UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF FLORIDA 

Miami Division 

www.flsb.uscourts.gov

In re: 

 Chapter 11 

FF FUND I, L.P. Case No. 19-22744-BKC-LMI 

F5 BUSINESS INVESTMENT 

 PARTNERS, LLC Case No. 20-10996-BKC-LMI 

 Debtors. 

(Jointly Administered Under Case 

No. 19-22744-BKC-LMI) 

______________________________/ 

FIRST AMENDED DISCLOSURE STATEMENT FOR FIRST AMENDED CHAPTER 

11 PLANS OF REORGANIZATION 

PROPOSED BY FF FUND I, L.P. AND F5 BUSINESS INVESTMENT PARTNERS, LLC 

GENOVESE JOBLOVE & BATTISTA, P.A. 

Paul J. Battista, Esq. 

Florida Bar No. 884162 

Heather L. Harmon. Esq. 

Florida Bar No. 013192 

100 SE 2nd Street, 44th Floor 

Miami, FL 33131 

Telephone: (305) 349-2300 

Facsimile: (305) 349-2310 

Counsel for the Debtors-in-Possession

Dated: February 1, 2021 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 1 of 94
 

DISCLAIMER 

THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT IS 

INCLUDED HEREIN FOR PURPOSES OF SOLICITING ACCEPTANCES OF EACH OF THE 

FOLLOWING: (I) FIRST AMENDED CHAPTER 11 PLAN OF REORGANIZATION PROPOSED 

BY FF FUND I, LP, AND (II) FIRST AMENDED CHAPTER 11 PLAN OF REORGANIZATION 

PROPOSED BY F5 BUSINESS INVESTMENT PARTNERS, LLC, EACH DATED FEBRUARY 

1, 2021 (AS DEFINED HEREIN, INDIVIDUALLY A “PLAN” AND COLLECTIVELY, THE 

“PLANS”),1 AND MAY NOT BE RELIED UPON FOR ANY PURPOSE OTHER THAN TO 

DETERMINE HOW TO VOTE ON THE PLANS. NO SOLICITATION OF VOTES TO 

ACCEPT THE PLANS MAY BE MADE EXCEPT PURSUANT TO SECTION 1125 OF TITLE 

11 OF THE UNITED STATES CODE. 

ALL CREDITORS ARE ADVISED AND ENCOURAGED TO READ THIS 

DISCLOSURE STATEMENT AND THE APPLICABLE PLAN(S) IN THEIR ENTIRETY

BEFORE VOTING TO ACCEPT OR REJECT THE PLAN(S). ALL HOLDERS OF CLAIMS 

SHOULD CAREFULLY READ AND CONSIDER FULLY THE RISK FACTORS SET FORTH 

IN THIS DISCLOSURE STATEMENT (“RISK FACTORS IN CONNECTION WITH THE 

PLANS”) BEFORE VOTING TO ACCEPT OR REJECT THE PLAN(S). PLAN SUMMARIES 

AND STATEMENTS MADE IN THIS DISCLOSURE STATEMENT ARE QUALIFIED IN 

THEIR ENTIRETY BY REFERENCE TO THE PLAN(S) AND THE EXHIBITS ANNEXED 

TO THIS DISCLOSURE STATEMENT, INCLUDING THE DEFINITIONS OF TERMS 

CONTAINED IN SUCH DOCUMENTS. ALL EXHIBITS TO THE DISCLOSURE 

STATEMENT ARE INCORPORATED INTO AND ARE A PART OF THIS DISCLOSURE 

STATEMENT AS IF SET FORTH IN FULL HEREIN 

THIS DISCLOSURE STATEMENT CONTAINS A SUMMARY OF CERTAIN 

PROVISIONS OF THE PLAN(S). ALTHOUGH THE DEBTORS BELIEVE AND HAVE 

MADE EVERY EFFORT TO ENSURE THAT THIS SUMMARY PROVIDES ADEQUATE

INFORMATION WITH RESPECT TO THE PLANS, IT DOES NOT PURPORT TO BE 

COMPLETE AND IS QUALIFIED TO THE EXTENT IT DOES NOT SET FORTH THE 

ENTIRE CONTENT OF THE PLANS. IF THERE IS ANY INCONSISTENCY BETWEEN THE 

PLANS AND THE SUMMARY OF THE PLANS CONTAINED IN THIS DISCLOSURE

STATEMENT, THE PLANS SHALL CONTROL. ACCORDINGLY, EACH HOLDER OF A 

CLAIM SHOULD REVIEW THE PLANS IN THEIR ENTIRETY. 

THE DISCLOSURE STATEMENT HAS BEEN PREPARED IN ACCORDANCE WITH 

SECTION 1125 OF THE UNITED STATES BANKRUPTCY CODE AND RULE 3016(b) OF 

THE FEDERAL RULES OF BANKRUPTCY PROCEDURE AND NOT NECESSARILY IN 

ACCORDANCE WITH OTHER NON-BANKRUPTCY LAW. PERSONS OR ENTITIES 

TRADING IN OR OTHERWISE PURCHASING, SELLING OR TRANSFERRING CLAIMS 

AGAINST OR EQUITY INTEREST IN EITHER DEBTOR SHOULD EVALUATE THIS 

DISCLOSURE STATEMENT AND THE PLAN(S) IN LIGHT OF THE PURPOSE FOR 

WHICH IT WAS PREPARED. THIS DISCLOSURE STATEMENT SHALL NOT BE 

 

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 Unless otherwise defined, capitalized terms used herein shall have the meaning ascribed to such terms in the Plans. 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 2 of 94
 

CONSTRUED TO BE ADVICE ON THE TAX, SECURITIES OR OTHER LEGAL EFFECTS 

OF THE REORGANIZATION OF ANY DEBTOR AS TO HOLDERS OF CLAIMS AGAINST 

OR EQUITY INTEREST IN SUCH DEBTOR. 

AS TO ANY CONTESTED MATTERS OR OTHER ACTIONS OR THREATENED 

ACTIONS, THIS DISCLOSURE STATEMENT SHALL NOT CONSTITUTE OR BE 

CONSTRUED AS AN ADMISSION OF ANY FACT OR LIABILITY, STIPULATION OR 

WAIVER, BUT RATHER AS A STATEMENT MADE IN SETTLEMENT NEGOTIATIONS. 

THIS DISCLOSURE STATEMENT WILL NOT BE ADMISSIBLE IN ANY NONBANKRUPTCY PROCEEDING INVOLVING ANY DEBTOR OR ANY OTHER PARTY, 

NOR WILL IT BE CONSTRUED TO BE CONCLUSIVE ADVICE ON THE TAX, 

SECURITIES, OR OTHER LEGAL EFFECTS OF THE PLAN AS TO HOLDERS OF CLAIMS 

AGAINST, OR EQUITY INTERESTS IN, ANY DEBTOR AND DEBTOR-IN-POSSESSION 

IN THE CHAPTER 11 CASES. 

NO HOLDER OF A CLAIM SHOULD RELY ON ANY INFORMATION RELATING 

TO ANY DEBTOR, ITS RESPECTIVE PROPERTY OR ANY PLAN OTHER THAN THAT 

CONTAINED IN THIS DISCLOSURE STATEMENT AND THE ATTACHED EXHIBITS. 

THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE AS 

OF THE DATE HEREOF UNLESS ANOTHER TIME IS SPECIFIED HEREIN, AND (I) 

THERE CAN BE NO ASSURANCE THAT THE STATEMENTS CONTAINED HEREIN WILL 

BE CORRECT AT ANY TIME AFTER THE DATE HEREOF, AND (II) THE DELIVERY OF 

THIS DISCLOSURE STATEMENT SHALL NOT CREATE AN IMPLICATION THAT 

THERE HAS BEEN NO CHANGE IN THE INFORMATION STATED SINCE THE DATE 

HEREOF. 

THIS DISCLOSURE STATEMENT IS THE ONLY DOCUMENT AUTHORIZED BY 

THE BANKRUPTCY COURT TO BE USED IN CONNECTION WITH THE SOLICITATION 

OF VOTES ACCEPTING THE PLANS. NO REPRESENTATIONS HAVE BEEN 

AUTHORIZED BY THE BANKRUPTCY COURT CONCERNING ANY DEBTOR OR ANY

PLAN, EXCEPT AS EXPLICITLY SET FORTH IN THE DISCLOSURE STATEMENT. 

APPROVAL OF THIS DISCLOSURE STATEMENT BY THE BANKRUPTCY COURT DOES 

NOT INDICATE THAT THE BANKRUPTCY COURT RECOMMENDS EITHER 

ACCEPTANCE OR REJECTION OF THE PLANS NOR DOES SUCH APPROVAL 

CONSTITUTE A DETERMINATION BY THE BANKRUPTCY COURT OF THE FAIRNESS 

OR MERITS OF THE PLANS OR OF THE ACCURACY OR COMPLETENESS OF THE 

INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT. 

EXCEPT WHERE SPECIFICALLY NOTED, THE FINANCIAL INFORMATION 

CONTAINED HEREIN HAS NOT BEEN AUDITED BY A CERTIFIED PUBLIC 

ACCOUNTANT AND HAS NOT BEEN PREPARED IN ACCORDANCE WITH 

ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES. THE 

FINANCIAL PROJECTIONS ATTACHED TO THIS DISCLOSURE STATEMENT WERE 

PREPARED SOLELY BY FF MANAGEMENT, THE GENERAL PARTNER OF FF FUND, 

AND HAVE NOT BEEN VERIFIED OR APPROVED BY THE DEBTORS’ CHIEF 

RESTRUCTURING OFFICER, SONEET R. KAPILA. 

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ALTHOUGH THE PROFESSIONALS (INCLUDING THE CRO) EMPLOYED BY THE 

DEBTORS HAVE ASSISTED IN PREPARING THIS DISCLOSURE STATEMENT BASED 

UPON FACTUAL INFORMATION AND ASSUMPTIONS RESPECTING FINANCIAL, 

BUSINESS, AND ACCOUNTING DATA FOUND IN THE BOOKS AND RECORDS OF THE 

DEBTORS, THEY HAVE NOT INDEPENDENTLY VERIFIED SUCH INFORMATION AND 

MAKE NO REPRESENTATIONS AS TO THE ACCURACY THEREOF, INCLUDING 

SPECIFICALLY IN CONNECTION WITH THE INFORMAITON CONTAINED IN THE 

FINANCIAL PROJECTIONS ATTACHED TO THIS DISCLOSURE STATEMENT. THE 

PROFESSIONALS (INCLUDING THE CRO) EMPLOYED BY THE DEBTORS SHALL

HAVE NO LIABILITY FOR THE INFORMATION IN THIS DISCLOSURE STATEMENT OR 

IN THE EXHIBITS ATTACHED HERETO. 

THE DEBTORS RESERVE THE RIGHT TO OBJECT TO ANY CLAIM PRIOR TO 

THE DATE ESTABLISHED BY THE BANKRUPTCY COURT. ON AND AFTER THE

EFFECTIVE DATE OF THE PLANS, THE REORGANIZED DEBTORS WILL BE VESTED 

WITH FULL AUTHORITY TO UNDERTAKE THE CLAIMS OBJECTION PROCESS WITH 

RESPECT TO ALL CLAIMS THAT HAVE NOT BEEN PREVIOUSLY RESOLVED BY

COURT ORDER OR OTHERWISE (INCLUDING, BUT NOT LIMITED TO, GENERAL 

UNSECURED CLAIMS). THE ACTUAL AMOUNTS OF THE DISTRIBUTIONS UNDER 

THE PLANS TO THE HOLDERS OF ALLOWED GENERAL UNSECURED CLAIMS THAT 

ARE OBJECTED TO BY THE DEBTORS OR THE REORGANIZED DEBTORS, AS THE 

CASE MAY BE, WILL BE DETERMINED AFTER COMPLETION OF THE CLAIMS 

OBJECTION PROCESS. 

ALL OF THE PROJECTED RECOVERIES TO CREDITORS ARE BASED UPON 

ANALYSES PERFORMED BY FF MANAGEMENT, THE GENERAL PARTNER OF THE FF 

FUND DEBTOR. THE DEBTORS AND THEIR PROFESSIONALS (INCLUDING THE CRO) 

HAVE NOT PREPARED ANY SUCH ANALYSES AND THEREFORE CANNOT AND DO

NOT MAKE ANY REPRESENTATIONS OR WARRANTIES WHATSOEVER REGARDING

THE ACCURACY OF THE INFORMATION. 

IRS CIRCULAR 230 NOTICE: TO ENSURE COMPLIANCE WITH IRS CIRCULAR 

230, HOLDERS OF CLAIMS AND EQUITY INTERESTS ARE HEREBY NOTIFIED THAT: 

(A) ANY DISCUSSION OF FEDERAL TAX ISSUES CONTAINED OR REFERRED TO IN 

THIS DISCLOSURE STATEMENT IS NOT INTENDED OR WRITTEN TO BE USED, AND 

CANNOT BE USED, BY HOLDERS OF CLAIMS OR EQUITY INTERESTS FOR THE 

PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON THEM UNDER THE 

INTERNAL REVENUE CODE; (B) SUCH DISCUSSION IS WRITTEN IN CONNECTION 

WITH THE PROMOTION OR MARKETING BY THE DEBTORS OF THE TRANSACTIONS 

OR MATTERS ADDRESSED HEREIN; AND (C) HOLDERS OF CLAIMS AND EQUITY 

INTERESTS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR 

CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR. 

THIS DISCLOSURE STATEMENT WAS NOT FILED WITH THE SECURITIES AND

EXCHANGE COMMISSION OR ANY STATE AUTHORITY AND NEITHER THE 

SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE AUTHORITY HAS 

PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DISCLOSURE STATEMENT 

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OR UPON THE MERITS OF THE PLANS. NEITHER THIS DISCLOSURE STATEMENT 

NOR THE SOLICITATION OF VOTES TO ACCEPT OR REJECT ANY PLAN 

CONSTITUTES AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY 

SECURITIES IN ANY STATE OR JURISDICTION IN WHICH SUCH OFFER OR 

SOLICITATION IS NOT AUTHORIZED. 

THIS DISCLOSURE STATEMENT MAY CONTAIN “FORWARD LOOKING 

STATEMENTS” WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION 

REFORM ACT OF 1995. SUCH STATEMENTS CONSIST OF ANY STATEMENT OTHER 

THAN A RECITATION OF HISTORICAL FACT AND CAN BE IDENTIFIED BY THE USE 

OF FORWARD-LOOKING TERMINOLOGY SUCH AS “MAY,” “EXPECT,” 

“ANTICIPATE,” “ESTIMATE” OR “CONTINUE” OR THE NEGATIVE THEREOF OR 

OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY. THE READER IS 

CAUTIONED THAT ALL FORWARD-LOOKING STATEMENTS ARE NECESSARILY 

SPECULATIVE AND THERE ARE CERTAIN RISKS AND UNCERTAINTIES THAT 

COULD CAUSE ACTUAL EVENTS OR RESULTS TO DIFFER MATERIALLY FROM 

THOSE REFERRED TO IN SUCH FORWARD-LOOKING STATEMENTS. 

THE DEBTORS BELIEVE THAT THE PLANS PROVIDE THE BEST POSSIBLE 

RESULT FOR ALL HOLDERS OF CLAIMS. THE DEBTORS ALSO BELIEVE THAT 

THE PLANS WILL ENABLE THE DEBTORS TO ACCOMPLISH THE OBJECTIVES 

OF REORGANIZATION UNDER CHAPTER 11 AND THAT ACCEPTANCE OF THE 

PLANS ARE IN THE BEST INTERESTS OF THE DEBTORS AND THEIR CREDITORS. 

THUS, IT IS THE OPINION OF THE DEBTORS THAT THE TREATMENT OF 

CREDITORS UNDER THE PLANS CONTEMPLATE A GREATER RECOVERY THAN 

THAT WHICH IS LIKELY TO BE ACHIEVED THROUGH LIQUIDATION OF THE 

DEBTORS. 

IF YOU ARE ENTITLED TO VOTE TO APPROVE ANY PLAN(S), YOU ARE 

RECEIVING A BALLOT WITH YOUR NOTICE OF THIS DISCLOSURE STATEMENT. 

THE DEBTORS STRONGLY URGE CREDITORS TO VOTE TO ACCEPT THE PLANS.

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TABLE OF CONTENTS 

Page 

ARTICLE I - INTRODUCTION AND OVERVIEW .....................................................................1

ARTICLE II -BACKGROUND AND HISTORY OF THE DEBTORS ........................................6

ARTICLE III - EVENTS LEADING TO THE CHAPTER 11 CASES .......................................11

ARTICLE IV - MATERIAL EVENTS OCCURRING DURING CHAPTER 11 

CASES .............................................................................................................14

ARTICLE V - SUMMARY OF THE PLANS ..............................................................................17

ARTICLE VI - MEANS OF PLAN IMPLEMENTATION ..........................................................28

ARTICLE VII - MEANS OF PLAN IMPLEMENTATION - LIQUIDATING 

TRUST ALTERNATIVE ................................................................................31 

ARTICLE VIII - PRESERVATION OF CAUSES OF ACTION .................................................36

ARTICLE IX - PROVISIONS GOVERNING DISTRIBUTIONS ...............................................40

ARTICLE X - DISPUTED CLAIMS ............................................................................................44

ARTICLE XI - TREATMENT OF EXECUTORY CONTRACTS AND 

 UNEXPIRED LEASES ...................................................................................45

ARTICLE XII - CONDITIONS PRECEDENT TO EFFECTIVE DATE ....................................48

ARTICLE XIII - EFFECT OF CONFIRMATION; INDEMNIFICATION, 

INJUNCTIVE AND RELATED PROVISIONS .............................................49

ARTICLE XIV - RETENTION OF JURISDICTION ...................................................................52

ARTICLE XV- RISK FACTORS IN CONNECTION WITH THE PLANS ...............................54

ARTICLE XVI - MISCELLANEOUS PROVISIONS .................................................................56 

ARTICLE XVII - CONFIRMATION REQUIREMENTS ...........................................................58

ARTICLE XVIII - ALTERNATIVE TO THE PLANS ................................................................62

ARTICLE XIX - CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF 

THE PLAN ......................................................................................................63

ARTICLE XX - CONCLUSION ...................................................................................................65

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EXHIBITS 

EXHIBIT 1 Summary and Description of Assets and Investments. 

EXHIBIT 2 Revised Listing of Holders of Limited Partner Equity Interests. 

EXHIBIT 3 Financial Projections, with assumptions. 

EXHIBIT 4 Liquidation Analysis, with assumptions. 

THE DEBTORS HEREBY ADOPT AND INCORPORATE EACH EXHIBIT 

ATTACHED TO THIS DISCLOSURE STATEMENT BY REFERENCE AS THOUGH 

FULLY SET FORTH HEREIN. 

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ARTICLE I 

INTRODUCTION AND OVERVIEW 

A. General Terms of the Plans 

FF Fund I, L.P. (“FF Fund” or the “FF Fund Debtor”) and F5 Business Investment Partners, 

LLC (“F5 Business” or the “F5 Business Debtor,” and together with FF Fund, the “Debtors”) as 

debtors and debtors in possession, hereby transmit this First Amended Disclosure Statement (as 

may be amended, supplemented or otherwise modified 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, 

as amended (the “Bankruptcy Code”), in connection with the Debtors’ solicitation of votes (the 

“Solicitation”) to confirm the First Amended Chapter 11 Plan of Reorganization of FF Fund I, L.P. 

(the “FF Fund Plan”) and the First Amended Chapter 11 Plan of Reorganization of F5 Business 

Investment Partners, LLC (the “F5 Business Plan” and together with the FF Fund Plan, each as 

may be amended, the “Plans”) each dated as of February 1, 2021.

This Disclosure Statement and the other documents described herein are being furnished 

by the Debtors to Creditors and Limited Partners in the Debtors’ respective Chapter 11 Cases 

pending before the Bankruptcy Court. This Disclosure Statement is intended to provide adequate 

information of a kind, and in sufficient detail, to enable the Debtors’ Creditors and Limited 

Partners to make an informed judgment about the Plan applicable to them, including whether to 

accept or reject such Plan. This Disclosure Statement sets forth certain information regarding: (i) 

each Debtor’s prepetition operating and financial history; (ii) each Debtor’s need to file for relief 

under chapter 11 of the Bankruptcy Code; (iii) significant events that have occurred during the 

each Debtor’s Chapter 11 Case; (iv) the terms of the Plans; (v) the manner in which distributions 

will be made under the Plans; (vi) certain effects of confirmation of the Plans; (vii) certain risk 

factors associated with the Plans; and (viii) the confirmation process and the voting procedures 

that holders of Claims and Equity Interests entitled to vote under the Plans must follow for their 

votes to be counted. 

The Debtors are advancing the Plans described in this Disclosure Statement to enable the 

Debtors to emerge from the Chapter 11 Cases as reorganized entities, which the Debtors anticipate 

will occur in early 2021. In order to do so, the Plans are premised on the provision (i) by FF 

Management, the general partner of FF Fund, on the Effective Date of an Investment Guarantee 

Amount in the amount of $4.0 million in cash, and (ii) by the Exit Lender of the Exit Financing in 

the form of a line of credit in the amount of $1.5 million. In exchange for the Investment Guarantee 

Amount, FF Management will retain its General Partner Equity Interest in FF Fund, will be issued 

the New Limited Partner Equity Interests in the FF Fund Debtor and will manage the Debtors’ 

Assets in the ordinary course of their businesses after the Effective Date. The Investment 

Guarantee Amount and the Exit Financing will be used by the Reorganized Debtors to finance: (i) 

the Distributions required under the Plans, including to Holders of Allowed Claims and Allowed 

Limited Partner Interests, as applicable, (ii) the Debtors’ anticipated working capital needs for 

operations, and (iii) new and existing investments. 

As a further inducement to Holders of Allowed Claims to accept the Plans, FF Management 

has agreed to (i) subordinate its $2,000,000 claim against the FF Fund Debtor to all Allowed 

General Unsecured Claims against the FF Fund Debtor and the F5 Business Debtor (but not to the 

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Holders of Limited Partner Equity Interests) as part of the Plans, and (ii) reduce such claim to 

$1,000,000 provided that FF Management or its designee is the provider of the Investment 

Guarantee Amount. 

Holders of Allowed General Unsecured Claims against each Debtor will be Impaired and 

will receive 100% of their Allowed Claims over a three year period, including a 20 percent 

Distribution on or shortly after the Effective Date of the Plans. Holders of the Limited Partner 

Equity Interests in the FF Fund Debtor shall receive on account of their Limited Partner Equity 

Interests, one or more Distributions on a Pro Rata basis, during and/or before the end of the fifth 

year after the Effective Date in the aggregate amount of $2 million (the “LP Payment”), provided 

further, that the Reorganized Debtors shall pay interest on the LP Payment in an amount equal to 

two (2%) percent per annum, which interest payments shall commence on the one year anniversary 

of the Effective Date and continue annually thereafter on the same date until the LP Payment is 

paid in full. 

This Disclosure Statement is subject to the Bankruptcy Court’s approval, as containing 

information of a kind, and in sufficient detail, adequate to enable a hypothetical, reasonable 

investor typical of each of the Classes whose votes are being solicited to make an informed 

judgment with respect to the applicable Plan. THE BANKRUPTCY COURT’S APPROVAL 

OF THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE A 

DETERMINATION WITH RESPECT TO THE MERITS OF THE PLANS. ALL 

CREDITORS ARE ENCOURAGED TO READ THIS DISCLOSURE STATEMENT AND 

ITS EXHIBITS CAREFULLY AND IN THEIR ENTIRETY BEFORE DECIDING TO

VOTE TO ACCEPT OR REJECT THE APPLICABLE PLAN. 

The summary of the Plans provided herein is qualified in its entirety by reference to each 

Plan. To the extent that the information provided in this Disclosure Statement and the Plans 

(including any Plan Supplements) conflict, the terms of the applicable Plan (including any Plan 

Supplements) will control. Terms not otherwise specifically defined herein will have the meanings 

attributed to them in each Plan. Each definition in this Disclosure Statement and in the Plans 

includes both the singular and plural. Headings are for convenience or reference and shall not 

affect the meaning or interpretation of this Disclosure Statement. 

B. The Liquidating Trust Alternative. 

In the event that (i) the Investment Guarantee Amount is not funded in advance of the 

Confirmation Hearing as set forth herein, (ii) the Debtors are not able to secure the Exit Financing 

prior to the Confirmation Hearing as set forth herein, or (iii) certain of the events described in the 

Risk Factors set forth in Article XV below prevent Confirmation of the Plans, then the Debtors 

reserve the right, in their sole discretion, to abandon those aspects of the Plans that seek to enable 

the Debtors to emerge from these Chapter 11 Cases as Reorganized Debtors and instead proceed 

to Confirmation of the Plans under the Liquidating Trust Alternative discussed below. In the event 

the Debtors exercise this right, then the Debtors will provide notice to the Bankruptcy Court, all 

Holders of Claims and Equity Interests in the Debtors and all other parties in interest that the 

Debtors intend to proceed to Confirmation of the Plans under the Liquidating Trust Alternative 

discussed below. 

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Under the Liquidating Trust Alternative, in lieu of the transfer of all Assets of the Estates 

to the Reorganized Debtors on the Effective Dates of the Plans, the Debtors will transfer and vest 

any and all Assets of the Estates of each Debtor into their respective Liquidating Trusts to be 

created under each Plan, each Liquidating Trust under the direction and control of Soneet R. Kapila 

as the Liquidating Trustee therein. The Liquidating Trustee shall have those powers and duties set 

forth in the Plans, including all of the powers and duties of a chapter 7 trustee or a chapter 11 

trustee, including under Sections 704 and 1106 of the Bankruptcy Code. 

Pursuant to the Liquidating Trust Alternative, the Debtors will not have the benefit of the 

Investment Guarantee Amount or the Exit Financing. Rather, the Debtors will use the Assets of 

the Estates to fund confirmation of the respective Plans. In addition, FF Management, Andrew 

Franzone and any of their affiliates will not have any obligations or rights under the Plans, other 

than the rights afforded to all Holders of Claims against and/or Equity Interests in one or both of 

the Debtors. However, under the Liquidating Trust Alternative, FF Management (and its affiliates) 

will continue to agree to reduce their General Unsecured Claims (including the General Unsecured 

Claim of FF Management in the amount of $2,000,000) against the FF Fund Debtor to an amount 

not greater than $1,000,000 and also subordinate such Claims to all Allowed General Unsecured 

Claims against the FF Fund Debtor and the F5 Business Debtor (but not to the Holders of Limited 

Partner Equity Interests). 

Under the Liquidating Trust Alternative, the Liquidating Trusts will be created solely to 

implement the terms of the respective Plans. The primary purposes of the Liquidating Trusts will 

be to collect and liquidate the Assets of each Estate, pursue those claims and Causes of Action 

transferred to, and vested in, the respective Liquidating Trust and to distribute to the respective 

Liquidating Trust Beneficiaries all proceeds from the liquidation of the Assets of each Estate 

pursuant to the terms of the applicable Plan and in accordance with Treasury Regulation Section 

301.7701-4(d). Under no circumstances shall the Liquidating Trustee have any power to engage 

in any trade or business or any other activity except as specifically provided in the Plans otherwise 

reasonably necessary and advisable for the orderly liquidation and distribution of the Assets. 

Under the Liquidating Trust Alternative, the Debtors will not cancel or extinguish the 

Limited Partner Equity Interests in the FF Fund Debtor. Rather, the Plans provide that the 

respective Liquidating Trust shall issue beneficial interests in such Liquidating Trust to the 

respective Liquidating Trust Beneficiaries. Under the FF Fund Plan, (i) the Class A Beneficial 

Interests in the FF Fund Debtor’s Liquidating Trust will be issued to the Holders of all Allowed 

Unsecured Claims against the FF Fund Debtor, (ii) the Class B Beneficial Interests in the FF Fund 

Debtor’s Liquidating Trust will be issued to the Holders of the Subordinated Claim against the FF 

Fund Debtor, and (c) the Class C Beneficial Interests in the FF Fund Debtor’s Liquidating Trust 

will be issued to the Holders of the Limited Partner Equity Interests in the FF Fund Debtor. 

Under the F5 Business Plan, (i) the Class A Beneficial Interests in the F5 Business Debtor’s 

Liquidating Trust will be issued to the Holders of all Allowed Unsecured Claims against the F5 

Business Debtor, and (ii) the Class B Beneficial Interests in the F5 Business Debtor’s Liquidating 

Trust will be issued to the Holders of the Equity Interests in the F5 Business Debtor. 

The Liquidating Trustee shall make Distributions from each Liquidating Trust in 

accordance with the respective Plan to the Liquidating Trust Beneficiaries, in each case on a Pro 

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Rata basis within Class A, Class B or Class C as applicable, provided that the Holders of the Class 

B Beneficial Interests in each Liquidating Trust shall be subordinated in all respects to the Holders 

of the Class A Beneficial Interests in each such Liquidating Trust, and provided further that the 

Holders of the Class C Beneficial Interests in the FF Fund Debtor’s Liquidating Trust shall be 

subordinated in all respects to the Holders of the Class A and Class B Beneficial Interests therein. 

The Liquidating Trustee shall be deemed to have been appointed as the representative of each 

Estate by the Bankruptcy Court pursuant to section 1123(b)(3)(B) of the Bankruptcy Code. 

In the event the Debtors elect to implement the Liquidating Trust Alternative, then the 

Debtors reserve the right to seek a continuance of the Confirmation Hearing and/or to amend or 

modify the Plans to accomplish such result consistent with the terms described herein. 

C. Overview of Chapter 11 and the Plan Confirmation Process. 

Chapter 11 of the Bankruptcy Code allows debtors to reorganize or to liquidate and wind 

up their affairs for the benefit of the debtors and their creditors. Upon the commencement of a 

chapter 11 case, an estate is created comprised of all the legal and equitable interests of a debtor 

as of the date the petition is filed, and the current owner(s) and management typically remain in 

control of the debtor as a debtor-in-possession. The debtor remains in possession of its property 

without the oversight of a trustee. 

Pursuant to section 362 of the Bankruptcy Code, the filing of a chapter 11 petition imposes 

an automatic stay of all attempts by creditors or third-parties to collect or enforce prepetition claims 

against a debtor or otherwise interfere with its property or business, unless relief from the 

automatic stay is obtained from the bankruptcy court. 

The Bankruptcy Code is designed to encourage the parties-in-interest in a chapter 11 case 

to negotiate the terms of a chapter 11 plan so that it may be confirmed. A chapter 11 plan is the 

vehicle for satisfying or otherwise addressing the claims against and the interests in the debtor. 

Confirmation of a chapter 11 plan makes it binding on the debtor and all of its creditors and the 

prior obligations owed by the debtor to such parties are compromised in exchange for the 

obligations specified in the plan. 

After a chapter 11 plan has been filed, the holders of impaired claims against the debtor 

are permitted to vote to accept or reject the plan. Before soliciting acceptances of the proposed 

plan, section 1125 of the Bankruptcy Code requires the debtor to file a disclosure statement 

containing adequate information of a kind, and in sufficient detail, to enable a hypothetical, 

reasonable investor to make an informed judgment about the plan. This Disclosure Statement is 

presented to holders of Claims against the Debtor entitled to vote under section 1125 of the 

Bankruptcy Code in connection with the Proponents’ solicitation of votes on the Plan. 

