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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------------
FORM 8-K
--------------------------------------
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
September
14, 2023
--------------------------------------
PLx Pharma Winddown Corp.
(Exact name of Registrant as Specified in Its
Charter)
--------------------------------------
|
Delaware
(State or Other Jurisdiction
of Incorporation)
|
001-36351
(Commission
File Number)
|
46-4995704
(IRS Employer
Identification No.)
|
| |
|
|
|
8 The Green, Suite 11895
Dover, Delaware
(Address of Principal Executive Offices) |
|
07871
(Zip Code) |
Registrant’s Telephone Number, Including
Area Code: (973) 381-7408
(Former Name or Former Address, if Changed
Since Last Report)
--------------------------------------
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
| ☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
| ☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b)
of the Act:
|
Title
of each class |
Trading
Symbol(s) |
Name
of each exchange on which registere |
|
Common Stock, $0.001 par value |
PLXPQ |
N/A |
*Our Common Stock trades on the OTC Expert Market maintained by the
OTC Markets Group, Inc. under the symbol “PLXPQ.”
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ☐
| Item 1.03 | Bankruptcy or Receivership. |
As previously disclosed, on April 13, 2023 (the “Petition
Date”), PLx Pharma Winddown Corp. (formerly known as PLx Pharma Inc.) (the “Company”) and its wholly-owned subsidiary,
PLx Opco Winddown Corp. (formerly known as PLx Opco Inc.) (together with the Company, the “Debtors”), filed voluntary petitions
for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy
Court for the District of Delaware (the “Bankruptcy Court”). The Chapter 11 proceedings are being jointly administered under
the caption In re PLx Pharma Winddown Corp., et al., Case No. 23-10456 (the “Chapter 11 Cases”).
Confirmation of the Plan
As previously disclosed, on July 7, 2023 the Debtors
filed a proposed Combined Disclosure Statement and Joint Chapter 11 Plan of Liquidation [Docket No. 192] (the “Original Plan”)
describing the plan of liquidation and the solicitation of votes to approve the same from certain of the Debtors’ creditors with
respect to the Chapter 11 Cases. On July 26, 2023, the Company filed its First Amended Combined Disclosure Statement and Joint Chapter
11 Plan of Liquidation [Docket No. 218] (the “Combined Disclosure Statement and Plan” and, when the respective documents therein
are referred to separately, each the “Disclosure Statement” and “Plan”) with the Bankruptcy Court, which included
certain modifications to the Original Plan. On July 28, 2023, the Bankruptcy Court entered an order [Docket No. 224] that, among other
things, approved the Disclosure Statement on an interim basis for solicitation purposes only.
On September 14, 2023, the Bankruptcy Court entered
the Findings of Fact, Conclusions of Law and Order Approving the Debtors’ Disclosure Statement on a Final Basis and Confirming the
Debtors’ Joint Chapter 11 Plan of Liquidation [Docket No. 279] (the “Confirmation Order”), which approved the Disclosure
Statement on a final basis and confirmed the Plan, subject to certain modifications filed on September 11, 2023 [Docket No. 267]. The
Debtors expect that the effective date of the Plan will occur once all conditions precedent to the Plan have been satisfied or waived
(the “Effective Date”).
Summary of the Plan
The following is a summary of the material terms
of the Plan as confirmed by the Bankruptcy Court. This summary highlights only certain substantive provisions of the Plan and is not intended
to be a complete description of the Plan. This summary is qualified in its entirety by reference to the full text of the Confirmation
Order, which includes the Combined Disclosure Statement and Plan as an exhibit, attached hereto as Exhibit 2.1 and is incorporated herein
by reference. Capitalized terms used herein that are not otherwise defined have the meaning ascribed to them in the Combined Disclosure
Statement and Plan.
The Plan provides for the appointment of a Plan Administrator
who will become the sole officer, director and/or responsible person for the Debtors after the Effective Date, and, among other things,
take all steps and execute all instruments and documents necessary to make distributions to Holders of Allowed Claims in accordance with
the terms of the Plan and, as set forth in the Plan Administrator Agreement, including, at a minimum, an interim distribution to unsecured
creditors no later than the later of: (i) 75 days after the appointment of the Plan Administrator, or (ii) December 1, 2023 after setting
aside, in consultation with the Consulting Parties, a reasonable reserve for any disputed claims that have not been resolved.
The Plan creates five classes of claims against and
interests in the Debtors: claims in Class 1 (Secured Claims), Class 2 (Priority Non-Tax Claims), Class 3 (General Unsecured Claims), Class
4 (Subordinated Claims), and Class 5 (PLx Parent Interests). Claims in Class 1 and Class 2 are deemed unimpaired under the Plan and were
conclusively presumed to have accepted the Plan without the solicitation of acceptances or rejections pursuant to section 1126(f) of the
Bankruptcy Code. Holders of claims in Class 3 are impaired and were entitled to vote on the Plan, and Holders of claims in Classes 4 and
5 are impaired and were deemed to reject the Plan. Holders of Allowed Claims in Class 3 are the only class of creditors or interest holders
who are anticipated to receive distributions under the Plan. Additionally, the Plan provides for the payment of Administrative Claims,
Priority Tax Claims, and Professional Fee Claims. Certain reserves may be created by the Plan Administrator for purposes of resolving
disputed claims and ongoing disputes, and funding various costs and expenses associated with the administration of the Plan and the wind
down of the Debtors’ estates.
As of September 20, 2023, the Debtors had an estimated $7,795,689
in remaining assets and an estimated $12,590,687 of liabilities. This financial information has not been audited or reviewed by an independent
registered public accounting firm and may be subject to future reconciliation or adjustments. This information should not be viewed as
indicative of future results or recoveries.
Treatment of Company Stock
As of September 19, 2023 the Company had outstanding
(i) 30,596,309 shares of common stock, $0.001 par value per share (the “Common Stock”), (ii) 9,756 shares of Series A convertible
preferred stock, $0.001 par value per share, with a liquidation value of $1,000 per share (the “Series A Preferred”), and
(iii) 2,000 shares of Series B convertible preferred stock, $0.001 par value per share, with a liquidation value of $1,000 per share
(the “Series B Preferred” and, together with the Series A Preferred, the “Preferred Stock”). On or around the
Effective Date, all Common Stock and Preferred Stock will be deemed cancelled and extinguished, and the Company will cease to be publicly
traded. All rights and interests of the holders of any Common Stock or Preferred Stock in the Company will be terminated and those holders
will not receive or retain any property or interest in the Debtors based on their holding of any Common Stock or Preferred Stock.
On September 19, 2023, the Company and PLx Opco Winddown
Corp. filed their monthly operating reports with the Bankruptcy Court for the period beginning August 1, 2023 and ending August 31, 2023
(the “Monthly Operating Reports”).
The Monthly Operating Reports are attached hereto
as Exhibit 99.1 and are incorporated herein by reference.
Cautionary Note Regarding the Monthly Operating
Reports
The Company cautions investors and potential investors
not to place undue reliance upon the information contained in the Monthly Operating Reports, which were not prepared for the purpose of
providing the basis for an investment decision relating to any Company securities. The Monthly Operating Reports are limited in scope
and have been prepared solely for the purpose of complying with requirements of the Bankruptcy Court. The Monthly Operating Reports were
not reviewed by independent accountants, are in a format prescribed by applicable bankruptcy laws, and are subject to future adjustment.
The financial information in the Monthly Operating Reports are not prepared in accordance with accounting principles generally accepted
in the United States (“GAAP”), and, therefore, may exclude items required by GAAP, such as certain reclassifications, eliminations,
accruals, valuations and disclosures. The Monthly Operating Reports also relate to a period that is different from the historical periods
required in the Company’s reports pursuant to the Securities Exchange Act of 1934, as amended.
Cautionary Note Regarding Trading in the Company’s
Securities
The Company cautions that trading in the Company’s
Common Stock during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. Trading prices for the Company’s
Common Stock may bear little or no relationship to the actual recovery, if any, by holders of the Company’s Common Stock in the
Chapter 11 Cases. Accordingly, the Company urges extreme caution with respect to existing and future investments in its Common Stock.
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws, about the Company that
involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Current Report
on Form 8-K are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such
as “expect,” “may,” “will,” “could” or “believes” or the negative of these
words or other similar terms or expressions. Forward-looking statements in this Current Report on Form 8-K include, but are not limited
to, the Company’s ability to continue ordinary course operations during the Chapter 11 Cases, the value of the Company’s Common
Stock, and the ability of holders of the Company’s Common Stock to receive any payment or distribution. The forward-looking statements
in this Current Report on Form 8-K are only predictions. The Company has based these forward-looking statements largely on its current
expectations and projections about future events and financial trends that it believes may affect its business, financial condition and
results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may
cause its actual results, performance or achievements to be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements, including the important factors discussed in the sections entitled “Risk
Factors” of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, and in the Company’s
other filings with the Securities and Exchange Commission. The forward-looking statements in this Current Report on Form 8-K are based
upon information available to the Company as of the date of this Current Report on Form 8-K, and while the Company believes such information
forms a reasonable basis for such statements, such information may be limited or incomplete, and its statements should not be read to
indicate that the Company has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These
statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Except as required by law, the
Company assumes no obligation to update these forward-looking statements, or to update the reasons if actual results differ materially
from those anticipated in the forward-looking statements.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| |
|
PLx Pharma Winddown Corp. |
| |
|
| Date: September 20, 2023 |
By: |
/s/ John Halloran |
| |
|
John Halloran |
| |
|
Deputy Chief Restructuring Officer |
6
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 1 of 20
IN THE UNITED
STATES BANKRUPTCY
COURT
FOR
THE DISTRICT
OF DELAWARE
| |
) |
|
| In re: |
) |
Chapter 11 |
| |
) |
|
| PLX
PHARMA WINDDOWN
CORP., et |
) |
Case
No. 23-10456 (MFW) |
| al.,1 |
) |
|
| |
) |
(Jointly Administered) |
| Debtors. |
) |
|
| |
) |
Ref. Docket No. 224 |
| |
) |
|
| |
) |
|
FINDINGS
OF FACT,
CONCLUSIONS
OF LAW AND ORDER
APPROVING
DEBTORS’ DISCLOSURE
STATEMENT
ON A FINAL
BASIS
AND
CONFIRMING
DEBTORS’ JOINT
CHAPTER 11 PLAN
OF LIQUIDATION
Upon
consideration of (i)
the Debtors’ First Amended
Combined Disclosure
Statement and Joint Chapter
11 Plan of Liquidation attached
hereto as
Exhibit A (as amended,
modified or supplemented,
the “Combined
Disclosure
Statement and Plan,”
and separately
referred
to as the “Plan”
and “Disclosure
Statement,”
as applicable)
filed by
the debtors
and debtors
in possession in the above-captioned
cases
(collectively,
the “Debtors”),2
(ii) the Debtors’ Motion
for Entry of an Order
(I) Approving
the Combined Disclosure
Statement and Plan
on an Interim Basis
for Solicitation Purposes
Only; (II)
Establishing Solicitation and Tabulation
Procedures;
(III) Approving
the Form of Ballot and Solicitation
Materials; (IV)
Establishing the Voting Record
Date; (V)
Fixing the Date,
Time and Place
for the Combined Hearing
and the Deadline for Filing Objections
Thereto; (VI)
Establishing Bar Dates
for Filing Requests
for Allowance of Initial
Administrative
Claims; and (VII)
Granting Related
Relief [Docket
No. 193] (the
“Solicitation
Motion”),
(iii) the Declaration
of John Halloran
in Support of Confirmation
of the Debtors’ First
_________________________
1
The Debtors
in these
chapter
11 cases,
along
with
the last
four
digits
of each Debtor’s
federal tax
identification
number,
are PLx Pharma
Winddown
Corp.
(5704)
and PLx
Opco Winddown
Corp.
(6588).
The mailing
address for
each of the
Debtors
is 8 The
Green, Suite
11895, Dover,
DE 19901.
2
Capitalized
terms
not defined
herein shall
have the
meaning
provided
to them
in the
Combined
Disclosure
Statement
and Plan.
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 2 of 20
Amended
Combined Disclosure
Statement and Joint Chapter
11 Plan of Liquidation [Docket
No. 265] (the “Halloran
Declaration”),
(iv) the Memorandum
of Law in Support of Confirmation of
the Debtors’ First Amended
Combined Disclosure
Statement and Joint Chapter
11 Plan of Liquidation [Docket
No. 266] (the “Confirmation
Memorandum”),
and (v) the Declaration
of John Burlacu
of Donlin, Recano & Company,
Inc.
regarding Voting and Tabulation of Ballots
Cast on the Debtors’ First
Amended Combined
Disclosure Statement
and Joint Chapter 11 Plan
of Liquidation [Docket
No. 264] (the “Voting
Declaration”);
and this Court, by
order
dated
July 28, 2023 [Docket
No. 224] (the “Interim
Approval and
Procedures
Order”),
having conditionally
approved
the Disclosure
Statement
for solicitation
purposes only,
and authorized
the Debtors to solicit
acceptances
for the Plan;
and all objections
and all reservations
of rights
that have not been
withdrawn,
waived, or settled
pertaining to final
approval
of the Disclosure
Statement
and Confirmation
of the Plan having been
overruled on the merits;
and a hearing
having been
held on September
13, 2023, regarding
final
approval
of the Disclosure
Statement
and Confirmation
of the Plan (the “Confirmation
Hearing”);
and upon the evidence
adduced
and proffered
and the arguments
of counsel made
at or in connection
with the Confirmation
Hearing;
and this Court having
reviewed
all documents
in connection with
Confirmation,
and having
heard all
parties desiring
to be heard with
respect
to Confirmation
of the Plan; and upon the record
compiled in the Chapter
11 Cases; and
after due
deliberation and
consideration of all
of the foregoing;
and sufficient
cause appearing
therefor;
this Court hereby
makes
the following
FINDINGS
OF FACT
AND CONCLUSIONS
OF LAW:
A. The findings
and conclusions
set forth
herein
and on the record
of the Confirmation
Hearing constitute
this Court’s findings
of fact
and conclusions
of law pursuant
to Rule 52 of the Federal
Rules of Civil Procedure,
as made applicable
herein by Bankruptcy
Rules 7052 and 9014. To
the extent
any of the following
findings of
fact constitute conclusions
of law, they are
adopted
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 3 of 20
as
such. To the extent
any of the following
conclusions
of law constitute
findings
of fact, they are
adopted as
such.
B. This Court has jurisdiction
over the Chapter
11 Cases pursuant
to 28 U.S.C. §§ 1334(a)
and 157(1)
and the Amended
Standing Order
of Reference
from the United States
District Court for the District
of Delaware, dated
as of February
29, 2012. Venue
of these proceedings
and the Chapter
11 Cases in this district
is proper pursuant
to 28 U.S.C. §§ 1408 and
1409. This is a core
proceeding
pursuant
to 28 U.S.C. §157(b)(2)
and this Court may
enter
a final order
hereon under
Article III
of the U.S. Constitution.
C. This Court takes
judicial notice
of the docket
in the Chapter
11 Cases
maintained
by the Clerk of
the Bankruptcy
Court and/or its duly
appointed agent,
including,
without limitation,
all pleadings,
notices, and other
documents filed,
all orders
entered,
and all evidence
and arguments
made, proffered
or adduced
at or in connection
with the hearings
held before
this Court during the Chapter
11 Cases, including,
without limitation,
the hearing on the Solicitation
Motion and the Confirmation
Hearing.
D. The filing of the Combined Disclosure
Statement
and Plan satisfies
Bankruptcy
Rule 3016 and Local
Rule 3017-2, to the extent
applicable.
E. As evidenced by
the Affidavit of Service filed at Docket No.
235 in the Chapter 11 Cases (the “Solicitation Affidavit of
Service”),
on or before August
5, 2023, the Debtors or their agents caused
the Ballots to be distributed as required by
Bankruptcy Code
Sections 1125 and 1126, Bankruptcy
Rules 3017 and 3018, the Local
Rules, all other applicable
provisions of the Bankruptcy
Code, the Interim Approval and
Procedures Order, and all
other rules,
laws and regulations applicable to
such solicitation. The
Solicitation Packages were
transmitted in accordance with
the Interim Approval and
Procedures Order.
Sufficient
time was provided for
the Voting Class (as defined
in the Interim Approval and
Procedures Order)
to vote to accept or reject
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 4 of 20
the
Plan. Such transmittal
and service
was adequate
and sufficient
under the circumstances
and no other or further
notice is or shall be required.
F. As evidenced
by the Solicitation
Affidavit of Service,
the Debtors
have provided
proper, adequate,
and sufficient
notice of the Combined
Disclosure
Statement
and Plan and
the Confirmation
Hearing,
as required
by Bankruptcy
Rule 3017(d),
to all Holders
of Claims and Interests
and all other
parties
in interest, and no other
or further
notice thereof is or shall
be required. Sufficient
time was provided
to all Holders
of Claims and Interests
and all other
parties in interest
to object to Confirmation
of the Plan.
G. The solicitation of acceptance
or rejection
of the Plan has been
fair, properly
conducted,
in good faith,
and in compliance
with applicable
provisions of the Bankruptcy
Code, the Bankruptcy
Rules, the Local
Rules, the Interim
Approval
and Procedures
Order,
and all other
rules, laws
and regulations
applicable to such
solicitation.
H. The procedures
by which
the Ballots for
acceptance
or rejection
of the Plan were
distributed and
tabulated,
including as set
forth in the Voting
Declaration,
under the circumstances
of the Chapter 11 Cases
were fair,
properly
conducted,
in good faith, and
complied with
the Bankruptcy
Code, the Bankruptcy
Rules, the Local
Rules, applicable
non-bankruptcy
law, and the Interim
Approval
and Procedures
Order.
As more fully
set forth
in the Voting Declaration,
Class 3 voted to accept
the Plan.
I. Prior
to the Confirmation Hearing,
the Debtors filed
the Plan Supplement [Docket
No. 249]. The Plan
Supplement complies with
the terms of the Plan, and
the filing and notice
of the Plan Supplement was,
under the circumstances
of the Chapter 11 Cases, appropriate and complied with
the requirements
of the Bankruptcy
Code, the Bankruptcy
Rules, the Local
Rules, and the Interim Approval and
Procedures Order, and
no other or further
notice thereof is or shall
be required. The Debtors are authorized
to modify the Plan Supplement
documents following
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 5 of 20
entry
of this Confirmation
Order in a manner
consistent
with this Confirmation
Order, the Plan,
or applicable law.
J. The Plan complies
with all of the applicable
provisions of the Bankruptcy
Code including,
but not limited to: (i) the
proper
classification
of Claims and Interests
(Bankruptcy
Code Sections 1122, 1123(a)(i));
(ii) the specification
of Unimpaired
Classes (Bankruptcy
Code Section 1123(a)(2));
(iii) the specification
of treatment
of Impaired
Classes (Bankruptcy
Code Section 1123(a)(3));
(iv) the provision
for the equal
treatment of each
Claim or Interest
within a particular
class (Bankruptcy
Code Section 1123(a)(4));
(v) the provision for
adequate
and proper
means of implementation
(Bankruptcy
Code Section 1123(a)(5));
(vi) the prohibition against
the issuance of non-voting
equity securities
(Bankruptcy
Code Section 1123(a)(6));
(vii) the manner
of selection of the
Plan Administrator
(Bankruptcy
Code Section 1123(a)(7));
and (viii) the inclusion
of additional Plan
provisions permitted
to effectuate
and implement
the transactions
contemplated
by the Combined Disclosure
Statement
and Plan (Bankruptcy
Code Section 1123(b)).
Thus, the Plan
satisfies
Bankruptcy
Code Section 1129(a)(1).
K. Section 9.6 of the Plan provides
for the appointment
of the Plan Administrator,
who will serve
as a fiduciary
of the Debtors’
Estates
and the Post-Effective
Date Debtors
as provided
for in the Plan and
the Plan Administrator
Agreement,
and who shall
be empowered to, among
other things, implement
the terms of the Plan
and otherwise wind-down
the Estates,
in accordance
with the terms of the Plan,
this Confirmation
Order,
and the Plan Administrator
Agreement.
As disclosed
in the Plan Supplement,
Daniel R. Williams
of J.S. Held LLC
will serve as
the initial Plan Administrator.
The foregoing
is consistent with
the interest of Holders
of Claims and Interests
and with public policy
and therefore,
section 1123(a)(7)
of the Bankruptcy
Code is satisfied.
L. The Plan provides
for the same treatment
by the Debtors
for each
Claim or Interest
in each respective
Class, unless the Holder
of a particular
Claim or Interest
has agreed
to a less
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 6 of 20
favorable
treatment of
such Claim
or Interest. Thus,
section 1123(a)(4)
of the Bankruptcy
Code is satisfied.
M. This Court has jurisdiction
under 28 U.S.C. §§1334(a)
and (b),
and the Amended
Standing Order of Reference
dated
as of February
29, 2012, from the United
States District
Court, to approve
the releases
and exculpations
set forth
in Article XIV
of the Plan, and the related
injunctions provided
for therein. Bankruptcy
Code Section 105(a) permits
approval
of such releases,
exculpations,
and injunctions because,
as has been
established
here, based
upon the record
in the Chapter 11 Cases
and the evidence
presented
at or in connection
with the Confirmation
Hearing,
such provisions
set forth
in Article XIV
of the Plan are:
(i) within the jurisdiction
of the Bankruptcy
Court as set
forth above;
(ii) an appropriate
exercise
of the Debtors’ business
judgment; (iii)
given in exchange
for the good and
valuable consideration
provided by
the Released
Parties; (iv)
a good faith
settlement
and compromise
of the claims and
causes
of action released
by Article
XIV of
the Plan; (v) in the
best interests
of the Debtors and
their Estates;
(vi) fair,
equitable, and
reasonable;
(vii) given
and made after
due notice and an
opportunity
to object and
be heard with respect
thereto,
as the Combined Disclosure
Statement
and Plan, the Confirmation
Hearing Notice,
and the Ballots
each
unambiguously
state that (a)
the Plan contains
certain
release,
exculpation,
and injunction provisions,
and (b) affected
parties
may object
to such release,
exculpation,
and injunction
provisions; (viii) are
consistent with
sections 105, 524, 1123, 1129, and 1141 and
other applicable
provisions of the Bankruptcy
Code and applicable
law; and (ix)
a bar to any
Entity asserting
any claim
or cause of action
released
or exculpated
by Article
XIV of the Plan,
including a bar
to any of the Releasing
Parties
asserting
any released
claims or
causes
of action against
any of
the Third-Party
Released
Parties,
as and to the extent
provided for
in the Plan and this Confirmation
Order.
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 7 of 20
N. The releases
in Section 14.3(b) of the Plan
are consensual
as they pertain
to the Releasing Parties
because
they are
given and
made pursuant
to the Release Opt-In
mechanism, after
due notice and
an opportunity
to object and be heard
with respect
thereto. As
set forth
in the Voting Declaration,
none of the Holders of Claims
in Class 3 exercised
the Release
Opt-In
on their Ballot,
to indicate their decision
to opt into the releases
set forth
in Section 14.3(b) of the Plan.
O. In accordance
with Bankruptcy
Rule 3016(a), the
Plan is dated
and identifies
the Debtors as
the proponents
thereof.
P. As required by
Bankruptcy
Code Section 1129(a)(2),
the Debtors, as
proponents
of the Plan, have complied
with the Bankruptcy
Code, the Bankruptcy
Rules, the Local
Rules, the Interim
Approval
and Procedures
Order,
and all other
rules, laws
and regulations
applicable to such
solicitation. The
Debtors
are proper
debtors
under Bankruptcy
Code Section 109 and
proper proponents
of the Plan pursuant
to Bankruptcy
Code Section 1121(a).
Q. The Plan has
been proposed
in good faith and
in compliance
with applicable
provisions of the Bankruptcy
Code, and not by
any means
forbidden
by law,
thus satisfying
Bankruptcy
Code Section 1129(a)(3).
R. Any payments
made or
promised by
the Debtors
for services
or for costs
and expenses
in, or in connection
with, the Chapter
11 Cases, or in connection
with the Plan and
incident to the Chapter
11 Cases, have
been approved
by, or are
subject to approval
of this Court as reasonable,
thus satisfying
Bankruptcy
Code Section 1129(a)(4).
S. The identity of,
and the terms
of the proposed compensation
to be paid to, the Plan Administrator,
as disclosed
in the Plan Supplement,
is consistent with
the interests of Holders
of Claims and Interests
and with public policy
and thus, the Plan satisfies
Bankruptcy
Code Section 1129(a)(5).
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 8 of 20
T. The provisions of Bankruptcy
Code Section 1129(a)(6)
are inapplicable
to the Chapter 11 Cases.
U. As evidenced
by the Plan
and the Voting
Declaration
and established
at or in connection
with the Confirmation
Hearing,
each holder
of a Claim or Interest
in each Impaired
Class has either
accepted
the Plan, or will receive
or retain under
the Plan property
of a value,
as of the Effective
Date, that
is not less than the amount
that such holder
would receive
or retain if the Debtors
liquidated under
Chapter 7 of the Bankruptcy
Code on such date.
Thus, the Plan satisfies
Bankruptcy
Code Section 1129(a)(7).
V. As evidenced
by the Voting
Declaration,
Class 3 has voted
to accept the Plan.
Classes 1 and
2 are not Impaired
under the Plan and
are, therefore,
deemed to have
accepted
the Plan under Bankruptcy
Code Section 1126(f),
thus satisfying
Bankruptcy
Code Section 1129(a)(8).
The remaining
classes
of Claims and
Interests
are Impaired
by the Plan and
are not entitled
to receive or retain
any property
under the Plan and,
therefore,
are deemed
to have rejected
the Plan pursuant
to Bankruptcy
Code Section 1126(g).
As found and
determined
below, pursuant
to Bankruptcy
Code Section 1129(b)(1),
the Plan may be
confirmed
notwithstanding the fact
that such classes
are Impaired
and deemed
to have rejected
the Plan.
W. Except to the extent
that the Holder
of a particular
Claim has agreed
to a different
treatment of such
Claim, the treatment
of Claims under
the Plan of the type
specified
in Bankruptcy
Code Sections 507(a)(1)
and 507(a)(3)-507(a)(8),
if any,
complies with
the provisions of Bankruptcy
Code Section 1129(a)(9).
X. Class 3 is Impaired
and has accepted
the Plan, determined
without including
any acceptances
of the Plan by any
insider. Thus, the Plan
satisfies
Bankruptcy
Code Section 1129(a)(10).
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 9 of 20
Y. The Plan provides
for adequate
means for its implementation
and, thus, satisfies
the requirements
of Bankruptcy
Code Section 1129(a)(11).
Because the Plan
is a plan of
liquidation for the Debtors,
Confirmation
is not likely to be followed
by the need for
further
financial
reorganization
of the Debtors.
Z. All fees payable
on or before
the Effective
Date,
pursuant to United
States Code title 28 section
1930, shall be paid in full
in Cash by the Debtors
on or before
the Effective
Date. All
such fees
payable
after
the Effective
Date shall be paid
in full in cash by
the Post-Effective
Date Debtors
until the cases are
converted,
dismissed, or closed,
whichever
occurs
first. Notwithstanding
anything
to the contrary
in the Plan, the U.S. Trustee
shall not be required
to file a request
for allowance
of any
Administrative Claims
on account of such fees.
AA.
No Debtor offered
“retiree
benefits,”
as that
term is used in the Bankruptcy
Code, was required
to pay a domestic support
obligation, or is an
individual. Accordingly,
Bankruptcy
Code Sections 1129(a)(13)-(15)
are inapplicable.
BB.
The Debtors
are moneyed,
business, or commercial
corporations.
Accordingly,
Bankruptcy
Code Section 1129(a)(16)
is inapplicable.
CC. No
other chapter
11 plan has been
moved for confirmation.
DD.
The primary
purpose of the Plan
is not the avoidance
of taxes
or the requirements
of Section 5 of the Securities
Act of 1933.
EE.
The Debtors
and their officers,
directors,
employees,
advisors, professionals,
and other agents
and representatives
have acted
in good faith
within the meaning
of Bankruptcy
Code Section 1125(e), and
in compliance
with the applicable
provisions of the Bankruptcy
Code, the Bankruptcy
Rules, and the Interim
Approval
and Procedures
Order,
in connection
with all of their
respective activities
relating
to the solicitation of the Plan
and their participation
in the activities described
in Bankruptcy
Code Section 1125(e), and
they are entitled
to the protections afforded
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 10 of 20
by
Bankruptcy
Code Section 1125(e)
and the injunction, exculpation,
and release
provisions set forth
in Article XIV
of the Plan and
in this Confirmation
Order to the extent
provided in the Plan
and this Confirmation
Order.
FF.
Holders of Claims
and Interests
in Classes 4 and
5 are deemed
to have not accepted
the Plan. Based
upon the evidence
proffered,
adduced, and
presented
by the Debtors
at or in connection
with the Confirmation
Hearing,
the Plan does not discriminate
unfairly
and is fair and
equitable with
respect
to the aforementioned
Classes, as
required
by Bankruptcy
Code Sections
1129(b)(1) and
(b)(2).
Thus, the Plan may
be confirmed
notwithstanding the
deemed rejection
of the Plan by the Holders
of Claims and
Interests
in Classes 4 and
5.
GG.
The conditions to the
occurrence
of the Effective
Date in Article
XIII of the
Plan are reasonably
likely to be
satisfied
or waived
in accordance
with the Plan.
HH.
With respect
to any and
all executory
contracts
and unexpired
leases of the Debtors
that have not been
assumed
or assumed and
assigned
by the Debtors
as of the Effective
Date,
such executory
contracts
and unexpired
leases are
burdensome to the Estates,
and rejection
of such executory
contracts
and unexpired
leases pursuant
to the Plan and this Confirmation
Order is in the best
interests of the Estates
and an appropriate
exercise
of the Debtors’
business judgment.
II. The Debtors,
as proponents
of the Plan, have
met their burden
of proving the elements
of Bankruptcy
Code Sections 1129(a) and
(b) by a preponderance
of the evidence,
which
is the applicable
evidentiary
standard.
This Court also
finds that
the Debtors
have satisfied
the elements
of Bankruptcy
Code Sections 1129(a) and
(b) under the clear
and convincing
standard
of proof.
JJ.
The modifications
to the Plan since the entry
of the Interim
Approval
and Procedures
Order,
as reflected
in the Combined Disclosure
Statement
and Plan attached
hereto as Exhibit A,
comply with
the applicable provisions
of the Bankruptcy
Code, the Bankruptcy
Rules,
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 11 of 20
and
the Local
Rules. The filing
of the modifications
with the Court prior
to the Confirmation
Hearing constitutes
due and sufficient
notice thereof
under the circumstances
of the Chapter 11 Cases.
Such modifications
are either
not material
or do not adversely
change
the treatment
of any Holders
of Claims and Interests,
do not require resolicitation
of the Voting Class, and
are approved
pursuant to Bankruptcy
Code Section 1127(a) and
Bankruptcy
Rule 3019. No Holder
of Claim that has
voted to accept
the Plan shall be
permitted
to change
its acceptance
to a rejection as
a consequence
of such modifications.
As a result of the foregoing,
the Plan satisfies
all applicable
requirements
for Confirmation.
