White Wilson Medical Center PA - Chapter 11 Plan Terms

Plan Terms

Overview

• White Wilson Medical Center, PA (the “Debtor”), which commenced its chapter 11 case in the Bankruptcy Court for the Northern District of Florida, Tallahassee Division, on Oct. 3, 2025 (Case No. 25-40486-MWC), filed an amended plan of liquidation on Aug. 19, 2026, providing for the liquidation of the Debtor’s assets and resolution of claims against and equity interests in the Debtor.
  • The plan provides for (i) the liquidation of the Debtor’s assets in accordance with confirmation of the plan and a separate order of the Bankruptcy Court providing for the sale of substantially all of the Debtor’s assets free and clear of liens, claims and encumbrances to the court-approved Buyer, and (ii) distribution of the sale proceeds to holders of allowed claims.
  • Sale proceeds were or will be used, in part, to satisfy (i) in full, the secured claims of INS Bank and Itria Ventures LLC, (ii) in part, holders of allowed general unsecured claims at the effective date or when such claims are determined by the court or by agreement to be allowed, and (iii) the priority unsecured portions of the deferred compensation claims of providers and extenders, in each case on or prior to the effective date.
  • The plan affords holders of allowed general unsecured claims an election to receive MSO Common Units in lieu of part of the cash distribution to Class 9 (the “Class 9 Cash Distribution”). The election and receipt of MSO Common Units is voluntary, and no holder shall receive, or be deemed to have accepted, any MSO Common Units unless it timely and affirmatively elects to receive them in accordance with the procedures and requirements established under the plan.
  • The effective date is the date that is 90 days after an order confirming the plan becomes final and non-appealable.
• The amended plan reflects developments since the filing of the original plan and incorporates modifications to the treatment of claims and to plan implementation and administration, including the treatment of Class 9 general unsecured claims, the opportunity for eligible Class 9 holders to elect an allocation of MSO Common Units, and revisions relating to claims administration and the duties and authority of the plan administrator.
  • The Debtor considered the objections to the original disclosure statement filed by Blue Cross and Blue Shield of Florida, Inc. d/b/a Florida Blue [ECF No. 511] and Paula M. Fisher, as personal representative of the Estate of James Fisher [ECF No. 510].
  • The Debtor believes the amendments address and resolve the issues raised in Florida Blue’s objection concerning the treatment, allocation and issuance of the MSO Common Units.
  • With respect to the matters raised by Fisher, the amended plan provides for the plan administrator to review and analyze claims asserted against the Debtor and the estate, including the subrogation claims and Fisher’s unsecured claim, and to exercise the claims-administration authority provided under the amended plan. Nothing in the plan constitutes an admission regarding the allowance, amount, priority, validity or enforceability of any claim.

Sale Transaction

• The Debtor filed the sale motion on Dec. 18, 2025 [Docket No. 201] seeking approval of the purchase agreement, among other things; the Bankruptcy Court entered the sale order on Feb. 23, 2026 [Docket No. 363].
• The Buyer, used interchangeably with “Purchaser,” consists of (i) KC WW Acquisition, LLC, a Florida limited liability company (the “Non-Clinical Purchaser”), and (ii) WW Medical Center, P.A., a Florida professional association (the “Clinical Purchaser”), or any of their respective designees, successors or assigns.
  • KC WW Acquisition, LLC is the “MSO,” a non-clinical management services organization that, pursuant to the purchase agreement and related management services agreements, acquires and operates the non-clinical assets of the practice post-sale, including operational responsibility for non-clinical expenses, while receiving practice revenues. Clinical matters remain under the exclusive authority of the clinical entity and its licensed providers, as required by the governing documents, the sale order, the purchase agreement and the TSA.
• The transfer of the purchased assets is being consummated in two phases:
  • The Non-Clinical Closing, covering the transfer of the non-clinical assets and operations to the Purchaser or its designated non-clinical affiliate, was consummated on March 20, 2026, prior to confirmation, and is ratified, approved and deemed valid in all respects under the plan.
  • The Clinical Closing, covering the transfer of the clinical assets and operations to the Purchaser or its designated clinical affiliate, is anticipated to occur on or about Dec. 31, 2026, subject to satisfaction of the regulatory and contractual conditions under the purchase agreement. Failure of the Clinical Closing to occur by the anticipated date shall not, by itself, constitute a failure of the effective date or a default under the plan, unless otherwise provided in the purchase agreement, sale order, confirmation order or an applicable court order.
• All transfers of the purchased assets, whether at the Non-Clinical Closing or the Clinical Closing, are ratified, approved and deemed effective pursuant to sections 363 and 365 of the Bankruptcy Code and the sale order, free and clear of all liens, claims, encumbrances and interests of any kind, to the fullest extent permitted by law.
• In connection with the Non-Clinical Closing, the Debtor and KC WW Acquisition LLC entered into a Transition Management Services Agreement dated as of March 20, 2026, under which the manager provides management services and assumes responsibility for certain operational expenses of the Debtor’s practice during the transition period in exchange for the right to receive practice revenues.
• Except as expressly provided in the plan or confirmation order with respect to the MSO Common Units, nothing in the plan amends, modifies or supersedes the purchase agreement or sale order. Solely with respect to the identity of recipients, eligibility, election, allocation, reallocation, reservation, timing and issuance of the MSO Common Units, the plan and confirmation order govern and control over any inconsistent provision of the purchase agreement or any other document governing the sale transaction, subject to any court-approved amendment to the purchase agreement conforming it to the plan’s treatment of the units.
• The plan shall be deemed substantially consummated within the meaning of section 1101 of the Bankruptcy Code upon the closing of the sale and purchase of the purchased assets.

