VYR - Confirmation Brief Proposed Filing Version

Memorandum — VYR - Confirmation Brief Proposed Filing Version, dated 2024-11-11.

Full text

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
)
In re:
)
Chapter 11
)
VYAIRE MEDICAL, INC., et al.,1
)
Case No. 24-11217 (BLS)
)
Debtors.
)
(Jointly Administered)
)
DEBTORS’ MEMORANDUM OF LAW IN SUPPORT OF
AN ORDER (I) APPROVING THE DEBTORS’ DISCLOSURE STATEMENT ON A
FINAL BASIS AND (II) CONFIRMING THE DEBTORS’ JOINT CHAPTER 11 PLAN
KIRKLAND & ELLIS LLP
COLE SCHOTZ P.C.
KIRKLAND & ELLIS INTERNATIONAL LLP
Patrick J. Reilley (No. 4451)
Joshua A. Sussberg, P.C. (admitted pro hac vice)
500 Delaware Avenue, Suite 1410
601 Lexington Ave
Wilmington, Delaware 19801
New York, New York 10022
Telephone:
(302) 652-3131
Telephone:
(212) 446-4800
Facsimile:
(302) 652-3117
Facsimile:
(212) 446-4900
Email:
preilley@coleschotz.com
Email:
joshua.sussberg@kirkland.com
- and -
- and -
Spencer A. Winters, P.C. (admitted pro hac vice)
Michael D. Sirota, Esq. (admitted pro hac vice)
Yusuf U. Salloum (admitted pro hac vice)
Warren A. Usatine, Esq (admitted pro hac vice)
333 West Wolf Point Plaza
Court Plaza North, 25 Main Street
Chicago, Illinois 60654
Hackensack, New Jersey 07601
Telephone:
(312) 862-2000
Telephone:
(201) 489-3000
Facsimile:
(312) 862-2200
Facsimile:
(201) 489-1536
Email:
spencer.winters@kirkland.com
Email:
msirota@coleschotz.com
yusuf.salloum@kirkland.com

wusatine@coleschotz.com
Co-Counsel to the Debtors
Co-Counsel to the Debtors
and Debtors in Possession
and Debtors in Possession
November 11, 2024
1
The last four digits of Debtor Vyaire Medical, Inc.’s federal tax identification number are 6495.  A complete list
of each of the Debtors in these Chapter 11 Cases and each such Debtor’s federal tax identification number may
be obtained on the website of the Debtors’ claims and noticing agent at https://omniagentsolutions.com/Vyaire.
The location of Debtor Vyaire Medical, Inc.’s principal place of business and the Debtors’ service address in
these Chapter 11 Cases is 26125 North Riverwoods Boulevard, Mettawa, Illinois, USA 60045.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 1 of 81

i
TABLE OF CONTENTS
Page(s)
Preliminary Statement...................................................................................................................2
Background ....................................................................................................................................5
I.
Procedural History.............................................................................................................5
II.
The Plan Solicitation and Notification Process ...............................................................7
Argument ......................................................................................................................................10
I.
The Disclosure Statement Contains “Adequate Information” as Required by
Section 1125 and 1126 of the Bankruptcy Code and Satisfies Notice
Requirements....................................................................................................................10
A.
The Disclosure Statement Contains Adequate Information. ...........................10
B.
The Debtors Complied with Applicable Notice Requirements. .......................14
1.
The Debtors Complied with the Notice Requirements Set Forth
in the Disclosure Statement Order. ........................................................15
2.
The Ballots Used to Solicit Holders of Claims Entitled to Vote
on the Plan Complied with the Disclosure Statement Order. ..............15
3.
The Debtors’ Solicitation Period Complied with the Disclosure
Statement Order.......................................................................................16
4.
The Debtors’ Tabulation Procedures Complied with the
Disclosure Statement Order. ...................................................................16
5.
Solicitation of the Plan Complied with the Bankruptcy Code
and Was in Good Faith. ...........................................................................17
II.
The Plan Satisfies Each Requirement for Confirmation..............................................17
A.
The Plan Fully Complies with the Applicable Provisions of the
Bankruptcy Code (§ 1129(a)(1)). ........................................................................18
1.
The Plan Satisfies the Classification Requirements of
Section 1122 of the Bankruptcy Code. ...................................................18
2.
The Plan Satisfies the Mandatory Plan Requirements of
Section 1123(a) of the Bankruptcy Code. ..............................................21
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 2 of 81

ii
B.
The Debtors Complied with the Applicable Provisions of the
Bankruptcy Code (§ 1129(a)(2)). ........................................................................24
1.
The Debtors Complied with Section 1125 of the Bankruptcy
Code. ..........................................................................................................25
2.
The Debtors Satisfied the Plan Acceptance Requirements of
Section 1126 of the Bankruptcy Code. ...................................................26
C.
The Plan Was Proposed in Good Faith (§ 1129(a)(3)). .....................................28
D.
The Plan Provides that the Debtors’ Payment of Professional Fees and
Expenses Are Subject to Bankruptcy Court Approval (§ 1129(a)(4)). ...........30
E.
The Debtors Have Complied with the Governance Disclosure
Requirement (§ 1129(a)(5)). ................................................................................31
F.
The Plan Does Not Require Governmental Regulatory Approval
(§ 1129(a)(6)).........................................................................................................31
G.
The Plan Is in the Best Interests of All the Debtors’ Creditors
(§ 1129(a)(7)).........................................................................................................32
H.
The Plan Is Confirmable Notwithstanding the Requirements of
Section 1129(a)(8) of the Bankruptcy Code. ......................................................33
I.
The Plan Provides for Payment in Full of All Allowed Priority Claims
(§ 1129(a)(9)).........................................................................................................35
J.
At Least One Class of Impaired, Non-Insider Claims Accepted the
Plan (§ 1129(a)(10)). .............................................................................................38
K.
The Plan Is Feasible (§ 1129(a)(11)). ..................................................................38
L.
The Plan Provides for the Payment of Certain Statutory Fees
(§ 1129(a)(12)).......................................................................................................41
M.
Sections 1129(a)(13) through 1129(a)(16) of the Bankruptcy Code Do
Not Apply to the Plan. .........................................................................................42
N.
The Plan Satisfies the “Cram Down” Requirements of Section 1129(b)
of the Bankruptcy Code.......................................................................................42
1.
The Plan Does Not Unfairly Discriminate with Respect to the
Impaired Classes That Have Not Voted to Accept the Plan
(§ 1129(b)(1)). ...........................................................................................43
2.
The Plan Is Fair and Equitable (§ 1129(b)(2)). .....................................45
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 3 of 81

iii
O.
The Plan Complies with the Remaining Provisions of Section 1129 of
the Bankruptcy Code (§§ 1129(c)–(e)). ..............................................................46
III.
The Discretionary Contents of the Plan Are Appropriate Under
Section 1123(b) of the Bankruptcy Code. ......................................................................47
A.
The Plan’s Release, Exculpation, and Injunction Satisfy
Section 1123(b) of the Bankruptcy Code. ..........................................................50
1.
The Debtor Release in the Plan Is Appropriate. ...................................50
2.
The Third-Party Release Is Consensual and Appropriate and
Should Be Approved. ...............................................................................55
3.
The Exculpation Provision Is Appropriate. ..........................................58
4.
The Injunction Provision Is Appropriate. .............................................61
B.
The Plan Complies with Section 1123(d) of the Bankruptcy Code. ................62
IV.
The Plan Modifications Do Not Require Resolicitation or an Additional
Disclosure Statement. ......................................................................................................62
V.
Good Cause Exists to Waive the Stay of the Confirmation Order. .............................65
Conclusion ....................................................................................................................................66
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 4 of 81

iv
TABLE OF AUTHORITIES

Page(s)
Cases
In re 203 N. LaSalle St. Ltd. P’ship.,
190 B.R. 567 (Bankr. N.D. Ill. 1995), rev’d on other grounds ...............................................43
In re 500 Fifth Ave. Assocs.,
148 B.R. 1010 (Bankr. S.D.N.Y. 1993) ...................................................................................18
In re A.H. Robins Co.,
88 B.R. 742 (Bankr. E.D. Va. 1988), aff’d, 880 F.2d 694 (4th Cir. 1989) ..............................62
In re Abbotts Dairies of Pa., Inc.,
788 F.2d 143 (3d Cir. 1986).....................................................................................................28
In re Abeinsa Holding, Inc.,
562 B.R. 265 (Bankr. D. Del. 2016) ........................................................................................52
In re Adelphia Commc’ns Corp.,
368 B.R. 140 (Bankr. S.D.N.Y. 2007) .....................................................................................32
In re Aegean Marine Petroleum Network, Inc.,
599 B.R. 717 (Bankr. S.D.N.Y. 2019) .....................................................................................59
In re Aleris Int’l, Inc.,
2010 WL 3492664 (Bankr. D. Del. May 13, 2010) ...........................................................24, 43
In re Am. Solar King Corp.,
90 B.R. 808 (Bankr. W.D. Tex. 1988) ...............................................................................63, 64
In re Ambanc La Mesa L.P.,
115 F.3d 650 (9th Cir. 1997) .............................................................................................42, 43
In re Anna Holdings, Inc.,
No. 19-12551 (CSS) (Bankr. D. Del. Dec. 17, 2019) ..............................................................65
In re APC Auto. Techs. Intermediate Holdings, LLC,
No. 20-11466 (CSS) (Bankr. D. Del. July 10, 2020) ...............................................................65
In re Armstrong World Indus., Inc.,
348 B.R. 111 (D. Del. 2006) ........................................................................................17, 18, 43
In re Aztec Co.,
107 B.R. 585 (Bankr. M.D. Tenn. 1989) .................................................................................43
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 5 of 81

Page(s)
v
Bank of Am. Nat. Trust & Sav. Ass’n v. 203 N. LaSalle St. P’ship,
526 U.S. 434 (1999) .....................................................................................................32, 43, 44
In re Bed Bath & Beyond Inc.,
No. 23-13359-VFP (MBK) (Bankr. D.N.J. Sept. 14, 2023) ....................................................58
In re BlockFi Inc.,
No. 22 19361 (MBK) (Bankr. D.N.J. Oct. 3, 2023) ................................................................58
Brite v. Sun Country Dev., Inc. (In re Sun Country Dev., Inc.),
764 F.2d 406 (5th Cir. 1985) ...................................................................................................28
In re Capmark Fin. Grp.,
2011 WL 6013718 ...................................................................................................................38
In re Century Glove, Inc.,
Civ. A. Nos. 90-400 and 90-401, 1993 WL 239489 (D. Del. Feb. 10, 1993)
................................................................................................................................28, 32, 63, 64
Century Glove, Inc. v. First Am. Bank of N.Y.,
860 F.2d 94 (3d Cir. 1988).......................................................................................................11
In re Chapel Gate Apartments, Ltd.,
64 B.R. 569 (Bankr. N.D. Tex. 1986) ......................................................................................30
In re Clover Techs. Grp., LLC,
No. 19-12680 (KBO) (Bankr. D. Del. Jan. 22, 2020) ..............................................................65
In re Congoleum Corp.,
362 B.R. 167 (Bankr. D.N.J. 2007) .........................................................................................58
In re Coram Healthcare Corp.,
315 B.R. 321 (Bankr. D. Del. 2004) ......................................................................43, 48, 50, 55
Cosoff v. Rodman (In re W.T. Grant Co.),
699 F.2d 599 (2d Cir. 1983).....................................................................................................48
In re Cyxtera Techs., Inc.,
No. 23-14853 (JKS) (Bankr. D.N.J. Nov. 17, 2023) ...............................................................58
In re Dow Coming Corp.,
237 B.R. 374 (Bankr. E.D. Mich. 1999) ..................................................................................62
In re Drexel Burnham Lambert Grp. Inc.,
138 B.R. 723 (Bankr. S.D.N.Y. 1992) .....................................................................................18
In re Drexel Burnham Lambert Grp., Inc.,
960 F.2d 285 (2d Cir. 1992).....................................................................................................60
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 6 of 81

Page(s)
vi
In re Enron Corp.,
326 B.R. 497 (S.D.N.Y. 2005) .................................................................................................60
In re Exaeris, Inc.,
380 B.R. 741 (Bankr. D. Del. 2008) ..................................................................................48, 50
In re FAH Liquidating Corp.,
No. 13-13087 (KG) (Bankr. D. Del. July 28, 2014) ................................................................58
Fin. Sec. Assurance Inc. v. T-H New Orleans Ltd. P’ship (In re T-H New Orleans
Ltd. P’ship),
116 F.3d 790 (5th Cir. 1997) ...................................................................................................28
First Am. Bank of N.Y. v. Century Glove, Inc.,
81 B.R. 274 (D. Del. 1988) ......................................................................................................11
In re Flintkote Co.,
486 B.R. 99 (Bankr. D. Del. 2012) ..........................................................................................38
In re Freymiller Trucking, Inc.,
190 B.R. 913 (Bankr. W.D. Okla. 1996) .................................................................................43
Frito-Lay, Inc. v. LTV Steel Co. (In re Chateaugay Corp.),
10 F.3d 944 (2d Cir. 1993).......................................................................................................18
In re Future Energy Corp.,
83 B.R. 470 (Bankr. S.D. Ohio 1988) ......................................................................................29
In re G-1 Holdings Inc.,
420 B.R. 216 (D.N.J. 2009) ...............................................................................................63, 64
In re Genesis Health Ventures, Inc.,
266 B.R. 591 (Bankr. D. Del. 2001) ........................................................................................17
In re Heritage Org., L.L.C.,
375 B.R. 230 (Bankr. N.D. Tex. 2007) ....................................................................................18
In re HighPoint Res. Corp.,
No. 21-10565 (CSS) (Bankr. D. Del. Mar. 18, 2021) ..............................................................65
In re Indianapolis Downs, LLC,
486 B.R. 286 (Bankr. D. Del. 2013) ......................................................................51, 52, 55, 60
In re ION Media Networks, Inc.,
No. 09-13125 (JMP), 419 B.R. 585 (Bankr. S.D.N.Y. Nov. 24, 2009) ...................................45
In re Jersey City Med. Ctr.,
817 F.2d 1055 (3d Cir. 1987)...................................................................................................18
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 7 of 81

Page(s)
vii
John Hancock Mut. Life Ins. Co. v. Route 37 Bus. Park Assocs.,
987 F.2d 154 (3d Cir. 1993)...............................................................................................18, 42
In re Johns-Manville Corp.,
68 B.R. 618 (Bankr. S.D.N.Y. 1986) .......................................................................................43
Kane v. Johns-Manville Corp.,
843 F.2d 636 (2d Cir. 1988).....................................................................................................38
In re Laboratory Partners, Inc.,
No. 13-12769 (PJW) (Bankr. D. Del. July 10,2014) ...............................................................58
In re Lapworth,
1998 WL 767456 (DWS) (Bankr. E.D. Pa. Nov. 2, 1998) ......................................................24
In re Lernout & Hauspie Speech Prods., N.V.,
301 B.R. 651 (Bankr. D. Del. 2003) ........................................................................................43
In re Lisanti Foods, Inc.,
329 B.R. 491 (Bankr. D. N.J. 2005) ..................................................................................12, 29
In re Longview Power, LLC,
No. 20-10951 (BLS) (Bankr. D. Del. May 22, 2020) ..............................................................65
In re Martin,
91 F.3d 389 (3d Cir. 1996).......................................................................................................48
In re Master Mortg. Inv. Fund, Inc.,
168 B.R. 930 (Bankr. W.D. Mo. 1994)....................................................................................51
In re Metrocraft Pub. Serv., Inc.,
39 B.R. 567 (Bankr. N.D. Ga. 1984) .......................................................................................13
Momentum Mfg. Corp. v. Emp. Creditors Comm. (In re Momentum Mfg. Corp.),
25 F.3d 1132 (2d Cir. 1994).....................................................................................................25
In re Monnier Bros.,
755 F.2d 1336 (8th Cir. 1985) .................................................................................................11
In re Neshaminy Office Bldg. Assocs.,
62 B.R. 798 (E.D. Pa. 1986) ....................................................................................................48
In re NII Holdings, Inc.,
288 B.R. 356 (Bankr. D. Del. 2002) ........................................................................................28
In re Nutritional Sourcing Corp.,
398 B.R. 816 (Bankr. D. Del. 2008) ........................................................................................17
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 8 of 81

Page(s)
viii
Oneida Motor Freight, Inc. v. United Jersey Bank,
848 F.2d 414 (3d Cir. 1988).....................................................................................................11
In re PC Liquidation Corp.,
383 B.R. 856 (E.D.N.Y. 2008) ................................................................................................12
In re Phoenix Petrol., Co.,
278 B.R. 385 (Bankr. E.D. Pa. 2001) ..........................................................................11, 12, 13
Matter of Pizza of Haw.,
761 F.2d 1374 (9th Cir. 1985) .................................................................................................38
In re Premier Int'l. Holdings, Inc.,
No. 09-12019 (CSS), 2010 WL 2745964, at *10 (Bankr. D. Del. Apr. 29,
2010) ........................................................................................................................................59
In re Prussia Assocs.,
322 B.R. 572 (Bankr. E.D. Pa. 2005) ......................................................................................38
In re PWS Holding Corp.,
228 F.3d 224 (3d Cir. 2000).........................................................................................28, 59, 60
In re River Village Assoc.,
181 B.R. 795 (E.D. Pa. 1995) ..................................................................................................12
In re S&W Enter.,
37 B.R. 153 (Bankr. N.D. Ill. 1984) ........................................................................................17
In re Scioto Valley Mortg. Co.,
88 B.R. 168 (Bankr. S.D. Ohio 1988) ......................................................................................13
In re Sea Garden Motel & Apartments,
195 B.R. 294 (D. N.J. 1996) ....................................................................................................38
In re Sentinel Mgmt. Grp., Inc.,
398 B.R. 281 (Bankr. N.D. Ill. 2008) ......................................................................................62
In re SiO2 Med. Prods., Inc.,
No. 23-10366 (JTD) (Bankr. D. Del. July 19, 2023) ...............................................................65
In re Smith,
357 B.R. 60 (Bankr. M.D.N.C. 2007) ......................................................................................32
In re Spansion, Inc.,
426 B.R. 114 (Bankr. D. Del. 2010) ..................................................................................50, 55
In re Sponsion, Inc.,
No. 09-10690 (KJC), 2010 WL 2905001 (Bankr. D. Del. 2010) ............................................59
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 9 of 81

Page(s)
ix
In re Stone & Webster, Inc.,
286 B.R. 532 (Bankr. D. Del. 2002) ........................................................................................32
In re Tribune Co.,
464 B.R. 126 (Bankr. D. Del. 2011), overruled in part on other grounds, 464
B.R. 208 (Bankr. D. Del. 2011) ...............................................................................................38
In re Tricidia, Inc.,
No. 23-10023 (JTD) (Bankr. D. Del. May 23, 2023) ..............................................................65
In re U.S. Brass Corp.,
194 B.R. 420 (Bankr. E.D. Tex. 1996) ....................................................................................13
In re U.S. Truck Co.,
47 B.R. 932 (E.D. Mich. 1985), aff’d, 800 F.2d 581 (6th Cir. 1986) ......................................38
In re Unichem Corp.,
72 B.R. 95 (Bankr. N.D. Ill. 1987) ..........................................................................................11
In re Vyaire Med., Inc.
No. 24-11217 (BLS) ................................................................................................................37
In re W.R. Grace & Co.,
475 B.R. 34 (D. Del. 2012) ................................................................................................28, 38
In re Wash. Mut., Inc.,
442 B.R. 314 (Bankr. D. Del. 2011) ......................................................................50, 51, 52, 58
In re WCI Cable, Inc.,
282 B.R. 457 (Bankr. D. Or. 2002) ..........................................................................................50
In re World Health Alts., Inc.,
344 B.R. 291 (Bankr. D. Del. 2006) ..................................................................................48, 50
In re Zenith Elecs. Corp.,
241 B.R. 92 (Bankr. D. Del. 1999) ..............................................................................51, 52, 55
Statutes
11 U.S.C. § 101(51D)(B) ...............................................................................................................46
11 U.S.C. § 365(f) ..........................................................................................................................65
11 U.S.C. § 502 ..............................................................................................................................26
11 U.S.C. § 503(b) .........................................................................................................................34
11 U.S.C. § 507(a)(1) .....................................................................................................................35
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 10 of 81