KK.
This Court properly
may retain
jurisdiction over
the matters
set forth
in Article
XV of the Plan.
LL.
Under the circumstances,
it is appropriate
that the 14-day
stay imposed
by Bankruptcy
Rules 3020(e)
and 7062(a)
be waived.
ACCORDINGLY,
IT IS HEREBY ORDERED,
ADJUDGED
AND DECREED
AS FOLLOWS:
1. The
Plan is confirmed
pursuant
to Bankruptcy
Code Section 1129. The
terms of the Combined
Disclosure
Statement
and Plan are
incorporated
by reference
into, and are
an integral
part of, this Confirmation
Order. Any
objections to Confirmation
of the Plan, or any
reservations
of rights thereto,
to the extent
not withdrawn, waived,
or resolved herein,
are hereby
overruled
and denied
on the merits. In the event
and to the extent
that any
provision of the Plan is inconsistent
with the provisions of the
Disclosure
Statement
and any
other Order
in the Chapter 11 Cases
(except
for the Bid Procedures
Order,
the Sale Order
or the Patheon Stipulation
Approval
Order),3
________________________
3
For purposes
of this
Confirmation
Order, “Patheon
Stipulation
Approval Order”
shall
mean that
certain Order
Approving
Stipulation
Re: Reconciliation
and Allowance
of Claims
of Patheon
Pharmaceuticals
Inc. and Patheon
Manufacturing
Services
LLC [Docket
No. 258].
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 12 of 20
or
any other
agreement
to be executed
by any
Person
pursuant to the Plan,
the provisions of the Plan
shall control
and take precedence;
provided, however,
that this Confirmation
Order shall
control and
take precedence
in the event of
any inconsistency
between
this Confirmation
Order, any
provision of the Plan,
and any
of the foregoing
documents.
To the extent
that this Confirmation
Order conflicts
with the terms of the
Bid Procedures
Order,
the Sale Order
or the Patheon Stipulation
Approval
Order, as
applicable,
the terms and conditions
of the Bid Procedures
Order, the Sale Order
or the Patheon
Stipulation Approval
Order,
as applicable,
shall control
and govern.
2. The Disclosure
Statement
is approved
on a final
basis as containing
adequate
information
within the meaning of
Bankruptcy
Code Section 1125, and any
objections to the adequacy
of the information
contained
in the Disclosure
Statement,
or any reservations
of rights thereto,
to the extent
not withdrawn, waived,
or resolved
herein
are hereby
overruled and
denied on the merits.
3. Upon the Effective
Date,
section 1141 of the Bankruptcy
Code shall become
applicable with
respect
to the Plan and
the Plan shall be binding
on all parties
to the fullest extent
permitted by
section 1141(a)
of the Bankruptcy
Code.
4. The Plan shall
not become effective
unless and until the conditions
set forth
in Section 13.1 of the Plan have
been satisfied
or waived pursuant
to Section 13.2 thereof.
5. The Plan’s
classification
scheme is approved.
The classifications
set forth
on the Ballots: (i)
were
set forth
solely for
purposes of
voting to accept
or reject the Plan;
(ii) do not necessarily
represent,
and in no event
shall be deemed
to modify or otherwise
affect,
the actual
classification
of such Claims and
Interests
under the Plan
for distribution purposes;
(iii) may not be relied
upon by any
Holder
of a Claim or Interest
as representing
the actual classification
of such
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 13 of 20
Claim
or Interest under
the Plan for distribution
purposes; and
(iv) shall not be binding on the Debtors,
the Estates
or the Post-Effective Date
Debtors except
for Plan voting purposes.
6. The substantive consolidation
of the Debtors for
purposes relating
to the Plan as contemplated
by Section 9.5(a)
of the Plan is approved.
7. Except
as otherwise provided
herein or in the Plan,
in accordance
with section
1123(b)(3) of the
Bankruptcy
Code, any
Retained
Causes of Action
that the Debtors
may hold against
any Person
or Entity
shall vest
upon the Effective
Date in the Post-Effective
Date Debtors.
8. Except
as otherwise provided
herein or in the Plan,
after the
Effective
Date,
the Post-Effective Date
Debtors
shall have the exclusive
right
to institute, prosecute,
abandon,
settle or compromise
any Retained
Causes of Action,
in accordance
with the terms
of the Plan and the Plan
Administrator Agreement
and without further
order of or notice
to this Court, in any
court or
other tribunal,
including,
without limitation, in an
adversary
proceeding
filed in the Chapter
11 Cases.
9. Unless
a Retained
Cause of Action against
a Holder
or other Person or Entity
is expressly waived, relinquished, released, compromised
or settled in the Plan,
the Confirmation Order,
or any Final Order,
the Debtors, the Estates and
the Post-Effective Date Debtors expressly reserve
such Retained
Cause of Action for
later adjudication by
the Post-Effective Date Debtors,
including, without
limitation, Retained
Causes of Action
of which the Debtor
may presently be
unaware or which
may arise
or exist by reason
of additional facts or circumstances
unknown to the Debtors at
this time or facts or circumstances
that may change
or be different from
those the Debtors now believe
to exist. Therefore,
no preclusion doctrine,
including, without
limitation, the doctrines
of res judicata, collateral estoppel,
issue preclusion, claim
preclusion, waiver, estoppel (judicial, equitable or
otherwise),
laches or the like,
shall apply
to such Retained
Causes of Action
upon or after the entry
of the Confirmation Order
or Effective Date
based
on the Disclosure
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 14 of 20
Statement,
the Plan, or the Confirmation
Order, except
where
such Retained
Causes of Action
have been expressly
waived,
relinquished, released,
compromised
or settled in the Plan,
the Confirmation
Order, a Final
Order of the Bankruptcy
Court or, following
the Effective Date,
in a written agreement
duly executed
by the Post-Effective Date
Debtors
which
agreement,
by its terms, is not subject
to approval
of this Court.
10. The Debtors,
the Post-Effective Date
Debtors
and the Plan Administrator,
as applicable,
are authorized
to take or cause to be taken
all corporate
or other actions necessary
or appropriate
to implement all
provisions of, and
to consummate,
the Plan and to execute,
enter into or otherwise
make effective
all documents
arising in connection
therewith.
11. On the Effective Date,
the officers
of the Debtors and
the Plan Administrator
are authorized
to do all things and
to execute
and deliver
all agreements,
documents, instruments,
notices, and certificates
as are contemplated
by the Plan
and to take all
necessary
or appropriate
actions required
in connection
therewith, in the name
of and on behalf
of the Debtors
and the Post- Effective Date
Debtors,
as applicable.
12. The approvals
and authorizations
specifically
set forth
in this Confirmation
Order are
not intended to limit the
authority
of the Debtors,
the Post-Effective Date
Debtors and
the Plan Administrator
to take any and
all actions necessary
or appropriate
to implement, effectuate,
and consummate,
as applicable,
any and
all documents
or transactions contemplated
by the Plan or this Confirmation
Order.
13. The Post-Effective Date
Debtors and
the Plan Administrator
are hereby
authorized
to wind up the Debtors’
affairs
and may make
Distributions
after the Effective
Date in accordance
with this Confirmation
Order
and the Plan.
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 15 of 20
14. The (i) appointment
of Daniel R. Williams
of J.S. Held
LLC as
the initial Plan
Administrator and (ii)
Plan Administrator
Agreement,
substantially
in the form
filed with
the Plan Supplement,
are hereby
approved.
15. The Plan Administrator
shall have such
rights, powers,
and duties and
shall receive such
compensation
as is provided
for in the Plan, this Confirmation
Order, and
the Plan Administrator Agreement.
16. On the Effective
Date, all
executory
contracts
and unexpired
leases of
the Debtors that
have not been assumed,
assumed and
assigned,
or rejected,
prior to the Effective
Date,
or are not subject
to a motion to assume,
assume and assign,
or reject
Filed before
the Effective
Date,
shall be deemed
rejected
pursuant to the Plan
and this Confirmation
Order, effective
as of the Effective
Date, other
than Insurance
Contracts (each,
a “Rejected
Agreement”).
17. Any
Creditor
asserting a Rejection
Claim shall File
a proof of claim on account
of such Rejection Claim
with the
Debtors’
claims
and noticing agent,
Donlin Recano & Company,
Inc., in the form
and manner provided
for in Section 12.1
of the Plan, within
thirty-five
(35) days of the Effective
Date, and shall
also serve such proof
of claim upon
the Plan Administrator
and its counsel.
The Debtors
shall provide notice
of such deadline in the Effective
Date Notice
(as defined
below). Any
Rejection
Claims that
are not timely
Filed pursuant
to Section 12.1
of the Plan and this
Confirmation
Order may
be forever
disallowed
and barred and prohibit
the applicable counterparty
from
asserting
a claim for damages
arising from
such rejection
and from receiving
any distribution
on account of such
claim from
the Estates
or otherwise.
Nothing in the Plan or herein
shall impair,
prejudice, waive
or otherwise affect
the rights
of the Debtors, the Estates,
the Post-Effective Date Debtors
or the Plan Administrator
to: (a) assert
that any
Rejected
Agreements
(i) were
terminated
prior to the Effective
Date, or (ii)
are not executory
contracts
or unexpired
leases
under Bankruptcy
Code Section
365;
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 16 of 20
(b)
assert that
any Rejection
Claims are limited
to the remedies
available
under any
applicable
termination provisions
of any
Rejected
Agreements;
(c) assert
that any
Rejection Claim
is an obligation
of a third party,
and not that of the Debtors
or the Estates;
or (d) otherwise
contest any
claims that
may be asserted
in connection
with any
Rejected
Agreements.
All rights,
claims, defenses
and causes
of action that the Debtors
and the Estates
may have
against
the counterparties
to any Rejected
Agreements,
whether
or not such claims
arise under,
are related
to the rejection
of, or are independent
of any Rejected
Agreements,
are reserved,
and except
as otherwise set
forth herein
or in the Plan, nothing
herein
is intended or shall
be deemed to impair,
prejudice, waive
or otherwise effect
such rights,
claims, defenses
and causes
of action.
18. On the Effective
Date, (a)
all PLx
Parent Interests
shall be deemed
cancelled
and extinguished,
and the Holders
thereof shall
not receive
or retain
any property,
interest
in property
or consideration
under the Plan
on account of such PLx
Parent Interests,
(b) all
PLx Parent
Interests
shall cease
to be publicly
traded,
and (c)
the Post-Effective
Date Debtors
shall take appropriate
steps to cease to be a reporting
company
under the Securities
Exchange
Act of 1934 and upon doing so shall
not be required
to file reports
with the Securities
and Exchange
Commission. The Post-Effective Date
Debtors
are authorized
to take all steps
and execute
all instruments
and documents
necessary
or appropriate
in connection with
the foregoing.
19.
Any Insurance
Contracts
shall be treated
in accordance
with Section 9.8 of the
Plan.
20. Unless required
to be filed
by an earlier
date by another
order of this
Court, all requests
for payment
of an Administrative
Claim (other
than a Section 503(b)(9)
Claim) that
arose or accrued
after July 28, 2023, but
prior to the
Effective Date,
other than
a Professional
Fee Claim
or a claim for fees
payable pursuant
to section 1930 of title
28 of the
United States
Code, must
file with
this Court
and serve on the Plan
Administrator
and its counsel
a request for
payment of such
Administrative
Claim so as
to be received
by 5:00 p.m.
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 17 of 20
(prevailing
Eastern Time) on the
date that is thirty
(30) days after
the Effective
Date (the
“Final Administrative
Claims Bar Date”). The
Debtors shall
provide notice of the Final
Administrative
Claims Bar
Date in the Effective
Date Notice.
Such request
must include at a minimum:
(i) the name
of the Debtor(s)
that are purported
to be liable for
the asserted
Administrative
Claim;
(ii) the name
of the Holder of the
asserted
Administrative
Claim;
(iii) the amount
of the asserted
Administrative
Claim; (iv)
the basis of the asserted
Administrative
Claim;
and (v) all supporting
documentation
for the asserted
Administrative
Claim. Pursuant
to Bankruptcy
Rule 3003(c)(2),
any person or entity
that is required
to file such
a request
for an
Administrative
Claim, but that
fails to do so by the
Final Administrative
Claims
Bar Date in the
form and
manner provided
for in this Confirmation
Order, shall not be treated
as a creditor
with respect
to such Administrative
Claim for
purposes
of participating
in any distributions
under the Plan
on account of such
Administrative
Claim or
receiving
further
notices regarding
such Administrative
Claim.
21. Professional
Fee Claims
shall be paid by
the Post-Effective Date
Debtors as
set forth in Section
16.2 of the Plan. Unless
required
to be filed
by an earlier
date by another
order of this
Court, all final
requests
for payment
of Professional
Fee Claims
pursuant to sections
327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy
Code must
be made by application
Filed with
this Court
and served on
counsel to
the Plan Administrator,
counsel to
the Post-Effective
Date
Debtors
and counsel
to the U.S.
Trustee no later
than twenty-one
(21) days after the
Effective
Date,
unless otherwise
ordered by the
Bankruptcy
Court. The Debtors
shall provide notice
of such deadline
in the notice
of Effective Date
filed and
served by the
Debtors.
Objections to
such applications
must be Filed
and served
on counsel to
the Plan Administrator,
counsel
to the Post-Effective
Date Debtors,
counsel to
the U.S. Trustee
and the requesting
Professional
on or before
the date
that is fourteen
(14) days after
the date
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 18 of 20
on
which the
applicable application
was served.
All Professional
Fee Claims
shall be paid by the Estates
to the extent
approved by Order
of this Court
within
three
(3) Business Days
from entry
of such Order.
22. As set forth
in Section 16.2 of the Plan,
on or before
the Effective
Date, the
Debtors
shall establish the
Professional
Fee Reserve,
which shall
only be used to
pay Professional
Fee Claims,
unless and until
all Professional
Fee Claims
have been paid in full,
otherwise
satisfied
or withdrawn.
The Professional
Fee Reserve
shall vest in the Estates
and shall be maintained
by the Post-Effective
Date Debtors
in accordance
with the
Plan and the Plan
Administrator
Agreement.
23. This Confirmation
Order shall
constitute all approvals
and consents
required, if any,
by the laws,
rules or
regulations
of any State
or any other
governmental
authority
with respect
to the implementation
or consummation of the Plan.
Each federal,
state, commonwealth,
local, or other governmental
agency
is hereby
authorized
to accept any
and all documents
and instruments
necessary
or appropriate
to effectuate,
implement or consummate
the transactions
contemplated
by the Plan and
this Confirmation
Order.
24. The Debtors
are hereby
authorized
to execute,
deliver, file
or record
such documents,
contracts, instruments,
releases,
and other agreements,
and to take such
other actions, as
may be necessary
or appropriate
to effectuate,
implement, or further
evidence
the terms and conditions
of the Plan. On and
after the Effective
Date, the
Plan Administrator
is authorized
and empowered
to issue, execute,
file, and
deliver or record
such documents,
contracts, instruments,
releases,
and other agreements
in the name of and on behalf
of the Debtors and
Post-Effective Date Debtors.
25.
Pursuant to Bankruptcy
Code Section 1146(a), any
transfers
of property
under the Plan
shall not be subject to any
stamp tax or similar
tax. Upon
entry of this
Confirmation
Order,
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 19 of 20
the
appropriate
state or local
governmental
officials
or agents
shall forgo
the collection of any
such tax
and may accept
for filing
and recordation
this Confirmation
Order without
the payment
of any such
tax, recordation
fee, or governmental
assessment.
26. This Court hereby
retains
jurisdiction of the Chapter
11 Cases
and all matters
arising under, out of,
or related
to the Chapter 11 Cases
and the Plan (i)
as provided
for in Article
XV of the Combined Disclosure
Statement
and Plan, (ii)
as provided
for in this Confirmation
Order, and
(iii) for the purposes
set forth
in Bankruptcy
Code Sections 1127 and
1142.
27. The release,
exculpation,
injunction, and indemnification
provisions contained
in the Plan including,
without
limitation,
those set
forth in Article
XIV of the Plan,
are expressly
incorporated
into this Confirmation
Order as if set
forth herein
in full, and
are hereby authorized
and approved and shall
be effective
and binding on all persons
or entities,
to the extent
provided in the
Plan and this Confirmation
Order.
28. The failure
to reference
or discuss any
particular
provision of the Plan
in this Confirmation
Order shall
have no effect
on the validity,
binding effect
and enforceability
of such provision and
such provision shall
have the same
validity,
binding effect
and enforceability
as every
other provision of the and
Plan.
29. The provisions of Federal
Rule of Civil Procedure
62, as applicable
pursuant
to Bankruptcy
Rule 7062, and Bankruptcy
Rule 3020(e) shall not apply
to this Confirmation
Order. The
period in which
an appeal
with respect
to this Confirmation
Order must be filed
shall commence
immediately
upon the entry of this Confirmation
Order.
30. The Debtors
or the Post-Effective Date
Debtors
shall file
with this Court and
serve a notice of
the entry of
this Confirmation
Order
and the occurrence
of the Effective
Date,
substantially
in the form attached
hereto as
Exhibit B (the “Effective
Date Notice”),
no later
than three (3)
Business Days
after
the Effective
Date.
The Effective
Date Notice
shall be served
on all
Case 23-10456-MFW Doc 279 Filed 09/14/23 Page 20 of 20
Holders
of Claims and Interests
and all other
persons and entities
on which notice
of the Confirmation
Hearing was
served. The
Effective
Date Notice
is hereby
approved.
The Effective
Date Notice
shall constitute
good and sufficient
notice of the entry
of this Confirmation
Order and
of the relief granted
herein
and the occurrence
of the Effective
Date, including,
without limitation, the rejection
of executory
contracts and
unexpired
leases of the Debtors
as provided
for in the Plan and
this Confirmation
Order,
and any
bar dates
and deadlines
established
under the Plan
and this Confirmation
Order, and
no other or further
notice of the entry
of this Confirmation
Order, the
occurrence
of the Effective
Date and any
such rejections,
bar dates
and deadlines
need be given.
31. Subject to the occurrence
of the Effective
Date, and
notwithstanding Bankruptcy
Rules 3020(e), 6004(h),
7062, 8001 or otherwise,
immediately
upon the entry of
this Confirmation
Order, the
terms of the Plan
and this Confirmation
Order shall
be, and hereby
are, immediately
effective
and enforceable
and deemed
binding as provided
for herein
and in the Plan.
32. The Debtors
are authorized
to consummate
the Plan at any
time after the entry
of the Confirmation
Order, subject
to satisfaction or waiver
of the conditions
precedent
to the occurrence
of the Effective Date
as set forth
in Article XIII
of the Plan. On the Effective
Date,
the Plan shall be deemed
to be substantially
consummated
within the meaning
in Bankruptcy
Code Section 1101 and pursuant
to Bankruptcy
Code Section 1127(b).
Case 23-10456-MFW Doc 279-1
Filed 09/14/23 Page 1 of 75
EXHIBIT
A
Combined
Disclosure
Statement
and Plan
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 2 of 75
IN
THE UNITED STATES
BANKRUPTCY COURT FOR THE
DISTRICT
OF DELAWARE
| |
) |
|
| In re: |
) |
Chapter 11 |
| |
) |
|
| PLX
PHARMA WINDDOWN
CORP., et |
) |
Case
No. 23-10456 (MFW) |
| al.,1 |
) |
|
| |
) |
(Jointly Administered) |
| Debtors. |
) |
|
| |
) |
|
| |
) |
|
| |
) |
|
DEBTORS’
FIRST AMENDED
COMBINED DISCLOSURE
STATEMENT AND
JOINT CHAPTER 11 PLAN OF LIQUIDATION
YOUNG
CONAWAY STARGATT & TAYLOR,
LLP
Robert S. Brady (No. 2847)
Robert F. Poppiti, Jr.
(No. 5052)
Shane M. Reil (No. 6195)
Rodney Square
1000
N. King Street
Wilmington,
Delaware 19801
Telephone: (302) 571-6600
Email: rbrady@ycst.com
rpoppiti@ycst.com
sreil@ycst.com
Co-Counsel to the Debtors and Debtors in Possession
|
OLSHAN
FROME WOLOSKY
LLP
Adam H.
Friedman (admitted pro hac vice)
Jonathan T. Koevary (admitted pro hac vice)
1325 Avenue of the Americas
New
York, NY 10019
Telephone: (212) 451-2300
Email: afriedman@olshanlaw.com
jkoevary@olshanlaw.com
Co-Counsel to the Debtors and Debtors in Possession
|
Dated: July
26, 2023
______________________
1
The Debtors in these chapter
11 cases, along with the last four
digits of
each Debtor’s federal
tax identification
number, are
PLx Pharma
Winddown
Corp. (5704)
and PLx Opco
Winddown Corp.
(6588).
The mailing
address for
each of the Debtors is 8 The Green,
Suite 11895, Dover,
DE 19901.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 3 of 75
TABLE OF CONTENTS
Page
| ARTICLE I DEFINED TERMS AND RULES OF INTERPRETATION |
2 |
| ARTICLE II CLASSIFICATION OF CLAIMS AND INTERESTS AND ESTIMATED RECOVERIES |
11 |
| 2.1 Classification |
11 |
| ARTICLE III BACKGROUND AND DISCLOSURES |
13 |
| 3.1 General Background |
13 |
| 3.2 Events Leading to Chapter 11 |
15 |
| 3.3 The Chapter 11 Cases |
17 |
| ARTICLE IV CONFIRMATION AND VOTING PROCEDURES |
24 |
| 4.1 Confirmation Procedure |
24 |
| 4.2 Procedure for Objections |
24 |
| 4.3 Requirements for Confirmation |
25 |
| 4.4 Classification of Claims and Interests |
25 |
| 4.5 Unclassified Claims |
26 |
| 4.6 Unimpaired Classes of Claims |
26 |
| 4.7 Impaired/Voting Class of Claims |
27 |
| 4.8 Impaired/Non-Voting Classes of Claims and Interests |
27 |
| 4.9 Confirmation Without Necessary Acceptances; Cramdown |
27 |
| 4.10 Feasibility |
28 |
| 4.11 Best Interests Test and Liquidation Analysis |
28 |
| 4.12 Acceptance of the Plan |
29 |
| ARTICLE V CERTAIN RISK FACTORS TO BE CONSIDERED PRIOR TO VOTING |
30 |
| 5.1 The Plan May Not Be Accepted |
30 |
| 5.2 The Plan May Not Be Confirmed |
31 |
| 5.3 Distributions to Holders of Allowed Claims under the Plan May Be Inconsistent with Projections |
31 |
| 5.4 Objections to Classification of Claims |
31 |
| 5.5 Failure to Consummate the Plan |
32 |
| 5.6 Plan Releases May Not Be Approved |
32 |
| 5.7 Reductions to Estimated Creditor Recoveries |
32 |
| 5.8 Certain Tax Considerations |
32 |
| ARTICLE VI TREATMENT OF UNCLASSIFIED CLAIMS |
36 |
| ARTICLE VII TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS |
36 |
i
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 4 of 75
| 7.1 Unimpaired Non-Voting Classes of Claims |
37 |
| 7.2 Impaired/Voting Class of Claims and Interests |
37 |
| 7.3 Reservation of Rights Regarding Claims and Interests |
37 |
| ARTICLE VIII ACCEPTANCE OR REJECTION OF THE PLAN |
38 |
| 8.1 Class Entitled to Vote |
38 |
| 8.2 Acceptance by Impaired Classes of Claims or Interests |
38 |
| 8.3 Presumed Acceptance by Unimpaired Classes |
38 |
| 8.4 Presumed Rejections by Impaired Classes |
38 |
| 8.5 Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code |
38 |
| 8.6 Controversy Concerning Impairment |
38 |
| 8.7 Elimination of Vacant Classes |
38 |
| ARTICLE IX IMPLEMENTATION OF THE PLAN |
38 |
| 9.1 Implementation of the Plan |
38 |
| 9.2 The Debtors’ Post-Effective Date Corporate Affairs |
39 |
| 9.3 Dissolution and Cancellation of the Debtors |
39 |
| 9.4 Cancellation of PLx Parent Interests |
39 |
| 9.5 Substantive Consolidation for Plan Purposes Only |
39 |
| 9.6 Plan Administrator |
40 |
| 9.7 Funding of Reserves |
43 |
| 9.8 Special Provisions Regarding Insurance |
43 |
| 9.9 Provision Governing Allowance and Defenses to Claims |
44 |
| ARTICLE X PROVISIONS GOVERNING DISTRIBUTIONS |
45 |
| 10.1 Interest on Claims |
45 |
| 10.2 Distributions by Post-Effective Date Debtors |
45 |
| 10.3 Distributions for Claims Allowed as of the Effective Date |
45 |
| 10.4 Means of Cash Payment |
45 |
| 10.5 Fractional Distributions |
46 |
| 10.6 De Minimis Distributions |
46 |
| 10.7 Delivery of Distributions |
46 |
| 10.8 Withholding, Payment and Reporting Requirements with Respect to Distributions |
46 |
| 10.9 Setoffs |
47 |
| 10.10 No Distribution in Excess of Allowed Amounts |
47 |
| 10.11 Allocation of Distributions |
47 |
| 10.12 Forfeiture of Distributions |
47 |
| ARTICLE XI PROVISIONS FOR CLAIMS OBJECTIONS AND ESTIMATION OF CLAIMS |
48 |
| 11.1 Claims Administration Responsibility |
48 |
| 11.2 Claim Objections |
48 |
| 11.3 No Distributions Pending Allowance |
48 |
| 11.4 Estimation of Contingent or Unliquidated Claims |
48 |
| 11.5 Amendments to Claims |
49 |
ii
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 5 of 75
| ARTICLE XII EXECUTORY CONTRACTS |
49 |
| 12.1 Executory Contracts and Unexpired Leases |
49 |
| 12.2 Rejection Claims |
49 |
| ARTICLE XIII CONFIRMATION AND CONSUMMATION OF THE PLAN |
50 |
| 13.1 Conditions to the Occurrence of the Effective Date |
50 |
| 13.2 Waiver of Conditions to the Occurrence of the Effective Date |
50 |
| 13.3 Effect of Non-Occurrence of Conditions to the Effective Date |
50 |
| ARTICLE XIV EFFECTS OF CONFIRMATION |
50 |
| 14.1 Binding Effect of Plan |
50 |
| 14.2 Non-Discharge of the Debtors; Injunction |
50 |
| 14.3 Releases and Related Matters |
51 |
| 14.4 Exculpation and Limitation of Liability |
53 |
| 14.5 Term of Injunctions or Stays |
53 |
| ARTICLE XV RETENTION OF JURISDICTION |
54 |
| 15.1 Scope of Retained Jurisdiction |
54 |
| 15.2 Failure of the Bankruptcy Court to Exercise Jurisdiction |
55 |
| ARTICLE XVI MISCELLANEOUS PROVISIONS |
55 |
| 16.1 Administrative Claims Bar Date |
55 |
| 16.2 Professional Fee Claims |
56 |
| 16.3 Payment of Statutory Fees; Filing of Quarterly Reports |
56 |
| 16.4 Modifications and Amendments |
56 |
| 16.5 Severability of Plan Provisions |
57 |
| 16.6 Successors and Assigns |
57 |
| 16.7 Post-Effective Date Compromises and Settlements |
57 |
| 16.8 Revocation, Withdrawal or Non-Consummation |
57 |
| 16.9 Computation of Time |
58 |
| 16.10 Headings |
58 |
| 16.11 Governing Law |
58 |
| 16.12 Preservation of Retained Causes of Action |
58 |
| 16.13 Bar Date Order |
59 |
| 16.14 Section 1146 Exemption |
59 |
| 16.15 Conflicts with the Plan |
59 |
| 16.16 No Stay of Confirmation Order |
59 |
iii
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 6 of 75
DISCLAIMER
THIS FIRST AMENDED COMBINED
DISCLOSURE STATEMENT AND PLAN WAS COMPILED FROM INFORMATION OBTAINED FROM NUMEROUS SOURCES BELIEVED TO BE ACCURATE TO THE BEST OF THE
DEBTORS’ KNOWLEDGE, INFORMATION, AND BELIEF. NO GOVERNMENTAL AUTHORITY HAS PASSED ON, CONFIRMED OR DETERMINED THE ACCURACY OR ADEQUACY
OF THE INFORMATION CONTAINED HEREIN.
NOTHING STATED HEREIN SHALL
BE (I) DEEMED OR CONSTRUED AS AN ADMISSION OF ANY FACT OR LIABILITY BY ANY PARTY, (II) ADMISSIBLE IN ANY PROCEEDING INVOLVING THE DEBTORS
OR ANY OTHER PARTY, OR (III) DEEMED CONCLUSIVE EVIDENCE OF THE TAX OR OTHER LEGAL EFFECTS OF THE COMBINED DISCLOSURE STATEMENT AND PLAN
ON THE DEBTORS OR HOLDERS OF CLAIMS OR INTERESTS. CERTAIN STATEMENTS CONTAINED HEREIN, BY NATURE, ARE FORWARD-LOOKING AND CONTAIN ESTIMATES
AND ASSUMPTIONS. THERE CAN BE NO ASSURANCE THAT SUCH STATEMENTS WILL REFLECT ACTUAL OUTCOMES.
THE STATEMENTS CONTAINED HEREIN
ARE MADE AS OF THE DATE HEREOF, UNLESS ANOTHER TIME IS SPECIFIED. THE DELIVERY OF THIS COMBINED DISCLOSURE STATEMENT AND PLAN SHALL NOT
BE DEEMED OR CONSTRUED TO CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AT ANY TIME AFTER THE DATE HEREOF. HOLDERS
OF CLAIMS OR INTERESTS SHOULD NOT CONSTRUE THE CONTENTS OF THIS COMBINED DISCLOSURE STATEMENT AND PLAN AS PROVIDING ANY LEGAL, BUSINESS,
FINANCIAL OR TAX ADVICE. THEREFORE, EACH SUCH HOLDER SHOULD CONSULT WITH ITS OWN LEGAL, BUSINESS, FINANCIAL, AND TAX ADVISORS AS TO ANY
SUCH MATTERS CONCERNING THIS COMBINED DISCLOSURE STATEMENT AND PLAN AND THE TRANSACTIONS CONTEMPLATED HEREBY.
NO PARTY IS AUTHORIZED TO
GIVE ANY INFORMATION WITH RESPECT TO THIS COMBINED DISCLOSURE STATEMENT AND PLAN OTHER THAN THAT WHICH IS CONTAINED IN THIS COMBINED DISCLOSURE
STATEMENT AND PLAN. NO REPRESENTATIONS CONCERNING THE DEBTORS OR THE VALUE OF THEIR PROPERTY HAVE BEEN AUTHORIZED BY THE DEBTORS OTHER
THAN AS SET FORTH IN THIS COMBINED DISCLOSURE STATEMENT AND PLAN. ANY INFORMATION, REPRESENTATIONS, OR INDUCEMENTS MADE TO OBTAIN AN ACCEPTANCE
OF THIS COMBINED DISCLOSURE STATEMENT AND PLAN OTHER THAN, OR INCONSISTENT WITH, THE INFORMATION CONTAINED HEREIN SHOULD NOT BE RELIED
UPON BY ANY HOLDER OF A CLAIM OR INTEREST. THE COMBINED DISCLOSURE STATEMENT AND PLAN HAS BEEN PREPARED IN ACCORDANCE WITH SECTION 1125
OF THE BANKRUPTCY CODE AND BANKRUPTCY RULE 3016(b) AND NOT IN ACCORDANCE WITH FEDERAL OR STATE SECURITIES LAWS OR OTHER APPLICABLE NON-BANKRUPTCY
LAWS.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 7 of 75
SEE ARTICLE V HEREIN, ENTITLED
“CERTAIN RISK FACTORS TO BE CONSIDERED PRIOR TO VOTING,” FOR A DISCUSSION OF CERTAIN CONSIDERATIONS IN CONNECTION WITH A DECISION
BY A HOLDER OF AN IMPAIRED CLAIM ENTITLED TO VOTE TO ACCEPT THE PLAN.