D. Summary of Voting Requirements for Plan Confirmation. 

1. In General. 

Creditors should refer only to this Disclosure Statement and the Plans and any Court 

approved solicitations to determine whether to vote to accept or reject the applicable Plan. Under 

the Bankruptcy Code, only holders of Claims that are “impaired” are entitled to vote to accept or 

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reject the applicable Plan. Under section 1124 of the Bankruptcy Code, a class of claims or 

interests is deemed to be “impaired” under a plan unless (1) the plan leaves unaltered the legal, 

equitable and contractual rights to which such claim or interest entitles the holder thereof, or (2) 

notwithstanding any legal right to an accelerated payment of such claim or interest, the plan, 

among other things, cures all existing defaults (other than defaults resulting from the occurrence 

of events of bankruptcy) and reinstates the maturity of such claim or interest as it existed before 

the default. 

An impaired class of creditors votes to accept a plan if the holders of at least two-thirds 

(2/3) in dollar amount, and more than one-half (1/2) in number, of those creditors that actually cast 

ballots vote to accept such plan. Those classes that are not impaired are not entitled to vote and 

are deemed to accept a plan. Those classes that are not entitled to a distribution and will not retain 

property under a plan are deemed to reject a plan. 

A class of equity interest holders is deemed to accept a plan if the holders of at least twothirds (2/3) in amount of those interest holders that actually cast ballots vote to accept such plan. 

A class of equity interest holders is impaired, not entitled to vote, and deemed to reject the plan if 

the plan treats such holders by providing that they will retain no property and receive no 

distributions under the plan. 

Any Claim in an Impaired Class that is subject to a pending objection or is scheduled 

as unliquidated, disputed or contingent is not entitled to vote unless the holder of such Claim 

has obtained an order of the Bankruptcy Court temporarily allowing the Claim for the 

purpose of voting on the applicable Plan. 

Pursuant to the Bankruptcy Code, only creditors who actually vote on each Plan will be 

counted for purposes of determining whether the required number of acceptances have been 

obtained for each such Plan. Failure to deliver a properly completed ballot by the Voting Deadline 

(as defined herein) will result in an abstention; consequently, the vote will neither be counted as 

an acceptance or rejection of the applicable Plan. 

2. Impaired Classes Entitled to Vote. 

The FF Fund Plan contains five (5) Classes. Claims in Classes 2 and 3 and the Limited 

Partner Equity Interests in Class 5 are Impaired and therefore are entitled to vote on the FF Fund 

Plan. 

The F5 Business Plan contains three (3) Classes. Claims in Class 2 are Impaired and 

therefore are entitled to vote on the F5 Business Plan. 

3. Unimpaired Classes Deemed to Accept the Plans. 

For the FF Fund Plan, Claims in Class 1 and the General Partner Equity Interests in Class 

4 are Unimpaired, and as such will not be solicited and will be deemed to have accepted the FF 

Fund Plan pursuant to Section 1126(f) of the Bankruptcy Code. 

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6 

 For the F5 Business Plan, Claims in Class 1 and the Equity Interests in Class 3 are 

Unimpaired, and as such will not be solicited and will be deemed to have accepted the F5 Business 

Plan pursuant to Section 1126(f) of the Bankruptcy Code. 

4. Voting Deadline. 

If a Creditor holds a Claim classified in a voting Class of Claims under a Plan, the 

Creditor’s acceptance or rejection of such Plan is important and must be in writing and submitted 

on time. The record date for determining which Creditors may vote on the applicable Plan is 

__________ ___, 2021 (the “Voting Record Date”). The voting deadline is __________ ___, 

2021, at 4:00 p.m. (prevailing Eastern Time) (the “Voting Deadline”). 

5. Voting Instructions. 

IN ORDER FOR A VOTE TO BE COUNTED, THE BALLOT MUST BE 

PROPERLY COMPLETED IN ACCORDANCE WITH THE VOTING INSTRUCTIONS 

ON THE BALLOT AND RETURNED TO THE CLERK OF THE COURT OF THE 

UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF 

FLORIDA (MIAMI DIVISION) BY THE VOTING DEADLINE AT THE ADDRESS 

PRINTED ON THE BALLOT. 

6. Ballots. 

Creditors must use only the Ballot or Ballots sent to them with the notice of this Disclosure 

Statement. If a Creditor has multiple Claims that it is entitled to vote, it should receive multiple 

Ballots. IF A CREDITOR RECEIVES MORE THAN ONE BALLOT, THEN THE 

CREDITOR SHOULD ASSUME THAT EACH BALLOT IS FOR A SEPARATE CLAIM

AND SHOULD COMPLETE AND RETURN ALL OF THEM. 

7. Additional Information. 

If you have any questions about (i) the procedure for voting on your Claim, (ii) the package 

of materials that you have received, (iii) the amount of your Claim, (iv) obtaining or replacing a 

Ballot, or (v) obtaining an additional copy of the Plans, this Disclosure Statement, or any exhibits 

to such documents, please contact the Debtors’ counsel, Genovese Joblove & Battista, P.A., 100 

S.E. Second Street, 44th Floor, Miami, FL 33131, Attn: Heather L. Harmon, Esq., telephone: 

305.349.2300, email: hharmon@gjb-law.com, and provide a copy of your inquiry to Paul J. 

Battista, Esq., email: pbattista@gjb-law.com. 

ARTICLE II 

BACKGROUND AND HISTORY OF THE DEBTORS2

A. The Debtors’ Business Operations 

FF Fund is a limited partnership that was formed in August, 2010. FF Fund’s general 

partner is FF Management. FF Fund’s offering documents identified a broad range of investment 

 

2

 The information contained in this Article II was provided to the Debtors by FF Management. 

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strategies to achieve its stated objectives of “capital appreciation and current income.” The 

offering documents explained without limitation that: “[t]o attempt to minimize the portfolio’s 

overall volatility and exposure to exchange traded market risk, [FF Fund] will also invest a portion 

of its capital in a portfolio of non-exchange traded assets, including but not limited to: private 

investments, direct real estate and real estate partnerships, direct loans, other collateral-backed 

investment vehicles and securities lending partnerships. In addition, [FF Fund] may invest in real 

estate or other private investments thru wholly owned subsidiaries. These investments seek to 

enhance [FF Fund’s] return, either through capital appreciation and/or stable current income 

streams that may be uncorrelated to [FF Fund’s] other publicly traded investments.” 

FF Fund’s offering documents further provided that FF Management “is not limited by the 

above discussion of the investment program. Further, the investment program is a strategy as of 

the date of this Memorandum only. [FF Management] has wide latitude to invest or trade [FF 

Fund’s] assets, to pursue any particular strategy or tactic, or to change the emphasis without 

obtaining the approval of the Limited Partners. The investment program imposes no significant 

limits on the types of instruments in which [FF Management] may take positions, the type of 

positions it may take, its ability to borrow money, or the concentration of investments” and that 

“[t]he foregoing description is general and is not intended to be exhaustive. Prospective investors 

must recognize that there are inherent limitations on all descriptions of investment processes due 

to the complexity, confidentiality, and subjectivity of such processes. In addition, the description 

of virtually every trading strategy must be qualified by the fact that trading approaches are 

continually changing, as are the markets invested in by [FF Management].” A more thorough 

description of the risks and disclaimers associated with FF Fund is available through FF Fund’s 

offering documents, copies of which may be obtained on request to FF Management. 

As of the Petition Date, FF Fund had thirteen subsidiaries and affiliates that FF 

Management set up and routinely evolved over the roughly ten years since FF Fund’s formation 

for various accounting, tax, audit, insurance, regulatory, liquidity, operational, and administrative 

reasons based on the advice, requirement, input, and suggestion of best practices by the FF Fund’s 

pre-petition legal counsel and/or service providers, including, among others, auditors, accountants, 

administrators, and advisors. As of the Petition Date, the thirteen subsidiary and affiliates were as 

follows (the “Subsidiaries”): 

 F1 General Trading Partners, LP 

 F2 Standard Infrastructure Partners, LLC 

 F3 Real Estate Partners, LLC 

 F4 Global Volatility Partners, LLC 

 Debtor, F5 Business Investment Partners, LLC 

 F6 Standard Securities Partners, LLC 

 F7 Group Operating Partners, LLC 

 F8 Commercial Venture Partners, LLC 

 F9 World Property Partners, LLC 

 F10 Consolidated Holding Partners, LLC 

 FF Fund Management, LLC 

 FF Trading Management, LLC 

 FF Reserve Account, LLC 

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As a limited partnership, FF Fund has several Limited Partners who invested directly into 

FF Fund and hold the Limited Partner Equity Interests in FF Fund. Prior to the Petition Date, 

based on the advice of FF Fund’s pre-petition legal counsel, on July 25, 2019, FF Fund issued a 

wind-down notice to its Limited Partners, which FF Fund’s pre-petition legal counsel advised FF 

Management to do in order to effectively convert the fund from an open-ended fund to a closedend fund, along with various other effective changes, including, but not limited to, certain 

advancement rights to the General Partner as well as certain requirements on future capital call 

obligations. As a general course of business, however, FF Fund transferred funds received from 

its Limited Partners into the various Subsidiaries and affiliates in order to enable such entities to 

procure investments based on their stated purpose. 

Specifically and for example, F3 Real Estate Partners, LLC (“F3”) was established to invest 

in real estate primarily from 2011 through 2019. Prior to the CRO’s appointment, F3 purchased 

and then sold a residential complex containing 87 condominium units in West Palm Beach, FL, 

which sale transaction closed in May 2019. 

As of the Petition Date, the F5 Business Debtor held and currently owns the majority of 

the current investments made by FF Fund with monies received from the Limited Partners. The 

investments made by the F5 Business Debtor consisted mainly of (i) illiquid, non-tradeable 

privately held shares in early stage or start-up companies, (ii) minority interests in real estate 

partnerships, or (iii) unsecured promissory notes. 

As of the Petition Date, F6 Standard Securities Partners, LLC (“F6”) held liquid hedge 

fund investments (subject to appropriate redemption notices). 

As of the Petition Date, the remainder of the above Subsidiaries had nominal investments. 

B. Service Providers 

As of the Petition Date, FF Management, often on the advice of legal counsel, or as required 

by regulatory or insurance or best practice reasons or requirements, engaged a number of thirdparty companies to aggregate, organize, and manage the information and data of FF Fund, 

including information received from the Limited Partners, various investments or other third 

parties (collectively, the “Service Providers”). 

C. Officers 

Immediately prior to the Petition Date, FF Fund engaged Soneet R. Kapila as chief 

restructuring officer (the “CRO”) pursuant to the terms of a September 24, 2020 engagement letter 

with FF Management. The CRO filed the Chapter 11 Case for FF Fund on September 24, 2019 

after signing that engagement letter. The CRO was thereafter approved by the Bankruptcy Court 

to act as the Debtor’s chief restructuring officer by Orders dated October 25, 2019 and October 

31, 2019 respectively. The CRO then sought and obtained approval from the Bankruptcy Court to 

file the Chapter 11 Case for the F5 Business Debtor. The CRO filed the Chapter 11 Case for the 

F5 Business Debtor on January 24, 2020 and thereafter sought and obtained approval from the 

Bankruptcy Court to act as the CRO for the F5 Business Debtor. 

D. Summary of Prepetition Indebtedness 

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As of the Petition Date, the Debtors did not have any Creditors asserting Secured Claims. 

With respect to General Unsecured Claims, the Debtors estimate that the ultimate amount of 

Allowed General Unsecured Claims (i) that will remain against FF Fund will be approximately 

$2.7 million in class 2 and $2.0 million in class 3, with the class 3 claim subject to subordination 

and a cap pursuant to and as set forth in the Plans, and (ii) that will remain against the F5 Business 

Debtor will be approximately $4.5 million. 

E. The Debtors’ Investments 

As stated above, the investments/assets that existed as of the Petition Date are generally 

held in the name of FF Fund, the F5 Business Debtor and F6. With a few exceptions, the 

investments/assets are generally held in early stage businesses which were and are inherently 

speculative and illiquid in nature. The following is an overall summary of the investments: 

1. FF Fund 

In addition to the Subsidiaries, FF Fund currently holds three direct investments: (i) two 

investments that are privately held shares not tradeable in the open market and illiquid; and (ii) a 

special purpose vehicle investment. Attached as Exhibit 1 hereto is a summary and description of 

the assets and investments held the Debtors, including the FF Fund Debtor. 

2. F6 

As of the Petition Date, F6 held liquid hedge fund investments. On January 6, 2020 and 

pursuant to the approval of the Bankruptcy Court, the CRO submitted redemption requests to each 

such hedge fund in order to redeem F6’s interests therein. To date, three of the four hedge fund 

positions have been liquidated, resulting in approximately $175,000 being received by F6. 

3. The F5 Business Debtor 

As of the Petition Date, the F5 Business Debtor held approximately 46 investments, many 

of which are either illiquid, consist of non-tradeable privately held shares in early stage or start-up 

companies, are minority interests in real estate partnerships or are unsecured promissory notes with 

non-long term maturities. 

Based on the records and information received to date by the CRO on the Investments, the 

CRO and his Professionals have reviewed and analyzed each of the Investments for the following 

information: 

 The type of Investment, e.g. equity, convertible security or promissory note; 

 The specifics of the equity interest held by the F5 Business Debtor; 

 The amount invested and/or loaned by the F5 Business Debtor; 

 The capital call obligations (“Capital Calls”), if any, that might require the F5 

Business Debtor to fund future amounts in connection with any such Investments. 

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 The ownership group in the Investment, including the principal(s) thereof. 

 A description and understanding of the Investment; and 

 The various withdrawal, liquidation and/or assignment rights of the F5 Business 

Debtor therein based on the Investment Subscription Agreements, Operating 

Agreements and/or Promissory Notes. 

Certain of the Investments that consist of equity interests in various companies require 

approval from either the manager or members of such companies in order for the F5 Business 

Debtor to be able to sell, assign or transfer the F5 Business Debtor’ interest therein. 

A summary and description of the assets and investments held by the F5 Business Debtor 

are included in Exhibit 1 attached hereto. 

One of those investments in Exhibit 1 that is held by the F5 Business Debtor consists of a 

loan and equity investment made in Acadaca, LLC, which is a New York limited liability company, 

which is under the direct or indirect control of Mr. Jason Feingold. The investment made by the 

F5 Business Debtor in Acadaca, LLC consists of (i) loans made by the F5 Business Debtor to 

Acadaca as evidenced by a $500,000 Promissory Note, dated December 1, 2015 and a $6,250,000 

Promissory Note, dated May 21, 2017 (the “Acadaca Promissory Notes”), each issued by Acadaca 

in favor of the F5 Business Debtor, and (ii) money invested by the F5 Business Debtor into 

Acadaca in exchange for a 10% membership interest in Acadaca (the “Equity Interest”). Prior to 

the Petition Date, on June 22, 2019, the F5 Business Debtor and Acadaca entered into a certain 

Agreement, pursuant to the terms of which the F5 Business Debtor and Acadaca agreed to release 

each other from and against any and all obligations under the above loans, the Acadaca Promissory 

Notes and the Equity Interest (the “Release Agreement”). The Debtors have been engaged in 

extended settlement discussions with Acadaca and certain related parties in an effort to resolve 

and settle issues between the Debtors and such parties, including specifically related to the Release 

Agreement so as to reinstate the above loans, the Acadaca Promissory Notes and the Equity 

Interests in accordance with their original terms (the “Acadaca Claims”). The Debtors have 

reached an agreement in principle on the material terms of such settlement and anticipate bringing 

such settlement, once finalized and documented, to the Bankruptcy Court approval under 

Bankruptcy Rule 9019. The settlement with Acadaca will be conditioned on confirmation of the 

Plans and the occurrence of the Effective Dates thereunder. 

A second investment listed in the attached Exhibit 1 consists of a number of investments 

made pre-petition by the Debtors through Mike Skinner Properties, LLC, Michael Skinner and 

Angie Skinner (collectively, the “Skinners”). Such investments made by the Debtors through the 

Skinners included funding the purchase of an airplane hangar known as the Cessna property 

($795,000), a condominium known as the Cornell property ($176,000) and in a loan made to an 

individual named Mr. Hoobler ($72,000). The Cessna property and the Cornell property have been 

sold by the Skinners and the loan to Mr. Hoobler has been collected by the Skinners and only a 

portion of such proceeds have been remitted to the Debtors. The Debtors were in extended 

settlement discussions with the Skinners related to claims that have been asserted by and between 

the Debtors and the Skinners, including related to the proceeds from the assets/investments 

described above that have not been turned over to the Debtors by the Skinners (the “Skinner 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 17 of 94
 

11 

Claims”). In February, 2020, the Skinners, in partial resolution of the claims asserted by the 

Debtors related to the above assets, transferred an amount equal to approximately $375,000 to the 

Debtors. The Skinners have also asserted claims against the Debtors and Mr. Franzone, including 

(i) set off claims related to the proceeds from the sale of the above assets, and (ii) claims that the 

Skinners invested in certain of the Florence Capital Partner entities set forth on Exhibit 1 hereto 

through the Debtors and did not receive an assignment of such interests or proceeds paid in 

connection therewith. Michael Skinner also holds a Limited Partner Equity Interest in the FF Fund 

Debtor and asserts that he properly redeemed such Equity Interest prior to the Petition Date, which 

Mr. Skinner asserts entitles him to a General Unsecured Claim against the FF Fund Debtor in an 

amount equal to approximately $250,000. The Debtors dispute the claims asserted by the Skinners, 

including in respect of the asserted redemption claim. The Skinner Claims are being preserved 

hereunder and will be pursued either before and/or after the Effective Date. 

ARTICLE III 

EVENTS LEADING TO THE CHAPTER 11 CASES 

A. Generally. 

Prior to the Petition Date, the Debtors were controlled by Andrew Franzone, who is the 

managing member of FF Management. As set forth further herein, since their respective petition 

dates, Soneet R. Kapila as CRO has controlled the Debtors. The Prepetition Events described 

below happened before the CRO was in place with the Debtors. 

On July 25, 2019, FF Management announced a fund wind down and started the process 

of returning capital to all of the 85+ investors in FF Fund – a process that FF Management projected 

to take approximately three years due to the illiquid nature of many of the investments in FF Fund’s 

portfolio. The parameters of the wind down announcement are governed by the offering documents 

of FF Fund. 

FF Management was advised by FF Fund’s pre-petition legal counsel to announce the wind 

down after FF Fund’s largest investor, the Linden West Trust (the “LW Trust”) through Dennis S. 

Hersch (“Hersch”) as trustee, which had approximately $34 million, or roughly 70%, of FF Fund’s 

Limited Partner Equity Interests filed a full redemption request shortly before that wind down 

announcement. 

B. Litigation – Pre-petition and post-petition. 

On August 6, 2019, Hersch, as trustee for the LW Trust, brought an action against FF 

Management, Andrew Franzone and FF Fund in Delaware Chancery Court seeking, among other 

things, (i) dissolution of FF Fund, (ii) the appointment of a liquidating agent/trustee over FF Fund 

and (iii) damages for alleged fraud, breach of fiduciary duty and breach of contract against FF 

Management and Franzone (the “Hersch Delaware Litigation”). None of the allegations in the 

Hersch Delaware Litigation have been litigated and/or proven. A copy of the Complaint in the 

Hersch Delaware Litigation may be obtained by sending an email to Debtors’ counsel, Paul J. 

Battista, Esq. (pbattista@gjb-law.com) and/or Heather L. Harmon, Esq. (hharmon@gjb-law.com). 

As a result of the Hersch Delaware Litigation, on September 24, 2019, FF Management, 

also on the advice of legal counsel, retained Soneet R. Kapila as CRO to function as an independent 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 18 of 94
 

12 

person who would take control over FF Fund and its assets, and to, among other things, preserve 

the value of such assets and to attempt to monetize such assets. The filing of the Chapter 11 Cases 

provided immediate benefits to FF Fund, including because it stayed the Delaware litigation. 

As set forth below, on December 1, 2020, Hersch, as trustee for the LW Trust, notified the 

Debtors that the LW Trust and the HKW 2018 Trust (Mr. Harry K. Wexner) elected to abandon 

and forfeit the entirety of their respective Limited Partner Equity Interests in the FF Fund Debtor. 

On October 28, 2020, Dennis Hersch, individually and not as trustee for the LW Trust, 

filed a lawsuit in the United States District Court for the Southern District of New York, Case No, 

20-cv-09047, against Franzone and FF Management alleging fraud, breach of duty and breach of 

contract in connection with Hersch’s individual Limited Partner Equity Interest in the FF Fund 

Debtor (the “Hersch New York Litigation”). Franzone and FF Management have denied the 

allegations in the Hersch New York Litigation and have sought to dismiss the Hersch New York 

Litigation and Hersch has responded and objected to such dismissal. The Court has not ruled on 

such motion as of the date hereof. A copy of the Complaint and related pleadings in the Hersch 

New York Litigation may be obtained by sending an email to Debtors’ counsel, Paul J. Battista, 

Esq. (pbattista@gjb-law.com) and/or Heather L. Harmon, Esq. (hharmon@gjb-law.com). 

On December 4, 2020, Hersch, in his capacity as the trustee for the LW Trust, his son 

Gregory A. Hersch, FloCap, LLC, the HKW Trust, Michael and Angela Skinner and certain other 

plaintiffs filed a lawsuit in the Court of Chancery Court for the State of Delaware against Franzone 

and the following four limited liability companies of which Franzone was and is the managing 

member: Florence Capital Advisors SPV II, LLC, Florence Capital Advisors SPV IV, LLC, 

Florence Capital Advisors SPV V, LLC, and Florence Capital Advisors SPV VI, LLC (the “FloCap 

Litigation”). Pursuant to the FloCap Litigation, the plaintiffs sought to remove and replace 

Franzone as the sole managing member of such entities, and for damages for his alleged breach of 

duty. Franzone has denied these allegations. Franzone also asserts that he acted as the sole 

managing member at the request of G. Hersch, FloCap, Hersch. Franzone asserts that he received 

no compensation for such role. Franzone also asserts that he assumed such role in order to, among 

other reasons, help protect the Debtors’ interests in these entities. A copy of the Complaint in the 

FloCap Litigation may be obtained by sending an email to Debtors’ counsel, Paul J. Battista, Esq. 

(pbattista@gjb-law.com) and/or Heather L. Harmon, Esq. (hharmon@gjb-law.com). 

 C. The Debtors’ Relationship With Gregory Hersch 

Gregory Hersch (“G. Hersch”), Dennis Hersch (who is G. Hersch’s father) and Andrew 

Franzone have had a long standing personal and professional relationship. 

G. Hersch is the principal and the owner of Florence Capital Advisors, LLC (“FloCap”). 

FloCap is a Delaware limited liability company that is an investment adviser firm registered with 

the Securities and Exchange Commission under SEC #801-106523. 

On December 23, 2015, FloCap and the FF Fund Debtor entered into a Discretionary 

Wealth Management Agreement, pursuant to the terms of which FloCap, by and through G. 

Hersch, provided the FF Fund Debtor with investment management and advisory services in 

connection with the FF Fund Debtor’s investment of its assets (the “Investment Services 

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Agreement”). The Investment Services Agreement has been amended five times, with the most 

recent amendment dated July 1, 2018. 

Pursuant to the Investment Services Agreement, the FF Fund Debtor paid monthly advisory 

fees to FloCap that ranged from $30,000 per month to $60,000 per month. From November 7, 

2016 through April 11, 2019, the FF Fund Debtor paid a total of $851,866.51 in advisory fees to 

FloCap (the “Hersch Transfers”). 

Based on investment advice from FloCap and G. Hersch, the FF Fund Debtor and the F5 

Business Debtor invested in excess of $3.9 million in several investments. Included in Exhibit 1 

attached hereto is a listing of the investments made by the Debtors based on investment advice 

from FloCap and G. Hersch. 

On October 9, 2020, FloCap and G. Hersch were sued in the Superior Court of the State of 

California, Case No. 20STCV32965, by Theresa Hughes, as trustee for the Blake Mallen 2013 

Trust (the “Mallen Litigation”). The plaintiffs in the Mallen Liitgaiton have alleged breach of 

fiduciary duty, constructive fraud, fraud – intentional misrepresentation, fraud-concealment, 

negligent misrepresentation and negligence against FloCap and G. Hersch in connection with 

advice given to them by G Hersch to invest in the FF Fund Debtor. Neither the Debtors nor 

Franzone are listed as defendants in the Mallen Litigation. The Mallen Litigation was recently 

dismissed in favor of an private arbitration based on the agreement of the parties thereto. The 

Debtors understand that the arbitration is on-going. A copy of the Complaint in the Mallen 

Litigation may be obtained by sending an email to Debtors’ counsel, Paul J. Battista, Esq. 

(pbattista@gjb-law.com) and/or Heather L. Harmon, Esq. (hharmon@gjb-law.com). 

D. Investigation by the Securities and Exchange Commission. 

The Debtors understand that the Securities and Exchange Commission (the “SEC”) has 

commenced an investigation that involves the Debtors and perhaps others related to the Debtors. 

The Debtors do not know the scope or extent of such investigation, or who is the subject of such 

investigation. The Debtors also do not know the status of such investigation and whether and/or 

when it may lead to the filing of any actions by the SEC. 

The Debtors received a subpoena from the SEC on April 27, 2020 for the production of 

documents related to the Debtors and their investments. The Debtors fully responded to the 

subpoena. The Debtors also understand that the SEC has issued subpoenas to various other parties 

related to the Debtors, but do not know who and/or whether such discovery is ongoing. The 

Debtors will continue to cooperate with the SEC in connection with its investigation. 

The SEC has filed a protective proof of claim in these Chapter 11 Cases in an amount to 

be determined. Pursuant to the SEC Claim, the SEC asserts that the “monetary remedies may be 

imposed against FF Fund I, L.P. ... for potential violations of the federal securities laws.” In 

addition, the Debtors agreed to the entry of an order further extending the deadline for the SEC to 

file an action seeking to determine the non-dischargeability of any debt owed to the SEC. Pursuant 

to an Order of the Bankruptcy Court, dated October 21, 2020, the current deadline for the SEC to 

bring any such action is February 1, 2021. [ECF No. 177]. 

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ARTICLE IV 

MATERIAL EVENTS OCCURRING DURING CHAPTER 11 CASES 

On September 24, 2019, FF Management retained the CRO to manage FF Fund. FF 

Management was and is controlled by Franzone. 

On September 24, 2019 (the “Petition Date”) and at the direction of the CRO, FF Fund 

filed a voluntary Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the 

Southern District of Florida, Miami Division (the “Bankruptcy Court”), Case No. 19-22744-BKCLMI. In connection therewith, FF Fund filed certain “first day” motions, including a motion to 

approve Soneet R. Kapila as the CRO, together with personnel at KapilaMukamal, LLP (“KM”) 

to provide advisory services to the CRO, and to employ Paul J. Battista, Esq. and the law firm of 

Genovese Joblove & Battista, P.A (“GJB”) as bankruptcy counsel to the Debtor, FF Fund. 

The Bankruptcy Court granted the motion to approve Soneet R. Kapila as the CRO, 

including the use of personnel at KM, and the employment of GJB initially on an interim basis and 

then on a final basis by Orders dated October 25, 2019 and October 31, 2019 respectively, all 

effective as of the Petition Date. 

On October 17, 2019, Mr. Franzone filed a Motion For Order Granting Relief From 

Automatic Stay, To Extent Applicable, To Permit Certain Insurance Carriers To Pay Certain 

Defense Costs To The Movants Under Debtor's Insurance Policy. On December 31, 2019, the 

Bankruptcy Court entered an order granting the motion (DE 53). Since then, the Bankruptcy Court 

entered a further order authorizing an increase in the amounts to be paid from the policy [DE 66]. 

To date, approximately $500,000 of the policy limit of $1,000,000, subject to the $150,000 retainer 

which was satisfied in advance by FF Management has been used and approved by the insurance 

carrier, leaving $500,000 of the policy still available for any potential future derivative claims. 

On December 30, 2019, at the request of the CRO, the Bankruptcy Court entered an order 

granting FF Fund’s motion (i) to vote its equity interest in F5 Business to remove the then manager 

of F5 Business, Mr. Franzone, and replace him with the CRO, and (ii) to file a Chapter 11 

bankruptcy petition for F5 Business. 

In addition, on December 30, 2019, at the request of the CRO, the Bankruptcy Court 

entered an order granting FF Fund’s motion (i) to vote its equity interest in F6 Standard Securities 

Partners, LLC (“F6”) to remove the then manager of F6, Mr. Franzone, and replace him with the 

CRO, and (ii) to authorize F6 and the CRO to liquidate the remaining assets of F6, and transfer the 

proceeds therefrom to FF Fund, subject to addressing any liabilities in F6. 

On January 24, 2020 (a “Petition Date”) and consistent with the Bankruptcy Court’s order, 

the CRO caused F5 Business to file a voluntary petition under Chapter 11 of the Bankruptcy Code 

the Bankruptcy Court under Case No. 20-10996-BKC-LMI. On January 30, 2020 the Debtors 

filed a motion seeking an order seeking joint administration of the Debtors’ two bankruptcy cases 

(DE 89). On February 4, 2020 the Bankruptcy Court entered an order (DE 98) approving the 

motion. 

On January 31, 2020, the Debtors sought to extend the CRO’s engagement to the F5 

Business Debtor and filed the Application to Employ Soneet R. Kapila as Chief Restructuring 

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Officer for F5 Business Investments Partners, LLC and Other Professionals at KapilaMukamal, 

LLC to Provide Advisory Services (DE 91). On February 27, 2020, the Bankruptcy Court entered 

an order approving this Motion (DE 116). 

On January 31, 2020, the F5 Business Debtor filed its Application for Authority to Employ 

and Retain Paul J. Battista and the Law Firm of Genovese Joblove & Battista, P.A. as General 

Bankruptcy Counsel (DE 92). On February 27, 2010, the Bankruptcy Court entered an order 

approving this application (DE 117). 

Upon his appointment, the CRO began to go through the records underlying and supporting 

the various investments which were held by one or more of the Service Providers. After a labor 

intensive and complex undertaking by KM and GJB over the course of several months, including 

multiple requests and follow up requests for documents and information on FF Fund, the F5 

Business Debtor and their various investments, KM and GJB were able to procure a substantial 

volume of records from numerous sources, including the use of formal document discovery 

through subpoenas issued under Bankruptcy Rule 2004. 

The CRO, through GJB and KM, requested records from as many as 11 of the Service 

Providers, either directly or through the issuance of Bankruptcy Rule 2004 subpoenas. The CRO, 

through KM, identified 81 separate bank or brokerage accounts for FF Fund, FF Management and 

other entities related to them and Mr. Franzone over the ten year period from 2010 through the 

Petition Date (the “Bank Accounts”). Thirty-one of such Bank Accounts were maintained at 

SunTrust Bank. At the direction of the CRO, GJB issued Bankruptcy Rule 2004 subpoenas to the 

various financial institutions who maintained the Bank Accounts in order to obtain bank 

statements, opening and closing documents, cancelled checks, wire transfer information and 

underlying support. The process of obtaining documents from the various financial institutions in 

respect of the Bank Accounts has been extensive and labor-intensive. A substantial number of such 

documents have been produced. 

In addition to obtaining financial records of the Bank Accounts, KM contacted 

representatives of over 40 of the underlying investments that FF Fund and the F5 Business Debtor 

had made in order to procure investment records, current financial statements and information, and 

the status of each such investment. KM undertook such efforts so as to evaluate the potential 

recovery to FF Fund and/or the F5 Business Debtor from each such investment. The process of 

evaluating each such investment required substantial time and energy on the part of KM, including 

multiple follow-up calls and emails, providing confirmation of the CRO’s authority over FF Fund 

and the F5 Business Debtor in order to request and receive such records, and at times, needing the 

assistance of Mr. Franzone to intercede on behalf of the CRO with such investment principals, 

which assistance Mr. Franzone provided. 