Page(s)
x
11 U.S.C. § 507(a)(2) .........................................................................................................34, 40, 41
11 U.S.C. § 507(a)(4) .....................................................................................................................35
11 U.S.C. § 507(a)(5) .....................................................................................................................35
11 U.S.C. § 507(a)(6) .....................................................................................................................35
11 U.S.C. § 507(a)(7) .....................................................................................................................35
11 U.S.C. § 507(a)(8) .....................................................................................................................35
11 U.S.C. § 547 ...................................................................................................................... passim
11 U.S.C. § 1107(a) .........................................................................................................................5
11 U.S.C. § 1108 ..............................................................................................................................5
11 U.S.C. § 1114 ............................................................................................................................41
11 U.S.C. § 1122 ..........................................................................................................17, 18, 19, 21
11 U.S.C. § 1122(a) .................................................................................................................18, 20
11 U.S.C. § 1122(b) .......................................................................................................................18
11 U.S.C. § 1123 ................................................................................................................17, 48, 50
11 U.S.C. § 1123(a) .......................................................................................................................20
11 U.S.C. § 1123(a)(1) ...................................................................................................................21
11 U.S.C. § 1123(a)(2) ...................................................................................................................21
11 U.S.C. § 1123(a)(3) ...................................................................................................................21
11 U.S.C. § 1123(a)(4) .............................................................................................................21, 22
11 U.S.C. § 1123(a)(5) .............................................................................................................22, 23
11 U.S.C. § 1123(a)(6) ...................................................................................................................23
11 U.S.C. § 1123(a)(7) ...................................................................................................................23
11 U.S.C. § 1123(b) ............................................................................................................... passim
11 U.S.C. § 1123(b)(1) ..................................................................................................................47
11 U.S.C. § 1123(b)(2) ..................................................................................................................47
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 11 of 81

Page(s)
xi
11 U.S.C. § 1123(b)(3) ..................................................................................................................47
11 U.S.C. § 1123(b)(3)(A) .......................................................................................................48, 50
11 U.S.C. § 1123(b)(4) ..................................................................................................................47
11 U.S.C. § 1123(b)(5) ..................................................................................................................47
11 U.S.C. § 1123(b)(6) ..................................................................................................................47
11 U.S.C. § 1123(d) .................................................................................................................61, 62
11 U.S.C. § 1125 .................................................................................................................... passim
11 U.S.C. § 1125(a) .................................................................................................................14, 25
11 U.S.C. § 1125(a)(1) .......................................................................................................10, 11, 25
11 U.S.C. § 1125(b) .................................................................................................................24, 25
11 U.S.C. § 1125(c) .......................................................................................................................25
11 U.S.C. § 1125(e) .................................................................................................................16, 17
11 U.S.C. § 1126 .................................................................................................................... passim
11 U.S.C. § 1126(a) .................................................................................................................26, 27
11 U.S.C. § 1126(b)(2) ..................................................................................................................14
11 U.S.C. § 1126(c) ...........................................................................................................16, 27, 33
11 U.S.C. § 1126(d) .......................................................................................................................33
11 U.S.C. § 1126(f) ..............................................................................................................7, 26, 27
11 U.S.C. § 1126(g) ...................................................................................................................8, 27
11 U.S.C. § 1127 ............................................................................................................................64
11 U.S.C. § 1127(a) .......................................................................................................................62
11 U.S.C. § 1128 ............................................................................................................................41
11 U.S.C. § 1129 ............................................................................................................1, 10, 17, 45
11 U.S.C. § 1129(a) .......................................................................................................................42
11 U.S.C. § 1129(a)(1) ...................................................................................................................17
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 12 of 81

Page(s)
xii
11 U.S.C. § 1129(a)(2) .......................................................................................................24, 28, 59
11 U.S.C. § 1129(a)(3) .......................................................................................................28, 29, 59
11 U.S.C. § 1129(a)(4) .............................................................................................................29, 30
11 U.S.C. § 1129(a)(5) .............................................................................................................30, 31
11 U.S.C. § 1129(a)(5)(A) .............................................................................................................30
11 U.S.C. § 1129(a)(5)(A)(ii) ........................................................................................................30
11 U.S.C. § 1129(a)(6) ...................................................................................................................31
11 U.S.C. § 1129(a)(7) .......................................................................................................31, 32, 33
11 U.S.C. § 1129(a)(8) .................................................................................................33, 34, 37, 42
11 U.S.C. § 1129(a)(9) .................................................................................................34, 35, 37, 39
11 U.S.C. § 1129(a)(9)(A) .......................................................................................................34, 35
11 U.S.C. § 1129(a)(9)(B) .......................................................................................................35, 36
11 U.S.C. § 1129(a)(9)(C) .................................................................................................35, 36, 37
11 U.S.C. § 1129(a)(10) ...........................................................................................................28, 37
11 U.S.C. § 1129(a)(11) ...........................................................................................................38, 40
11 U.S.C. § 1129(a)(12) ...........................................................................................................40, 41
11 U.S.C. § 1129(a)(13) .................................................................................................................41
11 U.S.C. § 1129(a)(14) .................................................................................................................41
11 U.S.C. § 1129(a)(15) ...........................................................................................................41, 42
11 U.S.C. § 1129(a)(16) ...........................................................................................................41, 42
11 U.S.C. § 1129(b) ............................................................................................................... passim
11 U.S.C. § 1129(b)(1) ............................................................................................................42, 43
11 U.S.C. § 1129(b)(2) ............................................................................................................44, 45
11 U.S.C. § 1129(b)(2)(B)(i) .........................................................................................................44
11 U.S.C. § 1129(b)(2)(B)(ii) ........................................................................................................44
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 13 of 81

Page(s)
xiii
11 U.S.C. § 1129(c) .................................................................................................................45, 46
11 U.S.C. § 1129(d) .................................................................................................................45, 46
11 U.S.C. § 1129(e) .................................................................................................................45, 46
28 U.S.C. § 1930 ......................................................................................................................40, 41
28 U.S.C. § 1930(a) .......................................................................................................................41
Securities Act of 1933, § 5 .............................................................................................................46
Rules
Fed. R. Bankr. P. 1015(b) ................................................................................................................5
Fed. R. Bankr. P. 3017 .............................................................................................................14, 24
Fed. R. Bankr. P. 3018 ...................................................................................................................24
Fed. R. Bankr. P. 3018(c) ..............................................................................................................15
Fed. R. Bankr. P. 3019 .......................................................................................................62, 63, 64
Fed. R. Bankr. P. 3019(a) ........................................................................................................62, 63
Fed. R. Bankr. P. 3020 ...................................................................................................................65
Fed. R. Bankr. P. 3020(e) ..............................................................................................................64
Fed. R. Bankr. P. 6004 ...................................................................................................................65
Fed. R. Bankr. P. 6004(h) ..............................................................................................................65
Fed. R. Bankr. P. 6006 ...................................................................................................................65
Fed. R. Bankr. P. 6006(d) ..............................................................................................................65
Fed. R. Bankr. P. 9019 .............................................................................................................48, 50
Local Rule 3017-1..........................................................................................................................14
Other Authorities
H.R. Rep. No. 95-595, reprinted in 1978 U.S.C. C.A.N. 5963 (1977) .........................................17
H.R. Rep. No. 595, 95th Cong., 1st Sess. (1977) ..........................................................................24
S. Rep. No. 989, 95th Cong., 2d Sess. (1978) .........................................................................24, 63
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 14 of 81

RELIEF REQUESTED
The above-captioned debtors and debtors in possession (collectively, the “Debtors”)
submit this memorandum of law in support of (a) final approval of the Disclosure Statement for
the Joint Chapter 11 Plan of Vyaire Medical, Inc. and Its Debtor Affiliates [Docket No. 582] (as
modified, amended, or supplemented from time to time, the “Disclosure Statement”), pursuant to
section 1125
of
title
11
of
the
United States
Code,
11 U.S.C. §§ 101–1532
(the “Bankruptcy Code”) and (b) confirmation of the Joint Chapter 11 Plan of Vyaire
Medical, Inc. and Its Debtor Affiliates [Docket No. 518], as amended by the Joint Chapter 11 Plan
of Vyaire Medical, Inc. and Its Debtor Affiliates [Docket No. 581], and as further amended by the
Second Amended Joint Chapter 11 Plan of Vyaire Medical, Inc. and Its Debtor Affiliates [Docket
No. 719] (as modified, amended, or supplemented from time to time, the “Plan”),
2 pursuant to
sections 1125, 1126, and 1129, respectively, of the Bankruptcy Code.
In support of the Plan, the Debtors have filed the Declaration of Charles N. Braley in
Support of Confirmation of the Joint Chapter 11 Plan of Vyaire Medical, Inc. and Its Debtor
Affiliates [Docket No. 721] (the “Braley Declaration”) concurrently herewith, and the Declaration
of Paul H. Deutch Regarding the Solicitation and Tabulation of Votes on, and Elections to Opt-In
to the Third-Party Release in, the Joint Chapter 11 Plan of Vyaire Medical, Inc. and Its Debtor
Affiliates (the “Voting Report”) [Docket No. 712].  On or about the date hereof, the Debtors
submitted a proposed order confirming the Plan (the “Confirmation Order”).  In further support of
2
Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Plan, the
Confirmation Order (as defined herein), or the Order (I) Approving the Adequacy of the Disclosure Statement on
an Interim Basis, (II) Scheduling a Combined Disclosure Statement Approval and Plan Confirmation Hearing,
(III) Approving the Solicitation and Notice Procedures, (IV) Approving the Combined Hearing Notice, and
(V) Granting Related Relief [Docket No. 596] (the “Disclosure Statement Order”).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 15 of 81

2
confirmation of the Plan and approval of the Disclosure Statement, the Debtors respectfully state
as follows:
Preliminary Statement
1.
The Debtors commenced these Chapter 11 Cases amidst a liquidity crunch to
effectuate value-maximizing sale transactions that would allow their businesses to be recapitalized
and continue as going concerns.  The Debtors are poised to complete sale transactions resulting in
approximately $90 million in cash proceeds to the estate, plus the assumption of certain liabilities.
And five months after the commencement of these Chapter 11 Cases, the Debtors seek to confirm
a chapter 11 plan in support of the sale processes, providing a path to servicing their transition
services obligations to the Purchasers and ultimately winding down the Debtors and their
non-Debtor affiliates in an efficient manner.  The Plan has been unanimously accepted by those
creditors entitled to vote and has the support of the whole capital structure, and the Debtors are not
aware of any contested issues with respect to approval of the Disclosure Statement or Confirmation
of the Plan.
2.
The path to plan confirmation has been challenging but fruitful.  In the lead up to
these Chapter 11 Cases, the Debtors, facing dwindling liquidity: (i) initiated their prepetition
marketing process, (ii) began marketing and negotiating for debtor-in-possession financing to
support their sale efforts, and (iii) engaged in negotiations with their lenders and prepetition
sponsor on the terms of a restructuring support agreement to secure their key stakeholders’ support
for continuation of the sale process on a postpetition basis and an orderly wind-down of the
Debtors’ estates through confirmation of a chapter 11 plan of liquidation.  Accordingly, the
Debtors filed these Chapter 11 Cases with the support of the majority of the First Lien Lenders,
their Second Lien Lenders, and their Sponsor through execution of the Restructuring Support
Agreement to support the sale and marketing process.  In further support of the Debtors’ sale
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 16 of 81

3
efforts, the 1L Ad Hoc Group provided the Debtors with the DIP Facility consisting of $25 million
of new liquidity on an interim basis and up to $20 million of new liquidity on a final basis,
including funding in support of the Wind-Down.  From initiation of the sale process in May 2024,
the Debtors and their advisors connected with over 110 potentially interested parties, comprised
of numerous potential strategic and financial parties.  In advance of the Petition Date, the Debtors
received multiple indications of interest from interested parties.  Accordingly, the Debtors
commenced these Chapter 11 Cases to complete their robust sale process.
3.
Once in chapter 11, the Debtors continued to actively market their assets.  As of the
bid deadline set forth in the Bidding Procedures, the Debtors identified three qualified bids for the
Ventilation Business, and one qualified bid for the Respiratory Diagnostics Business.  On
August 12, the Debtors initiated a three-day auction for the Ventilation Business.  After multiple
rounds of competitive bidding, on August 15, 2024, the Debtors selected Zoll Medical Corporation
(“Zoll”) as the successful bidder.  On August 20, 2024, the Debtors selected Trudell Medical
Limited (“Trudell”) as the successful bidder for the Respiratory Diagnostics Business.  On
September 4, 2024, the Court approved the sale of the Ventilation Business to Zoll for
approximately $37 million [Docket No. 496] (the “Zoll Transaction”) and the sale of the
Respiratory Diagnostics Business to Trudell for approximately $53 million [Docket No. 497]
(the “Trudell Transaction”) (in each case, plus the assumption of certain obligations and
liabilities).  The orders approving the sale transactions authorized a paydown of the DIP Facility,
subject to a “Holdback” for the Debtors to fund the Wind-Down.  On October 11, 2024, the
Debtors closed the Zoll Transaction.  The Debtors anticipate closing the Trudell Transaction as
soon as November 12, 2024.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 17 of 81

4
4.
In further effort to achieve consensus among their stakeholders, the Debtors have
engaged in good faith, arms’-length negotiations with the Committee (as defined herein) to resolve
the Committee’s concerns regarding the Plan and the Wind-Down.  Following these fruitful
negotiations, the Debtors and the Committee reached a comprehensive settlement with the
Committee, embodied in the Plan (the “Committee Settlement”).  The Committee Settlement
provides, among other things:  (i) a reserve of approximately $3 million for payment of Allowed
Administrative Claims; (ii) a “Residual GUC Recovery Pool” that provides for the greater of
(x) $250,000 and (y) the amount of excess funds of the Professional Fee Escrow Account, if any,
to be distributed pro rata to Holders of Class 6 (General Unsecured Claims) as specified in the
Plan, following satisfaction of the Debtors’ Wind-Down obligations; (iii)  the Debtors’ release of
preference claims pursuant to section 547 of the Bankruptcy Code; and (iv) treatment of the
Debtors’ vendors and service providers servicing the Purchasers pursuant to the transition services
agreement.
5.
Following the consummation of the sale transactions, the final step to achieve a
value-maximizing outcome for all parties is to confirm a liquidating chapter 11 plan and
wind-down the Debtor entities and their non-Debtor affiliates.  As discussed further herein, all
voting creditors voted in favor of the Plan, and the Plan enjoys support across the Debtors’ capital
structure.  The Plan is consistent with the Bankruptcy Code and maximizes the value of the
Debtors’ Estates under the circumstances.  The Debtors submit that the Plan is the best outcome
for the Debtors, their Estates, and all constituencies affected by these Chapter 11 Cases:  it allows
the Debtors to continue supporting the distribution of life-saving medical devices and equipment
through provision of transition services to the Purchasers and provides a mechanism to wind-down
the Debtors in an orderly, cost-efficient manner.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 18 of 81

5
6.
Accordingly, for the reasons stated herein and in light of the Debtors’ evidentiary
support for confirmation of the Plan, the Debtors respectfully request that the Disclosure Statement
be approved on a final basis and the Plan be confirmed.
Background
I.
Procedural History.
7.
On June 9, 2024 (the “Petition Date”), the Debtors commenced filing voluntary
petitions with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy
Court”) under chapter 11 of the Bankruptcy Code.  The Debtors continue to operate their business
and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the
Bankruptcy Code.  These Chapter 11 Cases have been consolidated for procedural purposes only
and are being jointly administered pursuant to Bankruptcy Rule 1015(b) [Docket No. 84].  On
June 26, 2024, the U.S. Trustee appointed an official committee of unsecured creditors [Docket
No. 121] (the “Committee”).  On October 30, 2024, the Bankruptcy Court appointed a fee
examiner [Docket No. 690].  No trustee has been appointed in these Chapter 11 Cases.
8.
A detailed description of the Debtors and their businesses, and the facts and
circumstances surrounding these Chapter 11 Cases, are set forth in greater detail in the Declaration
of John Bibb, Group Chief Executive Officer of Vyaire Medical, Inc., in Support of Debtors’
Chapter 11 Petitions and First Day Motions [Docket No. 15].
9.
On September 11, 2024, the Debtors filed with the Bankruptcy Court the Joint
Chapter 11 Plan of Vyaire Medical, Inc. and Its Debtor Affiliates [Docket No. 518] and the
Disclosure Statement for the Joint Chapter 11 Plan of Vyaire Medical, Inc. and Its Debtor
Affiliates [Docket No. 519], along with the Disclosure Statement Motion,
3 pursuant to which the
3
Motion of Debtors for Entry of an Order (I) Approving the Adequacy of the Disclosure Statement on an Interim
and Final Basis, (II) Scheduling a Combined Disclosure Statement Approval and Plan Confirmation Hearing,
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 19 of 81

6
Debtors sought approval of the Disclosure Statement and the related solicitation and voting
procedures (the “Solicitation and Voting Procedures”).
10.
On September 30, 2024, the Debtors filed with the Bankruptcy Court, the Joint
Chapter 11 Plan of Vyaire Medical, Inc. and Its Debtor Affiliates [Docket No. 581] and the
Disclosure Statement for the First Amended Joint Chapter 11 Plan of Vyaire Medical, Inc. and Its
Debtor Affiliates [Docket No. 582].
11.
On October 2, 2024, the Bankruptcy Court entered the Disclosure Statement Order,
approving, among other things, the proposed procedures for solicitation of the Plan and related
notices, forms, and ballots (collectively, the “Solicitation Packages”).  On October 3, 2024, the
Debtors filed with the Bankruptcy Court the Notice of Hearing to Consider the (I) Adequacy of the
Disclosure Statement and (II) Confirmation of the Joint Chapter 11 Plan Filed by the Debtors
[Docket No. 601].
12.
On October 28, 2024, the Debtors filed with the Bankruptcy Court the Plan
Supplement [Docket No. 689], as amended on November 11, 2024 by the filing of the First
Amended Plan Supplement [Docket No. 720]  (as amended, modified, or supplemented from time
to time, the “Plan Supplement”), which included the (a) Rejected Executory Contracts and
Unexpired Lease Schedule, (b) Assumed Executory Contracts and Unexpired Leases Schedule,
(c) Transition Services Agreements Schedule of Contracts and Unexpired Leases Schedule,
(d) Schedule of Retained Causes of Action, (e) the Identity of Plan Administrator and Plan
Administrator Agreement, (f) the Wind-Down Budget, and (g) the Restructuring Transactions
Memorandum.
(III) Approving the Solicitation and Notice Procedures, (IV) Approving the Combined Hearing Notice, and
(V) Granting Related Relief [Docket No. 520] (the “Disclosure Statement Motion”).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 20 of 81