Means of Implementation

• The plan is to be implemented through consummation of the sale transaction, the administration and liquidation of the Debtor’s remaining assets, the review, reconciliation and resolution of claims, the prosecution, settlement or other disposition of causes of action against the MCA Lenders and objections to claims asserted by the MCA Lenders, the distribution of net sale proceeds, the Class 9 Cash Distribution and litigation proceeds, and the reservation, allocation and issuance of the MSO Common Units.
• On the effective date, all remaining assets of the estate, including the causes of action, vest in the Reorganized Debtor free and clear of all liens, debts, obligations, claims, cure claims, liabilities, encumbrances and other interests, except for obligations expressly preserved or required to be paid, reserved for or performed under the plan, confirmation order, sale order or purchase agreement.
  • Any portion of the net sale proceeds or other estate assets necessary to satisfy allowed administrative expense claims, professional fee claims, priority claims, disputed claims or other claims or obligations required to be paid or reserved for under the plan shall be reserved and applied to such claims and shall not vest in the Reorganized Debtor free and clear of those obligations.
  • All privileges with respect to the remaining assets of the estate, including the attorney-client privilege, automatically vest in the Reorganized Debtor.
• The Debtor shall continue to exist after the effective date as a Florida professional association, without prejudice to any right to terminate such existence, whether by dissolution or otherwise, under applicable law after the effective date.
• The Debtor retains the exclusive right to amend or modify the plan, and to solicit acceptances of any amendments or modifications, through and until the effective date.
• Pursuant to section 1146(a) of the Bankruptcy Code, the issuance, distribution, transfer or exchange of any security, or the making, delivery or recording of any instrument of transfer, under the plan or in connection with the transactions contemplated thereby — including the transfer of the Debtor’s assets pursuant to the purchase agreement — shall not be taxed under any law imposing a stamp tax or similar tax.
• All corporate and organizational actions contemplated by the plan are deemed to have occurred and are authorized, approved and effective as of the effective date without further action by the shareholders, directors or officers of the Debtor or Reorganized Debtor, with the confirmation order constituting all necessary authorization. The Debtor, the Reorganized Debtor acting through Dr. Persaud, and the plan administrator, each within its respective authority, are authorized to execute documents and take further actions to implement the plan, provided that none of them may issue the MSO Common Units or modify the Final MSO Allocation Schedule, which remain solely with KC WW Holdings, LLC.