INTRODUCTION2
The Debtors, PLx Pharma Winddown
Corp., f/k/a PLx Pharma Inc., and PLx Opco Winddown Corp., f/k/a PLx Opco Inc., hereby jointly propose the following First Amended Combined
Disclosure Statement and Plan for the liquidation of the Debtors’ Assets and distribution of the proceeds of the Assets to the Holders
of Allowed Claims as set forth herein. Each Debtor is a proponent of the Plan within the meaning of section 1129 of the Bankruptcy Code.
This First Amended Combined
Disclosure Statement and Plan contains, among other things, a discussion of the Debtors’ history, business, operations, Assets,
the Chapter 11 Cases, and certain risk factors associated with the First Amended Combined Disclosure Statement and Plan, as well as a
summary and analysis of the Plan and certain other related matters.
ALL HOLDERS OF CLAIMS ENTITLED
TO VOTE ON THE PLAN ARE ENCOURAGED TO READ THE COMBINED DISCLOSURE STATEMENT AND PLAN IN ITS ENTIRETY, AND TO CONSULT WITH AN ATTORNEY,
BEFORE VOTING TO ACCEPT OR REJECT THE PLAN. SUBJECT TO CERTAIN RESTRICTIONS AND REQUIREMENTS SET FORTH IN SECTION 1127 OF THE BANKRUPTCY
CODE, BANKRUPTCY RULE 3019, AND IN THE PLAN, THE DEBTORS RESERVE THE RIGHT TO ALTER, AMEND, MODIFY, REVOKE OR WITHDRAW THE PLAN, OR ANY
PART THEREOF, PRIOR TO ITS SUBSTANTIAL CONSUMMATION.
ARTICLE I
DEFINED TERMS AND RULES OF INTERPRETATION
Defined Terms
1.1
Administrative Claim: A Claim (other than Professional Fee Claims) arising under sections 365, 503(b), 507(a)(2), 507(b)
or 1114(e)(2) of the Bankruptcy Code, to the extent not previously paid, otherwise satisfied or withdrawn, including, but not limited
to, fees and charges assessed against the Estates under chapter 123 of title 28 of the United States Code.
1.2
Allowed: With respect to any Claim or Interest, except as otherwise provided herein: (a) a Claim or Interest that has
been scheduled by the Debtors on their Schedules as other than disputed, contingent or unliquidated and as to which no proof of claim
has been Filed; (b) a Claim that is set forth in a Filed proof of claim as to which no objection has been Filed on or before the Claim
Objection Deadline, and which is not otherwise a Disputed Claim; (c) a Claim or Interest that has been allowed by a Final Order; (d) a
Claim or Interest that is allowed: (i) in any stipulation executed by the Debtor prior to the Effective Date and approved by the Bankruptcy
Court, (ii) in any stipulation executed by the Post-Effective Date Debtors on or after the Effective Date, or (iii) in any contract, instrument,
indenture or other agreement entered into or assumed by the Debtors in connection with and in accordance with the Plan; or (e) a Claim
or Interest that is allowed pursuant to the terms of the Plan.
2
Capitalized terms not defined in this Introduction shall have the meanings ascribed below.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 8 of 75
1.3
Allowed Claim, or Allowed [___] Claim: A Claim that has been Allowed.
1.4
Assets: Any and all right, title and interest of the Debtors and their Estates as of the Effective Date in and to property
of whatever type or nature and wherever located, including, and without limitation, all real, personal, mixed, intellectual, tangible
or intangible property and any proceeds thereof. For the avoidance of doubt, any and all assets that were sold to the Buyer pursuant to
the Sale Order and the Stalking Horse APA shall not constitute “Assets” for purposes hereof.
1.5
Avoidance Actions: Any and all avoidance or equitable subordination or recovery actions under sections 105(a), 502(d),
510, 542 through 551 and 553 of, and otherwise under, the Bankruptcy Code or any similar federal, state or common law causes of action;
provided, however, that any and all such actions that were sold to the Buyer pursuant to the Sale Order and the Stalking Horse APA shall
not constitute “Avoidance Actions” for purposes hereof.
1.6
Ballot: The ballot form distributed to each Holder of a General Unsecured Claim entitled to vote to accept or reject
the Plan in accordance with the Solicitation Procedures Order.
1.7
Bankruptcy Code: Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (as may be amended).
1.8
Bankruptcy Court: The United States Bankruptcy Court for the District of Delaware, or in the event such court ceases
to exercise jurisdiction over the Chapter 11 Cases, such court or adjunct thereof that exercises jurisdiction over the Chapter 11 Cases
in lieu thereof.
1.9
Bankruptcy Rules: The Federal Rules of Bankruptcy Procedure (as may be amended).
1.10
Bar Date Order: That certain Order Establishing Deadlines for Filing Proofs of Claim and Approving the Form and Manner
of Notice Thereof entered by the Bankruptcy Court on May 23, 2023 [D.I. 132].
1.11
Business Day: Any day, excluding Saturdays, Sundays or “legal holidays” (as defined in Bankruptcy Rule 9006(a)(6))
on which commercial banks are open for business in Wilmington, Delaware.
1.12
Buyer: Means PLx Acquisition Company, LLC.
1.13
Cash: Cash and cash equivalents in certified or immediately available U.S. funds, including but not limited to bank
deposits, checks and similar items.
1.14
Causes of Action: Includes, without limitation, any and all of the Debtors’ actions, causes of action, including
Avoidance Actions, controversies, liabilities, obligations, rights, suits, damages, judgments, Claims and demands whatsoever, whether
known or unknown, reduced to judgment, liquidated or unliquidated, fixed or contingent, matured or unmatured, disputed or undisputed,
secured or unsecured, whether assertible by the Debtors directly, indirectly, derivatively or in any representative or other capacity,
now existing or hereafter arising, in law, equity or otherwise, based in whole or in part upon any act, failure to act, error, omission,
transaction, occurrence or other event arising or occurring prior to or after the Petition Date, provided, however, that any and all such
actions, causes of action, including Avoidance Actions, controversies, liabilities, obligations, rights, suits, damages, judgments, Claims
and demands that were sold to the Buyer pursuant to the Sale Order and the Stalking Horse APA shall not constitute “Causes of Action”
for purposes hereof.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 9 of 75
1.15
Chapter 11 Cases: The voluntary chapter 11 bankruptcy cases commenced by the Debtors, which are being jointly administered
under case caption In re PLx Pharma Winddown Corp., Case No. 23-10456 (MFW).
1.16
Claim: A claim, as defined in section 101(5) of the Bankruptcy Code, against the Debtors or their Estates whether or
not asserted or Allowed.
1.17
Claim Objection Deadline: The date that is 180 days after the Effective Date, subject to extension as set forth in Section
11.2 of the Plan.
1.18
Class: A category of Claims or Interests designated pursuant to the Plan.
1.19
Collateral: Any property or interest in property of the Estates that is subject to a Lien to secure the payment or performance
of a Claim, which Lien is not subject to avoidance under the Bankruptcy Code or otherwise invalid under the Bankruptcy Code or applicable
law.
1.20
Combined Disclosure Statement and Plan: This Combined Disclosure Statement and Joint Chapter 11 Plan of Liquidation,
as the same may be amended, modified or supplemented.
1.21
Confirmation: Entry by the Bankruptcy Court of the Confirmation Order.
1.22
Confirmation Date: The date upon which the Confirmation Order is entered by the Bankruptcy Court.
1.23
Confirmation Hearing: Collectively, the hearing or hearings held by the Bankruptcy Court on confirmation of the Plan,
as such hearing or hearings may be continued from time to time.
1.24
Confirmation Order: The Order of the Bankruptcy Court confirming the Plan pursuant to section 1129 of the Bankruptcy
Code.
1.25
Consulting Parties: Collectively, Market Performance Group, LLC and Patheon.
1.26
Creditor: Any Holder of a Claim.
1.27
Debtors: Collectively, PLx Parent and PLx Opco.
1.28
Disclosure Statement: The Disclosure Statement, as amended, supplemented, or modified from time to time, that is embodied
within this Combined Disclosure Statement and Plan and distributed in accordance with, among others, sections 1125, 1126(b), and 1145
of the Bankruptcy Code, Bankruptcy Rule 3018, and other applicable law.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 10 of 75
1.29
Disputed Claim: Any Claim that is not yet Allowed. To the extent that a Claim is held by a Holder that is or may be
liable to the Debtors, the Estate or the Post-Effective Date Debtors on account of a Retained Cause of Action, such Claim shall be a Disputed
Claim unless and until such Retained Cause of Action has been settled or withdrawn or has been determined by a Final Order.
1.30
Distribution: The transfer of Cash or other property by the Post-Effective Date Debtors in accordance with the terms
of the Plan to the Holders of Allowed Claims.
1.31
Effective Date: The date that is the first Business Day on which each condition set forth in Article 13.1 of the Plan
has been satisfied or waived as set forth therein.
1.32
Entity: Shall have the meaning set forth in section 101(15) of the Bankruptcy Code. Unless otherwise specified herein,
any reference to an Entity as a Holder of a Claim or Interest includes such Entity’s successors, assigns and affiliates.
1.33
Estates: The chapter 11 estates of the Debtors created pursuant to section 541 of the Bankruptcy Code.
1.34
Exculpated Parties: Each of, solely in their capacities as such: (a) the Debtors and the Estates; (b) the Debtors’
officers, directors, and managers who served at any time on or after the Petition Date and prior to or on the Effective Date, including
the Debtors’ Chief Restructuring Officer, Lawrence Perkins, the Debtors’ Deputy Chief Restructuring Officer, John Halloran,
and any employees of SierraConstellation Partners, LLC supporting Mr. Perkins or Mr. Halloran in connection with the Chapter 11 Cases;
and (c) the Professionals.
1.35
File, Filed or Filing: File, filed or filing with the Bankruptcy Court or its authorized designee
in the Chapter 11 Cases.
1.36
Face Amount: When used in reference to an Allowed Claim, the amount of such Claim that is Allowed, and, when used in
reference to a Disputed Claim, (a) the liquidated amount set forth in the proof of claim or request for payment relating to the Disputed
Claim (if any); (b) an amount agreed to by the Post-Effective Date Debtors and the Holder of the Disputed Claim; or (c) if a request for
estimation is Filed with respect to such Disputed Claim, the amount at which such Disputed Claim is estimated by the Bankruptcy Court.
1.37
Final Order: An order or judgment of the Bankruptcy Court, or other court of competent jurisdiction, that is not subject
to stay or appeal, and for which the applicable time within which to take such action has expired, or for which such actions has been
adjudicated by the highest court with jurisdiction over the matter.
1.38
General Unsecured Claim: Any unsecured, non-priority Claim against the Debtors or their Estates.
1.39
General Unsecured Claim Distribution: The aggregate amount of Cash or proceeds realized from the Assets of the Estates,
including, without limitation, the proceeds of any Retained Causes of Action, available for Distribution Pro Rata to Holders of Allowed
General Unsecured Claims, after the payment, or appropriate reserves have been established, in full satisfaction of wind-down costs, including
fees payable pursuant to section 1930 of title 28 of the United States Code, Allowed Unclassified Claims, Allowed Secured Claims and Allowed
Priority Non-Tax Claims.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 11 of 75
1.40
Holder: The Person that is the owner of record of a Claim or Interest, as applicable.
1.41
Impaired: Any Class of Claims or Interests that is impaired within the meaning of section 1124 of the Bankruptcy Code.
1.42
Insurance Contract: All insurance policies that have been issued at any time to provide coverage to the Debtor and all
agreements, documents or instruments relating thereto, excluding any such policies that are, or have been, assumed and assigned
to the Buyer pursuant to the Stalking Horse APA, the Sale Order, and section 365 of the Bankruptcy Code.
1.43
Insured Claim: Any Claim or portion of a Claim (other than a Claim held by an employee of the Debtors for workers’
compensation coverage under the workers’ compensation program applicable in the particular state in which the employee is employed
by the Debtors) that is insured under any Insurance Contract, but only to the extent of such coverage.
1.44
Insurer: Any company or other entity that issued an Insurance Contract, any third party administrator, and any respective
predecessors and/or affiliates thereof.
1.45
Intercompany Claim: Any Claim of any nature and arising at whatever time held by one Debtor against the other Debtor.
1.46
Interests: Any equity security (as such term is defined in section 101(16) of the Bankruptcy Code) of the Debtors, including
all issued, unissued, authorized, or outstanding shares of capital stock and any other common stock, preferred stock, limited liability
company interests, and any other equity, ownership or profits interests of the Debtors, including all options, warrants, rights, stock
appreciation rights, phantom stock rights, restricted stock units, redemption rights, repurchase rights, convertible, exercisable, or
exchangeable securities, or other agreements, arrangements, or commitments of any character relating to, or whose value is related to,
any such interest or other ownership interest in any of the Debtors, whether or not arising under or in connection with any employment
agreement, and whether or not certificated, transferable, preferred, common, voting, or denominated “stock,” or similar security,
that existed immediately before the Effective Date.
1.47
Lien: Any lien, security interest, pledge, title retention agreement, encumbrance, charge, mortgage or hypothecation
to secure payment of a debt or performance of an obligation, other than, in the case of securities and any other equity ownership interests,
any restrictions imposed by applicable United States or foreign securities laws.
1.48
Local Rules: The Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District
of Delaware, as amended from time to time.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 12 of 75
1.49
MPG Group: Market Performance Group, LLC together with its affiliate Greenwood Brands, LLC.
1.50
Order: An order or judgment of the Bankruptcy Court, or other court of competent jurisdiction, as entered on the docket
in the Chapter 11 Cases or the docket of any other court of competent jurisdiction.
1.51
Patheon: Patheon Pharmaceuticals Inc.
1.52
Person: An individual or Entity, limited liability company, corporation, partnership, association, trust or unincorporated
organization, joint venture or other person or a government or any agency or political subdivision thereof.
1.53
Petition Date: April 13, 2023, the date on which the Debtors filed their voluntary chapter 11 petitions for relief in
the Bankruptcy Court.
1.54
Plan: The First Amended Joint Chapter 11 Plan of Liquidation, and all exhibits thereto, including, without limitation,
the Plan Supplement, as the same may be amended, modified or supplemented, that is embodied within this Combined Disclosure Statement
and Plan.
1.55
Plan Administrator: Such Person or entity designated by the Debtors prior to the Confirmation Date and approved by the
Bankruptcy Court pursuant to the Confirmation Order to (a) administer the Plan in accordance with its terms and the Plan Administrator
Agreement; (b) be the sole officer, director and/or responsible Person for the Debtors and Post-Effective Date Debtors from and after
the Effective Date; and (c) take such other actions as may be authorized under the Plan and the Plan Administrator Agreement, and any
successor thereto.
1.56
Plan Administrator Agreement: The agreement by and among the Debtors, the Post-Effective Date Debtors and the Plan Administrator
specifying the rights, duties and responsibilities of the Plan Administrator under the Plan.
1.57
Plan Administrator Professionals: The agents, financial advisors, attorneys, consultants, independent contractors, representatives
and other professionals of the Plan Administrator or the Post-Effective Date Debtors (in each case, solely in their capacities as such).
1.58
Plan Administrator Professional Fees: The fees and expenses of the Plan Administrator Professionals employed by the
Plan Administrator.
1.59
Plan Supplement: The ancillary documents necessary to the implementation and effectuation of the Plan, including the
Plan Administrator Agreement, which shall be Filed on or before the date that is seven (7) days prior to the Voting Deadline.
1.60
PLx Opco: PLx Opco Winddown Corp., f/k/a PLx Opco Inc.
1.61
PLx Parent: PLx Pharma Winddown Corp., f/k/a PLx Pharma Inc.
1.62
PLx Parent Interests: Collectively, the PLx Parent Common Interests and the PLx Parent Preferred Interests.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 13 of 75
1.63
PLx Parent Common Interests: The common stock issued by PLx Parent that is outstanding on the Petition Date.
1.64
PLx Parent Preferred Interests: The Series A and Series B convertible preferred stock issued by PLx Parent that was
outstanding on the Petition Date.
1.65
Post-Effective Date Debtors: The Debtors on and after the Effective Date.
1.66
Priority Non-Tax Claim: A Claim that is entitled to priority under section 507(a) of the Bankruptcy Code, other than
an Administrative Claim, Professional Fee Claim and a Priority Tax Claim.
1.67
Priority Tax Claim: A Claim that is entitled to priority under section 507(a)(8) of the Bankruptcy Code.
1.68
Professional: Any professional employed or retained in the Chapter 11 Cases pursuant to sections 327, 328, 1103 or 1104
of the Bankruptcy Code or any professional or other Person seeking compensation or reimbursement of expenses in connection with the Chapter
11 Cases pursuant to section 503(b)(3) or 503(b)(4) of the Bankruptcy Code.
1.69
Professional Fee Claim: A Claim of a Professional for compensation or reimbursement of costs and expenses relating to
services incurred during the period from the Petition Date through and including the Effective Date.
1.70
Professional Fee Reserve: The reserve established and funded by the Debtors on or prior to the Effective Date pursuant
to Section 16.2 of the Plan.
1.71
Pro Rata: The proportion that the Allowed Claim in a particular Class bears to the aggregate amount of (a) Allowed Claims
in such Class as of the date of determination, plus (b) Disputed Claims in such Class as of the date of determination, in their aggregate
Face Amounts or such other amount: (i) as calculated by the Post-Effective Date Debtors on or before the date of any such Distribution;
(ii) as determined by an Order of the Bankruptcy Court estimating such Disputed Claim; or (iii) as directed by a Final Order of the Bankruptcy
Court.
1.72
Rejection Claim: Any Claim for monetary damages as a result of the rejection of an executory contract or unexpired lease
pursuant to the Plan and the Confirmation Order.
1.73
Related Parties: With respect to any Person or Entity, such Person’s or Entity’s current and former (i)
employees, (ii) partners, (iii) professionals, (iv) advisors, (v) agents, and (vi) other representatives, including, without limitation,
attorneys, accountants, consultants, investment bankers and financial advisors and the successors, assigns or heirs of such Person or
Entity.
1.74
Released Parties: Each solely in their capacities as such, (a) the Debtors and the Estates; (b) the Debtors’ officers,
directors, and managers as of the Petition Date; (c) the Professionals; and (d) to the extent not included in the foregoing, each of the
preceding entities’ respective Related Parties.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 14 of 75
1.75
Release Opt-In: The item set forth in the Ballots, due by the Voting Deadline, pursuant to which Holders of General
Unsecured Claims in Class 3 entitled to vote on the Plan may opt into the releases set forth in Section 14.3(b) of the Plan.
1.76
Releasing Parties: all Holders of General Unsecured Claims in Class 3 that timely submit a Release Opt-In indicating
such Holder’s decision to participate in the releases set forth in Section 14.3(b) of the Plan.
1.77
Retained Causes of Action: All rights, including rights of setoff and rights of recoupment, refunds, claims, counterclaims,
demands, Causes of Action, and rights to collect damages of the Debtors against third parties, including, without limitation: (a) all
litigation, arbitration or other types of adversarial or dispute resolution proceedings disclosed on the Schedules; and (b) all litigation,
arbitration or other types of adversarial or dispute resolution proceedings arising in law, equity or pursuant to any other theory of
law and all other rights (including, without limitation, defenses, cross-claims and counter-claims), regardless of whether they (or the
facts underlying them) were disclosed in the Schedules, or otherwise during the Chapter 11 Cases, against or related to any party that
(i) owed to the Debtors or the Estates a fiduciary, contractual or statutory duty, whether imposed by law or in equity; (ii) committed
a tort or other unlawful or actionable conduct against or related to the Debtors or the Estates; and (iii) received a payment, obligation
or other consideration from the Debtors or the Estates that may be avoided under chapter 5 of the Bankruptcy Code and other similar state
law claims and causes of action, but excluding all rights, including rights of setoff and rights of recoupment, refunds, claims,
counterclaims, demands, Causes of Action, and rights to collect damages of the Debtors (1) against the Released Parties released pursuant
to the Plan and the Confirmation Order, (2) purchased by the Buyer pursuant to Stalking Horse APA and the Sale Order or (3) released by
the Debtors pursuant to the Stalking Horse APA and the Sale Order.
1.78
Sale Order: That certain Order (A) Approving and Authorizing the Sale of Substantially
All of the Debtors Assets to PLx Acquisition Company, LLC Free and Clear of All Liens, Claims, Encumbrances and Other Interests, (B) Approving
the Assumption and Assignment of Certain Executory Contracts and (C) Granting Related Relief entered by the Bankruptcy
Court on May 25, 2023 [D.I. 147].
1.79
Schedules: The Schedules of Assets and Liabilities Filed by the Debtors, as may be amended from time to in accordance
with Bankruptcy Rule 1009.
1.80
Section 503(b)(9) Claim: A Claim that is entitled to priority under section 503(b)(9) of the Bankruptcy Code.
1.81
Secured Claim: A Claim that is (i) secured by a valid, perfected and enforceable Lien on property in which the Debtors
or their Estates have an interest that is not subject to avoidance, or (ii) subject to setoff under section 553 of the Bankruptcy Code,
to the extent of the value of the Creditor’s interest in such property or to the extent of the amount subject to setoff, as applicable,
all as determined pursuant to sections 506(a) and 1111(b) of the Bankruptcy Code and other applicable law.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 15 of 75
1.82
Solicitation Procedures Order: The order entered by the Bankruptcy Court approving the Disclosure Statement on interim
basis for solicitation purposes only and approving the procedures for soliciting votes on the Plan, entered on July 28, 2023 [D.I. 224].
1.83
Stalking Horse APA: That certain Asset Purchase Agreement, dated as April 12, 2023, between the Debtors and the
Stalking Horse Bidder (as amended, and including all schedules and exhibits thereto), approved pursuant to the Sale Order.
1.84
Stalking Horse Bidder: MPG Group together with their affiliate, PLx Acquisition Company, LLC.
1.85
Subordinated Claim: Any Claim that is subordinated to General Unsecured Claims pursuant to section 510 of the Bankruptcy
Code or a Final Order of the Bankruptcy Court.
1.86
Unimpaired: Any Class of Claims that is unimpaired within the meaning of section 1124 of the Bankruptcy Code.
1.87
Unclassified Claims: Any Administrative Claims, Professional Fee Claims and Priority Tax Claims.
1.88
U.S. Trustee: The Office of the United States Trustee for the District of Delaware.
1.89
Voting Deadline: The date and time by which all Ballots to accept or reject the Plan must be received to be counted
as set by the Solicitation Procedures Order.
Rules of Interpretation
1.90
For purposes of the Plan, except as expressly provided or unless the context otherwise requires, (a) any capitalized term used
in the Combined Disclosure Statement and Plan that is not defined herein, but is defined in the Bankruptcy Code or the Bankruptcy Rules,
shall have the meaning ascribed to that term in the Bankruptcy Code or the Bankruptcy Rules, as applicable, (b) whenever the context requires,
each term stated in either the singular or the plural shall include the singular and the plural, and pronouns stated in the masculine,
feminine, or neuter shall include the masculine, feminine and the neuter, (c) any reference in the Plan to a contract, instrument, release,
indenture, or other agreement or document being in a particular form or on particular terms and conditions means that such document shall
be substantially in such form or substantially on such terms and conditions, (d) any reference in the Plan to an existing document or
exhibit means such document or exhibit as it may be amended, modified, or supplemented from time to time, (e) unless otherwise specified,
all references in the Plan to sections, articles, schedules, and exhibits are references to sections, articles, schedules, and exhibits
of or to the Plan, (f) the words “herein,” “hereof,” “hereto,” “hereunder,” and other
words of similar import refer to the Plan in its entirety rather than to any particular paragraph, subparagraph, or clause contained in
the Plan, (g) captions and headings to articles and sections are inserted for convenience of reference only and shall not limit or otherwise
affect the provisions hereof or the interpretation of the Plan, and (h) the rules of construction set forth in section 102 of the Bankruptcy
Code and in the Bankruptcy Rules shall apply.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 16 of 75
ARTICLE II
CLASSIFICATION OF CLAIMS AND INTERESTS AND ESTIMATED RECOVERIES
**THE PROJECTED RECOVERIES SET FORTH IN THE
TABLE BELOW ARE
ESTIMATES ONLY AND ARE THEREFORE SUBJECT TO CHANGE.**
2.1
Classification. The information in the table below is provided in summary form for illustrative purposes
only and is subject to material change based on certain contingencies, including those related to the claims reconciliation process in
the Chapter 11 Cases. Actual recoveries may widely vary within these ranges, and any changes to any of the assumptions underlying these
amounts could result in material adjustments to recovery estimates provided herein and/or the actual Distribution received by Holders
of Allowed Claims entitled to a Distribution under the Plan. The projected recoveries are based on information available to the Debtors
as of the date hereof, including the Debtors’ estimate of the amount of Cash available for Distribution as of the Effective Date,
and reflect the Debtors’ estimates as of the date hereof only. In addition to the cautionary notes contained elsewhere in the Combined
Disclosure Statement and Plan, it is underscored that the Debtors make no representation as to the accuracy of these recovery estimates.
The Debtors expressly disclaim any obligation to update any estimates or assumptions after the date hereof on any basis (including new
or different information received and/or errors discovered).
A Claim or Interest is placed
in a particular Class only to the extent that the Claim or Interest falls within the description of that Class and is classified in other
Classes to the extent that any portion of the Claim or Interest falls within the description of such other Classes. A Claim is also placed
in a particular Class for the purpose of receiving Distributions pursuant to the Plan only to the extent that such Claim is an Allowed
Claim in that Class and such Claim has not been paid, released, or otherwise settled prior to the Effective Date.
All Claims and Interests,
except Administrative Claims, Professional Fee Claims, and Priority Tax Claims, are placed in the Classes set forth below. In accordance
with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims, Professional Fee Claims and Priority Tax Claims, as described herein,
have not been classified, and the respective treatment of such Unclassified Claims is set forth below in Article VI of the Plan. The categories
of Claims and Interests listed below classify Claims and Interests for all purposes, including voting, confirmation and distribution pursuant
to the Plan and pursuant to sections 1122 and 1123(a)(1) of the Bankruptcy Code.
The Plan contemplates the
substantive consolidation of the Debtors for purposes of the Plan only, as discussed and provided for more fully below.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 17 of 75
|
Class/
Designation
|
Treatment |
Estimated Amount of Allowed Claims |
Status |
Projected Recovery |
| Class 1: Secured Claims |
Subject to the terms of this Combined Disclosure Statement and Plan, each Holder of an Allowed Class 1 Claim, in full satisfaction of such Allowed Class 1 Claim, shall receive, in the Post-Effective Date Debtors’ discretion, (i) Cash equal to the value of such Claim; (ii) the return of the Holder’s Collateral securing such Claim; (iii) such Claim reinstated pursuant to sections 1124(1) or 1124(2) of the Bankruptcy Code; or (iv) such other less favorable treatment as to which such Holder and the Post-Effective Date Debtors shall have agreed upon in writing. |
$0.00 |
Unimpaired/Deemed to accept Plan |
100% |
|
Class 2: Priority Non-Tax Claims
|
Subject to the terms of this Combined Disclosure Statement and Plan, each Holder of an Allowed Class 2 Claim, in full satisfaction of such Allowed Class 2 Claim, shall receive, in the Post-Effective Date Debtors’ discretion, either (i) Cash equal to the unpaid portion of the Face Amount of such Allowed Priority Non-Tax Claim; or (ii) such other less favorable treatment as to which such Holder and the Post-Effective Date Debtors shall have agreed upon in writing. |
$0.00 |
Unimpaired/Deemed to accept Plan |
100% |
|
Class 3: General Unsecured Claims
|
Subject to the terms of this Combined Disclosure Statement and Plan, each Holder of an Allowed Class 3 Claim, in full satisfaction of such Allowed Class 3 Claim, shall receive (i) its Pro Rata share of the General Unsecured Claim Distribution, or (ii) such other less favorable treatment as to which such Holder and the Post-Effective Date Debtors shall have agreed upon in writing. |
$11,907,000 |
Impaired/
Entitled to vote
|
49% |
|
Class 4: Subordinated Claims
|
Subject to the terms of this Combined Disclosure Statement and Plan, Holders of Allowed Class 4 Claims shall not receive or retain any property, interest in property or other consideration under the Plan on account of such Class 4 Subordinated Claims. |
$0 |
Impaired/
Deemed to reject Plan
|
$0 |
|
Class 5: PLx Parent Interests
|
Subject to the terms of this Combined Disclosure Statement and Plan, Holders of Allowed Class 5 PLx Parent Interests shall not receive or retain any property, interest in property or other consideration under the Plan on account of such Class 5 PLx Parent Interests. |
N/A |
Impaired/
Deemed to reject Plan
|
$0 |
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 18 of 75
ARTICLE III
BACKGROUND AND DISCLOSURES
3.1
General Background3
(a)
The Debtors’ Business
As of the Petition Date, the
Debtors were a commercial-stage drug delivery platform technology company, focused on improving how and where active pharmaceutical ingredients
are absorbed in the gastrointestinal tract, via their clinically-validated and patent-protected PLxGuard™ technology. The Debtors
had two Food and Drug Administration approved products, VAZALORE® 81 mg and VAZALORE® 325 mg (referred to together as “VAZALORE”),
which are liquid-filled aspirin capsules for over-the-counter distribution.
Prior to the Petition Date,
the Debtors had secured extensive distribution for VAZALORE, as the product was available in over 30,000 drug, grocery and mass retail
stores and e-commerce sites in the United States at launch.
As of the Petition Date, the
Debtors relied on third-party contract manufacturers for all of their required ingredients and finished products for VAZALORE and other
product candidates. The Debtors were parties to a Manufacturing Services Agreement with Patheon the capabilities to bring VAZALORE to
market. Patheon manufactured the VAZALORE capsules in bulk at its facility in Cincinnati, Ohio, and those capsules were then bottled at
Patheon’s Greenville, North Carolina facility or packaged in blister form at the facility of Sharp Packaging Solutions in Conshohocken,
Pennsylvania.
As of the Petition Date, the
Debtors were also party to certain commercial agreements (the “MPG Agreements”) with the MPG Group. The MPG Group provided
the Debtors with certain warehousing, distribution, sales, management, logistics, fulfillment, and customer and collections support in
respect of VAZALORE. The Debtors marketed VAZALORE to retailers and consumers exclusively through MPG Group’s network. Retailers
transacted with MPG Group—not the Debtors—when they purchased or returned VAZALORE. In short, MPG Group was the face of VAZALORE
to the Debtors’ retail customers. Under the MPG Agreements, the Debtors were obligated to compensate MPG Group either directly or
indirectly from retailer payments.