7
13.
The amended Plan Supplement, primarily revises the Schedule of Retained Causes
of Action pursuant to the Committee Settlement.
II.
The Plan Solicitation and Notification Process
14.
On or about October 7, 2024, October 11, 2024, and October 16, 2024, the Debtors
caused their notice and claims agent, Omni Agent Solutions, Inc. (the “Notice and Claims Agent”),
to distribute the Solicitation Packages to Holders of Claims entitled to vote on the Plan as of
October 2, 2024 (the “Voting Record Date”)—i.e., the Holders of First Lien Claims (Class 4), and
Second Lien Claims (Class 5, and together with Class 4, the “Voting Classes”) — in accordance
with sections 1125 and 1126 of the Bankruptcy Code.
4  On October 11, 2024, the Debtors caused
the Publication Notice (as defined in the Disclosure Statement Order) to be published in The New
York Times as provided in the Disclosure Statement Order.
5
15.
The Plan constitutes a separate Plan for each of the Debtors, and the classification
of Claims and Interests set forth herein applies separately to each of the Debtors.  For purposes of
administrative convenience, the Plan consolidates the process by which distributions will be made
under the Plan, but the Plan does not contemplate substantive consolidation.
16.
In compliance with the Bankruptcy Code and the Disclosure Statement Order, only
Holders of Claims and Interests in Impaired Classes entitled to receive or retain property on
account of such Claims or Interests were entitled to vote on the Plan.
6  Holders of Claims and
Interests were not entitled to vote if their rights are (a) Unimpaired under the Plan (in which case
such Holders were conclusively presumed to accept the Plan pursuant to section 1126(f) of the
4
See Certificate of Service [Docket No. 707] (the “Solicitation Affidavit”).
5
See Certificate of Publication [Docket No. 620].
6
See 11 U.S.C. § 1126.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 21 of 81

8
Bankruptcy Code) or (b) Impaired and such Holders are not entitled to receive any distribution
under the Plan (in which case such Holders were conclusively deemed to reject the Plan pursuant
to section 1126(g) of the Bankruptcy Code).  With respect to Holders of General Unsecured Claims
(Class 6), as set forth in greater detail herein and in the Plan, pursuant to the Committee Settlement
such Holders may receive a recovery from a carveout of cash that would otherwise go to the
Debtors’ DIP Lenders, if available following the Debtors’ wind-down efforts.  Accordingly, the
following Classes of Claims and Interests were not entitled to vote on the Plan, and the Debtors
did not solicit votes from Holders of such Claims and Interests:
Class
Claim or Interest
Status
Voting Rights
1
Secured Tax Claims
Unimpaired
Not Entitled to Vote (Presumed to Accept)
2
Other Secured Claims
Unimpaired
Not Entitled to Vote (Presumed to Accept)
3
Other Priority Claims
Unimpaired
Not Entitled to Vote (Presumed to Accept)
6
General Unsecured
Claims
Impaired
Not Entitled to Vote (Deemed to Reject)
7
Intercompany Claims
Unimpaired
/ Impaired
Not Entitled to Vote (Presumed to Accept or
Deemed to Reject)
8
Intercompany Interests
Unimpaired
/ Impaired
Not Entitled to Vote (Presumed to Accept or
Deemed to Reject)
9
Existing Equity Interests
Impaired
Not Entitled to Vote (Deemed to Reject)
10
510(b) Claims
Impaired
Not Entitled to Vote (Deemed to Reject)
17.
The Debtors solicited votes on the Plan only from Holders of Claims in Impaired
Classes receiving or retaining property on account of such Claims.  The deadline for all Holders
of Claims and Interests entitled to vote on the Plan to cast their Ballots
7 was November 4, 2024, at
4:00 p.m. (prevailing Eastern Time) (the “Voting Deadline”), and the deadline to object to
confirmation of the Plan was November 4, 2024, at 4:00 p.m. (prevailing Eastern Time)
7
The forms of ballots used in solicitation were included as Exhibit 3A and 3B, attached to the Disclosure Statement
Order (the “Ballots”).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 22 of 81

9
(the “Confirmation Objection Deadline”).  As reflected in the Voting Report, all Ballots for Class 4
and Class 5 that were returned, voted in favor of confirmation of the Plan.
CLASSES
TOTAL BALLOTS RECEIVED
Accept
Reject
AMOUNT
(% of Amount/
Shares Voting)
NUMBER
(% of Number
Voting)
AMOUNT
(% of Amount/
Shares Voting)
NUMBER
(% of Number
Voting)
Class 4
First Lien Claims
$146,189,713.20
(100%)
49
(100%)
$0
(0%)
$0
(0%)
Class 5
Second Lien Claims
$117,549,742.14
(100%)
4
(100%)
$0
(0%)
$0
(0%)
18.
As reflected in the Voting Report, the Voting Classes were also provided with
notice and opportunity to “opt-in” to the Third-Party Release by checking the appropriate box on
the Ballots.  Non-voting stakeholders were given the opportunity to opt in to the Third-Party
Release and received notice and instructions for doing so in their applicable Notice of Non-Voting
Status.  Such stakeholders could opt in by checking the appropriate box on the Notice of
Non-Voting Status or objecting on or before the Opt-In Deadline (November 4, 2024, at 4:00 p.m.
prevailing Eastern Time).
19.
Overall, the Debtors believe the Plan is in the best interest of the Debtors, their
Estates, and other parties in interest, and complies with the applicable provisions of the Bankruptcy
Code.  As set forth above and in the Voting Report, at least one Voting Class voted in favor of
accepting the Plan.  Because the Plan meets the requirements of section 1129(b) as described
below, the Bankruptcy Court should confirm the Plan over the Classes that were deemed to reject
the Plan.  A chapter 7 liquidation merely creates additional administrative burn and does not result
in greater recover for creditors relative to the Plan.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 23 of 81

10
20.
Additionally, the Debtors have consensually resolved certain comments from the
Committee and other parties in interest through modifications incorporated in the modified version
of the Plan filed contemporaneously herewith.
21.
A formal objection was filed by the U.S. Trustee (the “U.S. Trustee Objection”),
and the Debtors have revised the injunction provision of the Plan to consensually resolve the U.S.
Trustee Objection.
22.
The sale transactions represent a significant achievement for the Debtors, their
employees, their vendors and commercial partners, and the patients that rely on the Debtors’
products and services around the world, and consummation of the Plan will provide finality and
the most value-maximizing path forward for all constituencies.
Argument
23.
This memorandum is divided into five parts.  First, the Debtors request approval
of the Disclosure Statement on a final basis and a finding that all notice requirements are satisfied.
Second, the Debtors present their case in chief that the Plan satisfies section 1129 of the
Bankruptcy Code by a preponderance of the evidence and, accordingly, request that the
Bankruptcy Court confirm the Plan.  Third, the Debtors discuss the discretionary content of the
Plan.  Fourth, the Debtors discuss the post-solicitation modifications to the Plan. Fifth, the
Debtors assert that good cause exists to waive the stay of the Confirmation Order.
I.
The Disclosure Statement Contains “Adequate Information” as Required by
Section 1125 and 1126 of the Bankruptcy Code and Satisfies Notice Requirements.
A.
The Disclosure Statement Contains Adequate Information.
24.
Pursuant to section 1125 of the Bankruptcy Code, the proponent of a proposed
chapter 11 plan must provide “adequate information” regarding that plan to holders of impaired
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 24 of 81

11
claims and interests entitled to vote on the plan.  Specifically, section 1125(a)(1) of the Bankruptcy
Code provides, in relevant part, as follows:
‘[A]dequate information’ means information of a kind, and in
sufficient detail, as far as is reasonably practicable in light of the
nature and history of the debtor and the condition of the debtor’s
books and records, including a discussion of the potential material
Federal tax consequences of the plan to the debtor, any successor to
the debtor, and a hypothetical investor typical of the holders of
claims or interests in the case, that would enable such a hypothetical
investor of the relevant class to make an informed judgment about
the plan.
25.
The primary purpose of a disclosure statement is to provide all material
information, or “adequate information,” that allows parties entitled to vote on a proposed plan to
make an informed decision about whether to vote to accept or reject the plan.
8  Congress intended
that such informed judgments would be needed to both negotiate the terms of, and vote on, a
chapter 11 plan.
9
26.
“Adequate information” is a flexible standard, based on the facts and circumstances
of each case.
10  Courts within the Third Circuit and elsewhere acknowledge that determining what
8
See, e.g., Century Glove, Inc. v. First Am. Bank of N.Y., 860 F.2d 94, 100 (3d Cir. 1988) (“[Section] 1125 seeks
to guarantee a minimum amount of information to the creditor asked for its vote.”); In re Monnier Bros., 755 F.2d
1336, 1342 (8th Cir. 1985) (“The primary purpose of a disclosure statement is to give the creditors the information
they need to decide whether to accept the plan.”); In re Phoenix Petrol., Co., 278 B.R. 385, 392 (Bankr.  E.D. Pa.
2001) (“[T]he general purpose of the disclosure statement is to provide ‘adequate information’ to enable
‘impaired’ classes of creditors and interest holders to make an informed judgment about the proposed plan and
determine whether to vote in favor of or against that plan.”); In re Unichem Corp., 72 B.R. 95, 97 (Bankr. N.D.
Ill. 1987) (“The primary purpose of a disclosure statement is to provide all material information which creditors
and equity security holders affected by the plan need in order to make an intelligent decision whether to vote for
or against the plan.”).
9
See Century Glove, Inc., 860 F.2d at 100.
10  11 U.S.C. § 1125(a)(1) (stating that “‘adequate information’ means information of a kind, and in sufficient detail,
as far as is reasonably practicable in light of the nature and history of the debtor and the condition of the debtor’s
books and records”); see also Oneida Motor Freight, Inc. v. United Jersey Bank, 848 F.2d 414, 417 (3d Cir. 1988)
(“From the legislative history of § 1125 we discern that adequate information will be determined by the facts and
circumstances of each case.”); First Am. Bank of N.Y. v. Century Glove, Inc., 81 B.R. 274, 279 (D. Del. 1988)
(noting that adequacy of disclosure for a particular debtor will be determined based on how much information is
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 25 of 81

12
constitutes “adequate information” for the purpose of satisfying section 1125 of the Bankruptcy
Code resides within the broad discretion of the court.
11  Accordingly, the determination of whether
a disclosure statement contains adequate information must be made on a case-by-case basis,
focusing on the unique facts and circumstances of each case.
12
27.
In making a determination as to whether a disclosure statement contains adequate
information as required by section 1125 of the Bankruptcy Code, courts typically look for
disclosures related to topics such as:
a.
the events that led to the filing of a bankruptcy petition;
b. the relationship of the debtor with its affiliates;
c.
a description of the available assets and their value;
d. the debtor’s anticipated future performance;
e.
the source of information stated in the disclosure statement;
f.
the debtor’s condition while in chapter 11;
g. claims asserted against the debtor;
h. the estimated return to creditors under a chapter 7 liquidation of the debtor;
i.
the future management of the debtor;
j.
the chapter 11 plan or a summary thereof;
available from outside sources); S. Rep. No. 95-989, at 121 (1978), as reprinted in 1978 U.S.C.C.A.N. 5787,
5907 (stating that “the information required will necessarily be governed by the circumstances of the case”).
11  See, e.g., In re River Village Assoc., 181 B.R. 795, 804 (E.D. Pa. 1995) (“[T]he Bankruptcy Court is thus given
substantial discretion in considering the adequacy of a disclosure statement.”); In re Phoenix Petrol., 278 B.R. at
393 (same).
12  See In re Phoenix Petrol., 278 B.R. at 393; In re PC Liquidation Corp., 383 B.R. 856, 865 (E.D.N.Y. 2008) (“The
standard for disclosure is, thus, flexible and what constitutes ‘adequate disclosure’ in any particular situation is
determined on a case-by-case basis, with the determination being largely within the discretion of the bankruptcy
court.” (internal citations omitted)); In re Lisanti Foods, Inc., 329 B.R. 491, 507 (Bankr. D. N.J. 2005) (stating
that “[t]he information required will necessarily be governed by the circumstances of the case”).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 26 of 81

13
k. financial information, valuations, and projections relevant to a creditor’s
decision to accept or reject the chapter 11 plan;
l.
information relevant to the risks posed to creditors under the plan;
m. the actual or projected realizable value from recovery of preferential or
otherwise avoidable transfers;
n. litigation likely to arise in a nonbankruptcy context; and
o. tax attributes of the debtor.
13
28.
The Disclosure Statement contains a number of categories of information that
courts consider “adequate information,” including, without limitation:

The Debtors’ Corporate History, Structure, and Business Overview.  An
overview of the Debtors’ corporate history, business operations,
organizational structure, and capital structure is described in Article V of
the Disclosure Statement;

Events Leading to the Chapter 11 Filings.  A detailed overview of the
Debtors’ out-of-court restructuring efforts in response to liquidity
constraints is described in Article VII of the Disclosure Statement;

Material Developments and Anticipated Events of these Chapter 11 Cases.
A summary of the course of events in these Chapter 11 Cases, including the
sale process, is described in Article VIII of the Disclosure Statement;

Risk Factors.  Certain risks associated with the Debtors’ businesses, as well
as certain risks associated with forward-looking statements and an overall
disclaimer as to the information provided by and set forth in the Disclosure
Statement, are described in Article IX of the Disclosure Statement;

Solicitation and Voting Procedures.  A description of the procedures for
soliciting votes to accept or reject the Plan and voting on the Plan is
provided in Article X of the Disclosure Statement;

Confirmation of the Plan.  Confirmation procedures and statutory
requirements for confirmation and consummation of the Plan are described
in Article XI of the Disclosure Statement;
13
See In re U.S. Brass Corp., 194 B.R. 420, 424–25 (Bankr. E.D. Tex. 1996); see also In re Scioto Valley Mortg.
Co., 88 B.R. 168, 170–71 (Bankr. S.D. Ohio 1988) (listing the factors courts have considered in determining the
adequacy of information provided in a disclosure statement); In re Metrocraft Pub. Serv., Inc., 39 B.R. 567, 568
(Bankr. N.D. Ga. 1984) (same).  Disclosure regarding all topics is not necessary in every case.  See In re U.S.
Brass Corp., 194 B.R. at 424; see also In re Phoenix Petroleum, 278 B.R. at 393 (“[C]ertain categories of
information which may be necessary in one case may be omitted in another; no one list of categories will apply
in every case.”).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 27 of 81

14

Material United States Federal Income Tax Consequences.  A description
of certain U.S. federal income tax law consequences of the Plan is provided
in Article XII of the Disclosure Statement;

Recommendation.  A recommendation by the Debtors that Holders of
Claims in the Voting Classes should vote to accept the Plan is included in
Article XIII of the Disclosure Statement; and

Liquidation Analysis.  An analysis of the liquidation value of the Debtors
is filed at Docket No. 532.
29.
In addition, prior to the solicitation, the Disclosure Statement and the Plan were
subject to review and comment by various parties, including the DIP Lenders, the Committee, and
the U.S. Trustee.  The Bankruptcy Court approved the Disclosure Statement on an interim basis
on October 2, 2024, as containing adequate information to commence solicitation.  No party in
interest has requested additional information nor disputed that the Disclosure Statement contained
information sufficient for Impaired Classes to be able to cast an informed vote on the Plan.  For the
reasons set forth above, the Debtors submit that the Disclosure Statement contains adequate
information within the meaning of section 1125(a) of the Bankruptcy Code in satisfaction of
section 1126(b)(2), and should be approved.
B.
The Debtors Complied with Applicable Notice Requirements.
30.
On October 2, 2024, the Bankruptcy Court entered the Disclosure Statement Order
granting the relief requested in the Disclosure Statement Motion, including, among other things,
(a) approving the Solicitation and Voting Procedures, (b) approving the form and manner of the
Combined Hearing Notice and the Publication Notice, and (c) approving certain dates and
deadlines with respect to the Plan and Disclosure Statement.  The Debtors complied with the
procedures and timeline approved by the Disclosure Statement Order.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 28 of 81

15
1.
The Debtors Complied with the Notice Requirements Set Forth in the
Disclosure Statement Order.
31.
The Debtors satisfied the notice requirements set forth in the Disclosure Statement
Order, Bankruptcy Rule 3017, and Local Rule 3017-1.  First, on or about October 7, 2024, the
Debtors caused the Notice and Claims Agent to distribute the Solicitation Packages to Holders of
Claims entitled to vote on the Plan as of the Voting Record Date.
14 Second, the Debtors caused
the Publication Notice to be published in The New York Times on October 11, 2024.
15 Third, the
Combined Hearing Notice included instructions on how to obtain the Plan and the Disclosure
Statement without a fee through the Debtors’ restructuring website or for a fee at the Bankruptcy
Court’s PACER website.
16
2.
The Ballots Used to Solicit Holders of Claims Entitled to Vote on the
Plan Complied with the Disclosure Statement Order.
32.
The forms of Ballots used comply with the Bankruptcy Rules and were
conditionally approved by the Bankruptcy Court pursuant to the Disclosure Statement Order.
17
No party has objected to the sufficiency of the Ballots.  Based on the foregoing, the Debtors submit
that they complied with the Disclosure Statement Order and satisfied the requirements of
Bankruptcy Rule 3018(c).
14
See Solicitation Affidavit.
15
See Certificate of Publication [Docket No. 620].
16
See Combined Hearing Notice [Docket No. 601].
17  See Disclosure Statement Order ¶ 8.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 29 of 81

16
3.
The Debtors’ Solicitation Period Complied with the Disclosure
Statement Order.
33.
The Debtors’ solicitation period complied with the Disclosure Statement Order, the
Bankruptcy Code, Bankruptcy Rules, and Local Rules.  First, the Solicitation Packages, including
instructions for accessing electronic or hard-copy versions of the Plan and Disclosure Statement,
were transmitted to all Holders of Claims entitled to vote on the Plan.
18 Second, the solicitation
period, which lasted from October 7, 2024 through November 4, 2024 at 4:00 p.m. (prevailing
Eastern Time), complied with the Disclosure Statement Order and was adequate under the
particular facts and circumstances of these Chapter 11 Cases.
19 Third, no party has objected on
the basis that it did not have sufficient time to consider the Solicitation Materials.  Accordingly,
the Debtors submit that the solicitation period complied with the Disclosure Statement Order.
4.
The Debtors’ Tabulation Procedures Complied with the Disclosure
Statement Order.
34.
The Debtors request that the Bankruptcy Court find that the Debtors’ tabulation of
votes complied with the Disclosure Statement Order.  The Notice and Claims Agent reviewed all
Ballots received in accordance with the Solicitation and Voting Procedures approved pursuant to
the Disclosure Statement Order.
20  Accordingly, the Debtors respectfully submit that the
Bankruptcy Court should approve the Debtors’ tabulation of votes, confirming that the requisite
Claims voted to accept the Plan pursuant to section 1126(c) of the Bankruptcy Code.
18
See Solicitation Affidavit.
19  See Disclosure Statement Order ¶ 6; Solicitation Affidavit.
20  See Disclosure Statement Order ¶ 13.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 30 of 81