Classification and Treatment of Claims

• Administrative expenses and priority tax claims are not classified.
  • Each holder of an allowed administrative expense claim receives cash equal to the unpaid portion of such claim on, or as soon as reasonably practicable after, the later of the effective date, the date the claim becomes allowed, or such other date ordered by the court, except that ordinary course liabilities are paid in accordance with the terms of the transactions giving rise to them.
  • Any person or entity required to file a request for payment of an administrative expense claim that fails to file and serve the request by the administrative expense claim bar date is forever barred, estopped and enjoined from asserting the claim against the Debtor, the estate, the Reorganized Debtor, the plan administrator or their respective assets, and the claim is deemed discharged and released as of the effective date without the need for any objection.
  • Professionals must file final fee applications no later than 45 days after the effective date. The final compensation of Raymond James & Associates, Inc., as investment banker to the Debtor, was allowed by order entered May 12, 2026 [ECF No. 455] in the amount of $1.5 million and shall be treated and paid in accordance with that order.
  • Deferred compensation liabilities — assumed administrative expense claims held by physicians and non-physician medical providers employed by the Debtor — are paid out of sale proceeds in the ordinary course to the extent not already satisfied. All deferred compensation claims paid by the Purchaser have been satisfied in full, and no additional distributions on account of the deferred compensation liability shall be made under the plan.
  • Unpaid fees assessed under 28 U.S.C. §§ 1911-1930 through the confirmation date will be paid no later than 30 days after the effective date, with post-effective date U.S. Trustee fees paid by the Reorganized Debtor.
  • Each holder of an allowed priority tax claim receives, on the effective date, cash equal to the amount of its allowed claim, or payment on such other agreed terms.
• Class 1 (Priority Claims) — Each holder not otherwise satisfied by the Purchaser as part of the sale is paid in cash on the effective date out of net sale proceeds or cash on hand, or on such other agreed terms. Unimpaired; presumed to accept.
• Class 2 (Secured Tax Claims of Governmental Units) — Paid in cash out of net sale proceeds on the effective date, unless otherwise agreed. Unimpaired; presumed to accept.
• Class 3 (Secured Claim of INS) — INS was paid in full from the proceeds of the asset sale prior to the effective date and shall receive no further distributions; any lien securing its claim has been satisfied and released. Unimpaired; deemed to accept.
• Class 4 (Secured Claim of Itria Ventures) — Itria Ventures was paid in full from the proceeds of the asset sale prior to the effective date and shall receive no further distributions; any lien securing its claim has been satisfied and released. Unimpaired; deemed to accept.
• Class 5 (Subrogation Claims of Dr. Krishan Nagda and Damona Emani) — Consists of subrogation claims in the amount of $1,725,322.63, arising from the prepetition setoff and application by INS of non-estate pledged deposit accounts.
  • Following the effective date, the plan administrator shall review and analyze the claim and may object to, prosecute an objection to, settle, compromise, estimate or otherwise resolve it. No distribution shall be made unless and until, and only to the extent that, the claim becomes allowed.
  • To the extent allowed, the holder receives cash equal to the allowed amount as soon as reasonably practicable after the later of the effective date or the date the claim becomes allowed, together with postpetition interest only to the extent expressly allowed by the plan or a final order; upon payment in full, the allowed claim is deemed satisfied and extinguished. Impaired; entitled to vote.
• Class 6 (Subrogation Claims of Dr. Kenneth Persaud and Monica Persaud) — Consists of a subrogation claim in the amount of $1.16 million, subject to the same review, objection and payment mechanics as Class 5. Impaired; entitled to vote.
• Class 7 (Other Secured Claims) — Within 30 days following the effective date, each holder shall be satisfied by (a) the Debtor returning to the secured creditor any asset (to the extent not a purchased asset) determined by the Bankruptcy Court to secure the claim, in full satisfaction of that claim, (b) the Buyer paying the allowed amount as agreed between the Buyer and the secured creditor, or (c) where the asset is a purchased asset and/or relates to a designated contract, the Buyer’s express assumption of the underlying liability and reinstatement of the claim under the purchase agreement, which constitutes full treatment with no payment required on the effective date.
  • Any deficiency is classified and treated as a Class 9 general unsecured claim to the extent allowed by a final order, provided that no holder shall receive MSO Common Units on account of the secured portion of a Class 7 claim. Impaired; entitled to vote.
• Class 8 (Cure Claims of Non-Debtor Contract Parties) — Holders are paid in cash equal to their allowed cure claim by the Purchaser on the later of the Clinical Closing and the effective date, if not paid previously, or on such other terms as agreed with the Purchaser.
  • Upon payment in full, non-debtor contract parties shall release and satisfy all liens against the Debtor’s assets and file and record terminations of any UCC-1 financing statements granted by the Debtor or in their favor.
  • Amounts determined to be allowed unsecured claims rather than allowed cure claims are paid under the Class 9 treatment, and such holders may participate in the MSO Common Unit distribution solely in their capacity as Class 9 holders and only upon a timely, affirmative election. Unimpaired; presumed to accept.
• Class 9 (General Unsecured Claims) — Estimated by the Debtor at approximately $18,289,470. Each holder receives, in full and final satisfaction and on a date determined by the plan administrator, its pro rata share of:
  • Net sale proceeds and cash on hand after reserving for U.S. Trustee fees and payment in full of allowed secured, subrogation, cure, administrative expense, priority tax and priority claims;
  • Cash in the amount of the Class 9 Cash Distribution — defined as cash in an amount not to exceed $1,200,000, as adjusted in accordance with Section 5.11 — except that a holder electing MSO Common Units receives its pro rata share of the units and no portion of the Class 9 Cash Distribution; and
  • Litigation proceeds — defined as the net recovery after payment of all reasonable attorneys’ fees and costs and any additional allowed administrative or priority claim in the case relating to the causes of action — in an estimated amount of approximately $500,000.
  • Impaired; entitled to vote.
• Class 10 (Equity Interests) — On the effective date, all equity interests are cancelled, released and extinguished, and no holder receives or retains any property, including any MSO Common Units. A person holding both an equity interest and an allowed Class 9 claim may receive MSO Common Units solely in its capacity as a Class 9 holder and only if it is a participating holder. Impaired; deemed to reject and not entitled to vote.
• Claims for damages from rejected contracts, once fixed and liquidated and determined to be allowed, shall be allowed Class 9 general unsecured claims.
• No attorneys’ fees, punitive damages, penalties, exemplary damages or interest shall be paid on any claim except as specified in the plan or allowed by a final order. Any claim estimated for a purpose other than voting shall not be allowed in an amount greater than the estimated amount.