3
Additional information regarding the Debtors’ business, assets, capital structure, and the circumstances leading to the filing of
the Chapter 11 Cases is set forth in detail in the First Day Declaration, which is incorporated herein by reference.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 19 of 75
(b) The Debtors’ Capital Structure as of the Petition Date
| 3.1.2 | Secured Indebtedness |
The Debtors have no funded
secured indebtedness, and as of the Petition Date, had approximately $9.4 million of unencumbered cash on hand to administer the Chapter
11 Cases.
As of the Petition Date, the
Stalking Horse Bidder asserted secured claims against the Debtors in excess of approximately $7.5 million, subject to further reconciliation,
on account of, among other things, return liability, expired and expiring products that are subject to return, product discontinuations,
trade promotions, and other unpaid amounts due and owing under the MPG Agreements. The Stalking Horse Bidder alleged that its claims were
secured on a first priority basis by certain inventory in the Stalking Horse Bidder’s possession and future payment obligations
under the MPG Agreements. Upon the closing of the Sale (as defined below), the Stalking Horse Bidder’s secured claims were fully
satisfied, and the Stalking Horse Bidder received an allowed prepetition unsecured deficiency claim of $1.7 million, as set forth in the
Sale Order and described more fully below.
| 3.1.3 | Unsecured Indebtedness and Trade Debt |
In the ordinary course of
business, the Debtors incurred unsecured indebtedness to various suppliers, trade vendors, their landlord, utility providers, and service
providers, among others. As of the Petition Date, the Debtors’ estimated consolidated outstanding unsecured indebtedness, including
raw materials purchases based on the Debtors’ forecast, manufacturing capacity reservation fees, returns from retailers for expired
and excess product at retail stores, and trade payables, excluding the MPG Group’s allowed prepetition unsecured deficiency claim,
is approximately $11.9 million, the bulk of which is due and owing to Patheon and its affiliate, Patheon Manufacturing Services LLC.
PLx Parent is a publicly-traded
company with its common stock listed on the NASDAQ Capital Market (symbol PLXPQ). As of the Petition Date, there were 30,565,309 shares
of its common stock outstanding.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 20 of 75
As of the Petition Date, PLx
Parent also had (i) 9,756 shares of Series A convertible preferred stock, $0.001 par value, outstanding with a liquidation value of $1,000
per share, and (ii) 2,000 shares of Series B convertible preferred stock, $0.001 par value, outstanding with a liquidation value of $1,000
per share.
3.2
Events Leading Up to the Chapter 11 Cases
(a)
The Debtors’ Post-Launch Challenges
Several factors contributed
to the Debtors’ need to commence the Chapter 11 Cases, including operational, financial, and macroeconomic challenges in the
pharmaceutical business that, over time, complicated the Debtors’ operations and limited the Debtors’ access to capital. The
current inflationary environment put pressure on consumer behavior, including on adoption of new products and fostering an increased price
sensitivity. The market acceptance and sales of VAZALORE took longer than anticipated to develop, due in part to difficult macroeconomic
conditions that affected both the broader markets and biotech markets, and unfavorable COVID-19 market impacts, such as restrictions that
limited face-to-face medical communications with healthcare professionals and their patients. In addition, in October 2021, negative media
coverage of the United States Preventative Services Task Force’s therapy guidelines on use of aspirin in prevention of cardiovascular
disease created confusion among consumers and health care professionals, and unfavorably impacted the heart health aspirin category, resulting
in an immediate and continued decline in the category reflected in both dollars and units sold.
In February 2022, the Debtors
began evaluating financing and other strategic alternatives in order to secure additional capital to continue to grow the business and
their pipeline. Due to a downturn in actual sales compared to the Debtors’ forecasts, the Debtors began implementing spending reduction
measures during the second quarter of 2022 to reduce their cash burn, including: (i) reducing their media spend for the second half of
the year; (ii) reducing their 27-person outsourced sales force; (iii) cancelling remaining open purchase orders for inventory; (iv) deferring
a planned manufacturing site scale up and deferring work to establish a second manufacturing site; and (v) reducing other expenses, including
consultants and advertising agency projects. The Debtors were also engaging in strategic discussions with other pharmaceutical companies
to discuss a potential partnership with the Debtors or a sale of the Debtors’ business.
In July 2022, the Debtors
engaged Raymond James & Associates, Inc. (“Raymond James”) as their investment banker, and commenced a marketing
process for a strategic going concern or asset sale. As discussed more fully below, despite the Debtors’ efforts, however, the Debtors
were unable to mitigate the challenges they faced leading up to the commencement of the Chapter 11 Cases.
In the nine months ended September
30, 2022 and the year ended December 31, 2022, the Debtor incurred a net loss of $31.1 million and $48.9 million, respectively. The Debtors’
accumulated deficit was, as of September 30, 2022 and December 31, 2022, $179.4 million and $197.1 million, respectively.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 21 of 75
(b)
Prepetition Marketing and Restructuring Efforts
Prior to the Petition Date,
beginning around August 2022, the Debtors management working with Raymond James launched a multi-pronged outreach effort to 97 potential
parties. Of the 97 potential parties, 73 were strategic buyers and 24 were financial buyers. Conversations with parties explored a variety
of structuring alternatives, including whether they may be interested in supporting an out of court sale, merger or similar transaction.
Of the 97 parties contacted,
the Debtors held diligence calls with 9 parties to review the opportunity and answer questions. Eight of these parties entered into non-disclosure
agreements with the Debtors. To support this process, the Debtors organized a comprehensive data room, including a 42-page Confidential
Information Memorandum, for parties under a non-disclosure agreement.
The Debtors’ management
team conducted its own outreach efforts and reached out to 25 potential strategic parties. The management team held diligence calls with
10 parties to review the opportunity and answer questions, and 3 of these parties entered into non-disclosure agreements with the Debtors.
In November 2022, the Debtors
contacted 8 potential counterparties to discuss a reverse merger transaction with the Debtors. Of the 8 parties contacted, the Debtors
held diligence calls with 6 parties to review the opportunity and answer questions, and 4 parties entered into non-disclosure agreements
with the Debtors. Of the 6 parties with which the Debtors held diligence calls, 3 submitted initial, non-binding term sheets.
Despite the Debtors’
significant efforts, the Debtors were unable to agree on any non-binding term sheets or transactions.
Following the Debtors’
release of their earnings for the third quarter of 2022, Raymond James re-contacted 7 high-priority parties to determine if there was
interest in re-engaging on the opportunity. However, these efforts were unsuccessful, too.
On March 31, 2023, after weeks
of hard fought, good faith, arms’ length negotiations, the Debtors and the Stalking Horse Bidder entered into an Indication of Interest
(the “IOI”). The IOI contemplated several things, including (a) that the parties would endeavor to negotiate a
stalking horse asset purchase agreement, against which higher or better offers would be solicited pursuant to a section 363 sale process;
(b) on account of its asserted secured claim, pursuant to section 363(k) of the Bankruptcy Code, the Stalking Horse Bidder purchasing
the Debtors’ business for a combination of a partial credit bid of $3,000,000, plus assumption of certain liabilities, plus $100,000
in cash; (c) that the Debtors would file for chapter 11 protection soon thereafter to administer such sale process; and (d) certain interim
operating covenants in respect of discontinued VAZALORE products and interim decisions impacting pricing.
In March 2023, prior to the
commencement of the Chapter 11 Cases, the Debtors re-contacted all 11 parties that had previously signed a non-disclosure agreement. Of
the 11 parties contacted, 3 parties explicitly passed pre-petition.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 22 of 75
(c)
The Stalking Horse APA
On April 12, 2023, the Debtors
and the Stalking Horse Bidder entered into the Stalking Horse APA. As more fully described in the Bidding Procedures Motion, upon its
execution, the Stalking Horse APA provided for the sale of substantially all of the Debtors’ assets (the “Sale”)
and the following principal terms, as more fully set forth and defined in the Stalking Horse APA:
| (A) | Pursuant to section 363(k) of the Bankruptcy Code, an initial credit bid of a portion of the Stalking
Horse Bidder’s secured claims in the amount of $3,000,000, which shall offset the Debtors’ liability to the Stalking Horse
Bidder on a dollar-for-dollar basis, plus |
| (B) | $100,000 in Cash, plus |
| (C) | assumption of the Assumed Liabilities. |
| • | Assignment and Assumption of Certain Liabilities: Subject to the terms and conditions set forth
in the Stalking Horse APA, the Stalking Horse Bidder shall assume from the Debtors and thereafter be responsible for the payment, performance
or discharge of the Assumed Liabilities and obligations of the Debtors as more fully described in Sections 1.1, 2.3 and 2.6 of the Stalking
Horse APA; and without duplication, all obligations of the Seller that first arise after the Closing under the Assumed Contracts.. |
| • | Assets Subject to Stalking Horse APA: All the Debtors’ Assets and all properties, assets
and rights used in or held for use by the Debtors in connection with, or related to the Debtors’ business, or arising out of the
Debtors’ business as more fully described in Section 1.1 of the Stalking Horse APA, except for Excluded Assets—including the
Debtors’ cash on hand projected to provide a meaningful recovery to creditors. |
| • | Release of Escrows to Certain Retailers in Respect of Discontinued VAZALORE Product: In accordance
with the Stalking Horse APA, prior to the Petition Date, the Debtors escrowed $900,000 for the benefit of the Stalking Horse Bidder to
pay certain retailers on account of discontinued VAZALORE product. Such payments, once reconciled, shall reduce the Debtors’ liability
to the Stalking Horse Bidder on a dollar-for-dollar basis. |
3.3
The Chapter 11 Cases
(a)
Generally
As set forth above, on the
Petition Date, the Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in the Bankruptcy Court.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 23 of 75
The commencement of a chapter
11 case creates an estate that is composed of all of the legal and equitable interests of the debtor as of that date. The Bankruptcy Code
provides that the debtor may continue to operate its business and remain in possession of its property as a “debtor in possession.”
The Debtors continue to operate their business and manage their properties as debtors and debtors in possession, subject to the closing
of the Sale. The Chapter 11 Cases are being jointly administered for procedural purposes only. No trustee or examiner has been appointed
in the Chapter 11 Cases. No statutory creditors’ committee has been appointed in the Chapter 11 Cases.
The filing of the Debtors’
bankruptcy petitions on the Petition Date triggered the immediate imposition of the automatic stay under section 362 of the Bankruptcy
Code, which, with limited exceptions, enjoins all collection efforts and actions by creditors, the enforcement of liens against property
of the Debtors and both the commencement and the continuation of prepetition litigation against the Debtors. With certain limited exceptions
and/or modifications as permitted by order of the Bankruptcy Court, the automatic stay will remain in effect from the Petition Date until
the Effective Date of the Plan, at which time it will, in effect, be replaced by the injunction provisions set forth in this Combined
Disclosure Statement and Plan.
(b)
“First Day” Motions and Related Applications
Commencing on the Petition
Date, the Debtors filed the following “first-day” motions and applications designed to ease the Debtors’ transition
into chapter 11, maximize the value of the Debtors’ assets, and minimize the effects of the commencement of the Chapter 11 Cases
(collectively, the “First Day Motions”):
| i. | Debtors’ Motion for Entry of an Order Authorizing the Joint Administration of the Debtors’
Chapter 11 Cases (“Joint Administration Motion”) [D.I. 2]. |
| ii. | Debtors’ Application for Entry of an Order (I) Authorizing the Appointment of Donlin, Recano &
Company as Claims and Noticing Agent in the Chapter 11 Cases; and (II) Granting Related Relief (“Claims Agent Retention Application”)
[D.I. 3] |
| iii. | Debtors’ Motion for Entry of an Order (I) Modifying Requirements to File a List of, and Provide
Notice to, All Equity Holders, (II) Authorizing Redaction of Certain Personal Identification Information from the Creditor Matrix and
Other Documents, and (III) Granting Related Relief (“Equity Notice Modification Motion”) [D.I. 4]. |
| iv. | Debtors’ Motion for Interim and Final Orders (I) Prohibiting Utility Companies From Altering, Refusing,
or Discontinuing Utility Services; (II) Deeming Utility Companies Adequately Assured of Future Payment; (III) Establishing Procedures
for Determining Additional Adequate Assurance of Payment; and (IV) Setting a Final Hearing Related Thereto (“Utility Motion”)
[D.I. 5]. |
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 24 of 75
| v. | Debtors’ Motion for Interim and Final Orders (I) Authorizing the Debtors to Pay Certain Prepetition
Taxes and Fees and Related Obligations; and (II) Authorizing Banks to Honor and Process Check and Electronic Transfer Requests Related
Thereto (“Tax Motion”) [D.I. 6]. |
| vi. | Debtors’ Motion Pursuant to Sections 105(a), 363(c), 503(b), 1107(a) and 1108 of the Bankruptcy
Code for Authorization to Honor Certain Prepetition Obligations to Customers and Otherwise Maintain (A) the Call Center and (B) the Coupon
Program in the Ordinary Course of Business (“Customer Programs Motion”) [D.I. 7]. |
| vii. | Debtors’ Motion for Entry of Interim and Final Orders (I) Authorizing and Approving Continued Use
of the Cash Management System; (II) Authorizing Use of Prepetition Bank Accounts and Business Forms; (III) Waiving the Requirements of
Section 345(b) on an Interim Basis; and (IV) Granting Certain Related Relief (“Cash Management Motion”) [D.I. 8]. |
| viii. | Debtors’ Motion for Entry of Interim and Final Orders (I) Authorizing Debtors to (A) Pay Wages,
Salaries, and Other Compensation, (B) Maintain Payments to their Professional Employer Organization, (C) Pay Prepetition Employee Business
Expenses, (D) Maintain Contributions to Prepetition Employee Benefit Programs and Continuation of Such Programs in the Ordinary Course,
(E) Pay Workers' Compensation Obligations, and (F) Pay and Remit Funds on Account of Withholding and Payroll-Related Taxes and Deductions;
and (II) Authorizing Banks to Honor and Process Check and Electronic Transfer Requests Related Thereto (“Employee Wage Motion”)
[D.I. 9]. |
On April 14, 2023 the Bankruptcy
Court entered orders: (i) approving the relief requested in the Joint Administration Motion [D.I. 29], the Claims Agent Retention Application
[D.I. 30], and the Equity Notice Modification Motion [D.I. 31] on a final basis; and (ii) approving the relief requested in the Utilities
Motion [D.I. 32], the Taxes Motion [D.I. 33], the Cash Management Motion [D.I. 35], the Customer Programs Motion [D.I. 35], and the Employee
Wage Motion [D.I. 36], on an interim basis.
On May 3, 2023, the Bankruptcy
Court entered orders approving the relief requested in the Utilities Motion [D.I. 78], the Taxes Motion [D.I. 79], the Customer Programs
Motion [D.I. 80], and the Employee Wage Motion [D.I. 81], on a final basis.
On May 8, 2023, the Bankruptcy
Court entered an order approving the Cash Management Motion [D.I. 90] on a final basis.
(c)
Retention of Professional Advisors
The Bankruptcy Court entered
orders in the Chapter 11 Cases approving the Debtors’ retention of Olshan Frome Wolosky LLP as bankruptcy counsel [D.I. 128], Young
Conaway Stargatt & Taylor, LLP as bankruptcy co-counsel [D.I. 129], SierraConstellation Partners, LLC to provide the Debtors with
a Chief Restructuring Officer, a Deputy Chief Restructuring Officer, and certain additional personnel to assist the Chief Restructuring
Officer and the Deputy Chief Restructuring Officer [D.I. 130], Donlin Recano & Company, Inc. as administrative advisor [D.I. 133],
and Raymond James as investment banker [D.I. 142].
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 25 of 75
(d) The Bidding Procedures Motion
As set forth in the Declaration
of Lawrence Perkins In Support of Chapter 11 Petitions and First Day Motions [D.I. 11] (the “First Day Declaration”),
the Debtors’ paramount goal in the Chapter 11 Cases is to maximize the value of the Estates for the benefit of the Debtors’
stakeholders through the sale of their business as a going concern.
The Debtors entered chapter
11 with the belief that a robust, public sale process would result in the highest and best price for substantially all of their assets
and would best allow the Debtors to maximize the value of their Estates.
On April 13, 2023, the Debtors
filed their Motion for Entry of (A) Order (I) Approving Bidding Procedures in Connection with Sale of Assets of the Debtors and Related
Bid Protections, (II) Approving Form and Manner of Notice, (III) Scheduling Auction and Sale Hearing, (IV) Authorizing Procedures Governing
Assumption and Assignment of Certain Contracts and Unexpired Leases, and (V) Granting Related Relief; and (B) Order (I) Approving Asset
Purchase Agreement, and (II) Authorizing Sale Free and Clear of All Liens, Claims, Encumbrances, and Other Interests [D.I. 19] (the
“Bidding Procedures Motion”).
The Bidding Procedures Motion
sought approval of a sale of substantially all of the Debtors’ assets to the Stalking Horse Bidder, subject to a marketing and auction
process, and certain bid protections in favor of the Stalking Horse Bidder. In addition, the Bidding Procedures Motion sought to fix the
claim of the Stalking Horse Bidder, subject to a claims reconciliation process.
The Debtors received an informal
objection from Patheon and a formal objection from the U.S. Trustee to entry of the proposed order approving the proposed bidding procedures
set forth in the Bidding Procedures Motion (the “Bid Procedures Order”).
Prior to the hearing on the
Bid Procedures Order, the Debtors worked to resolve the objections of Patheon and the U.S. Trustee, and with the assistance of the MPG
Group, successfully resolved the objection of Patheon by agreeing to a procedure that included the claim reconciliation process, that
was documented in the Bid Procedures Order, as further described below.
The Bankruptcy Court entered
the Bid Procedures Order on May 10, 2023 [D.I. 101], but with certain modifications from the proposed version. The Bid Procedures Order
did not approve the bid protections sought, but instead reserved on that issue to the sale hearing.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 26 of 75
| ii. | The Patheon Stipulation and Claim Reconciliation Process |
The Bid Procedures Order contained a stipulation
between the Debtors, Patheon, and the MPG Group, that resolved Patheon’s informal objection which was conditioned upon the Stalking
Horse Bidder being designated as the Successful Bidder (as defined in the Bid Procedures Order) for the Credit Bid Inventory (as defined
in the Bid Procedures Order).
The stipulation in the Bid
Procedures Order included, among others, the following provisions:
| (A) | Paragraph 31(b), which provides that “that upon closing of the Sale, the aggregate amount of Patheon’s
prepetition claims against the Debtors shall not exceed $11,000,000 … less any reductions set forth in this Order, with such amount
being subject to further reconciliation;” |
| (B) | Paragraph 31(c), which provides that “upon closing of the Sale, the aggregate amount of the Allowed
MPG Claim shall not exceed $4,400,000, with such amount being subject to further reconciliation;” and |
| (C) | Paragraph 31(d) which provides that “Patheon and the Stalking Horse Bidder shall have reciprocal
consultation rights concerning the allowance and reconciliation of the Allowed MPG Claim and the Patheon Claims, respectively, which consultation
rights shall be exercised in good faith.” |
Following entry of the Bid
Procedures Order, the Debtors worked with the MPG Group and Patheon to reconcile the MPG Group’s prepetition Claim (i.e., the Allowed
MPG Claim). Ultimately the parties were able to reconcile such Claim as of the closing of the Sale, and agreed that it shall be an Allowed
$1.7 million prepetition unsecured Claim, as provided for in the Sale Order.
As reflected in the Liquidation
Analysis attached hereto as Exhibit A, the Debtors believe that Patheon’s prepetition claims against the Debtors and
their Estates, of any nature, including any rejection damages claims (which are prepetition general unsecured claims), are capped at $11
million in the aggregate pursuant to the Bid Procedures Order. However, between June 23, 2023 and June 26, 2023, Patheon filed six proofs
of claim in the Chapter 11 Cases (numbered 43, 44, 46, 47, 48, and 49) asserting prepetition general unsecured claims against the Debtors
and their Estates in excess of $22 million for, among other things, rejection damages. To the extent it is determined that Patheon’s
prepetition claims are not capped at $11 million in the aggregate pursuant to the Bid Procedures Order, and that such claims are Allowed
at an amount that exceed $11 million, actual recoveries to Holders of Allowed General Unsecured Claims under the Combined Disclosure Statement
and Plan will be impacted.
| iii. | The Post-Petition Sale Process |
On May 10, 2023, in accordance
with the Bid Procedures Order, the Debtors filed and served the Notice of Auction, Sale Hearing and Certain Related Deadlines [D.I.
102] (the “Sale Notice”). The Sale Notice identified certain deadlines, which were approved by the Bid Procedures Order
(the “Sale Deadlines”). Among others, the Sale Deadlines included a May 19, 2023 bid deadline, a May 22, 2023 auction
date (as necessary) and a May 25, 2023 sale hearing.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 27 of 75
Notwithstanding the Debtors’
robust pre- and postpetition sale process, no parties except for the Stalking Horse Bidder provided a bid and, in accordance with the
Bid Procedures Order, the auction was cancelled.
However, in consideration
of comments made by the Bankruptcy Court at the hearing to consider the Bid Procedures Order, the Debtors and the Stalking Horse Bidder
amended the Stalking Horse APA to, among other things, provide clarity that certain assets would remain with the Debtors, including an
approximate $69,000 tax refund due and owing from the State of Delaware and to allow for the reconciliation of the MPG Claim. The amendment
was filed with the Bankruptcy Court on May 23, 2023 [D.I. 125].
On May 25, 2023, the Bankruptcy
Court conducted a hearing to consider the Sale to the Stalking Horse Bidder under the Stalking Horse APA, as amended, on an uncontested
basis. At the conclusion of the hearing, the Bankruptcy Court entered the Sale Order, thereby approving the Sale.
In addition to approving the
Sale, among other things, the Sale Order (i) fixed the Allowed General Unsecured Claim of the MPG Group at $1.7 million (as described
above); (iii) authorized the Debtors to change their names upon consummation of the Sale as required by the Stalking Horse APA; and (iii)
provided for certain releases between the Debtors and the Stalking Horse Bidder.
Also, Section 2.1 of the Stalking
Horse APA [D.I. 19] provides the list of assets purchased by the Stalking Horse Bidder (subject to the later filed amendment) and includes
the purchase of all “Acquired Claims,” which are defined as:
all causes of action, lawsuits, judgments,
Claims, refunds, rights of recovery, rights of setoff, counterclaims, defenses, demands, remedies, warranty claims, rights to indemnification,
contribution, advancement of expenses or reimbursement, or similar rights (whether choate or inchoate, known or unknown, contingent or
noncontingent) available to Sellers or their estates as of the time of Closing against (a) Buyer or any of its Affiliates (other than
Claims pursuant to this Agreement or arising out of the Transactions contemplated hereby), (b) any person who at any time at or prior
to Closing served or may serve as a director, officer, manager, employee or advisor of any Seller and any shareholder or Related Party
of any Seller, (c) any customer, supplier, manufacturer, distributor, broker, or vendor of any Seller or any other Person with whom any
Seller has an ordinary course commercial relationship, and (d) any other third party.
In turn, the Stalking Horse
Bidder released the Acquired Claims (as defined in the Stalking Horse APA) as and to the extent provided for in Paragraph 30 of the Sale
Order, which provides:
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 28 of 75
Effective upon the Closing Date, the Stalking
Horse Bidder shall forever and irrevocably be deemed to have released, discharged, and acquitted the Debtors and their estates and each
of their former, current, and future officers, employees, directors, agents, representatives, owners, members, shareholders, partners,
financial and other advisors, investors and consultants, legal advisors, shareholders, managers, consultants, accountants, attorneys,
affiliates, and predecessors and successors in interest from any and all claims, demands, liabilities, responsibilities, disputes, remedies,
causes of action, indebtedness and obligations, rights, assertions, allegations, actions, suits, controversies, proceedings, losses, damages,
injuries, reasonable attorneys’ fees, costs, expenses, or judgments of every type, whether known, unknown, asserted, unasserted,
suspected, unsuspected, accrued, unaccrued, fixed, contingent, pending or threatened, including all legal and equitable theories of recovery,
arising under common law, statute or regulation or by contract, of every nature and description; provided, however, nothing herein shall
release any rights, claims and defenses of the Stalking Horse Bidder with respect to the Remaining Stalking Horse Bidder Claim or any
claims or causes of action that the Stalking Horse Bidder may have to enforce the terms of the Stalking Horse APA and this Sale Order.
As set forth in the Notice
of Sale Closing, Change of Debtors’ Names, and Assumed and Assigned Agreements dated May 26, 2023 [D.I. 148], the Sale closed
on May 26, 2023.
(e)
Schedules and Bar Dates
On May 11, 2023, the Debtors
filed the Schedules. Among other things, the Schedules set forth the Claims of known or putative creditors against the Debtors as of the
Petition Date, based upon the Debtors’ books and records.
On May 23, 2023, the Bankruptcy
Court entered the Bar Date Order that, among other things, established the General Bar Date and the Government Bar Date (each as defined
in the Bar Date Order) as June 26, 2023 at 5:00 p.m. (prevailing Eastern Time) and October 10, 2023 at 5:00 p.m. (prevailing Eastern Time),
respectively. As described in detail below, the Plan contemplates deadlines for filing certain Administrative Claims, Professional Fee
Claims and Rejection Claims.
The projected recoveries set
forth in the Plan are based on certain assumptions, including the Debtors’ estimates of the Claims that will eventually be Allowed
in various Classes. There is no guarantee that the ultimate amount of each of such categories of Claims will correspond to the Debtors’
estimates. The Debtors or the Plan Administrator, as applicable, and their professionals will investigate Claims filed against the Debtors
to determine the validity of such Claims. The Debtors or the Plan Administrator, as applicable, may file objections to Claims that are
filed in improper amounts or classifications, or are otherwise subject to objection under the Bankruptcy Code or other applicable law.
(f)
The Wind-down of the Estates
Following the closing of the
Sale, the Debtors have been focused principally on efficiently winding down their businesses and preserving Cash held in the Estates.
That included eliminating virtually all operating expenses, including terminating all employees and closing the Debtors’ office
by June 30, 2023.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 29 of 75
In addition, as part of those
wind down efforts, the Debtors filed (i) the Motion for Entry of an Order, Pursuant to Sections 105(a) and 365(a) of the Bankruptcy
Code, Authorizing the Debtors to Reject Certain Contracts Effective as of June 6, 2023 [D.I. 163], (ii) the Debtors’ Motion
for Entry of an Order (I) Authorizing the Debtors to, Effective as of June 30, 2023, (A) Abandon Certain Property and (B) Reject Any Executory
Contracts Associated Therewith, and (II) Granting Related Relief [D.I. 187], and (iii) the Debtors’ Motion for Order, Pursuant
to Sections 105(a), 365(a), and 554 of the Bankruptcy Code and Bankruptcy Rule 6004, Authorizing (I) Rejection of (A) Certain Unexpired
Leases of Non-Residential Real Property and (B) a Certain Executory Contract, Effective as of the Rejection Date, and (II) Abandonment
of any Remaining Property Located at the Premises Covered By the Unexpired Leases [D.I. 188], pursuant to which the Debtors have sought,
as applicable, to reject certain executory contracts and unexpired leases and abandon certain personal property of de minimis or no value
to their Estates. The Debtors expect to seek the rejection of other contracts and leases.
This Combined Disclosure Statement
and Plan provides for the Assets to be liquidated over time and the proceeds thereof to be distributed to Holders of Allowed Claims in
accordance with the terms of the Plan and the treatment of Allowed Claims described more fully herein. The Plan Administrator will effect
such liquidation and Distributions. The Debtors will be dissolved as soon as practicable after the Effective Date.
(g)
The Filing of the Combined Disclosure Statement and Joint Chapter 11 Plan of Liquidation
On July 7, 2023, the Debtors
filed their Combined Disclosure Statement and Joint Chapter 11 Plan of Liquidation (the “Original Plan”) [D.I. 192].
The Debtors noticed the Original Plan for conditional approval of the disclosure statement set forth therein to be heard on July 28, 2023.
Subsequently, on July 26, 2023, the Debtors filed this Plan, which supersedes the Original Plan in all respects.
ARTICLE IV
CONFIRMATION AND VOTING PROCEDURES
4.1
Confirmation Procedure. The Solicitation Procedures Order, among other things, approves the Combined Disclosure
Statement and Plan on an interim basis for solicitation purposes only and authorizes the Debtors to solicit votes to accept or reject
the Plan. The Confirmation Hearing has been scheduled for September 13, 2023 at 2:00 p.m. (prevailing Eastern Time) at the
Bankruptcy Court, 824 North Market Street, 5th Floor, Courtroom 4, Wilmington, Delaware 19801 to consider (a) final approval of the Disclosure
Statement as providing adequate information pursuant to section 1125 of the Bankruptcy Code and (b) confirmation of the Plan pursuant
to section 1129 of the Bankruptcy Code. The Confirmation Hearing may be adjourned from time to time by the Debtors without further notice,
except for an announcement of the adjourned date made at the Confirmation Hearing or by filing a notice with the Bankruptcy Court or including
a notation in the agenda for the Confirmation Hearing.
4.2
Procedure for Objections. Any objection to final approval of the Disclosure Statement as providing adequate
information pursuant to section 1125 of the Bankruptcy Code or confirmation of the Plan must be made in writing and filed with the Bankruptcy
Court and served on: (a) counsel to the Debtors, Olshan Frome Wolosky LLP, 1325 Avenue of the Americas, New York, NY 10019 (Attn: Adam
H. Friedman (afriedman@olshanlaw.com) and Jonathan T. Koevary (jkoevary@olshanlaw.com)); (ii) co-counsel to the Debtors, Young Conaway
Stargatt & Taylor, LLP, Rodney Square, 1000 N. King Street, Wilmington, DE 19801 (Attn: Robert F. Poppiti, Jr. (rpoppiti@ycst.com)
and Shane M. Reil (sreil@ycst.com)); and (iii) the U.S. Trustee, J. Caleb Boggs Federal Building, 844 King Street, Suite 2207, Lockbox
35, Wilmington, DE 19801 (Attn.: Joseph F. Cudia) in each case, by no later than September 1, 2023 at 4:00 p.m. (prevailing Eastern
Time). Unless an objection is timely filed and served, it may not be considered by the Bankruptcy Court at the Confirmation Hearing.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 30 of 75
4.3
Requirements for Confirmation. The Bankruptcy Court will confirm the Plan only if it meets all the applicable
requirements of section 1129 of the Bankruptcy Code. Among other requirements, the Plan (i) must be accepted by all Impaired Classes of
Claims or Interests or, if rejected by an Impaired Class, the Plan must not “discriminate unfairly” against, and be “fair
and equitable” with respect to, such Class; and (ii) must be feasible. The Bankruptcy Court must also find that: (i) the Plan has
classified Claims and Interests in a permissible manner; (ii) the Plan complies with the technical requirements of chapter 11 of the Bankruptcy
Code; and (iii) the Plan has been proposed in good faith.