17
5.
Solicitation of the Plan Complied with the Bankruptcy Code and Was
in Good Faith.
35.
Section 1125(e) of the Bankruptcy Code provides that “a person that solicits
acceptance or rejection of a plan, in good faith and in compliance with the applicable provisions
of this title . . . is not liable” on account of such solicitation for violation of any applicable law,
rule, or regulation governing solicitation of acceptance or rejection of a plan.
21
36.
As set forth in the Disclosure Statement and Disclosure Statement Motion, and as
demonstrated by the Debtors’ compliance with the Disclosure Statement Order, the Debtors at all
times engaged in arm’s-length, good-faith negotiations and took appropriate actions in connection
with the solicitation of the Plan in compliance with section 1125 of the Bankruptcy Code.
Therefore, the Debtors respectfully request that the Bankruptcy Court grant the parties the
protections provided under section 1125(e) of the Bankruptcy Code.
II.
The Plan Satisfies Each Requirement for Confirmation.
37.
To confirm the Plan, the Bankruptcy Court must find that the Debtors have satisfied
the provisions of section 1129 of the Bankruptcy Code by a preponderance of the evidence.
22  As
set forth herein, the Plan fully complies with all relevant sections of the Bankruptcy Code—
including sections 1122, 1123, 1125, 1126, and 1129—as well as the Bankruptcy Rules and
applicable non-bankruptcy law.
21  11 U.S.C. § 1125(e).
22  See In re Armstrong World Indus., Inc., 348 B.R. 111, 120, n.15 (D. Del. 2006); In re Genesis Health Ventures,
Inc., 266 B.R. 591, 616 n.23 (Bankr. D. Del. 2001).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 31 of 81

18
A.
The Plan Fully Complies with the Applicable Provisions of the Bankruptcy
Code (§ 1129(a)(1)).
38.
Section 1129(a)(1) of the Bankruptcy Code requires that a plan “compl[y] with the
applicable provisions of [the Bankruptcy Code].”
23  The legislative history of section 1129(a)(1)
of the Bankruptcy Code explains that this provision also encompasses and incorporates the
requirements of sections 1122 and 1123 of the Bankruptcy Code, which govern the classification
of claims and the contents of a chapter 11 plan, respectively.
24  As explained below, the Plan
complies with the requirements of sections 1122, 1123, and 1129 of the Bankruptcy Code, as well
as other applicable provisions.
1.
The Plan Satisfies the Classification Requirements of Section 1122 of
the Bankruptcy Code.
39.
The classification requirement of section 1122(a) of the Bankruptcy Code provides,
in pertinent part, as follows:
Except as provided in subsection (b) of this section, a plan may place
a claim or an interest in a particular class only if such claim or
interest is substantially similar to the other claims or interests of
such class.
25
40.
For a classification structure to satisfy section 1122 of the Bankruptcy Code, not all
substantially similar claims or interests need to be grouped in the same class.
26  Instead, claims or
23  11 U.S.C. § 1129(a)(1).
24  S. Rep. No. 95-989, at 126, reprinted in 1978 U.S.C. C.A.N. 5787, 5912 (1978); H.R. Rep. No. 95-595, at 412,
reprinted in 1978 U.S.C. C.A.N. 5963, 6368 (1977); In re S&W Enter., 37 B.R. 153, 158 (Bankr. N.D. Ill. 1984)
(“An examination of the Legislative History of [section 1129(a)(1)] reveals that although its scope is certainly
broad, the provisions it was most directly aimed at were [s]ections 1122 and 1123.”); In re Nutritional Sourcing
Corp., 398 B.R. 816, 824 (Bankr. D. Del. 2008).
25  11 U.S.C. § 1122(a).
26
Armstrong World Indus., Inc., 348 B.R. at 159.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 32 of 81

19
interests designated to a particular class must be substantially similar to each other.
27  Courts in
this jurisdiction and others have recognized that plan proponents have significant flexibility in
placing similar claims into different classes, provided there is a rational basis to do so.
28
41.
The Plan’s classification of Claims and Interests satisfies the requirements of
section 1122 of the Bankruptcy Code because the Plan places Claims and Interests into ten separate
Classes, with Claims and Interests in each Class differing from the Claims and Interests in each
other Class in a legal or factual way or based on other relevant criteria.
29  Specifically, the Plan
provides for the separate classification of Claims and Interests into the following Classes:
(a) Class 1:  Secured Tax Claims; (b) Class 2:  Other Secured Claims; (c) Class 3:  Other Priority
Claims; (d) Class 4:  First Lien Claims; (e) Class 5:  Second Lien Claims; (f) Class 6:  General
Unsecured Claims; (g) Class 7:  Intercompany Claims; (h) Class 8:  Intercompany Interests;
(i) Class 9:  Existing Equity Interests; and (j) Class 10:  510(b) Claims.
27
Id.
28  Courts have identified grounds justifying separate classification, including (a) where members of a class possess
different legal rights and (b) where there are good business reasons for separate classification.  See John Hancock
Mut. Life Ins. Co. v. Route 37 Bus. Park Assocs., 987 F.2d 154, 158–59 (3d Cir. 1993) (holding that, as long as
each class represents a voting interest that is “sufficiently distinct and weighty to merit a separate voice in the
decision whether the proposed reorganization should proceed,” the classification is proper); In re Jersey City Med.
Ctr., 817 F.2d 1055, 1061 (3d Cir. 1987) (recognizing that separate classes of claims must be reasonable and
allowing a plan proponent to group similar claims in different classes); see also Frito-Lay, Inc. v. LTV Steel Co.
(In re Chateaugay Corp.), 10 F.3d 944, 956–57 (2d Cir. 1993) (finding separate classification appropriate because
classification scheme had a rational basis on account of the bankruptcy court-approved settlement); In re Heritage
Org., L.L.C., 375 B.R. 230, 303 (Bankr. N.D. Tex. 2007) (explaining that “the only express prohibition on
separate classification is that it may not be done to gerrymander an affirmative vote on a reorganization plan”);
In re 500 Fifth Ave. Assocs., 148 B.R. 1010, 1018 (Bankr. S.D.N.Y. 1993) (holding that, although discretion is
not unlimited, “the proponent of a plan of reorganization has considerable discretion to classify claims and
interests according to the facts and circumstances of the case”) (internal quotations omitted); In re Drexel
Burnham Lambert Grp. Inc., 138 B.R. 723, 757 (Bankr. S.D.N.Y. 1992) (“Courts have found that the Bankruptcy
Code only prohibits the identical classification of dissimilar claims.  It does not require that similar classes be
grouped together . . . .”).
29  See Plan, Art. III.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 33 of 81

20
42.
Claims and Interests assigned to each particular Class described above are
substantially similar to the other Claims and Interests in each such Class.
30  In addition, valid
business, legal, and factual reasons justify the separate classification of the particular Claims or
Interests into the Classes created under the Plan, and no unfair discrimination exists between or
among Holders of Claims and Interests.
31  The Plan separately classifies the Claims and Interests
because each Holder of such Claims or Interests may hold (or may have held) rights in the Estates
legally dissimilar to the Claims or Interests in other Classes or because substantial administrative
convenience resulted from such classification.
32  For example, Intercompany Claims (rights to
payment) are classified separately from Intercompany Interests (representing ownership in the
business).  The classification scheme distinguishes Other Priority Claims (Class 3) due to their
relative priority and required treatment under the Bankruptcy Code.  First Lien Claims (Class 4)
are classified separately from Second Lien Claims (Class 5) because of the different circumstances
of each Class and the relative priority of their Claims against the Debtors.
33  Holders of Second
Lien Claims (Class 5) are distinguished from Holders of General Unsecured Claims (Class 6)
because of the different circumstances of each Class, including that the Debtors’ obligations with
respect to the former are secured by collateral.
34
30
See Braley Declaration ¶ 18.
31
See id. at ¶ 21.
32
See generally id. at ¶ 19-21.
33
See id. at ¶ 20.
34
See id.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 34 of 81

21
43.
Accordingly, the Claims or Interests assigned to each particular Class described
above are substantially similar to the other Claims or Interests in each such Class and the
distinctions among Classes are based on valid business, factual, and legal distinctions.
The Debtors submit that the Plan fully complies with and satisfies section 1122(a) of the
Bankruptcy Code.
2.
The
Plan
Satisfies
the
Mandatory
Plan
Requirements
of
Section 1123(a) of the Bankruptcy Code.
44.
Section 1123(a) of the Bankruptcy Code sets forth seven criteria that every
chapter 11 plan must satisfy.  The Plan satisfies each of these requirements.
(1)
Designation
of
Classes of
Claims
and
Equity
Interests
(§ 1123(a)(1))
45.
For the reasons set forth above, Article III of the Plan properly designates classes
of Claims and Interests and thus satisfies the requirement of section 1122 of the
Bankruptcy Code.
35
(2)
Specification of Unimpaired Classes (§ 1123(a)(2))
46.
Section 1123(a)(2) of the Bankruptcy Code requires that the Plan “specify any class
of claims or interests that is not impaired under the plan.”
36  The Plan meets this requirement by
identifying each Class in Article III that is Unimpaired.
37
35  See Plan, Art. III.A.
36  11 U.S.C. § 1123(a)(2).
37
See Plan, Art. III.A-B.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 35 of 81

22
(3)
Treatment of Impaired Classes (§ 1123(a)(3))
47.
Section 1123(a)(3)
of
the
Bankruptcy
Code
requires
that
the
Plan
“specify the treatment of any class of claims or interests that is impaired under the plan.”
38
The Plan meets this requirement by setting forth the treatment of each Class in Article III that is
Impaired.
39
(4)
Equal Treatment within Classes (§ 1123(a)(4))
48.
Section 1123(a)(4) of the Bankruptcy Code 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 such particular claim or interest.”
40 The Plan meets
this requirement because Holders of Allowed Claims or Interests will receive the same rights and
treatment as other Holders of Allowed Claims or Interests within such Holders’ respective Class.
41
(5)
Means for Implementation (§ 1123(a)(5))
49.
Section 1123(a)(5) of the Bankruptcy Code requires that the Plan provide
“adequate means” for its implementation.
42  The Plan, together with the documents and forms of
agreement included in the Plan Supplement, provides a detailed blueprint for the transactions that
underlie the Plan, which are focused on an orderly wind-down of the estate after all operating
assets have been sold.
38  11 U.S.C. § 1123(a)(3).
39
See id.
40  11 U.S.C. § 1123(a)(4).
41  See Plan, Art. III.B.
42  11 U.S.C. § 1123(a)(5).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 36 of 81

23
50.
Article IV of the Plan, in particular, sets forth the means for implementation of the
Plan, which include, inter alia:  (a) the Restructuring Transactions, including the execution and
delivery of any appropriate agreements or documents pursuant to the Plan; (b) the sources of
consideration for Plan distributions; (c) the vesting of assets in Wind-Down Debtors; (d)
establishment of the Liquidating Trust (if any); (e) establishment of the Plan Administrator; and
(f) the preservation of Causes of Action.
43  In addition to these core transactions, the Plan sets forth
other critical mechanics of the Debtors’ liquidation, such as the dissolution of the Wind-Down
Debtor and non-debtor affiliates, cancellation of securities and agreements, and the payment of
certain fees.
44
51.
The precise terms governing the execution of these transactions are set forth in
greater detail in the Plan and the Plan Supplement.  The Debtors believe that the Plan satisfies
section 1123(a)(5) of the Bankruptcy Code.
(6)
Issuance of Non-Voting Securities (§ 1123(a)(6))
52.
Section 1123(a)(6) of the Bankruptcy Code requires that a debtor’s corporate
constituent documents prohibit the issuance of nonvoting equity securities.
45  Because the Debtors
and the Wind-Down Debtors, as applicable, will be wound down, there will not be any issuance
of any new securities under the Plan.  Accordingly, section 1123(a)(6) of the Bankruptcy Code
does not apply to the Plan.
43
See Plan, Art. IV.
44
Id.
45  11 U.S.C. § 1123(a)(6).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 37 of 81

24
(7)
Directors and Officers (§ 1123(a)(7))
53.
Section 1123(a)(7) of the Bankruptcy Code requires that plan provisions with
respect to the manner of selection of any director, officer, or trustee, or any other successor thereto,
be “consistent with the interests of creditors and equity security holders and with public policy.”
46
The Plan satisfies this requirement by providing for the deemed resignation of the Debtors’
directors and officers from their duties and the appointment of the Plan Administrator to act for
each Wind-Down Debtor in the same fiduciary capacity as applicable to a board of managers and
officers, subject to terms of the Plan (and all governance documents are deemed amended by the
Plan to permit and authorize the same).
47
B.
The Debtors Complied with the Applicable Provisions of the Bankruptcy Code
(§ 1129(a)(2)).
54.
The Debtors have satisfied section 1129(a)(2) of the Bankruptcy Code, which
requires the plan proponent to comply with the applicable provisions of the Bankruptcy Code.
48
The legislative history to section 1129(a)(2) provides that section 1129(a)(2) is intended to
encompass the disclosure and solicitation requirements set forth in section 1125 and the plan
acceptance requirements set forth in section 1126 of the Bankruptcy Code.
49  As set forth herein,
the Debtors have complied with these provisions, including sections 1125 and 1126 of the
46  11 U.S.C. § 1123(a)(7).
47
See Plan, Art. IV.E.
48  See 11 U.S.C. § 1129(a)(2).
49  See In re Lapworth, 1998 WL 767456, at *3 (DWS) (Bankr. E.D. Pa. Nov. 2, 1998) (“The legislative history of
§ 1129(a)(2) specifically identifies compliance with the disclosure requirements of § 1125 as a requirement of
§ 1129(a)(2).”); In re Aleris Int’l, Inc., 2010 WL 3492664, at *20 (Bankr. D. Del. May 13, 2010) (“[S]ection
1129(a)(2) of the Bankruptcy Code reflects that this provision is intended to encompass the solicitation and
disclosure requirements under sections 1125 and 1126 of the Bankruptcy Code.”); S. Rep. No. 989, 95th Cong.,
2d Sess., at 126 (1978); H.R. Rep. No. 595, 95th Cong., 1st Sess., at 412 (1977).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 38 of 81

25
Bankruptcy Code, as well as Bankruptcy Rules 3017 and 3018, by distributing the Disclosure
Statement and soliciting acceptances of the Plan through their Notice and Claims Agent in
accordance with the Disclosure Statement Order.
1.
The Debtors Complied with Section 1125 of the Bankruptcy Code.
55.
Section 1125 of the Bankruptcy Code prohibits the solicitation of acceptances or
rejections of a chapter 11 plan “unless, at the time of or before such solicitation, there is transmitted
to such holder the plan or a summary of the plan, and a written disclosure statement approved,
after notice and a hearing, by the court as containing adequate information.”
50 Section 1125 ensures
that parties in interest are fully informed regarding the debtor’s condition so that they may make
an informed decision whether to approve or reject the plan.
51
56.
Section 1125 is satisfied here.  Before the Debtors solicited votes on the Plan, the
Bankruptcy Court approved the Disclosure Statement on an interim basis in accordance with
section 1125(a)(1).
52  The Bankruptcy Court also approved the contents of the Solicitation
Packages provided to Holders of Claims entitled to vote on the Plan, the non-voting materials
provided to parties not entitled to vote on the Plan, and the relevant deadlines for voting on and
objecting to the Plan.
53  As reflected in the Solicitation Affidavit, the Debtors, through their Notice
and Claims Agent, complied with the content and delivery requirements of the Disclosure
50  11 U.S.C. § 1125(b).
51  See Momentum Mfg. Corp. v. Emp. Creditors Comm. (In re Momentum Mfg. Corp.), 25 F.3d 1132, 1136 (2d Cir.
1994) (finding that section 1125 of the Bankruptcy Code obliges a debtor to engage in full and fair disclosure that
would enable a hypothetical reasonable investor to make an informed judgment about the plan).
52  See generally Disclosure Statement Order.
53
Id.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 39 of 81

26
Statement Order,
54 thereby satisfying sections 1125(a) and (b) of the Bankruptcy Code.  The
Debtors also satisfied section 1125(c) of the Bankruptcy Code, which provides that the same
disclosure statement must be transmitted to each holder of a claim or interest in a particular class.
Here, the Debtors caused a Solicitation Package or a Non-Voting Status Notice Package, as
applicable, each of which included instructions for accessing electronic or hard-copy versions of
the Disclosure Statement, to be transmitted to each Holder of a Claim or Interest.
55
57.
Based on the foregoing, the Debtors submit that they have complied in all respects
with the solicitation requirements of section 1125 of the Bankruptcy Code and the Disclosure
Statement Order.
2.
The Debtors Satisfied the Plan Acceptance Requirements of
Section 1126 of the Bankruptcy Code.
58.
Section 1126 of the Bankruptcy Code specifies the requirements for acceptance of
a chapter 11 plan.  Specifically, under section 1126 of the Bankruptcy Code, only holders of
allowed claims and equity interests in impaired classes of claims or interests that will receive or
retain property under a plan on account of such claims or interests may vote to accept or reject
such plan.  Section 1126 of the Bankruptcy Code provides, in pertinent part, that:
(a)
The holder of a claim or interest allowed under section 502
of [the Bankruptcy Code] may accept or reject a plan . . . .
(f)
Notwithstanding any other provision of this section, a class
that is not impaired under a plan, and each holder of a claim
or interest of such class, are conclusively presumed to have
accepted the plan, and solicitation of acceptances with
54  See Solicitation Affidavit.
55  See Solicitation Affidavit.  The “Non-Voting Status Notice Package” as used herein shall refer to the package of
documents as referenced in the Solicitation Affidavit ¶ 2–4, as applicable.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 40 of 81

27
respect to such class from the holders of claims or interests
of such class is not required.
56
59.
As set forth above, in accordance with section 1125 of the Bankruptcy Code, the
Debtors solicited acceptances or rejections of the Plan from the Holders of Allowed Claims in
Class 4 (First Lien Claims) and Class 5 (Second Lien Claims).  The Debtors did not solicit votes
from Holders of Claims and Interests in Class 1 (Secured Tax Claims), Class 2 (Other Secured
Claims), and Class 3 (Other Priority Claims) because Holders of Claims in these Classes are
Unimpaired and, pursuant to section 1126(f) of the Bankruptcy Code, are conclusively presumed
to have accepted the Plan.
57  Depending on their ultimate treatment by the Debtors, Holders of
Claims and Interests in Class 7 (Intercompany Claim Claims) and Class 8 (Intercompany Interests)
will be either conclusively deemed to accept or conclusively deemed to reject the Plan, and in
either scenario are not entitled to vote on the Plan.
58  Holders of Claims and Interests in Class 9
(Existing Equity Interests) and Class 10 (510(b) Claims) will receive no distribution on account of
their Claims or Interests and, pursuant to section 1126(g) of the Bankruptcy Code, are deemed to
reject the Plan.
59  Further, the Debtors waived their right to solicit votes from Holders of Claims in
Class 6 (General Unsecured Claims) and treated such Class as rejecting the Plan.
60  Pursuant to the
Committee Settlement, such Holders will receive a recovery by negotiated resolution that only
56  11 U.S.C. § 1126(a), (f).
57  See Plan, Art. III.A-B.
58
Id.
59
Id.
60  Braley Declaration ¶ 79.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 41 of 81

28
enhances their treatment relative to the version of the Plan that was solicited.
61  Thus, pursuant to
section 1126(a) of the Bankruptcy Code, only Holders of Claims in Classes 4 and 5 were entitled
to vote to accept or reject the Plan.
62
60.
With respect to the voting classes, section 1126(c) of the Bankruptcy Code provides
that a class accepts a plan where holders of claims holding at least two-thirds in amount and more
than one-half in number of allowed claims in such class vote to accept such plan.
61.
The Voting Report, summarized above, reflects the results of the voting process in
accordance with section 1126 of the Bankruptcy Code.
63  As set forth in the Voting Declaration
and summarized above, all Holders of Claims in Class 4 and Class 5 that submitted a ballot voted
in favor of confirmation of the Plan.
64  Additionally, as discussed below, the Debtors have satisfied
the requirements of section 1129(a)(10) of the Bankruptcy Code and will be able to “cram down”
on the Holders of Claims in Classes 6, 7, 8, 9, and 10.  Based on the foregoing, the Debtors submit
that they have satisfied the requirements of section 1129(a)(2).
C.
The Plan Was Proposed in Good Faith (§ 1129(a)(3)).
62.
Section 1129(a)(3) of the Bankruptcy Code requires that a chapter 11 plan be
“proposed in good faith and not by any means forbidden by law.”
65  Where a plan satisfies the
purposes of the Bankruptcy Code and has a good chance of succeeding, the good faith requirement
61
Id.
62  See Plan, Art.III.A–B; see also Solicitation Affidavit.
63  See generally Voting Report.
64
Id.
65  11 U.S.C. § 1129(a)(3).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 42 of 81

