UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF FLORIDA 

MIAMI DIVISION 

www.flsb.uscourts.gov

In re: Chapter 11 

COSTA HOLLYWOOD PROPERTY OWNER, LLC1 Case No. 19-22483-AJC 

 

 Debtor. 

 / 

FIRST AMENDED DISCLOSURE STATEMENT UNDER 11 U.S.C. § 1125 IN SUPPORT 

OF THE LIQUIDATING CHAPTER 11 PLAN PROPOSED BY THE DEBTOR 

MELAND RUSSIN & BUDWICK, P.A. 

Peter D. Russin, Esquire 

Florida Bar No. 765902 

prussin@melandrussin.com

James C. Moon, Esquire 

Florida Bar No. 938211 

jmoon@melandrussin.com

3200 Southeast Financial Center 

200 South Biscayne Boulevard 

Miami, Florida, 33131 

Telephone: (305) 358-6363 

Telecopy: (305) 358-1221 

Attorneys for the Debtor in Possession 

Dated: April 22, 2020 

 

1

 The Debtor’s current mailing address is 777 North Ocean Drive, Hollywood, FL 33019. The Debtor’s EIN is 47-

4883778. 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 1 of 130
DISCLAIMER 

THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT IS 

INCLUDED HEREIN FOR PURPOSES OF SOLICITING ACCEPTANCES OF THE 

LIQUIDATING CHAPTER 11 PLAN PROPOSED BY THE DEBTOR OF EVEN DATE 

HEREWITH (AS DEFINED HEREIN, THE “PLAN”),2

 AND MAY NOT BE RELIED UPON 

FOR ANY PURPOSE OTHER THAN TO DETERMINE HOW TO VOTE ON THE PLAN. NO 

SOLICITATION OF VOTES TO ACCEPT THE PLAN 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 PLAN IN THEIR ENTIRETY BEFORE VOTING TO 

ACCEPT OR REJECT THE PLAN. ALL HOLDERS OF CLAIMS SHOULD CAREFULLY 

READ AND CONSIDER FULLY THE RISK FACTORS SET FORTH IN SECTION VIII OF 

THIS DISCLOSURE STATEMENT (“RISK FACTORS IN CONNECTION WITH THE 

PLAN”) BEFORE VOTING TO ACCEPT OR REJECT THE PLAN. A COPY OF THE PLAN 

IS ANNEXED HERETO AS EXHIBIT “1”. PLAN SUMMARIES AND STATEMENTS 

MADE IN THIS DISCLOSURE STATEMENT ARE QUALIFIED IN THEIR ENTIRETY BY 

REFERENCE TO THE PLAN AND THE EXHIBITS ANNEXED TO THE PLAN AND 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. ALTHOUGH THE PLAN PROPONENT BELIEVES AND HAS 

MADE EVERY EFFORT TO ENSURE THAT THIS SUMMARY PROVIDES ADEQUATE 

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

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

ENTIRE TEXT OF THE PLAN. IF THERE IS ANY INCONSISTENCY BETWEEN THE PLAN 

AND THE SUMMARY OF THE PLAN CONTAINED IN THIS DISCLOSURE STATEMENT, 

THE PLAN SHALL CONTROL. ACCORDINGLY, EACH HOLDER OF A CLAIM SHOULD 

REVIEW THE PLAN IN ITS 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 THE DEBTOR SHOULD EVALUATE THIS DISCLOSURE STATEMENT AND 

THE PLAN IN LIGHT OF THE PURPOSE FOR WHICH IT WAS PREPARED. THIS 

DISCLOSURE STATEMENT SHALL NOT BE CONSTRUED TO BE ADVICE ON THE TAX, 

SECURITIES OR OTHER LEGAL EFFECTS OF THE LIQUIDATING PLAN OF THE 

 

2

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

(defined herein). 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 2 of 130
DEBTOR AS TO HOLDERS OF CLAIMS AGAINST THE 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 THE 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, THE DEBTOR AND DEBTOR-IN-POSSESSION IN THIS 

CHAPTER 11 CASE. 

NO HOLDER OF A CLAIM SHOULD RELY ON ANY INFORMATION RELATING 

TO THE DEBTOR, ITS PROPERTY OR THE 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 AND THE PLAN ARE THE ONLY DOCUMENTS 

AUTHORIZED BY THE BANKRUPTCY COURT TO BE USED IN CONNECTION WITH 

THE SOLICITATION OF VOTES ACCEPTING THE PLAN. NO REPRESENTATIONS HAVE 

BEEN AUTHORIZED BY THE BANKRUPTCY COURT CONCERNING THE DEBTOR OR 

THE 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 PLAN NOR DOES SUCH APPROVAL 

CONSTITUTE A DETERMINATION BY THE BANKRUPTCY COURT OF THE FAIRNESS 

OR MERITS OF THE PLAN 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 MAY NOT HAVE BEEN PREPARED IN ACCORDANCE WITH 

ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES. 

ALTHOUGH THE ATTORNEYS, ADVISORS AND OTHER PROFESSIONALS 

EMPLOYED BY THE PLAN PROPONENT 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 DEBTOR, THEY HAVE NOT 

INDEPENDENTLY VERIFIED SUCH INFORMATION AND MAKE NO 

REPRESENTATIONS AS TO THE ACCURACY THEREOF. THE ATTORNEYS, ADVISORS 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 3 of 130
AND OTHER PROFESSIONALS EMPLOYED BY THE PLAN PROPONENT SHALL HAVE 

NO LIABILITY FOR THE INFORMATION IN THIS DISCLOSURE STATEMENT. 

PRIOR TO THE EFFECTIVE DATE, THE DEBTOR DOES NOT INTEND TO 

UNDERTAKE A GENERAL CLAIMS OBJECTION PROCESS WITH RESPECT TO 

GENERAL UNSECURED CLAIMS, BUT THE DEBTOR RESERVES THE RIGHT TO 

OBJECT TO ANY CLAIM PRIOR TO THE EFFECTIVE DATE. ON AND AFTER THE 

EFFECTIVE DATE OF THE PLAN, THE LIQUIDATING TRUSTEE (AS FURTHER 

DEFINED HEREIN) 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 PLAN TO THE HOLDERS OF ALLOWED GENERAL 

UNSECURED CLAIMS THAT ARE OBJECTED TO BY THE DEBTOR OR THE 

LIQUIDATING TRUSTEE, 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 THE 

ANALYSES PERFORMED BY THE PLAN PROPONENT AND ITS PROFESSIONALS. 

ALTHOUGH THE PLAN PROPONENT HAS MADE EVERY EFFORT TO VERIFY THE 

ACCURACY OF THE INFORMATION PRESENTED HEREIN AND IN THE EXHIBITS 

ATTACHED HERETO, THE PLAN PROPONENT CANNOT MAKE ANY 

REPRESENTATIONS OR WARRANTIES REGARDING THE ACCURACY OF THE 

INFORMATION. 

THE PLAN PROPONENT BELIEVES THAT THE PLAN PROVIDES THE BEST 

POSSIBLE RESULT FOR ALL HOLDERS OF CLAIMS. THE PLAN PROPONENT ALSO 

BELIEVES THAT THE PLAN WILL ENABLE THE DEBTOR TO ACCOMPLISH THE 

OBJECTIVES OF LIQUIDATING UNDER CHAPTER 11 AND THAT ACCEPTANCE OF 

THE PLAN IS IN THE BEST INTERESTS OF THE DEBTOR AND ITS CREDITORS. THUS, 

IT IS THE OPINION OF THE PLAN PROPONENT THAT THE TREATMENT OF 

CREDITORS UNDER THE PLAN CONTEMPLATES A GREATER RECOVERY THAN 

THAT WHICH IS LIKELY TO BE ACHIEVED THROUGH A CHAPTER 7 LIQUIDATION 

OF THE DEBTOR. 

IF YOU ARE ENTITLED TO VOTE TO APPROVE THE PLAN, YOU ARE 

RECEIVING A BALLOT WITH YOUR NOTICE OF THIS DISCLOSURE STATEMENT. THE 

PLAN PROPONENT STRONGLY URGES CREDITORS TO VOTE TO ACCEPT THE PLAN. 