Shortly after the respective Petition Dates, the CRO established separate Debtor-inPossession bank accounts in the name of FF Fund and the F5 Business Debtor, along with bank 

accounts for the remaining Subsidiaries. The combined bank balance as of September 9, 2020 for 

the FF Fund and the Subsidiaries was $1,045,258. The principal sources of such funds on deposit 

are from: (i) funds in the Bank Accounts that the CRO closed after his appointment, (ii) dividends 

received post-petition from certain of the investments, (iii) proceeds from the liquidation of the 

hedge fund positions at F6, and (iv) proceeds from investments whose underlying asset has been 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 22 of 94
 

16 

liquidated or sold. The CRO files monthly Debtor-in-Possession operating reports for FF Fund and 

the F5 Business Debtor that include receipts and disbursements for the prior month, including on 

an aggregate basis. Such reports can be obtained on the Bankruptcy Court’s PACER docket. 

As against FF Fund, the Bankruptcy Court established February 10, 2020 as the general 

bar date to file proofs of claim and March 23, 2020 as the governmental bar date to file proofs of 

claim. As against the F5 Business Debtor, the Bankruptcy Court established June 3, 2020 as the 

general bar date to file proofs of claim and July 22, 2020 as the governmental bar date to file proofs 

of claim. 

On December 1, 2020, the Debtors received written notice from The Linden West Trust 

and HKW 2018 Trust (Mr. Harry K. Wexner) that they elected to abandon and forfeit the entirety 

of their respective Limited Partner Equity Interests in the FF Fund Debtor, which Limited Partner 

Interests represent in excess of $34 million and 70% of the total Limited Partner Equity Interests 

in the FF Fund Debtor. In connection therewith, on January 14, 2021, the Debtors filed an Agreed 

Ex-Parte Motion to Strike and Disallow Proofs of Claims/Interests [ECF No. 211]. On January 

15, 2021, the Court entered an Order granting such motion [ECF No. 212]. 

As a result of the forfeiture of the Limited Partner Equity Interests by The Linden West 

Trust and HKW 2018 Trust (Mr. Harry K. Wexner) as set forth above, over 70% of the Limited 

Partner Equity Interests have been eliminated. To that end, the remaining Holders of Limited 

Partner Equity Interests have had their ownership percentages increased. Attached hereto as 

Exhibit 2 is a revised listing of the Holders of the Limited Partner Equity Interests. 

On January 20, 2021, Genovese Joblove & Battista, P.A.. as counsel to the Debtors, filed 

its First Interim Application for Compensation and Reimbursement of Expenses [ECF No. 214] 

seeking fees in the amount of $393,331 and expenses in the amount of $10,164.09. 

On January 20, 2021, Soneet R. Kapila, as the CRO for the FF Fund Debtor, filed his First 

Interim Application for Compensation and Reimbursement of Expenses [ECF No. 215] seeking 

fees in the amount of $499,984.20 and expenses in the amount of $5,056.81. 

On January 20, 2021, Soneet R. Kapila, as the CRO for F5 Business Debtor, filed his First 

Interim Application for Compensation and Reimbursement of Expenses [ECF No. 216] seeking 

fees in the amount of $278,925.00 and expenses in the amount of $1,021.24. 

On January 20, 2021, a Limited Objection and Reservation of Rights to the Debtors’ 

Disclosure Statement [ECF No. 217] was filed by the Securities and Exchange Commission (the 

“SEC Limited Objection”). 

On January 20, 2021, an Objection to the Debtors’ Disclosure Statement [ECF No. 221] 

was filed by Florence Capital Advisors, LLC, Gregory A. Hersch, Richard Grausman, Brian Stein, 

the Ann Lewin Revocable Trust, Angie Skinner, Michael Skinner, the Kimple 2009 Trust, Lewis 

Hall, Stalene Hall and Ashleigh Aungst. 

On January 20, 2021, an Objection to the Debtors’ Disclosure Statement [ECF No. 222] 

was filed by Dennis S. Hersch, individually. 

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In response to the above Objections, on February 1, 2021, the Debtors filed a First 

Amended Disclosure Statement [ECF No. ___], a First Amended Chapter 11 Plan of 

Reorganization Proposed by FF Fund I, L.P. [ECF No. ___] and a First Amended Chapter 11 Plan 

of Reorganization Proposed by F5 Business Investment Partners, LLC [ECF No. ___]. 

On February 4, 2021, the Bankruptcy Court conducted a hearing on the approval of the 

First Amended Disclosure Statement. At such hearing, the Debtors announced, among other 

things, that they will terminate exclusivity under Section 1121 of the Bankruptcy Code so as to 

enable any party-in-interest to file and seek confirmation of a competing plan. 

 

ARTICLE V 

SUMMARY OF THE PLANS 

A. Summary 

THE FOLLOWING IS A SUMMARY OF SOME OF THE SIGNIFICANT 

ELEMENTS OF THE PLANS. THE DISCLOSURE STATEMENT IS QUALIFIED IN ITS 

ENTIRETY BY REFERENCE TO THE MORE DETAILED INFORMATION SET 

FORTH IN THE PLANS AND THE EXHIBITS AND SCHEDULES THERETO. 

The Plans classify Claims and Equity Interests separately in accordance with the 

Bankruptcy Code and provides different treatment for different Classes of Claims and Equity 

Interests. Claims and Equity Interests shall be included in a particular Class only to the extent such 

Claims or Equity Interests qualify for inclusion within such Class. The Plans separate the various 

Claims (other than those that do not need to be classified) into five (5) separate Classes in the case 

of the FF Fund Plan and three (3) separate Classes in the case of the F5 Business Plan. These 

Classes take into account the differing nature and priority of Claims against, and Equity Interests 

in, the respective Debtor. Unless otherwise indicated, the characteristics and amounts of the 

Claims or Equity Interests in the following Classes are based on the books and records of the 

Debtors. 

The Plans are intended to enable the Debtors to continue their present operations without 

the likelihood of a subsequent liquidation or the need for further financial reorganization. FF 

Management believes that the Debtors will be able to perform all of their obligations under the 

Plans and meet their expenses after the Effective Date without further financial reorganization. 

Also, FF Management believes that the Plans permit fair and equitable recoveries, while expediting 

the reorganization of the Debtors. 

Other than as specifically provided in the Plans, the treatment under the Plans of each Claim 

and Equity Interest will be in full satisfaction, settlement, release and discharge of all Claims or 

Equity Interests. The Reorganized Debtors will make all payments and other distributions to be 

made under the Plans unless otherwise specified. 

B. Exit Financing and the Investment Guarantee Amount 

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The Plans are premised on the provision by (i) FF Management, the general partner of FF 

Fund, on the Effective Date of an Investment Guarantee Amount in the amount of $4.0 million in 

cash, and (ii) the Exit Lender of the Exit Financing in the form of a line of credit in the amount of 

$1.5 million. In exchange for the Investment Guaranty Amount, FF Management will retain its 

General Partner Equity Interest in FF Fund, will be issued the New Limited Partner Equity Interests 

in FF Fund and will continue to manage the Debtors’ Assets in the ordinary course of business 

after the Effective Date. The Investment Guarantee Amount and the Exit Financing will be used 

by the Reorganized Debtors to finance: (i) initial Distributions under the Plans, including to 

Holders of Allowed General Unsecured Claims, (ii) the Debtors’ anticipated working capital needs 

for operations, and (iii) new and existing investments. 

The Investment Guarantee Amount is being made available by FF Management to the 

Debtors pursuant to Section 3.8 of that certain 3rd Amended and Restated Limited Partnership 

Agreement of FF Fund I, L.P. dated December 12, 2013, as may be modified in the Plan 

Supplement. Pursuant thereto, FF Management (as the general partner of FF Fund) may, if it 

determines that a material event that negatively impacts FF Fund’s financial prospects or results 

has occurred, guarantee all or a portion of an investment by either depositing cash into FF Fund’s 

bank account, waiving all or a portion of management and performance fees for investors in FF 

Fund that were affected by such material event, or some combination of the foregoing. FF 

Management has up to 180 days following the date upon which FF Management makes an 

affirmative determination to invoke the Investment Guarantee Amount to decide the form of the 

Investment Guarantee Amount. 

As set forth above and in the Plans, FF Management will contribute the Investment 

Guarantee Amount, which is in the aggregate amount equal to $4,000,000, to the FF Fund Debtor 

and the F5 Business Debtor on the Effective Date, which amount will be allocated between the FF 

Fund Debtor and the F5 Business Debtor as determined by FF Management, provided that there 

shall be at least a sufficient amount available to each of the FF Fund Debtor and the F5 Business 

Debtor to pay the obligations of the FF Fund Debtor and the F5 Business Debtor in accordance 

with the Plans on the Effective Dates thereof. The Investment Guarantee Amount shall be used 

solely to fund the Debtors’ obligations under the Plans (including Allowed Administrative Claims, 

Professional Fees, Allowed Claims and Allowed Equity Interests), to fund the Reorganized 

Debtors’ operations and to fund new and existing investments by the Reorganized Debtors. The 

Investment Guarantee Amount shall be deposited into the attorneys’ trust account of Genovese 

Joblove & Battista, P.A., as counsel to the Debtors, on the date that is at least five (5) business days 

prior to the Confirmation Hearing. Such funds shall only be used to fund the Investment Guarantee 

Amount required to be funded by FF Management on the Effective Date of the Plans. In the event 

the Plans are not confirmed on or before 15 business days after the Investment Guarantee Amount 

has been deposited into such trust account, then FF Management shall have the right to withdraw 

such funds from such trust account upon written notice to the Debtors and counsel to the Debtors, 

Genovese Joblove & Battista, P.A., which notice shall be filed with the Bankruptcy Court. Upon 

receipt of such notice, Genovese Joblove & Battista, P.A. shall return the Investment Guarantee 

Amount to FF Management. In such event, the Debtors reserve the right to withdraw the Plans. 

As a further inducement to Holders of Allowed Claims, FF Management has agreed to (i) 

subordinate its $2,000,000 claim against the FF Fund Debtor to all Allowed General Unsecured 

Claims against the FF Fund Debtor and the F5 Business Debtor (but not to the Holders of Limited 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 25 of 94
 

19 

Partner Equity Interests) as part of the Plans, and (ii) reduce such claim to $1,000,000 provided 

that FF Management or its designee is the provider of the Investment Guarantee Amount. 

C. Provisions for Treatment of Unclassified Claims 

1. Administrative Expense Claims 

Pursuant to each Plan, the Debtors shall pay each holder of an Allowed Administrative 

Claim, in satisfaction of such Allowed Administrative Claim, the full unpaid amount of such 

Allowed Administrative Claim in Cash: (1) on the Effective Date or as soon as practicable 

thereafter (or, if not then due, when such Allowed Administrative Claim is due or as soon as 

practicable thereafter); (2) if such Claim is Allowed after the Effective Date, on the date such 

Claim is Allowed or as soon as practicable thereafter (or, if not then due, when such Allowed 

Administrative Claim is due or as soon as practicable thereafter); (3) at such time and upon such 

terms as may be agreed upon by such holder and the applicable Debtor; or (4) at such time and 

upon such terms as set forth in an order of the Bankruptcy Court; provided, however, that any 

Claim seeking administrative expense status included as a part of a proof of claim filed in this 

Chapter 11 Case shall not qualify as an Administrative Claim. The treatment of Allowed 

Administrative Expense Claims shall be the same under the Liquidating Trust Alternative, if 

applicable. 

2. Professional Fee Claims 

On or prior to the deadline set by the Bankruptcy Court for Professionals to file final fee 

applications, each Professional shall file with the Bankruptcy Court its final fee application seeking 

final approval of all fees and expenses from the applicable Petition Date through the Confirmation 

Hearing. Pursuant to each Plan, the Debtors shall pay the Allowed Professional Fee Claim of each 

Professional from Available Cash in accordance with the Orders of the Bankruptcy Court, unless 

otherwise agreed to by the Holders of such Allowed Professional Fee Claims. From and after the 

Confirmation Date until the Effective Date, the Debtors, in the ordinary course of business and 

without the necessity for any approval by the Bankruptcy Court, shall pay the reasonable fees and 

necessary and documented expenses of the Professionals during such period. The treatment of 

Allowed Professional Fee Claims shall be the same under the Liquidating Trust Alternative, if 

applicable. 

3. Priority Tax Claims 

Pursuant to each Plan, the Debtors shall pay each holder of an Allowed Priority Tax Claim, 

in satisfaction of such Allowed Priority Tax Claim, the full unpaid amount of such Allowed 

Priority Tax Claim in Cash, on the later of (i) the Effective Date, (ii) the date such Allowed Priority 

Tax Claim becomes Allowed or as soon as practicable thereafter and (iii) the date such Allowed 

Priority Tax Claim is payable under applicable non-bankruptcy law; provided, however, that the 

Debtors shall not pay any premium, interest or penalty in connection with such Allowed Priority 

Tax Claim. The treatment of Allowed Priority Tax Claims shall be the same under the Liquidating 

Trust Alternative, if applicable. 

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4. Statutory Fees 

Notwithstanding any other provisions of the Plans to the contrary, the Debtors shall pay 

the United States Trustee the appropriate sum required pursuant to 28 U.S.C. § 1930(a)(6), within 

ten (10) days of the entry of the order confirming each Plan, for pre-confirmation periods and 

simultaneously file all the Monthly Operating Reports for the relevant periods, indicating the cash 

disbursements for the relevant period. The Reorganized Debtors shall further pay the United States 

Trustee the appropriate sum required pursuant to 28 U.S.C. § 1930(a)(6), based upon all postconfirmation periods within the time period set forth in 28 U.S.C. § 1930(a)(6), based upon all 

post-confirmation disbursements made by the Reorganized Debtors, until the earlier of the closing 

of the applicable Chapter 11 Case by the issuance of a Final Decree by the Bankruptcy Court, or 

upon the entry of an Order by the Bankruptcy Court dismissing such case or converting such case 

to another chapter under the United States Bankruptcy Code, and the Reorganized Debtors shall 

provide to the United States Trustee upon the payment of each post-confirmation payment, and 

concurrently filed with the Court, Post-Confirmation Quarterly Operating reports indicating all the 

cash disbursements for the relevant period. The treatment and payment of the fees due to the 

Office of the United States Trustee shall be the same under the Liquidating Trust Alternative, if 

applicable, provided that the Liquidating Trustee shall be responsible to pay the post-confirmation 

fees and file the post-confirmation reports. 

The table below provides a summary of the classification, treatment and estimated 

recoveries of Claims and Equity Interests under the Plans. This information is provided in 

summary form below for illustrative purposes only, is subject to material change based on 

contingencies related to the claims reconciliation process, and is qualified in its entirety by 

reference to the provisions of the Plans. 

THE ESTIMATED PROJECTED RECOVERIES SET FORTH IN THE TABLE 

BELOW ARE ESTIMATES ONLY AND ARE THEREFORE SUBJECT TO CHANGE. 

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21 

SUMMARY OF TREATMENT OF CLAIMS AND EQUITY INTERESTS AND 

ESTIMATED RECOVERIES 

A. The FF Fund Plan 

Class Treatment of Claims and 

Interests 

Estimated 

Aggregate 

Claims 

Estimated Percentage 

Recovery 

Class 1: 

Other 

Priority 

Claims

Except to the extent that a holder of an 

Allowed Other Priority Claim has been 

paid by either Debtor prior to the 

Effective Date or agrees to a different 

classification and treatment, each 

holder of an Allowed Other Priority 

Claim shall receive the full unpaid 

amount of such Allowed Other Priority 

Claim in Cash, on the later of (i) the 

Effective Date or as soon as 

practicable thereafter, (ii) the date such 

Allowed Other Priority Claim becomes 

Allowed or as soon as practicable 

thereafter and (iii) the date such 

Allowed Other Priority Claim is 

payable under applicable nonbankruptcy law; provided, however, 

that the Debtors shall not pay any 

premium, interest or penalty in 

connection with such Allowed Other 

Priority Claim. The treatment of Other 

Priority Claims shall be the same 

under the Liquidating Trust 

Alternative, if applicable. 

$0 100% 

Class 2: 

Allowed 

General 

Unsecured 

Claims 

In full and final satisfaction of their 

Allowed Class 2 General Unsecured 

Claims, each holder of an Allowed 

Class 2 General Unsecured Claim shall 

receive (i) a Distribution in an amount 

equal to twenty (20%) percent of their 

respective Allowed Class 2 General 

Unsecured Claim on the Effective Date 

or as soon as reasonably practicable 

thereafter, (ii) a second Distribution in 

an amount equal to twenty (20%) 

percent of their respective Allowed 

Class 2 General Unsecured Claim on 

the one year anniversary of the 

Effective Date, (iii) a third Distribution 

in an amount equal to twenty (20%) 

percent of their respective Allowed 

Class 2 General Unsecured Claim on 

the second anniversary of the Effective 

Date, and (iii) a final Distribution in an 

amount equal to forty (40%) percent of 

their respective Allowed Class 2 

$2,700,000 100% 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 28 of 94
 

22 

General Unsecured Claim on the third 

anniversary of the Effective Date. 

Class 3: 

Allowed 

Subordinated 

Claims 

In full and final satisfaction of its 

Allowed Class 3 Subordinated Claims, 

FF Management shall receive 

Distributions at such times and in such 

amounts as the Reorganized Debtor 

shall determine in the exercise of its 

best business judgment, provided that 

no Distributions will be made to FF 

Management on account of the 

Allowed Subordinated Claims unless 

and until all Allowed Administrative 

Claims, all Allowed Priority Tax 

Claims and all Allowed Claims in 

Classes 1 and 2 have been paid in full, 

reserved or otherwise resolved, and/or 

included in or accounted for in the 

Distribution at issue, and provided 

further that any proposed Distribution 

on the Allowed Subordinated Claims 

shall not adversely affect the 

Reorganized Debtor’s ability to 

comply with its obligations to the 

holders of Class 5 Limited Partner 

Equity Interests under this Plan. 

$1,000,000 

(After taking into 

account the 

reduction 

consented to by 

the Holder of 

Class 3 

Subordinated 

Claim in 

accordance with 

the terms of this 

Plan). 

100% 

Class 4: 

General 

Partner 

Equity 

Interests 

On the Effective Date, the legal, 

equitable and contractual rights of the 

General Partner Equity Interests shall 

be unaltered and the holder of the 

General Partner Equity Interests in the 

Debtor, which is FF Management, 

shall retain its General Partner Equity 

Interests in the Reorganized Debtor 

from and after the Effective Date. 

N/A N/A 

Class 5: 

Limited 

Partner 

Equity 

Interests 

On the Effective Date, all Limited 

Partner Equity Interests in the Debtor 

as of the Effective Date shall be 

cancelled and extinguished, provided 

however, that the holders of Allowed 

Limited Partner Equity Interests in the 

Debtor shall receive on account of 

their Limited Partner Equity Interests, 

one or more Distributions on a pro rata 

basis, during and/or before the end of 

the fifth year after the Effective Date 

in the aggregate amount of $2 million 

(the “LP Payment”), provided further,

that the Reorganized Debtor shall pay 

interest on the LP Payment in an 

amount equal to two (2%) percent per 

annum, which interest payments shall 

commence on the one year anniversary 

of the Effective Date and continue 

annually thereafter on the same date 

until the LP Payment is paid in full. 

N/A N/A ($2,000,000 in the aggregate for 

the Class). 

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23 

Except for the payment of accrued 

interest as set forth above, all 

Distributions to the holders of Class 5 

Limited Partner Interests shall be 

subordinated to the Distributions to the 

Holders of Allowed Claims in Classes 

1, 2 and 3 above and no such 

Distributions shall be made to Holders 

of Class 5 Limited Partner Equity 

Interests unless and until all Allowed 

Administrative Claims, all Allowed 

Priority Tax Claims and all Allowed 

Claims in Classes 1, 2 and 3 have been 

paid in full, reserved or otherwise 

resolved, and/or included in or 

accounted for in the Distribution at 

issue. 

B. The F5 Business Plan 

Class Treatment of Claims and 

Interests 

Estimated 

Aggregate 

Claims 

Estimated Percentage 

Recovery 

Class 1: 

Other 

Priority 

Claims

Except to the extent that a holder of an 

Allowed Other Priority Claim has been 

paid by the Debtor prior to the 

Effective Date or agrees to a different 

classification and treatment, each 

holder of an Allowed Other Priority 

Claim shall receive the full unpaid 

amount of such Allowed Other Priority 

Claim in Cash, on the later of (i) the 

Effective Date or as soon as 

practicable thereafter, (ii) the date such 

Allowed Other Priority Claim becomes 

Allowed or as soon as practicable 

thereafter and (iii) the date such 

Allowed Other Priority Claim is 

payable under applicable nonbankruptcy law; provided, however, 

that the Debtor shall not pay any 

premium, interest or penalty in 

connection with such Allowed Other 

Priority Claim. The treatment of 

Other Priority Claims shall be the 

same under the Liquidating Trust 

Alternative, if applicable. 

$0 100% 

Class 2: 

Allowed 

General 

Unsecured 

Claims 

In full and final satisfaction of their 

Allowed Class 2 General Unsecured 

Claims, each holder of an Allowed 

Class 2 General Unsecured Claim shall 

receive (i) a Distribution in an amount 

equal to twenty (20%) percent of their 

respective Allowed Class 2 General 

$4,500,000 100% 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 30 of 94
 

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Unsecured Claim on the Effective Date 

or as soon as reasonably practicable 

thereafter, (ii) a second Distribution in 

an amount equal to twenty (20%) 

percent of their respective Allowed 

Class 2 General Unsecured Claim on 

the one year anniversary of the 

Effective Date, (iii) a third Distribution 

in an amount equal to twenty (20%) 

percent of their respective Allowed 

Class 2 General Unsecured Claim on 

the second anniversary of the Effective 

Date, and (iii) a final Distribution in an 

amount equal to forty (40%) percent of 

their respective Allowed Class 2 

General Unsecured Claim on the third 

anniversary of the Effective Date. 

Class 3: 

Allowed 

Equity 

Interests 

On the Effective Date, the legal, 

equitable and contractual rights of the 

Equity Interests shall be unaltered and 

the holder of the Equity Interests in the 

Debtor, which is the FF Fund Debtor, 

shall retain its Equity Interests in the 

Reorganized Debtor from and after the 

Effective Date. 

N/A N/A 

C. Classification of Claims and Equity Interests Under the Plans 

The following table designates the Classes of Claims against and Equity Interests in the 

Debtors under the Plans, and specifies which Classes are (a) Impaired or Unimpaired by the Plans, 

(b) entitled to vote to accept or reject the Plans in accordance with section 1126 of the Bankruptcy 

Code, or (c) deemed to accept or reject the Plans. 

I. The FF Fund Plan 

Class Designation Impaired Entitled to Vote 

1 Other Priority Claims No No, Deemed to Accept 

2 General Unsecured Claims Yes Yes 

3 Allowed Subordinated Claims Yes Yes 

4 General Partner Equity Interests No No, Deemed to Accept 

5 Limited Partner Equity Interests Yes Yes 

II. The F5 Business Plan 

Class Designation Impaired Entitled to Vote 

1 Other Priority Claims No No, Deemed to Accept 

2 General Unsecured Claims Yes Yes 

3 Allowed Equity Interests No No, Deemed to Accept 

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25 

D. The Liquidating Trust Alternative - Treatment of Claims and Equity 

Interests 

In the event the Debtors elect to proceed with the Liquidating Trust Alternative, then in 

lieu of the above treatments, the Classes of Claims and Interests under the Plans shall be treated 

and paid as follows: 

1. FF Fund Plan: 

Class 2 of the FF Fund Plan - Allowed General Unsecured Claims. Class 2 of the FF 

Fund Plan consists of the Holders of Allowed General Unsecured Claims. In full satisfaction, 

settlement, release, extinguishment and discharge of each such Allowed General Unsecured Claim, 

each Holder of an Allowed General Unsecured Claim against the FF Fund Debtor’s Estate shall 

receive a Class A Beneficial Interest in the Liquidating Trust created under the FF Fund Plan on a 

Pro Rata basis with all other Holders of Allowed General Unsecured Claims against the FF Fund 

Debtor. Such Class A Beneficial Interest shall entitle such Holder to Distributions from time to 

time from the applicable Liquidating Trust, as determined by the Liquidating Trustee in the 

exercise of his business judgment after accounting for any Liquidating Trust Reserves, on a Pro 

Rata basis with the Holders of all Class A Beneficial Interests in such Liquidating Trust, which 

Distributions will be made from Available Cash on deposit from time to time with the Liquidating 

Trust, provided that the maximum Distributions to the Holders of Allowed General Unsecured 

Claims shall be the full amount of each Allowed General Unsecured Claim without interest. The 

first Distribution shall be made as soon as reasonably practicable following the Effective Date, 

provided however, that any Distribution to the Holders of Disputed Claims shall be reserved in the 

Disputed Claims Fund. No Distribution shall be made to Holders of Allowed General Unsecured 

Claims unless and until (i) all Allowed Administrative Claims, all Allowed Professional Fee 

Claims, all Allowed Priority Claims, all Allowed Priority Tax Claims, and all U.S. Trustee Fees 

have been paid in full, reserved or otherwise resolved, and (ii) the Liquidating Trustee has paid or 

reserved for all obligations of the Liquidating Trust and has established the Liquidating Trust 

Reserve in connection therewith. Class 2 under the FF Fund Plan is Impaired, and therefore, the 

Holders of the Allowed General Unsecured Claims in Class 2 under the FF Fund Plan are entitled 

to vote to accept or reject such Plan. The Debtors are not able to project an expected recovery for 

the Holders of Allowed Class 2 Claims under the Liquidating Trust Alternative. 

Class 3 of the FF Fund Plan - Allowed Subordinated Claims. Class 3 of the FF Fund 

Plan consists of the Holders of Allowed Subordinated Claim of FF Management and any affiliates 

of FF Management and/or Franzone. In full satisfaction, settlement, release, extinguishment and 

discharge of each such Allowed Subordinated Claim against the FF Fund Debtor’s Estate, such 

Holder shall receive a Class B Beneficial Interest in the FF Fund Liquidating Trust created under 

the FF Fund Plan on a Pro Rata basis with all such Holders of Class 3 Allowed Subordinated 

Claims, which Class B Beneficial Interest shall entitle such Holders to receive Distributions on a 

Pro Rata basis from time to time from the FF Fund Liquidating Trust, as determined by the 

Liquidating Trustee in the exercise of his business judgment after accounting for any Liquidating 

Trust Reserves, from Available Cash on deposit from time to time with the FF Fund Liquidating 

Trust, provided that the maximum Distributions to such Holders shall be the full amount of each 

Allowed Subordinated Claim without interest, provided further, that no Distribution shall be made 

to any Holder of an Allowed Subordinated Claim unless and until (i) all Allowed Administrative 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 32 of 94
 

26 

Claims, all Allowed Professional Fee Claims, all Allowed Priority Claims, all Allowed Priority 

Tax Claims, all U.S. Trustee Fees and all Allowed General Unsecured Claims in Class 2 of each 

Plan have been paid in full, reserved or otherwise resolved, and (ii) the Liquidating Trustee has 

paid or reserved for all obligations of the Liquidating Trust and has established the Liquidating 

Trust Reserve in connection therewith. Class 3 under the FF Fund Plan is Impaired, and therefore, 

the Holders of Allowed Subordinated Claims are entitled to vote to accept or reject the FF Fund 

Plan. The Debtors are not able to project an expected recovery for the Holders of Allowed Class 

3 Claims under the FF Fund Plan under the Liquidating Trust Alternative. 

Class 4 of the FF Fund Plan – Holder of Allowed General Partner Equity Interests. 

Class 4 of the FF Fund Plan consists of the Allowed General Partner Equity Interests in the FF 

Fund Debtor held by FF Management. On the Effective Date, the legal, equitable and contractual 

rights of the General Partner Equity Interests shall be unaltered, provided however, that the FF 

Fund Debtor will not receive a discharge as set forth below and all Assets of the Estate of the FF 

Fund Debtor shall have been transferred to and vested in the FF Fund Liquidating Trust. Class 4 

under the FF Fund Plan is Unimpaired and therefore is deemed to have accepted the FF Fund Plan. 

The Debtors do not believe that there will be any recovery to FF Management on account of the 

Allowed General Partner Equity Interests under the Liquidating Trust Alternative. 

Class 5 of the FF Fund Plan – Holders of Allowed Limited Partner Equity Interests. 

Class 5 under the FF Fund Plan consists of the Holders of the Allowed Limited Partner Equity 

Interests in the FF Fund Debtor. In full satisfaction, settlement, release, extinguishment and 

discharge of the Allowed Class 5 Limited Partner Equity Interests under the FF Fund Plan, each 

Holders of such Allowed Limited Partner Equity Interests shall receive a Class C Beneficial 

Interest in the FF Fund Liquidating Trust created under the FF Fund Plan, which Class C Beneficial 

Interest shall entitle each such Holder to receive Distributions from time to time from the FF Fund 

Liquidating Trust, as determined by the Liquidating Trustee in the exercise of his business 

judgment after accounting for any Liquidating Trust Reserves, from Available Cash on deposit 

from time to time with the FF Fund Liquidating Trust, provided that no Distribution shall be made 

to such Holders on account of the Allowed Class 5 Limited Partner Equity Interests unless and 

until (i) all Allowed Administrative Claims, all Allowed Professional Fee Claims, all Allowed 

Priority Claims, all Allowed Priority Tax Claims, all U.S. Trustee Fees, all Allowed General 

Unsecured Claims in Class 2 of each Plan and all Allowed Subordinated Claims in Class 3 of the 

FF Fund Plan have been paid in full, reserved or otherwise resolved, and (ii) the Liquidating 

Trustee has paid or reserved for all obligations of the Liquidating Trust and has established the 

Liquidating Trust Reserve in connection therewith. Class 5 under the FF Fund Plan is Impaired, 

and therefore, the Holders therein are entitled to vote to accept or reject the FF Fund Plan. The 

Debtors are not able to project an expected recovery for the Holders of the Allowed Class 5 Limited 

Partner Equity Interests under the FF Fund Plan under the Liquidating Trust Alternative. 

2. F5 Business Plan: 

Class 2 of the F5 Business Plan - Allowed General Unsecured Claims. Class 2 of the 

F5 Business Plan consists of the Holders of Allowed General Unsecured Claims. In full 

satisfaction, settlement, release, extinguishment and discharge of each such Allowed General 

Unsecured Claim, each Holder of an Allowed General Unsecured Claim against the F5 Business 

Debtor’s Estate shall receive a Class A Beneficial Interest in the F5 Business Liquidating Trust 

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created under the F5 Business Plan on a Pro Rata basis with all other Holders of Allowed General 

Unsecured Claims against the F5 Business Debtor. Such Class A Beneficial Interest shall entitle 

such Holder to Distributions from time to time from the Liquidating Trust, as determined by the 

Liquidating Trustee in the exercise of his business judgment after accounting for any Liquidating 

Trust Reserves, on a Pro Rata basis with the Holders of all Class A Beneficial Interests in such 

Liquidating Trust, which Distributions will be made from Available Cash on deposit from time to 

time with the applicable Liquidating Trust, provided that the maximum Distributions to the 

Holders of Allowed General Unsecured Claims shall be the full amount of each Allowed General 

Unsecured Claim without interest. The first Distribution shall be made as soon as reasonably 

practicable following the Effective Date, provided however, that any Distribution to the Holders 

of Disputed Claims shall be reserved in the Disputed Claims Fund. No Distribution shall be made 

to Holders of Allowed General Unsecured Claims unless and until (i) all Allowed Administrative 

Claims, all Allowed Professional Fee Claims, all Allowed Priority Claims, all Allowed Priority 

Tax Claims, and all U.S. Trustee Fees have been paid in full, reserved or otherwise resolved, and 

(ii) the Liquidating Trustee has paid or reserved for all obligations of the Liquidating Trust and 

has established the Liquidating Trust Reserve in connection therewith. Class 2 under the F5 

Business Plan is Impaired, and therefore, the Holders of the Allowed General Unsecured Claims 

in Class 2 under the F5 Business Plan are entitled to vote to accept or reject such Plan. The Debtors 

are not able to project an expected recovery for the Holders of Allowed Class 2 Claims under the 

Liquidating Trust Alternative. 