29
of section 1129(a)(3) of the Bankruptcy Code is satisfied.
66  To determine whether a plan seeks
relief consistent with the Bankruptcy Code, courts consider the totality of the circumstances
surrounding the development of the plan.
67
63.
The Debtors negotiated, developed, and proposed the Plan with integrity, good
intentions, and with the goal of maximizing recoveries for the benefit of their stakeholders.
68
Throughout these Chapter 11 Cases, the Debtors worked to build consensus among their various
stakeholders.
69  The Plan and the process leading up to its formulation are the result of extensive
arm’s-length negotiations among the Debtors, their lenders, the Purchasers, the Committee, and
other parties in interest.
70
64.
Throughout the negotiation of the Plan and these cases, the Debtors have upheld
their fiduciary duties to stakeholders and protected the interests of all constituents with an even
hand.
71  Accordingly, the Plan and the Debtors’ conduct satisfy section 1129(a)(3) of the
Bankruptcy Code.
66
E.g., In re PWS Holding Corp., 228 F.3d 224, 242 (3d Cir. 2000) (quoting In re Abbotts Dairies of Pa., Inc., 788
F.2d 143, 150 n.5 (3d Cir. 1986)); Fin. Sec. Assurance Inc. v. T-H New Orleans Ltd. P’ship (In re T-H New
Orleans Ltd. P’ship), 116 F.3d 790, 802 (5th Cir. 1997) (quoting Brite v. Sun Country Dev., Inc. (In re Sun
Country Dev., Inc.), 764 F.2d 406, 408 (5th Cir. 1985)); In re Century Glove, Inc., Civ. A. Nos. 90-400 and
90-401, 1993 WL 239489, at *4 (D. Del. Feb. 10, 1993); In re NII Holdings, Inc., 288 B.R. 356, 362 (Bankr.
D. Del. 2002).
67  E.g., T-H New Orleans, 116 F.3d at 802 (quoting In re Sun Country Dev., Inc., 764 F.2d at 408); In re W.R.
Grace & Co., 475 B.R. 34, 87 (D. Del. 2012); Century Glove, 1993 WL 239489, at *4.
68
See Braley Declaration ¶ 53.
69
See id.
70  See id.
71
Id. at  ¶ 53.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 43 of 81

30
D.
The Plan Provides that the Debtors’ Payment of Professional Fees and
Expenses Are Subject to Bankruptcy Court Approval (§ 1129(a)(4)).
65.
Section 1129(a)(4) of the Bankruptcy Code requires that certain fees and expenses
paid by the plan proponent, by the debtor, or by a person receiving distributions of property under
the plan, be subject to approval by the Bankruptcy Court as reasonable.
72  Courts have construed
this section to require that all payments of professional fees paid out of estate assets be subject to
review and approval by the Bankruptcy Court as to their reasonableness.
73
66.
The Plan satisfies section 1129(a)(4) of the Bankruptcy Code.  All payments made
or to be made by the Debtors for services or for costs or expenses in connection with these
Chapter 11 Cases prior to the Effective Date, including all Professional Fee Claims, have been
approved by, or are subject to approval of, the Bankruptcy Court.
74  Article II.B.1 of the Plan
provides that all final requests for payment of Professional Fee Claims shall be filed no later than
60 days after the Effective Date for determination by the Bankruptcy Court, after notice and a
hearing, in accordance with the procedures established by the Bankruptcy Court.
75  Accordingly,
the Plan fully complies with the requirements of section 1129(a)(4) of the Bankruptcy Code.
72  11 U.S.C. § 1129(a)(4).
73  Lisanti Foods, 329 B.R. at 503 (“Pursuant to § 1129(a)(4), a [p]lan should not be confirmed unless fees and
expenses related to the [p]lan have been approved, or are subject to the approval, of the Bankruptcy Court”), aff’d,
241 F. App’x 1 (3d Cir. 2007); In re Future Energy Corp., 83 B.R. 470, 488 (Bankr. S.D. Ohio 1988);
In re Chapel Gate Apartments, Ltd., 64 B.R. 569, 573 (Bankr. N.D. Tex. 1986) (noting that, before a plan may be
confirmed, “there must be a provision for review by the Court of any professional compensation”).
74  See Plan, Art. II; see also Braley Declaration ¶ 55.
75
Id.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 44 of 81

31
E.
The Debtors Have Complied with the Governance Disclosure Requirement
(§ 1129(a)(5)).
67.
Section 1129(a)(5)(A)(ii) of the Bankruptcy Code requires the plan proponent to
disclose the identity and affiliation of any individual proposed to serve as a director or officer of
the debtor or a successor to the debtor under the plan and that the appointment or continuance of
such officers and directors be consistent with the interests of creditors and equity security holders
and public policy.
76
68.
The Plan satisfies section 1129(a)(5).  Article IV.E of the Plan provides for a Plan
Administrator.  The Plan further provides that the Plan Administrator will act for the Wind-Down
Debtor in the same fiduciary capacity as applicable to a board of managers and officers and that,
on the Effective Date, the authority, power, and incumbency of the persons acting as directors and
officers of the Wind-Down Debtor shall be deemed to have resigned, solely in their capacities as
such.
77  At such time, the Plan Administrator, David M. Barse, will be appointed as the sole director
and sole officer of the Wind-Down Debtor.
78  Accordingly, the Plan fully complies with and
satisfies all of the requirements of section 1129(a)(5) of the Bankruptcy Code.
F.
The
Plan
Does
Not Require
Governmental
Regulatory
Approval
(§ 1129(a)(6)).
69.
Section 1129(a)(6) of the Bankruptcy Code requires that any rate change provided
for in a plan be approved by or subject to the approval of all governmental regulatory commissions
with jurisdiction, if any.
79  The Plan does not provide for any rate changes, and the Debtors are not
76  11 U.S.C. § 1129(a)(5)(A).
77
See Plan, Art.IV.E.
78
See Plan, Art. IV.E; Plan Supplement, Ex. E.
79  11 U.S.C. § 1129(a)(6).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 45 of 81

32
subject to any such regulation.
80  Thus, section 1129(a)(6) of the Bankruptcy Code does not apply
to the Plan.
G.
The Plan Is in the Best Interests of All the Debtors’ Creditors (§ 1129(a)(7)).
70.
Section 1129(a)(7) of the Bankruptcy Code, commonly known as the “best interests
test,” requires that, with respect to each impaired class of claims or interests, each individual holder
of a claim or interest has either accepted the plan or will receive or retain property having a value
of not less than the value such holder would receive if the debtor were liquidated under chapter 7
of the Bankruptcy Code.
81  The best interests test applies to individual dissenting holders of
impaired claims and interests rather than classes,
82 and is generally satisfied through a comparison
of the estimated recoveries for a debtor’s stakeholders in a hypothetical chapter 7 liquidation of
that debtor’s estate against the estimated recoveries under that debtor’s chapter 11 plan.
83
71.
As set forth in the Disclosure Statement,
84 the Debtors, with the assistance of
AlixPartners, the Debtors’ financial advisor, prepared a liquidation analysis, which is attached to
80
See Braley Declaration ¶ 59.
81  11 U.S.C. § 1129(a)(7).
82
See Bank of Am. Nat. Trust & Sav. Ass’n v. 203 N. LaSalle St. P’ship, 526 U.S. 434, 441 n.13 (1999) (“The ‘best
interests’ test applies to individual creditors holding impaired claims, even if the class as a whole votes to accept
the plan.”); Century Glove, 1993 WL 239489, at *7; In re Adelphia Commc’ns Corp., 368 B.R. 140, 251 (Bankr.
S.D.N.Y. 2007) (stating that section 1129(a)(7) is satisfied when an impaired holder of claims would receive “no
less than such holder would receive in a hypothetical chapter 7 liquidation”).
83
See In re Stone & Webster, Inc., 286 B.R. 532, 544–45 (Bankr. D. Del. 2002) (citation omitted) (“The application
of the best interest test involves a hypothetical application of chapter 7 to a chapter 11 plan.  A liquidation and
distribution analysis is performed to see whether each holder of a claim or interest in each impaired class, as such
classes are defined in the subject plan, receive not less than the holders would receive in a ‘hypothetical Chapter 7
distribution’ to those classes.”); In re Smith, 357 B.R. 60, 67 (Bankr. M.D.N.C. 2007) (“In order to show that a
payment under a plan is equal to the value that the creditor would receive if the debtor were liquidated, there must
be a liquidation analysis of some type that is based on evidence and not mere assumptions or assertions.”)
(citations omitted).
84  See Disclosure Statement, Art. XI.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 46 of 81

33
the
Notice
of
Filing
of
Liquidation
Analysis
[Docket
No.
532]
as
Exhibit 1
(the “Liquidation Analysis”).  The Liquidation Analysis reflects that the Debtors’ businesses under
chapter 7 of the Bankruptcy Code would result in diminution in the value to be realized by Holders
of Allowed Claims or Interests as compared to distributions contemplated under the Plan.
Importantly, because this is a liquidating plan, creditors are receiving all of the remaining assets
in the Debtors’ estates, subject to the terms of the Plan and the settlements embodied therein.  In
light of the minimal remaining assets, consensual resolutions and settlements embodied in the Plan,
and incremental costs of a liquidation, no party would do better in an alternative structure,
including a chapter 7 liquidation.
85 Rather, the General Unsecured Creditors would likely receive
nothing in a chapter 7, and would likely be pursued for preference actions pursuant to section 547
of the Bankruptcy Code, but are being provided the potential for a recovery and a release of
preference actions under the Plan based on the Committee Settlement.  Additionally, the provision
of transition services to the Purchasers in connection with their distribution of life-saving products
to hospitals and patients could be jeopardized in a disruptive liquidation process without the
support of the Plan Administrator and the Wind-Down Debtors’ advisors.  Accordingly, with
respect to remaining assets, the Plan satisfies section 1129(a)(7) of the Bankruptcy Code.
H.
The
Plan
Is
Confirmable
Notwithstanding
the
Requirements
of
Section 1129(a)(8) of the Bankruptcy Code.
72.
Section 1129(a)(8) of the Bankruptcy Code requires that each class of claims or
interests must either accept a plan or be unimpaired under a plan.
86  Pursuant to section 1126(c) of
the Bankruptcy Code, a class of claims accepts a plan if holders of at least two thirds in amount
85
Id. See also Braley Declaration ¶ 61.
86  See 11 U.S.C. § 1129(a)(8).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 47 of 81

34
and more than one half in number of the allowed claims in that class vote to accept the plan.
87
Pursuant to section 1126(d) of the Bankruptcy Code, a class of interests accepts a plan if holders
of at least two thirds in amount of the allowed interests in that class vote to accept the plan.
88
A class that is not impaired under a plan, and each holder of a claim or interest in such a class, is
conclusively presumed to have accepted the plan.  On the other hand, a class is deemed to have
rejected a plan if the plan provides that the claims or interests of that class do not receive or retain
any property under the plan on account of such claims or interests.
73.
If any class of claims or interests rejects the plan, the plan must satisfy the
“cramdown” requirements with respect to the claims or interests in that class.
89  Because certain
Classes are deemed to reject the Plan, the Debtors do not satisfy section 1129(a)(8) of the
Bankruptcy Code.  However, the Debtors satisfy the cram down requirements, as discussed in
greater detail in Section II.O below.
74.
As set forth above and as reflected in the Voting Report, Classes 1, 2, and 3 are
deemed to have accepted the Plan and Classes 4 and 5 have voted to accept the Plan.  Moreover,
Holders of Claims and Interests in Classes 6, 7 (if the Debtors elect to impair Intercompany
Claims), 8 (if the Debtors elect to impair Intercompany Interests), 9 and 10 are deemed to have
rejected the Plan and, thus, were not entitled to vote.
90
87
See 11 U.S.C. § 1126(c).
88
See 11 U.S.C. § 1126(d).
89
See 11 U.S.C. § 1129(a)(8).
90
See Plan, Art. III.A–B; see also Braley Declaration ¶ 62.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 48 of 81

35
75.
The Debtors meet the requirements of section 1129(b) of the Bankruptcy Code to
“cram down” these rejecting classes, as discussed below.
I.
The Plan Provides for Payment in Full of All Allowed Priority Claims
(§ 1129(a)(9)).
76.
Section 1129(a)(9) of the Bankruptcy Code requires that certain priority claims be
paid in full on the effective date of a plan and that the holders of certain other priority claims
receive deferred cash payments.
91  In particular, pursuant to section 1129(a)(9)(A) of the
Bankruptcy Code, holders of claims of a kind specified in section 507(a)(2) of the
Bankruptcy Code—administrative claims allowed under section 503(b) of the Bankruptcy Code—
must receive on the effective date cash equal to the allowed amount of such claims.
92
Section 1129(a)(9)(B) of the Bankruptcy Code requires that each holder of a claim of a kind
specified in section 507(a)(1) or (4) through (7) of the Bankruptcy Code—generally wage,
employee benefit, and deposit claims entitled to priority—must receive deferred cash payments of
a value, as of the effective date of the plan, equal to the allowed amount of such claim (if such
class has accepted the plan), or cash of a value equal to the allowed amount of such claim on the
effective date of the plan (if such class has not accepted the plan).
93  Finally, section 1129(a)(9)(C)
of the Bankruptcy Code provides that the holder of a claim of a kind specified in section 507(a)(8)
of the Bankruptcy Code—i.e., priority tax claims—must receive cash payments over a period not
91
See 11 U.S.C. § 1129(a)(9).
92  11 U.S.C. § 1129(a)(9)(A).
93  11 U.S.C. § 1129(a)(9)(B).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 49 of 81

36
to exceed five years from the petition date, the present value of which equals the allowed amount
of the claim.
94
77.
The Plan satisfies section 1129(a)(9) of the Bankruptcy Code.  First, Article II.A
of the Plan satisfies section 1129(a)(9)(A) of the Bankruptcy Code because it provides that each
holder of an Allowed Administrative Claim will receive payment in an amount of Cash equal to
the amount of the unpaid portion of such Allowed Administrative Claim in accordance with the
following:  (1) if such Administrative Claim is Allowed on or prior to the Effective Date, on the
Effective Date (or, if not then due, when such Allowed Administrative Claim is due or as soon as
reasonably practicable thereafter); (2) if such Administrative Claim is not Allowed as of the
Effective Date, no later than 30 days after the date on which an order Allowing such Administrative
Claim becomes a Final Order, or as soon as reasonably practicable thereafter; (3) if such Allowed
Administrative Claim is based on liabilities incurred by the Debtors in the ordinary course of their
business after the Petition Date, in accordance with the terms and conditions of the particular
transaction or course of business giving rise to such Allowed Administrative Claim, without any
further action by the Holder of such Allowed Administrative Claim; (4) at such time and upon
such terms as may be agreed upon by the Holder of such Allowed Administrative Claim and the
Debtors or the Wind-Down Debtors, as applicable; or (5) at such time and upon such terms as set
forth in a Final Order of the Bankruptcy Court.
95 Second, the Plan satisfies section 1129(a)(9)(B)
of the Bankruptcy Code because no Holders of the types of Allowed Claims specified by
94  11 U.S.C. § 1129(a)(9)(C).
95  See Plan, Art. II.A.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 50 of 81

37
1129(a)(9)(B) are Impaired under the Plan.
96  More specifically, under Article III.B of the Plan,
except to the extent that a Holder of an Allowed Other Priority Claim agrees to less favorable
treatment, on the Effective Date, in full and final satisfaction, compromise, settlement, and release
of and in exchange for such Allowed Other Priority Claim, each Holder of an Allowed Other
Priority Claim shall receive payment in full in Cash on account of such Holder’s Allowed Other
Priority Claim or such other treatment rendering such Holder’s Allowed Other Priority Claim
Unimpaired.
97 Third, Article II.D of the Plan satisfies section 1129(a)(9)(C) of the Bankruptcy
Code because it provides that Holders of Allowed Priority Tax Claims shall be treated in
accordance with the terms set forth in section 1129(a)(9)(C) of the Bankruptcy Code.
98  The Plan
thus satisfies each of the requirements of section 1129(a)(9) of the Bankruptcy Code.
78.
As discussed in the Braley Declaration, and in Mr. Braley’s testimony before the
Bankruptcy Court at the August 30, 2024 hearing for approval of the Zoll Transaction and the
Trudell Transaction, the Debtors have carefully prepared the Wind-Down Budget, estimating
expected Allowed Administrative Claims and maintaining adequate liquidity to satisfy such
estimated Allowed Administrative Claims.
99  The Plan provides for Cash payments to Holders of
Claims entitled to priority under section 507(a).
79.
Accordingly, the Plan satisfies the requirements of section 1129(a)(9) of the
Bankruptcy Code.
96
See Braley Declaration ¶ 63.
97  See Plan, Art. III.B.
98  See Plan, Art. II.D.
99
See Braley Declaration ¶ 74; see also In re Vyaire Med., Inc. No. 24-11217 (BLS), Hr’g Tr. 27:13–14 (Bankr. D.
Del. Aug. 30, 2024).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 51 of 81

38
J.
At Least One Class of Impaired, Non-Insider Claims Accepted the Plan
(§ 1129(a)(10)).
80.
Section 1129(a)(10) of the Bankruptcy Code provides that, to the extent there is an
impaired class of claims, at least one impaired class of claims must accept the plan, “without
including any acceptance of the plan by any insider,” as an alternative to the requirement under
section 1129(a)(8) of the Bankruptcy Code that each class of claims or interests must either accept
the plan or be unimpaired under the plan.
100  As detailed herein and in the Voting Report, the
Debtors have obtained the requisite acceptance to confirm the Plan because Class 4 and Class 5
each voted to accept the Plan.  Accordingly, the Plan satisfies the requirements of
section 1129(a)(10) of the Bankruptcy Code.
K.
The Plan Is Feasible (§ 1129(a)(11)).
81.
Section 1129(a)(11) of the Bankruptcy Code requires that the Bankruptcy Court
find that a plan is feasible as a condition precedent to confirmation.  Specifically, the Bankruptcy
Court must determine that “[c]onfirmation of the plan is not likely to be followed by the
liquidation, or the need for further financial reorganization, of the debtor or any successor to the
debtor under the plan, unless such liquidation or reorganization is proposed in the plan.”
101
To demonstrate that a plan is feasible, it is not necessary for a debtor to guarantee success.
102
100  11 U.S.C. § 1129(a)(10).
101  11 U.S.C. § 1129(a)(11).
102
See Kane v. Johns-Manville Corp., 843 F.2d 636, 649 (2d Cir. 1988) (“[T]he feasibility standard is whether the
plan offers a reasonable assurance of success.  Success need not be guaranteed.”); In re Flintkote Co., 486 B.R.
99, 139 (Bankr. D. Del. 2012); W.R. Grace & Co., 475 B.R. at 115 (“[T]he bankruptcy court need not require a
guarantee of success, but rather only must find that ‘the plan present[s] a workable scheme of organization and
operation from which there may be [a] reasonable expectation of success.’”) (citations omitted); In re U.S. Truck
Co., 47 B.R. 932, 944 (E.D. Mich. 1985) (“‘Feasibility’ does not, nor can it, require the certainty that a
reorganized company will succeed.”), aff’d, 800 F.2d 581 (6th Cir. 1986).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 52 of 81