MSO Common Unit Election

• The MSO Common Units are non-voting equity interests in KC WW Holdings, LLC that may be distributed to electing holders of allowed Class 9 general unsecured claims. The aggregate value assigned to the units is $8 million, as adjusted (the “Assigned Equity Value”).
• The election is separate and independent from a holder’s vote on the plan and from any election concerning the third-party release under Section 12.02 of the plan; each election is made and administered separately. An opt-out of the releases does not constitute an election to decline the units, and vice versa.
• To receive MSO Common Units in lieu of its pro rata share of the Class 9 Cash Distribution, a holder must:
  • Timely and affirmatively elect to receive the units in the solicitation materials, including the voting instructions;
  • Complete and submit an investor certification, in form and substance acceptable to the Purchaser, certifying, among other things, that the holder is an “accredited investor” within the meaning of Rule 501(a) under the Securities Act;
  • Satisfy a minimum ownership threshold of $250,000 in MSO Common Units, as determined by reference to the Assigned Equity Value or based on the holder’s pro rata share;
  • Execute and deliver a joinder to the limited liability company agreement of KC WW Holdings, LLC, in form and substance acceptable to KC WW Holdings, LLC; and
  • Timely provide any tax forms, beneficial ownership information, investor questionnaires and other information or documents reasonably requested for issuance of the units and compliance with applicable law.
• Each participating holder must also be reasonably acceptable to the Buyer. A holder that fails to satisfy any of the foregoing requirements is ineligible to receive MSO Common Units and instead receives its pro rata share of the Class 9 Cash Distribution; however, no holder that timely made the election shall forfeit its right to the units solely due to a documentation deficiency without first being given a reasonable opportunity to cure. The plan administrator, with the Buyer’s approval, may establish reasonable procedures and deadlines for submission and cure of such documentation.
• Exchange mechanics:
  • For every $0.15 in Class 9 Cash Distribution distributed to a holder, the number of MSO Common Units otherwise available to that holder is reduced by $1.00 of value, based on the Assigned Equity Value.
  • For every $0.15 of value of MSO Common Units elected by a holder, the amount of cash otherwise available in the Class 9 Cash Distribution to such holders is reduced by $1.00.
  • Each participating holder’s pro rata share is determined without regard to whether it or any other holder receives cash or elects units, and no election alters any holder’s pro rata share.
  • Any MSO Common Units not distributed to Class 9 holders shall be retained or cancelled by the Purchaser, at its election and sole and absolute discretion.
• Timing and issuance:
  • The MSO Common Units shall not be issued on the effective date. As of the effective date, KC WW Holdings, LLC shall reserve the units pending completion of the Class 9 claims-reconciliation and allocation process.
  • Following the effective date, the plan administrator shall reconcile Class 9 claims, administer the election process and prepare and certify the Final MSO Allocation Schedule and the Class 9 Cash Distribution Schedule, using commercially reasonable efforts to complete the process within approximately 180 days after the effective date; that period is an estimate and not a mandatory deadline, and its expiration does not terminate or affect the rights of any holder or the obligations of KC WW Holdings, LLC.
  • Both schedules are delivered to KC WW Holdings, LLC for approval and to the Buyer, and must be reasonably acceptable to the Buyer.
  • Within 10 business days after receipt of the schedules, KC WW Holdings, LLC shall issue the applicable units directly to the participating holders identified therein, and the Buyer shall transfer the Class 9 Cash Distribution, as adjusted, to the plan administrator, who is responsible for making the cash distributions. The plan administrator has no obligation or authority to issue the MSO Common Units.
• A timely election remains effective following the effective date and through completion of the claims-reconciliation process and applies only to the amount of the claim that ultimately becomes an allowed Class 9 claim; if a claim is objected to, reduced, reclassified, settled, estimated or disallowed, entitlement to units is determined solely by reference to the allowed amount, if any.
  • A holder’s election applies to all Class 9 claims it holds as of the election deadline; a holder may not elect units as to only a portion of its Class 9 claims.
  • On a transfer of a Class 9 claim, a timely election by the transferor remains binding on the transferred claim and the transferee, which is deemed to have made the same election and may receive the allocable units only if it timely provides required issuance documentation, subject to any cure opportunity. If the transferor declined or failed to elect before the deadline, the transferee may not thereafter elect.
  • No interest, additional units, cash or other consideration shall accrue or become payable for the period between the effective date and issuance of the units.
• KC WW Holdings, LLC is responsible for compliance with any tax withholding and reporting requirements applicable to the issuance of the units, and each participating holder must timely provide the tax forms, certifications, questionnaires, joinders and other documentation it reasonably requires for lawful issuance, subject to the notice and cure opportunity under Section 5.11. Each holder bears its own tax obligations arising from any distribution, and nothing in the plan constitutes tax advice.
• Securities law treatment:
  • The offer and issuance of the units to participating holders is exempt from registration under the Securities Act pursuant to Section 4(a)(2) and Rule 506(b) of Regulation D, in a transaction that does not involve general solicitation or general advertising and solely to a limited number of participating holders, each of whom must certify accredited investor status and that the units are acquired for investment purposes only and not with a view to resale.
  • The units are non-transferable without the consent of KC WW Holdings, LLC and may not be offered, sold, pledged or otherwise transferred except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with applicable state securities laws.
  • Pursuant to Section 18(b)(4)(D) of the Securities Act, as amended by NSMIA, the units constitute “covered securities” and state registration and qualification requirements are preempted, provided that KC WW Holdings, LLC or the participating holders may be required to make notice filings and pay applicable filing fees in certain states.
  • Neither the SEC nor any state securities commission or regulatory authority has approved, disapproved or passed upon the merits of the units or the accuracy or completeness of the related disclosures.