IRS CIRCULAR 230 NOTICE: TO ENSURE COMPLIANCE WITH IRS CIRCULAR 

230, HOLDERS OF CLAIMS AND EQUITY INTERESTS ARE 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 DEBTOR OF THE TRANSACTIONS 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 4 of 130
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 

OR UPON THE MERITS OF THE PLAN. NEITHER THIS DISCLOSURE STATEMENT NOR 

THE SOLICITATION OF VOTES TO ACCEPT OR REJECT THE 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. 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 5 of 130
TABLE OF CONTENTS 

Pages 

I. INTRODUCTION................................................................................................................. 1

A. Overview of Chapter 11 and the Plan Confirmation Process .................................... 1

B. Recommendation of the Plan Proponent and Plan Overview .................................... 2

C. Summary of Voting Requirements for Plan Confirmation ........................................ 2

1. In General. .................................................................................................................... 2

2. Impaired Classes Entitled to Vote. ............................................................................... 3

3. Unimpaired Classes Deemed to Accept the Plan. ........................................................ 3

4. Certain Classes Are Deemed to Reject the Plan and Do Not Vote. ............................. 3

5. Voting Deadline. ........................................................................................................... 4

6. Voting Instructions. ...................................................................................................... 4

7. Ballots. .......................................................................................................................... 4

8. Additional Information. ................................................................................................ 4

II. BACKGROUND INFORMATION .................................................................................... 4

A. Overview of the Debtor’s Business ............................................................................... 4

B. Organizational Structure and Management of the Debtor ........................................ 5

III. EVENTS LEADING TO THE CHAPTER 11 FILINGS ............................................... 5

A. The Reasons for the Debtor’s Chapter 11 Case .......................................................... 5

B. Prepetition Secured Loan from 777 N. Ocean Drive, LLC (“Secured Lender”) ...... 5

C. Pending Litigation .......................................................................................................... 6

IV. EVENTS OCCURRING DURING DEBTOR’S CHAPTER 11 CASE ....................... 7

A. Bankruptcy Filings and First Day Orders and Other Initial Matters ...................... 7

B. Schedules and Statements .............................................................................................. 8

C. Retention and Employment of Bankruptcy Professionals .......................................... 9

D. No Appointment of Creditors’ Committee .................................................................. 9

E. Post Petition DIP Loan from Secured Lender ............................................................. 9

F. Bid Procedures/Sale Motion, Marketing, Auction and Sale ....................................... 9

G. Exclusivity Extension ................................................................................................... 10

H. Turnover Action ........................................................................................................... 10

V. EXPLANATION OF CHAPTER 11 ................................................................................. 11

A. Overview of Chapter 11 ............................................................................................... 11

B. Liquidation Plan ........................................................................................................... 12

C. Bar Date for Filing Proofs of Claim ........................................................................... 12

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 6 of 130
TABLE OF CONTENTS 

(continued) 

D. Definition of Impairment ............................................................................................. 13

E. Confirmation of Plan ................................................................................................... 13

1. Solicitation of Acceptances ........................................................................................ 13

2. Requirements for Confirmation of the Plan ............................................................... 14

3. Acceptances Necessary to Confirm the Plan .............................................................. 15

4. Cramdown .................................................................................................................. 15

VI. DESCRIPTION OF THE PLAN .................................................................................... 16

A. Introduction .................................................................................................................. 16

B. Designation of Claims and Equity Interests/Impairment ......................................... 16

C. Treatment of Claims and Interests ............................................................................. 17

1. Administrative Expense Claims ................................................................................. 17

2. Priority Claims ............................................................................................................ 17

3. Claims for Statutory Fees ........................................................................................... 18

4. Protective Advance Claim .......................................................................................... 18

D. Classification, Impairment and Treatment of Claims and Equity Interests .......... 18

1. Classification .............................................................................................................. 18

2. Separate Classes and Treatment ................................................................................. 22

3. Claims May Be in More Than One Class ................................................................... 22

4. Summary of Claims .................................................................................................... 23

E. Rejection of Executory Contracts ............................................................................... 24

F. Rejection Claims ........................................................................................................... 24

G. Injunction Under the Plan ........................................................................................... 24

VII. MEANS FOR EXECUTION AND IMPLEMENTATION OF THE PLAN .............. 24

A. Introduction .................................................................................................................. 24

B. Sale of the Collateral .................................................................................................... 25

C. Secured Lender Settlement ......................................................................................... 25

D. Purpose of the Liquidating Trustee ............................................................................ 27

E. Authority and Limitations of Liquidating Trustee ................................................... 27

F. Operations of the Liquidating Debtor ........................................................................ 30

G. Compensation of Liquidating Trustee........................................................................ 32

H. Dissolution of Corporate Existence ............................................................................ 32

I. Termination of Employees/Limitation of Liability/Release of Professionals ......... 32

VIII. RISK FACTORS IN CONNECTION WITH THE PLAN ...................................... 32

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 7 of 130
TABLE OF CONTENTS 

(continued) 

A. Bankruptcy Considerations ......................................................................................... 33

B. Claims Estimates May Be Incorrect ........................................................................... 33

C. No Duty to Update Disclosures ................................................................................... 33

D. Representations Outside this Disclosure Statement .................................................. 33

E. No Admission ................................................................................................................ 34

F. Tax and Other Related Considerations ...................................................................... 34

IX. LEGAL PROCEEDINGS ............................................................................................... 34

A. Retention of Causes of Action ..................................................................................... 34

X. ALTERNATIVES TO PLAN AND LIQUIDATION ANALYSIS ................................. 36

A. Dismissal ........................................................................................................................ 36

B. Chapter 7 Liquidation ................................................................................................. 36

C. Alternative Plan ............................................................................................................ 38

XI. Injunction and Releases ................................................................................................... 38

XII. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN.... 39

A. United States Federal Income Tax Consequences to the Debtor ............................. 39

B. United States Federal Income Tax Consequences to Claimholders of Debtor ....... 40

1. Gain or Loss Recognition on the Satisfaction of Claims ............................................ 40

2. Character of Gain or Loss ........................................................................................... 40

3. Information Reporting and Backup Withholding ....................................................... 40

C. Importance of Obtaining Professional Tax Assistance ............................................. 41

XIII. CONCLUSION ............................................................................................................. 42

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 8 of 130
EXHIBITS 

Exhibit 1 First Amended Chapter 11 Plan of Liquidation Proposed by the Debtor 

Exhibit 2 Liquidation Analysis 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 9 of 130
 1 

I. INTRODUCTION 

 On September 19, 2019 (the “Petition Date”), Costa Hollywood Property Owner, LLC 

(the “Debtor”) filed a voluntary petition for relief under chapter 11 of title 11 of the United States 

Code, as now in effect or as hereafter amended (the “Bankruptcy Code”), and an order for relief 

under section 301 of the Bankruptcy Code was entered in this case (the “Chapter 11 Case”). 

The Debtor (the “Plan Proponent”) submits this first amended disclosure statement (the 

“Disclosure Statement”), pursuant to section 1125 of the Bankruptcy Code, and rule 3017 of the 

Federal Rules of Bankruptcy Procedure, as now in effect or as hereafter amended (the “Bankruptcy 

Rules”), in connection with the solicitation of votes on its proposed First Amended Chapter 11 

Plan of Liquidation of even date herewith (the “Plan”) and attached hereto as “Exhibit 1”. The 

Plan Proponent believes that confirmation and implementation of the Plan is in the best interests 

of the Debtor’s estate (the “Estate”), its Creditors and all other interested parties. 

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

by the Plan Proponent to Creditors in the Debtor’s Chapter 11 Case pending before the United 

States Bankruptcy Court for the Southern District of Florida (the “Bankruptcy Court”). This 

Disclosure Statement is intended to provide adequate information of a kind, and in sufficient detail, 

to enable the Debtor’s Creditors to make an informed judgment about the Plan, including whether 

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

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

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

Debtor’s Chapter 11 Case; (iv) the terms of the Plan; (v) the manner in which distributions will be 

made under the Plan; (vi) certain effects of confirmation of the Plan; (vii) certain risk factors 

associated with the Plan; and (viii) the confirmation process and the voting procedures that holders 

of Claims entitled to vote under the Plan must follow for their votes to be counted. 

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 Plan. 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 PLAN. 

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

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

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

will control. Terms not otherwise specifically defined herein will have the meanings attributed to 

them in the Plan. Each definition in this Disclosure Statement and in the Plan includes both the 

singular and plural. Headings are for convenience or reference and shall not affect the meaning or 

interpretation of this Disclosure Statement. 

A. Overview of Chapter 11 and the Plan Confirmation Process 

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

up its affairs for the benefit of the debtor and its 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 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 10 of 130
 2 

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 Plan Proponent’s solicitation of votes on the Plan. 