39
Rather, a debtor must provide only a reasonable assurance of success.
103  There is a relatively low
threshold of proof necessary to satisfy the feasibility requirement.
104
82.
Here, the Plan is feasible as it is an orderly wind-down with allocated funding.  As
set forth in the Braley Declaration, the Debtors and their advisors have thoroughly analyzed their
ability to meet their obligations under the Plan.
105  The Debtors and the Wind-Down Debtors, as
applicable, shall fund the distributions and obligations under the Plan with Available Cash held by
the Debtors or in reserves, and the Wind-Down Debtor Account, as applicable on the Effective
Date.
106  In addition to other assets, the Available Cash will be largely comprised of proceeds from
the Zoll Transaction and the Trudell Transaction, along with assumptions of certain liabilities
thereunder.
107  As indicated in Article II.C. of the Plan, each Holder of an Allowed DIP Claim has
consented to receive payment in full in Cash in the amount of such Holder’s pro rata share of the
Distributable Value, in accordance with the terms of the DIP documents and the Sale Orders,
notwithstanding any deficiency in the payment of the Allowed DIP Claims.
103
Kane, 843 F.2d at 649; Flintkote Co., 486 B.R. at 139; In re W.R. Grace & Co., 475 B.R. 34, 115 (D. Del. 2012);
see also Matter of Pizza of Haw., 761 F.2d 1374, 1382 (9th Cir. 1985) (holding that “[t]he purpose of
section 1129(a)(11) is to prevent confirmation of visionary schemes which promise creditors and equity security
holders more under a proposed plan than the debtor can possibly attain after confirmation”) (citations omitted);
accord In re Capmark Fin. Grp., 2011 WL 6013718, at *61 (Bankr. D. Del. 2011) (same).
104  See, e.g., In re Prussia Assocs., 322 B.R. 572, 584 (Bankr. E.D. Pa. 2005) (quoting approvingly that “[t]he Code
does not require the debtor to prove that success is inevitable, and a relatively low threshold of proof will satisfy
§ 1129(a)(11) so long as adequate evidence supports a finding of feasibility”) (internal citations omitted);
In re Sea Garden Motel & Apartments, 195 B.R. 294, 305 (D. N.J. 1996); In re Tribune Co., 464 B.R. 126, 185
(Bankr. D. Del. 2011), overruled in part on other grounds, 464 B.R. 208 (Bankr. D. Del. 2011).
105  See Braley Declaration ¶¶ 67–76.
106
See id. at ¶ 68.
107
See Braley Declaration ¶ 68.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 53 of 81

40
83.
In addition, as set forth in the Braley Declaration, the Debtors sized the wind-down
contribution contemplated by the Sale Transactions in order to make the Plan feasible.
108  The
Debtors anticipate having sufficient funds from the Available Cash to make all distributions
contemplated by the Plan, including cash sufficient to pay all known administrative expense claims
pursuant to section 1129(a)(9).
109 Additionally, the Purchasers assumed many contracts that
generated administrative claims and cure obligations related thereto (subject to the terms of the
applicable asset purchase agreements).
84.
As set forth in the Braley Declaration, the Debtors believe that the Plan’s required
distributions and obligations have been reasonably accounted for.
110  The Debtors have
appropriately reserved, from their Available Cash from the Wind-Down Budget attached to the
Plan Supplement as Exhibit F, Cash to fund their expected obligations under the Plan.
111  The
Debtors sized the Wind-Down Budget with approximately $[18.5] million to fund Wind-Down
costs including the payment of certain employee-related costs, account-payable accrued liabilities,
taxes, international obligations, legal and professional fees, and other Wind-Down expenses.
112
Further, in accordance with the DIP Orders, the Debtors maintained a reserve account for Debtor
and Committee professional fees, which will constitute the Professional Fee Escrow Account
under the Plan, and that will be used to satisfy the Professional Fee Claims arising through the
108
See id. at ¶¶ 74, 76.
109
See id. at ¶ 74.
110
See generally id. at ¶¶ 67–76.
111
See id. at ¶ 74.
112
See id.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 54 of 81

41
Confirmation Date.
113  The Debtors with their advisors have analyzed the Wind-Down and, based
on information available, reasonably believe that they will be able to meet their obligations under
the Wind Down.
85.
Overall, the Debtors anticipate having sufficient funds to satisfy all requirements
and obligations under the Plan.
114  Accordingly, the Debtors submit that the Plan fully complies
with and satisfies all of the requirements of section 1129(a)(11) of the Bankruptcy Code.
L.
The Plan Provides for the Payment of Certain Statutory Fees (§ 1129(a)(12)).
86.
Section 1129(a)(12) of the Bankruptcy Code requires the payment of “[a]ll fees
payable under section 1930 of title 28 [of the United States Code], as determined by the court at
the hearing on confirmation of the plan.”
115  Section 507(a)(2) of the Bankruptcy Code provides
that “any fees and charges assessed against the estate under [section 1930 of] chapter 123 of
title 28” are afforded priority as administrative expenses.
116
87.
The Plan satisfies section 1129(a)(12) of the Bankruptcy Code because Article II.E
of the Plan provides that all fees payable pursuant to section 1930(a) of the Judicial Code, as
determined by the Bankruptcy Court at a hearing pursuant to section 1128 of the Bankruptcy Code,
shall be paid by the Wind-Down Debtor (or the Disbursing Agent on behalf of the Wind-Down
Debtor) for each quarter (including any fraction thereof) until the Chapter 11 Cases are converted,
dismissed, or closed, whichever occurs first.
117
113
See id. at ¶ 75.
114
See id. at ¶ 76.
115  11 U.S.C. § 1129(a)(12).
116  11 U.S.C. § 507(a)(2).
117  See Plan, Art. II.E.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 55 of 81

42
88.
Accordingly, the Debtors submit that the Plan fully complies with and satisfies the
requirements of section 1129(a)(12) of the Bankruptcy Code.
M.
Sections 1129(a)(13) through 1129(a)(16) of the Bankruptcy Code Do Not
Apply to the Plan.
89.
Section 1129(a)(13) of the Bankruptcy Code requires that all retiree benefits
continue post-confirmation at any levels established in accordance with section 1114 of the
Bankruptcy Code.  The Debtors do not have any remaining obligations to pay retiree benefits (as
defined in section 1114 of the Bankruptcy Code).  Therefore, section 1129(a)(13) of the
Bankruptcy Code is inapplicable to these Chapter 11 Cases or the Plan.  Section 1129(a)(14) of
the Bankruptcy Code relates to the payment of domestic support obligations.  Since the Debtors
are not subject to any domestic support obligations, the requirements of section 1129(a)(14) of the
Bankruptcy Code do not apply.  Likewise, section 1129(a)(15) of the Bankruptcy Code applies
only in cases in which the debtor is an “individual” as defined in the Bankruptcy Code.  Because
none of the Debtors is an “individual,” the requirements of section 1129(a)(15) of the Bankruptcy
Code do not apply.  Finally, each of the Debtors are a moneyed, business, or commercial
corporation and, therefore, section 1129(a)(16) of the Bankruptcy Code, which provides that
property transfers by a corporation or trust that is not a moneyed, business, or commercial
corporation or trust be made in accordance with any applicable provisions of nonbankruptcy law,
is not applicable to these Chapter 11 Cases.
N.
The Plan Satisfies the “Cram Down” Requirements of Section 1129(b) of the
Bankruptcy Code.
90.
Section 1129(b)(1) of the Bankruptcy Code provides that, if all applicable
requirements of section 1129(a) of the Bankruptcy Code are met other than section 1129(a)(8) of
the Bankruptcy Code, a plan may be confirmed so long as the requirements set forth in
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 56 of 81

43
section 1129(b) of the Bankruptcy Code are satisfied.
118  To confirm a plan that has not been
accepted by all impaired classes (thereby failing to satisfy section 1129(a)(8) of the
Bankruptcy Code), the plan proponent must show that the plan does not “discriminate unfairly”
and is “fair and equitable” with respect to the non-accepting impaired classes.
119
91.
The Plan satisfies section 1129(b) of the Bankruptcy Code.  As noted above,
Holders of Claims and Interests in Classes 6, 9, and 10 are deemed to reject the Plan. Classes 7
and 8 may be deemed to reject the Plan based on the Debtors’ ultimate determination to maintain
or cancel these intercompany claims and interests.
1.
The Plan Does Not Unfairly Discriminate with Respect to the Impaired
Classes That Have Not Voted to Accept the Plan (§ 1129(b)(1)).
92.
The Plan does not unfairly discriminate with respect to Classes 6, 7, 8, 9, and 10.
Although the Bankruptcy Code does not provide a standard for determining when “unfair
discrimination” exists, courts typically examine the facts and circumstances of the particular case
to make the determination.
120  In general, courts have held that a plan unfairly discriminates in
violation of section 1129(b) of the Bankruptcy Code only if it provides materially different
treatment for creditors and interest holders with similar legal rights without compelling
118
See 11 U.S.C. § 1129(b).
119  John Hancock, 987 F.2d at 157 n.5; In re Ambanc La Mesa L.P., 115 F.3d 650, 653 (9th Cir. 1997) (“the [p]lan
satisfies the ‘cramdown’ alternative . . . found in 11 U.S.C. § 1129(b), which requires that the [p]lan ‘does not
discriminate unfairly’ against and ‘is fair and equitable’ towards each impaired class that has not accepted the
[p]lan”).
120  In re 203 N. LaSalle St. Ltd. P’ship., 190 B.R. 567, 585 (Bankr. N.D. Ill. 1995), rev’d on other grounds, Bank of
Am., 526 U.S. 434 (1999) (noting “the lack of any clear standard for determining the fairness of a discrimination
in the treatment of classes under a Chapter 11 plan” and that “the limits of fairness in this context have not been
established”); In re Aztec Co., 107 B.R. 585, 589 (Bankr. M.D. Tenn. 1989) (“Courts interpreting language
elsewhere in the Code, similar in words and function to § 1129(b)(1), have recognized the need to consider the
facts and circumstances of each case to give meaning to the proscription against unfair discrimination.”);
In re Freymiller Trucking, Inc., 190 B.R. 913, 916 (Bankr. W.D. Okla. 1996) (holding that a determination of
unfair discrimination requires a court to “consider all aspects of the case and the totality of all the circumstances”).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 57 of 81

44
justifications for doing so.
121  A threshold inquiry to assessing whether a proposed chapter 11 plan
unfairly discriminates against a dissenting class is whether the dissenting class is equally situated
to a class allegedly receiving more favorable treatment.
122
93.
Here, the Plan’s treatment of the non-accepting Impaired Classes is proper because
all similarly situated Holders of Claims and Interests at each applicable Debtor will receive
substantially similar treatment, and the Plan’s classification scheme rests on a legally acceptable
rationale, including in relation to their priority within the Debtors’ capital structure, their differing
legal nature, and their respective rights against the Debtors.
123  Claims in each of the non-accepting
Impaired Classes are not similarly situated to those of any other classes, given their distinctly
different legal character from all other Claims and Interests.
124
94.
Accordingly, the Plan does not discriminate unfairly with respect Classes 6, 7, 8, 9,
and 10, who are deemed to reject the Plan, and satisfies the requirements of section 1129(b).
121  See In re Coram Healthcare Corp., 315 B.R. 321, 349 (Bankr. D. Del. 2004) (citing cases and noting that separate
classification and treatment of claims is acceptable if the separate classification is justified because such claims
are essential to a reorganized debtor’s ongoing business); In re Lernout & Hauspie Speech Prods., N.V., 301 B.R.
651, 661 (Bankr. D. Del. 2003) (permitting different treatment of two classes of similarly situated creditors upon
a determination that the debtors showed a legitimate basis for such discrimination); Ambanc La Mesa, 115 F.3d
at 656–57 (same); Aztec Co., 107 B.R. at 589–91 (stating that plan which preserved assets for insiders at the
expense of other creditors unfairly discriminated); In re Johns-Manville Corp., 68 B.R. 618, 636 (Bankr.
S.D.N.Y. 1986) (stating that interests of objecting class were not similar or comparable to those of any other class
and thus there was no unfair discrimination).
122  See Aleris Int’l, Inc., 2010 WL 3492664, at *31 (citing Armstrong World Indus., 348 B.R. at 121).
123
See Braley Declaration ¶ 80.
124
Id.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 58 of 81

45
2.
The Plan Is Fair and Equitable (§ 1129(b)(2)).
95.
A plan is “fair and equitable” with respect to an impaired class of claims or interests
that rejects a plan (or is deemed to reject a plan) if it follows the “absolute priority” rule.
125
This requires that an impaired rejecting class of claims or interests either be paid in full or that a
class junior to the impaired accepting class not receive any distribution under a plan on account of
its junior claim or interest.
126
96.
Here, the Plan is “fair and equitable” to Holders of Claims and Interests in those
Classes that were deemed to reject the Plan because the Plan satisfies the absolute priority rule
with respect to each of these non-accepting Impaired Classes.
127  Specifically, no holder of any
claim or interest junior to Class 6 will receive or retain any property under the Plan on account of
such junior claim or interest.  With respect to Class 6 (General Unsecured Claims), to the extent
such Class receives any recovery, such recovery is a result of a negotiated resolution with the
Debtors’ DIP Lenders embodied in the Plan, and, in any event, all Classes senior to Class 6 are
Unimpaired or have voted in favor of the Plan.  In light of this, the Plan structure is fair and
equitable and does not violate the absolute priority rule.
97.
In addition, to the extent that Intercompany Interests are Reinstated under the Plan,
distributions on account of Intercompany Interests are not being received by Holders of such
Intercompany Interests on account of their Intercompany Interests but for the purposes of
125  Bank of Am., 526 U.S. at 441–42 (“As to a dissenting class of impaired unsecured creditors, such a plan may be
found to be ‘fair and equitable’ only if the allowed value of the claim is to be paid in full, § 1129(b)(2)(B)(i), or,
in the alternative, if ‘the holder of any claim or interest that is junior to the claims of such [impaired unsecured]
class will not receive or retain under the plan on account of such junior claim or interest any property,’
§ 1129(b)(2)(B)(ii).  That latter condition is the core of what is known as the ‘absolute priority rule.’”).
126
Id.
127
See Braley Declaration ¶¶ 71–83.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 59 of 81

46
administrative convenience, for the ultimate benefit of all parties in interest.
128  Any reinstatement
of Intercompany Interests will thus have no economic substance.
129  Accordingly, the Plan is “fair
and equitable” with respect to all Impaired Classes of Claims and Interests and satisfies
section 1129(b) of the Bankruptcy Code.
98.
For the foregoing reasons, and further supported by the lack of objections on any
grounds related to Section 1129(b)(2), the Plan can be crammed down on the non-consenting
Impaired Classes.
O.
The Plan Complies with the Remaining Provisions of Section 1129 of the
Bankruptcy Code (§§ 1129(c)–(e)).
99.
The Plan satisfies the remaining provisions of section 1129 of the Bankruptcy
Code.  First, section 1129(c) of the Bankruptcy Code, which prohibits confirmation of multiple
plans, is not implicated because there is only one proposed plan.  Second, the purpose of the Plan
is not to avoid taxes or the application of section 5 of the Securities Act of 1933.
130  Moreover, no
governmental unit or any other party has requested that the Bankruptcy Court decline to confirm
the Plan on such grounds.  As provided in the Braley Declaration, the Plan was proposed in good
faith and is not by any means forbidden by law.
131  Accordingly, the Plan satisfies the requirements
of section 1129(d) of the Bankruptcy Code.  Lastly, section 1129(e) of the Bankruptcy Code is
128
See id. at ¶ 82.
129  See In re ION Media Networks, Inc., No. 09-13125 (JMP), 419 B.R. 585 (Bankr. S.D.N.Y. Nov. 24, 2009) (“This
technical preservation of equity is a means to preserve the corporate structure that does not have any economic
substance and that does not enable any junior creditor or interest holder to retain or recover any value under the
Plan. The Plan’s retention of intercompany equity interests for holding company purposes constitutes a device
utilized to allow the Debtors to maintain their organizational structure and avoid the unnecessary cost of having
to reconstitute that structure.”).
130
See Braley Declaration ¶ 84.
131  Id.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 60 of 81

47
inapplicable because none of the Debtors’ chapter 11 cases are a “small business case.”
132
Accordingly, the Plan satisfies the requirements of section 1129(c), (d), and (e) of the Bankruptcy
Code.
III.
The Discretionary Contents of the Plan Are Appropriate Under Section 1123(b) of
the Bankruptcy Code.
100.
Section 1123(b) of the Bankruptcy Code sets forth various discretionary provisions
that may be incorporated into a chapter 11 plan.  Among other things, section 1123(b) of the
Bankruptcy Code provides that a plan may:  (a) impair or leave unimpaired any class of claims or
interests; (b) modify or leave unaffected the rights of holders of secured or unsecured claims;
(c) provide for the settlement or adjustment of claims against or interests in a debtor or its estate
or the retention and enforcement by a debtor, trustee, or other representative of claims or interests;
(d) provide for the assumption or rejection of executory contracts and unexpired leases; (e) provide
for the sale of all or substantially all of the property of the Debtors’ estates, and the distribution of
the proceeds of such sale among holders of claims or interests; or (f) include any other appropriate
provision not inconsistent with the applicable provisions of the Bankruptcy Code.
133
101.
As set forth below, the Plan includes certain of these discretionary provisions.  The
Debtors have determined, as fiduciaries of their Estates and in the exercise of their reasonable
business judgment, that each of the discretionary provisions of the Plan is appropriate given the
circumstances of these Chapter 11 Cases.
134
132  See 11 U.S.C. § 1129(e).  A “small business debtor” cannot be a member “of a group of affiliated debtors that has
aggregate noncontingent liquidated secured and unsecured debts in an amount greater than $2,566,050 []
(excluding debt owed to 1 or more affiliates or insiders).”  11 U.S.C. § 101(51D)(B).
133  See 11 U.S.C. § 1123(b)(1)–(6).
134
See Braley Declaration ¶¶ 23–24.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 61 of 81

48
102.
Here, the Plan includes various discretionary provisions that are consistent with the
discretionary authority vested under section 1123(b) of the Bankruptcy Code.  For example, the
Plan impairs certain Classes of Claims and Interests and leaves others Unimpaired, proposes
treatment for Executory Contracts and Unexpired Leases, provides a structure for Claim allowance
and disallowance, and establishes a distribution process for the satisfaction of Allowed Claims
entitled to distributions under the Plan.  In addition, the Plan contains provisions implementing
certain releases and exculpations, and enjoining certain causes of action.
103.
Each of these provisions are appropriate because, among other things, they (a) are
the product of arm’s-length negotiations, (b) have been critical to obtaining the support of the
various constituencies for the Plan, (c) are given for valuable consideration, (d) are fair and
equitable and in the best interests of the Debtors, these estates, and the Chapter 11 Cases, and
(e) are consistent with the relevant provisions of the Bankruptcy Code and Third Circuit law.
135
Such provisions are discussed in turn below but, in summary, satisfy the requirements of
section 1123(b).
104.
The Bankruptcy Code states that a plan may “provide for . . . the settlement or
adjustment of any claim or interest belonging to the debtor or to the estate.”
136  Article VIII of the
Plan provides for a general settlement of all Claims and Interests to the extent provided for by the
Bankruptcy Code.
105.
The standards for approval of a settlement under section 1123 of the Bankruptcy
Code are generally the same as those under Bankruptcy Rule 9019.  Generally, courts in the Third
135
See id. at ¶ 24.
136  11 U.S.C. § 1123(b)(3)(A).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 62 of 81