Plan Administrator

• Mark C. Healy is to be appointed plan administrator on the effective date, with authority to:
  • Make all cash and other estate distributions to holders of allowed claims and establish, maintain and administer the Plan Administrator Account and any other accounts or reserves;
  • Review, investigate, analyze and reconcile all claims asserted against the Debtor or the estate, including the subrogation claims, and — except as to claims asserted by the MCA Lenders — object to, prosecute objections to, settle, compromise, withdraw, estimate or otherwise resolve claims;
  • Establish and maintain reasonable reserves for disputed claims, administrative expense claims, professional fee claims, priority claims and other obligations;
  • Administer the MSO Common Unit Election process, including maintaining records of elections and determining participating holders entitled to receive units and the Class 9 Cash Distribution;
  • Reconcile Class 9 claims and prepare, certify and deliver the Final MSO Allocation Schedule and the Class 9 Cash Distribution Schedule to KC WW Holdings, LLC;
  • Request and receive information, tax forms and certifications from holders; and
  • Retain attorneys, accountants, claims agents, financial advisors, tax professionals and other professionals or agents as necessary or appropriate.
• The plan administrator has no authority to investigate, prosecute, settle, compromise, release, abandon or otherwise control the causes of action against the MCA Lenders or any objection or challenge to a claim asserted by an MCA Lender, all of which remain within the exclusive authority of the Debtor or Reorganized Debtor. The plan administrator may nevertheless review and analyze MCA Lender claims for plan administration purposes and consult and coordinate with the Debtor or Reorganized Debtor. The plan administrator shall receive all net litigation proceeds from the Reorganized Debtor and administer and distribute them under the plan.
• The plan administrator may consult with and request information or assistance from the Debtor, the Reorganized Debtor and Kenneth T. Persaud, M.D., as president of the Reorganized Debtor. The Debtor and Reorganized Debtor shall reasonably cooperate with the plan administrator and its professionals, including by providing access to books and records, documents, electronically stored information and personnel, and assistance with discovery, depositions, hearings and trials. Except with respect to MCA Lender claims, the plan administrator is not required to obtain the consent of the Reorganized Debtor or Dr. Persaud on matters within its authority.
• The plan administrator may, in its discretion, make interim cash and other estate distributions, provided it first establishes and maintains reasonable reserves for disputed claims, administrative expense claims, professional fee claims, priority claims and other plan obligations, and may take into account the anticipated costs of administering the plan; no interim distribution or issuance of MSO Common Units is authorized. The plan administrator must comply with applicable tax withholding and reporting requirements, may withhold from any distribution, and may condition a distribution on receipt of a properly completed tax form, subject to a reasonable opportunity to cure.
• Funding and compensation:
  • The plan administrator is funded from net sale proceeds, cash and other funds available under the plan, and all net proceeds of causes of action remitted by the Reorganized Debtor.
  • The plan administrator is compensated at the customary hourly rates described in the disclosure statement, plus reimbursement of reasonable and necessary expenses, and receives an initial retainer of $50,000 upon entry of the confirmation order, applied against fees and expenses incurred.
  • Compensation requests may be filed periodically with the court, providing parties 14 days from service to object; absent a timely objection, amounts may be paid without further order, and if an objection cannot be resolved consensually, the court determines the amount payable.
  • Fees and expenses are paid from the Plan Administrator Expense Reserve or other funds available for such purpose under the plan.

Claims Administration and Objections

• The general bar date for filing proofs of claim was Dec. 12, 2025 [Doc. No. 32]; the governmental unit bar date was April 1, 2026; and for an administrative expense arising after the deadline set by the court or the Bankruptcy Rules, the administrative expense claim bar date is the date of the confirmation hearing.
• The claims objection deadline is 180 days after the effective date, subject to one or more extensions sought for cause by the plan administrator, or by the Reorganized Debtor solely as to MCA Lender claims. An objection filed on or before the deadline is preserved notwithstanding that it is resolved thereafter.
• Except as to MCA Lender claims, the plan administrator has exclusive authority to file, prosecute, settle, compromise, withdraw, estimate or otherwise resolve claim objections; the Debtor and, after the effective date, the Reorganized Debtor retain sole and exclusive authority over objections and other challenges to MCA Lender claims. Failure to object to a claim before the effective date does not constitute allowance, waiver, release or adjudication of such claim.
• The plan administrator is not required to delay preparation of the Final MSO Allocation Schedule solely because a Class 9 claim remains unresolved, provided the claim has been estimated, settled, allowed, disallowed, withdrawn or otherwise resolved in a manner sufficient to permit determination of the allocation. Except as to MCA Lender claims, the plan administrator may continue to prosecute, settle, compromise, estimate or otherwise resolve any timely objected-to Class 9 claim after expiration of the claims objection deadline.
• Disputed claims are to be fixed or liquidated in the Bankruptcy Court as core proceedings under 28 U.S.C. § 157(b)(2)(B) unless otherwise ordered. Where fixing or liquidating a contingent or unliquidated claim would cause undue delay, the claim shall be estimated under section 502(c) for purposes of allowance, establishing reserves, making distributions, preparing the allocation and cash distribution schedules, or otherwise implementing the plan. An estimation solely for reserve, distribution or schedule-preparation purposes does not constitute final allowance for all purposes.
• Distribution mechanics include: no distribution on a disputed claim until it becomes allowed; aggregation of all claims held by the same holder in a class as a single claim, with claims held by separate persons or entities not aggregated solely because they are affiliates or under common ownership or control; crediting of any payment, satisfaction or other consideration received prior to the effective date against the claim amount, with no duplicate distribution; no accrual or payment of postpetition interest except as expressly provided or allowed by final order; and administration of unclaimed distributions under section 347(b) and, to the extent applicable, section 1143 — a distribution that is unclaimed, undeliverable or represented by a check not negotiated within 90 days of issuance remains subject to administration by the plan administrator, is deemed unclaimed if not claimed or negotiated within 180 days of issuance, and thereafter vests in the Reorganized Debtor free and clear of the holder’s claim, with any distribution of less than $5.00 treated as unclaimed — none of which applies to the MSO Common Units, which are governed exclusively by Section 5.11 of the plan and the Final MSO Allocation Schedule.