B. Recommendation of the Plan Proponent and Plan Overview 

The Plan contemplates that the Debtor will be liquidated and dissolved, and a liquidating 

trust will be formed and a Liquidating Trustee (as defined and discussed in Section VII(C) hereof) 

will be appointed to prosecute Causes of Action, including Avoidance Actions (in the Liquidating 

Trustee’s business judgment), and make distributions to creditors. 

The Plan Proponent believes that the Plan will allow for a prompt resolution of the Debtor’s 

Chapter 11 Case and will achieve the best possible result for the General Unsecured Creditors who 

are classified in Class 8 of the Plan. The following is a brief overview of the Plan and is qualified 

by reference to the Plan itself. 

The Plan Proponent believes the Plan is in the best interest of Creditors and the Plan 

Proponent urges all Creditors who are entitled to vote on the Plan to vote in favor of the Plan. 

C. Summary of Voting Requirements for Plan Confirmation 

1. In General. 

Creditors should refer only to this Disclosure Statement and the Plan to determine whether 

to vote to accept or reject the Plan. Under the Bankruptcy Code, only holders of Claims that are 

“impaired” are entitled to vote to accept or reject the 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 

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 3 

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 provides 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 Plan. All claims against the Debtor remain subject to review by parties-in-interest, 

including the Debtor and the Liquidating Trustee, and to objection, whether or not such claims are 

entitled to vote on the Plan as of the Voting Record Date (defined below). To the extent any claim 

is referred to herein as "Allowed," it is only for purposes of providing a description of such claim's 

treatment under the Plan if ultimately allowed. In the event an objection is filed to a claim deemed 

"Allowed" for purposes of voting on the Plan, that claim may later be disallowed by the Court 

(with the exception of the claims of Secured Lender). 

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

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

obtained. 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 Plan. 

2. Impaired Classes Entitled to Vote. 

Claims in Classes 3, 4, 5, 6 and 8 are Impaired. Accordingly, only the Claims in Classes 3, 

4, 5, 6 and 8 are entitled to vote to accept or reject the Plan. 

3. Unimpaired Classes Deemed to Accept the Plan. 

Claims in Classes 1, 2 and 7 are Unimpaired and the vote of holders of such Claims in 

these Classes will not be solicited. 

4. Certain Classes Are Deemed to Reject the Plan and Do Not Vote. 

Under Bankruptcy Code section 1126(g), Class 9 (Equity Interests) will receive no 

Distributions and is deemed to have rejected the Plan. The vote of holders of such Equity Interests 

in this Class will not be solicited. 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 12 of 130
 4 

5. Voting Deadline. 

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

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

on time. The record date for determining which Creditors may vote on the Plan is [TBD by Court 

Order], (the “Voting Record Date”). The voting deadline is [TBD by Court Order] at 4:00 p.m. 

(prevailing Eastern Time) (the “Voting Deadline”). 

6. 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 BANKRUPTCY COURT, 301 NORTH MIAMI 

AVENUE, ROOM 150, MIAMI, FLORIDA 33128, BY THE VOTING DEADLINE AT THE 

ADDRESS PRINTED ON THE BALLOT. 

7. 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. 

8. 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 Plan, this Disclosure Statement, or any exhibits 

to such documents, please contact the Debtor’s counsel, Meland Russin & Budwick, P.A., 3200 

Southeast Financial Center, 200 South Biscayne Boulevard, Miami, Florida 33131, ATTN: James 

C. Moon, telephone: 305.358.6363, email: jmoon@melandrussin.com or ATTN: Peter D. Russin, 

telephone: 305.358.6363, email: prussin@melandrussin.com. 

II. BACKGROUND INFORMATION 

A. Overview of the Debtor’s Business 

The Debtor developed a condominium hotel project commonly known as “Costa 

Hollywood Beach Resort” located at 777 North Ocean Drive, in Hollywood, Florida (the “CondoHotel”). The Condo-Hotel contains 307 residential units, 15 commercial units, and 1 Shared 

Facilities Unit and related improvements. The Debtor (i) owns 43 residential units, 9 commercial 

units and 1 Shared Facilities Unit (ii) controls the Condominium Association3

 and shares common 

 

3

 Costa Hollywood Condominium Association, Inc. The Debtor is the developer, and the Condominium Association 

has not been turned over to the condominium owners. 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 13 of 130
 5 

operating expenses with the Condominium Association,4 and (iii) has established a rental 

management program pursuant to which the Debtor acts as the rental agent for “Third Party 

Controlled Units”5

 that are under contract for the “Rental Management Program” from time to 

time, and for the Owner Controlled Units. All units within the Rental Management Program are 

operated as hotel rooms in the Costa Hollywood Beach Resort. 

B. Organizational Structure and Management of the Debtor 

The Debtor is a Delaware limited liability company authorized to do business in Florida. 

The Debtor’s President is Moses Bensusan who is the manager and sole member of Liberty 

Grande, LLC, a Florida limited liability company which is the sole member of Costa Hollywood 

Development Holdings LLC, a Delaware limited liability company which is the manager and sole 

member of the Debtor. 

III. EVENTS LEADING TO THE CHAPTER 11 FILINGS 

A. The Reasons for the Debtor’s Chapter 11 Case 

As a result of its liquidity constraints, the Debtor has been unable to pay its expenses as 

they became due, including its obligations under certain loan agreements. Thus, the Debtor filed 

this Chapter 11 proceeding to effectively and efficiently facilitate a sale of substantially all of the 

Debtor’s assets in order maximize the return to creditors through a bankruptcy plan of liquidation.

B. Prepetition Secured Loan from 777 N. Ocean Drive, LLC (“Secured Lender”) 

On or about July 1, 2016, the Debtor obtained a loan from Secured Lender in the original 

principal sum of up to $70,000,000 (the “Loan”). The Loan is evidenced by an Amended and 

Restated Construction Loan Note dated July 1, 2016, executed by the Debtor in favor of Secured 

Lender (the “Note”) in the principal sum of up to $70,000,000. 

As security for the repayment of the Note, Debtor executed and delivered to Secured 

Lender a Certificate of Future Advance and Amended and Restated Mortgage and Security 

Agreement (“Mortgage”) which was recorded on July 20, 2016. 

Between August 22, 2017 and September 30, 2018, the Debtor and the Secured Lender 

entered into three successive forbearance agreements (collectively, the “Forbearance 

Agreements”) with the final forbearance agreement being the Third Amended Forbearance 

Agreement (the “Final Forbearance Agreement”) dated September 30, 2018. 

Pursuant to the Mortgage, the Debtor granted the Secured Lender a continuing security 

interest in and lien on, among other things, all of the Debtor’s real and personal property and 

fixtures which it now owns or are in existence or hereafter acquired or created, wherever located, 

of whatever kind and description, tangible or intangible, including without limitation, all money, 

 

4

 The Condominium Association has its own budget that is paid for by all condominium unit owners, including the 

Debtor as developer. Debtor allows the owners the right to use the “Shared Facilities,” and condominium unit owners 

pay an assessment to use the Shared Facilities. 

5

 The condominium units owned or controlled by third parties (and which are not owned by Owner), from time to 

time. 

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 6 

instruments, documents, deposit accounts, chattel paper, accounts and general intangibles, as these 

terms are defined in the Uniform Commercial Code (“Collateral”). 

As of the Petition Date, the Debtor owes the Secured Lender approximately 

$47,189,513.79, plus interest. The Collateral is valued at approximately $50,525,000. 

C. Pending Litigation 

On March 24, 2016, Design Engineering Group, LLC filed a complaint to foreclose a 

construction lien against the Debtor, case styled Design Engineering Group, LLC v. Costa 

Hollywood Property Owner, LLC, case no. CACE-16-005451, in the Circuit Court of the 

Seventeenth Judicial Circuit in and for Broward County, Florida. 

On March 13, 2017, Beauchamp Construction Co., Inc. filed a complaint to foreclose a 

construction lien against the Debtor, case styled Beauchamp Construction Co., Inc. v. Costa 

Hollywood Property Owner, LLC, case no. CACE-17-004911, in the Circuit Court of the 

Seventeenth Judicial Circuit in and for Broward County, Florida. 

On May 22, 2018, Costa Investors, LLC filed a counterclaim for damages against the 

Debtor in the case styled Costa Hollywood Property Owner, LLC v. Alexey Burya, Costa Investors 

Manager, LLC & Costa Investors, LLC, case no. CACE-18-011130, in the Circuit Court of the 

Seventeenth Judicial Circuit in and for Broward County, Florida. 