4.4
Classification of Claims and Interests
Section 1123 of the Bankruptcy
Code provides that a plan must classify the claims and interests of a debtor’s creditors and equity interest holders. In accordance
with section 1123 of the Bankruptcy Code, the Plan divides Claims and Interests into Classes and sets forth the treatment for each Class
(other than those claims which pursuant to section 1123(a)(1) of the Bankruptcy Code need not be and have not been classified). The Debtors
also are required, under section 1122 of the Bankruptcy Code, to classify Claims and Interests into Classes that contain Claims or Interests
that are substantially similar to the other Claims or Interests in such Class.
The Bankruptcy Code also requires
that a plan provide the same treatment for each claim or interest of a particular class unless the claim holder or interest holder agrees
to a less favorable treatment of its claim or interest. The Debtors believe that the Plan complies with such standard. If the Bankruptcy
Court finds otherwise, however, it could deny confirmation of the Plan if the Holders of Claims or Interests affected do not consent to
the treatment afforded them under the Plan.
A Claim or Interest is placed
in a particular Class only to the extent that the Claim or Interest falls within the description of that Class and is classified in other
Classes to the extent that any portion of the Claim or Interest falls within the description of such other Classes. A Claim also is placed
in a particular Class for the purpose of receiving Distributions pursuant to the Plan only to the extent that such Claim is an Allowed
Claim in that Class and such Claim has not been paid, released, or otherwise settled prior to the Effective Date.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 31 of 75
The Debtors believe that the
Plan has classified all Claims and Interests in compliance with the provisions of section 1122 of the Bankruptcy Code and applicable case
law. It is possible that a Holder of a Claim or Interest may challenge the Debtors’ classification of Claims or Interests and that
the Bankruptcy Court may find that a different classification is required for the Plan to be confirmed. If such a situation develops,
the Debtors intend, in accordance with the terms of the Plan, to make such permissible modifications to the Plan as may be necessary to
permit its confirmation. Any such reclassification could adversely affect Holders of Claims by changing the composition of one or more
Classes and the vote required of such Class or Classes for approval of the Plan.
EXCEPT AS SET FORTH IN
THE PLAN, UNLESS SUCH MODIFICATION OF CLASSIFICATION MATERIALLY ADVERSELY AFFECTS THE TREATMENT OF A HOLDER OF A CLAIM AND REQUIRES RE-SOLICITATION,
ACCEPTANCE OF THE PLAN BY ANY HOLDER OF A CLAIM PURSUANT TO THIS SOLICITATION WILL BE DEEMED TO BE A CONSENT TO THE PLAN’S TREATMENT
OF SUCH HOLDER OF A CLAIM REGARDLESS OF THE CLASS AS TO WHICH SUCH HOLDER ULTIMATELY IS DEEMED TO BE A MEMBER.
The amount of any Claim that
ultimately is Allowed by the Bankruptcy Court may vary from any estimated Allowed amount of such Claim and, accordingly, the total Claims
that are ultimately Allowed by the Bankruptcy Court with respect to each Class of Claims may also vary from any estimates contained herein
with respect to the aggregate Claims in any Class. Thus, the actual recovery ultimately received by a particular Holder of an Allowed
General Unsecured Claim may be adversely or favorably affected by the aggregate amount of Claims Allowed in such Class. Additionally,
any changes to any of the assumptions underlying the estimated Allowed amounts could result in material adjustments to recovery estimates
provided herein or the actual Distribution received by Holders of Allowed General Unsecured Claims. The projected recoveries are based
on information available to the Debtors as of the date hereof, including the Debtors’ estimate of the amount of Cash available for
Distribution as of the Effective Date, and reflect the Debtors’ views as of the date hereof only.
The classification of Claims
and Interests and the nature of Distributions, if any, to members of each Class are summarized herein. The Debtors believe that the consideration,
if any, provided under the Plan to Holders of Claims and Interests reflects an appropriate resolution of their Claims taking into account
the differing nature and priority (including applicable contractual subordination) of such Claims and Interests. The Bankruptcy Court
must find, however, that a number of statutory tests are met before it may confirm the Plan. Many of these tests are designed to protect
the interests of Holders of Claims or Interests who are not entitled to vote on the Plan, or do not vote to accept the Plan, but who will
be bound by the provisions of the Plan if it is confirmed by the Bankruptcy Court.
Pursuant to the provisions
of the Bankruptcy Code, only classes of claims or interests that are “impaired” (as defined in section 1124 of the Bankruptcy
Code) under a plan may vote to accept or reject such plan. Generally, a claim or interest is impaired under a plan if the holder’s
legal, equitable, or contractual rights are changed under such plan. In addition, if the holders of claims or interests in an impaired
class do not receive or retain any property under a plan on account of such claims or interests, such impaired class is deemed to have
rejected such plan under section 1126(g) of the Bankruptcy Code and, therefore, such holders are not entitled to vote on such plan. AS
SET FORTH BELOW ONLY HOLDERS OF CLAIMS IN CLASS 3 (GENERAL UNSECURED CLAIMS) ARE ENTITLED TO VOTE ON THE PLAN AND ARE BEING PROVIDED A
BALLOT TO ACCEPT OR REJECT THE PLAN.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 32 of 75
4.5
Unclassified Claims. Holders of the following Claims are not entitled to vote on the Plan:
(a)
Administrative Claims
(b)
Professional Fee Claims
(c)
Priority Tax Claims
4.6
Unimpaired Classes of Claims. Holders of Claims in the following Unimpaired Classes of Claims are deemed
to have accepted the Plan and, therefore, are not entitled to vote on the Plan:
(a)
Secured Claims (Class 1)
(b)
Priority Non-Tax Claims (Class 2)
4.7
Impaired/Voting Class of Claims. Holders of Claims in the following Impaired Class of Claims will receive
a Distribution on account of any Allowed Claims in such Class, and therefore, are entitled to vote on the Plan:
(a)
General Unsecured Claims (Class 3)
4.8
Impaired/Non-Voting Classes of Claims and Interests. Holders of Claims and Interests in the following
Impaired Classes of Claims and Interests will receive no Distribution on account of such Claims and Interests, are deemed to have rejected
the Plan, and therefore, are not entitled to vote on the Plan:
(a)
Subordinated Claims (Class 4)
(b)
PLx Parent Interests (Class 5)
4.9
Confirmation Without Necessary Acceptances; Cramdown
In the event that any impaired
class of claims or interests does not accept a plan, a debtor nevertheless may move for confirmation of a plan. A plan may be confirmed,
even if it is not accepted by all impaired classes, if the plan has been accepted by at least one impaired class of claims, and the plan
meets the “cramdown” requirements set forth in section 1129(b) of the Bankruptcy Code. Section 1129(b) of the Bankruptcy Code
requires that a court find that a plan (a) “does not discriminate unfairly” and (b) is “fair and equitable,” with
respect to each non-accepting impaired class of claims or interests. Here, because Holders of Claims and Interests in Classes 4 (Subordinated
Claims) and 5 (PLx Parent Interests) are deemed to reject the Plan, the Debtors will seek confirmation of the Plan from the Bankruptcy
Court by satisfying the “cramdown” requirements set forth in section 1129(b) of the Bankruptcy Code. The Debtors believe that
such requirements are satisfied, as no Holder of a Claim or Interest junior to those in Class 3 (General Unsecured Claims) is entitled
to receive any property under the Plan.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 33 of 75
A plan does not “discriminate
unfairly” if (a) the legal rights of a non-accepting class are treated in a manner that is consistent with the treatment of other
classes whose legal rights are similar to those of the non-accepting class, and (b) no class receives payments in excess of that which
it is legally entitled to receive for its claims or interests. The Debtors believe that, under the Plan, all Impaired Classes of Claims
or Interests are treated in a manner that is consistent with the treatment of other Classes of Claims or Interests that are similarly
situated, if any, and no Class of Claims or Interests will receive payments or property with an aggregate value greater than the aggregate
value of the Allowed Claims or Allowed Interests in such Class. Accordingly, the Debtors believe that the Plan does not discriminate unfairly
as to any Impaired Class of Claims or Interests.
The Bankruptcy Code provides
a nonexclusive definition of the phrase “fair and equitable.” To determine whether a plan is “fair and equitable,”
the Bankruptcy Code establishes “cramdown” tests for secured creditors, unsecured creditors and equity holders, as follows:
(a)
Secured Creditors. Either (i) each impaired secured creditor retains its liens securing its secured claim and receives on
account of its secured claim deferred Cash payments having a present value equal to the amount of its allowed secured claim, (ii) each
impaired secured creditor realizes the “indubitable equivalent” of its allowed secured claim or (iii) the property securing
the claim is sold free and clear of liens with such liens to attach to the proceeds of the sale and the treatment of such liens on proceeds
to be as provided in clause (i) or (ii) above.
(b)
Unsecured Creditors. Either (i) each impaired unsecured creditor receives or retains under the plan property of a value
equal to the amount of its allowed claim or (ii) the Holders of claims and interests that are junior to the claims of the dissenting class
will not receive any property under the plan.
(c)
Interests. Either (i) each holder of an equity interest will receive or retain under the plan property of a value equal
to the greatest of the fixed liquidation preference to which such holder is entitled, the fixed redemption price to which such holder
is entitled or the value of the interest or (ii) the holder of an interest that is junior to the non-accepting class will not receive
or retain any property under the plan.
As discussed above, the Debtors believe that the
Distributions provided under the Plan satisfy the absolute priority rule.
4.10
Feasibility
Section 1129(a)(11) of the
Bankruptcy Code requires that confirmation of the Plan not be likely to be followed by the liquidation, or the need for further financial
reorganization, of the Debtors or any successor to the Debtors (unless such liquidation or reorganization is proposed in the Plan). Inasmuch
as the Assets have been, or will be, liquidated and the Plan provides for the Distribution of all of the Cash proceeds of the Assets to
Holders of Allowed Claims in accordance with the Plan, for purposes of this test, the Debtors have analyzed the ability of the Debtors
to meet their obligations under the Plan upon the Effective Date. Based on the Debtors’ analysis, the Plan Administrator will have
sufficient assets to accomplish the necessary tasks under the Plan. Therefore, the Debtors believe that the liquidation pursuant to the
Plan will meet the feasibility requirements of the Bankruptcy Code.
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4.11
Best Interests Test and Liquidation Analysis
Even if a plan is accepted
by the holders of each class of claims and interests, the Bankruptcy Code requires the Bankruptcy Court to determine that such plan is
in the best interests of all holders of claims or interests that are impaired by that plan and that have not accepted the plan. The “best
interests” test, as set forth in section 1129(a)(7) of the Bankruptcy Code, requires a court to find either that all members of
an impaired class of claims or interests have accepted the plan or that the plan will provide a member who has not accepted the plan with
a recovery of property of a value, as of the effective date of the plan, that is not less than the amount that such holder would recover
if the debtor were liquidated under chapter 7 of the Bankruptcy Code.
To calculate the probable
distribution to holders of each impaired class of claims and interests if the debtor was liquidated under chapter 7, a court must first
determine the aggregate dollar amount that would be generated from a debtor’s assets if its chapter 11 cases were converted to cases
under chapter 7 of the Bankruptcy Code. To determine if a plan is in the best interests of each impaired class, the present value of the
distributions from the proceeds of a liquidation of the debtor’s unencumbered assets and properties, after subtracting the amounts
attributable to the costs, expenses and administrative claims associated with a chapter 7 liquidation, must be compared with the value
offered to such impaired classes under the plan. If the hypothetical liquidation distribution to holders of claims or interests in any
impaired class is greater than the distributions to be received by such parties under the plan, then such plan is not in the best interests
of the holders of claims or interests in such impaired class.
Because the Plan is a liquidating
plan, the “liquidation value” in the hypothetical chapter 7 liquidation analysis for purposes of the “best interests”
test is similar to the estimates of the results of the chapter 11 liquidation contemplated by the Plan. However, the Debtors believe that
in a chapter 7 liquidation, there would be additional costs and expenses that the Estates would incur as a result of liquidating the Estates
in a chapter 7 case.
For example, the costs of
liquidation under chapter 7 of the Bankruptcy Code would include the compensation of a trustee, as well as the costs of counsel and other
professionals retained by the trustee, all of whom would lack the institutional knowledge regarding the Debtors and the Assets that the
Debtors’ current management and professional advisors have. The Debtors believe such amount would exceed the amount of expenses
that would be incurred in implementing the Plan and winding up the affairs of the Debtors. Conversion also would likely delay the liquidation
process and ultimate distribution of the Assets. The Estates would also be obligated to pay all unpaid expenses incurred by the Debtors
during the Chapter 11 Cases (such as compensation for professionals) that are allowed in the chapter 7 cases.
Accordingly, the Debtors believe
that Holders of Allowed Claims would receive less than anticipated under the Plan if the Chapter 11 Cases were converted to chapter 7
cases, and therefore, the Plan complies with section 1129(a)(7) of the Bankruptcy Code.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 35 of 75
4.12
Acceptance of the Plan
The rules and procedures governing
eligibility to vote on the Plan, solicitation of votes, and submission of Ballots are set forth in the Solicitation Procedures Order.
For the Plan to be accepted
by an Impaired Class of Claims, a majority in number and two-thirds in dollar amount of the Claims voting in such Class must vote to accept
the Plan. At least one voting Class, excluding the votes of insiders, must actually vote to accept the Plan. Accordingly, in order
for the Plan to be confirmed, Class 3 General Unsecured Claims must vote to accept the Plan.
IF YOU ARE A HOLDER OF A CLASS 3 GENERAL UNSECURED
CLAIM ENTITLED TO VOTE ON THE PLAN, YOU ARE URGED TO COMPLETE, DATE, SIGN, AND PROMPTLY SUBMIT THE BALLOT YOU RECEIVE IN ACCORDANCE WITH
THE SOLICITATION PROCEDURES ORDER AND THE INSTRUCTIONS ON THE BALLOT. PLEASE BE SURE TO COMPLETE ALL BALLOT ITEMS PROPERLY, LEGIBLY AND
OTHERWISE IN ACCORDANCE WITH THE SOLICITATION PROCEDURES ORDER AND THE INSTRUCTIONS ON THE BALLOT.
IF YOU ARE A HOLDER OF A CLASS 3 GENERAL UNSECURED
CLAIM ENTITLED TO VOTE ON THE PLAN AND YOU DID NOT RECEIVE A BALLOT, YOU RECEIVED A DAMAGED BALLOT, OR YOU LOST YOUR BALLOT, OR IF YOU
HAVE ANY QUESTIONS CONCERNING THE PLAN OR PROCEDURES FOR VOTING ON THE PLAN, PLEASE CONTACT THE CLAIMS AGENT AT DRCVote@DonlinRecano.com
OR 1 (800) 499-8519. THE CLAIMS AGENT IS NOT
AUTHORIZED TO, AND WILL NOT, PROVIDE LEGAL ADVICE.
ARTICLE V
CERTAIN RISK FACTORS TO BE CONSIDERED PRIOR TO VOTING
THE PLAN AND ITS IMPLEMENTATION
ARE SUBJECT TO CERTAIN RISKS, INCLUDING, BUT NOT LIMITED TO, THE RISK FACTORS SET FORTH BELOW. HOLDERS OF GENERAL UNSECURED CLAIMS WHO
ARE ENTITLED TO VOTE ON THE PLAN SHOULD READ AND CAREFULLY CONSIDER THE RISK FACTORS, AS WELL AS THE OTHER INFORMATION SET FORTH IN THE
COMBINED PLAN AND DISCLOSURE STATEMENT AND THE DOCUMENTS DELIVERED TOGETHER HEREWITH OR REFERRED TO OR INCORPORATED BY REFERENCE HEREIN,
BEFORE DECIDING WHETHER TO VOTE TO ACCEPT OR REJECT THE PLAN. THESE RISK FACTORS SHOULD NOT, HOWEVER, BE REGARDED AS CONSTITUTING THE
ONLY RISKS INVOLVED IN CONNECTION WITH THE PLAN AND ITS IMPLEMENTATION.
5.1
The Plan May Not Be Accepted
The Debtors can make no assurances
that the requisite acceptances of the Plan will be received, including to the extent that the substantive consolidation contemplated by
the Plan is not approved, and the Debtors may need to obtain acceptances to an alternative plan (or plans) of liquidation for the Debtors
that may not have the support of the requisite Creditors, in which case the Debtors may be required to liquidate the Estates under chapter
7 of the Bankruptcy Code. There can be no assurance that the terms of any such alternative restructuring arrangement or plan would be
similar to or as favorable to Creditors as those proposed in the Plan.
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5.2
The Plan May Not Be Confirmed
Even if the Debtors receive
the requisite acceptances, there is no assurance that the Bankruptcy Court, which may exercise substantial discretion as a court of equity,
will confirm the Plan. Even if the Bankruptcy Court determined that the Combined Disclosure Statement and Plan and the balloting procedures
and results were appropriate, the Bankruptcy Court could still decline to confirm the Plan if it finds that any of the statutory requirements
for Confirmation have not been met. Moreover, there can be no assurance that modifications to the Combined Disclosure Statement and Plan
will not be required for Confirmation or that such modifications would not necessitate the re-solicitation of votes. If the Plan is not
confirmed, it is unclear what distributions Holders of Allowed Claims ultimately would receive with respect to their Allowed Claims in
any subsequent plan of liquidation.
If the Plan is not confirmed
and an alternative cannot be agreed to, it is possible that the Debtors would have to liquidate their Assets, if any, in chapter 7, in
which case it is likely that the Holders of Allowed Claims would receive less favorable treatment than they would receive under the Plan.
There can be no assurance that the terms of any such alternative would be similar to or as favorable to the Debtors’ Creditors as
those proposed in the Plan.
5.3
Distributions to Holders of Allowed Claims under the Plan May Be Inconsistent with Projections
Projected Distributions are
based upon the Debtors’ good faith estimates of the total amount of Unclassified Claims, Secured Claims, Priority Non-Tax Claims,
and General Unsecured Claims ultimately Allowed and the funds available for Distribution. There can be no assurance that the estimated
Claim amounts set forth in the Combined Disclosure Statement and Plan are correct. These estimated amounts are based on certain assumptions
with respect to a variety of factors. Both the actual amount of Allowed Claims in a particular Class and the funds available for Distribution
to such Class may differ from the Debtors’ estimates. If the total amount of Allowed Claims in a Class is higher than the Debtors’
estimates, or the funds available for Distribution to such Class are lower than the Debtors’ estimates, the percentage recovery
to Holders of Allowed Claims in such Class will be less than projected. As discussed above, to the extent it is determined that Patheon’s
prepetition claims are not capped at $11 million in the aggregate pursuant to the Bid Procedures Order, and that such claims are Allowed
at an amount that exceed $11 million, actual recoveries to Holders of Allowed General Unsecured Claims under the Combined Disclosure Statement
and Plan will be impacted.
5.4
Objections to Classification of Claims
Section 1122 of the Bankruptcy
Code requires that the Plan classify Claims and Interests. The Bankruptcy Code also provides that the Plan may place a Claim or Interest
in a particular Class only if such Claim or Interest is substantially similar to the other Claims or Interests of such Class. The Debtors
believe that all Claims and Interests have been appropriately classified in the Plan. To the extent that the Bankruptcy Court finds that
a different classification is required for the Plan to be confirmed, the Debtors would seek to (i) modify the Plan to provide for whatever
classification might be required for Confirmation and (ii) use the acceptances received from any Holder of Claims pursuant to this solicitation
for the purpose of obtaining the approval of the Class or Classes of which such Holder ultimately is deemed to be a member. Any such reclassification
of Claims, although subject to the notice and hearing requirements of the Bankruptcy Code, could adversely affect the Class in which such
Holder was initially a member, or any other Class under the Plan, by changing the composition of such Class and the vote required for
approval of the Plan. There can be no assurance that the Bankruptcy Court, after finding that a classification was inappropriate and requiring
a reclassification, would approve the Plan based upon such reclassification. Except to the extent that modification of classification
in the Plan requires re-solicitation, the Debtors will, in accordance with the Bankruptcy Code and the Bankruptcy Rules, seek a determination
by the Bankruptcy Court that acceptance of the Plan by any Holder of Claims pursuant to this solicitation will constitute a consent to
the Plan’s treatment of such Holder, regardless of the Class as to which such Holder is ultimately deemed to be a member. The Debtors
believe that under the Bankruptcy Rules, they would be required to resolicit votes for or against the Plan only when a modification adversely
affects the treatment of the Claim of any Holder.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 37 of 75
The Bankruptcy Code also requires
that the Plan provide the same treatment for each Claim or Interest of a particular Class unless the Holder of a particular Claim or Interest
agrees to a less favorable treatment of its Claim or Interest. The Debtors believe that the Plan complies with the requirement of equal
treatment. To the extent that the Bankruptcy Court finds that the Plan does not satisfy such requirement, the Bankruptcy Court could deny
Confirmation of the Plan. Issues or disputes relating to classification and/or treatment could result in a delay in the Confirmation and
consummation of the Plan and could increase the risk that the Plan will not be consummated.
5.5
Failure to Consummate the Plan
The Plan provides for certain
conditions that must be satisfied (or waived) prior to the occurrence of the Effective Date. As of the date of the Combined Plan and Disclosure
Statement, there can be no assurance that any or all of the conditions in the Plan will be satisfied (or waived). Accordingly, there can
be no assurance that the Plan will be confirmed by the Bankruptcy Court. Further, if the Plan is confirmed, there can be no assurance
that the Plan will be consummated (i.e., that the Effective Date will occur).
5.6
Plan Releases May Not Be Approved
There can be no assurance
that the releases, as provided in Article XIV of the Plan, will be granted. Failure of the Bankruptcy Court to grant such relief may result
in a plan of liquidation that differs from the Plan or the Plan not being confirmed.
5.7
Reductions to Estimated Creditor Recoveries
The Allowed amount of Claims
in any Class could be greater than projected, which, in turn, could cause the amount of Distributions to Holder of Allowed Claims in such
Class to be reduced substantially. The amount of administrative expenses incurred to administer the Chapter 11 Cases and wind down the
Debtors’ Estates could be greater than anticipated, or the amount of cash realized from the liquidation of the Debtors’ Assets
could be less than anticipated, which could cause the amount of Distributions to creditors to be reduced substantially.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 38 of 75
5.8
Certain Tax Considerations
The following discussion summarizes
certain U.S. federal income tax considerations relevant to the implementation of the Plan to the Debtors and to Holders of certain Claims.
This discussion does not address the U.S. federal income tax consequences to (i) creditors whose Claims are Unimpaired or otherwise entitled
to payment in full in cash under the Plan, (ii) public entities or Governmental Units, including the U.S. Government, states, municipalities,
and Native American Tribes, or (iii) Holders who are deemed to reject the Plan, such as Holders of PLx Parent Interests.
The discussion of U.S. federal
income tax consequences below is based on the Internal Revenue Code, Treasury regulations, judicial authorities, published positions of
the IRS, and other applicable authorities, all as in effect on the date of this Combined Plan and Disclosure Statement and all of which
are subject to change or differing interpretations, possibly with retroactive effect. The U.S. federal income tax consequences of the
Plan are complex and subject to significant uncertainties. The Debtors have not requested an opinion of counsel or a ruling from the IRS
with respect to any of the tax aspects of the Plan. No assurance can be given that the IRS will not take a position contrary to the description
of U.S. federal income tax consequences of the Plan described below.
This discussion does not address
non-U.S., state, or local tax consequences of the Plan, nor does it purport to address the U.S. federal income tax consequences of the
Plan to special classes of taxpayers (e.g., public entities and Governmental Units (including the U.S. Government, states, municipalities,
and Native American Tribes), foreign taxpayers, small business investment companies, regulated investment companies, real estate investment
trusts, banks and certain other financial institutions, insurance companies, tax-exempt organizations, retirement plans, individual retirement
and other tax-deferred accounts, Holders that are, or hold Claims through, S corporations, partnerships, or other pass-through entities
for U.S. federal income tax purposes, persons whose functional currency is not the U.S. dollar, dealers in securities or foreign currency,
traders that mark-to-market their securities, persons subject to the alternative minimum tax or the “Medicare” tax on unearned
income, persons who use the accrual method of accounting and report income on an “applicable financial statement,” and persons
holding Claims that are part of a straddle, hedging, constructive sale, or conversion transaction). In addition, this discussion does
not address U.S. federal taxes other than income taxes, nor does it address the Foreign Account Tax Compliance Act.
The following discussion generally
assumes that the Plan implements the liquidation of the Debtors for U.S. federal income tax purposes, and that all distributions by the
Debtors to Holders of Allowed Claims will be taxed accordingly. Additionally, this discussion assumes that (i) the various arrangements
to which any of the Debtors is a party will be respected for U.S. federal income tax purposes in accordance with their form and (ii) except
if otherwise indicated, the Claims are held as “capital assets” (generally, property held for investment) within the meaning
of section 1221 of the Internal Revenue Code.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 39 of 75
The following discussion of
certain U.S. federal income tax consequences is for general informational purposes only and is not a substitute for careful tax planning
and advice based upon your individual tax circumstances. Each Holder of a Claim or Interest is urged to consult its own tax advisor for
the U.S. federal, state, local, and other tax consequences applicable under the Plan.
(a)
Consequences to the Debtors.
As of the Petition Date, the
Debtors may have had consolidated net operating losses (“NOLs”) for U.S. federal income tax purposes. However, the
amount of any NOLs and other tax attributes, as well as the application of any limitations on their use, remain subject to review and
adjustment by the IRS. Moreover, the Debtors may recognize additional losses as a result of the Sale, and anticipate having NOLs carrying
forward into 2023.
| i. | Limitations on NOL Carryforwards and Other Tax Attributes. The Debtors’ ability to utilize
any NOLs and certain other tax attributes could be subject to limitation if the Debtors underwent or were to undergo an ownership change
within the meaning of section 382 of the Internal Revenue Code after the Petition Date. The Debtors believe that no ownership change for
section 382 purposes has occurred to date and expect that no such ownership change will occur prior to the liquidation of the Debtors
pursuant to the Plan, anticipated to occur in 2023. If, however, the Debtors were to undergo an ownership change for purposes of section
382 of the Internal Revenue Code, the Debtors’ utilization of any NOLs or other tax attributes could be meaningfully impaired. |
| ii. | Cancellation of Debt. In general, the Internal Revenue Code provides that a debtor must recognize
cancellation of debt (“COD”) income upon the elimination or reduction of debt for insufficient consideration. The Internal
Revenue Code provides an exception to such income recognition treatment for any COD arising by reason of the discharge of the debtor’s
indebtedness in the bankruptcy case or to the extent of the debtor’s insolvency immediately before the cancellation of the debt.
In such case, the Internal Revenue Code generally requires the debtor to reduce certain of its tax attributes—such as current year
NOLs, NOL carryforwards, tax credits, capital losses and tax basis in assets—by the amount of any such excluded COD income. COD
income generally is the amount by which the adjusted issue price of cancelled debt exceeds the sum of the amount of cash and the fair
market value of any other property transferred in exchange therefor. In general, any reduction in tax attributes under the COD rules does
not occur until the end of the tax year, after such attributes have been applied to determine the tax for the year or, in the case of
asset basis reduction, the first day of the taxable year following the tax year in which the COD occurs. |
Consistent with the intended
treatment of the Plan as a plan of liquidation for U.S. federal income tax purposes, the Debtors believe that no COD should be incurred
by a Debtor as a result of the implementation of the Plan prior to the distribution by such Debtor of all of its assets. In such case,
the reduction of tax attributes resulting from such COD (which, as indicated above, only occurs as of the end of the tax year in which
the COD occurs) generally should not have a material impact on the Debtors. However, there can be no assurance that the IRS will agree
to such characterization, due to, among other things, a lack of direct authoritative guidance as to when COD occurs in the context of
a liquidating chapter 11 plan, and thus there can be no assurance that all or a substantial amount of the COD will not be incurred earlier.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 40 of 75
(b)
Consequences to Holders of Allowed Class 3 General Unsecured Claims. Pursuant to the Plan, each Holder of an Allowed General
Unsecured Claim in Class 3 will receive (i) its Pro Rata share of the General Unsecured Claim Distribution, or (ii) such other less favorable
treatment as to which such Holder and the Post-Effective Date Debtors shall have agreed upon in writing.
In the event of the subsequent
disallowance of any Disputed Claim, it is possible that a Holder of a previously Allowed Claim may receive additional distributions in
respect of its Claim. Accordingly, it is possible that the recognition of any loss realized by a Holder with respect to an Allowed Claim
may be deferred until all Claims are Allowed or Disallowed. Alternatively, it is possible that a Holder will have additional gain in respect
of any additional distributions received.
If gain or loss is recognized,
such gain or loss may be long-term capital gain or loss if the Allowed Claim disposed of is a capital asset in the hands of the Holder
and has been held for more than one year. Each Holder of an Allowed Claim should consult its own tax advisor to determine whether gain
or loss recognized by such Holder will be long-term capital gain or loss and the specific tax effect thereof on such Holder. The character
of any gain or loss depends on a variety of factors, including, among other things, the origin of the Holder’s Allowed Claim, when
the Holder receives payment (or is deemed to receive payment) in respect of such Allowed Claim, whether the Holder reports income using
the accrual or cash method of tax accounting, whether the Holder acquired its Allowed Claim at a discount, whether the Holder has taken
a bad debt deduction with respect to such Allowed Claim, and/or whether (as intended and herein assumed) the Plan implements the liquidation
of the Debtors for U.S. federal income tax purposes.
| i. | Distributions in Respect of Accrued but Unpaid Interest. In general, to the extent any amount received
(whether cash or other property) by a Holder of a debt instrument is received in satisfaction of interest that accrued during its holding
period, such amount will be taxable to the Holder as ordinary interest income (if not previously included in the Holder’s gross
income under the Holder’s normal method of accounting). Conversely, a Holder generally recognizes a deductible loss to the extent
any accrued interest was previously included in its gross income and is not paid in full. |
Pursuant to Section 10.11
of the Plan, except as otherwise required by law (as reasonably determined by the Plan Administrator), distributions in respect of any
Allowed Claim shall be allocated first to the principal amount of such Allowed Claim (as determined for U.S. federal income tax purposes)
and, thereafter, to the remaining portion of such Allowed Claim, if any. However, there is no assurance that such allocation would be
respected by the IRS for U.S. federal income tax purposes. You are urged to consult your own tax advisor regarding the allocation of consideration
received under the Plan, as well as the deductibility of accrued but unpaid interest and the character of any loss claimed with respect
to accrued but unpaid interest previously included in gross income for U.S. federal income tax purposes.
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5.8.2
Withholding Tax Requirements. All distributions to Holders of Allowed Claims under the Plan are subject
to any applicable tax withholding, including employment tax withholding. Under U.S. federal income tax law, interest, dividends, and other
reportable payments may, under certain circumstances, be subject to “backup withholding” at the then applicable withholding
rate. Backup withholding generally applies if the Holder (a) fails to furnish its social security number or other taxpayer identification
number, (b) furnishes an incorrect taxpayer identification number, (c) fails properly to report interest or dividends, or (d) under
certain circumstances, fails to provide a certified statement, signed under penalty of perjury, that the tax identification number provided
is its correct number and that it is not subject to backup withholding. Backup withholding is not an additional tax but merely an advance
payment, which may be refunded to the extent it results in an overpayment of tax. Certain persons are exempt from backup withholding,
including, in certain circumstances, corporations and financial institutions. Holders of Allowed Claims are urged to consult their own
tax advisors regarding the Treasury Regulations governing backup withholding and whether the transactions contemplated by the Plan would
be subject to these Treasury Regulations.
