UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF FLORIDA 

MIAMI DIVISION 

www.flsb.uscourts.gov

In re: Case No. 20-20259-RAM 

 (Jointly Administered) 

IT’SUGAR FL I LLC, et al., 

 Chapter 11 

 Debtors.1 

_______________________________/

CONFIRMATION AFFIDAVIT OF TROY TAYLOR 

STATE OF FLORIDA ) 

 ) s.s.: 

COUNTY OF MIAMI-DADE ) 

I, Troy Taylor, being duly sworn, hereby states: 

1. I am over 21 years of age and fully competent to make this Affidavit. Unless 

otherwise stated, I have personal knowledge of the facts set forth in this affidavit. 

2. I am the president of Algon Capital, LLC d/b/a Algon Group (“Algon”), a 

restructuring and investment banking firm with completed assignments throughout the United 

States and internationally. 

3. On November 19, 2020, the Court entered its Final Order Authorizing (I) The 

Retention of Algon Capital, LLC d/b/a/ Algon Group to Provide the Debtors a Chief Restructuring 

Officer and (II) The Designation of Troy Taylor as Chief Restructuring Officer for the Chapter 11 

Debtors-in-Possession Nunc Pro Tunc to the Petition Date (“Retention Order”) [ECF No. 166]. 

1

 The Debtors in these cases are as follows: (i) IT’SUGAR FL I LLC (Case No. 20-20259); (ii) 

IT’SUGAR LLC (Case No. 20-20261); (iii) IT’SUGAR Atlantic City LLC (Case No. 20263); and 

(iv) IT’SUGAR FLGC LLC (Case No. 20-20264) (collectively, “Chapter 11 Cases”). 

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4. Pursuant to the Retention Order, the Court authorized IT’SUGAR FL I LLC, 

IT’SUGAR, LLC, IT’SUGAR ATLANTIC CITY LLC and IT’SUGAR FLGC LLC (“Debtors” 

or “Plan Proponents”) to retain Algon and designate me as Chief Restructuring Officer of the 

Debtors in these Chapter 11 Cases. 

5. In my role as Chief Restructuring Officer (“CRO”), I, among other duties, (a) 

performed a financial review of the Debtors, (b) negotiated with the Debtors’ senior lender, (c) 

participated in negotiations with landlords and other key constituents in connection with the 

modification of the Debtors’ prepetition leases of non-residential real property, (d) participated in 

negotiations with the Creditors’ Committee, (e) served as the Debtors’ representative for all 

purposes in connection with these Chapter 11 Cases, (f) assisted in the preparation of the monthly 

operating reports and other budget and financial related information and (g) assisted the Debtors 

in developing the Debtors’ plan of reorganization. 

6. I submit this Affidavit in support of the confirmation of the Plan of Reorganization 

for IT’SUGAR FL I LLC, IT’SUGAR LLC, IT’SUGAR ATLANTIC CITY LLC and IT’SUGAR 

FLGC LLC, dated April 20, 2021 (as may be amended or modified, including without limitation 

all exhibits thereto, collectively, “Plan”) [ECF No. 301].e I am familiar with the terms of the Plan 

and the Disclosure Statement Pursuant to 11 U.S.C. § 1125 for IT’SUGAR FL I LLC, IT’SUGAR 

LLC, IT’SUGAR ATLANTIC CITY LLC, and IT’SUGAR FLGC LLC (“Disclosure Statement”) 

[ECF No. 302]. 

7. Unless otherwise indicated, all facts and opinions set forth in this Affidavit are 

based upon: (i) my personal knowledge; (ii) my experience, knowledge and information 

concerning the operations of the Debtors, the Debtors’ financial condition and the Debtors’ 

industry as a whole; (iii) my review of relevant business records; (iv) information provided to me 

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by agents of the Debtors or others working under my direction; (v) a review of pleadings and 

orders on the Court’s docket for the Debtors’ chapter 11 bankruptcy cases; and (vi) as to matters 

involving United States bankruptcy law or rules or other applicable laws, my reliance on the advice 

of counsel of the Debtors. If I were called upon as a witness, I could and would testify competently 

to the facts and opinions set forth herein. 