On August 22, 2018, Professional Blinds Systems Inc. filed a complaint for damages 

against the Debtor, case styled Professional Blind Systems Inc. v. Costa Hollywood Property 

Owner, LLC, et al., case no. 2018-028519-CA-01, in the Circuit Court of the Eleventh Judicial 

Circuit in and for Miami-Dade County, Florida. 

On November 16, 2018, National Service Group & Associates, Inc. filed a complaint for 

damages against the Debtor, case styled National Service Group & Associates, Inc. v. Costa 

Hollywood Property Owner, LLC, case no. CACE-18-026915, in the Circuit Court of the 

Seventeenth Judicial Circuit in and for Broward County, Florida. 

On December 27, 2018, Betje Investments, LLC filed a complaint for rescission and 

damages against the Debtor, case styled Betje Investments, LLC v. Costa Hollywood Property 

Owner, case no. 2018-042794-CA-01, in the Circuit Court of the Eleventh Judicial Circuit in and 

for Miami-Dade County, Florida. 

On January 8, 2019, New Continent Ventures filed an amended complaint in the case styled 

New Continent Ventures, Inc. v. Liberty Grande LLC, Costa Hollywood Property Owner, LLC & 

Moses Bensusan, case no. 17-09278, in the Circuit Court of the Ninth Judicial Circuit in and for 

Orange County Florida, alleging claims for damages against the Debtor. 

On April 23, 2019, the Secured Lender filed a complaint to foreclose the Mortgage against 

the Debtor, case styled 777 N. Ocean Drive LLC v. Costa Hollywood Property Owner, LLC, et al., 

case no. CACE-19-009153, in the Circuit Court of the Seventeenth Judicial Circuit in and for 

Broward County, Florida. 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 15 of 130
 7 

On May 9, 2019, plaintiff Baker Concrete Construction, Inc. filed an action for damages 

and foreclosure of a construction lien against the Debtor, case styled Baker Concrete Construction, 

Inc. v. Costa Hollywood Property Owner LLC & 777 N. Ocean Drive, LLC, case no. CACE-19-

010135, in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, 

Florida. 

On June 6, 2019, plaintiffs Costa 402 Inc., et. al., filed a complaint for injunctive relief and 

damages against the Debtor, case styled Costa 402 Inc., et. al. v. Costa Hollywood Property 

Owner, LLC, case no. CACE-19-012062, in the Circuit Court of the Seventeenth Judicial Circuit 

in and for Broward County, Florida (the “State Court Action”). 

On July 3, 2019, plaintiff PSO Investments LLC filed a complaint for injunctive relief and 

damages against the Debtor, case styled PSO Investments LLC v. Costa Hollywood Property 

Owner, LLC, case no. CACE-19-013967, in the Circuit Court of the Seventeenth Judicial Circuit 

in and for Broward County, Florida. 

On September 15, 2019, Modulex Miami LLC filed a complaint for damages against the 

Debtor, case styled Modulex Miami, LLC v. Costa Hollywood Property Owner LLC, case no. 

CACE-19-018829, in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward 

County, Florida. 

IV. EVENTS OCCURRING DURING DEBTOR’S CHAPTER 11 CASE 

A. Bankruptcy Filings and First Day Orders and Other Initial Matters 

On September 19, 2019 (as defined, the “Petition Date”), the Debtor filed a Voluntary 

Petition for relief under chapter 11 of the United States Bankruptcy Code [ECF No. 1].6

The Debtor continues to manage its business as a debtor in possession pursuant to §§ 1107 

and 1108 of the Bankruptcy Code. 

On September 26, 2019, the Debtor filed its Expedited Motion for Authorization to (I) 

Continue Insurance Programs; and (II) Pay all Insurance Obligations [ECF No. 18], which was 

granted per Court Order [ECF No. 147]. 

On September 26, 2019, the Debtor filed its Expedited Motion for (A) Authority to (I) 

Maintain Certain Bank Accounts and Continue to Use Existing Business Forms and Checks, and 

(II) Continue to Use Existing Cash Management System, and (B) Waiver of Certain Investment 

and Deposit Guidelines [ECF No. 19], which was granted on an interim basis per Court Order 

[ECF No. 78] and on a final basis per Court Order [ECF No. 103]. 

On September 26, 2019, the Debtor filed its Expedited Motion Pursuant to Sections 

105(A), 363(B), and 503(B)(1) of the Bankruptcy Code for Authorization to Honor Certain 

Prepetition Customer Programs [ECF No. 20], which was granted per Court Order [ECF No. 146]. 

 

6

 The references to “ECF” in this Disclosure Statement are to the “Electronic Case File” system which is the docket 

number in this Chapter 11 Case for the referenced item. 

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 8 

On September 26, 2019, the Debtor filed its Amended Expedited Motion of the Debtor for 

Interim (1 Month) Use of Cash Collateral Nunc Pro Tunc to September 19, 2019 [ECF No. 23], 

which was granted on an interim basis per Court Order [ECF No. 69]. 

On October 2, 2019, PSO Investments LLC filed a Motion for Stay Relief [ECF No. 36] 

and the Debtor filed its Response [ECF No. 91], which remains pending. 

On October 2, 2019, Costa 402 Inc., et al. filed their Motion for Stay Relief [ECF No. 37] 

and the Debtor filed its Response [ECF No. 92], which was granted per Court Order [ECF No. 

176] and the automatic stay was terminated so as to permit Costa 402 Inc., et al. to pursue the State 

Court Litigation for injunctive relief only. 

On October 4, 2019, the United States Trustee’s (I) Emergency Motion to Dismiss or 

Convert this Case to Chapter 7 or Alternatively, to Direct the Appointment of a Chapter 11 Trustee 

and (II) Request for an Expedited Hearing (the “Motion to Dismiss”) [ECF No. 46] and nonsubstantive joinders were filed by various parties, including the hotel manager Evolution 

Hospitality, LLC at ECF Nos. 49, 51-68. The Debtor and the Secured Lender filed a Response in 

Objection [ECF No. 94 and 96, respectively] and, after notice and a hearing, the Court denied the 

Motion to Dismiss [ECF No. 112]. 

On October 15, 2019, the Debtor filed its Expedited Motion for Interim and Final Orders 

(I) Authorizing Debtor to (A) Use Cash Collateral Nunc Pro Tunc to September 19, 2019 (B) 

Obtain Postpetition Financing from [Secured Lender] (II) Granting Adequate Protection and (III) 

Scheduling Final Hearing [ECF No. 97], which was granted on a final basis per Court Order [ECF 

No. 189]. 

On October 15, 2019, the Debtor filed its Expedited Motion for an Order Authorizing 

Payment of Prepetition Claims of Critical Vendors [ECF No. 98], which was granted per Court 

Order [ECF No. 116]. 

The 341 Meeting of Creditors was held on October 28, 2019 [ECF No. 34]. 

On November 27, 2019, Maxcom Advisors, LLC filed an adversary proceeding against the 

Debtor, case styled Maxcom Advisors, LLC v. Costa Hollywood Property Owner, LLC, Adv. Case 

No. 19-01909, seeking substantially similar injunctive relief as in the State Court Action. 

On March 11, 2020, the Debtor filed its Chapter 11 Plan of Liquidation (“Original Plan”) 

[ECF No. 247] and Disclosure Statement Under 11 U.S.C. § 1125 in Support of the Liquidating 

Chapter 11 Plan Proposed by the Debtor (“Original Disclosure Statement”) [ECF No. 248]. 

B. Schedules and Statements 

The Debtor filed its Schedules and Statements of Financial Affairs on October 3, 2019 

[ECF No. 39]. The Debtor filed its Amended Summary of Schedules and Amended Schedules D, 

E/F, and G on February 19, 2020 [ECF No. 235] and provided notice to affected parties [ECF No. 

236]. 

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C. Retention and Employment of Bankruptcy Professionals 

On September 26, 2019, the Debtor filed its Application of the Debtor for an Order, on an 

Interim Basis, Authorizing the Employment and Retention of Meland Russin & Budwick, P.A. as 

Attorneys for the Debtor and Debtor in Possession Nunc Pro Tunc to the Petition Date [ECF No. 

21], which was granted on a final basis per Court Order [ECF No. 113]. 

On October 31, 2019, the Debtor filed its Application for an Order Authorizing the 

Employment and Retention of Robb E. Udell, Esq. and Rennert Vogel Mandler & Rodriguez, P.A. 

as Special Tax Appeal Counsel Nunc Pro Tunc to September 19, 2019 [ECF No. 124], which was 

granted per Court Order [ECF No. 167]. 