Class 3 of the F5 Business Plan – Holders of Allowed Equity Interests. Class 3 under 

the F5 Business Plan consists of 100% of the Equity Interests in the F5 Business Debtor owned by 

the FF Fund Debtor. In full satisfaction, settlement, release, extinguishment and discharge of the 

Allowed Class 3 Equity Interest under the F5 Business Plan held by the FF Fund Debtor, the FF 

Fund Debtor shall receive a Class B Beneficial Interest in the F5 Business Liquidating Trust 

created under the F5 Business Plan, which Class B Beneficial Interest shall entitle the FF Fund 

Debtor to receive Distributions from time to time from the F5 Business Liquidating Trust, as 

determined by the Liquidating Trustee in the exercise of his business judgment after accounting 

for any Liquidating Trust Reserves, from Available Cash on deposit from time to time with the F5 

Business Liquidating Trust, provided that no Distribution shall be made to the FF Fund Debtor on 

account of the Allowed Class 3 Equity Interest unless and until (i) all Allowed Administrative 

Claims, all Allowed Professional Fee Claims, all Allowed Priority Claims, all Allowed Priority 

Tax Claims, all U.S. Trustee Fees and all Allowed General Unsecured Claims in Class 2 of the F5 

Business Plan have been paid in full, reserved or otherwise resolved, and (ii) the Liquidating 

Trustee has paid or reserved for all obligations of the Liquidating Trust and has established the 

Liquidating Trust Reserve in connection therewith. Class 3 under the F5 Business Plan is 

Impaired, and therefore, the FF Fund Debtor is entitled to vote to accept or reject the F5 Business 

Plan. The Debtors are not able to project an expected recovery for the FF Fund Debtor on account 

of the Allowed Class 3 Equity Interest under the Liquidating Trust Alternative. 

E. Classification of Claims and Equity Interests Under the Liquidating Trust 

Alternative. 

The following table designates the Classes of Claims against and Equity Interests in the 

Debtors under the Liquidating Trust Alternative, and specifies which Classes are (a) Impaired or 

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Unimpaired by the Plans, (b) entitled to vote to accept or reject the Plans in accordance with section 

1126 of the Bankruptcy Code, or (c) deemed to accept or reject the Plans. 

A. The FF Fund Plan – Liquidating Trust Alternative 

Class Designation Impaired Entitled to Vote 

1 Other Priority Claims No No, Deemed to Accept 

2 General Unsecured Claims Yes Yes 

3 Allowed Subordinated Claims Yes Yes 

4 General Partner Equity Interests No No, Deemed to Accept 

5 Limited Partner Equity Interests Yes Yes 

B. The F5 Business Plan – Liquidating Trust Alternative 

Class Designation Impaired Entitled to Vote 

1 Other Priority Claims No No, Deemed to Accept 

2 General Unsecured Claims Yes Yes 

3 Allowed Equity Interests Yes Yes 

ARTCLE VI 

MEANS OF PLAN IMPLEMENTATION3

A. Source of Funding for Plan Distributions – Investment Guarantee Amount 

and Exit Financing 

Distributions to the holders of Allowed Claims and Allowed Equity Interests as set forth 

in the Plans shall be made from (i) Cash on deposit in the respective Debtor’s debtor-in-possession 

account on the Effective Date, (ii) the Investment Guarantee Amount, (iii) the proceeds from the 

Exit Financing, (iv) the Net Litigation Proceeds, and (v) Cash generated from the respective 

Reorganized Debtor’s operations from and after the Effective Date. A consolidated cash flow pro 

forma of the proposed operations of the Debtors is attached to this Disclosure Statement as Exhibit 

3 (the “Financial Projections”).4

 

On or as soon as reasonably practicable following the Effective Date, the Reorganized 

Debtors will consummate the Exit Financing with the Exit Lender, which line of credit will be in 

accordance with the terms of this Plan and of the Exit Financing Documents. The Exit Lender is 

a third party lender with no present or prior affiliation with the Reorganized Debtors. The identity 

of the Exit Lender will be disclosed in the Exit Financing Documents to be filed with the Court 

prior to the Confirmation Hearing. The Reorganized Debtors shall be permitted to utilize the 

proceeds of the Exit Financing to fund their business operations from and after the Effective Date, 

including their obligations under the Plans. The Exit Financing is a line of credit facility in the 

maximum amount of $1,500,000, and shall be secured by a first lien on all of the assets of the 

 

3 The provisions of this Article VI shall not apply to the Liquidating Trust Alternative. 4 The Financial Projections have been prepared solely by FF Management. The CRO has not independently 

verified any of the information in the Financial Projections other than the cash on hand and the amount of 

Claims asserted against the Estates. 

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Reorganized Debtors, shall be for a term of not less than five (5) years after the Effective Date, 

and shall accrue interest at a monthly rate equal to 2.0% on the outstanding balance thereof, which 

interest shall be paid monthly. 

The Investment Guarantee Amount shall be funded into the Reorganized Debtors on the 

Effective Date by FF Management, provided that the Investment Guarantee Amount shall be 

deposited into the attorneys’ trust account of Genovese Joblove & Battista, P.A., as counsel to the 

Debtors, on the date that is at least five (5) business days prior to the Confirmation Hearing. Such 

funds shall only be used to fund the Investment Guarantee Amount required to be funded by FF 

Management on the Effective Date of the Plans. In the event the Plans are not confirmed on or 

before 15 business days after the Investment Guarantee Amount has been deposited into such trust 

account, then FF Management shall have the right to withdraw such funds from such trust account 

upon written notice to the Debtors and counsel to the Debtors, Genovese Joblove & Battista, P.A., 

which notice shall be filed with the Bankruptcy Court. Upon receipt of such notice, Genovese 

Joblove & Battista, P.A. shall return the Investment Guarantee Amount to FF Management. In 

such event, the Debtors reserve the right to withdraw the Plans. FF Management will be borrowing 

the Investment Guarantee Amount from the Exit Lender. The Reorganized Debtors shall not be 

liable on the loan from the Exit Lender to FF Management in respect of the Investment Guarantee 

Amount. The loan by the Exit Lender to FF Management will be secured by, among other things, 

a pledge of the New Limited Partner Equity Interests to be issued to FF Management under the FF 

Fund Plan. If FF Management defaults on such loan, then the Exit Lender will have the right to 

foreclose on the New Limited Partner Equity Interests. 

B. Cancellation of Limited Partner Equity Interests and Reissuance of New 

Limited Partner Equity Interests in FF Fund. 

On the Effective Date, all Limited Partner Equity Interests in FF Fund as of the Effective 

Date shall be cancelled and extinguished. Simultaneously therewith, the FF Fund Reorganized 

Debtor shall issue the New Limited Partner Equity Interests in the FF Fund Reorganized Debtor 

to FF Management or its designee in exchange for the Investment Guarantee Amount. 

C. Section 1146 Exemption 

Pursuant to section 1146 of the Bankruptcy Code, the issuance, distribution, transfer or 

exchange of any equity security or notes, or the creation, making, assignment delivery or recording 

of any mortgage, deed of trust, instrument of transfer, pursuant to, in implementation of or as 

contemplated by the Plans or any Plan Documents, or the vesting, re-vesting, transfer or sale of 

any property of, by or in the Debtors or their Estates or Reorganized Debtors pursuant to, in 

implementation of or as contemplated by the Plans or any Plan Document, or any transaction 

arising out of, contemplated by or in any way related to the foregoing, shall not be subject to any 

document recording tax, stamp tax, conveyance fee, intangible or similar tax, mortgage tax, stamp 

act, real estate transfer tax, mortgage recording tax, sales and use Uniform Commercial Code filing 

or recording fee, or other similar tax or governmental assessment, and the appropriate state or local 

governmental officials or agents shall, by the Confirmation Order, be directed to forego the 

collection of any such tax or governmental assessment and to accept for filing and recording any 

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of the foregoing instruments or other documents without the payment of any such tax or 

governmental assessment. 

D. Corporate Action 

All actions contemplated to be performed by the Debtors or the Reorganized Debtors 

pursuant to the Plans, or any corporate or partnership action to be taken by or required of the 

Debtors or the Reorganized Debtors, shall, as of the Effective Date, be deemed to have occurred 

and be effective as provided herein, and shall be authorized and approved in all respects without 

any requirement for further action by the shareholders, partners, members or managers of the 

Debtors or the Reorganized Debtors. All Persons, the Reorganized Debtors, governmental units, 

title agencies, licensing agencies and offices of recordation may rely upon the authority vested in 

the Debtors’ partners, officers, or managers to act on the Debtors’ behalf in order to effectuate the 

Plans and the transactions contemplated therein. 

E. Vesting of Assets in the Respective Reorganized Debtors 

Except as otherwise provided in the Plans, all property of each Estate. pursuant to sections 

1123(a)(5), 1123(b)(3) and 1141(b) and (c) of the Bankruptcy Code, shall vest in the respective 

Reorganized Debtor as of the Effective Date free and clear of all Liens, Claims, charges, or other 

encumbrances. As of the Effective Date, the Reorganized Debtors may operate their business and 

use, acquire, and dispose of their property, free of any restrictions of the Bankruptcy Code or the 

Bankruptcy Rules, other than those restrictions expressly imposed by the Plans and the 

Confirmation Order. All privileges with respect to the property of the respective Estates, including 

the attorney/client privilege, to which each Debtor is entitled shall automatically vest in, and may 

be asserted by or waived on behalf of, the respective Reorganized Debtor. 

F. Distributions 

The Distributions will be made in accordance with the Plan by the Debtors and the 

Reorganized Debtors. 

G. Surrender and Cancellation of Notes, Instruments, Certificates and Other 

Documents Evidencing Claims 

On the Effective Date, except to the extent otherwise provided in the Plans, all notes, 

instruments, certificates, and other documents evidencing Claims will be cancelled and the 

obligations of the Debtors discharged in accordance with section 1141(d)(1) of the Bankruptcy 

Code. 

H. Continued Existence of the Respective Reorganized Debtor 

 FF Fund, as a Reorganized Debtor, will exist after the Effective Date with all of the powers 

of a limited partnership under applicable law pursuant to its Limited Partnership Agreement in 

effect before the Effective Date, except to the extent it is amended by the FF Fund Plan, and to the 

extent such documents are amended, such documents are deemed to be authorized pursuant hereto 

and without the need for any other approvals, authorizations, actions or consents. 

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F5 Business, as a Reorganized Debtor, will exist after the Effective Date with all of the 

powers of a limited liability company under applicable law pursuant to its operating agreement in 

effect before the Effective Date, except to the extent it is amended by the F5 Business Plan, and to 

the extent such documents are amended, such documents are deemed to be authorized pursuant 

hereto and without the need for any other approvals, authorizations, actions or consents. 

I. Post-Confirmation Accounts 

The Reorganized Debtors may establish one or more accounts as they determine may be 

necessary or appropriate to effectuate the provisions of either Plan. 

J. Management of the Debtors 

On the Effective Date, the CRO shall resign from management of the Debtors and F6. 

From and after the Effective Date, the Debtors shall be managed directly and indirectly by the 

general partner of FF Fund, FF Management, under the direction and control of Andrew Franzone 

under and pursuant to the terms of the Limited Partnership Agreement and the Plans. On or before 

the Effective Date, and without the need for any further order or authority, the Debtors shall file 

with the Bankruptcy Court or execute, as appropriate, such agreements and other documents that 

are in form and substance satisfactory to the Debtors as may be necessary or appropriate to 

effectuate and further evidence the terms and conditions of the Plans. The Debtors, the 

Reorganized Debtors, and any other necessary party, as applicable, shall perform all actions 

reasonably contemplated regarding the implementation of the Plans. 

From and after the Effective Date, FF Management will be authorized on behalf of each 

Reorganized Debtor, without the need for any further order or authority, (i) to execute, deliver, 

file, or record such contracts, instruments, releases, indentures, mortgages, and other agreements 

or documents and take such actions as may be necessary or appropriate to implement or 

consummate the Plans, notes or securities issued or conveyed pursuant to the Plans, and (ii) to 

undertake any other action on behalf of the Debtors to implement or consummate the Plans. Each 

of the matters provided for under the Plans involving the corporate structure of the Debtors or 

corporate action to be taken by or required of any Debtors will, as of the Effective Date, be deemed 

to have occurred and be effective as provided herein, and shall be authorized, approved, and (to 

the extent taken before the Effective Date) ratified in all respects without any requirement of 

further action by any partner, officer, director or manager of either Debtor. 

K. Exemption for Issuance of the New Limited Partner Equity Interests 

The New Limited Partner Equity Interests will be issued to FF Management through a 

private placement under Section 4(a)(2) of the Securities Act of 1933 and Rule 506(b) of 

Regulation D thereunder. 

ARTICLE VII 

MEANS OF PLAN IMPLEMENTATION - LIQUIDATING TRUST ALTERNATIVE 

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The Liquidating Trusts 

7.1 Creation and Vesting. On the Effective Date of the Plans, (i) each of the FF Fund 

Liquidating Trust and the F5 Business Liquidating Trust shall be created and shall be governed by 

the terms of the respective Liquidating Trust Agreement, (ii) the Liquidating Trust Assets of the 

FF Fund Debtor shall vest in, and be transferred to, the FF Fund Liquidating Trust, which 

Liquidating Trust shall constitute, be appointed as and be deemed a representative of the FF Fund 

Debtor’s Estate pursuant to and in accordance with the terms of Section 1123(b)(3)(B) of the 

Bankruptcy Code solely for the benefit of the Beneficiaries of the FF Fund Liquidating Trust, (iii) 

the Liquidating Trust Assets of the F5 Business Debtor shall vest in, and be transferred to, the F5 

Business Liquidating Trust, which Liquidating Trust shall constitute, be appointed as and be 

deemed a representative of the F5 Business Debtor’s Estate pursuant to and in accordance with the 

terms of Section 1123(b)(3)(B) of the Bankruptcy Code solely for the benefit of the Beneficiaries 

of the F5 Business Liquidating Trust, and (iv) each Liquidating Trust, through the Liquidating 

Trustee, is and shall, among the other powers set forth herein and in the Liquidating Trust 

Agreement, be authorized and appointed to investigate, prosecute, enforce, pursue and settle any 

and all Causes of Action. 

7.2 Execution and Implementation. On or before the Effective Date, each 

Liquidating Trust Agreement shall be executed by the applicable Debtor and the Liquidating 

Trustee and all other necessary steps shall be taken to establish each Liquidating Trust, which shall 

be for the benefit of the Liquidating Trust Beneficiaries thereunder. Each Liquidating Trust is 

created solely to implement the terms of the applicable Plan. The primary purposes of the 

Liquidating Trusts are to collect and liquidate the Assets of the respective Debtors’ Estates, pursue 

those claims and Causes of Action transferred to, and vested in, the applicable Liquidating Trust 

as Assets and distribute to the respective Liquidating Trust Beneficiaries all proceeds from the 

liquidation of the applicable Assets pursuant to the terms of the Plans and in accordance with 

Treasury Regulation Section 301.7701-4(d). Under no circumstances shall the Liquidating Trustee 

have any power to engage in any trade or business or any other activity except as specifically 

provided herein or otherwise reasonably necessary and advisable for the orderly liquidation and 

distribution of the Assets of each Debtor’s Estate. 

7.3 Liquidating Trust Assets. Each Liquidating Trust shall consist of the Liquidating 

Trust Assets from the applicable Debtor’s Estate after any required Distributions by the applicable 

Debtor on the Effective Date. Each Debtor shall transfer its respective Liquidating Trust Assets 

to its respective Liquidating Trust. Such transfers shall be exempt from any stamp, real estate 

transfer, mortgage reporting, sales, use or other similar tax pursuant to section 1146(a) of the 

Bankruptcy Code and any other applicable law. In connection with the transfer of the Liquidating 

Trust Assets to the applicable Liquidating Trust, such Assets, including, without limitation, Causes 

of Action, shall vest in the Liquidating Trustee for each applicable Liquidating Trust on the 

Effective Date. 

7.4 Liquidating Trustee. Each Liquidating Trust shall be governed by the Liquidating 

Trustee according to the Liquidating Trust Agreement for each Liquidating Trust. The Liquidating 

Trustee for each Liquidating Trust shall mean Soneet R. Kapila, the Liquidating Trustee named to 

administer each Liquidating Trust, and all successor Liquidating Trustees. The Liquidating Trustee 

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shall be deemed to have been appointed as the respective Estate’s representative for each Debtor 

by the Bankruptcy Court pursuant to section 1123(b)(3)(B) of the Bankruptcy Code. 

7.5 Powers of Liquidating Trustee. In furtherance of and consistent with the purpose 

of each Liquidating Trust and the Plans, the Liquidating Trustee shall, among other things, have 

the rights, powers and duties of a chapter 7 trustee under Section 704 of the Bankruptcy Code and 

a chapter 11 trustee under section 1106 of the Bankruptcy Code and shall include, without 

limitation, the following: (i) to hold, manage, dispose of, sell, convert to Cash, and distribute the 

Liquidating Trust Assets, including investigating, prosecuting and resolving the Causes of Action; 

(ii) to hold the Liquidating Trust Assets for the benefit of the Liquidating Trust Beneficiaries that 

are entitled to distributions therefrom under the Plan, whether their Claims are Allowed on or after 

the Effective Date; (iii) in the Liquidating Trustee's reasonable business judgment, to investigate, 

prosecute, settle, liquidate, dispose of, and/or abandon the Liquidating Trust Assets, including 

Causes of Action; (iv) to monitor and enforce the implementation of the Plans; (v) to file all tax 

and regulatory forms, returns, reports and other documents and financial information required with 

respect to the Liquidating Trusts or the Debtors; (vi) in the Liquidating Trustee's reasonable 

business judgment, to reconcile and object to Claims against the Debtors or the Liquidating Trusts, 

and manage, control, prosecute and/or settle on behalf of the Estates and/or Liquidating Trusts’ 

Objections to Claims on account of which the Liquidating Trustee will be responsible (if Allowed) 

for making distributions under the Plans; (vii) to take all actions necessary, and create any 

documents necessary, to wind up the affairs of the Debtors and to implement the Plans; (viii) to 

hold, manage, and distribute Cash or non-Cash Liquidating Trust Assets obtained through the 

exercise of its power and authority; (ix) to act as a signatory to the Debtors for all purposes, 

including those associated with the novation of contracts or other obligations arising out of the 

sales of the Debtors’ Assets; (x) to dispose of the books and records transferred to the Liquidating 

Trustee in a manner deemed appropriate by the Liquidating Trustee in accordance with applicable 

law; provided, however, that the Liquidating Trustee shall not dispose of any books and records 

that are reasonably likely to pertain to pending litigation in which the Debtors or its current or 

former managers, partners, officers or directors are a party without further order of the Bankruptcy 

Court; (xi) to take all necessary action and file all appropriate motions to obtain an order closing 

the Chapter 11 Cases; (xii) to enter into and exercise rights under contracts that are necessary or 

desirable to the administration of the Liquidating Trusts and execute any documents or pleadings 

related to the liquidation of the Liquidating Trust Assets or other matters related to the Liquidating 

Trusts; (xiii) to establish and maintain bank accounts and terminate such accounts as the 

Liquidating Trustee deems appropriate; (xiv) to set off amounts owed to the Debtors against 

distributions to Liquidating Trust Beneficiaries; (xv) to bring suits or defend itself against such 

suits, if any, as the Liquidating Trustee determines in connection with any matter arising from or 

related to the Plans or the Liquidating Trust Agreements that affects in any way the rights or 

obligations of the Liquidating Trusts, the Liquidating Trustee or the Liquidating Trust 

Beneficiaries; (xvi) to obtain and maintain insurance coverage with respect to the liabilities and 

obligations of the Liquidating Trustee; (xvii) to take all actions necessary and appropriate to 

minimize any adverse state or federal tax consequences to the Liquidating Trust Beneficiaries 

provided such actions do not result in an adverse tax consequence to the Liquidating Trusts and 

are consistent with and are not contrary to the treatment of the Liquidating Trusts as a “grantor 

trust” for United States federal income tax purposes; and (xviii) to take such other and further 

actions as are permitted by the Plans and are not inconsistent with the Plans and the Liquidating 

Trust Agreements. In all circumstances, the Liquidating Trustee shall act in the best interests of all 

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beneficiaries of the Liquidating Trusts in furtherance of the purposes of the Liquidating Trusts. 

For the avoidance of doubt, and without limitation of the foregoing, the Liquidating Trustee shall 

explicitly have the authority to: (i) investigate, prosecute, settle, liquidate, dispose of, and/or 

abandon any and all Claims and Causes of Action; and (ii) file all tax and regulatory forms, returns, 

reports and other documents and financial information required with respect to the Debtors or the 

Liquidating Trusts, and request a prompt determination of such requests; and (iii) investigate, 

prosecute, settle, liquidate, dispose of, and/or abandon any and all other Claims and Causes of 

Action reserved in the Plans. 

7.6 Costs and Expenses. The costs and expenses of each Liquidating Trust, and the 

reasonable fees and expenses of the Liquidating Trustee and the Liquidating Trustee’s 

Professionals, United States Trustee fees, shall be paid out of the Liquidating Trust Assets for the 

respective Liquidating Trust. Those Professionals shall continue to file fee applications with the 

Bankruptcy Court for services provided to the Liquidating Trusts and Liquidating Trustee, and all 

requests of Professionals retained by the Liquidating Trusts for payment of fees or expenses shall 

be made by means of an interim or final fee application and shall be subject to the approval of, and 

review by, the Bankruptcy Court to ensure that such payment conforms to the terms of any 

engagement agreement, the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules. 

7.7 Compensation of Liquidating Trustee. The Liquidating Trustee shall be entitled 

to reasonable compensation at his standard hourly rates. 

7.8 Retention of Professionals. The Liquidating Trustee may retain and compensate 

attorneys, accountants and other professionals (collectively, the “Professionals”) to assist in his 

duties as Liquidating Trustee under the Plans and Liquidating Trusts on such terms (including on 

a contingency or hourly basis) as the Liquidating Trustee deems appropriate without Bankruptcy 

Court approval. Without limiting the foregoing, the Liquidating Trustee may retain any 

Professional that represented the Debtors or other parties in interest in these Chapter 11 Cases. 

7.9 Tax Consequences of Liquidating Trusts. For all U.S. federal income tax 

purposes, all parties (including, without limitation, the Debtors, the Liquidating Trustee and the 

Liquidating Trust Beneficiaries) shall treat the transfer of the Liquidating Trust Assets to the 

respective Liquidating Trust as: (A) a transfer of the Liquidating Trust Assets (subject to any 

obligations relating to those assets) directly to those Holders of Allowed Claims and Equity 

Interests receiving Beneficial Interests in the Liquidating Trusts (the “Liquidating Trust Beneficial 

Interests”), followed by (B) the transfer by such Liquidating Trust Beneficiaries to the applicable 

Liquidating Trust of the Liquidating Trust Assets in exchange for the applicable Liquidating Trust 

Beneficial Interests. Accordingly, those Holders of Allowed Claims and Equity Interests receiving 

Liquidating Trust Beneficial Interests shall be treated for United States federal income tax 

purposes as the grantors and deemed owners of their respective share of the Liquidating Trust 

Assets. The foregoing treatment shall also apply, to the extent permitted by applicable law, for 

state and local income tax purposes. Notwithstanding the foregoing, (i) in the event that any portion 

of a Liquidating Trust is treated as a “qualified settlement fund” pursuant to Section 1.468B-1 of 

the Treasury Regulations, the United States federal income tax consequences shall be determined 

in accordance with the rules set forth in Section 468B of the Internal Revenue Code and the 

Treasury Regulations thereunder; and/or (ii) in the event that the Liquidating Trustee timely elects 

to treat any Liquidating Trust Assets allocable to the Disputed Claims Fund as a “disputed 

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ownership fund” pursuant to Section 1.468B-9(c)(2)(ii) of the Treasury Regulations, any Holders 

of such Disputed Claims shall, to the extent of such Disputed Claims, not be treated as having 

received any portion of the Liquidating Trust Assets transferred to the Liquidating Trusts 

hereunder and shall not be deemed as grantors of the applicable Liquidating Trust to the extent of 

such Disputed Claims 

7.10 Duration. Each Liquidating Trust shall remain in existence and continue in full 

force and effect until all of the following shall have occurred: (a) the Liquidating Trust Assets have 

been reduced to Cash or the Liquidating Trustee has determined that it is impractical or not in the 

best interest of the Liquidating Trust Beneficiaries to do so; (b) all costs, expenses and obligations 

incurred in administering the Liquidating Trusts have been paid and discharged; (c) the Liquidating 

Trust Assets have been distributed to the Liquidating Trust Beneficiaries in accordance with the 

Plans; and (d) a final report has been filed and a Final Decree closing the Chapter 11 Cases has 

been entered; provided, however, that the Liquidating Trusts shall not remain in existence more 

than five years from the date of the respective Liquidating Trust Agreement, unless extended 

pursuant to the terms hereof. If warranted by the facts and circumstances provided for in the Plans, 

and subject to the approval of the Bankruptcy Court of a motion of the Liquidating Trustee seeking 

an extension of the term of the Liquidating Trusts as necessary to the purpose of the Liquidating 

Trusts, then the term of the Liquidating Trusts may be extended for a finite term based on the 

particular circumstances. Each extension must be approved by the Bankruptcy Court within six 

months of the beginning of the extended term with notice thereof to all Liquidating Trust 

Beneficiaries. Notwithstanding the foregoing, the Liquidating Trusts shall in no event remain in 

existence for more than twenty-one years from the Effective Date. 

7.11 Indemnification. The Liquidating Trustee and the Liquidating Trustee’s attorneys, 

employees, officers, directors, agents, representatives, and Professionals, as the case may be, shall 

be held harmless and shall not be liable for actions taken or omitted in their capacity as, or on 

behalf of, the Liquidating Trustee, except those acts that are determined by Final Order to have 

arisen out of their own intentional fraud, willful misconduct or gross negligence, and each shall be 

entitled to be indemnified, held harmless, and reimbursed for fees and expenses including, without 

limitation, reasonable attorney’s fees, which such Persons and Entities may incur or may become 

subject to or in connection with any action, suit, proceeding or investigation that is brought or 

threatened against such Persons or Entities in respect of that person’s or entity’s or the Liquidating 

Trustee’s actions or inactions regarding the implementation or administration of the Plans, the 

Liquidating Trusts or the Liquidating Trust Agreements or the discharge of their duties hereunder 

or thereunder, except for any actions or inactions that are determined by Final Order to have arisen 

from intentional fraud, willful misconduct or gross negligence. Any claim of the Liquidating 

Trustee and the other parties entitled to indemnification under this section, to be indemnified, held 

harmless, or reimbursed shall be satisfied solely from the Liquidating Trust Assets, including but 

not limited to the Available Cash, or any applicable insurance coverage. The Liquidating Trustee 

shall be entitled to rely, in good faith, on the advice of their retained professionals regardless of 

whether such advice is provided in writing or verbally. Notwithstanding the foregoing, the 

Liquidating Trustee shall not be under any obligation to consult with his retained professionals, 

and his determination not to do so shall not result in the imposition of liability on the Liquidating 

Trustee unless such determination is based on willful misconduct, gross negligence, or intentional 

fraud. 

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7.12 Bond. As a condition to serving as Liquidating Trustee, the Liquidating Trustee, 

and any successor trustee, shall post a bond in favor of the applicable Liquidating Trust in an 

amount that is not less than the amount of Cash held by the applicable Liquidating Trust on the 

Effective Date, which bond shall be in substantially the same form as is required by the United 

States Trustee for trustees in the Southern District of Florida. For the avoidance of doubt, each 

Liquidating Trust shall be responsible for all costs associated with the posting of the foregoing 

bond, including the premium associated with such bond. In addition, the Liquidating Trustee is 

hereby authorized, out of funds available from the applicable Liquidating Trust, to obtain all 

reasonably necessary insurance coverage for himself and the Liquidating Trusts, their agents, 

representatives, employees or independent contractors whether as a named insured on the policies 

or otherwise, including, but not limited to, coverage with respect to (a) appropriate directors and 

officers/trustee liability insurance,(b) any property that is or may in the future become the property 

of the Liquidating Trusts, and (c) the liabilities, duties, and obligations of the Liquidating Trustee 

and the Liquidating Trusts. Such bond shall be subject to discharge and release upon an appropriate 

motion and order from the Bankruptcy Court upon the Liquidating Trustee’s resignation, death or 

removal, or for other cause. 

7.13 Resignation, Death or Removal. The Liquidating Trustee may resign at any time; 

provided, however, that he shall file a motion with the Bankruptcy Court in connection therewith 

and request that a successor or replacement be appointed in accordance herewith, which motion 

shall be on notice to the top twenty (20) Creditors holding Allowed Claims and the Office of the 

United States Trustee. The Office of the United States Trustee or any party in interest, by motion 

filed with the Bankruptcy Court, or the Bankruptcy Court on its own order to show cause, may 

seek to remove the Liquidating Trustee for cause, including under Section 324 of the Bankruptcy 

Code, or, if Section 324 is deemed inapplicable, then for the same reasons that would otherwise 

suffice under Section 324, for the violation of any material provision of the Plans, or in the event 

the Liquidating Trustee becomes incapable of acting hereunder as a result of physical or mental 

disability and such physical or mental disability continues for a period in excess of thirty (30) days 

(except in the case of death, in which instance the procedures for replacement will begin 

immediately). In the event of a resignation or removal, the Liquidating Trustee, unless he is 

incapable of doing so, shall continue to perform his duties hereunder until such a time as a 

successor is approved by a Final Order of the Bankruptcy Court. In the event the Liquidating 

Trustee resigns or is removed, the Liquidating Trust Beneficiaries, shall have 90 days to select a 

successor Liquidating Trustee by filing a motion with the Bankruptcy Court. If the Liquidating 

Trust Beneficiaries do not select a successor Liquidating Trustee, then the Office of the United 

States Trustee may file a motion with the Bankruptcy Court seeking an order directing the United 

States Trustee to select such successor. 

 NOTWITHSTANDING ANYTHING IN THE PLAN TO THE CONTRARY, THE 

VESTING IN AND TRANSFER OF THE LIQUIDATING TRUST ASSETS TO EACH

APPLICABLE LIQUIDATING TRUST SHALL BE FREE AND CLEAR OF ANY AND ALL 

LIENS, CLAIMS, ENCUMBRANCES AND INTERESTS OF ANY KIND WHATSOEVER. 

NOTWITHSTANDING ANYTHING IN THE PLAN TO THE CONTRARY, UNDER 

THE LIQUIDATING TRUST ALTERNATIVE, NO ASSETS OF THE DEBTOR OR THE 

DEBTOR’S ESTATE SHALL VEST IN THE DEBTOR OR ANY OTHER PERSON OR

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ENTITY FROM AND AFTER THE EFFECTIVE DATE OTHER THAN THE RESPECTIVE 

LIQUIDATING TRUSTS. 