General Background / Plan of Reorganization 

8. On September 22, 2020 (“Petition Date”) each of the Debtors commenced a case 

under chapter 11 of the Bankruptcy Code (“Chapter 11 Cases”). By prior order of the Court, the 

Chapter 11 Cases have been consolidated for procedural purposes only and are being jointly 

administered pursuant to Bankruptcy Rule 1015. The Debtors have operated their business and 

managed their assets as debtors in possession pursuant to §§ 1107(a) and 1108 of the Bankruptcy 

Code. 

9. On October 20, 2020, the Office of the United States Trustee (“U.S. Trustee”) 

appointed the Creditors’ Committee which is comprised of the following five members: (i) Simon 

Property Group, Inc..; (ii) Jack’s Candy Company; (iii) Brookfield Properties Retail, Inc.; (iv) 

KRG Enterprises, Inc.; and (v) Nassau Candy Distributors, Inc. [ECF No. 110]. 

10. On May 5, 2021, the Court entered the Disclosure Statement Order,2 which, among 

other things, conditionally approved the Disclosure Statement, finding that it contained “adequate 

2 Order (I) Conditionally Approving the Disclosure Statement; (II) Approving the Ballot; 

(III) Setting a Date for a Consolidated Hearing on (A) Final Approval of the Disclosure Statement 

and (B) Confirmation of the Plan of Reorganization; (IV) Establishing and Consolidating the 

Deadlines to File (A) Objections to the Disclosure Statement and (B) Objections to Confirmation 

of the Plan of Reorganization; (V) Approving the Procedures for Solicitation and Tabulation of 

Votes on the Plan; (VI) Setting Various Deadlines; and (VII) Describing the Plan Proponents’ 

Obligations. (“Disclosure Statement Order”) [ECF No. 317] 

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information” within the meaning of § 1125 of the Bankruptcy Code, and established procedures 

for the Plan Proponents’ solicitation and tabulation of votes on the Plan. The (a) Disclosure 

Statement Order, (b) Disclosure Statement, (c) Plan, (d) Ballot for voting on the Plan, and (e) 

Solicitation Letter (collectively, the “Solicitation Package”), were served in compliance with the 

Bankruptcy Code, the Bankruptcy Rules, and the Disclosure Statement Order (“Solicitation”). I 

am familiar with the contents of each document comprising the Solicitation Package. 

11. As of the time of execution of this Affidavit, there has only been one objection filed 

to confirmation of the Plan, and I expect that objection, and any other objection filed by any party 

will be resolved prior to Confirmation, or overruled by the Court at the Confirmation Hearing. 

The Plan Satisfies Section 1129 of the Code 

12. The Plan Proponents’ Compliance with the Bankruptcy Code (11 U.S.C. § 

1129(a)(1)). On the basis of my understanding and discussions with Debtors’ legal advisors, I 

believe the Plan complies with section 1129(a)(1) of the Bankruptcy Code, as follows: 

13. Proper Classification (11 U.S.C. §§ 1122 and 1123(a)(1)). Article III of the Plan 

designates the following five classes of Claims and one class of Equity Interests: Class 1 (Other 

Priority Claims), Class 2 (Secured Claim of SHL Holdings, Inc.), Class 3 (Secured 

Construction/Mechanics Lien Claims), Class 4 (General Unsecured Claims), Class 5 

(Subordinated Claims) and Class 6 (Equity Interests). Each of the Claims or Equity Interests, as 

the case may be, in each particular Class is substantially similar to the other Claims or Equity 

Interests within such Class. Valid business, legal and factual reasons exist for separately 

classifying the various Claims and Equity Interests pursuant to the Plan, and such Classes do not 

unfairly discriminate between holders of Claims and Equity Interests. No party has objected to the 

classification of Claims and Equity Interests as reflected in the Plan. Thus, I have been advised 

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that such classification complies with section 1122 and 1123(a)(1) of the Bankruptcy Code because 

each Class contains only Claims or Equity Interests that are substantially similar to each other. 

14. Specified Unimpaired Classes (11 U.S.C. § 1123(a)(2)). Article III of the Plan 

specifies that Class 1 (Other Priority Claims) are unimpaired under the Plan, thereby complying 

with § 1123(a)(2) of the Bankruptcy Code. Accordingly, the Plan satisfies § 1123(a)(2) of the 

Bankruptcy Code. 