On December 19, 2019, the Debtor filed its Expedited Application for an Order 

Authorizing the Employment and Retention of Michael R. Kassower, Esq. and Frank Weinberg 

Black, P.L. as Special Counsel Nunc Pro Tunc to December 9, 2019 [ECF No. 191], which was 

granted per Court Order [ECF No. 207]. 

D. No Appointment of Creditors’ Committee 

The United States Trustee docketed a Notice of No Appointment of Committee of Creditors 

Holding Unsecured Claims pursuant to 11 U.S.C. § 1102 [ECF No. 134]. 

E. Post Petition DIP Loan from Secured Lender 

On October 15, 2019, the Debtor filed its Expedited Motion for Interim and Final Orders 

(I) Authorizing Debtor to (A) Use Cash Collateral Nunc Pro Tunc to September 19, 2019 (B) 

Obtain Postpetition Financing from [Secured Lender] (II) Granting Adequate Protection and (III) 

Scheduling Final Hearing [ECF No. 97], which was granted per Court Order [ECF No. 189] and 

authorized, on a final basis, the Debtor to obtain secured post-petition financing from the Secured 

Lender (the “Post-Petition Financing”) in the total amount not to exceed $726,000.00. 

F. Bid Procedures/Sale Motion, Marketing, Auction and Sale 

Contemporaneously with, or subsequent to, the filing of this Disclosure Statement and the 

Plan, the Debtor has filed/will file its Motion for Entry of (A) an Order Approving Bidding 

Procedures, (B) Approving Certain Protections to Stalking Horse Purchaser, (C) Approving Notice 

Procedures, and (D) and Order (i) Approving the Stalking Horse Purchase and Sale Agreement, 

(ii) Authorizing the Sale of All or Substantially All of the Assets of the Debtor Free and Clear of 

All Liens, Claims, Encumbrances and other Interests, (iii) Scheduling Dates to Conduct Auction 

and Hearing to Consider Final Approval of Sale, and (iv) Granting Related Relief [ECF No. TBD] 

(the “Secured Lender Sale Motion”). In the Secured Lender Sale Motion, the Debtor requests the 

entry of (a) an order approving the bidding procedures and the bid protections described therein; 

and (b) an order (i) approving the purchase and sale agreement for the sale of all of the Debtor’s 

assets to the Secured Lender or other successful bidder, (ii) authorizing the sale of all or 

substantially all of the assets of the Debtor free and clear of all claims and interests, (iii) granting 

any relief otherwise related or appropriate to the matters addressed in the Secured Lender Sale 

Motion. 

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As described in the Plan and Secured Lender Sale Motion, the Bankruptcy Court, the 

Debtor, or a designee may, if necessary, conduct an auction sale of the Collateral for the highest 

or best offer in accordance with the Plan, the Secured Lender Sale Motion and any order granting 

the Secured Lender Sale Motion. The sale of the Collateral at an auction or otherwise shall be done 

in connection with and as part of the implementation of the Plan for all purposes, including 

specifically Section 1146(a) of the Bankruptcy Code. 

Upon conclusion of any auction for the Collateral, the Debtor shall seek an order of the 

Bankruptcy Court approving the sale of the Collateral as contemplated in and pursuant to the Plan, 

the Secured Lender Sale Motion and any order granting the Secured Lender Sale Motion. 

If the Secured Lender is the successful purchaser of the Collateral at an auction or otherwise 

pursuant to the Plan, the Secured Lender Sale Motion and any order granting the Secured Lender 

Sale Motion, the Secured Lender or its nominee or designee may take title to the Collateral subject 

to the Mortgage, which Mortgage may be assigned to any such nominee’s or designee’s lender. 

G. Exclusivity Extension 

Unless a trustee is appointed, only the debtor may file a plan during the first 120 days of a 

Chapter 11 case. This 120-day period is called the “Exclusive Period.” On January 9, 2020, the 

Debtor filed its Expedited Motion Pursuant to Section 1121(D) of the Bankruptcy Code for an 

Extension of Exclusive Right to File a Plan of Reorganization and to Solicit Acceptances [ECF 

No. 211] which was granted by the Court on January 16, 2020 [ECF No. 222]. Accordingly, the 

Debtor’s exclusive deadline to file a plan is March 17, 2020. 

H. Turnover Action 

On April 10, 2020, Debtor filed an adversary proceeding against Greenberg Traurig, P.A. 

(“GT”) and Stewart Title Guaranty Company (“Stewart”) styled Costa Florida Hollywood 

Property Owner, LLC v. Greenberg Traurig, P.A., et al., Adv. Case No. 20-01129 (the “Turnover 

Action”) pursuant to 28 U.S.C. § 2201, Fla. Stat. Ch.86, 11 U.S.C. § 542, seeking, inter alia, an 

order directing the turnover of funds held in escrow by Greenberg Traurig P.A. on behalf of 

Stewart Title Guaranty Company. 

Prior to the Petition Date, Debtor and Stewart entered into two indemnity agreements 

(“Indemnity Agreements”) pursuant to which funds were escrowed from sale proceeds of unit sales 

to address so-called “identified risks” to Stewart and the law firm GT. Specifically, the Indemnity 

Agreements relate to 2 lawsuits: one involving Design Engineering Group (the “Design Indemnity 

Agreement”) and the other involving Costa Investors LLC (the “Costa Investors Indemnity 

Agreement”). Pursuant to the Indemnity Agreements a total of $1,425,139.55 was escrowed (the 

“Escrowed Funds”) with GT prepetition. GT continues to hold these funds to this day. 

Claims against Debtor raised in a lawsuit by Costa Investors LLC have been dismissed with 

prejudice, and the dismissal of those claims was affirmed on appeal. Therefore, there are no pending 

claims against Debtor by Costa Investors LLC. 

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Design Engineering Group has not filed any proof of claim in the bankruptcy case, and 

upon the sale of Debtor’s property it will be paid in accordance therewith and its purported 

construction lien against the Debtor’s property will be extinguished. Despite there no longer being 

any claims against Debtor by Design Engineering Group and Costa Investors LLC, GT and Stewart 

have failed and refused to comply with Debtor’s turnover demand. 

Moreover, even if Design Engineering Group had a valid claim (and it does not), its interest 

is subordinate to the Secured Lender, by virtue of a Subordination Agreement, dated July 1, 2016, 

and recorded in the Official Records of Broward County, Florida on July 20, 2016 under Instrument 

No. 113820795. 

In addition. the funds are escrowed from sale proceeds of unit sales. Thus, the proceeds from 

the Turnover Action as they are escrowed from sale proceeds, belong to the Secured Lender. 

To the extent there are proceeds from the Turnover Action, such proceeds shall, in the 

Debtor’s sole discretion, either be paid upon the Confirmation Date or anytime thereafter to 

Secured Lender to either (1) reimburse the Secured Lender for funds it has or will advance to the 

Debtor pursuant to any order entered by the Court on the use of Cash Collateral or DIP Financing 

or (2) pay the amounts that Secured Lender may have to pay in connection with the Plan, including 

without limitation, the payments relating to the Secured Lender Contribution. The remainder of 

any proceeds from the Turnover Action shall be paid to the Secured Lender upon the Confirmation 

Date or anytime thereafter.. 

.

V. EXPLANATION OF CHAPTER 11 

A. Overview of Chapter 11 

Chapter 11 is the principal reorganization chapter of the Bankruptcy Code. Under Chapter 

11, a debtor-in-possession attempts to reorganize or liquidate in an orderly fashion its business and 

financial affairs for the benefit of the debtor, its creditors, and other interested parties. 

The commencement of a Chapter 11 case creates an estate comprising all of the debtor’s 

legal and equitable interests in property as of the date the petition is filed. Unless the Bankruptcy 

Court orders the appointment of a trustee, Bankruptcy Code sections 1101, 1107 and 1108 provide 

that a Chapter 11 debtor may continue to operate its business and control the assets of its estate as 

a “debtor-in-possession.” 

The filing of a Chapter 11 petition also triggers the automatic stay under Bankruptcy Code 

section 362. The automatic stay essentially halts all attempts to collect prepetition claims from the 

debtor or to otherwise interfere with the debtor’s business or its bankruptcy estate. 

Formulation of a plan of reorganization or liquidation is the principal purpose of a Chapter 

11 case. The plan sets forth the means for satisfying the claims of creditors against, and interests 

of equity security holders in, the debtor. Unless a trustee is appointed, only the debtor may file a 

plan during the first 120 days of a Chapter 11 case. This 120-day period is called the “Exclusive 

Period.” After the Exclusive Period has expired, a creditor or any other interested party may file a 

plan, unless the debtor files a plan within the Exclusive Period. 