ARTCLE VIII 

PRESERVATION OF CAUSES OF ACTION5

Pursuant to the terms of the Plans, all Causes of Action are being transferred to the 

respective Reorganized Debtor. On and as of the Effective Date, all Causes of Action shall be 

preserved and vested in the respective Reorganized Debtor. After the Effective Date, each 

Reorganized Debtor will have the right, in its sole and absolute discretion, to pursue, not pursue, 

enforce, file, settle, compromise, release, withdraw, arbitrate or litigate any Cause of Action that 

vests in such Reorganized Debtor on the Effective Date without seeking any approval from the 

Bankruptcy Court. 

THE PLANS DO NOT, AND ARE NOT INTENDED TO, RELEASE ANY CAUSE 

OF ACTION OR OBJECTIONS TO CLAIMS, AND ALL SUCH RIGHTS ARE 

SPECIFICALLY RESERVED IN FAVOR OF THE APPLICABLE REORGANIZED 

DEBTOR. Creditors are advised that legal rights, claims and rights of action either Debtor may 

have against them, if they exist, are retained under the Plans for prosecution unless a specific order 

of the Bankruptcy Court authorizes the respective Debtor to release such claims. As such, 

Creditors are cautioned not to rely on (i) the absence of the listing of any legal right, claim or right 

of action against a particular Creditor in the Disclosure Statement, the Plans, or the Schedules, or 

(ii) the absence of litigation or demand prior to the Effective Date of the Plans as any indication 

that the Debtors or Reorganized Debtors do not possess or do not intend to transfer to or vest any 

Cause of Action in the respective Reorganized Debtors if a particular Creditor votes to accept the 

applicable Plan. It is the expressed intention of each Plan to preserve rights, objections to Claims, 

and rights of action of the respective Debtor, whether now known or unknown, for the benefit of 

the applicable Reorganized Debtor. A Cause of Action shall not, under any circumstances, be 

waived as a result of the failure of either Debtor to describe such Cause of Action with specificity 

in the Plans or in the Disclosure Statement; nor shall the Reorganized Debtors, as a result of such 

failure, be estopped or precluded under any theory from pursuing any such Cause of Action. 

Nothing in the Plans operates as a release of any Cause of Action. 

The Debtors do not presently know the full extent of the Causes of Action and, for purposes 

of voting on the Plans, all Creditors and Holders of Limited Partner Equity Interests are advised 

that the Reorganized Debtors will have substantially the same rights that a Chapter 7 trustee would 

have with respect to the Causes of Action. Accordingly, neither a vote to accept either Plan by 

any Creditor or Holder of an Equity Interest nor the entry of the Confirmation Order will act as a 

release, waiver, bar or estoppel of any Cause of Action against such Creditor or any other Person 

or Entity. Confirmation of the Plans and entry of the Confirmation Order is not intended to and 

shall not be deemed to have any res judicata or collateral estoppel or other preclusive effect that 

 

5 The provisions of this Article VIII shall apply equally to the Liquidating Trust Alternative, provided that 

any references to the Reorganized Debtors shall be deemed to refer to the Liquidating Trusts or Liquidating 

Trustee, as the context requires. 

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would precede, preclude, or inhibit prosecution of such Cause of Action following Confirmation 

of the Plans. 

For avoidance of doubt, the Debtors and the Reorganized Debtors specifically preserve any 

and all claims and Causes of Action against any of the following for actions taken or omitted to be 

taken that caused either of the Debtors damage or harm: (i) any Holders of Limited Partner Equity 

Interests, (ii) the Skinners in connection with the Skinner Claims asserted above, (iii) Acadaca, 

Jason Feingold, and related parties, related to the Acadaca Claims, including related in any way to 

the Acadaca Investment. the enforcement and collection of amounts owed in connection therewith 

to the Debtors and the avoidance of any releases provided by the Debtors or transfers of property 

interests of the Debtors, (iv) Global InterXchange, and related parties, (v) any of the investments 

held or owned by the Debtors to collect and/or realize on such investments, including the 

investments made through one or more of the Florence Capital entities, in each case as described 

in Exhibit 1 attached hereto, (vi) one or some combination of causes of action that may exist against 

Gregory Hersch and/or FloCap, including, without limitation, under or related to the Investment 

Services Agreement and for the avoidance and recovery of the Hersch Transfers, and (vii) one or 

some combination of causes of action that may exist against Dennis Hersch, Linden West Trust, 

and related parties regarding activities that may have harmed, the Debtors, and the Subsidiaries 

and affiliates.6

In addition to the above, the Causes of Action which are all specifically preserved under 

the Plans, including under the Liquidating Trust Alternative, include, without limitation, 

specifically the following: 

a. Any and all claims and causes of action, including Causes of Action, under 

state or federal law against the Skinners, Acadaca (and any related parties), Global 

InterXchange (and related parties), the Florence Capital entities, Gregory Hersch, FloCap, 

Dennis Hersch, the Linden West Trust, any and all present and former managers, partners 

(limited or general partners), directors, officers, shareholders, principals, employees, 

agents and affiliates of, the Debtors and of any affiliates of the Debtors, and any 

professionals employed by the Debtors, including accountants, auditors and lawyers, 

including without limitation, in any way related to, including providing aid and assistance 

in connection with: (i) the operation, management, funding and fund raising of the Debtors, 

including without limitation, breach of fiduciary duty, negligence, negligent management, 

fraud, civil theft, civil RICO or conspiracy, conversion, alter ego, misrepresentation, 

professional malpractice, corporate advantage, theft of corporate opportunities, wasting of 

corporate assets, equitable subordination of claims, breach of contract and federal or state 

statutory claims (including securities laws violations), as well as aiding and abetting any 

of the above; (ii) the sale, transfer, exchange or disposition of any property of or securities 

in the Debtors or any of their affiliates, or any partnership interests, preferred stock, 

common stock or equity or similar interest or securities therein, either prior to or after the 

 

6 Notwithstanding the specificity of the claims and causes of action described herein, nothing in the Plans 

or Disclosure Statement will limit or restrict in any way the rights of the Reorganized Debtors or the 

Liquidating Trustee, as applicable, in connection with pursuing any and all Claims and Causes of Action 

pursuant to the terms of the Plans. 

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Petition Date; or (iii) the conversion, misappropriation or misapplication of property of the 

Debtors or any of their affiliates or any products or proceeds therefrom. 

b. Any and all claims, choses in action, causes of action suits, accounts, 

controversies, agreements, promises, rights to legal remedies, rights to equitable remedies, 

rights to payments and claims, whether known or unknown, reduced to judgment, not 

reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, 

disputed, undisputed, secured or unsecured and whether assertable directly or derivatively, 

in law, equity or otherwise, which are owned or held by, or have accrued to, the Debtors 

or the Estates, whether arising before or after the Petition Date, including without 

limitation, those which are: (i) property of the Estates of either Debtor under and pursuant 

to Section 541 of the Bankruptcy Code; (ii) for subrogation and contribution; (iii) for 

turnover; (iv) for avoidable transfers and preferences under and pursuant to Sections 542 

through 550 and 553 of the Bankruptcy Code and applicable state law; (v) to determine the 

extent, validity and priority of liens and encumbrances; (vi) for surcharge under Section 

506(c) of the Bankruptcy Code; (vii) for subordination under Section 510 of the 

Bankruptcy Code; (viii) related to federal or state securities laws; (ix) direct or derivative 

claims or causes of action of any type or kind; (x) for professional malpractice against 

professionals employed by the Debtor; (xi) against any and all former managers, partners 

(limited or general partners), officers and directors of the Debtor, including for breach of 

fiduciary duty or improper distributions; (xii) under and pursuant to any policies of 

insurance maintained by the Debtors, including without limitation, the directors’ and 

officers’ liability insurance policy; (xiii) for theft of corporate opportunity; (xiv) for 

collection on accounts, accounts receivables, loans, notes receivables or other rights to 

payment; (xv) for the right to seek a determination by the Bankruptcy Court of any tax, 

fine or penalty relating to a tax, or any addition to a tax, under Section 505 of the 

Bankruptcy Code; (xvi) which arise under or as a result of any section of the Bankruptcy 

Code, including Section 362; and (xvii) against any lender of the Debtors related in any 

way to the lending relationship with the Debtors, and further including but not limited to 

claims against any such lender for exerting excessive or unreasonable control over the 

Debtors, for, charging, taking, reserving, collecting or receiving interest in excess of the 

highest lawful rate, for any breach of fiduciary duty, breach of any duty of fair dealing, 

breach of confidence, or any cause of action or defense based on the negligence of such 

lender, for any “lender liability” theories, breach of funding commitment, undue influence, 

duress, economic coercion, conflict of interest, negligence, bad faith, malpractice, 

violations of the Racketeer Influenced and Corrupt Organizations Act, intentional or 

negligent infliction of mental distress, tortious interference with contractual relations, 

tortious interference with corporate governance or prospective business advantage, breach 

of contract, fraud, mistake, deceptive trade practices, libel, slander, conspiracy, fraudulent 

conveyance, or any claim for wrongfully taking any action in connection with the 

foregoing; and (xviii) all claims against any Person with any connections with or to the 

Debtors, based in law or equity, including, without limitation, under the Bankruptcy Code, 

federal law or state law, whether direct, indirect, derivative or otherwise and whether 

asserted or unasserted as of the Effective Date. 

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c. Any and all claims and causes of action involving or in any way related to 

the collection of accounts receivables, notes receivables, loans receivables or other 

receivables owed to the Debtors. 

d. Any and all claims and causes of action seeking to subordinate, equitably 

or otherwise, Claims filed against the Estate, or to re-characterize such Claims as Equity 

Interests in the Debtors. 

Each Estate shall remain open, even if the Chapter 11 Cases have been closed, as to any 

and all Causes of Action until such time as the Causes of Action have been fully administered and 

the recoveries therefrom have been received. 

Each Reorganized Debtor (a) may commence or continue in any appropriate court, tribunal 

or any other appropriate setting (e.g., American Arbitration Association or other arbitration 

association) any suit or other proceeding for the enforcement of any Cause of Action which the 

applicable Debtor had or had power to assert immediately prior to the Effective Date, and (b) may 

settle or adjust such Cause of Action; provided, however, that from and after the Effective Date, 

the applicable Reorganized Debtor shall be authorized to compromise and settle any Cause of 

Action or objection to a Claim upon approval by the Bankruptcy Court after notice and a hearing. 

ARTICLE IX 

PROVISIONS GOVERNING DISTRIBUTIONS7

9.1 Manner of Cash Payments Under the Plans 

Any Distribution pursuant to the Plans, to the extent posted in the United States mail, shall 

be deemed made when deposited by the Debtors or the Reorganized Debtors (or their respective 

agent(s)), as applicable, into the United States mail, or paid by wire transfer. At the option of the 

Debtors or the Reorganized Debtors, as applicable, any Cash payment to be made pursuant to the 

Plans shall be made, at the election of the Debtors or the Reorganized Debtors, as applicable, by 

check drawn on a domestic bank, by wire transfer, or by ACH, from a domestic bank, or other 

method mutually agreed upon by the holder of the Allowed Claim and the applicable Debtor or 

the Reorganized Debtor. Whenever any Distribution to be made under the Plan shall be due on a 

day other than a Business Day, such Distribution shall instead be made, without interest, on the 

immediately succeeding Business Day, but shall be deemed to have been made on that due date. 

9.2 Entity Making Distributions 

Except as otherwise provided in the Plans, Distributions to holders of Allowed Claims and 

Allowed Equity Interests shall be made by the respective Debtor, if before the Effective Date, or 

the respective Reorganized Debtor if on or after the Effective Date. The Debtors and the 

Reorganized Debtors shall not be required to give any bond or surety or other security for the 

performance of their duties, unless otherwise ordered by the Bankruptcy Court.

 

7 The provisions of this Article IX shall apply equally to the Liquidating Trust Alternative, provided that 

any references to the Reorganized Debtors shall be deemed to refer to the Liquidating Trusts or Liquidating 

Trustee, as the context requires. 

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9.3 Distribution Dates 

Distributions to holders of Claims and Equity Interests shall be made as provided for in the 

Plans. If any payment or act under the Plans is required to be made or performed on a date that is 

not a Business Day, then the making of such payment or the performance of such act may be 

completed on the next succeeding Business Day, but shall be deemed to have been completed as 

of the required date. 

9.4 Record Date for Distributions 

Except as otherwise provided in a Final Order of the Bankruptcy Court, the transferees of 

Claims or Equity Interests that are transferred pursuant to Bankruptcy Rule 3001 on or prior to the 

Record Date will be treated as the holders of those Claims or Equity Interests (as applicable) for 

all purposes, notwithstanding that any period provided by Bankruptcy Rule 3001 for objecting to 

the transfer may not have expired by the Record Date. The Debtors or Reorganized Debtors, as 

applicable, shall have no obligation to recognize any transfer of any Claim or Equity Interest 

occurring after the Record Date. In making any Distribution with respect to any Claim or Equity 

Interest, the Debtors or Reorganized Debtors, as applicable, shall be entitled instead to recognize 

and deal with, for all purposes hereunder, only the Entity that is listed on the proof of Claim or 

Equity Interest filed with respect thereto or on the Schedules as the holder thereof as of the close 

of business on the Record Date and upon such other evidence or record of transfer or assignment 

that was known to the Debtor as of the Record Date. 

9.5 Delivery of Distributions 

Subject to Bankruptcy Rule 9010 and except as otherwise provided herein, Distributions 

to the holders of Allowed Claims and Allowed Equity Interests shall be made by the Debtors or 

Reorganized Debtors, as applicable, at (a) the address of each holder as set forth in the Schedules, 

unless superseded by the address set forth on proofs of Claim or Equity Interest filed by such 

holder or (b) the last known address of such holder if no proof of Claim or Equity Interest is filed 

or if the Debtors or Reorganized Debtors, as applicable, have not been notified in writing of a 

change of address. 

9.6 Undeliverable and Unclaimed Distributions 

In the event that any Distribution to any holder of an Allowed Claim or Allowed Equity 

Interest made by the Debtors or Reorganized Debtors, as applicable is returned as undeliverable, 

the Debtors or Reorganized Debtors, as applicable, shall use commercially reasonable efforts to 

determine the current address of each holder, but no Distribution to such holder shall be made 

unless and until the Debtors or Reorganized Debtors, as applicable, has determined the then current 

address of such holder; provided, however, that all Distributions to holders of Allowed Claims or 

Allowed Equity Interests made by the Debtors or Reorganized Debtors, as applicable, that are 

unclaimed for a period of ninety (90) days after the date of the first attempted Distribution shall 

have its, his or her Claim or Equity Interest for such undeliverable Distribution deemed satisfied 

and will be forever barred from asserting any such Claim or Equity Interest against the Debtors or 

Reorganized Debtors, as applicable, or their property. Any Distributions which are undeliverable 

or have not been negotiated within the time set forth above shall be deemed unclaimed property 

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42 

under section 347(b) of the Bankruptcy Code and revested in the Debtors or Reorganized Debtors, 

as applicable. The Debtors or Reorganized Debtors, as applicable, shall have no further obligation 

to make any Distribution to the holder of such Claim or Equity Interest on account of such Claim 

or Equity Interest, and any entitlement of any holder of such Claim or Equity Interest to any such 

Distributions shall be extinguished and forever barred; provided, however, that the holder of such 

Claim or Equity Interest may receive future Distributions on account of such Claim or Equity 

Interest by contacting the Debtors or Reorganized Debtors, as applicable, at some point prior to 

the final Distribution. 

9.7 Compliance with Tax Requirements 

The Debtors or Reorganized Debtors, as applicable, may withhold and pay to the 

appropriate taxing authority all amounts required to be withheld pursuant to the Tax Code or any 

provision of any foreign, state or local tax law with respect to any payment or Distribution on 

account of Claims or Equity Interests; provided, however, that the Debtors or Reorganized 

Debtors, as applicable, shall not make any such withholdings described in this paragraph (other 

than routine tax withholdings with respect to employee-related claims (if any)) from any payment 

or Distribution on account of Claims or Equity Interests without first filing a notice with the Court 

(and serving such notice on the holder of the Claim or Equity Interest) describing the nature and 

amount of the proposed withholding and providing the Creditor or holder of Equity Interest an 

opportunity to object. All such amounts withheld and paid to the appropriate taxing authority shall 

be treated as amounts distributed to such holders of the Claims or Equity Interests. The Debtors 

or Reorganized Debtors, as applicable, shall be authorized to collect such tax information from the 

holders of Claims or Equity Interests (including social security numbers or other tax identification 

numbers) as it in its sole discretion deems necessary to effectuate the Plan. In order to receive 

Distributions under the Plans, all holders of Claims or Equity Interests will need to identify 

themselves to the Debtors or Reorganized Debtors, as applicable, and provide all tax information 

the Debtors or Reorganized Debtors, as applicable, deem appropriate (including completing the 

appropriate Form W-8 or Form W-9, as applicable to each holder). The Debtors or Reorganized 

Debtors, as applicable, may refuse to make a Distribution to any holder of a Claim or Equity 

Interest that fails to furnish such information within the time period specified by the Debtors or 

Reorganized Debtors, as applicable, and such Distribution shall be deemed an unclaimed 

Distribution under the Plans, and, provided further that, if the Debtors or Reorganized Debtors, as 

applicable, fail to withhold in respect of amounts received or distributable with respect to any such 

holder and such Debtor are later held liable for the amount of such withholding, such holder shall 

reimburse the Debtors or Reorganized Debtors, as applicable, for such liability. Notwithstanding 

any other provision of the Plan, each holder of an Allowed Claim or Equity Interest that is to 

receive a Distribution under the Plan shall have the sole and exclusive responsibility for the 

satisfaction and payment of any tax obligations imposed by any governmental unit. 

9.8 No Payments of Fractional Dollars 

Notwithstanding any other provision of the Plans to the contrary, no payment of fractional 

dollars shall be made pursuant to the Plans. Whenever any payment of a fraction of a dollar under 

the Plans would otherwise be required, the actual Distribution made shall reflect a rounding down 

of such fraction to the nearest whole dollar. 

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9.9 Interest on Claims 

Except as specifically provided for in the Plans or the Confirmation Order or required by 

the Bankruptcy Code, interest shall not accrue on Claims or Equity Interests and no holder of a 

Claim or Equity Interest shall be entitled to interest on any Claim accruing on or after the 

applicable Petition Date. Interest shall not accrue on any General Unsecured Claim that is a 

Disputed Claim in respect of the period from the Effective Date to the date a final Distribution is 

made thereon if and after that Disputed Claim becomes an Allowed Claim. Except as expressly 

provided herein or in a Final Order of the Bankruptcy Court, no prepetition Claim shall be Allowed 

to the extent that it is for post-petition interest or similar charges. 

9.10 No Distribution in Excess of Allowed Amount of Claim 

Notwithstanding anything to the contrary contained in the Plans, no holder of an Allowed 

Claim shall receive in respect of that Claim any Distribution in excess of the Allowed amount of 

such Claim. 

9.11 Setoff and Recoupment 

Each Debtor or Reorganized Debtor, as applicable, may setoff against, or recoup from, any 

Claim or Equity Interest and the Distributions to be made pursuant to the Plan in respect thereof, 

any Claims or defenses of any nature whatsoever that such Debtor or Reorganized Debtor, as 

applicable, or the applicable Estate may have against the holder of such Claim or Equity Interest, 

but neither the failure to do so nor the allowance of any Claim or Equity Interest under the Plans 

shall constitute a waiver or release by the Debtors or Reorganized Debtors, as applicable, or the 

Estates of any right of setoff or recoupment that any of them may have against the holder of any 

Claim or Equity Interest. Any such setoffs or recoupments may be challenged in Bankruptcy 

Court. Notwithstanding any provision in the Plans to the contrary, nothing therein shall bar any 

creditor from asserting its setoff or recoupment rights to the extent permitted under section 553 or 

any other provision of the Bankruptcy Code; provided, however, that such setoff or recoupment 

rights are timely asserted; provided further that all rights of the Debtors or Reorganized Debtors, 

as applicable, and the Estates with respect thereto are reserved. 

9.12 De Minimis Distributions; Charitable Donation 

Notwithstanding anything to the contrary in the Plans, the Debtors or Reorganized Debtors, 

as applicable, shall not be required to make a Distribution to any Creditor of holder of an Equity 

Interest if the dollar amount of the Distribution is less than $10 or otherwise so small that the cost 

of making that Distribution exceeds the dollar amount of such Distribution. On or about the time 

that the final Distribution is made, the Debtors or Reorganized Debtors, as applicable, may make 

a donation of undistributable funds as defined by Local Rule 3011-1(C)(1), in the reasonable 

discretion of the Debtors or Reorganized Debtors, as applicable, to the following organizations 

(each of which qualifies for not-for-profit status under section 501(c)(3) of the Tax Code) with 

undistributable funds if, in the reasonable judgment of the Debtors or Reorganized Debtors, as 

applicable, the cost of calculating and making the final Distribution of the undistributable funds 

remaining is excessive in relation to the benefits to the or holders of Claims or Equity Interests 

who would otherwise be entitled to such Distributions: (i) the Bankruptcy Bar Foundation of the 

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Bankruptcy Bar Association of the Southern District of Florida; (ii) Legal Services of Greater 

Miami, Inc.; (iii) Dade Legal Aid- Put Something Back Program; or (iv) Miami Foundation for 

Mental Health, Inc. 

9.13 Withholding from Distributions 

Any federal, state or local withholding taxes or other amounts required to be withheld under 

applicable law shall be deducted from Distributions pursuant to the Plans. The Debtors or 

Reorganized Debtors, as applicable, may withhold from amounts distributable pursuant to the 

Plans to any Person or Entity any and all amounts, determined in the reasonable discretion of the 

Debtors or Reorganized Debtors, as applicable, required to be withheld by any law, regulation, 

rule, ruling, directive, or other governmental requirement. The Debtors or Reorganized Debtors, 

as applicable, shall not make any such withholdings described in this paragraph (other than routine 

tax withholdings with respect to employee-related claims (if any)) from any payment or 

Distribution on account of Claims or Equity Interests without first filing a notice with the Court 

(and serving such notice on the holder of the Claim or Equity Interest) describing the nature and 

amount of the proposed withholding and providing the Creditor or holder an opportunity to object. 

9.14 Distributions in Satisfaction; Allocation 

Except for the obligations expressly imposed by the Plans and the property and rights 

expressly retained under the Plans, if any, the Distributions and rights that are provided in the Plans 

shall be in complete satisfaction and release of all Claims against, liabilities in, Liens on, 

obligations of and Equity Interests in the Debtors and their Estates, whether known or unknown, 

that arose or existed prior to the Effective Date. Distributions received in respect of Allowed 

Claims will be allocated first to the principal amount of such Claims, with any excess allocated to 

unpaid accrued interest (if any).

9.15 No Distributions on Late-Filed Claims 

Except as otherwise provided in a Final Order of the Bankruptcy Court, any Claim as to 

which a proof of Claim was required to be filed and was first filed after the applicable bar date in 

the Chapter 11 Cases shall automatically be deemed a late-filed Claim that is disallowed in the 

Chapter 11 Cases, without the need for (a) any further action by the Debtors or Reorganized 

Debtors, as applicable, (b) an order of the Bankruptcy Court. Nothing in this paragraph is intended 

to expand or modify the applicable bar dates or any orders of the Bankruptcy Court relating thereto. 

ARTICLE X 

DISPUTED CLAIMS8

10.1 Resolution of Disputed Claims 

The Debtors or the Reorganized Debtors, as applicable, shall have the right to make and 

file objections to Claims or Equity Interests in the Bankruptcy Court. Unless otherwise ordered 

 

8 The provisions of this Article X shall apply equally to the Liquidating Trust Alternative, provided that any 

references to the Reorganized Debtors shall be deemed to refer to the Liquidating Trusts or Liquidating 

Trustee, as the context requires. 

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by the Bankruptcy Court after notice and a hearing, all Disputed Claims or Equity Interests shall 

be subject to the exclusive jurisdiction of the Bankruptcy Court. 

10.2 Objection Deadline 

All objections to Disputed Claims or Equity Interests shall be filed no later than the Claims 

Objection Bar Date, unless otherwise ordered by the Bankruptcy Court after notice and a hearing, 

with notice only to those parties entitled to notice in the Chapter 11 Cases pursuant to Bankruptcy 

Rule 2002. 

10.3 Estimation of Claims 

At any time, the Debtors or Reorganized Debtors, as applicable, may request that the 

Bankruptcy Court estimate any contingent or unliquidated Claim or Equity Interests to the extent 

permitted by section 502(c) of the Bankruptcy Code regardless of whether the Debtors or 

Reorganized Debtors, as applicable, have previously objected to such Claim or Equity Interest or 

whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court shall 

have jurisdiction to estimate any Claim or Equity Interest at any time during litigation concerning 

any objection to such Claim or Equity Interest, including during the pendency of any appeal 

relating to any such objection. If the Bankruptcy Court estimates any contingent or unliquidated 

Claim or Equity Interest, that estimated amount shall constitute either the Allowed amount of such 

Claim or Equity Interest or a maximum limitation on the Claim or Equity Interest, as determined 

by the Bankruptcy Court. If the estimated amount constitutes a maximum limitation on the Claim 

or Equity Interest, the Debtors or Reorganized Debtors, as applicable, may elect to pursue 

supplemental proceedings to object to the ultimate allowance of the Claim or Equity Interest. All 

of the aforementioned objection, estimation and resolution procedures are cumulative and not 

exclusive of one another. Claims or Equity Interests may be estimated and subsequently 

compromised, settled, withdrawn or resolved by any mechanism approved by the Bankruptcy 

Court. 

10.4 No Distributions Pending Allowance 

Notwithstanding any other provision in the Plans, if any portion of a Claim or Equity 

Interest is disputed, no payment or Distribution provided under the Plans shall be made on account 

of such Claim or Equity Interest unless and until such Disputed Claim or Equity Interest becomes 

an Allowed Claim or Allowed or Equity Interest. 

To the extent that a Disputed Claim or Equity Interests ultimately becomes an Allowed 

Claim or Equity Interest, Distributions (if any) shall be made to the holder of such Allowed Claim 

or Equity Interest in accordance with the provisions of the Plans. Upon allowance, a holder of the 

Allowed Disputed Claim or Equity Interest shall receive any Distributions that would have been 

made up to the date of allowance to such holder under the Plan had the Disputed Claim or Equity 

Interest been allowed on the Effective Date. 

10.5 Resolution of Claims 

On and after the Effective Date, the Debtors shall have the authority to compromise, settle, 

otherwise resolve or withdraw any objections to Claims or Equity Interests, and to compromise, 

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settle, or otherwise resolve any Disputed Claims or Equity Interests without approval of the 

Bankruptcy Court. 

ARTICLE XI 

TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES9

11.1 General Treatment: Rejected if not Previously Assumed. 

Within fourteen (14) days prior to the Confirmation Hearing, each Debtor shall file 

and serve a Notice of all contracts and unexpired leases that it intends to assume together 

with a Schedule of Cure Amounts for any leases or contracts that will be assumed under the 

Plan (the “Cure Schedule”). Any party objecting the proposed cure amount as set forth in 

the Cure Schedule shall file an objection within three (3) days prior to the Confirmation 

hearing. If no objection is filed, then the proposed cure amount will be deemed approved. 

Each Debtor shall have forty-five (45) days from the Effective Date to supplement the Cure 

Schedule and the Bankruptcy Court will determine any disputes regarding. Pursuant to 

sections 365(a) and 1123(b)(2) of the Bankruptcy Code, upon the Effective Date, all executory 

contracts and unexpired leases that exist between either Debtor and any Person or Entity 

shall be deemed rejected, unless included on the Cure Schedule or previously assumed. 

Subject to the occurrence of the Effective Date, entry of the Confirmation Order shall 

constitute approval of such assumption or rejection pursuant to section 365(a) of the 

Bankruptcy Code and a finding by the Bankruptcy Court that each such assumption or 

rejection is in the best interests of the Debtors, the Reorganized Debtors, their Estates, and 

all parties in interest in the Chapter 11 Cases. 

11.2 Bar to Claims Arising from Rejection, Termination or Expiration 

Claims created by the rejection of executory contracts or unexpired leases (including, 

without limitation, the rejection provided in herein (“General Treatment; Rejected if not 

Previously Assumed”) or the expiration or termination of any executory contract or 

unexpired lease prior to the Confirmation Date must be filed with the Bankruptcy Court and 

served on the Debtors or Reorganized Debtors, as applicable, no later than thirty (30) days 

after (a) the date of the entry of any order of the Bankruptcy Court authorizing rejection, with 

respect to any executory contract or unexpired lease rejected by the Debtors or otherwise 

pertaining to such order, or (b) the Confirmation Date, with respect to any executory contract 

or unexpired lease that is deemed rejected pursuant hereto (“General Treatment; Rejected 

if not Previously Assumed”). Any rejection claim for which a proof of claim is not filed and 

served within the time provided herein will be forever barred from assertion and shall not 

be enforceable against the Debtors, or the Estates, assets, properties, or interests in property, 

or the Reorganized Debtors, or the Estates, assets, properties, or interests in property. 

Nothing contained herein shall be deemed an admission by the Debtors that such rejection 

 

9 The provisions of this Article XI shall apply equally to the Liquidating Trust Alternative, provided that 

any references to the Reorganized Debtors shall be deemed to refer to the Liquidating Trusts or Liquidating 

Trustee, as the context requires. 

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gives rise to or results in a Claim or shall be deemed a waiver by the Debtors or the 

Reorganized Debtors of any objections to such Claim if asserted. 

11.3 Assumption of Executory Contracts and Unexpired Leases 

11.3.1.1 Rejection of Executory Contracts and Unexpired Leases; Schedule

of Assumed Executory Contracts and Unexpired Leases. On the Effective Date, the Debtors will 

reject all of the executory contracts and unexpired leases not listed on the Cure Schedule. 

11.3.1.2 Modifications, Amendments, Supplements, Restatements, or Other 

Agreements. Unless otherwise provided in the Plans, each executory contract or unexpired lease 

that is assumed pursuant to the Plans will include all modifications, amendments, supplements, 

restatements, or other agreements that in any manner affect such executory contract or unexpired 

lease, and all rights related thereto, if any, including all easements, licenses, permits, rights, 

privileges, immunities, options, and any other interests, unless any of the foregoing agreements 

has been previously rejected or repudiated, or is rejected or repudiated pursuant to the Plans or 

separate motion and Final Order of the Bankruptcy Court. 

11.3.1.3 Proof of Claim Based on Executory Contracts or Unexpired Leases

that Have Been Assumed. Any and all proofs of claim relating to executory contracts or unexpired 

leases that have been assumed in the Chapter 11 Cases will be deemed amended and superseded 

by the amount of Cure Claim identified in the Plans, the Confirmation Order or other order of the 

Bankruptcy Court authorizing assumption of executory contracts to the Debtors or the Reorganized 

Debtors. 

11.3.1.4 Cure of Defaults for Assumed Executory Contracts and Unexpired 

Leases. All Allowed Cure Claims will be satisfied by the applicable Debtor by payment of the 

Cure in Cash to (i) holders of such Cure Claims or on the Effective Date or as soon as reasonably 

practicable thereafter, or (ii) on such other terms as may be either ordered by the Bankruptcy Court 

or agreed by the Debtors and the applicable contract counter-party without any further notice to or 

action, order, or approval of the Bankruptcy Court. Any provisions or terms of executory contracts 

or unexpired leases to be assumed and assigned pursuant to the Plans that are, or may be, alleged 

to be in default, shall be satisfied solely by the Cure, or by an agreed-upon waiver of the Cure. 