15. Specified Treatment of Impaired Classes (11 U.S.C. § 1123(a)(3)). Article III of 

the Plan designates Class 2 (Secured Claim of SHL Holdings, Inc.), Class 3 (Secured 

Construction/Mechanics Lien Claims), Class 4 (General Unsecured Claims), Class 5 

(Subordinated Claims) and Class 6 (Equity Interests) as impaired, and Article III of the Plan 

specifies the treatment of Claims and Equity Interests in such Classes, thereby complying with § 

1123(a)(3) of the Bankruptcy Code. Accordingly, the Plan satisfies § 1123(a)(3) of the Bankruptcy 

Code. 

16. No Discrimination (11 U.S.C. § 1123(a)(4)). The Plan provides for the same 

treatment for each Claim or Equity Interest in each respective Class unless the holder of a particular 

Claim or Equity Interest has agreed to a less favorable treatment on account of such Claim or 

Equity Interest, thereby satisfying § 1123(a)(4) of the Bankruptcy Code. Accordingly, the Plan 

satisfies § 1123(a)(4) of the Bankruptcy Code. 

17. Implementation of the Plan (11 U.S.C. § 1123(a)(5)). The Plan provides adequate 

and proper means for the implementation of the Plan as required by §1123(a)(5) of the Bankruptcy 

Code. Such means include, but are not limited to: (i) procedural substantive consolidation for 

distribution purposes; (ii) funding of the Plan through the Available Cash on the Effective Date; 

(iii) revesting of Equity Interests or issuance of new equity in the Reorganized Debtors and 

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continued corporate existence of the Reorganized Debtors after the Effective Date; (iv) provisions 

regarding Distributions under the Plan; (v) procedures for objecting to Claims; and (vi) the 

treatment of unexpired, prepetition executory contracts and leases. Accordingly, the Plan satisfies 

§ 1123(a)(5) of the Bankruptcy Code. 

18. Non-Voting Equity Securities/Allocation of Voting Power (11 U.S.C. 

§ 1123(a)(6)). The Plan provides for, (1) in Article 3.10.2, among other things, that on the 

Effective Date 100% of the Equity Interests shall revest in the respective Reorganized Debtor. 

Accordingly, the Plan satisfies § 1123(a)(6) of the Bankruptcy Code. 

19. Designation of Directors and Officers (11 U.S.C. § 1123(a)(7)). The Plan provides 

in Article 12.28 that, as of the Effective Date, the directors, officers, partners, members and 

managers, as the case may be, of each of the Debtors immediately prior to the Effective Date shall 

be deemed to be the directors, officers, partners, members and managers, as the case may be, of 

each of the Reorganized Debtors without any further action by any party. Accordingly, the 

selection of directors, officers, partners, members, and managers are consistent with the interests 

of creditors, equity security holders, and public policy. As such, the Plan satisfies section 

1123(a)(7) of the Bankruptcy Code. 

20. Permissive Provisions in the Plan (11 U.S.C. § 1123(b)). The Plan also contains a 

number of provisions that I understand to be permissive, rather than mandatory, under the 

requirements of the Bankruptcy Code. 

21. Impairment/Unimpairment of Classes of Claims and Equity Interests (11 U.S.C. § 

1123(b)(1)). As contemplated by section 1123(b)(1) of the Bankruptcy Code, Classes 2, 3, 4, 5 

and 6 are impaired by the Plan, and Class 1 is unimpaired. Accordingly, the Plan satisfies section 

1123(b)(1) of the Bankruptcy Code. 

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22. Assumption and Rejection of Executory Contracts (11 U.S.C. § 1123(b)(2)). In 

accordance with section 1123(b)(2) of the Bankruptcy Code, Article 4.3 of the Plan provides that 

all executory contracts and unexpired leases listed on the Schedule of Assumed Executory 

Contracts and Unexpired Leases, as amended by the First Amended Schedule of Assumed 

Executory Contracts and Unexpired Leases [ECF No. 423] shall be deemed assumed by the 

Reorganized Debtors as of the Confirmation Date. Article 4.1 of the Plan further provides that all 

other executory contracts and unexpired leases shall be deemed rejected as of the Confirmation 

Date. Article 4.3.1 of the Plan provides for the assumption, as of the Confirmation Date, of 

agreements that are executory and unexpired leases. Accordingly, the Plan satisfies the 

requirements of section 1123(b)(2) of the Bankruptcy Code. 