Causes of Action

• On the effective date, the causes of action against the MCA Lenders vest exclusively in the Reorganized Debtor, which has sole authority to investigate, prosecute, settle, compromise, release or abandon them and to resolve any objection or challenge to an MCA Lender claim.
  • Such causes of action include all claims arising from or relating to merchant cash advance transactions involving Capybara Capital LLC, Mako Funding USA LLC, Newco Capital Group VI LLC and Austin Business Finance LLC d/b/a Backd, including applicable chapter 5 avoidance claims, together with any counterclaims, defenses, setoff rights, recoupment rights or other affirmative rights relating thereto.
  • Except for the causes of action against the MCA Lenders expressly preserved under the plan, no other causes of action of the Debtor or estate shall be retained for affirmative prosecution following the effective date.
• Neither a vote to accept the plan nor confirmation or entry of the confirmation order constitutes a release, waiver, bar, estoppel or defense with respect to any cause of action or objection to an MCA Lender claim unless expressly released by the plan, confirmation order or another final order; such causes of action and all objections and defenses are expressly preserved.
• All net litigation proceeds realized from the causes of action shall be promptly remitted to the plan administrator for distribution to holders of allowed claims. The Reorganized Debtor shall not retain any proceeds of causes of action except as expressly permitted under the plan or confirmation order.
• The Debtor and, after the effective date, the Reorganized Debtor reserve all rights under section 506(c) to the extent such rights relate to an MCA Lender claim and have not previously been waived, released, settled or adjudicated by final order.

Corporate Governance

• Subject to any requirement of court approval under section 1129(a)(5), Kenneth T. Persaud, M.D., president of the Debtor’s board of directors as of the confirmation date, shall continue to serve as president of the Reorganized Debtor during the term of the plan, with authority to take actions necessary or appropriate to facilitate implementation and administration of the plan in coordination with the plan administrator.
• The Reorganized Debtor, acting through Dr. Persaud, retains sole authority over the MCA Lender causes of action and related claim objections, while the plan administrator holds exclusive authority over all other claims review, reconciliation, objection, settlement and resolution, reserves, cash and other estate distributions, the MSO Common Unit Election process, and preparation, certification and delivery of the Final MSO Allocation Schedule and the Class 9 Cash Distribution Schedule.
• Operations of the Reorganized Debtor are limited to activities necessary or appropriate to implement and consummate the plan, administer the remaining vested assets, prosecute or resolve the causes of action, comply with applicable law, wind down its affairs, or as otherwise authorized by the court.
• Except as expressly provided in the plan or approved by court order, Dr. Persaud shall receive no compensation from the Debtor, the estate or the Reorganized Debtor for services in connection with the implementation or administration of the plan. Any indemnification or other agreements with Dr. Persaud in place as of the effective date that survive the effective date remain in effect and shall be honored by the Reorganized Debtor in accordance with their terms.

Executory Contracts and Unexpired Leases

• On the later of the effective date and the Clinical Closing Date, the designated contracts identified in the purchase agreement shall be assumed by the Debtor and assigned to the Buyer to the extent not already assumed and assigned at the Non-Clinical Closing. Assumption and assignment of any designated contract was, or shall be, effective upon the applicable closing, with amounts due paid in accordance with the purchase agreement and any applicable court-ordered stipulation.
• All executory contracts and unexpired leases not expressly identified as designated contracts or rejected with court approval on or prior to the confirmation date are deemed rejected as of the effective date, provided that the Debtor, at the Buyer’s request, reserves the right on or prior to the applicable closing date to assume and assign a contract or lease upon notice to the counterparty.
• All cure claims arising in connection with assumption and assignment were required to be asserted by the applicable objection deadline established by the final bidding procedures order [Docket No. 264] or another court order — the plan elsewhere defines the cure claim deadline by reference to orders at Doc. Nos. 229, 355 and 415 — and any party that failed to timely assert a cure claim is forever barred, estopped and enjoined from asserting or collecting it against the Debtor, the Reorganized Debtor, the Buyer or their property. All timely asserted cure claims have been resolved, satisfied or shall be satisfied in accordance with the applicable designated contracts, the sale order and the purchase agreement.
• Rejection damage claims must be filed by the applicable bar date — the voting deadline with respect to rejected contracts — or be forever barred and unenforceable against the Debtor, the Reorganized Debtor or the Buyer.
• The Debtor’s insurance policies are treated as executory contracts and are assumed, provided the Debtor reserves the right, on or prior to the applicable closing date, to reject a policy upon notice. Nothing in the plan waives any cause of action the Debtor may hold against any person or entity, including insurers under the policies.

Voting

• Classes 5, 6, 7 and 9 are impaired and entitled to vote to accept or reject the plan.
• Classes 1 through 4 and Class 8 are unimpaired and conclusively presumed to have accepted the plan under section 1126(f); they are not entitled to vote.
• Class 10 is impaired, receives no distribution, is deemed to reject under section 1126(g), and no vote of Class 10 shall be solicited or counted.
• An impaired class accepts the plan if holders of at least two-thirds in amount and more than one-half in number of the allowed claims in the class that actually vote do so in favor.
• The Debtor states that, in its opinion, the treatment of claims and equity interests under the plan contemplates a greater recovery than is likely to be achieved under other alternatives for the reorganization or liquidation of the Debtor, and recommends that creditors and holders of equity interests vote to accept the plan.