11.3.1.5 Confirmation Order. Entry of the Confirmation Order will 

constitute a finding of adequate assurance of future performance by the Reorganized Debtors 

within the meaning of section 365 of the Bankruptcy Code. Any objections relating to adequate 

assurance of future performance, or any other matters relating to the assumption and assignment 

of executory contracts and unexpired leases (other than Cure Claim disputes) must be asserted as 

an objection to confirmation of the Plans. Assumption of any executory contract or unexpired 

lease pursuant to the Confirmation Order or other order of the Bankruptcy Court will limit the 

Claims of any such contract counter-party to the (i) Allowed Cure Claim and (ii) Claims for 

ongoing performance under the unexpired lease or executory contract by Reorganized Debtor 

pursuant to section 365(k) of the Bankruptcy Code. 

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11.4 Indemnification and Reimbursement. 

Subject to the occurrence of the Effective Date, all Allowed Claims against the Debtors for 

indemnification, defense, reimbursement, or limitation of liability of current or former directors, 

officers, or employees of the Debtors against any Claims, costs, liabilities or causes of action as 

provided in the Debtors’ operating agreement, bylaws, other organizational documents, or 

applicable law, shall, to the extent such indemnification, defense, reimbursement, or limitation is 

owed in connection with one or more events or omissions occurring before the Petition Date, be 

paid only to the extent of any applicable insurance coverage. Nothing contained in the Plans shall 

affect the rights of partners, managers, directors, officers or employees under any insurance policy 

or coverage with respect to such Claims, costs, liabilities or Causes of Action or limit the rights of 

the Debtors or the Debtors’ Estates to object to or otherwise contest or challenge Claims or rights 

asserted by any current or former partner, manager, officer, director or employee of the Debtors. 

ARTICLE XII 

CONDITIONS PRECEDENT TO THE EFFECTIVE DATE10

12.1 Conditions Precedent 

The following are conditions precedent to the Effective Date that must be satisfied or 

waived by the applicable Debtor: 

12.1.1 The Court shall have entered the Confirmation Order in form and substance 

acceptable to the applicable Debtor confirming and approving each of the FF Fund Plan 

and the F5 Business Plan in all respects. 

12.1.2 There shall be no stay or injunction in effect with respect to the Confirmation Order. 

12.1.3 The Debtors shall have entered into the Exit Financing Documents with the Exit 

Lender and shall have access to the Exit Financing. 

12.1.4 The Investment Guarantee shall have been fully funded and available to the Debtors 

to meet their obligations under the Plans as of the Effective Date, including having been 

deposited in the attorneys’ trust account of Genovese Joblove & Battista, P.A. as Debtors’ 

counsel no later than five (5) business days prior to the Confirmation Hearing. 

12.1.5 The Plan Documents shall be in a form and substance reasonably acceptable to the 

Debtors, and have been duly executed and delivered; provided, however, that no party to 

 

10 The provisions of this Article XII shall apply equally to the Liquidating Trust Alternative, provided that 

any references to the Reorganized Debtors shall be deemed to refer to the Liquidating Trusts or Liquidating 

Trustee, as the context requires. 

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any such agreements and instruments, may unreasonably withhold its execution and 

delivery of such documents to prevent this condition precedent from occurring. 

12.2 Waiver 

Notwithstanding the foregoing conditions, each Debtor reserves, in its sole discretion, the 

right to waive the occurrence of any condition precedent or to modify any of the foregoing 

conditions precedent. Any such written waiver of a condition precedent set forth in the Plans may 

be effected at any time, without notice, without leave or order of the Bankruptcy Court, and without 

any formal action other than proceeding to consummate the Plans. Any actions required to be 

taken on the Effective Date or Confirmation Date (as applicable) shall take place and shall be 

deemed to have occurred simultaneously, and no such action shall be deemed to have occurred 

prior to the taking of any other such action. 

ARTICLE XIII 

EFFECT OF CONFIRMATION; INDEMNIFICATION, 

INJUNCTIVE AND RELATED PROVISIONS 

13.1 Compromise and Settlement 

Pursuant to section 363 of the Bankruptcy Code and Bankruptcy Rule 9019, and in 

consideration for the Distributions and other benefits provided pursuant to the Plans, the provisions 

of the Plans shall constitute a good faith compromise of all Claims and Equity Interests. The entry 

of the Confirmation Order shall constitute the Bankruptcy Court’s approval of the compromise or 

settlement of all Claims and Equity Interests, as well as a finding by the Bankruptcy Court that 

such compromises or settlements are fair, equitable, reasonable and in the best interests of the 

Debtors, the Estates and holders of Claims and Equity Interests. This provision shall also apply in 

the Liquidating Trust Alternative. 

13.2 Vesting of Assets 

Upon the Effective Date, pursuant to section 1141(b) and (c) of the Bankruptcy Code, all 

property of each Debtor shall vest in the respective Reorganized Debtor free and clear of all 

Claims, Liens, encumbrances, charges, and other interests. From and after the Effective Date and 

except as provided in this Plans, each Reorganized Debtor may operate the respective Debtor’s 

business and may use, acquire, and dispose of property free of any restrictions of the Bankruptcy 

Code or the Bankruptcy Rules and in all respects as if there were no pending case under any chapter 

or provision of the Bankruptcy Code. In the event that a Reorganized Debtor’s Chapter 11 Case 

is converted to a case under chapter 7 for any reason, any property held by either Debtor or 

Reorganized Debtor at any time, other than property that already has been distributed under the 

applicable Plan prior to conversion of the case from chapter 11 to chapter 7, shall revest in the 

applicable Debtor. This provision shall not apply in the Liquidating Trust Alternative. 

13.3 Title to Assets; Discharge of Liability 

Except as otherwise provided in the Plans, including, but not limited to any limitations set 

forth in the Plans, on the Effective Date, title to all assets and properties and interests in property 

dealt with by each Plan shall vest in the applicable Reorganized Debtor free and clear of all Claims, 

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Equity Interests, Liens, encumbrances, charges, and other interests, and the Confirmation Order 

shall be a judicial determination of discharge of the liabilities of such Debtor arising prior to the 

Effective Date, except as may be otherwise provided in the Plans. This provision shall not apply 

in the Liquidating Trust Alternative. 

13.4 Binding Effect 

Subject to the occurrence of the Effective Date, on and after the Confirmation Date, the 

provisions of each Plan shall bind the applicable Debtor, Reorganized Debtor, and any holder of a 

Claim against, or Equity Interest in, such Debtor and such holder’s respective successors and 

assigns, whether or not the Claim or Equity Interest of such holder is Impaired under the applicable 

Plan and whether or not such holder has accepted such Plan. 

13.5 Discharge of Claims 

 Except as provided herein, the rights afforded in the Plan and the payments and 

Distributions to be made hereunder shall discharge all existing debts, Claims and Equity Interests, 

of any kind, nature, or description whatsoever against or in each Debtor or any of its assets or 

properties to the fullest extent permitted by section 1141 of the Bankruptcy Code. Except as 

provided herein, upon the Effective Date, all existing Claims against and Equity Interests in each 

Debtor shall be, and shall be deemed to be, discharged and terminated, and all holders of Claims 

and Equity Interests shall be precluded and enjoined from asserting against the applicable 

Reorganized Debtor, its successors or assignees, or any of its assets or properties, any other or 

further Claim or Equity Interest based upon any act or omission, transaction, or other activity of 

any kind or nature that occurred prior to the Effective Date, whether or not such holder has filed a 

proof of claim or proof of equity interest, and whether or not the facts or legal bases therefore were 

known or existed prior to the Effective Date. Upon the Effective Date, all such persons shall be 

forever precluded and enjoined, pursuant to section 524 of the Bankruptcy Code, from prosecuting 

or asserting against each Reorganized Debtor any such discharged Claim against or Equity Interest 

in the applicable Debtor. 

13.6 Discharge of each Debtor 

 Pursuant to section 1141(d) of the Bankruptcy Code, and except as otherwise specifically 

provided in the Plans or in the Confirmation Order in respect of the Liquidating Trust Alternative, 

the Distributions and rights that are provided in the Plans will be in complete satisfaction, 

discharge, and release, of any and all Claims and Equity Interests, whether known or unknown, 

against each Debtor or Reorganized Debtor or any of their assets or properties, regardless of 

whether the property has been distributed or retained pursuant to the Plans. Without limiting the 

generality of the foregoing, each Debtor or Reorganized Debtor will be discharged from any and 

all Claims, Equity Interests and debts of the kind specified in sections 502(g), 502(h) of 502(i) of 

the Bankruptcy Code, in each case whether or not (a) a proof of claim is filed or deemed filed 

under section 501 of the Bankruptcy Code, (b) a Claim or Equity Interest is allowed under section 

502 of the Bankruptcy Code, or (c) the holder of such a Claim or Equity Interest accepted the 

applicable Plan. Except as otherwise provided in the Plans, the Confirmation Order shall be a 

judicial determination of discharge of all liabilities of the Debtors arising before the Effective Date. 

Under section 524 of the Bankruptcy Code, the discharge granted under this section shall avoid 

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any judgment against each Debtor at any time obtained (to the extent it relates to a discharged 

Claim or Equity Interest), and operates as an injunction against the prosecution of any action 

against such Debtor or its Estate (to the extent such action relates to a discharged claim). Nothing 

in this Article should be interpreted as a discharge of each Debtor’s or Reorganized Debtor’s rights 

or obligations under the applicable Plan. 

13.7 Exculpation 

Notwithstanding anything contained herein the contrary, the CRO, KapilaMukamal 

and Genovese Joblove & Battista, P.A. (and their respective employees, attorneys, 

professionals and agents) shall neither have nor incur any liability relating to the Chapter 

11 Cases to any Entity for any and all Claims and Causes of Action arising after the 

applicable Petition Date and through the Effective Date, including any act taken or omitted 

to be taken in connection with, or related to, formulating, negotiating, preparing, 

disseminating, implementing, administering, confirming or consummating the Plans or 

distributing property thereunder, the Disclosure Statement, or any other contract, 

instrument, release or other agreement or document created or entered into in connection 

with the Plans or any other postpetition act taken or omitted to be taken in connection with 

the Chapter 11 Cases; provided, however, that the foregoing provisions of this Article shall 

have no effect on the liability of any Entity that results from any such act or omission that is 

determined in a Final Order to have constituted gross negligence, fraud or willful 

misconduct. This provision shall also apply in the Liquidating Trust Alternative. 

13.8 Limitations on Exculpation 

Nothing in the Plans shall be construed to release or exculpate any Person from, or require 

indemnification of any Person against losses arising from criminal conduct, intentional 

unauthorized misuse of confidential information that causes damages, or limit the liability of the 

professionals of the Debtors to the Debtors pursuant to Rule 4-1.8(h) of the Florida Rules of 

Professional Conduct (“Limiting Liability for Malpractice”). This provision shall also apply in 

the Liquidating Trust Alternative. 

13.9 Injunction11

From and after the Effective Date, all Entities are permanently enjoined from commencing 

or continuing in any manner against the Debtors, the Reorganized Debtors, the Estates, and their 

successors and assigns, and their assets and properties, as the case may be, any suit, action or other 

proceeding, on account of or respecting any Claim or Equity Interest, demand, liability, obligation, 

debt, right, Cause of Action, interest or remedy released or satisfied or to be released or satisfied 

pursuant to the Plan or the Confirmation Order. 

Except as otherwise expressly provided for in the Plans or in obligations issued pursuant 

to the Plans, from and after the Effective Date, all Entities shall be precluded from asserting against 

the Debtors, the Reorganized Debtors, the Estates, and their successors and assigns and their assets 

 

11 This provision shall apply equally to the Liquidating Trust Alternative, provided that any references to 

the Reorganized Debtors shall be deemed to refer to the Liquidating Trusts or Liquidating Trustee, as the 

context requires. 

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52 

and properties, any other Claims or Equity Interests based upon any documents, instruments, or 

any act or omission, transaction or other activity of any kind or nature that occurred prior to the 

Effective Date, solely to the extent that (a) such Claims or Equity Interests have been released or 

satisfied pursuant to the Plans or the Confirmation Order or (b) such Claims, Equity Interests, 

actions or assertions of Liens relate to property that will be distributed pursuant to the Plans or the 

Confirmation Order. 

The rights afforded in the Plans and the treatment of all Claims and Equity Interests in the 

Plans shall be in exchange for and in complete satisfaction of Claims and Equity Interests against 

the Debtors or any of their assets or properties solely to the extent that (a) such Claims or Equity 

Interests have been released or satisfied pursuant to the Plans or the Confirmation Order or (b) 

such Claims, Equity Interests, actions or assertions of Liens relate to property that will be 

distributed pursuant to the Plans or the Confirmation Order. On the Effective Date, all such Claims 

against, and Equity Interests in, the Debtors shall be satisfied and released in full. 

Except as otherwise expressly provided for in the Plans or in obligations issued pursuant 

to the Plans, all Persons and Entities are permanently enjoined, on and after the Effective Date, on 

account of any Claim or Equity Interest satisfied and released pursuant to the Plans or 

Confirmation Order, from: 

-commencing or continuing in any manner any action or other proceeding of any kind 

against the Debtors, the Reorganized Debtors, the Estates and their successors and assigns and 

their assets and properties; 

-enforcing, attaching, collecting or recovering by any manner or means any judgment, 

award, decree or order against the Debtors, the Reorganized Debtors, the Estates and their 

successors and assigns and their assets and properties; 

-creating, perfecting or enforcing any encumbrance of any kind against the Debtors, the 

Reorganized Debtors, the Estates and their successors and assigns and their assets and properties; 

and 

-commencing or continuing in any manner any action or other proceeding of any kind in 

respect of any Claim or Equity Interest or Cause of Action released or settled hereunder). 

13.10 Release of Liens 

 Except as otherwise provided in the Plans or in any contract, instrument, release or other 

agreement or document created pursuant to the Plans, on the Effective Date, all mortgages, deeds 

of trust, Liens, pledges or other security interests against property of the Estates distributed under 

the Plans shall be fully released and discharged and all of the right, title and interest of any holder 

of such mortgages, deeds of trust, Liens, pledges or other security interest shall revert to the 

applicable Debtor. This provision shall also apply in the Liquidating Trust Alternative, if 

applicable. 

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ARTICLE XIV 

RETENTION OF JURISDICTION12

Notwithstanding the entry of the Confirmation Order and the occurrence of the Effective 

Date, the Bankruptcy Court shall, after the Effective Date, retain such jurisdiction over the Chapter 

11 Cases and all Entities with respect to all matters related to the Chapter 11 Cases, the Debtors, 

the Reorganized Debtors, and the Plans as is legally permissible, including, without limitation, 

jurisdiction to: 

14.1 allow, disallow, determine, liquidate, classify, estimate or establish the priority or 

secured or unsecured status of any Claim against or Equity Interest in the Debtors, including the 

resolution of any request for payment of any Administrative Claim and the resolution of any and 

all objections to the allowance or priority of Claims or Equity Interest; 

14.2 grant, deny or otherwise resolve any and all applications of Professionals or Persons 

retained in the Chapter 11 Cases by the Debtors for allowance of compensation or reimbursement 

of expenses authorized pursuant to the Bankruptcy Code or the Plans, for periods ending on or 

before the Effective Dates 

14.3 resolve any matters related to the assumption, assignment or rejection of any 

executory contract or unexpired leases to which a Debtor is party or with respect to which a Debtor 

may be liable and to hear, determine and, if necessary, liquidate, any Claims arising therefrom; 

14.4 ensure that Distributions to holders of Allowed Claims or Equity Interests are 

accomplished pursuant to the provisions of the Plans, including by resolving any disputes 

regarding, as applicable, each Debtor’s or Reorganized Debtor’s entitlement to recover assets held 

by third parties; 

14.5 decide or resolve any motions, contested or litigated matters (including but not 

limited to any adversary proceeding) and any other matters and grant or deny any applications 

involving the Debtor that may be pending on the Effective Date or instituted by the Reorganized 

Debtors after the Effective Date; 

14.6 enter such orders as may be necessary or appropriate to implement or consummate 

the provisions of the Plans and all other contracts, instruments, releases, indentures and other 

agreements or documents adopted in connection with the Plans or the Disclosure Statement; 

14.7 issue injunctions, enforce them, enter and implement other orders or take such other 

actions as may be necessary or appropriate to restrain interference by any Entity with the Effective 

Date or enforcement of the Plans, except as otherwise provided in the Plans; 

14.8 enforce Articles within the Plans; 

 

12 The provisions of this Article XIV shall apply equally to the Liquidating Trust Alternative, provided that 

any references to the Reorganized Debtors shall be deemed to refer to the Liquidating Trusts or Liquidating 

Trustee, as the context requires. 

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14.9 resolve any cases, controversies, suits or disputes with respect to the injunction and 

other provisions contained in the Plans, and enter such orders as may be necessary or appropriate 

to implement or enforce all such releases, injunctions and other provisions; 

14.10 resolve any issues or matters related to the Liquidating Trust Alternative and/or the 

Liquidating Trusts; 

14.11 enter and implement such orders as necessary or appropriate if the Confirmation 

Order is modified, stayed, reversed, revoked or vacated; 

14.12 resolve any other matters that may arise in connection with or related to the Plans, 

the Disclosure Statement, the Confirmation Order, or any contract, instrument, release, indenture 

or other agreement or document adopted in connection with the Plans or the Disclosure Statement; 

and 

14.13 enter an order and a Final Decree closing the Chapter 11 Cases.

ARTICLE XV 

RISK FACTORS IN CONNECTION WITH THE PLANS

The holders of Claims against and Equity Interests in each Debtor should read and carefully 

consider the following risk factors, as well as the other information set forth in this Disclosure 

Statement (and the documents delivered together herewith), before deciding whether to vote to 

accept or reject their respective Plan. These risk factors should not, however, be regarded as 

constituting the only risks associated with the Plans and their implementation. 

A. Business Risk 

The holders of Claims should consider the following business risk factors associated with 

the Plans: 

 i. The Debtors may not meet the Financial Projections as set forth in Exhibit 

3; and 

 ii. The Debtors’ business performance may be negatively impacted by 

outside factors that may adversely affect their direct and indirect investments. 

B. Bankruptcy Considerations.

Although the Debtors believe the Plans will satisfy all requirements necessary for 

confirmation by the Bankruptcy Court, there can be no assurance that the Bankruptcy Court will 

confirm the Plans as proposed. Moreover, there can be no assurance that modifications of the 

Plans will not be required for confirmation or that such modifications would not necessitate the resolicitation of votes. 

C. Failure to Obtain the Investment Guarantee Amount or the Exit Financing 

or Failure to Receive Requisite Acceptances 

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The Plans are contingent on the Debtors receiving the Investment Guarantee Amount from 

FF Management and the Exit Financing from the Exit Lender. In the event the funds from the 

Investment Guarantee Amount are not received prior to the Confirmation Hearing as set forth 

herein, or the Exit Financing is not in place prior to the Confirmation Hearing, then Debtors will 

not proceed with confirmation of the Plans. In that situation, the Debtors may elect to proceed 

with the Liquidating Trust Alternative. 

In addition, Classes 2, 3 and 5 in the FF Fund Plan and Class 2 in the F5 Business Plan are 

the only Classes that are entitled to vote to accept or reject the Plans. If the requisite acceptances 

are not received by at least one Impaired Class, the Debtors will not be able to seek confirmation 

of the Plan under section 1129(b) of the Bankruptcy Code, because at least one Impaired Class 

will not have voted in favor of the Plans as required by section 1129(a)(10) of the Bankruptcy 

Code. Further, if the requisite acceptances are not received, the Debtors may elect to proceed with 

the Liquidating Trust Alternative. In addition, the Debtors may seek to accomplish an alternative 

restructuring of their capitalization and obligations to creditors and obtain acceptances to an 

alternative plan of reorganization for the Debtors, or otherwise, the Debtors may be required to 

liquidate the Estates under chapter 7 or 11 of the Bankruptcy Code. There can be no assurance 

that the terms of any such alternative restructuring arrangement or plan would be similar to or as 

favorable to the Debtors’ creditors and equity holders as those proposed in the Plans. 

D. SEC Action 

As set forth above, the SEC is conducting an investigation into the Debtors and perhaps 

others related to or affiliated with the Debtors. In the event that the SEC brings an action and 

obtains injunctive relief in connection therewith, then such injunctive relief may impact the 

Debtors’ ability to confirm the Plans. 

E. No Duty to Update Disclosures.

The Debtors have no duty to update the information contained in this Disclosure Statement 

as of the date hereof, unless otherwise specified herein, or unless the Debtors are required to do so 

pursuant to an order of the Bankruptcy Court. Delivery of the Disclosure Statement after the date 

hereof does not imply that the information contained herein has remained unchanged. 

F. Representations Outside this Disclosure Statement.

This Disclosure Statement contains representations concerning or related to the Debtors 

and the Plans that are conditionally approved by the Bankruptcy Code and the Bankruptcy Court. 

Please be advised that any representations or inducements outside this Disclosure Statement and 

any related documents which are intended to secure your acceptance or rejection of the Plans 

should not be relied upon by holders of Claims that are entitled to vote to accept or reject the 

applicable Plan. 

G. Tax and Other Related Considerations.

A discussion of potential tax consequences of the Plans is provided below; however, the 

content of this Disclosure Statement is not intended and should not be construed as tax, legal, 

business or other professional advice. Holders of Claims and/or Equity Interests should seek 

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advice from their own independent tax, legal or other professional advisors based on their own 

individual circumstances. 

ARTICLE XVI 

MISCELLANEOUS PROVISIONS13

A. Modification of Plan 

Subject to the limitations contained in the Plans, each Debtor reserves the right in its sole 

discretion, in accordance with the Bankruptcy Code and the Bankruptcy Rules to amend or modify 

the Plans prior to the entry of the Confirmation Order, including amendments or modifications to 

(i) satisfy section 1129(b) of the Bankruptcy Code, or (ii) proceed with the Liquidating Trust 

Alternative; provided, however, that (1) any pre-Confirmation Date amendments shall not 

materially or adversely affect the interests, rights or treatment of any Allowed Claims or Equity 

Interests under the Plans as required under and in accordance with Section 1127 of the Bankruptcy 

Code or applicable Bankruptcy Rules; and (2) after the entry of the Confirmation Order, each 

Reorganized Debtor may, upon order of the Bankruptcy Court, amend or modify the Plans, in 

accordance with section 1127(b) of the Bankruptcy Code, or remedy any defect or omission or 

reconcile any inconsistency in the Plan in such manner as may be necessary to carry out the 

purpose and intent of the Plans. 

B. Revocation of Plan 

Each Debtor reserves the right in its sole discretion to revoke or withdraw the respective 

Plan prior to the entry of the Confirmation Order, and to file subsequent chapter 11 plans. 

C. Binding Effect 

On the Effective Date, the provisions of the Plans shall bind any holder of a Claim against, 

or present or former direct or indirect holder of an Equity Interest in, the Debtors and such holder’s 

respective successors and assigns, whether or not the Claim or Equity Interest of such holder is 

Impaired under the Plans, whether or not such holder has accepted the Plans and whether or not 

such holder is entitled to a Distribution under the Plans. 

D. Successors and Assigns 

The rights, benefits and obligations of any Entity named or referred to herein shall be 

binding on, and shall inure to the benefit of, any heir, executor, administrator, successor or assign 

of such Entity. 

E. Governing Law 

Except to the extent that the Bankruptcy Code or Bankruptcy Rules apply, unless otherwise 

stated, and subject to the provisions of any contract, instrument, release, indenture or other 

 

13 The provisions of this Article XVI shall apply equally to the Liquidating Trust Alternative, provided that 

any references to the Reorganized Debtors shall be deemed to refer to the Liquidating Trusts or Liquidating 

Trustee, as the context requires. 

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agreement or document entered into in connection herewith, the rights and obligations arising 

hereunder shall be governed by, and construed and enforced in accordance with, the laws of the 

State of Florida without giving effect to the principles of conflict of laws thereof. 

F. Reservation of Rights 

The Plans shall have no force or effect unless and until the Effective Date occurs. Neither 

the filing of the Plans, any statement or provision contained therein, nor the taking of any action 

by the Debtors or any Entity with respect to the Plans shall be or shall be deemed to be an admission 

or waiver of any rights of: (1) any Debtor with respect to the holders of Claims or Equity Interests 

or other parties-in-interest; or (2) any holder of a Claim or other party-in-interest prior to the 

Effective Date. 

G. Section 1125(e) Good Faith Compliance 

Confirmation of the Plans shall act as a finding by the Bankruptcy Court that the Debtors 

and each of their representatives have acted in “good faith” under sections 1125(e) and 1129(a)(3) 

of the Bankruptcy Code. 

H. Further Assurances 

The Debtors, all holders of Claims receiving Distributions hereunder, and all other parties 

in interest shall, from time to time, prepare, execute and deliver any agreements or documents and 

take any other actions as may be necessary or advisable to effectuate the provisions and intent of 

the Plans or the Confirmation Order. 

I. Service of Documents 

Any pleading, notice or other document required herein to be served on or delivered to the 

Debtor shall be sent by both email and first class, certified U.S. mail, postage prepaid as follows: 

If before the Effective Date or under the Liquidating Trust Alternative, to: 

FF Fund I, L.P./F5 Business Investment Partners, LLC

c/o Soneet R. Kapila 

KapilaMukamal 

1000 South Federal Highway, Suite 200 

Ft. Lauderdale, FL 33316 

Telephone: (954) 761-1011 

Email: skapila@kapilamukamal.com

With a copy to (which shall not constitute notice) 

GENOVESE JOBLOVE & BATTISTA, P.A. 

Attn: Paul J. Battista, Esq. 

Attn: Heather L. Harmon, Esq. 

100 SE 2nd Street, 44th Floor 

Miami, FL 33131Telephone: (305) 349-2300 

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Facsimile: (305) 349-2310 

Email: pbattista@gjb-law.com 

Email: hharmon@gjb-law.com

If after the Effective Date under the Plans, to: 

Andrew Franzone 

FF Fund Management, LLC 

429 Lenox Avenue 

Miami Beach, FL 33139 

J. Filing of Additional Documents 

On or before the Effective Date, the Debtors may file with the Bankruptcy Court all 

agreements and other documents that may be necessary or appropriate to effectuate and further 

evidence the terms and conditions hereof. 

K. No Stay of Confirmation Order 

The Debtors shall request that the Court waive stay of enforcement of the Confirmation 

Order otherwise applicable, including pursuant to Federal Rules of Bankruptcy Procedure 3020(e), 

6004(h) and 7062. 

L. Bankruptcy Rule 9019 Request; Impact 

The Plans, including the Plan Supplements or other Plan Documents, may provide for one 

or more compromises or settlements. Pursuant to Bankruptcy Rule 9019, the Debtors hereby 

request approval of all compromises and settlements included in the Plans, and entry of the 

Confirmation Order shall constitute the Bankruptcy Court’s approval, pursuant to Bankruptcy Rule 

9019, of any such compromise or settlement. 

L. Automatic Stay 

The automatic stay provided for under section 362 of the Bankruptcy Code shall remain in 

effect in the Chapter 11 Cases until the Effective Date. 

ARTICLE XVII 

CONFIRMATION REQUIREMENTS

In order for each Plan to be confirmed, the Bankruptcy Code requires that the Bankruptcy 

Court determine that each Plan complies with the technical requirements of chapter 11 of the 

Bankruptcy Code and that the disclosures concerning such Plan have been adequate and have 

included information concerning all payments made or promised in connection with such Plan and 

these Chapter 11 Cases. The Bankruptcy Code also requires that: (1) each Plan be accepted by the 

requisite votes of Creditors except to the extent that confirmation despite dissent is available under 

Bankruptcy Code section 1129(b); (2) each Plan is feasible (that is, there is a reasonable probability 

that the respective Debtor will be able to perform its obligations under its Plan without needing 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 65 of 94
 

59 

further financial reorganization not contemplated by such Plan); and (3) each Plan is in the “best 

interests” of all Creditors in that Chapter 11 Case (that is, Creditors will receive at least as much 

under such Plan as they would receive in a hypothetical liquidation case under chapter 7 of the 

Bankruptcy Code). To confirm each such Plan, the Bankruptcy Court must find that all of the 

above conditions are met, unless the applicable provisions of Bankruptcy Code section 1129(b) 

are employed to confirm such Plan, subject to satisfying certain conditions, over the dissent or 

deemed rejections of Classes of Claims. 

Set forth below is a summary of the relevant statutory confirmation requirements. 

1. Best Interests Test 

Each Holder of a Claim or Interest in an Impaired Class must either (i) accept the applicable 

Plan or (ii) receive or retain under such Plan Cash or property of a value, as of the Effective Date 

of such Plan, that is not less than the value such Holder would receive or retain if the Debtor were 

liquidated under chapter 7 of the Bankruptcy Code. The Bankruptcy Court will determine whether 

the Cash and property issued under such Plan to each Holder of a Claim or Interest equals or 

exceeds the value that would be allocated to such Holders in a liquidation under chapter 7 of the 

Bankruptcy Code (the “Best Interests Test”). The Debtors’ Liquidation Analysis for each Debtor 

is attached as Exhibit 4 hereto. The Debtors believe the Holders of Claims against and Equity 

Interests in the Debtors will have an equal or greater recovery as a result of an orderly chapter 11 

reorganization as discussed herein and under both Plan than could be realized in a chapter 7 

liquidation for either Debtor for the following reasons. 

To determine the value that a Holder of a Claim or Interest in an Impaired Class would 

receive if the Debtors were liquidated under chapter 7, the Bankruptcy Court must determine the 

aggregate dollar amount that would be generated from the liquidation of the Debtors’ Property if 

the Debtors’ Chapter 11 Cases had been converted to chapter 7 liquidation cases and the Debtors’ 

Property were liquidated by a chapter 7 trustee (the “Liquidation Value”). The Liquidation Value 

would consist of the net proceeds from the disposition of the Debtors’ Assets, augmented by Cash 

held by the Debtors and reduced by certain increased costs and Claims that arise in a chapter 7 

liquidation case that do not arise in a chapter 11 reorganization case. 

As explained below, the Liquidation Value available for satisfaction of Claims and Equity 

Interests in the Debtors would be reduced by: (a) the costs, fees and expenses of the liquidation 

under chapter 7, which would include disposition expenses and the compensation of a trustee and 

his or her counsel and other professionals retained, (b) the fees of the chapter 7 trustee, and (c) 

certain other costs arising from conversion of the Chapter 11 Cases to chapter 7. However, the 

Liquidation Value will not include the Investment Guarantee Amount or the proceeds from the 

Exit Financing, and the Estates will not have the benefit of the agreed subordination of the FF 

Management claim. 

The Debtors believe that Holders of Allowed General Unsecured Claims will clearly 

benefit from the reorganization of the Debtors under the terms of the Plans, including because of 

the funding of the Investment Guarantee Amount and the Exit Financing. If the Debtors’ Assets 

were liquidated by a chapter 7 trustee, the Debtors project that under the FF Fund Plan that there 

would be no recovery for Holders of Allowed General Unsecured Claims or Allowed Interests, 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 66 of 94
 

60 

while under the F5 Business Plan, FF Management projects that the maximum recovery for 

Holders of Allowed General Unsecured Claims would be $3,450,000 in the aggregate and there 

will be no recovery Holders of Allowed Interests. Under both Plans, if the Projections can be 

achieved, then the Debtors project a recovery of 100% for Holders of Allowed General Unsecured 

Claims over a three year period, while the FF Fund Plan anticipates a $2 million aggregate recovery 

for Holders of Limited Partner Equity Interests over five years. 