23. Debtors’ Releases (11 U.S.C.§ 1123(b)(3)(A). The parties are in discussions with 

the United States Trustee’s office regarding potential modifications to the following provisions in 

the Plan, which will be brought before the Court prior to or at the Confirmation Hearing. As set 

forth in Article 9.8.1 of the Plan, the Debtors’ Release provides that: as of the Effective Date, for 

the good and valuable consideration provided by each of the Released Parties, each of the 

Debtors, the Reorganized Debtors, their Estates, and each of their current and former 

Affiliates and Representatives shall be deemed to have provided a full, complete, 

unconditional and irrevocable release to the Released Parties (and each such Released Party 

so released shall be deemed released by the Debtors and their current and former Affiliates 

and Representatives, the Estates and the Creditors’ Committee and its members but solely 

in their capacity as members of the Creditors’ Committee and not in their individual 

capacities), from any and all Causes of Action and any other debts, obligations, rights, suits, 

damages, actions, remedies and liabilities whatsoever, whether accrued or unaccrued, 

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whether known or unknown, foreseen or unforeseen, existing before the Effective Date, as of 

the Effective Date or arising thereafter, in law, at equity, whether for tort, contract, 

violations of statutes (including but not limited to the federal or state securities laws), or 

otherwise, based in whole or in part upon any act or omission, transaction, or other 

occurrence or circumstances existing or taking place prior to or on the Effective Date arising 

from or related in any way to the Debtors, the Debtors’ in- or out-of court restructuring 

efforts, any intercompany transactions, transactions pursuant and/or related to the 

Prepetition Line of Credit, the Prepetition Equipment Loan, the DIP Loan (and any 

payments or transfers in connection therewith), any preference or avoidance claims 

pursuant to §§ 544, 547, 548, or 549 of the Bankruptcy Code, the formulation, preparation, 

dissemination, negotiation, or consummation of the Exit Facility, the settlements 

contemplated by the Plan, or any contract, instrument, release, or other agreement or 

document (including providing any legal opinion requested by any Entity regarding any 

transaction, contract, instrument, document, or other agreement contemplated by the Plan 

or the reliance by any Released Party on the Plan or the Confirmation Order in lieu of such 

legal opinion) created or entered into in connection with the Disclosure Statement, the Plan, 

the Exit Facility, the Chapter 11 Cases, the filing of the Chapter 11 Cases, the pursuit of 

Confirmation, the pursuit of Consummation, the administration and implementation of the 

Plan, including the issuance or distribution of Securities pursuant to the Plan (if any), or the 

distribution of property under the Plan, or any other related agreement, or upon any other 

act or omission, transaction, agreement, event, or other occurrence taking place on or before 

the Effective Date related or relating to the foregoing, including, without limitation, those 

that any of the Debtors would have been legally entitled to assert or that any holder of a 

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Claim or Equity Interest or other Entity would have been legally entitled to assert for or on 

behalf of any of the Debtors or the Estates, including those in any way related to the Chapter 

11 Cases or the Plan; provided, however, that the foregoing release shall not prohibit the 

Debtors, the Reorganized Debtors or the Estates from asserting any and all defenses and 

counterclaims in respect of any Disputed Claim asserted by any Released Parties; provided 

further that nothing contained in the foregoing provision or elsewhere in the Plan or 

Confirmation Order shall be construed as a release of any claims against any Released Party 

resulting from an act or omission determined by a final order of a court of competent 

jurisdiction to have constituted willful misconduct or gross negligence, provided that each 

such Released Party shall be entitled to rely upon the advice of counsel concerning its duties 

pursuant to, or in connection with, its actions or inactions. Based upon my participation in 

these bankruptcy cases, I believe that the Debtors’ Release is an integral part of the Plan and was 

required in order to induce the Debtors and various parties to support the Plan. Furthermore, based 

upon my knowledge, I do not believe that the Debtors are forfeiting any valuable claims or causes 

of action against the Released Parties. Moreover, the Debtors’ Release is subject to significant 

carve-outs. 

24. Preservation of Claims (11 U.S.C. § 1123(b)(3)(B). It is in the best interests of the 

Debtors and their creditors and holders of Equity Interests that the Debtors preserve the Causes of 

Action as set forth in Article 12.20 of the Plan. 

25. Sale of All or Substantially All Assets (11 U.S.C. § 1123(b)(4)). Section 1123(b)(4) 

applies to cases where the debtor’s plan provides for the sale of all or substantially all of the 

debtor’s assets. The Plan does not provide for such sale, and, therefore, this is inapplicable to the 

Plan. 