In addition, Treasury Regulations
generally require disclosure by a taxpayer on its U.S. federal income tax return of certain types of transactions in which the taxpayer
participated, including, among other types of transactions, certain transactions that result in the taxpayer’s claiming a loss in
excess of specified thresholds. Holders are urged to consult their tax advisors regarding these Treasury Regulations and whether the transactions
contemplated by the Plan would be subject to these Treasury Regulations and require disclosure on the Holder’s tax returns.
THE FOREGOING TAX SUMMARY
HAS BEEN PROVIDED FOR GENERAL INFORMATIONAL PURPOSES ONLY. THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN ARE COMPLEX. NOTHING HEREIN
SHALL CONSTITUTE TAX ADVICE. THE TAX CONSEQUENCES ARE IN MANY CASES UNCERTAIN AND MAY VARY DEPENDING ON A HOLDER’S PARTICULAR CIRCUMSTANCES.
ACCORDINGLY, HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS ABOUT THE UNITED STATES FEDERAL, STATE AND LOCAL, AND APPLICABLE FOREIGN
INCOME AND OTHER TAX CONSEQUENCES OF THE PLAN.
ARTICLE VI
TREATMENT OF UNCLASSIFIED CLAIMS
(a)
Administrative Claims. Except as otherwise provided for herein, in the Confirmation Order, or in a separate order of the
Bankruptcy Court, on, or as soon as reasonably practicable after, the later of (i) the Effective Date and (ii) 30 days following the date
on which an Administrative Claim becomes an Allowed Administrative Claim, the Holder of such Allowed Administrative Claim shall receive
from the Post-Effective Date Debtors, in full satisfaction of such Allowed Administrative Claim, (a) Cash equal to the unpaid portion
of the Face Amount of such Allowed Administrative Claim or (b) such other less favorable treatment as to which such Holder and the Post-Effective
Date Debtors shall have agreed upon in writing.
(b)
Professional Fee Claims. Professional Fee Claims shall be paid by the Post-Effective Date Debtors as set forth in Section
16.2 of the Plan.
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(c)
Priority Tax Claims. In full satisfaction of such Claims, Holders of Allowed Priority Tax Claims shall be paid by the Post-Effective
Date Debtors, at the Post-Effective Date Debtors’ discretion, as follows: (a) Cash equal to the unpaid portion of the Face Amount
of such Allowed Priority Tax Claim on the later of the Effective Date or 30 days following the date on which such Priority Tax Claim becomes
an Allowed Priority Tax Claim; (b) in regular installment payments in Cash over a period not exceeding five (5) years after the Petition
Date, plus interest on the unpaid portion thereof at the rate determined under applicable non-bankruptcy law as of the calendar month
in which the Confirmation Date occurs; and (c) such other treatment as to which the Holder of an Allowed Priority Tax Claim and the Post-Effective
Date Debtors shall have agreed upon in writing.
ARTICLE VII
TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS
Unless the Holder of an Allowed
Claim or Interest, as applicable, and the Debtors or the Post-Effective Date Debtors, as applicable, agree to a different treatment, each
Holder of an Allowed Claim or Interest, as applicable, shall receive the following treatment:
7.1
Unimpaired Classes of Claims
(a)
Class 1: Secured Claims. On, or as soon as reasonably practicable after the Effective Date, Holders of Class 1 Allowed Secured
Claims shall receive from the Post-Effective Date Debtors, at the discretion of the Post-Effective Date Debtors, in full satisfaction
of such Allowed Secured Claim, (i) Cash equal to the value of such Claim; (ii) the return of the Holder’s Collateral securing such
Claim; (iii) such Claim reinstated pursuant to sections 1124(1) or 1124(2) of the Bankruptcy Code; or (iv) such other less favorable treatment
as to which such Holder and the Post-Effective Date Debtors shall have agreed upon in writing. Class 1 is Unimpaired, and therefore
Holders of Secured Claims are conclusively presumed to have accepted the Plan.
(b)
Class 2: Priority Non-Tax Claims. On, or as soon as reasonably practicable after, the later of (i) the Effective Date and
(ii) 30 days following the date on which a Priority Non-Tax Claim becomes an Allowed Priority Non-Tax Claim, the Holder of such Allowed
Priority Non- Tax Claim shall receive from the Post-Effective Date Debtors, at the discretion of the Post-Effective Date Debtors, in full
satisfaction of such Allowed Priority Non-Tax Claim, either (i) Cash equal to the unpaid portion of the Face Amount of such Allowed Priority
Non-Tax Claim; or (ii) such other less favorable treatment as to which such Holder and the Post-Effective Date Debtors shall have agreed
upon in writing. Class 2 is Unimpaired, and therefore Holders of Priority Non-Tax Claims are conclusively presumed to have accepted
the Plan.
7.2
Impaired Classes of Claims and Interests.
(a)
Class 3: General Unsecured Claims. On, or as soon as reasonably practicable after, the Effective Date, a Holder of an Allowed
Class 3 General Unsecured Claim shall receive from the Post-Effective Date Debtors, in full satisfaction of such Allowed General Unsecured
Claim, (i) its Pro Rata share of the General Unsecured Claim Distribution, or (ii) such other less favorable treatment as to which such
Holder and the Post-Effective Date Debtors shall have agreed upon in writing. Class 3 is Impaired, and Holders of Allowed Class
3 General Unsecured Claims are entitled to vote on the Plan.
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(b)
Class 4: Subordinated Claims. Holders of Subordinated Claims shall not receive or retain any property, interest in property
or consideration under the Plan on account of such Subordinated Claims. Class 4 is Impaired and is deemed to have rejected the Plan,
and therefore Holders of Class 4 Subordinated Claims are not entitled to vote on the Plan.
(c)
Class 5: PLx Parent Interests. Holders of PLx Parent Interests shall not receive or retain any property, interest in property
or consideration under the Plan on account of such PLx Parent Interests. Class 5 is Impaired and is deemed to have rejected the
Plan, and therefore Holders of Class 5 PLx Parent Interests are not entitled to vote on the Plan.
7.3
Reservation of Rights Regarding Claims and Interests. Except as otherwise explicitly provided in the Plan,
nothing shall affect the Debtors’ rights and defenses, both legal and equitable, with respect to any Claims or Interests, including,
but not limited to, all rights with respect to legal and equitable defenses to alleged rights of setoff or recoupment.
ARTICLE VIII
ACCEPTANCE OR REJECTION OF THE PLAN
8.1
Class Entitled to Vote. Because General Unsecured Claims in Class 3 are Impaired and Holders thereof may
receive or retain property or an interest in property under the Plan, only Holders of Claims in Class 3 shall be entitled to vote to accept
or reject the Plan.
8.2
Acceptance by Impaired Classes of Claims. In accordance with section 1126(c) of the Bankruptcy Code, and
except as provided in section 1126(e) of the Bankruptcy Code, an Impaired Class of Claims shall have accepted the Plan if the Plan is
accepted by the Holders of at least two-thirds (2/3) in dollar amount and more than one-half (1/2) in number of the Allowed Claims in
such Class that have timely and properly voted to accept or reject the Plan.
8.3
Presumed Acceptance by Unimpaired Classes. Because Claims in Classes 1 (Secured Claims) and 2 (Priority
Non-Tax Claims) are Unimpaired pursuant to section 1126(f) of the Bankruptcy Code, Holders of Claims in Classes 1 and 2 are deemed to
have accepted the Plan and, therefore, such Holders of Claims are not entitled to vote to accept or reject the Plan.
8.4
Presumed Rejections by Impaired Classes. Holders of Claims or Interests in Classes 4 (Subordinated Claims)and
5 (PLx Parent Interests) are not entitled to receive or retain any property under the Plan, and therefore such Holders of Claims or Interests
are presumed to have rejected the Plan and are not entitled to vote to accept or reject the Plan.
8.5
Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code. To the extent that any Impaired Class
rejects the Plan or is deemed to have rejected the Plan, the Debtors will request confirmation of the Plan, as it may be modified from
time to time, under section 1129(b) of the Bankruptcy Code. The Debtors reserve the right to alter, amend, modify, revoke, or withdraw
the Plan, the documents submitted in support thereof or any schedule or exhibit, including to amend or modify it to satisfy the requirements
of section 1129(b) of the Bankruptcy Code, if necessary.
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8.6
Controversy Concerning Impairment. If a controversy arises as to whether any Claim or Interest is Impaired
under the Plan, the Bankruptcy Court shall, after notice and a hearing, determine such controversy on or before the Confirmation Date.
8.7
Elimination of Vacant Classes. Any Class of Claims or Interests that does not contain, as of the date
of the commencement of the Confirmation Hearing, a Holder of an Allowed Claim or Interest, or a Holder of a Claim or Interest temporarily
allowed under Bankruptcy Rule 3018, shall be deemed deleted from the Plan for all purposes, including for purposes of determining acceptance
of the Plan by such Class under section 1129(a)(8) of the Bankruptcy Code.
ARTICLE IX
IMPLEMENTATION OF THE PLAN
9.1
Implementation of the Plan. The Plan will be implemented by, among other things, the appointment of the
Plan Administrator and the making of Distributions from the Assets, including, without limitation, all Cash and the proceeds, if any,
from the Retained Causes of Action, by the Post-Effective Date Debtors in accordance with the Plan and the Plan Administrator Agreement.
Except as otherwise provided
in the Plan, on and after the Effective Date, all Assets of the Estate, including all claims, rights, Retained Causes of Action and any
property acquired by the Debtors under or in connection with the Plan, shall vest in the Post-Effective Date Debtors, free and clear of
all Claims, Liens, charges, other encumbrances and Interests.
9.2
The Debtors’ Post-Effective Date Corporate Affairs.
(a)
Debtors’ Officers, Directors and Managers. On the Effective Date, the Debtor’s officers, directors and managers
shall be terminated automatically without the need for any corporate action or approval and without the need for any corporate filings,
and shall have no continuing obligations to the Debtors following the occurrence of the Effective Date.
9.3
Dissolution of the Debtors.
On the Effective Date, the
Plan Administrator shall be the sole officer and director of the Post-Effective Date Debtors and appointed to manage the Post-Effective
Date Debtors, in accordance with the Plan and the Plan Administrator Agreement. Following the implementation of the Plan, the administration
and Distribution of the Debtors’ Assets in accordance with the terms of the Plan, and the winding down of the Post-Effective Date
Debtors’ affairs, without the need for any further order or action of the Bankruptcy Court, the Post-Effective Date Debtors will
be dissolved and their affairs will be wound up in accordance with Delaware law. The Plan Administrator is authorized to take all actions
reasonably necessary to dissolve the Post-Effective Date Debtors, and neither the Plan Administrator nor the Post-Effective Date Debtors
shall be required to pay any taxes or fees in order to cause such dissolution and termination of the Post- Effective Date Debtors’
existence.
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9.4
Cancellation of PLx Parent Interests.
On the Effective Date, (a)
all PLx Parent Interests shall be deemed cancelled and extinguished; (b) the PLx Parent Interests shall cease to be publicly traded; and
(c) the Debtors shall take appropriate steps to cease to be a reporting company under the Securities Exchange Act of 1934 and upon doing
so shall not be required to file reports with the Securities and Exchange Commission. The Post-Effective Date Debtors are authorized
to take all steps and execute all instruments and documents necessary or appropriate in connection with the foregoing.
9.5
Substantive Consolidation for Plan Purposes Only.
(a) Except
as otherwise provided in this Plan, each of the Debtors shall continue to maintain its separate corporate existence after the Effective
Date for all purposes, other than the treatment of Claims and Distributions under the Plan. Except as expressly provided in the Plan (or
as otherwise ordered by the Bankruptcy Court), for purposes of voting to accept or reject the Plan and Claims and Distributions under
the Plan: (i) the Assets and liabilities of the Debtors shall be deemed merged or treated as though they were merged into and with the
Assets and liabilities of PLx Opco; (ii) all guaranties of the Debtors of the obligations of any other Debtor shall be deemed eliminated
and extinguished so that any Claim against any Debtor, and any guarantee thereof executed by any Debtor and any joint or several liability
of any of the Debtors, shall be deemed to be one obligation of PLx Opco; (iii) each and every Claim filed or to be filed in either of
the Chapter 11 Cases shall be treated as filed against the consolidated Debtors and shall be treated as one Claim against and obligation
of PLx Opco; (iv) all Intercompany Claims shall be eliminated and extinguished, and holders of Intercompany Claims shall not receive any
Distributions or retain any property pursuant to this Plan on account of such Intercompany Claims; and (v) for purposes of determining
the availability of the right of setoff under section 553 of the Bankruptcy Code, the Debtors shall be treated as one entity, PLx Opco,
so that, subject to the other provisions of section 553 of the Bankruptcy Code, debts due to any of the Debtors may be set off against
the debts of any of the other Debtors. Such substantive consolidation shall not (other than for purposes relating to this Plan) affect
the legal and corporate structures of the Post-Effective Date Debtors. Moreover, such substantive consolidation shall not affect any subordination
provisions set forth in any agreement relating to any Claim or Interest or the ability of the Post-Effective Date Debtors to seek to have
any Claim or Interest subordinated in accordance with any contractual rights or equitable principles. Notwithstanding anything in this
section to the contrary, all post-Effective Date fees payable to the U.S. Trustee pursuant to section 1930 of title 28 of the United States
Code shall be calculated on a separate legal entity basis for each Post-Effective Date Debtor.
(b) The
Combined Disclosure Statement and Plan shall be deemed to be a motion by the Debtors requesting that the Bankruptcy Court approve the
substantive consolidation for purposes relating to this Plan as contemplated by Section 9.5(a) of the Plan. Unless an objection to the
proposed substantive consolidation is made in writing on or before the deadline to object to Confirmation, or such other date as may be
fixed by the Bankruptcy Court, the substantive consolidation for purposes relating to this Plan as contemplated by Section 9.5(a) of the
Plan may be approved by the Bankruptcy Court at the Confirmation Hearing. In the event any such objections are timely filed, a hearing
with respect thereto shall be scheduled by the Bankruptcy Court, which hearing may, but need not, be the Confirmation Hearing.
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(c) If
the Bankruptcy Court determines that substantive consolidation of one of the Debtors is not appropriate, then the Debtors may request
that the Bankruptcy Court otherwise confirm the Plan and approve the treatment of and Distributions to the different Classes under the
Plan on an adjusted, Debtor-by-Debtor basis. Furthermore, the Debtors reserve their rights to seek confirmation of the Plan without implementing
substantive consolidation of any given Debtor, and to request that the Bankruptcy Court approve the treatment of and Distributions to
any given Class under the Plan on an adjusted, Debtor-by-Debtor basis. Such request may include that the Bankruptcy Court confirm an amended
version of this Plan with respect to only one Debtor at the Confirmation Hearing, without the need to resolicit votes for or against the
amended version of the Plan.
9.6
Plan Administrator.
(a)
Appointment; Duties. The Debtors shall designate the Person who initially will serve as the Plan Administrator. The identity
of the Plan Administrator shall be included in the Plan Supplement.
(b)
Plan Administrator Agreement.
| i. | Plan Administrator as a Fiduciary. The Plan Administrator shall be a fiduciary of the Estates and
the Post-Effective Date Debtors, and shall be compensated and reimbursed for expenses as set forth in, and in accordance with, the Plan
and the Plan Administrator Agreement. |
| ii. | Provisions of the Plan Administrator Agreement and Confirmation Order. The Plan Administrator Agreement
and the Confirmation Order shall provide that: (i) the Plan Administrator shall have no duties until the occurrence of the Effective Date,
and on and after the Effective Date shall be a fiduciary of the Post-Effective Date Debtors and the Estates; and (ii) if the Plan is withdrawn
or otherwise abandoned prior to the occurrence of the Effective Date, the Plan Administrator position shall thereafter be dissolved. |
(c)
Powers and Duties of Plan Administrator.
| i. | General Powers and Duties. From and after the Effective Date, pursuant to the terms and provisions
of the Plan and the Plan Administrator Agreement, the Plan Administrator shall be empowered and directed to: (i) take all steps and execute
all instruments and documents necessary to make Distributions to Holders of Allowed Claims and to perform the duties assigned to the Post-Effective
Date Debtors and the Plan Administrator under the Plan or the Plan Administrator Agreement; (ii) comply with the Plan and the obligations
hereunder; (iii) employ, retain or replace professionals to represent him or her with respect to his or her responsibilities; (iv) object
to Claims or Interests as provided in the Plan, and prosecute such objections; (v) compromise and settle any issue or dispute regarding
the amount, validity, priority, treatment or allowance of any Claim or Interest; (vi) establish, replenish or release any reserves as
provided in the Plan, as applicable; (vii) exercise such other powers as may be vested in the Post-Effective Date Debtors or the Plan
Administrator pursuant to the Plan, the Plan Administrator Agreement or any other order of the Bankruptcy Court, including the Confirmation
Order, or otherwise act on behalf of and for the Debtors and the Post-Effective Date Debtors from and after the Effective Date; (viii)
file applicable tax returns for the Debtors; (ix) liquidate any of the Assets; and (x) prosecute, compromise, resolve or withdraw any
of the Retained Causes of Action. The Plan Administrator may, without the need for further Court approval, retain and compensate legal
counsel, financial advisors and other processional advisors to advise him or her in the performance of his or her duties, which counsel
and advisors may be counsel and advisors retained by the Debtors in the Chapter 11 Cases. |
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| ii. | Distributions. Pursuant to the terms and provisions of the Plan and the Plan Administrator Agreement,
the Plan Administrator shall make the required Distributions specified under the Plan and in accordance with the Plan. |
(d)
Compensation of the Plan Administrator. The Plan Administrator’s compensation, on a Post-Effective Date basis, shall
be described in the Plan Supplement.
(e)
Indemnification of the Plan Administrator and Related Parties. The Debtors and the Post-Effective Date Debtors shall indemnify
and hold harmless: (i) the Plan Administrator (solely in his or her capacity as such); (ii) the Plan Administrator Professionals; and
(iii) the Consulting Parties (collectively, the “Indemnified Parties”), with respect to any and all liabilities, losses,
damages, claims, costs and expenses arising out of or due to their post-Effective Date actions or omissions, or consequences of such actions
or omissions, taken in connection with the Plan, the Plan Administrator Agreement and the Confirmation Order, other than acts or omissions,
or consequences of such post-Effective Date actions or omissions, resulting from such Indemnified Party’s bad faith, willful misconduct
(including, without limitation, actual fraud) or gross negligence. To the extent that an Indemnified Party asserts a claim for indemnification
as provided above, (i) any payment on account of such claim shall be paid solely from the Estates and (ii) the legal fees and related
costs incurred by counsel to the Plan Administrator in monitoring and participating in the defense of such claims giving rise to the asserted
right of indemnification shall be advanced to such Indemnified Party (and such Indemnified Party undertakes to repay such amounts if it
ultimately shall be determined that such Indemnified Party is not entitled to be indemnified therefore) out of the Estates or any available
insurance. The indemnification provisions of the Plan Administrator Agreement shall remain available to and be binding upon any former
Plan Administrator or the estate of any decedent of the Plan Administrator and shall survive the termination of the Plan Administrator
Agreement.
(f)
Insurance. The Plan Administrator shall be authorized to obtain and pay for, out of the funds of the Estates, all reasonably
necessary insurance coverage for himself or herself, his or her agents, representatives, employees or independent contractors and the
Debtors, including, but not limited to, coverage with respect to: (i) any property that is or may in the future become the property of
the Debtors or the Estates; and (ii) the liabilities, duties and obligations of the Plan Administrator and his or her agents, representatives,
employees or independent contractors under the Plan Administrator Agreement, the latter of which insurance coverage may remain in effect
for a reasonable period of time as determined by the Plan Administrator after the termination of the Plan Administrator Agreement.
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(g)
Preservation of Retained Causes of Action. Except as expressly set forth in the Plan or the Confirmation Order, the Post-Effective
Date Debtors shall retain all Retained Causes of Action and nothing contained in the Plan or the Confirmation Order shall be deemed to
be a release, waiver or relinquishment of any such Retained Causes of Action. The Post-Effective Date Debtors or the Plan Administrator,
as applicable, shall have, retain, reserve and be entitled to assert all such Retained Causes of Action as fully as if the Chapter 11
Cases have not been commenced, and all of the Post-Effective Date Debtors’ legal and equitable rights respecting any Claim that
are not specifically waived or relinquished by the Plan, the Confirmation Order, or any Final Order (including settlement or other agreements
authorized thereby) may be asserted after the Effective Date to the same extent as if the Chapter 11 Cases have not been commenced.
(h)
Consulting Parties. The Plan Administrator Agreement shall provide mechanisms reasonably acceptable to each Consulting Party
which provide (i) for post-Effective Date periodic reporting from the Plan Administrator to the Consulting Parties and (ii) an ability
for each Consulting Party to object to the post-Effective Date expenses of the Reorganized Debtors and the Plan Administrator that, in
the aggregate, exceed the post-Effective Date budget for such expenses as set forth in the Liquidation Analysis.
9.7
Funding of Reserves.
(a)
Professional Fee Reserve. On the Effective Date, the Plan Administrator shall establish the Professional Fee Reserve as
set forth in Section 16.2 of the Plan.
(b)
Other Reserves. The Plan Administrator shall use Cash to establish and administer any other necessary reserves that, in
the Plan Administrator’s discretion, may be required to effectuate the Plan and the Distributions to Holders of Allowed Claims hereunder
or under the Plan Administrator Agreement.
9.8
Special Provisions Regarding Insurance. Notwithstanding anything to the contrary in the Combined Disclosure
Statement and Plan, the Plan Supplement, the Confirmation Order, any bar date notice or claim objection, any other document related to
any of the foregoing, or any other order of the Bankruptcy Court (including, without limitation, any other provision that purports to
be preemptory or supervening, grants an injunction, discharge or release, or confers Bankruptcy Court jurisdiction):
(a)
on the Effective Date, the Insurance Contracts shall vest, unaltered and in their entirety with the Post-Effective Date Debtors,
and all debts, obligations, and liabilities of the Debtors (and, after the Effective Date, of the Post-Effective Date Debtors) thereunder,
whether arising before or after the Effective Date, shall survive and shall not be amended, modified, waived, released, discharged or
impaired in any respect, all such debts, obligations, and liabilities of the Debtors (and, after the Effective Date, of the Post-Effective
Date Debtors) shall be satisfied by the Post-Effective Date Debtors in the ordinary course of business, and the Insurers shall not need
to or be required to file or serve any objection to a proposed cure amount or a request, application, Claim, proof or motion for payment
or allowance of any Claim or Administrative Claim and shall not be subject to any bar date or similar deadline governing cure amounts,
proofs of Claims or Administrative Claims;
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(b)
for the avoidance of doubt, subject to the automatic stay under section 362 of the Bankruptcy Code and the injunction under Section
14.2 of the Plan, if there is available insurance, any party with rights against or under the applicable Insurance Contract, including,
without limitation, the Estates, the Post-Effective Date Debtors and Holders of Claims covered by the Insurance Contracts, may pursue
such rights, and the Post-Effective Date Debtors may, but shall not be required to, move to limit any such Claim to the Face Amount of
such Claim less the total coverage available with respect to that Claim under the Insurance Contracts; provided, however, that
doing so in no way obligates an Insurer to pay any portion of the Claim or otherwise alters an Insurer’s coverage defenses; provided
further, however, that nothing alters or modifies the duty, if any, that Insurers have to pay Claims covered by the Insurance Contracts
and the Insurers’ right to seek payment or reimbursement from the Debtors (or after the Effective Date, the Post-Effective Date
Debtors); provided finally, however, the automatic stay of Bankruptcy Code section 362(a) and the injunctions set forth in the
Plan, if and to the extent applicable, shall be deemed lifted without further order of the Bankruptcy Court, solely to permit: (I) all
current and former employees of the Debtors to proceed with any valid workers compensation claims they might have in the appropriate judicial
or administrative forum; (II) direct action claims against an Insurer under applicable non-bankruptcy law to proceed with their claims;
(III) the Insurers to administer, handle, defend, settle, and/or pay, in the ordinary course of business and without further order of
the Bankruptcy Court, (A) any valid workers compensation claims, (B) claims where a claimant asserts a direct claim against any Insurer
under applicable non-bankruptcy law, or an order has been entered by the Bankruptcy Court granting a claimant relief from the automatic
stay to proceed with its Claim covered by the Insurance Contracts, and (C) all costs in relation to each of the foregoing; and (IV) the
Insurers to cancel any Insurance Contracts, to the extent permissible under applicable non-bankruptcy and bankruptcy law, and in accordance
with the terms of the Insurance Contracts (other than on the basis of any outstanding pre-petition claims against the Debtors, the Estates
or the Post-Effective Date Debtors arising from or related to such Insurance Contracts);
(c)
nothing in this Section 9.8 shall constitute a waiver of any Causes of Action the Debtors, their Estates or the Post-Effective
Date Debtors may hold against any Entity, including any Insurers. Nothing in this Section 9.8 is intended to, shall or shall be deemed
to preclude any Holder of an Allowed Claim covered by the Insurance Contracts from seeking and/or obtaining a recovery from any Insurer
in addition to (but not in duplication of) any Distribution such Holder may receive under the Plan; provided, however, that the
Debtors, the Estates, and the Post-Effective Date Debtors do not waive, and expressly reserve their rights to assert that the proceeds
of the Insurance Contracts are an Asset and property of the Estates to which they are entitled to the extent that the Debtors are entitled
to assert first-party claims pursuant to the terms and conditions of the applicable Insurance Contract; and
(d)
nothing shall modify the scope of, or alter in any other way, the rights and obligations of the Insurers, the Debtors (or, after
the Effective Date, the Post-Effective Date Debtors), or any other individual or entity, as applicable, under the Insurance Contracts,
and all such rights and obligations shall be determined under the Insurance Contracts and applicable non-bankruptcy law as if the Chapter
11 Cases had not occurred, and, for the avoidance of doubt, the Insurers shall retain any and all rights, claims and defenses to liability
and/or coverage that they have under the Insurance Contracts, including the right to contest and/or litigate with any party, including
the Debtors and the Post-Effective Date Debtors, the existence, primacy and/or scope of liability and/or available coverage under any
alleged applicable Insurance Contract.
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9.9
Provision Governing Allowance and Defenses to Claims. On and after the Effective Date, the Post-Effective
Date Debtors shall have all of the Debtors’ and the Estates’ rights under section 558 of the Bankruptcy Code. Nothing under
the Plan shall affect the rights and defenses of the Debtors, the Estates and the Post-Effective Date Debtors in respect of any Claim
or Interest not Allowed by Final Order, including all rights in respect of legal and equitable objections, defenses, setoffs or recoupment
against such Claims or Interests. The Post-Effective Date Debtors may, but shall not be required to, setoff against any Claim or Interest
any Causes of Actions or other claims or rights of any nature whatsoever that the Estate or the Post-Effective Date Debtors may have against
the Claim Holder or Interest Holder, including, without limitation, Avoidance Actions, but neither the failure to do so nor the allowance
of any Claim or Interest hereunder shall constitute a waiver or release by the Post-Effective Date Debtors of any such Claim or Interest
it may have against such Claim or Interest Holder.
ARTICLE X
PROVISIONS GOVERNING DISTRIBUTIONS
10.1
Interest on Claims. Except to the extent provided in section 506(b) of the Bankruptcy Code, the Plan or
the Confirmation Order, post-petition interest, penalties or fees shall not accrue or be paid on Allowed Claims, and no Holder of an Allowed
Claim shall be entitled to interest accruing on any Allowed Claim from and after the Petition Date.
10.2
Distributions by Post-Effective Date Debtors. The Plan Administrator or its designee, on behalf of the
Post-Effective Date Debtors, shall serve as the disbursing agent under the Plan with respect to Distributions to Holders of Allowed Claims
(provided that the Post-Effective Date Debtors may hire professionals or consultants to assist with making Distributions). The Post-Effective
Date Debtors shall make all Distributions required to be made to such Holders of Allowed Claims pursuant to the Plan, the Confirmation
Order and the Plan Administrator Agreement. The Post-Effective Date Debtors shall not be required to give any bond or surety or other
security for the performance of the Plan Administrator’s duties as disbursing agent unless otherwise ordered by the Bankruptcy Court.
10.3
Distributions for Claims Allowed as of the Effective Date. Except as otherwise provided herein or in the
Plan Administrator Agreement or as ordered by the Bankruptcy Court: (i) all Distributions to be made on account of Claims that are Allowed
Claims as of the Effective Date shall be made by the Post-Effective Date Debtors on or as soon as reasonably practicable after the Effective
Date; and (ii) all Distributions on account of Claims that first become Allowed Claims after the Effective Date shall be made not later
than 30 days following the date on which such Allowed Claim becomes an Allowed Claim. No Distribution shall be made on account of, without
limitation, any Claim or portion thereof that (i) has been satisfied after the Petition Date; (ii) is listed in the schedules as contingent,
unliquidated, disputed or in a zero amount, and for which a proof of claim has not been filed; or (iii) is evidenced by a proof of claim
that has been amended by a subsequently filed proof of claim.
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10.4
Means of Cash Payment.
(a)
Cash payments under the Plan shall be made, at the option, and in the sole discretion, of the Post-Effective Date Debtors, by wire,
check or such other method as the Post-Effective Date Debtors deem appropriate under the circumstances. Cash payments to foreign creditors
may be made, at the option, and in the sole discretion, of the Post-Effective Date Debtor, in such funds and by such means as are necessary
or customary in a particular foreign jurisdiction. Cash payments made pursuant to the Plan in the form of checks issued by the Post-Effective
Date Debtors shall be null and void if not cashed within 90 days of the date of the issuance thereof. Requests for reissuance of any check
within 90 days of the date of the issuance thereof shall be made in writing directly to the Post-Effective Date Debtors.
(b)
For purposes of effectuating Distributions under the Plan, any Claim denominated in foreign currency shall be converted to U.S.
Dollars pursuant to the applicable published exchange rate in effect on the Petition Date.
10.5
Fractional Distributions. Notwithstanding anything in the Plan to the contrary, no payment of fractional
cents shall be made pursuant to the Plan. Whenever any payment of a fraction of a cent under the Plan would otherwise be required, the
actual Distribution made shall reflect a rounding of such fraction to the nearest whole penny (up or down), with half cents or more being
rounded up and fractions less than half of a cent being rounded down.
10.6
De Minimis Distributions. Notwithstanding anything to the contrary contained in the Plan, the Post-Effective
Date Debtors shall not be required to distribute, and shall not distribute, Cash or other property to the Holder of any Allowed Claim
if the amount of Cash or other property to be distributed on account of such Claim is less than $100. Any Holder of an Allowed Claim on
account of which the amount of Cash or other property to be distributed is less than $100 shall be forever barred from asserting such
Claim against the Estates.