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B. Liquidation Plan 

The Debtor is filing this Plan as a liquidating plan and is not reorganizing to do further 

business. 

After a plan has been filed, the holders of claims against, or equity interests in, a debtor are 

permitted to vote on whether to accept or reject the plan. Chapter 11 does not require that each 

holder of a claim against, or equity interest in, a debtor vote in favor of a plan in order for the plan 

to be confirmed. At a minimum, however, a plan must be accepted by a majority in number and 

two-thirds in dollar amount of those claims actually voting from at least one class of claims 

impaired under the plan. The Bankruptcy Code also defines acceptance of a plan by a class of 

equity interests as acceptance by holders of two-thirds of the number of shares actually voted. 

Classes of claims or equity interests that are not “impaired” under a plan of reorganization 

or liquidation are conclusively presumed to have accepted the plan, and therefore are not entitled 

to vote. A class is “impaired” if the plan modifies the legal, equitable, or contractual rights 

attaching to the claims or equity interests of that class. Modification for purposes of impairment 

does not include curing defaults and reinstating maturity or payment in full in cash. 

Conversely, classes of claims or equity interests that receive or retain no property under a 

plan of reorganization or liquidation are conclusively presumed to have rejected the plan, and 

therefore are not entitled to vote. 

Even if all classes of claims and equity interests accept a plan of reorganization or 

liquidation, the Bankruptcy Court may nonetheless deny confirmation of the plan. Bankruptcy 

Code section 1129 sets forth the requirements for confirmation and, among other things, requires 

that a plan be in the “best interests” of impaired and dissenting creditors and interest holders and 

that the plan be "feasible". The “best interests” test generally requires that the value of the 

consideration to be distributed to impaired and dissenting creditors and interest holders under a 

plan may not be less than those parties would receive if the debtor were liquidated under a 

hypothetical liquidation occurring under Chapter 7 of the Bankruptcy Code. A plan must also be 

determined to be “feasible,” which generally requires a finding that there is a reasonable 

probability that the debtor will be able to perform the obligations incurred under the plan. 

The Bankruptcy Court must further find that the economic terms of the particular plan meet 

the specific requirements of Bankruptcy Code section 1129(b) with respect to the subject objecting 

class. If the proponent of the plan proposes to seek confirmation of the plan under the provisions 

of Bankruptcy Code section 1129(b), the proponent must also meet all applicable requirements of 

Bankruptcy Code section 1129(a) (except section 1129(a)(8)). Those requirements include the 

requirements that (i) the plan comply with applicable Bankruptcy Code provisions and other 

applicable law, (ii) that the plan be proposed in good faith, and (iii) that at least one impaired class 

of creditors or interest holders has voted to accept the plan. 

C. Bar Date for Filing Proofs of Claim 

The Bankruptcy Court established January 27, 2020 as the general deadline for filing 

proofs of claim and proof of interests in this Bankruptcy Case and the deadline for filing a proof 

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of claim by any governmental unit (as defined by section 101(27) of the Bankruptcy Code) is 

March 17, 2020. 

D. Definition of Impairment 

Under Bankruptcy Code section 1124, a class of Claims or Equity Interests is impaired 

under a plan of reorganization or liquidation unless, with respect to each Claim or Equity Interests 

of such class, the Plan: 

leaves unaltered the legal, equitable, and contractual rights of the holder of 

such claim or equity interest; or notwithstanding any contractual provision 

or applicable law that entitles the holder of a claim or equity interest to 

receive accelerated payment of such claim or equity interest after the 

occurrence of a default: cures any such default that occurred before or after 

the commencement of the case under the Bankruptcy Code, other than a 

default of a kind specified in Bankruptcy Code section 365(b)(2) or of a 

kind that section 365(b)(2) expressly does not require to be cured; reinstates 

the maturity of such claim or equity interest as it existed before the default; 

compensates the holder of such claim or equity interest for damages 

incurred as a result of reasonable reliance on such contractual provision or 

applicable law; if such claim or such interest arises from any failure to 

perform a nonmonetary obligation, other than a default arising from failure 

to operate a nonresidential real property lease subject to Bankruptcy Code 

section 365(b)(1)(A), compensates the holder of such claim or such interest 

(other than the debtor or an insider) for any actual pecuniary loss incurred 

by such holder as a result of such failure; and does not otherwise alter the 

legal, equitable, or contractual rights to which such claim or equity interest 

entitles the holder of such claim or equity interest. 

E. Confirmation of Plan 

1. Solicitation of Acceptances 

The Plan Proponent is soliciting your vote. 

NO REPRESENTATIONS OR ASSURANCES, IF ANY, CONCERNING THE DEBTOR OR 

THE PLAN ARE AUTHORIZED BY THE DEBTOR, OTHER THAN AS SET FORTH IN THIS 

DISCLOSURE STATEMENT. ANY REPRESENTATIONS OR INDUCEMENTS MADE BY 

ANY PERSON TO SECURE YOUR VOTE, OTHER THAN THOSE CONTAINED IN THIS 

DISCLOSURE STATEMENT, SHOULD NOT BE RELIED ON BY YOU IN ARRIVING AT 

YOUR DECISION, AND SUCH ADDITIONAL REPRESENTATIONS OR INDUCEMENTS 

SHOULD BE REPORTED TO DEBTOR’S COUNSEL FOR APPROPRIATE ACTION. 

THIS IS A SOLICITATION SOLELY BY THE PLAN PROPONENT, AND IS NOT A 

SOLICITATION BY ANY SHAREHOLDER, ATTORNEY, ACCOUNTANT, OR OTHER 

PROFESSIONAL FOR THE PLAN PROPONENT. THE REPRESENTATIONS, IF ANY, 

MADE IN THIS DISCLOSURE STATEMENT ARE THOSE OF THE PLAN PROPONENT 

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 14 

AND NOT OF SUCH SHAREHOLDERS, ATTORNEYS, ACCOUNTANTS, OR OTHER 

PROFESSIONALS, EXCEPT AS MAY BE OTHERWISE 

SPECIFICALLY AND EXPRESSLY INDICATED. 

2. Requirements for Confirmation of the Plan 

At the Confirmation Hearing, the Bankruptcy Court shall determine whether the 

requirements of Bankruptcy Code section 1129 have been satisfied, in which event the Bankruptcy 

Court shall enter an order confirming the Plan. For the Plan to be confirmed, Bankruptcy Code 

section 1129 requires that: 

(a) The Plan complies with the applicable provisions of the Bankruptcy Code; 

(b) The Debtor has complied with the applicable provisions of the Bankruptcy 

Code; 

(c) The Plan has been proposed in good faith and not by any means forbidden by 

law; 

(d) Any payment or distribution made or promised by the Debtor or by a Person 

issuing securities or acquiring property under the Plan for services or for costs 

and expenses in connection with the Plan has been disclosed to the Bankruptcy 

Court, and any such payment made before the confirmation of the Plan is 

reasonable, or if such payment is to be fixed after confirmation of the Plan, such 

payment is subject to the approval of the Bankruptcy Court as reasonable; 

(e) The Debtor has disclosed the identity and affiliation of any individual proposed 

to serve, after confirmation of the Plan, as a director, officer or voting trustee 

of the Debtor, an affiliate of the Debtor participating in a joint plan with the 

Debtor, or a successor to the Debtor under the Plan; the appointment to, or 

continuance in, such office of such individual is consistent with the interests of 

creditors and interest holders and with public policy; and the Debtor has 

disclosed the identity of any insider that will be employed or retained by the 

Debtor and the nature of any compensation for such insider; 

(f) Any government regulatory commission with jurisdiction (after confirmation 

of the Plan) over the rates of the Debtor has approved any rate change provided 

for in the Plan, or such rate change is expressly conditioned on such approval; 

(g) With respect to each impaired Class of Claims or Equity Interests, either each 

holder of a Claim or Equity Interest of the Class has accepted the Plan, or will 

receive or retain under the Plan on account of that Claim or Equity Interest, 

property of a value, as of the Effective Date of the Plan, that is not less than the 

amount that such holder would so receive or retain if the Debtor was liquidated 

on such date under Chapter 7 of the Bankruptcy Code. If Bankruptcy Code 

section 1111(b)(2) applies to the Claims of a Class, each holder of a Claim of 

that Class will receive or retain under the Plan on account of that Claim property 

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 15 

of a value, as of the Effective Date, that is not less than the value of that holder’s 

interest in the Debtor’s interest in the property that secures that claim; 

(h) Each Class of Claims or Equity Interests has either accepted the Plan or is not 

impaired under the Plan; 

(i) Except to the extent that the holder of a particular Allowed Administrative 

Claim, Allowed Priority Unsecured Tax Claim, or Allowed Priority Unsecured 

Non-Tax Claim has agreed to a different treatment of its Claim, such Claims 

shall be paid in accordance with the provisions of Bankruptcy Code section 

1129(a)(9); 

(j) If a Class of Claims or Equity Interests is impaired under the Plan, at least one 

such Class of Claims or Equity Interests has accepted the Plan, determined 

without including any acceptance of the Plan by any insider holding a Claim or 

Equity Interest of that Class; and 

(k) Confirmation of the Plan is not likely to be followed by the liquidation or the 

need for further financial reorganization of the Debtor or any successor to the 

Debtor under the Plan, unless such liquidation or reorganization is proposed in 

the Plan. 