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26. Modification of Creditor Rights (11 U.S.C. § 1123(b)(5)). As set forth in Article III 

of the Plan, the Plan modifies the rights of holders of Claims and Equity Interests in Classes 2, 3, 

4 and 5. The Plan also leaves unaffected the rights of holders of Claims in Class 1. Therefore, I 

believe that the Plan complies with section 1123(b)(5). 

27. Retention of Jurisdiction, Preservation of Causes of Action, Exculpation (11 U.S.C. 

§ 1123 (b)(6)). 

a. Retention of Jurisdiction Article 10.1 of the Plan provides that, 

among other things, the Court will retain jurisdiction as to, among other things 23 

enumerated matters, including, (i) matters involving the Plan, the claims allowance 

and distribution process, (ii) to hear any issues involving disputes over Claims, and 

(iii) enforce the provisions of the Plan. I understand from the Debtors’ counsel that 

the matters for which the Court retains jurisdiction are appropriate because the 

Court would have otherwise had jurisdiction over all of these matters during the 

pendency of the Debtors’ bankruptcy cases, and that a bankruptcy court may retain 

jurisdiction over the debtor or the property of the estate following confirmation. 

Therefore, I believe that the continuing jurisdiction of the Court for matters 

described in the Plan is consistent with applicable law and therefore permissible 

under section 1123(b)(6) of the Bankruptcy Code. 

b. Preservation of Causes of Action (11 U.S.C. § 1123(b)(3)(B)). 

Article 12.29 of the Plan appropriately provides for the preservation by the Debtors 

and/or Reorganized Debtors of Causes of Action. I believe that the provisions 

regarding Causes of Action in the Plan are appropriate and are in the best interests 

of Debtors, their Estates, Creditors, and other parties in interest. 

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c. Exculpation. The parties are in discussions with the United States Trustee’s 

office regarding potential modifications to the following provisions in the 

Plan, which will be brought before the Court prior to or at the Confirmation 

Hearing. I understand that the exculpation provision in Article 11.2 of the 

Plan limits liability arising out of postpetition acts and omissions of the Plan 

Proponents, SHL, BBX Capital, Inc., the Creditors’ Committee and their 

officers, directors, members, managers, managing members and 

Professionals (acting in such capacity). The Plan’s exculpation from 

liability provision shall not be applicable to any liability found by a court of 

competent jurisdiction to have resulted from fraud or the willful misconduct 

or gross negligence of any such party. With respect to the Professionals, the 

foregoing exculpation from liability provision shall also include claims of 

professional negligence arising from the services provided by such 

Professionals during the Bankruptcy Case. 

28. Bankruptcy Rule 3016(a). The Plan is dated and identifies the entities submitting 

it, thereby satisfying Bankruptcy Rule 3016(a). 

Compliance with Section 1129 of the Bankruptcy Code 

29. Compliance with the Bankruptcy Code (11 U.S.C. § 1129(a)(2)). On the basis of 

my understanding and discussions that I have had with the Debtors’ legal advisors, I believe that 

the Plan Proponents have complied with the applicable provisions of the Bankruptcy Code, 

including sections 1125 and 1126 of the Bankruptcy Code, as well as the Disclosure Statement 

Order, regarding disclosure and Plan solicitation thereby satisfying Bankruptcy Code § 1129(a)(2). 

The Plan Proponents have complied with all provisions of the Bankruptcy Rules, the Local 

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Bankruptcy Rules and the Disclosure Statement Order in transmitting the Plan, the Disclosure 

Statement, the Ballots and related documents and notices, and in soliciting and tabulating votes on 

the Plan. 

30. Additionally, it is my understanding, as is shown in the Certificate of Proponents 

of Plan on Acceptance of Plan, Report on Amount to be Deposited, Certificate of Amount 

Deposited and Payment of Fees, filled concurrently with this Affidavit (the “Ballot Report”), that 

the Plan Proponents have properly solicited and tabulated votes with respect to the Plan. 

Accordingly, I believe that the Plan Proponents have complied with the requirements of section 

1129(a)(2) of the Bankruptcy Code. 