49
Circuit will approve a settlement by the debtors if the settlement “exceed[s] the lowest point in the
range of reasonableness.”
137  The Third Circuit has provided the following four criteria that a
bankruptcy court should consider when approving a settlement pursuant to Bankruptcy Rule 9019:
(a) the probability of success in litigation; (b) the likely difficulties in collection; (c) the complexity
of the litigation involved, and the expense, inconvenience, and delay necessarily attending it; and
(d) the paramount interest of creditors.
138  In addition, the court must determine whether the
proposed settlement is fair and equitable, and in the best interests of the estate.
106.
The settlements embodied in the Plan satisfy the above factors.  The Plan and
Confirmation Order embody certain settlement of Claims and Interests between the Debtors and
certain other parties in interest, including the Debtors, the Debtors’ directors and officers, and the
Committee.  The settlements are fair and equitable and consistent with the Bankruptcy Code.  The
Plan and Confirmation Order resolve a host of alleged Claims and Interests, which were thoroughly
analyzed by the Debtors, the Special Committee, the Committee, and each of their advisors.
139
107.
The Debtors and their advisors worked diligently to ensure the Debtors’ creditors
are receiving the greatest value possible on their Claims or Interests through the Plan, and are in
the best interest of all stakeholders.  If the Debtors were forced to litigate the issues necessary to
resolve such Claims and Interests outside of the Plan, such litigation would be costly, protracted,
137
See In re Coram Healthcare Corp., 315 B.R. at 334–35.  Generally, courts in the Third Circuit approve a
settlement by the debtors if the settlement “is above the lowest point in the range of reasonableness.” Id. at 330
(internal citation omitted); see also In re Exaeris, Inc., 380 B.R. 741, 746–47 (Bankr. D. Del. 2008) (internal
citation omitted); see Cosoff v. Rodman (In re W.T. Grant Co.), 699 F.2d 599, 608 (2d Cir. 1983) (examining
whether settlement “fall[s] below the lowest point in the range of reasonableness”) (alteration in original) (internal
citation omitted); In re World Health Alts., Inc., 344 B.R. 291, 296 (Bankr. D. Del. 2006) (stating that settlement
must be within reasonable range of litigation possibilities) (internal citation omitted).
138
See In re Martin, 91 F.3d 389, 393 (3d Cir. 1996) (citing In re Neshaminy Office Bldg. Assocs., 62 B.R. 798, 803
(E.D. Pa. 1986)).
139
See generally Braley Declaration ¶¶ 32–34.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 63 of 81

50
inherently uncertain, and would leave the Debtors and all stakeholders in a substantially worse
position.  Litigation would prolong the Debtors’ bankruptcy process, draining the Debtors’ Estates
and distracting the Debtors’ key personnel and advisors, who would otherwise be focused on
winding down the Debtors’ Estates.  As reflected by the support of creditors for the Plan, this
settlement is in the best interests of creditors and all parties in interest.
A.
The Plan’s Release, Exculpation, and Injunction Satisfy Section 1123(b) of the
Bankruptcy Code.
108.
The Plan includes certain Debtor and third-party releases, an exculpation provision,
and an injunction provision.  These discretionary provisions are proper because, among other
things, they are the product of extensive good-faith, arm’s-length negotiations, were a material
inducement for parties to enter into the Restructuring Support Agreement and support the Plan,
are overwhelmingly supported by the Debtors and their key stakeholders (including unanimous
support from the Voting Classes), and are consistent with applicable precedent.
140  Further, these
provisions were fully and conspicuously disclosed to all parties in interest through the Combined
Hearing Notice, the Ballots, and the applicable Non-Voting Status Notice Package which
excerpted the full text of the releases, exculpation, and injunction provision as set forth in the Plan.
1.
The Debtor Release in the Plan Is Appropriate.
109.
Section 1123(b)(3)(A) of the Bankruptcy Code provides that a chapter 11 plan may
provide for “the settlement or adjustment of any claim or interest belonging to the debtor or to the
estate.”
141  Furthermore, a debtor may release claims under section 1123(b)(3)(A) of the
140
See also Braley Declaration ¶ 25.
141  See Coram, 315 B.R. at 334–35 (“The standards for approval of settlement under section 1123 [of the Bankruptcy
Code] are generally the same as those under [Bankruptcy] Rule 9019.”).  Generally, courts in the Third Circuit
approve a settlement by the debtors if the settlement “exceed[s] the lowest point in the range of reasonableness.”
Id. at 330 (internal citations omitted).  E.g., In re Exaeris, Inc., 380 B.R. 741, 746–47 (Bankr. D. Del. 2008);
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 64 of 81

51
Bankruptcy Code “if the release is a valid exercise of the debtor’s business judgment, is fair,
reasonable, and in the best interests of the estate.”
142  Article VIII.B of the Plan provides for releases
by the Debtors, the Wind-Down Debtors, and their estates of the Claims and Causes of Action set
forth in Article VIII.B of the Plan, including any derivative claims, that the Debtors, the
Wind-Down Debtors, or their Estates could assert against each of the Released Parties (the “Debtor
Release”).
143
110.
Courts in this jurisdiction generally analyze five factors when determining the
propriety of a debtor release, commonly known as the Zenith or Master Mortgage factors.
144  The
analysis includes an inquiry into whether there is:  “(1) an identity of interest between the debtor
and non-debtor such that a suit against the non-debtor will deplete the estate’s resources; (2) a
substantial contribution to the plan by the non-debtor; (3) the necessity of the release to the
reorganization; (4) the overwhelming acceptance of the plan and release by creditors and interest
In re World Health Alts., Inc., 344 B.R. 291, 296 (Bankr. D. Del. 2006) (stating that settlement must be “within
the reasonable range of litigation possibilities”) (internal quotation marks omitted).
142  In re Spansion, Inc., 426 B.R. 114, 143 (Bankr. D. Del. 2010); see also In re Wash. Mut., Inc., 442 B.R. 314, 327
(Bankr. D. Del. 2011) (“In making its evaluation [whether to approve a settlement], the court must determine
whether ‘the compromise is fair, reasonable, and in the best interest of the estate.’”) (internal quotation marks
omitted).  See also In re WCI Cable, Inc., 282 B.R. 457, 469 (Bankr. D. Or. 2002) (“a chapter 11 plan may provide
for the settlement of any claim belonging to the debtor or to the estate”).
143  The Released Parties include, among others, in each case in their capacity as such:  (a) the Debtors and the
Wind-Down Debtors, as applicable; (b) the Plan Administrator; (c) each Consenting Stakeholder; (d) the
Committee and its members; (e) the Purchasers; (f) the DIP Lenders; (g) the Agents; (h) all Holders of Claims
who opt in to granting the releases set forth herein; (i) all Holders of Interests who opt in to granting the releases
set forth herein; (j) each current and former Affiliate of each Entity in clause (a) through the following clause (k);
and (k) each Related Party of each Entity in clause (a) through this clause (k), each in their capacity as such;
provided that, in each case, an Entity shall not be a Released Party if it timely objects to the releases set forth in
Article VIII.C and such objection is not withdrawn or otherwise resolved before the Confirmation Order is
entered.
144  See In re Indianapolis Downs, LLC, 486 B.R. 286, 303 (Bankr. D. Del. 2013) (citing In re Zenith Elecs. Corp.,
241 B.R. 92, 105 (Bankr. D. Del. 1999)); In re Master Mortg. Inv. Fund, Inc., 168 B.R. 930, 937 (Bankr. W.D.
Mo. 1994).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 65 of 81

52
holders; and (5) the payment of all or substantially all of the claims of the creditors and interest
holders under the plan.”
145  These factors are “neither exclusive nor conjunctive requirements” but
rather serve as guidance to courts in determining fairness of a debtor’s releases.
146
111.
The Debtor Release meets the applicable standard because they are fair, reasonable,
and in the best interests of the Debtors’ estates.  As described in the Braley Declaration,
147 and as
an analysis of the Master Mortgage factors demonstrates, the Debtor Release embodied in
Article VIII.B of the Plan should be approved.

First, an identity of interest exists between the Debtors and the parties to be released.  Each
of the Released Parties, as a stakeholder and critical participant in the Plan process, shares
a common goal with the Debtors in seeing the Plan succeed and would have been unlikely
to participate in the negotiations and compromises that led to the ultimate formation of the
Plan without the Debtor Release.
148  Like the Debtors, these parties seek to confirm the Plan
and implement the transaction.
149  Moreover, with respect to certain of the releases—e.g.,
those releasing the Debtors’ current and former directors, officers, affiliates, and
principals—there is a clear identity of interest supporting the release because the Debtors
will assume certain indemnification obligations under the Plan that will be honored by the
Wind-Down Debtors.
150  Thus, a lawsuit commenced by the Debtors (or derivatively on
behalf of the Debtors) against certain individuals would effectively be a lawsuit against the
Wind-Down Debtors themselves.
145
See In re Washington Mut., Inc., 442 B.R. at 346 (citing In re Zenith Elecs. Corp., 241 B.R. at 110 and
In re Master Mortg., 168 B.R. at 937).
146  Id. (citing In re Master Mortg., 168 B.R. at 935).
147  See Braley Declaration ¶¶ 26–35.
148
Id. at ¶ 27.
149  See In re Abeinsa Holding, Inc., 562 B.R. 265, 284 (Bankr. D. Del. 2016) (finding that “there is an identity of
interest between the Debtors and the released parties arising out the shared common goal of confirming and
implementing the Plan”); see also Zenith, 241 B.R. at 110 (concluding that certain releasees who “were
instrumental in formulating the Plan” shared an identity of interest with the debtor “in seeing that the Plan succeed
and the company reorganize”).
150  See Plan Art. V.E; see also Braley Declaration ¶ 27; cf.  In re Indianapolis Downs, LLC, 486 B.R. at 303 (“An
identity of interest exists when, among other things, the debtor has a duty to indemnify the nondebtor receiving
the release.”).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 66 of 81

53

Second, substantial contributions have been made by the Released Parties.  The Released
Parties played an integral role in the formation of the Plan and the sale process and have
expended significant time and resources analyzing and negotiating the issues present in
these Chapter 11 Cases to reach a value-maximizing chapter 11 plan.  As Delaware
bankruptcy courts have recognized, a wide variety of acts may illustrate a substantial
contribution to a debtor’s chapter 11 case.
151  Moreover, the Released Parties have
expended time and resources analyzing and negotiating the issues presented by the
Debtors’ capital structure and the material barriers to the resolution thereof.
152  The
Released Parties have also sacrificed material economic interests to ensure the viability of
the Plan.  Here, the value contributed by the Released Parties is certainly substantial.
Without the contributions of each of these parties, the Plan and the transaction
contemplated therein would not be possible.
153

Third, the Debtor Release is essential to the successful resolution of the Chapter 11 Cases
because they constitute an integral term of the Plan.  Indeed, absent the Debtor Release, it
is highly unlikely the Released Parties would have agreed to support the Plan and the
Restructuring Transactions contemplated therein.
154  As described above, each of the
Released Parties contributed substantial value to these Chapter 11 Cases and did so with
the understanding that they would receive releases from the Debtors.  In the absence of
these parties’ support, the Debtors would not be in a position to confirm the Plan and
emerge from chapter 11.  The Debtor Release, therefore, is essential to the successful
resolution of these Chapter 11 Cases.

Fourth, no party in interest has contested the Debtor Release of any hypothetical claims,
and as evidenced by the Voting Report and noted herein, parties voting in Class 4 and Class
5 have unanimously voted to approve the Plan (including the Debtor Release).  Given the
critical nature of the Debtor Release and the Plan’s overall support, the Debtors submit that
the releases are proper.

Fifth, the Plan maximizes the value of the Debtors’ assets and the distribution of available
proceeds to creditors.
151  See id. at 304 (finding that the non-debtor party had substantially contributed by performing services for the
debtors post-petition without receiving compensation); In re Wash. Mut., Inc., 442 B.R. at 347 (finding substantial
contribution required the contribution of “cash or anything else of a tangible value to the [chapter 11 plan] or to
creditors”); In re Zenith Elecs. Corp., 241 B.R. at 111 (finding that prepetition contribution of work in negotiating
a plan constituted adequate consideration for debtor’s release).
152
See Braley Declaration ¶ 28.
153
See id. at ¶ 29.
154
See id. at ¶ 30.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 67 of 81

54
112.
Furthermore, as described in the Disclosure Statement, the Debtors, with the
assistance of their professional advisors, conducted an independent investigation to evaluate
potential claims.  That investigation was led by the special committee of the board of directors of
Vyaire Holding Company (the “Special Committee”).  That process involved an exhaustive
advisor review of over 385 non-custodial documents, over 2.3 million custodial documents from
ten custodians (with extensive review of over 56,000 of those documents relating to key search
terms), over 6,600 documents from the Sponsor, and seven interviews.
113.
From the review and analysis of those documents and interviews, advisors to the
Special Committee produced an in-depth investigation report, which was reviewed by the Special
Committee (and a non-privileged version was shared with the Committee).  The Special
Committee determined that, aside from the Causes of Action arising under section 547 of the
Bankruptcy Code, the Debtor Release would not extinguish valuable claims worth pursuing
because among other things, any theoretical claims lacked merit, were not viable, would be subject
to defenses, and/or would involve extremely costly and time-consuming litigation.
155  With respect
to preference actions, in exchange for releasing Causes of Action arising under section 547 of the
Bankruptcy Code in connection with the Committee Settlement, the Debtors secured the
Committee’s support for the Plan, including the Plan’s terms regarding the estate’s provision of
critical transition services to the Purchasers, and avoided costly litigation over confirmation of the
Plan.
114.
Accordingly, for the reasons set forth above, and as supported by the Braley
Declaration, each of the Master Mortgage factors supports approval of the Debtor Release.
155
See id. at ¶¶ 32–33.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 68 of 81

55
Moreover, the breadth of the Debtor Release is consistent with those regularly approved in this
jurisdiction.  The Debtors submit that they have satisfied the business judgment standard in
granting the Debtor Release under the Plan.  The Debtor Release easily meets the applicable
standard because they are fair, reasonable, and in the best interests of the Debtors’ Estates.  Thus,
the Bankruptcy Court should approve the Debtor Release in the Plan.
2.
The Third-Party Release Is Consensual and Appropriate and Should
Be Approved.
115.
In addition to the Debtor Release, the Plan provides for releases by certain Holders
of Claims and Interests.  Specifically, Article VIII.C of the Plan provides that each Releasing Party
shall release any and all Claims and Causes of Action such parties could assert against the Released
Parties (the “Third-Party Release” and, together with the Debtor Release, the “Releases”).  The
Releasing Parties include, among others:  (a) the Debtors and the Wind-Down Debtors, as
applicable; (b) the Plan Administrator; (c) each Consenting Stakeholder; (d) the Committee and
its members; (e) the Purchasers; (f) the DIP Lenders; (g) the Agents; (h) all Holders of Claims who
opt in to granting the releases set forth herein; (i) all Holders of Interests who opt in to granting
the releases set forth herein; (j) each current and former Affiliate of each Entity in clause (a)
through the following clause (k); and (k) each Related Party of each Entity in clause (a) through
this clause (k), for which such Entity is legally entitled to bind such Related Party to the releases
contained in the Plan under applicable law; provided, however, that in each case, an Entity shall
not be Releasing Party if it timely objects to the releases set forth in Article VIII.C and such
objection is not withdrawn or otherwise resolved before the Confirmation Order is entered.  The
Third-Party Release is consensual, consistent with established Third Circuit law, and integral to
the Plan, and should therefore be approved.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 69 of 81

56
116.
Numerous courts have recognized that a chapter 11 plan may include a release of
non-debtors by other non-debtors when such release is consensual.
156  Consensual releases are
permissible on the basis of general principles of contract law.
157  Approval of the Third-Party
Release under the circumstances of these Chapter 11 Cases is entirely appropriate because they
are not binding on any non-consenting parties.  Courts have held that an “affirmative agreement”
from an affected creditor will render a release consensual.
158
117.
The Third-Party Release is generally being provided by parties participating in the
formulation and negotiation of the Plan or to the extent a party affirmatively opts in to the release.
Thus, the only parties providing the Third-Party Release are creditors that have affirmatively opted
in, or otherwise agreed, to such releases.  All parties had ample opportunity to evaluate and opt in
to the Third-Party Release.  The Disclosure Statement, the Ballots, the Confirmation Notice, the
Opt-In Proof of Claim Form, and Notice of Confirmation Order (as defined in the proposed
Confirmation Order) each provide recipients with timely, sufficient, appropriate and adequate
notice of the Third-Party Release.
118.
The circumstances of these Chapter 11 Cases warrant the Third-Party Release
because it is critical to the success of the Plan, and it is fair and appropriate.  Without the efforts
of the Released Parties in providing the DIP Financing and actively participating in the Sale
Transactions and Plan negotiations, the Debtors would not have been able to consummate
value-maximizing Sale Transactions for the benefit of all stakeholders and an orderly post-sale
156  See, e.g., Indianapolis Downs, 486 B.R. at 305 (collecting cases); Spansion, 426 B.R. at 144 (stating that “a third
party release [sic] may be included in a plan if the release is consensual”).
157  Coram, 315 B.R. at 336.
158 See In re Zenith, 241 B.R. at 111.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 70 of 81

57
wind down through the Plan.
159  In addition, many of the Released Parties have been instrumental
in supporting these Chapter 11 Cases and facilitating a smooth administration thereof.  Finally,
throughout the entire case and all these negotiations, the Debtors’ directors and officers steadfastly
maintained their duties to maximize value for the benefit of all stakeholders, investing countless
hours both pre- and post- petition.
160
119.
The Third-Party Release is specific and precisely describe the nature and type of
claims released and the parties being released.  This provision provides that each Releasing Party
will release any and all claims and Causes of Action such party could assert against the Released
Parties.  Additionally, the Plan, including the Third-Party Release, was heavily negotiated.  The
Third-Party Release is a key component of the Debtors’ restructuring and were a key inducement
to bring stakeholder groups to the bargaining table.  Put simply, the Debtors’ key stakeholders
would be unwilling to support the Plan without the assurance that they would not be subject to
post-emergence litigation or other disputes.  The Third-Party Release therefore not only benefits
the non-Debtor Released Parties, but also the Debtors as a whole.
120.
Moreover, the third parties bound by the Releases have affirmatively opted in to
such releases, or were otherwise party to negotiating such releases, and have received sufficient
consideration in exchange for the release of their Claims against the Released Parties to justify the
Third-Party Release.  Many of the Released Parties have been active and important participants in
the development of the Plan and have expended significant time and resources analyzing and
negotiating the issues presented by the Debtors’ capital structure and the material barriers to the
159
See Braley Declaration ¶ 39.
160  See id.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 71 of 81