Conditions Precedent

• Conditions to confirmation: (i) court approval of the disclosure statement as containing adequate information under section 1125; (ii) a determination that the plan satisfies all applicable confirmation requirements; and (iii) entry of a confirmation order in form and substance consistent with the plan.
• Conditions to the effective date: (i) the confirmation order shall have been entered and be a final order; (ii) the sale order shall remain in full force and effect and not have been stayed, reversed, vacated or modified in any manner that would materially impair consummation or implementation of the plan; (iii) the Non-Clinical Closing shall have occurred; (iv) the Clinical Closing shall have occurred or contemporaneously occur (although, under Section 8.02, failure of the Clinical Closing to occur by the anticipated date does not, by itself, constitute a failure of the effective date or a default under the plan); (v) all documents and agreements necessary to implement the plan shall have been executed or become effective; and (vi) all actions necessary to implement the plan shall have been taken.
• The Debtor may waive any condition existing solely for its benefit by filing a notice of waiver with the court; no condition materially affecting the rights or obligations of the plan administrator, KC WW Holdings, LLC or any other person or entity may be waived without the consent of the affected party or further court order.

Releases

• Third-party release in favor of the Purchaser — As of the effective date, each holder of a claim or interest that (a) votes to accept the plan and does not timely and properly opt out, (b) is deemed to accept the plan and does not timely and properly opt out where provided the opportunity, or (c) otherwise affirmatively consents (the “Releasing Parties”) releases the Purchaser, its current and former affiliates, and each of their respective current and former officers, directors, members, managers, employees, agents, representatives, advisors, attorneys, financial advisors, consultants and professionals (the “Purchaser Released Parties”).
  • The release covers claims based upon, relating to or arising from the Debtor, its business or assets, the bankruptcy case or its administration, the negotiation, execution or implementation of the purchase agreement and related documents, the sale transaction and transfer of the purchased assets, or the formulation, preparation, dissemination, negotiation, solicitation, filing or confirmation of the plan or disclosure statement, in each case based on any act, omission, transaction, agreement, event or occurrence taking place on or before the effective date.
• Debtor and estate release — As of the effective date, the Debtor, the estate and the Reorganized Debtor release the Purchaser Released Parties on substantially the same terms and scope.
• Carve-outs from both releases: (a) any obligation of KC WW Holdings, LLC or any other Purchaser Released Party under the purchase agreement, sale order, plan, confirmation order or related documents required to be performed on or after the effective date; (b) any right to enforce such obligations; and (c) any claim or liability arising from fraud, gross negligence or willful misconduct of a Purchaser Released Party, as determined by a final order of a court of competent jurisdiction.
  • Neither release affects the obligations of KC WW Holdings, LLC with respect to the reservation, allocation or issuance of the MSO Common Units in accordance with the plan, the confirmation order, the Final MSO Allocation Schedule and the Class 9 Cash Distribution Schedule.
  • Nothing in the Debtor and estate release limits or impairs the preservation, vesting, investigation, prosecution, settlement, compromise, release or abandonment of causes of action by the Reorganized Debtor.
• Opt-out mechanism — Any holder solicited to vote or otherwise proposed to be bound by the third-party release shall be provided notice of the release and a reasonable opportunity to elect not to grant it, whether by opt-out election on the ballot or, for non-voting holders, by an appropriate notice containing a substantially similar opportunity.
  • A holder that timely and properly opts out is not deemed to have granted the release and retains any claims or causes of action it holds against the Purchaser Released Parties, subject to other applicable provisions of the plan, confirmation order, sale order and applicable law.
  • An opt-out election does not affect a holder’s treatment under the plan or its entitlement to any distribution otherwise provided.
  • Failure to timely and properly opt out may be deemed consent only to the extent the holder was provided notice and a reasonable opportunity to exercise the election, and only to the fullest extent permitted by applicable law.