31. Plan Proposed in Good Faith (11 U.S.C. § 1129(a)(3)). I believe that the Plan 

Proponents have proposed the Plan (including all documents necessary to effectuate the Plan) in 

good faith and not by any means forbidden by law, thereby complying with section 1129(a)(3) of 

the Bankruptcy Code. The Plan Proponents’ good faith is evident from the record of these Chapter 

11 Cases, including the record of the hearing to conditionally approve the Disclosure Statement, 

the entry by this Court of the Disclosure Statement Order, and other proceedings held in these 

Chapter 11 Cases. The Plan is based upon extensive, arms-length and good faith negotiations 

between and among the Debtors, the Creditors’ Committee, and other Creditors and parties-ininterest, and represent the culmination of months of intensive negotiations and discussions among 

all parties in interest. Moreover, the Plan was proposed with the legitimate purpose of maximizing 

the value of the Debtors’ estates and effectuating a successful reorganization of the Debtors. The 

Plan accomplishes equitable distribution of the Debtors’ assets by providing the means through 

which the Debtors may effectuate distributions to the Creditors. The impaired classes of Claims 

entitled to vote to accept or reject the Plan (Class 2, 3 and 4) have voted overwhelmingly to accept 

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the Plan and practically all of the Debtors’ significant creditors support the Plan. Further, the 

indemnification, exculpation, release, and injunction provisions of the Plan have been negotiated 

in good faith and at arms-length with, among other persons, representatives of the Debtors, parties 

in interest, and their respective advisors, are consistent with §§ 105, 1122, 1123(b)(3)(A), 

1123(b)(6), 1129, and 1142 of the Bankruptcy Code, and are each necessary to the Debtors’ 

successful reorganization in chapter 11. Accordingly, I believe that, inasmuch as the Plan promotes 

the objectives and purposes of the Bankruptcy Code, while also providing for a recovery to 

creditors, the Plan and the related documents have complied with the requirement of section 

1129(a)(3) of the Bankruptcy Code that the Plan be proposed in good faith. 

32. Payment for Services or Cost and Expenses (11 U.S.C. § 1129(a)(4)). Pursuant to 

§ 331 of the Bankruptcy Code, all payments made or to be made by the Debtors for services or for 

costs and expenses in connection with these Chapter 11 Cases, or in connection with the Plan and 

incident to the Chapter 11 Cases, have been approved by, or are subject to the approval of, the 

Court as reasonable, thereby satisfying § 1129(a)(4) of the Bankruptcy Code. Each Professional 

that will receive such payments has made substantial contributions to ensure success of the Plan. 

Therefore, I believe that the payments to any Professional are reasonable, represent a reasonable 

exercise of sound business judgment, and are in the best interests of Debtors, their Estates, 

Creditors, and parties in interest. 

33. Directors, Officers, and Insiders (11 U.S.C. § 1129(a)(5)). The Plan Proponents 

have complied with § 1129(a)(5) of the Bankruptcy Code. As set forth in Article 12.28 of the Plan 

as of the Effective Date, the directors, officers, partners, members and managers, as the case may 

be, of each of the Debtors immediately prior to the Effective Date shall be deemed to be the 

directors, officers, partners, members and managers, as the case may be, of each of the Reorganized 

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Debtors without any further action by any party. Based upon the foregoing, I believe that the 

provisions of the Plan are consistent with the interests of Creditors, the holders of Equity Interests, 

and public policy, and therefore, the Plan meets the requirements of section 1129(a)(5) of the 

Bankruptcy Code. 

34. No Rate Changes (11 U.S.C. § 1129(a)(6)). I understand that the Debtors are not 

changing any rates that require approval by a governmental agency. 

35. Best Interests of Creditors (11 U.S.C. § 1129(a)(7)). On the basis of my 

understanding, as well as discussions that I have had with the Debtors’ legal advisors, I believe 

that the Plan complies with section 1129(a)(7) of the Bankruptcy Code. In order to satisfy the “best 

interests” test under this section, each holder within an Impaired Class must either (a) vote to 

accept the Plan or (b) receive no less than such holder would have received in a liquidation. I took 

part in the preparation of, and have reviewed, the Liquidation Analysis (attached as Exhibit “2” to 

the Disclosure Statement). I believe that the assumptions underlying the Liquidation Analysis are 

reasonable and that the Liquidation Analysis provides a reasonable estimate of the liquidation 

value of the Debtors’ assets and the distribution that holders of Claims and Equity Interests would 

receive in a chapter 7 liquidation of the Debtors. Based upon that analysis, I believe that each 

holder of an impaired Claim, and each holder of an Equity Interest, would receive a distribution or 

retain property under the Plan, on account of its respective Claim or Equity Interest, of a value as 

of the Effective Date of the Plan that is not less than the amount that such holder of a Claim or 

Equity Interest would receive or retain were the Debtors liquidated under chapter 7 of the 

Bankruptcy Code. Accordingly, I believe that (a) the Plan is in the best interests of the holders of 

Claims and Equity Interests and reorganization of the Debtors under the Plan rather than a 

liquidation in chapter 7 will allow the overall realization of greater value for Creditors. 