10.7
Delivery of Distributions. All Distributions to Holders of Allowed Claims shall be made at the address
of such Holder as set forth in the claims register maintained in the Chapter 11 Cases (subject to, after the Effective Date, a change
of address notification provided by a Holder in writing in a manner reasonably acceptable to the Post-Effective Date Debtors) or, in the
absence of a filed-proof of claim, the Schedules. If a Distribution is returned as undeliverable, the Post-Effective Date Debtors shall
have no affirmative obligation to locate such Holder’s current address. If the Post-Effective Date Debtors cannot determine, or
are not notified in writing of, a Holder’s then-current address within 90 days after the Effective Date or does not receive a written
request for reissuance of any check within 90 days of the date of the issuance, the Distribution reserved for such Holder shall be deemed
an unclaimed Distribution. The responsibility to provide the Post-Effective Date Debtors a current address of a Holder of Claims or Interests
shall always be the responsibility of such Holder. Except as set forth above, nothing contained in the Plan shall require the Post-Effective
Date Debtors to attempt to locate any Holder of an Allowed Claim or Interest. Amounts in respect of undeliverable Distributions made by
the Post-Effective Date Debtors shall be held in trust on behalf of the Holder of the Allowed Claim or Interest to which they are payable
by the Post-Effective Date Debtors until the earlier of the date that such undeliverable Distributions are claimed by such Holder and
90 days after the date the undeliverable Distributions were made. The Post-Effective Date Debtors are entitled to, but shall have no obligation
to, recognize the sale or transfer of any Claim or Interest that occurs after the Confirmation Date.
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10.8
Withholding, Payment and Reporting Requirements with Respect to Distributions. All Distributions under
the Plan shall, to the extent applicable, comply with all tax withholding, payment and reporting requirements imposed by any federal,
state, provincial, local or foreign taxing authority, and all Distributions shall be subject to any such withholding, payment and reporting
requirements. The Post-Effective Date Debtors shall be authorized to take any and all actions that may be necessary or appropriate to
comply with such withholding, payment and reporting requirements. The Post-Effective Date Debtors may require, in the Post-Effective Date
Debtors’ sole and absolute discretion and as a condition to the receipt of any Distribution, that the Holder of an Allowed Claim
complete and return to the Post-Effective Date Debtors the appropriate Form W-8 or Form W-9, as applicable, to each Holder. Notwithstanding
any other provision of the Plan, (a) each Holder of an Allowed Claim that is to receive a Distribution pursuant to the Plan shall have
sole and exclusive responsibility for the satisfaction and payment of any tax obligations imposed by any governmental unit, including
income, withholding and other tax obligations, on account of such Distribution, and including, in the case of any Holder of a Disputed
Claim that has become an Allowed Claim, any tax obligation that would be imposed upon the Estates in connection with such Distribution;
and (b) no Distribution shall be made to or on behalf of such Holder pursuant to the Plan unless and until such Holder has made arrangements
reasonably satisfactory to the Post-Effective Date Debtors for the payment and satisfaction of such withholding tax obligations or such
tax obligation that would be imposed upon the Estates in connection with such Distribution.
10.9
Setoffs. The Post-Effective Date Debtors may, but shall not be required to, set off against any Claim
or Interest, any payments, Retained Causes of Actions or other Distributions to be made by the Post-Effective Date Debtors pursuant to
the Plan in respect of such Claim or Interest, any claims of any nature whatsoever that the Debtors or the Estates may have against the
Holder of such Claim or Interest; provided, however, that neither the failure to do so nor the allowance of any Claim or Interest
hereunder shall constitute a waiver or release by the Debtors, the Estates or the Post-Effective Date Debtors of any such claim that it
may have against such Holder, provided further, that if the Post-Effective Date Debtors set off any Retained Cause of Action against the
recovery to any Holder of a Claim or Interest pursuant to this Section 10.9, the Post-Effective Date Debtors shall not be deemed to have
impaired, estopped, waived, or released any rights to prosecute the same such Retained Cause of Action against any other Person or Entity.
10.10
No Distribution in Excess of Allowed Amounts. Notwithstanding anything to the contrary herein, no Holder
of an Allowed Claim shall receive in respect of such Claim any Distribution of a value as of the Effective Date in excess of the Allowed
amount of such Claim.
10.11
Allocation of Distributions. All Distributions received under the Plan by Holders of Allowed Claims shall
be deemed to be allocated first to the principal amount of such Claim as determined for United States federal income tax purposes and
then to accrued interest, if any, with respect to such Claim.
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10.12
Forfeiture of Distributions. If the Holder of an Allowed Claim fails to cash a check payable to it within
the time period set forth in Section 10.4(a) of the Plan, fails to claim an undeliverable Distribution within the time limit set forth
in Section 10.7 of the Plan, or fails to complete and return to the Post-Effective Date Debtors the appropriate Form W-8 or Form W-9 within
60 days of the written request by the Post-Effective Date Debtors for the completion and return to them of the appropriate form pursuant
to Section 10.8 of the Plan, then such Holder shall be deemed to have forfeited its right to any Distributions from the Estates (or the
proceeds thereof) and the Post-Effective Date Debtors. Notwithstanding any federal or state escheat laws to the contrary, the forfeited
Distributions shall become unrestricted Assets, and shall be redistributed to Holders of Allowed Claims in accordance with the terms of
the Plan after reserving as necessary for payment of expenses of the Plan Administrator and otherwise in compliance with the Plan and
the Plan Administrator Agreement. In the event the Post-Effective Date Debtors determine, in the Post-Effective Date Debtors’ sole
discretion, that any such amounts are too small in total to economically redistribute to the Holders of Allowed Claims, the Post-Effective
Date Debtors may instead donate such amounts to a charitable organization(s), free of any restrictions thereon, notwithstanding any federal
or state escheat laws to the contrary.
ARTICLE XI
PROVISIONS FOR CLAIMS OBJECTIONS AND ESTIMATION OF CLAIMS
11.1
Claims Administration Responsibility. Except as otherwise specifically provided in the Plan and the Plan
Administrator Agreement, after the Effective Date, the Post-Effective Date Debtor shall have the authority (a) to file, withdraw or litigate
to judgment objections to Claims; (b) to settle, compromise or Allow any Claim or Disputed Claim without any further notice to or action,
order or approval by the Bankruptcy Court; (c) to amend the Schedules in accordance with the Bankruptcy Code; and (d) to administer and
adjust the claims register to reflect any such settlements or compromises without any further notice to or action, order or approval by
the Bankruptcy Court; provided, however, that in no way shall the foregoing limit the rights of creditors to object to the allowance of
a Claim under Section 502 of the Bankruptcy Code. Any agreement entered into by the Post-Effective Date Debtors in accordance with the
terms of the Plan, the Confirmation Order, the Sale Order, and the Bid Procedures Order, with respect to the allowance of any Claim shall
be conclusive evidence and a final determination of the Allowance of such Claim.
11.2
Claim Objections. All objections to Claims (other than (i) Administrative Claims and (ii) Professional
Fee Claims, which Professional Fee Claims shall be governed by Section 16.2 of the Plan) shall be Filed on or before the Claim Objection
Deadline, which date may be extended by the Bankruptcy Court upon a motion filed by the Post-Effective Date Debtors on or before the Claim
Objection Deadline with notice only to those parties entitled to notice in the Chapter 11 Cases pursuant to Bankruptcy Rule 2002 as of
the filing of such motion. The Filing of a motion to extend the Claim Objection Deadline shall automatically extend the Claim Objection
Deadline until a final order is entered by the Bankruptcy Court. In the event that such a motion to extend the Claim Objection Deadline
is denied, the Claim Objection Deadline shall be the later of the then-current Claim Objection Deadline (as previously extended, if applicable)
or 30 days after entry of a Final Order denying the motion to extend the Claim Objection Deadline.
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Filed 09/14/23 Page 54 of 75
11.3
No Distributions Pending Allowance. Notwithstanding any other provision of the Plan or the Plan Administrator
Agreement, no payments or Distributions shall be made with respect to a Disputed Claim unless and until all objections to such Disputed
Claim have been settled, withdrawn, or determined by a Final Order, and the Disputed Claim has become an Allowed Claim. To the extent
that a Claim is not a Disputed Claim but is held by a Holder that is or may be liable to the Debtors or the Post-Effective Date Debtors
on account of a Retained Cause of Action, no payments or Distributions shall be made with respect to all or any portion of such Claim
unless and until such Claim and liability have been settled or withdrawn or have been determined by Final Order of the Bankruptcy Court
or such other court having jurisdiction over the matter.
11.4
Estimation of Contingent or Unliquidated Claims. The Post-Effective Date Debtors may, at any time, request
that the Bankruptcy Court estimate any contingent or unliquidated Claim pursuant to section 502(c) of the Bankruptcy Code, regardless
of whether the Debtors have previously objected to such Claim or whether the Bankruptcy Court has ruled on any such objection, and the
Bankruptcy Court shall retain jurisdiction to estimate any Claim at any time during litigation concerning any objection to any Claim,
including during the pendency of any appeal relating to any such objection. In the event the Bankruptcy Court so estimates any contingent
or unliquidated Claim, that estimated amount shall constitute the Allowed amount of such Claim. All of the Claims objection, estimation
and resolution procedures in the Plan are cumulative and are not necessarily exclusive of one another.
11.5
Amendments to Claims. On or after the Effective Date, a Claim may not be filed or amended to increase
liability or to assert new liabilities without the prior authorization of the Bankruptcy Court or the Post-Effective Date Debtors and
any such new or amended Claim filed without prior authorization shall be deemed disallowed in full and expunged without any further action.
Any Claims filed after the applicable deadlines in the Bar Date Order, the Solicitation Procedures Order, or the Plan and Confirmation
Order shall be automatically deemed disallowed in full and expunged without further action, unless otherwise ordered by the Bankruptcy
Court.
ARTICLE XII
EXECUTORY CONTRACTS
12.1
Executory Contracts and Unexpired Leases. Subject to the occurrence of the Effective Date, all executory
contracts and unexpired leases of the Debtors that have not been assumed, assumed and assigned, or rejected, prior to the Effective Date,
or are not subject to a motion to assume or reject Filed before the Effective Date, shall be deemed rejected pursuant to the Confirmation
Order, as of the Effective Date, other than the Insurance Contracts. For the avoidance of doubt, any post-petition consulting or transition
services agreements shall not be deemed rejected as of the Effective Date. Any Creditor asserting a Rejection Claim shall File a
proof of claim with the Debtors’ claims and noticing agent, Donlin, Recano & Company, Inc., (i) electronically, through the
online proof of Claim Form available at https://www.donlinrecano.com/Clients/plx/Static/bdpocor or (ii) by First-Class Mail, Hand Delivery
or Overnight Mail at the applicable address below, within 35 days of the Effective Date, and shall also serve such proof of claim upon
counsel to the Plan Administrator.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 55 of 75
If by First-Class Mail:
Donlin, Recano & Company, Inc.
Re: PLx Pharma Inc., et al.
P.O. Box 199043
Blythebourne Station
Brooklyn, NY 11219
If by Hand Delivery or Overnight Mail:
Donlin, Recano & Company, Inc.
Re: PLx Pharma Inc., et al.
6201 15th Avenue
Brooklyn, NY 11219
12.2
Rejection Claims. Any Rejection Claims that are not timely Filed pursuant to Section 12.1 of the Plan
may be forever disallowed and barred. If one or more Rejection Claims are timely Filed pursuant to Section 12.1 of the Plan, the Post-Effective
Date Debtors may File an objection to any Rejection Claim on or prior to the Claim Objection Deadline.
ARTICLE XIII
CONFIRMATION AND CONSUMMATION OF THE PLAN
13.1
Conditions to the Occurrence of the Effective Date. The Effective Date shall not occur and the Plan shall
not be consummated unless and until each of the following conditions has been satisfied or duly waived, as applicable, pursuant to Section
13.2 of the Plan:
(a)
the Bankruptcy Court shall have entered the Confirmation Order;
(b)
the Confirmation Order shall not be subject to any stay;
(c)
the Plan Administrator Agreement shall have been executed, and a Plan Administrator shall have been appointed;
(d)
the Professional Fee Reserve shall be funded in Cash pursuant to and in accordance with Section 16.2 of the Plan in an amount to
be reasonably determined by the Debtors or, if there is a dispute concerning the amount of the funding required, in an amount fixed by
the Bankruptcy Court; and
(e)
all actions, documents, and agreements necessary to implement the provisions of the Plan to be effectuated on or prior to the Effective
Date shall be effective or executed and delivered.
13.2
Waiver of Conditions to the Occurrence of the Effective Date. The conditions to the Effective Date set
forth in Section 13.1 of the Plan, other than 13.1(a) of the Plan, may be waived by the Debtors at any time without further Order.
13.3
Effect of Non-Occurrence of Conditions to the Effective Date. If each of the conditions to the Effective
Date is not satisfied or duly waived in accordance with Sections 13.1 and 13.2 of the Plan, the Debtors reserve all rights to seek an
order from the Bankruptcy Court directing that the Confirmation Order be vacated. If the Confirmation Order is vacated pursuant to this
Section 13.3 of the Plan, (i) the Plan shall be null and void in all respects and (ii) nothing contained in the Plan shall (a) constitute
a waiver or release of any Claims or any Interests, or (b) prejudice in any manner the rights of the Debtors, the Estates or any other
Person or Entity.
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ARTICLE XIV
EFFECTS OF CONFIRMATION
14.1
Binding Effect of Plan. Upon the Effective Date, section 1141 of the Bankruptcy Code shall become applicable
with respect to the Plan and the Plan shall be binding on all parties to the fullest extent permitted by section 1141(a) of the Bankruptcy
Code.
14.2
Non-Discharge of the Debtors; Injunction. In accordance with section 1141(d)(3) of the Bankruptcy Code,
the Plan does not discharge the Debtors. Section 1141(c) of the Bankruptcy Code nevertheless provides, among other things, that the property
dealt with by the Plan is free and clear of all Claims and Interests. As such, no Person or Entity holding a Claim or Interest may receive
any payment from, or seek recourse against, any Assets or property of the Debtors and the Estates that are to be distributed under the
Plan other than Assets or property required to be distributed to that Person or Entity under the Plan. As of the Effective Date, all parties
are precluded from asserting against any Assets or property of the Debtors that are to be distributed under the Plan any Claims, rights,
causes of action, liabilities or Interests based upon any act, omission, transaction or other activity that occurred before the Effective
Date except as expressly provided in the Plan or the Confirmation Order.
Except as otherwise expressly
provided in the Plan or the Confirmation Order, and except for any obligations under this Plan or the Confirmation Order, all Person and
Entities (collectively, the “Enjoined Parties”) who have held, hold, or may hold claims, interests, obligations, rights,
suits, damages, causes of action, remedies and liabilities that have been released pursuant to Section 14.3 of the Plan or the Confirmation
Order (the “Released Claims”) or that are subject to exculpation pursuant to Section 14.4 of the Plan or the Confirmation
Order (the “Exculpated Acts”) are permanently enjoined, from and after the Effective Date, from taking any of the following
actions against, as applicable, the Released Parties to the extent released under Section 14.3 of the Plan or the Confirmation Order or
the Exculpated Parties to the extent exculpated under Section 14.4 of the Plan or the Confirmation Order:
(1) commencing or continuing
in any manner any action or other proceeding of any kind on account of, in connection with, or with respect to, any Released Claims or
any Exculpated Acts, as applicable;
(2) enforcing, attaching,
collecting, or recovering, by any manner or means any judgment, award, decree or order against the Released Parties or the Exculpated
Parties, as applicable, on account of, in connection with, or with respect to, any Released Claims or any Exculpated Acts;
(3) creating, perfecting,
or enforcing any encumbrance of any kind against the Released Parties or the Exculpated Parties, as applicable, or their property or assets
on account of, in connection with, or with respect to, any Released Claims or any Exculpated Acts; and
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(4) asserting any right of
subrogation of any kind against any obligation due from the Released Parties or the Exculpated Parties, as applicable, or against their
property or assets on account of, in connection with, or with respect to, any Released Claims or any Exculpated Acts.
For the avoidance of doubt, nothing in this Section
14.2 of the Plan shall enjoin any Enjoined Parties from asserting any right of (i) setoff to the extent that such right of setoff is asserted
in a proof of claim that is timely filed, or deemed to be timely filed by the Court, or by way of a motion filed prior to the confirmation
of the Plan, in the Chapter 11 Cases or (ii) recoupment.
14.3
Releases and Related Matters.
(a)
Releases by Debtors. As of the Effective Date, for good and valuable consideration, including the contributions
of the Released Parties in facilitating the administration of the Chapter 11 Cases and other actions contemplated by the Plan and the
other contracts, instruments, releases, agreements or documents executed and delivered in connection with the Plan and the Chapter 11
Cases, the Released Parties are deemed forever released by the Debtors and the Estates, and anyone claiming by or through the Debtors
and the Estates, from any and all claims, interests, obligations, rights, suits, damages, causes of action (including any and all causes
of action under chapter 5 of the Bankruptcy Code), remedies and liabilities whatsoever, including any derivative claims or claims asserted
or assertible on behalf of the Debtors and the Estates, whether known or unknown, foreseen or unforeseen, liquidated or unliquidated,
fixed or contingent, matured or unmatured, existing or hereinafter arising, in law, equity or otherwise, that the Debtors or the Estates
would have been legally entitled to assert in their own right or which any Holder of any Claim or Interest would have been legally entitled
to assert, by, through or on behalf of the Debtors, based in whole or in part on any act, omission, transaction, event or other occurrence
taking place on or prior to the Effective Date, including in any way relating to the Debtors, the Estates, the Chapter 11 Cases, the Plan,
the Disclosure Statement or related agreements, instruments or other documents in the Chapter 11 Cases, except for any such act, omission,
transaction, event or other occurrence that is determined in a Final Order of the Bankruptcy Court to have constituted a criminal act,
actual fraud, gross negligence or willful misconduct.
(b)
Releases by Holders of Claims. As of the Effective Date, for good and valuable consideration, including the
contributions of the Released Parties in facilitating the administration of the Chapter 11 Cases and other actions contemplated by the
Plan and the other contracts, instruments, releases, agreements or documents executed and delivered in connection with the Plan and the
Chapter 11 Cases, each of the Releasing Parties shall be deemed to have conclusively, absolutely, unconditionally, irrevocably and forever,
released the Released Parties from any and all claims, interests, obligations, rights, suits, damages, causes of action (including any
and all causes of action under chapter 5 of the Bankruptcy Code), remedies and liabilities whatsoever, whether known or unknown, foreseen
or unforeseen, liquidated or unliquidated, fixed or contingent, matured or unmatured, existing or hereafter arising, in law, equity or
otherwise, that such Releasing Party would have been legally entitled to assert (whether individually or collectively), based in whole
or in part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date, including in any
way relating to the Debtors, the Estates, the Chapter 11 Cases, the Plan, the Disclosure Statement or related agreements, instruments
or other documents; provided, however, that nothing herein shall be deemed a waiver or release of any right of any such Releasing
Parties to receive a Distribution pursuant to the terms of the Plan; provided further, however, that the foregoing provisions of
this release in Section 14.3(b) of the Plan shall not operate to waive, release or otherwise impair any such claims, interests, obligations,
rights, suits, damages, causes of action, remedies and liabilities arising from criminal acts, willful misconduct, actual fraud, or gross
negligence of such applicable Released Party as determined by Final Order of the Bankruptcy Court. For the avoidance of doubt, notwithstanding
anything to the contrary herein, the foregoing release by the Releasing Parties is not, and shall not be deemed to be, in exchange for
a waiver of the Debtors’ rights or claims against the Releasing Parties, including the Debtors’ rights to assert setoffs,
recoupments or counterclaims, or to object or assert defenses to any Claim or Interest, and all such rights and claims are expressly reserved.
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(c)
Section 1542 of the Civil Code of the State of California provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT,
IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
Each Person and Entity deemed to grant a release
under Section 14.3(b) of the Plan shall be deemed to have granted such release notwithstanding Section 1542 of the Civil Code of the State
of California and any similar statute, and shall be deemed to have voluntarily waived the rights described in Section 1542 of the Civil
Code of the State of California and any similar statute, if such Person or Entity timely submits a Release Opt-In indicating such Holder’s
decision to participate in the releases set forth in Section 14.3(b) of the Plan.
14.4
Exculpation and Limitation of Liability. On the Effective Date, to the maximum extent permitted by law,
none of the Exculpated Parties shall have or incur any liability to any Person or Entity, including, without limitation, to the Debtors
or any Holder of a Claim or an Interest, for any act taken or omitted to be taken on or after the Petition Date and prior to or on the
Effective Date in connection with, relating to, or arising out of the Chapter 11 Cases, the formulation, negotiation, preparation, dissemination,
solicitation of acceptances, implementation, confirmation or consummation of the Stalking Horse APA, the Sale Order, the Plan, the Disclosure
Statement, the Plan Administrator Agreement or any contract, instrument, release or other agreement or document created, executed or contemplated
in connection with the Plan, or the administration of the Plan, or the Assets and property to be distributed under the Plan; provided,
however, that the exculpation provisions of this Section 14.4 shall not apply to acts or omissions constituting actual fraud, willful
misconduct or gross negligence by such Exculpated Party, as determined by a Final Order. The Confirmation Order and the Plan shall serve
as a permanent injunction against any Person or Entity seeking to enforce any claim, cause of action or other liability against the Exculpated
Parties that has been exculpated pursuant to this Section 14.4 of the Plan.
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14.5
Term of Injunctions or Stays. Unless otherwise provided herein or in the Confirmation Order, all injunctions
or stays provided for in the Chapter 11 Cases under sections 105 or 362 of the Bankruptcy Code or otherwise, and extant on the Confirmation
Date (including any injunctions or stays contained in or arising from the Plan or the Confirmation Order), shall remain in full force
and effect.
ARTICLE XV
RETENTION OF JURISDICTION
15.1
Scope of Retained Jurisdiction. Under sections 105(a) and 1142 of the Bankruptcy Code, and notwithstanding
entry of the Confirmation Order and occurrence of the Effective Date, and except as otherwise ordered by the Bankruptcy Court, the Bankruptcy
Court shall retain jurisdiction over all matters arising out of, or related to, the Chapter 11 Cases and the Plan to the fullest extent
permitted by law, including, among other things, jurisdiction to do the following:
(a)
allow, disallow, determine, liquidate, classify, estimate or establish the priority, secured or unsecured status of any Claim or
Interest not otherwise Allowed under the Plan, including the resolution of any request for payment of any Administrative Claim and the
resolution of any objections to the allowance or priority of Claims or Interests;
(b)
hear and determine all applications for compensation and reimbursement of expenses of Professionals under the Plan or under sections
327, 328, 330, 331, 503(b), 1103 and 1129(a)(4) of the Bankruptcy Code;
(c)
hear and determine all matters with respect to the assumption, assignment or rejection of any executory contract or unexpired lease
to which the Debtors are a party or with respect to which the Debtors may be liable, including, if necessary, the nature or amount of
any required cure or the liquidation or allowance of any Claims arising therefrom;
(d)
effectuate performance of and payments under the provisions of the Plan and any agreement or order of the Bankruptcy Court with
respect to the sale of the Debtors’ Assets prior to the Effective Date and enforce remedies upon any default under the Plan and
any such sale agreement or order;
(e)
hear and determine any and all adversary proceedings, motions, applications and contested or litigated matters that are pending
as of the Effective Date, that are arising out of, under or related to, the Chapter 11 Cases, including, without limitation, the Retained
Causes of Action;
(f)
enter such orders as may be necessary or appropriate to execute, implement or consummate the provisions of the Plan and all contracts,
instruments, releases and other agreements or documents created, executed or contemplated in connection with the Plan, the Disclosure
Statement or the Confirmation Order;
(g)
hear and determine disputes arising in connection with the interpretation, implementation, consummation, or enforcement of the
Plan, including disputes arising under agreements, documents or instruments executed in connection with the Plan;
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(h)
consider any modifications of the Plan, cure any defect or omission, or reconcile any inconsistency in any Order of the Bankruptcy
Court, including, without limitation, the Confirmation Order;
(i)
issue injunctions, enter and implement other Orders or take such other actions as may be necessary or appropriate to restrain interference
by any Entity with the implementation, consummation or enforcement of the Plan or the Confirmation Order;
(j)
enter and implement such Orders as may be necessary or appropriate if the Confirmation Order is for any reason reversed, stayed,
revoked, modified or vacated;
(k)
hear and determine any matters arising in connection with or relating to the Plan, the Plan Supplement, the Disclosure Statement,
the Confirmation Order, any agreement or Final Order of the Bankruptcy Court, or any contract, instrument, release or other agreement
or document created, executed or contemplated in connection with any of the foregoing documents and Orders;
(l)
enforce, interpret and determine any disputes arising in connection with any stipulations, orders, judgments, injunctions, releases,
exculpations, indemnifications and rulings entered in connection with the Chapter 11 Cases;
(m)
except as otherwise limited herein, recover all Assets of the Debtors, wherever located;
(n)
hear and determine matters concerning state, local and federal taxes in accordance with sections 346, 505 and 1146 of the Bankruptcy
Code;
(o)
hear and determine such other matters as may be provided in the Confirmation Order or as may be authorized under, or not inconsistent
with, provisions of the Bankruptcy Code;
(p)
resolve any cases, controversies, suits or disputes related to the Estates, including, but not limited to, the Debtors’ Assets;
and
(q)
enter a final decree closing the Chapter 11 Cases.
15.2
Failure of the Bankruptcy Court to Exercise Jurisdiction. If the Bankruptcy Court abstains from exercising,
or declines to exercise, jurisdiction or is otherwise without jurisdiction over any matter arising in, arising under, or related to the
Chapter 11 Cases, including the matters set forth in Section 15.1 of the Plan, the provisions of this Article XV shall have no effect
upon and shall not control, prohibit or limit the exercise of jurisdiction by any other court having jurisdiction with respect to such
matter.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
16.1
Administrative Claims Bar Date. All requests for payment of an Administrative Claim (other than
a Section 503(b)(9) Claim) that arose or accrued after the date on which the Solicitation Procedures Order was entered must be Filed with
the Bankruptcy Court and served on counsel to the Plan Administrator and counsel to the Post-Effective Date Debtors no later than 30 days
after the Effective Date. The Debtors shall provide notice of such deadline in the notice of Effective Date filed and served by
the Debtors. In the event of an objection to allowance of an Administrative Claim, the Bankruptcy Court shall determine the Allowed amount
of such Administrative Claim.
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16.2
Professional Fee Claims.
(a)
All final requests for payment of Professional Fee Claims pursuant to sections 327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy
Code must be made by application Filed with the Bankruptcy Court and served on counsel to the Plan Administrator, counsel to the Post-Effective
Date Debtors and counsel to the U.S. Trustee no later than 21 days after the Effective Date, unless otherwise ordered by the Bankruptcy
Court. The Debtors shall provide notice of such deadline in the notice of Effective Date filed and served by the Debtors. Objections to
such applications must be Filed and served on counsel to the Plan Administrator, counsel to the Post-Effective Date Debtors, counsel to
the U.S. Trustee and the requesting Professional on or before the date that is fourteen (14) days after the date on which the applicable
application was served.
(b)
All Professional Fee Claims shall be paid by the Estates to the extent approved by Order of the Bankruptcy Court within three (3)
Business Days from entry of such Order.
(c)
On or before the Effective Date, the Debtors shall establish the Professional Fee Reserve, which shall only be used to pay Professional
Fee Claims, unless and until all Professional Fee Claims have been paid in full, otherwise satisfied or withdrawn. The Professional Fee
Reserve shall vest in the Estates and shall be maintained by the Post-Effective Date Debtors in accordance with the Plan and the Plan
Administrator Agreement. The Estates shall fund the Professional Fee Reserve on the Effective Date in an amount that is reasonably determined
by the Debtors and that approximates, as of the Effective Date, the total projected amount of unpaid Professional Fee Claims. Any excess
funds in the Professional Fee Reserve shall be released back to the Estates to be used for other purposes consistent with the Plan and
the Plan Administrator Agreement.
16.3
Payment of Statutory Fees; Filing of Quarterly Reports. All fees payable pursuant to section 1930 of title
28 of the United States Code prior to the Effective Date, together with the statutory rate of interest set forth in section 3717 of Title
31 of the U.S. Code to the extent applicable (“Quarterly Fees”), shall be paid on or before the Effective Date. All
Quarterly Fees that arise after the Effective Date shall be paid when due and payable. The Debtors shall file with the Bankruptcy Court
all monthly operating reports due prior to the Effective Date when they become due, using UST Form 11-MOR. After the Effective Date, each
of the Post-Effective Date Debtors shall file with the Bankruptcy Court separate UST Form 11-PCR reports when they become due. Notwithstanding
the substantive consolidation of the Debtors provided for in the Plan, each and every one of the Estates, the Post-Effective Date Debtors
and the Plan Administrator shall have the obligation to pay Quarterly Fees to the Office of the United States Trustee pursuant to section
1930 of title 28 of the United States Code until the earlier of that particular Debtor’s Chapter 11 Case being closed, dismissed
or converted to a case under chapter 7 of the Bankruptcy Code. Notwithstanding anything to the contrary in the Plan, the U.S. Trustee
shall not be required to file any proofs of claims or administrative claims with respect to Quarterly Fees payable pursuant to section
1930 of title 28 of the United States Code, and shall not be treated as providing any releases under the Plan.
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16.4
Modifications and Amendments.
(a)
The Debtors may alter, amend or modify the Plan under section 1127(a) of the Bankruptcy Code at any time prior to the Confirmation
Date. All alterations, amendments or modifications to the Plan must comply with section 1127 of the Bankruptcy Code. The Debtors shall
provide parties in interest with notice of such amendments or modifications as may be required by the Bankruptcy Rules or Order of the
Bankruptcy Court. A Holder of a Claim that has accepted the Plan shall be deemed to have accepted the Plan, as altered, amended, modified
or clarified, if the proposed alteration, amendment, modification or clarification does not materially and adversely change the treatment
of the Claim of such Holder.
(b)
After the Confirmation Date and prior to substantial consummation (as defined in section 1101(2) of the Bankruptcy Code) of the
Plan, the Debtors or the Post-Effective Date Debtors, as applicable, may, under section 1127(b) of the Bankruptcy Code, institute proceedings
in the Bankruptcy Court to remedy any defect or omission or to reconcile any inconsistencies in the Plan, the Disclosure Statement approved
with respect to the Plan or the Confirmation Order, and such matters as may be necessary to carry out the purpose and effect of the Plan.
Such proceedings must comply with section 1127 of the Bankruptcy Code. To the extent required, prior notice of such proceedings shall
be served in accordance with the Bankruptcy Rules or an order of the Bankruptcy Court. A Holder of a Claim that has accepted the Plan
shall be deemed to have accepted the Plan, as altered, amended, modified or clarified, if the proposed alteration, amendment, modification
or clarification does not materially and adversely change the treatment of the Claim of such Holder.
16.5
Severability of Plan Provisions. If, prior to Confirmation, any term or provision of the Plan is held
by the Bankruptcy Court to be invalid, void or unenforceable, the Bankruptcy Court, at the request of the Debtors, shall have the power
to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original
purpose of the term or provision held to be invalid, void or unenforceable, and such term or provision shall then be applicable as altered
or interpreted. Notwithstanding any such holding, alteration, or interpretation, the remainder of the terms and provisions of the Plan
shall remain in full force and effect and shall in no way be affected, impaired or invalidated by such holding, alteration or interpretation.