58
resolution thereof.
161  In addition to significant concessions under the Plan, the Released Parties
made the contributions as discussed above, each in exchange for, among other things, the
Third-Party Release.
121.
The Third-Party Release is an integral and necessary party of the Plan, are
consensual, given in exchange for good and valuable consideration, and are narrowly tailored to
the circumstances of these Chapter 11 Cases.
3.
The Exculpation Provision Is Appropriate.
122.
Article VIII.D of the Plan provides that each Exculpated Party shall be exculpated,
“to the fullest extent permissible under applicable law and without affecting or limiting either the
Debtor Release or the Third-Party Release,”
162 from any Cause of Action arising out of acts or
omissions in connection with these Chapter 11 Cases and certain related transactions, except for
acts or omissions that are found to have been the product of actual fraud, willful misconduct, or
gross negligence (the “Exculpation”).  The Exculpation is intended to prevent collateral attacks
against estate fiduciaries that have acted in good faith to help facilitate the Debtors’ restructuring.
The Exculpation is an integral part of the Plan and otherwise satisfies the governing standards in
the Third Circuit.  This provision provides necessary and customary protections to estate
fiduciaries whose efforts were and continue to be vital to implementing the Plan.
123.
In the Third Circuit, exculpation provisions like the one set forth in the Plan are
regularly approved.
163  Courts evaluate the appropriateness of exculpation provisions based on a
161
See generally id.
162 Plan, Art. VIII.D.
163
See In re Cyxtera Techs., Inc., No. 23-14853 (JKS) (Bankr. D.N.J. Nov. 17, 2023) (approving a chapter 11 plan
with a similar exculpation provision to the Plan); In re BlockFi Inc., No. 22 19361 (MBK) (Bankr. D.N.J. Oct. 3,
2023) (same); In re Laboratory Partners, Inc., No. 13-12769 (PJW) (Bankr. D. Del. July 10,2014) (finding that
exculpation was appropriately extended to secured lender who funded the chapter 11 case); In re FAH Liquidating
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 72 of 81

59
number of factors, including whether the plan was proposed in good faith, whether liability is
limited, and whether the exculpation provision was necessary for plan negotiations.
164  Exculpation
provisions that are limited to claims not involving a criminal act, actual fraud, willful misconduct,
or gross negligence, are customary and generally approved in this district under appropriate
circumstances.
165  Unlike third-party releases, exculpation provisions do not affect the liability of
third parties per se but rather set a standard of care of gross negligence or willful misconduct in
future litigation by a non-releasing party against an “Exculpated Party” for acts arising out of the
Debtors’ restructuring.
166  Exculpation for parties participating in the Plan process is appropriate
where Plan negotiations could not have occurred without protection from liability.
167
124.
Moreover, the Exculpation and the liability standard it sets represents a conclusion
of law that flows logically from certain findings of fact that the Bankruptcy Court must reach in
Corp., No. 13-13087 (KG) (Bankr.  D. Del. July 28, 2014) (finding that exculpation as applied to a non-debtor
Plan Sponsor was appropriate under section 1123(b)).
164 See In re Congoleum Corp., 362 B.R. 167, 195-97 (Bankr. D.N.J. 2007) (evaluating the appropriateness of the
plan’s exculpation provisions based on whether the parties played a significant role in the negotiations that led to
the plan and whether the exculpation is necessary to the plan).
165 See In re Wash. Mut., Inc., 442 B.R. 314, 350-51 (Bankr. D. Del. 2011) (holding that an exculpation clause that
encompassed “the fiduciaries who have served during the chapter 11 proceeding: estate professionals, the
[c]ommittees and their members, and the debtors’ directors and officers” was appropriate); In re BlockFi Inc.,
No. 22-19361 (MBK) (Bankr. D.N.J. Oct. 3, 2023) (confirming plan where exculpation provision covered the
debtors and wind down debtors, the creditors’ committee, and related parties, including current and former control
persons and professionals); In re Bed Bath & Beyond Inc., No. 23-13359-VFP (MBK) (Bankr. D.N.J. Sept. 14,
2023) (same).
166 See In re PWS Holding Corp., 228 F.3d 224, 245 (3d Cir. 2000) (finding that an exculpation provision “is
apparently a commonplace provision in Chapter 11 plans, [and] does not affect the liability of these parties, but
rather states the standard of liability under the Code”); see also In re Premier Int’l. Holdings, Inc., No. 09-12019
(CSS), 2010 WL 2745964, at *10 (Bankr. D. Del. Apr. 29, 2010) (approving a similar exculpation provision as
that provided for under the Plan); In re Sponsion, Inc., No. 09-10690 (KJC), 2010 WL 2905001, at *16 (Bankr.
D. Del. 2010) (same).
167 In re Aegean Marine Petroleum Network, Inc., 599 B.R. 717, 721 (Bankr. S.D.N.Y. 2019) (“I believe that an
appropriate exculpation provision should say that it bars claims against the exculpated parties based on the
negotiation, execution, and implementation of agreements and transactions that were approved by the Court.”).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 73 of 81

60
confirming the Plan as it relates to the Debtors.  As discussed above, the Bankruptcy Court must
find, under section 1129(a)(2) of the Bankruptcy Code, that the Debtors have complied with the
applicable provisions of the Bankruptcy Code.  Additionally, the Bankruptcy Court must find,
under section 1129(a)(3) of the Bankruptcy Code, that the Plan has been proposed in good faith
and not by any means forbidden by law.  These findings apply to the Debtors and, by extension,
to certain of the Debtors’ officers, directors, employees, and professionals.  Furthermore, these
findings imply that the Plan was negotiated at arm’s-length and in good faith.  Where such findings
are made, parties who have been actively involved in such negotiations should be protected from
collateral attack.
125.
Here, the Debtors and their officers, directors, and professionals actively negotiated
with Holders of Claims and Interests across the Debtors’ capital structure as part of the Plan and
these Chapter 11 Cases.  Such negotiations were extensive, and the resulting agreements were
implemented in good faith with a high degree of transparency.
168  As a result, the Plan enjoys
unanimous support from Holders of Claims entitled to vote.
169  Accordingly, the Bankruptcy
Court’s findings of good faith vis-à-vis the Debtors’ Chapter 11 Cases should also extend to the
Exculpated Parties.
126.
In addition, the promise of exculpation played a significant role in facilitating Plan
negotiations.  All of the Exculpated Parties played a key role in developing the Plan that paved the
way for a successful reorganization, and likely would not have been so inclined to participate in
the plan process without the promise of exculpation.
170  Exculpation for parties participating in the
168  See Braley Declaration ¶ 44.
169  See, e.g., Voting Report, Exhibit A.
170
See Braley Declaration ¶ 45.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 74 of 81

61
plan process is appropriate where plan negotiations could not have occurred without protection
from liability.
171
127.
Accordingly, under the circumstances, it is appropriate for the Bankruptcy Court to
approve the Exculpation and to find that the Exculpated Parties have acted in good faith and in
compliance with the law.
172
128.
The Exculpation is fair and appropriate under both applicable law and the facts and
circumstances of these Chapter 11 Cases.  It is appropriate for the Bankruptcy Court to approve
the exculpation provision, and to find that the Exculpated Parties have acted in good faith and in
compliance with the law.
173
4.
The Injunction Provision Is Appropriate.
129.
The injunction provision set forth in Article VIII.E of the Plan (the “Injunction
Provision”) merely implements the Plan’s releases and Exculpation, in part, by enjoining entities
from commencing or maintaining any action against the Exculpated Parties, or the Released Parties
on account of or in connection with or with respect to any such claims or interests released or
subject to exculpation.  Thus, the Injunction Provision is a key provision of the Plan because it
enforces the release and Exculpation that are centrally important to the Plan.
130.
In addition, the injunction provision was revised pursuant to a resolution with the
U.S. Trustee to provide a temporary injunction as to the Debtors and the Wind-Down Debtors with
171  See In re Drexel Burnham Lambert Grp., Inc., 960 F.2d 285, 293 (2d Cir. 1992); In re Enron Corp., 326 B.R.
497, 503 (S.D.N.Y. 2005) (excising similar exculpation provisions would “tend to unravel the entire fabric of the
Plan, and would be inequitable to all those who participated in good faith to bring it into fruition”).
172  See PWS Holding Corp., 228 F.3d at 246–47 (approving plan exculpation provision exception for willful
misconduct and gross negligence); In re Indianapolis Downs, 486 B.R. at 306 (same).
173  See id.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 75 of 81

62
respect to the releases granted to the Debtors as Released Parties, and no Entity which is subject
to this provision has objected.
131.
As such, to the extent the Bankruptcy Court finds that the exculpation and release
provisions are appropriate, the Debtors respectfully submit that the Injunction Provision must also
be appropriate.
B.
The Plan Complies with Section 1123(d) of the Bankruptcy Code.
132.
Section 1123(d) of the Bankruptcy Code provides that “if it is proposed in a plan to
cure a default the amount necessary to cure the default shall be determined in accordance with the
underlying agreement and nonbankruptcy law.”
174
133.
Article V of the Plan provides for the satisfaction of all monetary defaults under
each Executory Contract and Unexpired Lease assumed pursuant to the Plan by payment of the
default amount, subject to the terms and conditions of the Plan, or on such other terms as the parties
to such Executory Contracts or Unexpired Leases may otherwise agree.  Therefore, to the extent
the Debtors or the Wind-Down Debtors, as applicable, decide to assume an Executory Contract or
Unexpired Lease and pay all outstanding Cure amounts, the Plan complies with section 1123(d)
of the Bankruptcy Code.
134.
Accordingly, the Debtors submit that the Plan fully complies with section 1123(d)
of the Bankruptcy Code.
IV.
The Plan Modifications Do Not Require Resolicitation or an Additional Disclosure
Statement.
135.
Section 1127(a) of the Bankruptcy Code permits plan modifications to a chapter 11
plan where votes have been solicited before confirmation so long as the modifications comply with
174  11 U.S.C. § 1123(d).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 76 of 81

63
sections 1122 and 1123 of the Bankruptcy Code.175  Once filed, “the plan as modified becomes the
plan.”176  Further, Bankruptcy Rule 3019 establishes that after a Plan has been accepted and before
its confirmation, the proponent may file a modified plan if the Court finds that the proposed
modification does not adversely change the treatment of the claim of any creditor and such
modification shall be deemed accepted by all creditors who previously accepted the plan.177
136.
Following solicitation, the Debtors made certain modifications to the Plan in the
spirit of good-faith compromise and settlement with the DIP Lenders, the Committee, and other
parties in interest.  These modifications to the Plan incorporate the terms of the Committee
Settlement including, among other things:  (i) a reserve of approximately $3 million for payment
of Allowed Administrative Claims; (ii) a “Residual GUC Recovery Pool” that provides for the
greater of (x) $250,000 and (y) the amount of excess funds of the Professional Fee Escrow
Account, if any, to be distributed pro rata to Holders of Class 6 (General Unsecured Claims), as
specified in the Plan, following satisfaction of the Debtors’ Wind-Down obligations; (iii) the
Debtors’ release of preference claims pursuant to section 547 of the Bankruptcy Code; and (iv)
treatment of the Debtors’ vendors and service providers servicing the Purchasers pursuant to the
Transition Services Agreement.
175 11 U.S.C. § 1127(a).
176 Id.
177 See F. R. Bankr. P. 3019(a); see also In re Sentinel Mgmt. Grp., Inc., 398 B.R. 281, 301 (Bankr. N.D. Ill. 2008)
(“The Bankruptcy Code is designed to encourage consensual resolution of claims and disputes through the plan
negotiation process, which includes pre-confirmation modifications”; one percent reduction of one class’s
distribution was not sufficiently material to require re-solicitation); In re Dow Coming Corp., 237 B.R. 374, 378
(Bankr. E.D. Mich. 1999) (holding that where proposed modification does not adversely impact previously
accepting claimants, such claimants are presumed to accept the modified plan); In re A.H. Robins Co., 88 B.R.
742, 750 (Bankr. E.D. Va. 1988) (“There have been no modifications which adversely affect the treatment of
claims or interests under the Plan. The Bankruptcy Court concludes that the modifications do not require
resolicitation of acceptances or rejections, nor do they require that holders of claims or interests be afforded an
opportunity to change previously cast acceptances or rejections of the Plan.”), aff’d, 880 F.2d 694 (4th Cir. 1989).
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 77 of 81

64
137.
In addition, the Debtors made certain other technical modifications to resolve issues
raised by the U.S. Trustee and other parties in interest.
138.
The Debtors submit that these modifications do not require re-solicitation.  Courts
in this Circuit have not interpreted Bankruptcy Rule 3019(a) to require resolicitation and additional
disclosure to mean any material and adverse change to any creditor.178  The seminal case on
resolicitation recognizes that “a literal reading of [Bankruptcy Rule 3019] would prevent a
modified plan from being deemed accepted if it adversely affected the treatment of any claim in
any way.”179  The court decision sought to give effect to legislative intent by ensuring that creditors
who voted for an un-modified plan had the opportunity to change their vote,180 and ultimately held
that additional disclosure and resolicitation was only required where “and to the extent the debtor
intends to solicit votes from previously dissenting creditors or when the modification materially
and adversely impacts parties who previously voted for the plan.”181 The legal standard set out by
courts in this Circuit have asked whether creditors would reconsider their vote based on the
modification at issue.182
139.
These modifications do not materially and adversely affect the treatment of Holders
of Class 4 or Class 5 Claims—the only classes entitled to vote on the Plan—such that resolicitation
178 See In re G-1 Holdings Inc., 420 B.R. 216 (D.N.J. 2009) (holding that resolicitation was not required where the
objecting creditor’s claims were not entitled to vote, either before or after modification, and further balloting was
unnecessary); In re Century Glove, Inc., No. Civ. A. 90-400-SLR, 1993 WL 239489 (D. Del. Feb. 10,1993).
179 In re Am. Solar King Corp., 90 B.R. 808, 823 (Bankr. W.D. Tex. 1988) (quoting S.Rep. No. 989, 95th Cong, 2d
Sess 124 (1978)).
180 See id.
181
See id; see also In re Century Glove 1993 WL 239489 at *3 (citing In re Am. Solar King) (holding that additional
disclosure was not warranted where “the debtors did not intend to solicit votes from previously dissenting
creditors. . . .”).
182 See In re G-I Holdings, 420 B.R. 216 at 256.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 78 of 81

65
would be required.  Importantly, all Holders of Claims in Voting Classes are receiving the same
recovery as contemplated under the prior version of the Plan [Docket No. 581].  Proceeds used to
fund payments to Holders of General Unsecured Claims would otherwise go to the Debtors’ DIP
Lenders, and such lenders have consented to the Committee Settlement.  Moreover, the
“Consenting Stakeholders,” which represent the supermajority of the Voting Classes, had an
opportunity to review the revised Plan.  With respect to Class 6 (General Unsecured Claims), the
Committee Settlement and related modifications to the Plan have resulted in improved treatment
of such creditors’ Claims.  Ultimately, therefore, the modifications comply with section 1127 of
the Bankruptcy Code and Bankruptcy Rule 3019 and otherwise do not require resolicitation of the
Plan.
V.
Good Cause Exists to Waive the Stay of the Confirmation Order.
140.
Bankruptcy Rule 3020(e) provides that “[a]n order confirming a plan is stayed until
the expiration of 14 days after the entry of the order, unless the court orders otherwise.”
Bankruptcy Rules 6004(h) and 6006(d) provide similar stays to orders authorizing the use, sale, or
lease of property (other than cash collateral) and orders authorizing a debtor to assign an executory
contract or unexpired lease under section 365(f) of the Bankruptcy Code.  Each rule also permits
modification of the imposed stay upon court order.
141.
The Debtors submit that good cause exists for waiving and eliminating any stay of
the Confirmation Order pursuant to Bankruptcy Rules 3020, 6004, and 6006 so that the
Confirmation Order will be effective immediately upon its entry.
183  The Debtors have undertaken
183
See, e.g., In re SiO2 Med. Prods., Inc., No. 23-10366 (JTD) (Bankr. D. Del. July 19, 2023) (waiving stay of
confirmation order and causing it to be effective and enforceable immediately upon its entry by the court);
In re Tricidia, Inc., No. 23-10023 (JTD) (Bankr. D. Del. May 23, 2023) (same); In re HighPoint Res. Corp., No.
21-10565 (CSS) (Bankr. D. Del. Mar. 18, 2021) (same); In re APC Auto. Techs. Intermediate Holdings, LLC, No.
20-11466 (CSS) (Bankr. D. Del. July 10, 2020) (same); In re Longview Power, LLC, No. 20-10951 (BLS) (Bankr.
D. Del. May 22, 2020) (same); In re Clover Techs. Grp., LLC, No. 19-12680 (KBO) (Bankr. D. Del. Jan. 22,
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 79 of 81

66
great efforts to facilitate their restructuring to exit chapter 11 as soon as practicable, and are seeking
to consummate the Trudell sale transaction in the coming days.  Each day the Debtors remain in
chapter 11 they incur significant administrative and professional costs.
184
142.
For these reasons, the Debtors, their advisors, and other key constituents are
working to expedite the Debtors’ entry into the documents and consummation of the transactions
related to the restructuring transactions so that the Effective Date of the Plan may occur as soon as
possible after the Confirmation Date.  Based on the foregoing, the Debtors request a waiver of any
stay imposed by the Bankruptcy Rules so that the proposed Confirmation Order may be effective
immediately upon its entry.
Conclusion
143.
For all of the reasons set forth herein and in the Braley Declaration and the Voting
Report, the Debtors respectfully request that the Bankruptcy Court approve the
Disclosure Statement and confirm the Plan as fully satisfying all of the applicable requirements of
the Bankruptcy Code by entering the proposed Confirmation Order and grant such other and
further relief as is just and proper.
[Remainder of page intentionally blank]
2020) (same); In re Anna Holdings, Inc., No. 19-12551 (CSS) (Bankr. D. Del. Dec. 17, 2019) (same).  Because
of the voluminous nature of the orders cited herein, such orders have not been attached to this motion.  Copies of
these orders are available upon request to the Debtors’ counsel.
184
See Braley Declaration ¶ 86.
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 80 of 81

Dated: November 11, 2024
Wilmington, Delaware
/s/ Patrick J. Reilley
KIRKLAND & ELLIS LLP
COLE SCHOTZ P.C.
KIRKLAND & ELLIS INTERNATIONAL LLP
Patrick J. Reilley, Esq. (DE Bar No. 4451)
Joshua A. Sussberg, P.C. (admitted pro hac vice)
500 Delaware Avenue, Suite 1410
601 Lexington Ave
Wilmington, Delaware 19801
New York, New York 10022
Telephone:
(302) 652-3131
Telephone:
(212) 446-4800
Facsimile:
(302) 652-3117
Facsimile:
(212) 446-4900
Email:
preilley@coleschotz.com
Email:
joshua.sussberg@kirkland.com
- and -
- and -
Spencer A. Winters, P.C. (admitted pro hac vice)
Michael D. Sirota, Esq. (admitted pro hac vice)
Yusuf U. Salloum (admitted pro hac vice)
Warren A. Usatine, Esq (admitted pro hac vice)
333 West Wolf Point Plaza
Court Plaza North, 25 Main Street
Chicago, Illinois 60654
Hackensack, New Jersey 07601
Telephone:
(312) 862-2000
Telephone:
(201) 489-3000
Facsimile:
(312) 862-2200
Facsimile:
(201) 489-1536
Email:
spencer.winters@kirkland.com
Email:
msirota@coleschotz.com
yusuf.salloum@kirkland.com
wusatine@coleschotz.com
Co-Counsel to the Debtors
Co-Counsel to the Debtors
and Debtors in Possession
and Debtors in Possession
Case 24-11217-BLS    Doc 722    Filed 11/11/24    Page 81 of 81

File and source

File

gov.uscourts.deb.193283.722.0.pdf

Size

1,132,373 bytes

SHA-256

360bdeb769383ee008fb45f3197ebc4fca7329b75074f5c4bef9b727dc577821

Our copy

gov.uscourts.deb.193283.722.0.pdf

Original

PACER (login required)