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36. Acceptance by Certain Classes (11 U.S.C. § 1129(a)(8)). Class 1 (Other Priority 

Claims) is unimpaired under the Plan and is, therefore, conclusively deemed to have accepted the 

Plan pursuant to § 1126(f) of the Bankruptcy Code. Class 2 (Secured Claim of SHL Holdings, 

Inc.), Class 3 (Secured Construction/Mechanics Lien Claims), and Class 4 (General Unsecured 

Claims), the impaired Classes of Claims eligible to vote, have affirmatively voted almost 

universally to accept the Plan. As such, § 1129(a)(8) is satisfied with respect to these Classes of 

Claims. Class 5 (Subordinated Claims) and Class 6 (Equity Interests) are deemed to reject the 

Plan pursuant to § 1126(g) of the Bankruptcy Code, because the holders of Subordinated Claims 

in Class 5 and Equity Interests in Class 6 will not receive or retain any Distributions under the 

Plan; provided, however, that on the Effective Date the Equity Interests shall revest in the current 

holders of the Equity Interests in their current proportionate shares. 

37. The Ballot Report reflects the compilation of the votes to accept or reject the Plan 

by Classes of Claims entitled to vote on the Plan. As has been demonstrated in the Ballot Report, 

Creditors in Classes 2, 3 and 4 have voted overwhelmingly to accept the Plan in accordance with 

section 1126(c) of the Bankruptcy Code. 

38. On the basis of my understanding, as well as discussions that I have had with the 

Debtors’ legal advisors, I therefore believe that the Plan complies with section 1129(a)(8) of the 

Bankruptcy Code. 

39. Treatment of Administrative Expense Claims and Priority Tax Claims (11 U.S.C. 

§ 1129(a)(9)). On the basis of my understanding, as well as discussions that I have had with the 

Debtors’ legal advisors, I believe that the treatment of Administrative Claims and Priority Tax 

Claims pursuant to Article II of the Plan satisfies the requirements of § 1129(a)(9)(A), (B), (C) 

and (D) of the Bankruptcy Code because holders of Allowed Administrative Claims, fees to the 

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U.S. Trustee, and Allowed Priority Tax Claims, to the extent they are Allowed Claims, will either 

be paid in full on the Effective Date or paid in a manner as otherwise agreed upon by the 

Reorganized Debtors and the holders of such Claims or by Order of the Court. 

40. Acceptance by Impaired Classes (11 U.S.C. § 1129(a)(10)). As has been set forth 

in the Ballot Report, Class 3 (Secured Construction/Mechanics Lien Claims), and Class 4 (General 

Unsecured Claims), voted to accept the Plan by the requisite majorities, determined without 

including any acceptance of the Plan by any insider, thereby satisfying the requirements of § 

1129(a)(10) of the Bankruptcy Code. Specifically, as set forth in the Ballot Report, approximately 

100% (in dollar amount of claims) and 100% (in number of ballots) of the Creditors casting Class 

3 Ballots in Class 3 voted to accept the Plan, and approximately 99.10% (in dollar amount of 

claims) and 98.92% (in number of ballots) of the Creditors casting Class 4 Ballots in Class 4 voted 

to accept the Plan. Therefore, the requirements of section 1129(a)(10) of the Bankruptcy Code 

have been satisfied. 

41. Feasibility (11 U.S.C. § 1129 (a)(11)). On the basis of my understanding, as well 

as discussions I have had with the Debtors’ legal advisors, I am aware that section 1129(a)(11) of 

the Bankruptcy Code permits a plan to be confirmed if it is not likely to be followed by a further 

financial liquidation or reorganization, unless such liquidation or reorganization is contemplated 

by the plan. I believe that the Plan satisfies the requirements of section 1129(a)(11). I have 

reviewed the monthly operating reports filed by the Debtors and provided certain information that 

was incorporated into the Ballot Report. I believe the Debtors will have sufficient cash on hand, 

to pay the amounts required to be paid on the Effective Date, including the fees due to the U.S. 