The Confirmation Order shall constitute a judicial determination and shall provide that each term and provision of the Plan, as it may
have been altered or interpreted, is valid and enforceable pursuant to its terms.
16.6
Successors and Assigns. The rights, benefits and obligations of any Person or Entity named or referred
to in the Plan shall be binding on, and shall inure to the benefit of, any heir, executor, administrator, personal representative, successor
or assign of such Person or Entity.
16.7
Post-Effective Date Compromises and Settlements. From and after the Effective Date, the Post-Effective
Date Debtors may compromise and settle Claims or Interests the Debtors and the Estates, as well as the Retained Causes of Action, without
any further approval by or notice to the Bankruptcy Court; provided, however, to the extent that the foregoing conflicts with the Bid
Procedures Order or the Sale Order, as applicable, the terms and conditions of the Bid Procedures Order or the Sale Order, as applicable,
shall control and govern.
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16.8
Revocation, Withdrawal or Non-Consummation. The Debtors reserve the right to revoke or withdraw the Plan
at any time prior to the Confirmation Date and to file subsequent chapter 11 plans. If the Debtors revoke or withdraw the Plan prior to
the Confirmation Date, or if Confirmation or the Effective Date does not occur, then (a) the Plan shall be null and void in all respects;
(b) any settlement or compromise embodied in the Plan (including the fixing or limiting to an amount certain any Claim or Class of Claims)
and any document or agreement executed pursuant to the Plan shall be deemed null and void; and (c) nothing contained in the Plan, and
no acts taken in preparation for consummation of the Plan, shall (i) constitute or be deemed to constitute a waiver or release of any
Claims or Interests or any Retained Causes of Action or other claims by or against the Debtors or any Person or Entity, (ii) prejudice
in any manner the rights of any Debtors or any Person or Entity in any further proceedings involving the Debtors or (iii) constitute an
admission of any sort by the Debtors or any other Person or Entity.
16.9
Computation of Time. In computing any period of time prescribed or allowed by the Plan, the provisions
of Rule 9006(a) of the Bankruptcy Rules shall apply.
16.10
Headings. The headings of articles, paragraphs and subparagraphs of the Plan are inserted for convenience
only and shall not affect the interpretation of any provision of the Plan.
16.11
Governing Law. Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy
Code and Bankruptcy Rules), and except as otherwise provide herein, the laws of the State of Delaware shall govern (a) the construction
and implementation of the Plan and (except as may be provided otherwise in any such agreements, documents or instruments) any agreements,
documents and instruments executed in connection with the Plan and (b) corporate governance matters with respect to the Debtors, in each
case without giving effect to the principles of conflicts of law thereof.
16.12
Preservation of Retained Causes of Action.
16.12.1 Vesting
of Causes of Action.
(a)
Except as otherwise provided in the Plan or Confirmation Order, in accordance with section 1123(b)(3) of the Bankruptcy Code, any
Retained Causes of Action that the Debtors may hold against any Person or Entity shall vest upon the Effective Date in the Post-Effective
Date Debtors.
(b)
Except as otherwise provided in the Plan or Confirmation Order, after the Effective Date, the Post-Effective Date Debtors shall
have the exclusive right to institute, prosecute, abandon, settle or compromise any Retained Causes of Action, in accordance with the
terms of the Plan and the Plan Administrator Agreement and without further order of or notice to the Bankruptcy Court, in any court or
other tribunal, including, without limitation, in an adversary proceeding filed in the Chapter 11 Cases.
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16.12.2
Reservation of Causes of Action. Unless a Retained Cause of Action against a Holder or other Person or
Entity is expressly waived, relinquished, released, compromised or settled in the Plan, the Confirmation Order or any Final Order, the
Debtors, the Estates and the Post-Effective Date Debtors expressly reserve such Retained Cause of Action for later adjudication by the
Post-Effective Date Debtors, including, without limitation, Retained Causes of Action of which the Debtor may presently be unaware or
which may arise or exist by reason of additional facts or circumstances unknown to the Debtors at this time or facts or circumstances
that may change or be different from those the Debtors now believe to exist. Therefore, no preclusion doctrine, including, without limitation,
the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, waiver, estoppel (judicial, equitable or otherwise),
laches or the like, shall apply to such Retained Causes of Action upon or after the entry of the Confirmation Order or Effective Date
based on the Disclosure Statement, Plan, or Confirmation Order, except where such Retained Causes of Action have been expressly waived,
relinquished, released, compromised or settled in the Plan, the Confirmation Order, a Final Order of the Bankruptcy Court or, following
the Effective Date, in a written agreement duly executed by the Post-Effective Date Debtors which agreement, by its terms, is not subject
to Bankruptcy Court approval.
16.13
Bar Date Order. Nothing herein extends or otherwise modifies a bar date established in the Bar Date Order
or other Final Order of the Bankruptcy Court.
16.14
Section 1146 Exemption. Pursuant to section 1146(a) of the Bankruptcy Code, the issuance, transfer or
exchange of any security under the Plan or the making or delivery of any instrument of transfer pursuant to, in implementation of, or
as contemplated by the Plan, or the re- vesting, transfer or sale of any real or personal property of the Debtors pursuant to, in implementation
of, or as contemplated by the Plan, shall not be taxed under any state or local law imposing a stamp tax, transfer tax or any similar
tax or fee.
16.15
Conflicts with the Plan. In the event and to the extent that any provision of the Plan is inconsistent
with the provisions of the Disclosure Statement and any other Order in the Chapter 11 Cases (except for the Bid Procedures Order and the
Sale Order), or any other agreement to be executed by any Person pursuant to the Plan, the provisions of the Plan shall control and take
precedence; provided, however, that the Confirmation Order shall control and take precedence in the event of any inconsistency
between the Confirmation Order, any provision of the Plan, and any of the foregoing documents. To the extent that the Confirmation Order
conflicts with the terms of the Bid Procedures Order or the Sale Order, as applicable, the terms and conditions of the Bid Procedures
Order or the Sale Order, as applicable, shall control and govern.
16.16
No Stay of Confirmation Order. The Debtors will request that the Bankruptcy Court waive any stay of enforcement
of the Confirmation Order otherwise applicable, including, without limitation, pursuant to Bankruptcy Rules 3020(e), 6004(h) and 7062.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 65 of 75
| Dated: July 26, 2023 |
|
| |
PLx Pharma Winddown Corp. et al. |
| |
|
| |
/s/ Lawrence Perkins |
| |
Name: |
Lawrence Perkins |
|
| |
Title: |
Chief Restructuring Officer |
|
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 66 of 75
EXHIBIT
B
Liquidation
Analysis
Case 23-10456-MFW Doc 279-1
Filed 09/14/23 Page 67 of 75
PLx
Pharma Winddown Corp. & PLx Opco Winddown Corp.
Liquidation
Analysis
$
in 000's
| Assumed Effective Date |
9/15/2023 |
|
|
|
|
|
|
| |
|
|
|
|
|
Chapter
11 Plan Confirmation Scenario |
|
|
|
Chapter
7 Liquidation Scenario |
| |
|
|
|
|
|
Low
Recovery Scenario |
|
High
Recovery Scenario |
|
|
|
Low
Recovery Scenario |
|
High
Recovery Scenario |
| |
|
|
|
|
|
|
|
|
|
|
|
%
of Adj. |
|
|
|
|
|
%
of Adj. |
|
|
|
%
of Adj. |
| |
|
|
|
Adj.
Book |
|
Estimated
|
|
%
of Book |
|
Estimated
|
|
Book |
|
Adj.
Book |
|
Estimated |
|
Book |
|
Estimated |
|
Book |
| |
Asset
Recovery |
Item
# |
|
Value |
|
Value |
|
Value |
|
Value |
|
Value |
|
Value |
|
Value |
|
Value |
|
Value |
|
Value |
| A |
Asset Proceeds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Cash |
1 |
|
6,467 |
|
6,467 |
|
100% |
|
6,467 |
|
100% |
|
6,467 |
|
6,467 |
|
100% |
|
6,467 |
|
100% |
| |
Accounts Receivable |
2 |
|
- |
|
- |
|
0% |
|
- |
|
0% |
|
- |
|
- |
|
100% |
|
- |
|
100% |
| |
Vendor Deposits |
3 |
|
- |
|
- |
|
0% |
|
- |
|
0% |
|
- |
|
- |
|
0% |
|
- |
|
0% |
| |
Prepaid Expenses |
4 |
|
571 |
|
240 |
|
42% |
|
257 |
|
45% |
|
571 |
|
240 |
|
42% |
|
257 |
|
45% |
| |
Short-Term Security Deposits |
5 |
|
17 |
|
- |
|
0% |
|
- |
|
0% |
|
17 |
|
- |
|
0% |
|
- |
|
0% |
| |
Total Asset Proceeds |
|
|
7,055 |
|
6,706 |
|
95% |
|
6,724 |
|
95% |
|
7,055 |
|
6,706 |
|
95% |
|
6,724 |
|
95% |
| |
|
| B |
Liquidation Fees and
Costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Operating Costs |
6 |
|
|
|
150 |
|
|
|
150 |
|
|
|
|
|
300 |
|
|
|
300 |
|
|
| |
Professional, Legal,
and Liquidation Related Fees |
7 |
|
|
|
500 |
|
|
|
500 |
|
|
|
|
|
914 |
|
|
|
914 |
|
|
| |
Total Liquidation
Fees and Costs |
|
|
|
|
650 |
|
|
|
650 |
|
|
|
|
|
1,214 |
|
|
|
1,214 |
|
|
| |
|
| Net Estimate Proceeds Available for Administrative and Priority Claims |
|
|
|
6,056 |
|
|
|
6,074 |
|
|
|
|
|
5,492 |
|
|
|
5,509 |
|
|
| |
|
| |
|
|
|
Estimated |
|
Estimate
|
|
Recovery |
|
Estimate |
|
Recovery |
|
Estimated |
|
Estimate |
|
Recovery |
|
Estimate
|
|
Recovery |
| |
|
|
|
Allowed |
|
Payable
to |
|
Estimate |
|
Payable
to |
|
Estimate |
|
Allowed |
|
Payable
to |
|
Estimate |
|
Payable
to |
|
Estimate |
| |
Recovery
to Creditors |
Item
# |
|
Claim |
|
Creditors |
|
% |
|
Creditors |
|
% |
|
Claim |
|
Creditors |
|
% |
|
Creditors |
|
% |
| C |
Administrative and
Priority Claims |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
503(b)9 Claims |
8 |
|
- |
|
- |
|
0% |
|
- |
|
0% |
|
- |
|
- |
|
0% |
|
- |
|
0% |
| |
Accrued Payroll and PTO |
9 |
|
- |
|
- |
|
0% |
|
- |
|
0% |
|
- |
|
- |
|
0% |
|
- |
|
0% |
| |
Administrative Claims |
10 |
|
182 |
|
182 |
|
100% |
|
182 |
|
100% |
|
182 |
|
182 |
|
100% |
|
182 |
|
100% |
| |
Priority Unsecured Claims |
11 |
|
- |
|
- |
|
0% |
|
- |
|
0% |
|
- |
|
- |
|
0% |
|
- |
|
0% |
| |
Total Administrative
and Priority Claims |
|
|
182 |
|
182 |
|
100% |
|
182 |
|
100% |
|
182 |
|
182 |
|
100% |
|
182 |
|
100% |
| |
|
| Net Estimate Proceeds Available for General Unsecured Claims |
|
|
|
5,874 |
|
|
|
5,891 |
|
|
|
|
|
5,310 |
|
|
|
5,327 |
|
|
| |
|
| D |
General Unsecured
Claims |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
General Unsecured Claims |
12 |
|
11,907 |
|
5,874 |
|
49% |
|
5,891 |
|
49% |
|
11,747 |
|
5,310 |
|
45% |
|
5,327 |
|
45% |
| |
Total General Unsecured
Claims |
|
|
11,907 |
|
5,874 |
|
49% |
|
5,891 |
|
49% |
|
|
|
5,310 |
|
45% |
|
5,327 |
|
45% |
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 68 of 75
Notes to the Liquidation Analysis
OVERVIEW
Under the “best
interests” of creditors test set forth by section 1129(a)(7) of the Bankruptcy Code,1
the Bankruptcy Court may not confirm a plan of reorganization unless the plan provides each holder of a claim or interest who does not
otherwise vote in favor of the plan with property of a value, as of the effective date of the plan (the “Effective Date”),
that is not less than the amount that such holder would receive or retain if the debtors were liquidated under chapter 7 of the Bankruptcy
Code. See 11 U.S.C. § 1129(a)(7). Accordingly, to demonstrate that the Plan satisfies the “best interests” of
creditors test, the Debtors prepared a hypothetical liquidation analysis (the “Liquidation Analysis”) presenting creditor
recoveries available assuming a hypothetical liquidation occurring on an assumed Effective Date of September 15, 2023 (the “Assumed
Effective Date”).
The Liquidation
Analysis presents information based on, among other things, the Debtors’ books and records and good faith estimates regarding asset
recoveries and Allowed claims resulting from a hypothetical liquidation undertaken under chapter 7 of the Bankruptcy Code as of the Assumed
Effective Date. The Liquidation Analysis has not been examined or reviewed by independent accountants in accordance with standards promulgated
by the American Institute of Certified Public Accountants. Although the Debtors consider the estimates and assumptions set forth herein
to be reasonable under the circumstances, such estimates and assumptions are inherently subject to significant uncertainties and contingencies
beyond the Debtors’ control. Accordingly, there can be no assurance that the results set forth by the Liquidation Analysis will
be realized if the Debtors liquidated. Actual results could vary materially from those presented herein, and distributions available
to Holders of Allowed Claims could differ materially from the Liquidation Analysis.
THE LIQUIDATION
ANALYSIS IS A HYPOTHETICAL EXERCISE THAT HAS BEEN PREPARED FOR THE SOLE PURPOSE OF PRESENTING A REASONABLE, GOOD FAITH ESTIMATE OF THE
PROCEEDS THAT WOULD BE REALIZED IF THE DEBTORS LIQUIDATED IN ACCORDANCE WITH CHAPTER 7 OF THE BANKRUPTCY CODE AS OF THE ASSUMED EFFECTIVE
DATE. THE LIQUIDATION ANALYSIS IS NOT INTENDED AND SHOULD NOT BE USED FOR ANY OTHER PURPOSE. THE LIQUIDATION ANALYSIS DOES NOT PURPORT
TO BE A VALUATION OF THE DEBTORS’ ASSETS AS A GOING CONCERN, AND THERE MAY BE A SIGNIFICANT DIFFERENCE BETWEEN THE LIQUIDATION
ANALYSIS AND THE VALUES THAT MAY BE REALIZED OR CLAIMS GENERATED.
NOTHING CONTAINED
IN THE LIQUIDATION ANALYSIS IS INTENDED TO BE, OR CONSTITUTES, A CONCESSION, ADMISSION, OR ALLOWANCE OF ANY CLAIM BY THE DEBTORS. THE
ACTUAL AMOUNT OR PRIORITY OF ALLOWED CLAIMS COULD
_________________________
1
Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to such terms in the Debtors’ Combined
Disclosure Statement and Joint Chapter 11 Plan of Liquidation (as may be amended, modified, or supplemented).
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 69 of 75
MATERIALLY DIFFER
FROM THE ESTIMATED AMOUNTS SET FORTH AND USED IN THE LIQUIDATION ANALYSIS. THE DEBTORS RESERVE ALL RIGHTS TO SUPPLEMENT, MODIFY, OR AMEND
THE ANALYSIS SET FORTH HEREIN.
BASIS OF
PRESENTATION
The Debtors
generally prepare financial statements for financial reporting purposes. The Liquidation Analysis was prepared as if the assets and liabilities
of the Debtors’ Estates were resolved in a manner consistent with the terms of the Plan, including, without limitation, the substantive
consolidation of the Debtors’ Estates as provided for therein, as discussed in the Disclosure Statement.
The Liquidation
Analysis was prepared shortly after the general bar date in the Chapter 11 Cases. Therefore, certain Claims might not have been fully
evaluated by the Debtors or adjudicated by the Bankruptcy Court and, accordingly, the final amount of Allowed Claims against the Debtors’
Estates may materially differ from the amounts used in the Liquidation Analysis.
The Liquidation
Analysis is based on estimated asset and liability values as of the Assumed Effective Date (except where indicated below). However, and
as noted above, the actual amount of assets available to the Debtors’ Estates and Allowed Claims may differ from the amounts pursuant
to the Liquidation Analysis.
The Liquidation
Analysis details two separate liquidation scenarios: Confirmation of the Chapter 11 Plan (the “Chapter 11 Plan Scenario”);
and conversion to a chapter 7 liquidation (the “Chapter 7 Liquidation Scenario”). Each scenario also shows two possible
scenarios for recovery of asset values. The low recovery scenarios (the “Low Recovery Scenarios”) show the possible
recovery for various Classes of creditors where the assets of the Debtors are liquidated for proceeds at the lower end of the expected
range of recoveries. The high recovery scenarios (the “High Recovery Scenarios”) detail the expected liquidation value
of assets at the higher end of the expected range of recoveries.
As noted above,
the Chapter 11 Plan Scenario assumes substantive consolidation of the Debtors’ Estates as provided for in the Plan. In the Chapter
7 Liquidation Scenario substantive consolidation might not occur; however, the Debtors do not believe this would materially change recoveries.
CURRENT VALUES
Unless otherwise
noted, the Liquidation Analysis is based on asset balances as of May 31, 2023, adjusted to reflect actual and anticipated subsequent
activity. The Debtors believe that the adjusted May 31, 2023 balance sheet (the “Balance Sheet”) is a reasonable proxy
for a pro forma balance sheet with respect to most asset line items as of the Assumed Effective Date. Adjustments made to the
Balance Sheet to reasonably reflect forecasted asset balances as of the Assumed Effective Date are summarized herein.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 70 of 75
LIQUIDATION
ACTIVITIES & WINDDOWN PERIOD
Because the
Debtors no longer have any business operations and substantially all of their assets have been sold pursuant to the Stalking Horse APA
and the Sale Order, the main objective of the Plan Administrator (in the Chapter 11 Plan Scenario) or the appointed chapter 7 trustee
(in the Chapter 7 Liquidation Scenario) is to maximize and preserve the Debtors’ remaining assets for distribution to the Holders
of Allowed Claims in accordance with the Plan and priority scheme of the Bankruptcy Code, as applicable.
The Liquidation
Analysis assumes that the winddown would occur over an estimated period of three to six months during which, among other things, final
tax returns would be filed, necessary or otherwise appropriate reports and schedules would be filed with the Bankruptcy Court, and any
remaining non-cash assets would be monetized or abandoned.
COMPONENTS
OF LIQUIDATION MODEL
The Debtors’
estimated cash balance as of the Assumed Effective Date is $6.467 million per the Debtors’ most recent cash flow forecast as of
the filing of the Liquidation Analysis. The estimated cash balance as of the Assumed Effective Date assumes that all professional fees
and quarterly United States Trustee fees that have been accrued prior to the Assumed Effective Date are paid prior to such date. To the
extent any such fees are not in fact paid prior to the Assumed Effective Date, they would be paid under the Plan in the Chapter 11 Plan
Scenario (which would have no effect on the estimated cash balance since such balance is assumed to be net of such fees) or asserted
as claims in the chapter 7 case in the Chapter 7 Liquidation Scenario (which would result in a greater estimated cash balance). In the
Chapter 7 Liquidation Scenario, the estimated recovery on the cash balance is 100%.
The Debtors’
estimated accounts receivable as of the Assumed Effective Date is $0. The $6,221 in accounts receivable on the Balance Sheet is a balance
due from a vendor that was not an acquired asset under the Stalking Horse APA. This amount is assumed to be collected before the Assumed
Effective Date, thereby zeroing out the Debtors’ accounts receivable.
The Debtors’
estimated vendor deposits as of the Assumed Effective Date is $0. The $4,154 of vendor deposits on the Balance Sheet is a deposit held
by a vendor in connection with the Debtors’ customer programs. This amount is assumed to be offset by post-petition invoices incurred
before the Assumed Effective Date, resulting in no further vendor deposits.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 71 of 75
The
Debtors’ estimated book balance of prepaid expenses as of the Assumed Effective Date is $571K which is primarily comprised of
prepaid insurance premiums, professional fee retainers, and other miscellaneous prepayments. In the Chapter 7 Liquidation Scenario,
little recovery from prepaid expenses is expected other than potentially retainers. It is likely that in the Chapter 11 Plan
Scenario and the Chapter 7 Liquidation Scenario certain insurance policies will need to be continued for some time, thus exhausting
any prepayment of insurance premiums that may have existed as of the Assumed Effective Date. Thus, a recovery of 42% and 45% on the
Debtors’ prepaid expenses is assumed in the Low Recovery Scenarios and High Recovery Scenarios, respectively, primarily
consisting of the return of professional fee retainers.
| 5. | Short-Term Security Deposits |
The Debtor’s
estimated short-term security deposits as of the Assumed Effective Date is $17,036. Such deposits are held by the landlord for the Debtors’
headquarters lease. In the Chapter 11 Plan Scenario and the Chapter 7 Liquidation Scenario the lease will be rejected and be applied
by the landlord against its rejection damages claim. The expected recovery on short-term security deposits is therefore assumed to be
0% in both the Low Recovery Scenarios and High Recovery Scenarios.
The Debtor’s
estimated ongoing costs beginning on the Assumed Effective Date will be dependent on the appropriate liquidation scenario. Under the
Chapter 11 Plan Scenario, the total operating costs are estimated to be $150,000, primarily comprised of insurance expense and other
essential services totaling approximately $50,000 per month for three months. Under the Chapter 7 Liquidation Scenario, operating costs
are assumed to be $300,000 for the duration of the liquidation, primarily comprised of insurance expense and other essential services
totaling approximately $50,000 per month for six months.
| 7. | Professional, Legal, and Liquidation Related Fees |
Under
the Chapter 11 Plan Scenario, professional fees are estimated to total approximately $500,000, which primarily includes fees for the
plan administrator, legal, finance, accounting and tax related professionals, as necessary.
Under
the Chapter 7 Liquidation Scenario, professional and other liquidation related fees are estimated to total approximately $914,000. Chapter
7 trustee fees of 2.0% are assumed on gross liquidation proceeds. Professional fees are estimated to be $130,000 per month, comprised
of $75,000 for legal, $25,000 for accounting support, and $30,000 for other professional services.
Under the Bar
Date Order, the deadline to file an administrative expense claim pursuant to section 503(b)(9) of the Bankruptcy Code (“503(b)(9)
Claims”) is June 26, 2023. Based on a review of the claims filed to date, the Debtors do not believe there are any claims filed
to date that will ultimately be Allowed with administrative priority pursuant to section 503(b)(9). To date, one creditor has asserted
such a claim.
Case 23-10456-MFW Doc 279-1
Filed 09/14/23 Page 72 of 75
| 9. | Accrued Payroll and PTO |
All remaining
employees of the Debtors were terminated prior to the Assumed Effective Date on or before June 30, 2023. As a result, the Debtors’
estimated accrued payroll and paid time off as of the Assumed Effective Date is $0.
The Debtors’
estimated Allowed Administrative Claims as of the Assumed Effective Date is assumed to be no greater than $182,113. These amounts include
anticipated expenses incurred related to certain contractual obligations prior to their effective date of rejection, including storage
fees.
| 11. | Priority Unsecured Claims |
The Debtors’
estimated Allowed Priority Tax Claims and Priority Non-Tax Claims as of the Assumed Effective Date are $0. At present, the priority claims
filed are not believed to be valid.
| 12. | General Unsecured Claims |
Allowed General
Unsecured Claims are estimated to be no greater than $11.907 million. As set forth, more fully in the Disclosure Statement, this estimate
is based on certain assumptions regarding the outcome of the Debtors’ anticipated claim objections and may change significantly
based on the actual outcome or for other reasons, including offsets.
CONCLUSION
AND RECOMMENDATIONS
As discussed
in the Disclosure Statement, in the event of a chapter 7 liquidation, the Debtors believe that higher operating expenses and professional
and liquidation fees would be incurred by the chapter 7 trustee as opposed to a Plan Administrator under the Plan.
The Debtors
believe that Confirmation will provide Holders of Allowed Claims and Interests in Impaired Classes under the Plan with a recovery that
is not less than what they would otherwise receive in connection with a hypothetical liquidation of the Debtors under chapter 7 of the
Bankruptcy Code as of the Assumed Effective Date.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 73 of 75
EXHIBIT B
Effective Date Notice
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 74 of 75
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
| |
) |
|
| In re: |
) |
Chapter 11 |
| |
) |
|
| PLX PHARMA WINDDOWN CORP., et al.,[1] |
)
)
|
Case No. 23-10456 (MFW) |
| |
) |
(Jointly Administered) |
| Debtors. |
)
)
)
|
Ref. Docket No. ____
|
| |
) |
|
NOTICE OF (I) ENTRY OF CONFIRMATION ORDER,
(II) OCCURRENCE OF EFFECTIVE DATE, AND (III) RELATED BAR DATES
TO: ALL PARTIES IN INTEREST
PLEASE TAKE NOTICE THAT:
Confirmation of Plan.
On [_____________], the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) entered
its Findings of Fact, Conclusions of Law and Order Approving and Confirming the Debtors’ First Amended Combined Disclosure Statement
and Joint Chapter 11 Plan of Liquidation [Docket No. ___] (the “Confirmation Order”). Unless otherwise defined
herein, capitalized terms used in this Notice shall have the meanings ascribed to such terms in the Debtors’ First Amended Combined
Disclosure Statement and Joint Chapter 11 Plan [Docket No. ___] (the “Plan”).[2]
Copies of the Confirmation Order and the Plan may be obtained by accessing https://www.donlinrecano.com/plx.
Effective Date.
The Effective Date of the Plan occurred on [______]. Each of the conditions precedent to consummation of the Plan enumerated in Section
13.1 of the Plan have been satisfied and/or waived as provided in Section 13.2 of the Plan.
Release, Exculpation,
and Injunction. Pursuant to the Confirmation Order, the release, injunction, and exculpation provisions in Article XIV of the
Plan are now in full force and effect.
Bar Date for Administrative
Expense Claims. In accordance with Section 16.1 of the Plan, unless required to be filed by an earlier date by another order of
this Court, any Holder of an Administrative Claim that arose after July 28, 2023, but prior to the Effective Date, other than a Professional
Fee Claim or a claim for U.S. Trustee Fees, must file with this Court and serve on (i) the Plan Administrator and its counsel, (ii) the
U.S. Trustee, and (iii) all parties requesting notice pursuant to Bankruptcy Rule 2002, a request for payment of such Administrative Claim
so as to be received by 5:00 p.m. (ET) on [_____________ ] (the “Administrative Claims Bar Date”).
Such request must include at a minimum: (i) the name of the Debtor(s) that are purported to be liable for the Administrative Claim; (ii)
the name of the Holder of the Administrative Claim; (iii) the amount of the Administrative Claim; (iv) the basis of the Administrative
Claim; and (v) all supporting documentation for the Administrative Claim. Any Administrative Claim that is not timely filed as set forth
above will be forever barred, and holders of such Administrative Claims will not be able to assert such Claims in any manner against the
Debtors, the Estates, the Post-Effective Date Debtors, or their respective successors or assigns or their respective property.
__________________________
1 The Debtors in these chapter 11
cases, along with the last four digits of each Debtor’s federal tax identification number, are PLx Pharma Winddown Corp. (5704)
and PLx Opco Winddown Corp. (6588). The mailing address for each of the Debtors is 8 The Green, Suite 11895, Dover, DE 19901.
2 Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Plan and the Confirmation Order, as applicable.
Case 23-10456-MFW Doc 279-1 Filed 09/14/23 Page 75 of 75
Bar Date for Professional
Fee Claims. In accordance with the Section 16.2 of the Plan, Professionals asserting Professional Fee Claims for services rendered
by Professionals in connection with the Chapter 11 Cases from the Petition Date through and including the Effective Date must File an
application for allowance and payment of such Professional Fee Claim no later than 5:00 p.m. (ET) on [_______________]
(the “Professional Fee Claims Bar Date”). Objections to any applications of Retained Professionals must be filed by
no later than fourteen (14) days after service of the applicable final application for allowance and payment of Professional Fee Claims.
Bar Date for Rejection
Damages. In accordance with Article XII of the Plan, on the Effective Date, all Executory Contracts will be deemed rejected as
of the Effective Date in accordance with, and subject to, the provisions and requirements of Bankruptcy Code sections 365 and 1123, except
to the extent (a) the Debtors previously have assumed, assumed and assigned or rejected such Executory Contract, or (b) prior to the
Effective Date, the Debtors have Filed a motion to assume, assume and assign, or reject an Executory Contract on which the Bankruptcy
Court has not ruled. Any and all Claims arising from the rejection of Executory Contracts under the Plan (the “Rejection Damage
Claims”) must be filed and served on the Plan Administrator no later than [______] (the “Rejection
Claims Bar Date”), provided, that the foregoing deadline shall apply only to Executory Contracts that are rejected automatically
by operation of Article XII of the Plan. Holders of Rejection Damage Claims that are required to File and serve a request for such payment
of Rejection Damage Claims that do not file and serve such a request by the Rejection Claims Bar Date may be forever barred, estopped,
and enjoined from asserting such Rejection Damage Claims against the Debtors, the Estates, the Post-Effective Date Debtors, or their
respective property. Subject to further order of the Bankruptcy Court, any requests for payment of Rejection Damage Claims that are not
properly Filed and served by the Rejection Claims Bar Date shall not appear on the Claims Register and shall be disallowed automatically
without the need for further action by the Debtors or the Plan Administrator, or further order of the Bankruptcy Court.
2
v3.23.3
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| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionFor the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
| Name: |
dei_DocumentPeriodEndDate |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:dateItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
| Name: |
dei_DocumentType |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:submissionTypeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionAddress Line 1 such as Attn, Building Name, Street Name
| Name: |
dei_EntityAddressAddressLine1 |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionAddress Line 2 such as Street or Suite number
| Name: |
dei_EntityAddressAddressLine2 |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- Definition
+ References
+ Details
| Name: |
dei_EntityAddressCityOrTown |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCode for the postal or zip code
| Name: |
dei_EntityAddressPostalZipCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionName of the state or province.
| Name: |
dei_EntityAddressStateOrProvince |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:stateOrProvinceItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityCentralIndexKey |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:centralIndexKeyItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionIndicate if registrant meets the emerging growth company criteria. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityEmergingGrowthCompany |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
| Name: |
dei_EntityFileNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:fileNumberItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
| Name: |
dei_EntityIncorporationStateCountryCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarStateCountryItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityRegistrantName |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityTaxIdentificationNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:employerIdItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionLocal phone number for entity.
| Name: |
dei_LocalPhoneNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
| Name: |
dei_PreCommencementIssuerTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
| Name: |
dei_PreCommencementTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTitle of a 12(b) registered security. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
| Name: |
dei_Security12bTitle |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:securityTitleItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Section 14a
-Number 240
-Subsection 12
| Name: |
dei_SolicitingMaterial |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
| Name: |
dei_TradingSymbol |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:tradingSymbolItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
| Name: |
dei_WrittenCommunications |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
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