The Plan Proponent believes that the Plan satisfies all of the statutory requirements of the 

Bankruptcy Code for confirmation and that the Plan was proposed in good faith. The Plan 

Proponent believes it has complied, or will have complied, with all the requirements of the 

Bankruptcy Code governing confirmation of the Plan. 

3. Acceptances Necessary to Confirm the Plan 

Voting on the Plan by each holder of a Claim (or its authorized representative) is important. 

Chapter 11 of the Bankruptcy Code does not require that each holder of a Claim vote in favor of 

the Plan in order for the Court to confirm the Plan. Generally, to be confirmed under the acceptance 

provisions of Bankruptcy Code section 1126(a), the Plan must be accepted by each Class of Claims 

that is impaired under the Plan by parties holding at least two-thirds in dollar amount and more 

than one-half in number of the Allowed Claims of such Class actually voting in connection with 

the Plan. Even if all Classes of Claims accept the Plan, the Bankruptcy Court may refuse to confirm 

the Plan. 

4. Cramdown 

In the event that any impaired Class of Claims does not accept the Plan, the Bankruptcy 

Court may still confirm the Plan at the request of the Debtor if, as to each impaired Class that has 

not accepted the Plan, the Plan “does not discriminate unfairly” and is “fair and equitable.” A plan 

of liquidation does not discriminate unfairly within the meaning of the Bankruptcy Code if no class 

receives more than it is legally entitled to receive for its claims or equity interests. “Fair and 

equitable” has different meanings for holders of secured and unsecured claims and equity interests. 

With respect to a secured claim, “fair and equitable” means either (i) the impaired secured 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 24 of 130
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creditor retains its liens to the extent of its allowed claim and receives deferred cash payments at 

least equal to the allowed amount of its claims with a present value as of the effective date of the 

plan at least equal to the value of such creditor’s interest in the property securing its liens; (ii) 

property subject to the lien of the impaired secured creditor is sold free and clear of that lien, with 

that lien attaching to the proceeds of sale, and such lien proceeds must be treated in accordance 

with clauses (i) and (iii) hereof; or (iii) the impaired secured creditor realizes the “indubitable 

equivalent” of its claim under the plan. 

With respect to an unsecured claim, “fair and equitable” means either (i) each impaired 

creditor receives or retains property of a value equal to the amount of its allowed claim or (ii) the 

holders of claims and equity interests that are junior to the claims of the dissenting class will not 

receive any property under the plan. 

With respect to equity interests, “fair and equitable” means either (i) each impaired equity 

interest receives or retains, on account of that equity interest, property of a value equal to the 

greater of the allowed amount of any fixed liquidation preference to which the holder is entitled, 

any fixed redemption price to which the holder is entitled, or the value of the equity interest, or (ii) 

the holder of any equity interest that is junior to the equity interest of that class will not receive or 

retain under the plan, on account of that junior equity interest, any property. 

The Plan Proponent believes that the Plan does not discriminate unfairly and is fair and 

equitable with respect to each impaired Class of Claims and Equity Interests. In the event at least 

one Class of impaired Claims or Equity Interests rejects or is deemed to have rejected the Plan, the 

Bankruptcy Court will determine at the Confirmation Hearing whether the Plan is fair and 

equitable and does not discriminate unfairly against any rejecting impaired Class of Claims or 

Equity Interests. 

VI. DESCRIPTION OF THE PLAN 

A. Introduction 

A summary of the principal provisions of the Plan and the treatment of Classes of Allowed 

Claims and Allowed Equity Interests is outlined below. The summary is entirely qualified by the 

Plan. This Disclosure Statement is only a summary of the terms of the Plan; it is the Plan (and not 

the Disclosure Statement) that governs the rights and obligations of the parties. 

B. Designation of Claims and Equity Interests/Impairment 

The following is a designation of the classes of Claims and Equity Interests under the Plan. 

In accordance with Bankruptcy Code section 1123(a)(1), Administrative Claims, and Priority 

Unsecured Claims (with the exception of Priority Deposit Claims) have not been classified and are 

excluded from the following Classes. A Claim or Equity Interest is classified in a particular Class 

only to the extent that the Claim or Equity Interest qualifies within the description of that Class, 

and is classified in another Class(es) to the extent that any remainder of the Claim or Equity Interest 

qualifies within the description of such other Class(es). A Claim or Equity Interest is classified in 

a particular Class only to the extent that the Claim or Equity Interest is an Allowed Claim or 

Allowed Equity Interest in that Class. Notwithstanding anything to the contrary in the Plan, no 

Distribution shall be made on account of any Claim that is not an Allowed Claim. 

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Holders of Equity Interest are not receiving any Distributions on account of such Claims 

under the Plan. Under Bankruptcy Code section 1126(g), such Interest holders and Claimholders 

are conclusively presumed to have rejected the Plan, and therefore the Debtor will not solicit their 

votes. 

C. Treatment of Claims and Interests 

1. Administrative Expense Claims 

All Administrative Expense Claims of the Debtor shall be treated as follows: 

a) Each Holder of an Allowed Administrative Expense Claim 

shall receive the full amount thereof without interest in Cash, except to the 

extent that any Holder of an Allowed Administrative Expense Claim agrees 

to less favorable treatment thereof, as soon as practicable after the later of 

(i) the Effective Date or as soon as practicable thereafter, (ii) the date that 

is 10 Business Days after an order of the Bankruptcy Court allowing such 

Administrative Expense Claim becomes a Final Order or (iii) as mutually 

agreed by the Liquidating Trustee and the Holder of such Allowed 

Administrative Expense Claim and approved by the Court. 

b) All requests for payment of Administrative Expense Claims 

(or any other means of preserving and obtaining payment of Administrative 

Expense Claims found to be effective by the Bankruptcy Court) shall be 

filed by any applicable Bar Date established by the Bankruptcy Court and 

noticed separately by the Plan Proponent; and if such requests for payment 

of Administrative Expense Claims are not so filed, the Holders of such 

Claims shall be forever barred and shall not be able to assert such Claims in 

any manner against the Debtor, the Secured Lender, the Liquidating 

Trustee, or the Remaining Assets of the Debtor 

c) Each Holder of an Allowed Professional Claim shall be paid from 

the Professional Claims’ Fund included in the Secured Lender’s 

Contribution. 

2. Priority Claims 

Each Holder of an Allowed Priority Claim (including Allowed Priority Tax Claims) shall 

receive on account of such Claim, (a) Cash equal to the amount of such Allowed Priority Claim, 

without post-petition interest or penalty, on the later of (i) the Effective Date or as soon as 

practicable thereafter or (ii) the date that is 10 Business Days after an order of the Bankruptcy 

Court allowing such Priority Claim becomes a Final Order; or (b) deferred cash payment in the 

amount of allowed claims; or (c) such other treatment as each Holder and the Liquidating Trustee 

may agree. The Holders of such Priority Claims shall be forever barred and shall not be able to 

assert such Claims in any manner against the Debtor, the Secured Lender, the Liquidating Trustee, 

or the Trust Assets of the Debtor. Allowed Priority Claims shall be paid from the Unsecured 

Creditors’ Fund included in the Secured Lender’s Contribution. 

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3. Claims for Statutory Fees 

The Liquidating Trustee shall pay within ten (10) days after the Effective Date all fees 

incurred under 28 U.S.C. and 1930(a)(6) for the period ending on the Effective Date. All fees 

payable pursuant to 28 U.S.C. § 1930 after the Effective Date will be assessed based solely on the 

disbursements made by the Liquidating Trustee and shall be paid by the Liquidating Trustee 

through the earlier of the closing of the Bankruptcy Case by the issuance of a final decree by the 

Bankruptcy Court or upon entry of an order dismissing or converting the Bankruptcy Case to 

Chapter 7. The Liquidating Trustee shall provide an appropriate affidavit indicating the cash 

disbursements made for all relevant periods. 