Exculpation and Injunctions

• The Debtor, the Reorganized Debtor, the plan administrator and their respective officers, directors, employees, professionals and other representatives, in each case acting in such capacity, and any other person or entity entitled to exculpation under applicable law (the “Exculpated Parties”), shall neither have nor incur liability for any act taken or omitted in good faith in connection with the bankruptcy case or the formulation, preparation, dissemination, solicitation, negotiation, filing, confirmation or implementation of the plan, disclosure statement, purchase agreement, sale transaction, sale order, confirmation order or related documents, during the period from the petition date through the effective date.
  • The exculpation does not extend to liability resulting from fraud, willful misconduct or gross negligence, as determined by a final order of a court of competent jurisdiction, or from breach of any obligation under the plan, confirmation order, sale order, purchase agreement or implementing documents, and does not affect any obligation of KC WW Holdings, LLC with respect to the reservation and issuance of the MSO Common Units.
  • The Exculpated Parties are entitled to the protections of section 1125(e) with respect to solicitation and participation in the offer, issuance, sale or purchase of securities under the plan, and any person that solicits acceptances or rejections of the plan in good faith and in compliance with the Bankruptcy Code shall not be liable, on account of that solicitation, for violation of any law, rule or regulation governing solicitation.
• From and after the effective date, each Releasing Party is permanently enjoined from commencing, continuing or prosecuting any action against the Purchaser Released Parties on account of any claim released under Section 12.02. The injunction applies only to claims actually released and does not enjoin enforcement of any obligation expressly excluded from the release, including the obligations of KC WW Holdings, LLC with respect to the reservation or issuance of the MSO Common Units.
• The preliminary injunction entered under section 105 in Adv. Pro. No. 25-04007 shall remain in full force and effect through the effective date and terminate automatically upon its occurrence, superseded and replaced by the plan injunction to the extent applicable.
• As of the effective date, all persons or entities holding claims, debts or liabilities are permanently enjoined from, among other things, commencing or continuing any action against the Debtor, its assets or estate, or the Buyer or the purchased assets; enforcing or collecting any judgment against the same; creating, perfecting or enforcing any lien or encumbrance against the same; asserting setoff, subrogation or recoupment against any debt or obligation due to the Debtor or its estate; commencing or continuing any action inconsistent with the plan, sale order or confirmation order; or interfering with the rights and remedies of the Debtor or Reorganized Debtor under the plan. The Debtor, Reorganized Debtor or Buyer may independently seek enforcement of the general injunction.
• Injunctions and automatic stays in existence on the confirmation date remain in full force and effect until the final decree date, unless otherwise ordered. Pending non-bankruptcy court lawsuits in which the Debtor was a defendant or counter-defendant seeking to establish liability on prepetition claims and stayed under section 362 shall be deemed dismissed as of the effective date, and pending stay-relief motions deemed denied, unless the Debtor or Reorganized Debtor affirmatively elects otherwise; the underlying prepetition claims shall be determined and allowed or disallowed by the Bankruptcy Court. Lawsuits in which the Debtor or Reorganized Debtor is a plaintiff are not subject to this provision and shall not be deemed dismissed.
• Unless a taxing governmental unit asserted a claim before the applicable governmental unit bar date (April 1, 2026) or administrative expense claim bar date, no such claim shall be allowed against the Debtor, the Reorganized Debtor, the Buyer or the purchased assets, or their respective officers, directors or agents, for taxes, penalties, interest, additions to tax or other charges arising out of any failure to pay tax or file a return in or for any prior year or period, or an audit of any return for a period before the petition date.

Modification, Revocation and Retention of Jurisdiction

• The Debtor may modify the plan prior to entry of the confirmation order, provided the modified plan and disclosure statement meet applicable requirements, are not inconsistent with the purchase agreement and are otherwise reasonably acceptable to the Buyer.
  • After entry of the confirmation order, the Debtor or Reorganized Debtor may modify the plan to remedy defects or omissions or reconcile inconsistencies with the confirmation order, subject to court approval after notice to the notice parties — the Reorganized Debtor, bankruptcy counsel, the U.S. Trustee, INS, Itria Ventures and the non-debtor contract parties — and a hearing, provided the modification does not materially adversely affect the interests, rights, obligations or treatment of the Buyer or any class and is not inconsistent with the purchase agreement.
  • After the confirmation date and before substantial consummation, a modification materially adversely affecting a class requires, among other things, court approval after notice and a hearing and acceptance by at least two-thirds in dollar amount and more than one-half in number of allowed claims actually voting in each adversely affected class.
  • The plan may not be altered, amended or modified without the written consent of the Debtor or Reorganized Debtor, as applicable.
• If any impaired class votes against the plan, the Debtor requests and shall be allowed to modify the plan’s terms to effect a cramdown on the dissenting class by restructuring the treatment of any class consistent with section 1129(b)(2)(B), or by deleting or reallocating distributions to all classes at or below the level of the objecting class until impaired senior classes are paid in accordance with the absolute priority rule. No such modification requires resolicitation unless the court orders otherwise.
• Solely to the extent not inconsistent with the purchase agreement, the Debtor reserves the right to revoke or withdraw the plan prior to the confirmation date; upon revocation, withdrawal or failure of confirmation, the plan is null and void and constitutes neither a waiver or release of claims nor prejudice to the rights of any party in further proceedings.
• The Bankruptcy Court retains the fullest jurisdiction permitted by applicable law until the case is closed, including to allow, disallow, estimate and determine claims and objections; enforce, interpret and administer the plan; construe, interpret and enforce the sale order and resolve disputes regarding the purchase agreement; assure performance by the Debtor, the Reorganized Debtor and the Buyer of their obligations; resolve disputes concerning releases, exculpation and injunctions; determine matters relating to the causes of action, including claims against Capybara Capital LLC, Mako Funding USA LLC, Austin Business Finance LLC d/b/a Backd and Newco Capital Group VI LLC arising from merchant cash advance transactions; enforce all indemnification obligations under the purchase agreement; and enter an order concluding and terminating the case, as well as to reopen the case after closing.
• To the extent the confirmation order is inconsistent with the plan, the confirmation order controls; to the extent any provision of the confirmation order is inconsistent with the sale order, the sale order controls. The confirmation order and the plan control over the disclosure statement and any agreement between the Debtor and any third party.
• Nothing in the plan is an admission of any fact or otherwise binding on the Debtor or the Reorganized Debtor prior to the effective date. Subject to section 553, the Debtor or Reorganized Debtor may, but is not required to, set off claims it holds against a holder against any distribution, without waiver or release of those claims. The Debtor or Reorganized Debtor may modify the treatment of any allowed claim after the effective date under section 1123(a)(4) with the consent of that holder. Creditors and other parties in interest, including foreign parties, are deemed to have consented to the Bankruptcy Court’s jurisdiction by accepting a distribution, filing a proof of claim or administrative expense claim, voting on the plan, being served with notice of the case or the confirmation hearing, or appearing in the case.
• Except where federal law applies or the plan or a related document provides otherwise, the rights and obligations arising under the plan are governed by Florida law.