Trustee as they become due and make the required disbursements pursuant to Article III of the 

Plan. 

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42. Based upon the foregoing, I believe that the Plan Proponents have established that 

confirmation of the Plan is not likely to be followed by the need for further reorganization or 

liquidation of the Debtors, and therefore, the Plan meets the standards set forth in section 

1129(a)(11) of the Bankruptcy Code. 

43. Payment of Statutory Fees (11 U.S.C. § 1129(a)(12)). It is my understanding that 

Debtors have paid all chapter 11 statutory and operating fees required to be paid during these 

chapter 11 cases. Article 2.5 of the Plan provides that the Reorganized Debtors shall pay the U.S. 

Trustee the appropriate sum required pursuant to 28 U.S.C. § 1930(a)(6), within ten (10) days of 

the Effective Date, for pre-confirmation periods. The Reorganized Debtors shall further pay the 

U.S. Trustee the appropriate sum required pursuant to 28 U.S.C. § 1930(a)(6) for 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 Debtors or Reorganized Debtors, as applicable, until 

the earlier of the closing of this case by the issuance of a Final Decree by the Bankruptcy Court, 

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

to another chapter under the United States Bankruptcy Code. After the Confirmation Date, the 

Debtors or Reorganized Debtors, as applicable, shall file a quarterly Post-Confirmation Operating 

Report which shall include, among other things, all payments made under the Plan and payments 

made in the ordinary course of business. Each Debtor or Reorganized Debtor, as applicable, shall 

remain obligated to pay quarterly fees to the Office of the U.S. Trustee until the earliest of that 

particular Debtor’s or Reorganized Debtors’, as applicable, case being closed pursuant to the terms 

of this Plan, dismissed or converted to a case under chapter 7 of the Bankruptcy Code. 

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44. Inapplicability of Sections 1129(a)(13)-(16). I have been advised by counsel that 

sections 1129(a)(13), 1129(a)(14), 1129(a)(15) and 1129(a)(16) of the Bankruptcy Code are 

inapplicable to the Debtors. 

45. Fair and Equitable; No Unfair Discrimination (11 U.S.C. § 1129(b)). Based upon 

my understanding, as well as discussions with the Debtors’ legal advisors, I understand that a plan 

may be confirmed notwithstanding the rejection or deemed rejection by a class of claims or equity 

interests so long as the plan does not discriminate unfairly and is fair and equitable. As stated 

above, I understand that the Classes of Claims entitled to vote to accept or reject the Plan (Classes, 

2, 3 and 4) have voted almost universally to accept the Plan. 

46. From my discussions with the Debtors’ legal advisors, I understand that there are 

only two impaired Classes that are deemed to have rejected the Plan (Class 5 (Subordinated 

Claims) and Class 6 (Equity Interests)). Accordingly, I understand that the Plan Proponents 

normally would invoke section 1129(b) only with respect to Classes 5 and 6. Importantly, the 

Persons and Entities holding claims and interests in these two classes agreed to this treatment 

because all of the Claims in Class 5 (Subordinated Claims) and interests in Class 6 (Equity 

Interests) are claims and interests of insiders. 

47. Principal Purpose of the Plan (11 U.S.C. § 1129(d)). I believe that the Plan has not 

been filed for the purpose of avoidance of taxes or the avoidance of the application of section 5 of 

the Securities Act of 1933. 

Conclusion 

48. Based upon the facts and opinions set forth herein and the law as I understand it, I 

believe that the Plan Proponents have formulated, negotiated, and proposed a Plan that treats all 

Classes of Claims and Equity Interests fairly, equitably, and reasonably, and satisfies all of the 

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Confirmation requirements contained in the Bankruptcy Code, and that the Disclosure Statement 

contained adequate information to permit creditors to make an informed choice as to whether to 

accept or reject the Plan. I further believe that due and adequate notice of the Confirmation 

Hearing, the deadline for Creditors entitled to vote to determine whether to vote to accept or reject 

the Plan, and the deadline for objecting to Confirmation of the Plan was properly given. I believe 

the Plan Proponents have sufficient funds to carry out the provisions of the Plan, and that the Plan 

is feasible. 

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