanding tax liens on the property
  • typical Hartford County seller charges for recording fees and similar costs
  • reasonable legal fees of the debtor's special counsel for the closing itself, held in escrow until his fee application is approved
• Until the sale is approved, the debtor continues to operate the property in the ordinary course, maintain all insurance and pay real estate taxes and assessments as they come due.
• The plan treats the sale and other plan transfers as exempt under section 1146(c) from stamp, real estate transfer, mortgage recording, document recording and similar taxes and fees, and provides that the confirmation order will direct government officials to forgo collecting them and to accept the instruments for recording.

Treatment of Claims and Interests

• Claims and interests are paid in order of priority on the effective date from net sale proceeds and the debtor's remaining cash; allowed claims exclude unmatured and postpetition interest unless the plan provides otherwise.
• The plan's classification article describes Classes A through D as impaired and entitled to vote, while its treatment provisions designate Class A as unimpaired and not entitled to vote and Class E as impaired and entitled to vote.
• Administrative claims (unclassified, unimpaired, not entitled to vote): paid in full in cash on the effective date as allowed by the court. These include the claims of the debtor's bankruptcy counsel, Edward P. Jurkiewicz of Lawrence & Jurkiewicz, LLC; special counsel Thomas P. Moriarty of Thomas P. Moriarty, LLC; JLL, as commercial real estate advisor; any other court-approved professionals; and U.S. Trustee quarterly fees. Administrative claims must be filed by the first business day 30 days after the effective date, and the debtor continues to file monthly operating reports and pay U.S. Trustee fees until a final decree, dismissal, conversion or case closing.
• Class A, City of Bristol secured tax claim (unimpaired, not entitled to vote): paid in full on the effective date, with statutory interest at 18% per annum from the petition date, on a $149,738.75 prepetition claim secured by a certificate of tax lien recorded against the property on March 11, 2025; the city retains its lien for the full amount of its secured claim.
• Class B, M&T Bank secured claim under the 2013 amended and restated note (impaired, entitled to vote): paid from net sale proceeds on the effective date, whether the property is sold privately or at auction, on an allowed prepetition claim of $8.7 million.
  • Manufacturers and Traders Trust Company holds the claim under an amended and restated mortgage note dated March 13, 2013, with $10 million in principal and an April 1, 2023 maturity, which amended a Nov. 14, 2007 mortgage note with $12.5 million in original principal; the bank retains its lien for the full amount of its secured claim.
  • Adequate protection payments received from the debtor reduce the claim and are applied first to accrued interest at the note's non-default rate, then to principal.
  • If net sale proceeds exceed the claim, M&T Bank is entitled, as an oversecured creditor, to its reasonable attorney's fees incurred in the case.
  • If net sale proceeds fall short, M&T Bank must still consent to the closing and execute the documents needed to close, including releases of its mortgage and related security agreements on the property; those releases do not waive or release any guarantor for the remaining deficiency, and any unpaid balance is paid from the debtor's remaining cash after administrative claims are paid in full.
• Class C, M&T Bank secured claim under the 2019 note (impaired, entitled to vote): paid from net sale proceeds on the effective date, whether by private sale or auction, on an allowed prepetition claim of $799,120.73 under a Nov. 20, 2019 mortgage note with $1.4 million in original principal that also matured April 1, 2023.
  • M&T Bank retains its lien for the full amount of its secured claim. If net proceeds exceed the claim, it receives its reasonable attorney's fees as an oversecured creditor; if they fall short, it must consent to the closing and release its mortgage and related security agreements on the property without releasing any guarantor for the deficiency. However, the Class C guarantor reservation refers to the amended and restated note underlying Class B rather than the 2019 note.
  • Unlike Class B, the Class C treatment provides neither for applying adequate protection payments nor for paying any shortfall from the debtor's remaining cash.
• Class D, general unsecured claims (impaired, entitled to vote): a pro rata dividend on the effective date from the remaining net sale proceeds and remaining cash, payable only if administrative claims and Classes A, B and C are paid in full. The class consists of the claims of:
  • Stephen Wasley, $800,013
  • USA Mechanical & Energy Services, $21,206.81
  • Cristina McIntyre, in an amount to be allowed by the court
• Class E, equity interests (impaired, entitled to vote): no distribution unless administrative claims and Classes A through D are paid in full, in which case holders share the remaining net closing proceeds and cash on the effective date pro rata by equity percentage; if the plan is consummated through the sale, holders do not retain their interests. The holders are:
  • Stephen C. Larson, 25.25%, who signed the plan on the debtor's behalf as a member
  • Ralph L. Larson, 25.25%
  • Stephen C. Wasley, 21.936%
  • Karen Wasley, 13.016%
  • JoAnn Larson, 6.47%
  • Dana Wasley, Noah Wasley, Peter Wasley and Robin Wasley, 2.017% each

Executory Contracts and Leases

• The plan assumes the following leases and contracts as of the effective date:
  • the ground leases of Pepper Dining Inc. and Sybra Inc.
  • the lease of Starling Physicians, PLLC
  • the landscaping contract of Pro Excavation
  • the service contracts of Summit Fire & Security, LLC, Superior Sweeping and USA Mechanical & Energy Services, which also holds a Class D claim
• All other prepetition executory contracts and unexpired leases in effect on the effective date that are not specifically reinstated, assumed or rejected are deemed rejected as of the effective date.

Key Dates

• Petition date: May 1, 2026
• Claims bar date: July 30, 2026
• Amended plan and disclosure statement: Nov. 5, 2026
• Claim objections: due by the date the debtor serves notice of the disclosure statement and plan on creditors, although the plan's definition of disputed claim also covers claims objected to within 30 days after the effective date
• End of JLL marketing period: Dec. 31, 2026
• Auction, if triggered: no later than 90 days after entry of the order retaining Maltz
• Auction sale closing: within 45 days after entry of the sale order
• Administrative claims bar date: first business day 30 days after the effective date

Implementation and Effect of Confirmation

• The plan is funded from the sale and the debtor's remaining cash on the effective date. On that date all estate property vests in the reorganized debtor free and clear of claims and interests except as the plan provides. Except as otherwise indicated, the debtor keeps the estate's assets and pays creditors the amounts set out in the plan and disclosure statement.
• The plan's obligations replace the debtor's prepetition obligations to creditors and are binding contractual promises, so a failure to perform supports a state-law breach of contract action; creditors that keep liens retain all rights under applicable non-bankruptcy law.
• Other than M&T Bank's mortgage releases at closing, the plan contains no releases and no exculpation provision. The debtor reserves its rights to begin or continue adversary proceedings, collect debts and pursue claims, and allowing a claim does not bar the debtor's claims against its holder.

Default and Remedies

• No creditor may take collection action against the debtor or its property unless the debtor is in material default of its plan obligations to that creditor. A material default requires all of the following:
  • the debtor fails to make a required plan payment, or perform another plan obligation, for more than 14 calendar days after it is due;
  • the affected creditor serves written notice of default on the debtor and its counsel; and
  • within 21 calendar days after service, the debtor neither cures the default nor obtains from the court or the creditor an extension of time to cure or a determination that no default occurred.

Amendments, Jurisdiction and Case Closing

• The debtor may amend the plan at any time before confirmation and may modify it after confirmation under section 1127(b).
• Until the case is closed, the court retains jurisdiction over claim allowance, classification and objections; adversary proceedings and contested matters; administrative expenses; plan defaults; plan modifications and corrections; and any orders needed to carry out the plan. If the debtor does not object to or examine a claim for voting purposes, it keeps its right to object later.
• The case closes upon substantial consummation and can be reopened to enforce the plan.