Moreover, under the Plans, the Debtors will avoid the increased costs and expenses of a 

chapter 7 liquidation, including the fees payable to a chapter 7 trustee and his or her professionals. 

The Cash to be distributed to Creditors would be reduced by the chapter 7 trustee’s statutory fee, 

which is calculated on a sliding scale from which the maximum compensation is determined based 

on the total amount of moneys disbursed or turned over by the chapter 7 trustee. Bankruptcy Code 

§ 326(a) permits reasonable compensation not to exceed 3% of the proceeds in excess of $1 million 

distributable to creditors.14 The chapter 7 trustee’s professionals, including legal counsel and 

accountants, would add substantial administrative expenses that would be entitled to be paid ahead 

of Allowed Claims and Equity Interests against the Debtors. These chapter 7 trustee fees would 

reduce the funds available for distribution to the Debtors’ Creditors from additional recoveries 

such as preferential payments, expunged Administrative Expense Claims and the proceeds of 

successful Estate litigation or settlement. 

It is also anticipated that a chapter 7 liquidation would result in a significant delay in 

payments being made to Creditors. Bankruptcy Rule 3002(c) provides that conversion of a chapter 

11 case to chapter 7 will trigger a new bar date for filing claims against the Debtor, and that the 

new bar date will be 90 days after the first date set for the meeting of creditors called under section 

341 of the Bankruptcy Code. Not only would a chapter 7 liquidation delay distribution to 

Creditors, but it is possible that additional claims that were not asserted in the Chapter 11 Cases, 

or were late-filed, could be filed against the Debtors. Reopening the bar date in connection with 

conversion to chapter 7 would provide these and other claimants an additional opportunity to file 

claims against the Estates. Furthermore, because the Debtors’ principal assets – their investments 

– are illiquid by nature, it can take years before such investments can be fully liquidated. Finally, 

under the FF Fund Plan, as part of the consideration for retaining its equity interest, FF 

Management is consenting to subordinate its $2 million claim to General Unsecured Claims and, 

provided it is the Exit Lender, reduce its claim to $1 million. The hypothetical liquidation analysis 

takes into account that FF Management has not consented to the subordination or reduction of its 

claim in that scenario. 

For the reasons set forth above, the Debtors believe that the Plans provide a superior 

recovery for Holders of Claims and Interests, and the Plans meet the requirements of the Best 

Interests Test. 

In the event of the Liquidating Trust Alternative, the Debtors believe the Liquidating Trust 

Alternative will provide a superior recovery for Holders of Claims and Interests as compared to a 

Chapter 7 liquidation because (i) the Liquidating Trustee and his Professionals are familiar with 

 

14 Bankruptcy Code § 326(a) permits a chapter 7 trustee to receive 25% of the first $5,000 distributed to creditors, 

10% of additional amounts up to $50,000, 5% of additional distributions up to $1 million and reasonable compensation 

up to 3% of distributions in excess of $1 million. 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 67 of 94
 

61 

the Assets of the Estates, resulting in a substantial savings in additional professional fees for a 

Chapter 7 trustee and his/her professionals, and (ii) the Debtors have obtained the agreement of 

FF Management and all affiliated parties to subordinate their respective Allowed Claims to the 

payment in full of all Allowed General Unsecured Claims under both Plans. 

2. Financial Feasibility Test 

Even if the Plans are accepted by each Class of Claims and Interests voting on the Plans, 

and even if the Bankruptcy Court determines that the Plans satisfy the Best Interests Test, the 

Bankruptcy Code requires that, in order for the Plans to be confirmed by the Bankruptcy Court, it 

must be demonstrated that consummation of the Plans are not likely to be followed by the 

liquidation or the need for further financial reorganization of the Debtor. 

As part of this analysis, FF Management has prepared projections of the financial 

performance of the Reorganized Debtors (the “Financial Projections”). The Financial Projections, 

and the assumptions on which they are based, are set forth in Exhibit 3 hereto. 

FF Management believes that, under its direction and control, the Debtors will be able to 

make all payments required pursuant to the Plans while conducting ongoing business operations 

and, therefore, that confirmation of the Plans is not likely to be followed by liquidation or the need 

for further reorganization. 

3. Acceptance by Impaired Classes 

Bankruptcy Code § 1129(b) provides that a plan can be confirmed even if it has not been 

accepted by all impaired classes as long as at least one impaired class of claims has accepted it. 

The process by which nonaccepting classes are forced to be bound by the terms of a plan is 

commonly referred to as “cramdown.” The Bankruptcy Court may confirm the Plans at the request 

of the Debtors notwithstanding either the Plan’s rejection (or deemed rejection) by impaired 

classes as long as such Plan “does not discriminate unfairly” and is “fair and equitable” as to each 

impaired class that has not accepted it. A plan does not discriminate unfairly within the meaning 

of the Bankruptcy Code if a dissenting class is treated equally with respect to classes of equal rank. 

A class of claims under a plan accepts the plan if the plan is accepted by creditors that hold 

at least two-thirds in amount and more than one-half in number of the allowed claims in the class 

that actually vote on the plan. A class of interests accepts the plan if the plan is accepted by holders 

of interests that hold at least two-thirds in amount of the allowed interests in the class that actually 

vote on a plan. 

A class that is not “impaired” under a plan is conclusively presumed to have accepted the 

plan. Solicitation of acceptances from such a class is not required. A class is “impaired” unless 

(i) the legal, equitable and contractual rights to which a claim or interest in the class entitles the 

holder are not modified, or (ii) the effect of any default is cured and the original terms of the 

obligation are reinstated. 

A plan is fair and equitable as to a class of secured claims that rejects the plan if the plan 

provides (i)(a) that the holders of claims included in the rejecting class retain the liens securing 

those claims, whether the property subject to those liens is retained by the debtor or transferred to 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 68 of 94
 

62 

another entity, to the extent of the allowed amount of such claims, and (b) that each holder of a 

claim of such class receives on account of that claim deferred cash payments totaling at least the 

allowed amount of that claim, of a value, as of the effective date of the plan, at least equal to the 

value of the holder’s interest in the estate’s interest in such property; (ii) for the sale, subject to 

Bankruptcy Code § 363(k), of any property that is subject to the liens securing the claims included 

in the rejecting class, free and clear of the liens, with the liens to attach to the proceeds of the sale, 

and the treatment of the liens on proceeds under clause (i) or (ii) of this paragraph; or (iii) for the 

realization of the indubitable equivalent of such claims. 

A plan is fair and equitable as to a class of unsecured claims that rejects the plan if the plan 

provides (i) for each holder of a claim included in the rejecting class to receive or retain on account 

of that claim property that has a value, as of the effective date of the plan, equal to the allowed 

amount of such claim, or (ii) that the holder of any claim or interest that is junior to the claims of 

such rejecting class will not receive or retain on account of such junior claim or interest any 

property at all. 

A plan is fair and equitable as to a class of equity interests that rejects a plan if the plan 

provides (i) that each holder of an interest included in the rejecting class receive or retain on 

account of that interest property that has a value, as of the effective date of the plan, equal to the 

greater of the allowed amount of any fixed liquidation preference to which such holder is entitled, 

any fixed redemption price to which such holder is entitled, or the value of such interest, or (ii) 

that the holder of any interest that is junior to the interest of such rejecting class will not receive 

or retain under the plan on account of such junior interest any property at all. The Debtors believe 

the Plan to be both fair and equitable. 

ARTICLE XVIII 

ALTERNATIVES TO THE PLANS

If the Plans are not confirmed and consummated, the alternatives include first the 

Liquidating Trust Alternative more fully described herein. In the event the Plans in respect of the 

Liquidating Trust Alternative are not confirmed or consummated, then the alternatives are as 

follows: 

A. Liquidation Under the Bankruptcy Code 

The Debtors could be liquidated under chapter 7 of the Bankruptcy Code. The Debtors 

believe that liquidation would result in lower aggregate distributions being made to creditors than 

those provided for in the Plan, which is demonstrated by the Liquidation Analysis discussed above 

and attached as Exhibit 4 to the Disclosure Statement. 

B. Alternative Plan(s) of Reorganization 

The Debtors believe that failure to confirm the Plans will lead inevitably to expensive and 

protracted Chapter 11 Cases. In formulating and developing the Plans, the Debtors have explored 

numerous other alternatives and engaged in an extensive negotiating process with FF Management. 

The Debtors believe that not only do the Plans fairly adjust the rights of various Classes of 

Claims, but also that the Plans provides superior recoveries to the Debtors’ creditors over any 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 69 of 94
 

63 

alternative capable of rational consideration (such as a chapter 7 liquidation), thus enabling many 

stakeholders to maximize their returns. Rejection of the Plans in favor of some alternative method 

of reconciling the Claims and Interests will require, at the very least, an extensive and time 

consuming process (including the possibility of protracted and costly litigation) and will not result 

in a better recovery for any Class of Claims or Interests. 

THE DEBTORS BELIEVE THAT CONFIRMATION OF THE PLANS IS 

PREFERABLE TO ANY ALTERNATIVE BECAUSE THE PLANS INCLUDE THE 

INVESTMENT GUARANTEE AMOUNT AND THE EXIT FINANCING, AND THEREFORE 

MAXIMIZE THE AMOUNT OF DISTRIBUTIONS TO ALL HOLDERS OF CLAIMS AND 

INTERESTS AND ANY ALTERNATIVE TO CONFIRMATION OF THE PLANS WILL

RESULT IN SUBSTANTIAL DELAYS IN THE DISTRIBUTION OF ANY RECOVERIES. 

THEREFORE, THE DEBTORS RECOMMEND THAT ALL HOLDERS OF IMPAIRED 

CLAIMS ENTITLED TO VOTE ON THE PLANS VOTE TO ACCEPT THE PLANS.

C, Dismissal of the Debtors’ Chapter 11 Cases 

Dismissal of the Debtors’ Chapter 11 Cases would have the effect of restoring (or 

attempting to restore) all parties to the status quo ante. Upon dismissal of the Debtors’ Chapter 11 

Cases, the Debtors would lose the protection of the Bankruptcy Code, thereby requiring, at the 

very least, an extensive and time consuming process of negotiation with the creditors of the 

Debtors, and possibly resulting in costly and protracted litigation in various jurisdictions. The 

Debtors believe that these actions would seriously undermine its ability to obtain financing and 

could lead ultimately to the liquidation of the Debtor under chapter 7 of the Bankruptcy Code. 

Therefore, the Debtors believe that dismissal of the Debtors’ Chapter 11 Cases is not a viable 

alternative to the Plans. 

ARTICLE XIX 

CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN 

The following discussion summarizes certain federal income tax consequences expected 

to result from the consummation of the Plans. This discussion is only for general information 

purposes and only describes the expected tax consequences to Holders entitled to vote on the Plans. 

It is not a complete analysis of all potential federal income tax consequences and does not address 

any tax consequences arising under any state, local or foreign tax laws or federal estate or gift tax 

laws. This discussion is based on the Internal Revenue Code of 1986, as amended, Treasury 

Regulations promulgated thereunder, judicial decisions, and published rulings and administrative 

pronouncements of the IRS, all as in effect on the date of the Disclosure Statement. These 

authorities may change, possibly retroactively, resulting in federal income tax consequences 

different from those discussed below. No ruling has been or will be sought from the IRS, and no 

legal opinion of counsel will be rendered, with respect to the matters discussed below. There can 

be no assurance that the IRS will not take a contrary position regarding the federal income tax 

consequences resulting from the consummation of the Plans or that any contrary position would 

not be sustained by a court. 

This discussion does not address all federal income tax considerations that may be relevant 

to a particular Holder in light of that Holder’s particular circumstances or to Holders subject to 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 70 of 94
 

64 

special rules under the federal income tax laws, such as financial institutions, insurance companies, 

brokers, dealers or traders in securities, commodities or currencies, tax-exempt organizations, taxqualified retirement plans, partnerships and other pass-through entities, foreign corporations, 

foreign trusts, foreign Estate, Holders who are not citizens or residents of the U.S., Holders subject 

to the alternative minimum tax, and Holders who have a functional currency other than the U.S. 

dollar. 

HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE U.S. 

FEDERAL INCOME TAX CONSEQUENCES TO THEM OF THE CONSUMMATION OF 

THE PLANS, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER ANY STATE, 

LOCAL OR FOREIGN TAX LAWS, OR ANY OTHER FEDERAL TAX LAWS. 

TO COMPLY WITH INTERNAL REVENUE SERVICE CIRCULAR 230, 

TAXPAYERS ARE HEREBY NOTIFIED THAT (a) ANY DISCUSSION OF U.S. 

FEDERAL TAX ISSUES IN THE DISCLOSURE STATEMENT IS NOT INTENDED OR 

WRITTEN TO BE USED, AND CANNOT BE USED BY ANY TAXPAYER, FOR THE

PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON A TAXPAYER

UNDER THE INTERNAL REVENUE CODE, (b) ANY SUCH DISCUSSION IS WRITTEN 

IN CONNECTION WITH THE PROMOTION OR MARKETING OF THE 

TRANSACTIONS OR MATTERS ADDRESSED HEREIN, AND (c) TAXPAYERS 

SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM

AN INDEPENDENT TAX ADVISOR. 

Payments of interest, dividends and certain other payments are generally subject to backup 

withholding at the applicable withholding rate unless the payee of such payment furnishes such 

payee’s correct taxpayer identification number (social security number or employer identification 

number) to the payor. The Debtors may be required to withhold the applicable percentage of any 

payments made to a Holder who does not provide his, her or its taxpayer identification number. 

Backup withholding is not an additional tax, but an advance payment that may be refunded to the 

taxpayer by the IRS to the extent that the backup withholding results in an overpayment of tax by 

such taxpayer in such taxable year. 

In accordance with the Plans, each Holder of an Allowed General Unsecured Claim against 

the Debtors shall be entitled to receive his, her or its Distributions under the Plans. Each Holder 

of an Allowed General Unsecured Claim may recognize gain or loss upon receipt of such 

Distributions equal to the difference between the “amount realized” by such Creditor and such 

Creditor’s adjusted tax basis in his, her or its Claim. The amount realized is equal to the value of 

such Creditor’s Distributions. Any gain or loss realized by an Unsecured Creditor should 

constitute ordinary income or loss to such creditor unless such Claim is a capital asset in the hands 

of such Unsecured Creditor. If a Claim is a capital asset and it has been held for more than one 

year, such Creditor may realize long-term capital gain or loss.

The federal income tax consequences to such Creditors may differ and will depend on 

factors specific to each such Creditor, including, but not limited to: (i) whether the Creditor’s 

Claim (or a portion thereof) constitutes a Claim for principal or interest, (ii) the origin of the 

Creditor’s Claim, (iii) the type of consideration received by the Creditor in exchange for the Claim, 

(iv) whether the Creditor is a United States person or a foreign person for United States federal 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 71 of 94
 

65 

income tax purposes, (v) whether the Creditor reports income on the accrual or cash basis method, 

and (vi) whether the Creditor has taken a bad debt deduction or otherwise recognized a loss with 

respect to the Claim.

THERE ARE MANY FACTORS THAT WILL DETERMINE THE TAX 

CONSEQUENCES TO EACH SUCH CREDITOR OR EQUITY INTEREST HOLDER. 

FURTHERMORE, THE TAX CONSEQUENCES OF THE PLANS ARE COMPLEX AND 

IN SOME CASES UNCERTAIN. THEREFORE, IT IS IMPORTANT THAT EACH 

CREDITOR AND EQUITY INTEREST HOLDER OBTAIN HIS, HER OR ITS OWN 

PROFESSIONAL TAX ADVICE REGARDING THE TAX CONSEQUENCES TO SUCH 

CREDITOR AS A RESULT OF THE PLAN 

THE FOREGOING DISCUSSION OF FEDERAL INCOME TAX CONSIDERATIONS 

IS FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. EACH 

HOLDER SHOULD CONSULT ITS OWN TAX ADVISOR REGARDING THE FEDERAL, 

STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE PLAN DESCRIBED

HEREIN. NEITHER THE DEBTORS NOR THEIR PROFESSIONALS WILL HAVE ANY 

LIABILITY TO ANY PERSON OR HOLDER ARISING FROM OR RELATED TO THE 

FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE PLANS OR 

THE FOREGOING DISCUSSION. 

ARTICLE XX 

CONCLUSION 

The Debtors believe that confirmation and implementation of the Plans are preferable 

because they will provide the greatest recovery to Holders of Claims and Equity Interests. Other 

alternatives do not include the Investment Guarantee Amount or the Exit Financing, and could 

involve significant delay, uncertainty and substantial administrative costs and are likely to reduce 

any return to creditors who hold Claims and holders of Equity Interests. The Debtors urge the 

Holders of Claims and Equity Interests who are entitled to vote on the Plans to vote to accept the 

Plans. 

 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 72 of 94
 

66 

Dated: February 1, 2021 

FF FUND I, L.P. 

 

By: /s/ Soneet R. Kapila

Name: Soneet R. Kapila 

Title: Chief Restructuring Officer 

F5 BUSINESS INVESTMENT PARTNERS, 

LLC 

 

By: /s/ Soneet R. Kapila

Name: Soneet R. Kapila 

Title: Chief Restructuring Officer 

GENOVESE JOBLOVE & BATTISTA, P.A. 

Counsel for the Debtor 

100 SE 2nd Street, 44th Floor 

Miami, FL 33131-2100 

Telephone: (305) 349-2300 

Facsimile: (305) 349-2310 

By: /s/ Paul J. Battista 

Paul J. Battista 

Florida Bar No. 884162 

pbattista@gjb-law.com

Heather L. Harmon 

 Florida Bar No. 013192 

hharmon@gjb-law.com

 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 73 of 94
 

67 

EXHIBIT 1 

 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 74 of 94
E

Investment Name Owner Investment Type (Debt / Equity) Equity Original Amount Invested / Loaned / Contributed (Note 1) Capital Call Obligations (Note 2) Descriptio

Florence Capital Advisors SPV IV -- Cura Partners (Note 3)

FF Fund Equity 22.50% 275,000 $ - $ F5 invested into SPV IV, that pooled oth

investment with a company called Cura there was a merger between Cura and investors in CURA (including FCA SPV Curaleaf over an extended time with so

SCP Opportunities Fund, LLC (Note 3) FF Fund Equity 2.82% 400,000 - SCP is an investor in WM Holding Com

agreement to go public on the Nasdaq 

Acquisition Corp. Per SCP, the earliest much later in 2021.

CoreWeave / Atlantic Crypto Corp (Note 3)

FF Fund Equity 1.95% (250,000 Seed 

Preferred Shares)

 CoreWeave is in the cryptocurre 250,000 ncy bu

Ethereum. 

Total FF Fund 925,000 $ - $ 69th Street Garage (Note 3) F5 Equity 5% 100,000 $ - $ According to the investment principal, t

small 40-space valet public parking gar

22 space self park condominium garagcondominium parking spaces which wil

7524 LLC F5 Equity (Real 

Estate)

43.97% 535,345 - Residential Real Estate - 43.97% equit

home in Miami. In August 2019, F5 rec

(post-petition), the property was sold an

Acadaca F5 Debt / Equity 10% 7,202,420 - Website design and ecommerce IT com

Aldwych Capital Partners LLC F5 Debt / Equity 15.5% 1,531,000 384,000 An investment in a fund that holds inter

including (i) Aldwych, LLC, an advisory 

development, (ii) Anvil Capital Partners(iii) a 5G light infrastructure / telecom dand promissory note for $1.9 million, of made a Capital Call on the $384,000 re

American Commercial - Cherry Tree F5 Equity (Real 

Estate)

8.46% 100,000 - Investment in Cherry Tree Shopping Ce

American Commercial - University Boulevard West

F5 Equity (Real 

Estate)

9.76% 100,000 - Membership interest in UBW- Investors

- 5839-5909 University Blvd West, Jack

Autodromo California, LLC F5 Debt 100,000 - Racetrack in California. According to th

development concept, so it has not gen

CC-FF F5 Equity (Real 

Estate)

50% 1,986,321 - F5 is a 50% Partner in CC-FF. The othe

FF has interests in approx. 10 different 

include Class A office space and a mul

Club Union Panama Holdings, LLC (Panama Hotel)

F5 Equity TBD 200,000 - F5 invested $200,000 in ACP CU I, LLC 

Holdings, LLC (“Club Union”), the entity CRO has been informed that the hotel iHotel Antiguo Club Union located in Ca

Creatis Select Entertainment Fund LLC F5 Equity 17.50% 100,000 - Fund facilitates private investments in m

companies. F5 investment is directly in TEREZIN PROJECT film. 

Investment Summary for FF Fund I, LP and F5 Business Investment Partners, LLC

Greg Hersch / Florence Capital Advisors -- Summary of Introduced Investments

FF FUND I, LP & F5 BUSINESS INVESTMENT PARTNERS, LLC

CASE NO. 19-22744-BKC-LMI - UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA - MIAMI DIVISION

The below analysis is based on the CRO and KM's preliminary findings. The CRO has not valued the investments nor has he confirmed the value of the investments are accurat

value attributed to the investments was made prior to the CRO’s appointment. Additionally, KM has not reconciled the amounts reflected herein to the bank records. This pre

available information. Additional documents and information may be made available or reviewed, and certain facts currently not available may come to light, which may im

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 75 of 94
E

Investment Name Owner Investment Type (Debt / Equity) Equity Original Amount Invested / Loaned / Contributed (Note 1) Capital Call Obligations (Note 2) Descriptio

Investment Summary for FF Fund I, LP and F5 Business Investment Partners, LLC

Greg Hersch / Florence Capital Advisors -- Summary of Introduced Investments

FF FUND I, LP & F5 BUSINESS INVESTMENT PARTNERS, LLC

CASE NO. 19-22744-BKC-LMI - UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA - MIAMI DIVISION

The below analysis is based on the CRO and KM's preliminary findings. The CRO has not valued the investments nor has he confirmed the value of the investments are accurat

value attributed to the investments was made prior to the CRO’s appointment. Additionally, KM has not reconciled the amounts reflected herein to the bank records. This pre

available information. Additional documents and information may be made available or reviewed, and certain facts currently not available may come to light, which may im

Dapp Ventures, LLC F5 Equity 48% 243,500 306,500 Boutique music publishing Company sp

careers through its music sync and lice

Duckworth F5 Equity TBD 50,000 - Retailer of Duckworth brand socks, vap

Duckworthco.com

E2 Performance Technologies Inc F5 Unknown 100,000 - Privately held shares in technology infu

Elegant Medical - Stethos F5 Equity / Convertible 

Securities

TBD 105,000 145,000 Developer of the Stethos Ecosystem - m

Faveit F5 Debt

 Convertible PNs

TBD 318,000 - Investment in convertible promissory no

Florence Capital Advisors SPV II -- Title Arbitrage (Note 3)

F5 Equity 23.72% 750,000 - F5's investment is in FCA SPV II, whos

Arbitrage (GP) for Fort Trinidad Investoundeveloped oil and gas fields.

Florence Capital Advisors SPV V -- Global InterXchange (Note 3)

F5 Equity TBD 591,706 - GIX entered into a lease agreement wit

Jersey to install fiber optic cable in exisWorld Trade Center to 1 Path Park Plaz

Florence Capital Advisors SPV VI -- Five Four Ventures (Note 3)

F5 Equity TBD 120,000 180,000 Focused on making incubation-stage, e

private companies.

GE&P Recycling F5 Debt N/A 3,271,500 1,740,000 Developing a permit for a waste transfe

municipal solid waste is temporarily hel

waste-to-energy plant. Lease payments denying access to finalize permit. • Project on hold and rent in arrears sin

Landlord has not defaulted on the lease• Permit pending add 'l testing, but cann

access to the property.• Per the 12/29/18 Amended PN: (i) GEobligation of $1,740,000 to fund the ren

Maturity Date is December 29, 2023.• $3,271,500 loaned to GE&P as of 9/30

Genesis (Note 3) F5 Equity N/A 500,000 - Investment in the hedge fund Megalodo

company. Genesis Media LLC contributed its bus

2017 in return for an interest in Adgene

asset of GenesisMedia). Adgenesis Howhen its senior lender sold all its remai

HALO (Note 3) F5 Equity 692,895 shares or 

about 0.8265% of the 

company

 - 519,185 Equity investment of privately held shar

Joss Realty Partners - 2233 Wisconsin F5 Equity (Real 

Estate)

7.14% 500,000 - Direct equity investment in class A offic

Plaza" located at 2215 and 2233 Wisco

Krasin F5 Debt N/A 800,000 - F5 loaned $800,000 to Krasin, that was 

separate companies. Per the investmen

have ceased operating and Krasin has 

companies. 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 76 of 94
E

Investment Name Owner Investment Type (Debt / Equity) Equity Original Amount Invested / Loaned / Contributed (Note 1) Capital Call Obligations (Note 2) Descriptio

Investment Summary for FF Fund I, LP and F5 Business Investment Partners, LLC

Greg Hersch / Florence Capital Advisors -- Summary of Introduced Investments

FF FUND I, LP & F5 BUSINESS INVESTMENT PARTNERS, LLC

CASE NO. 19-22744-BKC-LMI - UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA - MIAMI DIVISION

The below analysis is based on the CRO and KM's preliminary findings. The CRO has not valued the investments nor has he confirmed the value of the investments are accurat

value attributed to the investments was made prior to the CRO’s appointment. Additionally, KM has not reconciled the amounts reflected herein to the bank records. This pre

available information. Additional documents and information may be made available or reviewed, and certain facts currently not available may come to light, which may im

LANDC Corporation F5 Equity TBD - - LANDC is the sole member or contemp

(FocusPoint Private Capital Group LLC 

LDT Online F5 Equity 289,000 - Luxury Product line - dog travel needs, 

Livery Loans LLC F5 Equity / Conv Debt N/A 150,000 - CNH Limousine Consulting LLC and Liv

combined company. Livery Loans provbased loans of $1,500, repayments thro

payroll.Investment principal provided a final 20no longer operating.

Local Motors F5 Equity .04%

40,384 Series A4 

Shares

 - 150,000 World's first manufacturer of 3D-printed 

Medicare One, LLC F5 Debt N/A 50,000 - Licensed insurance agency for Medicar

• 2/6/20: $50K Promissory Note (unexe

Metropolitan Merchant Capital, Inc (MetMC)

F5 Conv Debt 148,790 - Investor in participation rights in mercha

Metropolitan Partners Fund IV F5 Equity 0.07% 30,000 - Fund focused on originating and invest

MiMedia Inc (Note 3) F5 Debt / Equity TBD 410,000 - Personal cloud based storage platform 

content (photos, media, music, etc.) in 

Modern Guild Inc F5 Convertible Notes TBD 50,000 - Modern Guild partners with companies 

trains college students for free to help w

MSP, LLC F5 Equity 50% 1,046,000 - Investments in several participation agr

(“MSP”) whereby F5 provided capital to 

notes and other investment opportunitieMSP, including a hangar known as CesCornell ($176k) and an individual prom

NCP II F5 Equity / Debt 50% 1,435,000 679,000 NCP II's source of revenue is from 35% 

relationships and referrals to Roberts & 

institutional broker dealer, per an agmt • Per July 2017 Unsecured PN & Aug 2 ○ $1.435M debt from loan to NCP waJune 2037, and then subsequently sho

 ○ F5 rec'd 50% equity in NCP II; and ○ F5 rec'd a transfer of the $200K inv

• R&R confirmed an agmt between NCP 

North River IV LLC F5 Equity (Real 

Estate)

0.41% 100,000 - Entity organized in January 2015 to acq

Maine. 

PerOs Biosciences F5 Debt 100,000 - Company manufactures tableted gum, 

dietary supplements. PerOs Bio redeemfor $60,000 in August 2019. 

R&R Partners Holdings F5 Equity 0.09% 100,000 - In November 2017, R&R Holdings Co L

Roberts & Ryan Investments Inc, a lice

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 77 of 94
E

Investment Name Owner Investment Type (Debt / Equity) Equity Original Amount Invested / Loaned / Contributed (Note 1) Capital Call Obligations (Note 2) Descriptio

Investment Summary for FF Fund I, LP and F5 Business Investment Partners, LLC

Greg Hersch / Florence Capital Advisors -- Summary of Introduced Investments

FF FUND I, LP & F5 BUSINESS INVESTMENT PARTNERS, LLC

CASE NO. 19-22744-BKC-LMI - UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA - MIAMI DIVISION

The below analysis is based on the CRO and KM's preliminary findings. The CRO has not valued the investments nor has he confirmed the value of the investments are accurat

value attributed to the investments was made prior to the CRO’s appointment. Additionally, KM has not reconciled the amounts reflected herein to the bank records. This pre

available information. Additional documents and information may be made available or reviewed, and certain facts currently not available may come to light, which may im

Refugee Ltd F5 Equity 30.4% of net profits 

until 100% of 

investment value 

recouped, then 17.2% 

of net profits after 

recoupment and 

deferments

 - 79,211 Refugee Doc Ltd. is a documentary pro

June 2017 as part of an investment in o

RSE Markets - Rally Road F5 Equity 26,373 shares 

Series Seed 2 

Preferred

 - 25,000 Rally Rd is a tech platform that allows u

assets e.g. Classic cars.

Sandhill F5 Equity 4.29% - 150,000 Start-up investment, F5 did not fund an

March 2019. 

Skyline Development F5 Equity 44% 236,000 364,000 Presto Garden is a vertical hollow grow 

Arnold invented and have been bringing 

2017. The grow tower is a patent pendihelp speed up, and also improve, the gproducts.

Solemates LLC F5 Debt 0.71%

 (Class B Member)

 - 50,000 Solemates is a consumer brand that pr

accessories. The line is sold in CVS, D

Amazon and the company website.Current status is business is operating 

Soundtrapper F5 Equity 10% 100,000 - Privately held shares in music licensing 

Tanz F5 Equity 21% 600,000 - Equity investment (privately held shares

entertainment events. The company's w

Vitalis F5 Equity 14,216 Units, 1.2062% 

of series A Preferred 

Shrs (including $500k 

unfunded capital call)

 566,728 Privately held s 475,000 hares in pharmaceutica

drugs. Main drug is a side effect reducdrug category, fumarates.

Waves Technologies, Ltd F5 Equity 254,890 - Privately held shares in European aviat

year. Out of business, confirmed with Investm

proceeding documents. 

Total F5 25,702,868 $ 4,515,228 $ Greg Hersch / Florence Capital Advisors ("FCA") - Introduced Investments for FF Fund and F5 (Note 3):SCP Opportunities FundAtlantic Crypto Corp/ CoreWeave FF Fund $ 250,000

Genesis F5 500,000HALO F5 519,185

MiMedia Inc F5 410,000SCP Opportunities Fund FF Fund 400,00069th Street Garage F5 100,000

$ 2,179,185

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 78 of 94
E

Investment Name Owner Investment Type (Debt / Equity) Equity Original Amount Invested / Loaned / Contributed (Note 1) Capital Call Obligations (Note 2) Descriptio

Investment Summary for FF Fund I, LP and F5 Business Investment Partners, LLC

Greg Hersch / Florence Capital Advisors -- Summary of Introduced Investments

FF FUND I, LP & F5 BUSINESS INVESTMENT PARTNERS, LLC

CASE NO. 19-22744-BKC-LMI - UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA - MIAMI DIVISION

The below analysis is based on the CRO and KM's preliminary findings. The CRO has not valued the investments nor has he confirmed the value of the investments are accurat

value attributed to the investments was made prior to the CRO’s appointment. Additionally, KM has not reconciled the amounts reflected herein to the bank records. This pre

available information. Additional documents and information may be made available or reviewed, and certain facts currently not available may come to light, which may im

Greg Hersch / FCA - Introduced Investments for FCA SPVs (Note 3):

FCA SPV II - Title Arbitrage F5 750,000

FCA SPV IV - Cura FF Fund I, LP 275,000FCA SPV V - Global InterXchange F5 591,706FCA SPV VI - Five Four Ventures F5 120,000

$ 1,736,706

Total Introduced Investments for FF Fund and F5 3,915,891 $ 3) These investments were introduced by Greg Hersch or Florence Capital Advisors and are based on the investment records provided and reviewed. 

2) Capital Calls - all Capital Call obligations have been requested from the Investment principals.

1) The investment, loan or contribution amount (collectively, the "Contribution Amount") was obtained from the investment records or information provided by the investment principals. The 

bank records and is unable to reconcile the Contribution Amounts to the bank records for verification. The Contribution Amount is the original principal investment or loan made that is outst

and does not account for the original Contribution Amount made less any redemptions or return of principal.

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 79 of 94
 

68 

EXHIBIT 2 

 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 80 of 94
Count Limited Partner As of January 21, 2021 Estimated % of Limited Partnership Interest

2 PENSCO Trust Company Custodian FBO Dennis S. Hersch IRA                                                 1,653,774.44  11.5983%

3 William A. Freydberg                                                 1,375,294.19  9.6452%

4 Blake Mallen 2013 Trust                                              1,341,183.71  9.4060%

6 Northbrook Real Estate Partners, LLC                                                  875,043.14  6.1369%

7 Aaron & Danielle Bernthal                                                  562,435.95  3.9445%

8 Kimple 2009 Trust                                                  521,744.16  3.6591%

9 WeHaBe Beheer BV                                                  513,224.22  3.5993%

10 Deborah L. Palmer                                                  466,136.31  3.2691%

11 PENSCO Trust Company Custodian FBO Kenneth Eng, IRA                                                  458,107.00  3.2128%

12 Hope Brown                                                     355,140.05  2.4907%

13 Nicholas & Kathryn Stein                                                     290,030.50  2.0340%

14 Ellen I. Sykes                                                     260,206.66  1.8249%

15 Ann Lewin Revocable Trust                                                  237,276.87  1.6641%

16 Ware & Amalia Sykes                                                     236,092.09  1.6558%

17 PENSCO Trust Company Custodian FBO Kenneth P. Lisiak, IRA                                                     214,406.38  1.5037%

18 PENSCO Trust Company FBO Anthony T. Niosi, IRA                                                  206,580.96  1.4488%

19 Susan Grausman                                                  204,183.33  1.4320%

20 Adrian E. Ulrich                                                     196,457.09  1.3778%

21 PENSCO Trust Company Custodian FBO Kathryn M. Gregory, IRA                                                     170,309.57  1.1944%

22 Timothy M. Evans                                                     167,438.90  1.1743%

23 The Pyne Co.'s Ltd. Profit Sharing Plan FBO Amalia P. Sykes                                                     161,338.81  1.1315%

24 Paul McCarthy                                                  156,575.76  1.0981%

25 PENSCO Trust Company FBO James V.V. Burke, IRA                                                  145,418.31  1.0198%

26 Jennifer Grausman                                                  143,311.53  1.0051%

27 Elkie Freydberg                                                     140,010.28  0.9819%

28 Vinay S. Kolla                                                  134,957.55  0.9465%

29 Keith M. Rosenbloom                                                  132,571.92  0.9298%

30 Richard B. Baer                                                  132,222.44  0.9273%

31 Fiona M. Caldow                                                  130,700.79  0.9166%

32 Deborah Grausman                                                  124,508.34  0.8732%

33 Richard Grausman                                                  124,508.34  0.8732%

34 Arthur Millholland                                                  124,460.45  0.8729%

35 Jonathan Stein                                                  122,573.93  0.8596%

36 PENSCO Trust Company Custodian FBO Dale Schlather                                                  105,445.77  0.7395%

37 PENSCO Trust Company Custodian FBO Brian Stein                                                  100,027.10  0.7015%

38 PENSCO Trust Company Custodian FBO Andrew T. Franzone, IRA                                                    99,954.35  0.7010%

39 TD Ameritrade Custodian. FBO Vinay Kolla ‐ IRA                                                       97,738.11  0.6855%

40 PENSCO Trust Company Custodian FBO Matthew R. Evans, IRA                                                       96,253.03  0.6750%

41 PENSCO Trust Company Custodian FBO Anna M. Alaimo, IRA                                                       89,104.76  0.6249%

42 PENSCO Trust Company FBO Robin S. Kelleher, IRA                                                    86,734.42  0.6083%

43 F. Perlberg Consulting Inc.                                                       78,916.82  0.5535%

44 Susan S. Andelman                                                       77,443.54  0.5431%

45 PENSCO Trust Company Cust. FBO Daniel J. Delaney, IRA                                                       75,043.91  0.5263%

46 Benner A. Ulrich                                                       74,894.34  0.5252%

47 Joseph P. Habboushe                                                    73,667.91  0.5166%

48 Roee & Melissa Wiczyk                                                       72,451.72  0.5081%

49 Maher Al Jallad                                                       66,698.68  0.4678%

50 Rafi Hovsepian                                                       66,108.35  0.4636%

51 Brave Equity Ventures, LLC                                                    55,529.97  0.3894%

52 PENSCO Trust Company Custodian FBO Richard J. Pacheco, IRA                                                       52,969.78  0.3715%

53 PENSCO Trust Co. FBO Lynne Kushnirenko, IRA                                                    51,057.93  0.3581%

54 Antony J. Ellis                                                       50,489.06  0.3541%

55 Nicholas F. Cohen                                                       50,136.69  0.3516%

56 PENSCO Trust Co. Cust. FBO James P. Sletteland, Jr., IRA                                                       42,835.44  0.3004%

57 PENSCO Trust Company Custodian FBO Grant M. Kornman, IRA                                                       40,378.95  0.2832%

58 PENSCO Trust Co. Cust FBO Michael F. Streicker IRA                                                       36,768.56  0.2579%

59 PENSCO Trust Company Custodian FBO Emily A. Farley, IRA                                                       36,371.07  0.2551%

60 PENSCO Trust Company Custodian FBO Joseph P. Habboushe, IRA                                                       35,052.20  0.2458%

61 Sheryl Parkin                                                    31,080.86  0.2180%

62 PENSCO Trust Co. Custodian FBO Charles H. Majors, IRA                                                       30,487.24  0.2138%

63 PENSCO Trust Company Custodian FBO Amalia P. Sykes, IRA                                                       27,460.28  0.1926%

64 Stephen A. Koldyke                                                    26,634.68  0.1868%

65 TD Ameritrade Custodian FBO Stalene C. Hall, IRA                                                    25,774.17  0.1808%

66 PENSCO Trust Company Custodian FBO Ashleigh K. Aungst, IRA                                                    24,223.20  0.1699%

67 Peter B. Bernagozzi                                                    24,049.68  0.1687%

68 PENSCO Trust Company Custodian FBO Rafi Hovsepian, IRA                                                       23,864.52  0.1674%

69 PENSCO Trust Co. Custodian FBO Kate R. Ullman, IRA                                                       22,573.50  0.1583%

70 Ronald & Renee Steinberg                                                       18,570.62  0.1302%

71 PENSCO Trust Company Custodian FBO Christine A. Avery, IRA                                                       16,137.00  0.1132%

72 Michael J. Rosenthal                                                       15,881.06  0.1114%

73 PENSCO Trust Co. Custodian FBO Ameet B. Amin, IRA                                                       14,401.03  0.1010%

74 Lewis & Stalene Hall                                                    14,146.79  0.0992%

75 TD Ameritrade FBO Rachel Lee, IRA                                                    14,129.77  0.0991%

76 Michael J. Skinner                                                    13,645.89  0.0957%

77 TD Ameritrade Custodian FBO Jeffrey Lasky, IRA                                                    11,743.54  0.0824%

Page 1 or 2

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 81 of 94
Count Limited Partner As of January 21, 2021 Estimated % of Limited Partnership Interest

78 Andrew T. Franzone, LLC                                                       10,368.46  0.0727%

79 TD Ameritrade Custodian FBO Jeffrey Lasky, IRA                                                      9,327.43  0.0654%

80 Adrien G. Fraise                                                         8,677.92  0.0609%

81 PENSCO Trust Company Custodian FBO Rafi Hovsepian, IRA                                                         8,471.63  0.0594%

82 Dustin Skinner                                                      8,419.09  0.0590%

83 FF Fund Management, LLC                                                      7,555.44  0.0530%

84 FF Reserve Account, LLC                                                      6,784.52  0.0476%

85 Guy Butler                                                      5,398.35  0.0379%

86 Richard Pacheco                                                      5,130.60  0.0360%

87 James M. Dawson                                                      4,815.61  0.0338%

88 Margaux Lisiak                                                      4,407.18  0.0309%

89 Jarrah Venables                                                      4,196.11  0.0294%

90 Dale Schlather                                                      3,338.88  0.0234%

91 PENSCO Trust Company Custodian FBO Kenneth Eng IRA                                                      2,971.04  0.0208%

92 Jeanne M. Franzone, MD                                                         2,884.90  0.0202%

93 Andrew & Margaret Franzone                                                         2,840.85  0.0199%

94 Northern Trust Company FBO Raymond L. Floyd, IRA                                                      2,782.03  0.0195%

95 James & Jennifer Franzone                                                         2,650.09  0.0186%

96 Mike C. Skinner                                                      1,966.03  0.0138%

97 Philip E. Gaucher, Jr.                                                      1,930.16  0.0135%

98 Evans & Son, Ltd.                                                      1,325.70  0.0093%

99 James A Franzone Custodian Until Age 21                                                         1,249.39  0.0088%

100 James A Franzone Custodian Until Age 21                                                         1,249.39  0.0088%

101 James A Franzone Custodian Until Age 21                                                         1,249.26  0.0088%

102 James V.V. Burke                                                         1,234.59  0.0087%

103 Jeffrey H. Lasky                                                             758.17  0.0053%

104 Franklin Weil                                                             609.95  0.0043%

105 Aron & Penina Schoenfeld                                                         303.82  0.0021%

106 Matthew S. Magnuson                                                             255.93  0.0018%

107 FF Reserve Account, LLC ‐‐ Class C                                                         109.69  0.0008%

108 Millennium Trust Company Custodian FBO Michael A. Beck, IRA                                                           96.94  0.0007%

109 TD Ameritrade FBO O'Donnell Lee, IRA                                                           95.48  0.0007%

110 TD Ameritrade Custodian FBO Andrew T. Franzone, IRA                                                         107.67  0.0008%

111 Andrew & Kate Ullman                                                               71.52  0.0005%

112 Andrew T. Franzone, LLC ‐‐ Class C                                                           64.77  0.0005%

113 PENSCO Trust Company Cust FBO Ashleigh K Aungst, ROTH IRA                                                           20.19  0.0001%

$ 1.00 14,258,819.04 

Page 2 or 2

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 82 of 94
 

69 

EXHIBIT 3 

 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 83 of 94
PROJECTED Year 1 Year 2 Year 3 

November 30, 2020 Effective Date January 2022 January 2023 January 2024 

Sources Cash Beginning Cash on Hand 5,200,00 $ 2,560,00 0 $ 280,00 0 $ 300,00 0 $ 

0 $ 

Cash From Sale of Investments (Note 1) $ 1,500,00 500,000 $ 5,000,00 0 $ 

0 $ 

Litigation Recoveries

Investments Return on Investments (Note 2) $ 2,000,00 1,000,000 $ 

0 $ 

 Credit Draw of $1.5m Line of Credit 100,00 $ 1,400,00 0 $ 0

Total Sources (Assets) 5,200,00 $ 3,160,00 0 $ 4,180,00 0 $ 7,300,00 0 $ 

0 $ 

Uses

Cash Plan Distributions

 Admin/Class 1 Distributions (Both Plans) 1,200,00 $ 0

 Class 2 Distributions (Both Plans) $ 1,440,00 1,440,000 $ 1,440,00 0 $ 2,880,00 0 $ 0

 Class 3 Distributions (FF Fund Plan) $ 

 Class 5 Distributions (FF Fund Plan) $ 40,000 40,000 $ 40,000 $ 

$ 

Operating Expenses (Note 3) $ 400,00 400,000 $ 400,00 0 $ 

0 $ 

Investments Investments $ 1,000,00 1,000,000 $ 1,000,00 0 $ 

0 $ 

Credit Paydown of $1.5m Line of Credit $ 

Total Uses 2,640,00 $ 2,880,00 0 $ 2,880,00 0 $ 4,320,00 0 $ 

0 $ 

Balances

Balance on Line of Credit 100,00 $ 1,500,00 0 $ 1,500,00 0 $ 0

Admin/Class 1 (Both Plans) 1,200,00 $ 0

Class 2 (Both Plans) 7,200,00 $ 5,760,00 0 $ 4,320,00 0 $ 2,880,00 0 $ 0

Class 3 (FF Fund Plan) 1,000,00 $ 1,000,00 0 $ 1,000,00 0 $ 1,000,00 0 $ 1,000,00 0 $ 0

Class 5 (FF Fund Plan) 2,000,00 $ 2,000,00 0 $ 2,000,00 0 $ 2,000,00 0 $ 2,000,00 0 $ 

0 $ 

Total Liabilities 11,400,00 $ 8,760,00 0 $ 7,420,00 0 $ 7,380,00 0 $ 4,500,00 0 $ 

0 $ 

Net Liquidity (excludes Return on Investments) $ 280,00 2,560,000 $ 300,00 0 $ 980,00 0 $ 

0 $ 

FF Fund and F5 Consolidated Projections

SEE ACCOMPANYING NOTES

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 84 of 94
Note 1:

In addition to the monetization of investments described below, the Fund receives periodic distributions and/or dividend payments from 

a few of the limited partnership interests held (e.g. North River IV LLC, American Commercial Realty - Cherry Tree and UBW, and 

Metropolitan Partners Fund IV).

Year 1) Assumes the recovery of funds currently in settlement negotiations for the MSP, LLC investment, redemption of funds in the 

Cruiser Capital hedge fund and potentially a combination of monetizing the Fund's interest in North River IV, LLC, or a sale of a portion of 

interest or stock in SCP Opportunity Fund (Ticker symbol: SSPK) and FCA SPV IV - Cura (Ticker symbol: CURLF), assuming the shares are 

available to the Fund to monetize. 

Year 2) Assuming the shares are available to the Fund to monetize, the Debtor intends to sell of a portion of interest or stock in SCP 

Opportunity Fund (Ticker symbol: SSPK) and FCA SPV IV - Cura (Ticker symbol: CURLF). 

Year 3, 4 and 5) Assumes the Debtors may liquidate the interest (or a portion of the interest) held in Vitalis, GE&P, Aldwych, Joss Realty, 

American Commercial Realty, 69th Garage, Clay Cove -Urbana, Halo, RSE Markets - Rally Road at various points in time as the investments 

mature or as shares become publicly traded and the Debtors assume the monetization of the Acadaca investment upon maturity.

Note 2:

The estimated return on investments assumes the interest held in certain investments continues to appreciate. For example, the Debtors 

assume the following investments will appreciate over the five year period or prior to monetizing the investment as discussed above: SCP 

Opportunity Fund (Ticker symbol: SSPK), FCA SPV IV - Cura (Ticker symbol: CURLF), Clay Cove-Urbana, American Commercial Realty - 

Cherry Tree and UBW, Atlantic Crypto Corp, Halo and RSE Markets - Rally Road. 

Note 3:

The $400,000 estimated annual operating expenses includes assumed payments to service providers for accounting, administrator, IT 

systems, banking, legal, auditing and tax services. 

Page 2 of 2

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 85 of 94
5582803-1

Disclosures and General Assumptions for Projections 

The Plans and the Projections are based on the Debtors receiving (i) the Investment 

Guarantee Amount from FF Management, the general partner of FF Fund I, LP, on the Effective 

Date, and (ii) the Exit Financing from the Exit Lender on the Effective Date. Such funding will 

enable the Debtors to emerge from Chapter 11 as Reorganized Debtors. Pursuant to the Plans, 

control over the Reorganized Debtors and their operations will vest in FF Management and the 

CRO will resign as of the Effective Date. As a result, the Projections have been prepared solely 

by FF Management and have not been reviewed or confirmed by the CRO or any of the Debtors’ 

pre-Effective Date Professionals. 

The Plans contain forward-looking Projections that relate to the business and operations of 

the Debtors. These Projections are based on FF Management’s current expectations and 

assumptions and may be affected by subsequent developments, regulatory actions and business 

conditions that are not within the Reorganized Debtors’ control. Accordingly, there can be no 

assurance that future business and operations will not differ materially from those described herein. 

Without limiting the generality of the foregoing, any and all projected financial information 

contained herein is based upon estimates and assumptions about circumstances and events that 

have not yet taken place and are subject to change. Actual results may significantly vary from 

projected results. Interested parties should conduct their own investigation and analysis of the 

proposed business and data described herein. 

FF Management developed a multi-year business plan covering the time from January 1, 

2021 through the Projection Period. The Projection Period is based on forecasted revenues and 

estimated future operating, overhead costs, and capital expenditures. For purposes of these 

Projections, FF Management employed a simplifying assumption that emergence from the Chapter 

11 Cases occurs on or before December 31, 2020. If the Effective Date is significantly delayed, 

then additional expenses, including Professional Fees Claims, may be incurred and operating 

results may be negatively impacted. 

These Projections are reflective of the current state of the markets under the current 

COVID-19 pandemic. These Projections include consideration of the general macroeconomic 

factors in areas the Debtor may operate their investment decisions. 

General Notes: 

The following is a list of key assumptions that were utilized in the Projections (which are 

consolidated). 

 The basis for the Projections is (a) information included in the Disclosure Statement, and 

(b) the Debtors’ books and records. 

 The Effective Date entries take into account Cash on hand and the expected Effective Date 

distributions for Allowed Administrative Claims, Professional Fee Claims and the initial 

Distributions to Holders of Allowed Claims. 

 A five year time horizon to realize all of the Reorganized Debtors’ investments. 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 86 of 94
2 

5582588-1 

5582803-1

 The Reorganized Debtors will fully draw the $1.5 million Exit Financing by the end of 

2022. 

 The Debtors expect to begin selling existing assets/investments in 2021 to help raise cash 

to make Distributions required under the Plans and to fund operations and new and existing 

investments. The Projections do not anticipate the sale of any new investments in the event 

new investments are made. 

 The Reorganized Debtors expect to begin noticeably realizing growth upon investment 

returns by 2023. 

 The Reorganized Debtors expect to make certain new investments, and add to existing 

investments, including through funding capital calls to help manage existing investments 

beginning in 2021. 

 Expenses are expected to approximate $400,000 annually. The expenses are solely for 

third party vendors, including accounting, administrator, IT systems, banking, legal, 

auditing and tax services. None of such funds are allocated to be paid to FF management 

of Mr. Franzone. 

 The Reorganized Debtors expect to realize a return on the Acadaca Investment sometime 

before 2024. 

Specific Notes referenced in the Projections: 

Note 1 – In addition to the monetization of investments described below, the Reorganized Debtors 

expect to receive periodic distributions and/or dividend payments from a few of the limited 

partnership interests held (e.g. North River IV, LLC, American Commercial Realty – Cherry Tree 

and UBW, and Metropolitan Partners Fund IV). 

In Year 1, the Projections assume the recovery of funds currently in settlement negotiations for the 

MSP, LLV investment (including in the event litigation is required), redemption of funds in the 

Cruiser Capital hedge fund and potentially a combination of monetizing some or all of the 

Reorganized Debtors’ interest in North River IV, LLC, or a sale of a portion of the stock in SCP 

Opportunity Fund (Ticker symbol: SSPL) and Florence Capital Partners SPV IV,LLC (Cura – 

ticker symbol: CURLF), assuming such share become unrestricted so as to enable the Reorganized 

Debtors to monetize them. 

In Year 2, the Projections assume the shares of stock in the following will be available to the 

Reorganized Debtors to monetize in part or in whole: SCP Opportunity Fund (Ticker symbol: 

SSPL) and Florence Capital Partners SPV IV,LLC (Cura – ticker symbol: CURLF). 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 87 of 94
3 

5582588-1 

5582803-1

In Years 3, 4 and 5, the Projections assume that the Reorganized Debtors may liquidate some or 

all of the interests held in Vitalis, GE&P, Aldwych, Joss Realty, American Commercial Realty, 

69th Garage, Clay Cove- Urbana, Halo, RSE Markets – Rally Road, all at various points in time as 

the investments mature or as shares become publically traded. The Reorganized Debtors also 

assume that the Acadaca Investment will be realized in respect of the loan. 

Note 2 – The estimated return on investment in the Projections assumes the interest held in certain 

investments continues to appreciate. For example, the Reorganized Debtors assume the following 

investments will appreciate over the five year period of the Projections or prior to monetizing the 

investments as set forth above; SCP Opportunity Fund (Ticker symbol: SSPL) and Florence 

Capital Partners SPV IV,LLC (Cura – ticker symbol: CURLF), Clay Cove- Urbana, American 

Commercial Realty, Cherry Tree, UBW, Atlantic Crypto Corp., Halo and RSE Markets – Rally 

Road. 

Note 3 – The $400,000 in estimated annual operating expenses includes assumed payments to 

service providers for accounting, administrator, IT systems, banking, legal, auditing and tax 

services. None of such funds are allocated to be paid to FF management of Mr. Franzone. 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 88 of 94
 

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EXHIBIT 4 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 89 of 94
Liquidation Analysis FF Fund Debtor

The tables below summarize the recovery estimates for proceeds that would be available fordistribution in FF Fund hypothetical chapter 7 bankruptcy case.

Carrying value Carrying value 

as of as of 

the Petition Date  11/30/2020  

Assets

Cash & Cash Equivalents 300,000 $                  

F5 Investments 46,000,000 $            

Non‐F5 Investments 2,650,000 $              

Total Assets 48,950,000 $            

Liabilities

Priority/Administrative Claims 600,000 $                 General Unsecured Claims (includes GP and Intercompany Claims) 9 $              ,000,000Total Liabilities $              9,600,000 

Potential Recovery

Estimated Liquidation Value 

        Less: Priority /Administrative Claims 

        Less: Shutdown costs/Chapter 7 costs 

Net Estimated Liquidation Proceeds of Unsecured Claims 

Ending Net Asset Value (including cash) 48,950,000 $            9,600,000 $              ‐ $                          ‐ $                          

$       

Recovery % Comparison by ClassClass 1 ‐ Priority/Administrative Claims $                 600,000 Class 2 ‐ General Unsecured Claims (includes Incompany Claims) 7 $              ,000,000 

Class 3 ‐ GP Claim (not subject to the cap) $             2,000,000 Class 4 ‐ Existing GP Equity Interests N/A 

Class 5 ‐ Existing LP Equity Interests N/A 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 90 of 94
Liquidation Analysis F5 Business Debtor

The tables below summarize the recovery estimates for proceeds that would be available fordistribution in F5 Business hypothetical chapter 7 bankruptcy case.

Carrying value Carrying value 

as of as of 

the Petition Date  11/30/2020  

Assets

Cash & Cash Equivalents 800,000 $                  

Investments 46,000,000 $            

Total Assets 46,800,000 $            

Liabilities

Priority/Administrative Claims 600,000 $                 

General Unsecured Claims 4,500,000 $             Total Liablilities $              5,100,000 

Potential Recovery

Estimated Liquidation Value 

        Less: Priority /Administrative Claims 

        Less: Shutdown costs/Chapter 7 costs 

Net Estimated Liquidation Proceeds of Unsecured Claims Ending Net Asset Value (including cash) 46,800,000 $            5,100,000 $              ‐ $                          ‐ $                          

$       

Recovery % Comparison by ClassClass 1 ‐ Priority/Administrative Claims $                 600,000 Class 2 ‐ General Unsecured Claims $              4,500,000 

Class 3 ‐ Existing Equity Interests N/A  

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 91 of 94
5575066-1

General Assumptions for Hypothetical Liquidation Analysis 

Section 1129(a)(7) of the Bankruptcy Code requires that each holder of an impaired 

allowed claim or interest either (a) accept the plan of reorganization or (b) receive or retain, under 

the plan, property of a value, as of the effective date, that is not less than the value such holder 

would receive or retain if the applicable Debtor were liquidated under chapter 7 of the Bankruptcy 

Code on the effective date. This requirement is referred to as the “best interests” test. 

To demonstrate compliance with the “best interests” test, the Debtors estimated a range of 

proceeds that would be generated from a hypothetical chapter 7 liquidation (“Liquidation 

Analysis”), which Liquidation Analysis is attached to the Disclosure Statement as Exhibit 2. The 

Liquidation Analysis was prepared by the Debtors with assistance from their financial and other 

advisors and represents the Debtors’ best estimate under the circumstances of these Chapter 11 

Cases of the proceeds that would be realized if the Debtors Chapter 11 Cases were converted to 

cases under Chapter 7 and thereafter liquidated in accordance with chapter 7 of the Bankruptcy 

Code. The Liquidation Analysis also assumes that the chapter 7 trustee would seek to liquidate 

the assets promptly to the extent such assets are subject to liquidation. During the Chapter 7 

proceedings, the Debtors anticipate that the Chapter 7 trustee would likely need to continue using 

cash and proceeds from the liquidation of the assets in order to effect winding down the affairs of 

the Estates. 

The Liquidation Analysis is premised upon a number of estimates and assumptions 

that, although developed and considered reasonable by the Debtors under the circumstances 

of these Chapter 11 Cases, are inherently subject to significant business, economic, and 

competitive uncertainties beyond the control of the Debtors and, as discussed below, may be 

subject to change. Thus, there can be no assurance that the values reflected in the 

Liquidation Analysis would be realized if the Debtors were, in fact, to undergo liquidation. 

In addition, any liquidation ultimately undertaken would take place under future 

circumstances that cannot be predicted with certainty. Accordingly, although the 

Liquidation Analysis that follows is necessarily presented with numerical specificity, if the 

Debtors’ estates were in fact liquidated as described herein, the actual proceeds from such 

liquidation could vary significantly from the amounts set forth in the Liquidation Analysis. 

The actual liquidation proceeds could be materially higher or lower than the amounts set 

forth in the Liquidation Analysis, and no representation or warranty can be or is being made 

with respect to the actual proceeds that would be generated from the liquidation of the 

Debtors’ assets under chapter 7 of the Bankruptcy Code. The Liquidation Analysis has been 

prepared solely for the purposes of estimating the proceeds that would be available if the 

Debtors liquidated under chapter 7 of the Bankruptcy Code for purposes of the “best 

interests” test and does not represent values that may be appropriate for any other purpose, 

including the values applicable in the context of the Plans. Nothing contained in the 

Liquidation Analysis is intended as or constitutes a concession or admission for any purpose 

other than the presentation of a hypothetical liquidation analysis, as required by the “best 

interests” test. 

As presented in the illustrative Liquidation Analysis, the Debtors believe that a liquidation 

of the Debtors’ assets under Chapter 7 of the Bankruptcy Code would result in reductions in the 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 92 of 94
2 

5575066-1

value to be realized by constituents as compared to the distributions that are contemplated by FF 

Management under the Plans. Based on the Projections prepared by FF Management, the Plans 

provide a substantially greater return to constituents than would any liquidation under Chapter 7 

of the Bankruptcy Code. 

General Notes: 

The following is a list of key assumptions that were utilized in the Liquidation Analysis: 

 The basis for the Liquidation Analysis is (a) information included in the Disclosure 

Statement, and (b) the Debtors’ books and records. 

 The Liquidation Analysis assumes that the liquidation of the Debtors would commence on 

January 1, 2021 under the direction of a court-appointed chapter 7 trustee. 

 The Liquidation Analysis assumes that all of the Debtors’ assets are liquidated. 

 The “carrying value” of the investments presented in the Liquidation Analysis are based 

on the book value of such investments as reflected on the pre-petition books and records 

of the Debtors under the direction and control of FF Management. 

 Cash & Cash Equivalents are forecasted as of December 31, 2020. 

 The estimated liquidation value of the investments is based on an estimated 7.5% recovery, 

and may or may not reflect the fair value of such investments. Such estimate is solely an 

estimate because the investments are of a type that do not allow the Debtors to make any 

meaningful prediction as to such recovery from the liquidation of such investments. 

 The Liquidation Analysis assumes that proceeds realized from a chapter 7 liquidation 

would be reduced by administrative costs incurred during the wind down of operations, the 

stabilization and protection of assets, the disposition of assets and the reconciliation of 

claims. These costs include professional fees, trustee fees, corporate wind down costs and 

post-conversion date trade claims. 

 The Liquidation Analysis assumes that the net proceeds from the liquidation of the assets 

under Chapter 7 would be distributed in accordance with the Bankruptcy Code and that no 

distributions would be made to junior creditors or equity holders until all senior creditors 

are paid in full. 

 Fees to the chapter 7 trustee are estimated to be 3.0% of the total gross liquidation proceeds. 

 The fees and costs associated with the chapter 7 trustee’s legal counsel and professional 

advisors are estimated by the Debtors to be $400,000. 

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 The F5 Business Debtor’s assets are comprised of cash and illiquid investments. The 

Liquidation Analysis takes into account approximately 46 investments, many of which are 

either illiquid, consist of non-tradeable privately held shares in early stage or start-up 

companies, are minority interests in real estate partnerships, or are unsecured promissory 

notes with maturities substantially longer than six months. 

 The Liquidation Analysis also assumes that several of the investments consist of interests 

in various companies which require approval from either the manager or members of such 

companies in order for the Debtors to be able to sell, assign or transfer F5 Business’ interest 

therein. The Debtors do not know the impact of such approvals on the liquidation value of 

such investments. 

 Because of the nature of the investments, the CRO is unable to project the timing of the 

liquidation of such investments and for purposes of the hypothetical liquidation of the F5 

Business Debtor’s investments utilized a period of two to five years (the “Liquidation 

Period”). The recoveries in the hypothetical liquidation analysis assume a payout will not 

be complete until the end of the Liquidation Period. 

 While the Liquidation Analysis assumes full liquidation over the Liquidation Period 

commencing January 1, 2021, it is probable that the disposition and recovery from certain 

assets could take several years. The potential impact of litigation and actions by other 

parties could increase the amount of time required to realize recoveries assumed in this 

analysis. Such events could also add costs to the liquidation in the form of higher legal 

and professional fees to resolve these potential events. 

 The General Unsecured Claim amounts used in the Liquidation Analysis are based on the 

Debtors’ books and records and the proofs of claims filed in the Chapter 11 Cases by the 

applicable bar dates. The actual amount of Allowed General Unsecured Claims could vary 

materially from these estimates. No order has been entered by the Bankruptcy Court 

estimating or otherwise fixing the amount of Allowed General Unsecured Claims.

 Where the Plans provide for the voluntary subordination of FF Management’s claim, the 

Liquidation Analysis treats the claim as a general unsecured claim. 

 Based on the above assumptions and notes, the Liquidation Analysis evidences that under 

a chapter 7 liquidation there would be a recovery of 77% to the Holders of Allowed General 

Unsecured Claims against the F5 Business Debtor. 

 The Liquidation Analysis further estimates that the F5 Business Debtor will not be able to 

distribute any funds to the FF Fund Debtor on account of its equity interest in the F5 

Business Debtor. 

Case 19-22744-LMI Doc 248 Filed 02/01/21 Page 94 of 94