4. Protective Advance Claim

The Protective Advance Claim shall be allowed in the full amount due and owing under 

the Cash Collateral Orders as of the Effective Date, including any and all expenditures related to 

the Properties referenced in said orders made by Secured Lender to pay pre and post-petition real 

estate taxes due at the Properties or any other pre and post-petition expenses including, without 

limitation, maintenance and other capital advances. Except to the extent that the holder of a 

Protective Advance Claim agrees in writing to a different treatment, to the extent not otherwise 

repaid prior to the Effective Date, the amount of Protective Advance Claim will be added to the 

Secured Lender’s Allowed Secured Claim and treated in accordance with Class 2 herein. 

D. Classification, Impairment and Treatment of Claims and Equity Interests 

1. Classification 

All Claims and Equity Interests, except Administrative Expenses, Priority Claims and 

Claims for Statutory Fees, are placed in Classes as set forth below. A Claim or Interest is classified 

in a particular Class only to the extent that the Claim or Interest qualifies within the description of 

that Class and is classified in other Classes to the extent that any remainder of the Claim or Interest 

qualifies within the description of such other Classes. A Claim also is classified in a particular 

Class for the purpose of receiving distributions pursuant to the Plan only to the extent that such 

Claim is an Allowed Claim in that Class, and such Claim has not been disallowed, paid or released 

prior to the Effective Date. 

It is not possible to predict precisely the total amount of Claims in a particular Class or the 

Distributions that will be ultimately paid to holders of Claims in the different Classes because of 

the variables involved in the calculations (including the results of the claims objection process). 

Notwithstanding, the estimates specified for each Class as set forth on the Liquidation Analysis 

attached hereto as Exhibit 2 are based on information known to the Debtor on the date of this 

Disclosure Statement. 

Class Claim Treatment Voting Rights 

Class 1 Secured Tax 

Claims 

Unimpaired. Not Entitled to 

Vote 

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If Secured Lender closes on the purchase 

of the Properties7

 as set forth in the Plan, 

then the Class 1 Claim shall be paid in full 

and fully satisfied upon such closing. In 

the event the Secured Lender is not the 

successful purchaser for the Properties, 

then the Class 1 Claim shall be paid from 

the sale proceeds of such sale as a first 

priority lien thereon, and upon such 

payment the Class 1 Claim shall be 

deemed paid in full and fully satisfied. 

Class 2 Allowed Secured 

Claim of City of 

Hollywood 

Unimpaired. 

If Secured Lender closes on the purchase 

of the Properties as set forth in the Plan, 

then the Class 2 Claim shall be paid in full 

at closing and fully satisfied upon such 

closing. In the event the Secured Lender is 

not the successful purchaser for the 

Properties, then the Class 2 Claim shall be 

paid from the sale proceeds of such sale, 

and upon such payment the Class 2 Claim 

shall be deemed paid in full and fully 

satisfied. 

Not Entitled to 

Vote 

Class 3 Allowed Secured 

Claim of United 

Leasing, Inc. 

Impaired. 

To the extent that United Leasing, Inc. has 

an Allowed Secured Claim and such claim 

is higher in legal priority than that of the 

Secured Lender, if Secured Lender closes 

on the purchase of the Properties as set 

forth in the Plan, then the Class 3 Claim 

shall be paid in full at closing and fully 

satisfied upon such closing. In the event 

the Secured Lender is not the successful 

purchaser for the Properties, then the Class 

3 Claim shall be paid from the sale 

proceeds of such sale, and upon such 

payment the Class 3 Claim shall be 

deemed paid in full and fully satisfied. 

Entitled to Vote 

 

7

 Capitalized terms used in this Table shall have the meaning ascribed to them in the Plan unless otherwise defined. 

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To the extent that United Leasing, Inc.’s 

Allowed Secured Claim is subordinate in 

priority to the Secured Lender, United 

Leasing, Inc.’s Allowed Secured Claim 

shall be treated as a Class 6 Claim. 

Class 4 Allowed Secured 

Claim of 777 N. 

Ocean Drive, 

LLC (Secured 

Lender) 

Impaired. 

The Secured Lender has an Allowed 

Secured Claim in the amount of $47, 

189,513.79 plus interest, attorneys’ fees 

and expenses, and the Protective Advance 

Claim. Pursuant to the Secured Lender Sale 

Motion to be filed contemporaneously with 

or subsequent to the Plan, the Debtor will 

seek to sell the Properties to the Secured 

Lender as the Stalking Horse Bidder, 

subject to the receipt of higher and/or better 

bids. The Secured Lender has agreed to 

acquire the Properties for an initial credit 

bid in the amount of $43,000,000.00, 

subject to the right to increase the purchase 

price through a credit bid up to and in the 

full amount of its Class 4 Claim. 

In the event the Secured Lender is not the 

successful purchaser for the Properties, 

then the Class 4 Claim shall be paid from 

the sale proceeds of such sale and all then 

existing cash collateral after the payment of 

the Class 1 Claims, Class 2 Claim and Class 

3 Claim (to the extent the Class 3 Claim has 

higher legal priority than Secured Lender’s 

Class 4 Claim). 

In either case, pursuant to the Secured 

Lender Settlement, the Secured Lender 

shall make the Secured Lender 

Contribution on the Effective Date, subject 

to the entry of an Order of the Bankruptcy 

Court approving the Secured Lender 

Settlement under Bankruptcy Rule 9019 as 

more fully set forth below.. 

To the extent there are proceeds from the 

Turnover Action, such proceeds shall, in 

Entitled to Vote 

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the Debtor’s sole discretion, either be paid 

upon the Confirmation Date or anytime 

thereafter to Secured Lender to either (1) 

reimburse the Secured Lender for funds it 

has or will advance to the Debtor pursuant 

to any order entered by the Court on the use 

of Cash Collateral or DIP Financing or (2) 

pay the amounts that Secured Lender may 

have to pay in connection with the Plan, 

including without limitation, the payments 

relating to the Secured Lender 

Contribution. The remainder of any 

proceeds from the Turnover Action shall be 

paid to the Secured Lender upon the 

Confirmation Date or anytime thereafter. 

Class 5 Allowed Secured 

Mechanic’s Lien 

Claims 

Impaired. 

Paid in order of legal priority in class from 

the net proceeds of the sale of the Properties 

after all Class 1 Claims, Class 2 Claims, 

Class 3 Claims (to the extent the Class 3 

Claim has legal priority higher than the 

Class 4 Claim) and Class 4 Claims are paid 

in full. Any deficiency claim will be treated 

as Class 8 Allowed General Unsecured 

Claim. 

Entitled to vote. 

Class 6 Allowed Other 

Secured Claims 

Impaired. 

Paid in order of legal priority in class from 

the net proceeds of the sale of the Properties 

after all Class 1 Claims, Class 2 Claims, 

Class 3 Claims and Class 4 Claims are paid 

in full. Any deficiency claim will be treated 

as Class 8 Allowed General Unsecured 

Claim. 

Entitled to vote. 

Class 7 Allowed Priority 

Deposit Claims 

Unimpaired. 

Unless such Holder agrees to accept a lesser 

treatment of an Allowed Priority Deposit 

Claim, each Holder of an Allowed Priority 

Deposit Claim shall receive, as soon as 

practicable in the discretion of the 

Liquidating Trustee, up to $3,025 of the 

Not entitled to 

vote. 

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Unsecured Creditors’ Fund before payment 

of or reserve for the Allowed General 

Unsecured Claims. Any deficiency claim 

will be treated as Class 8 Allowed General 

Unsecured Claim. 

Class 8 Allowed General 

Unsecured Claims 

Impaired. 

Unless such Holder agrees to accept a lesser 

treatment of an Allowed General 

Unsecured Claim, each Holder of an 

Allowed General Unsecured Claim shall 

receive, as soon as practicable in the 

discretion of the Liquidating Trustee, (i) a 

Pro Rata Share of the Unsecured Creditors’ 

Fund after payment of or reserve for the 

Allowed Priority Claims therefrom, and (ii) 

distributions from the Trust Assets after the 

Effective Date in the discretion of the 

Liquidating Trustee. 

Entitled to vote. 

Class 9 Equity Interests in 

the Debtor 

Impaired. 

Equity Interests shall be canceled as of the 

Effective Date. 

Not entitled to 

vote 

2. Separate Classes and Treatment 

No Class, member of any Class or Holder of any Claim against the Debtor shall be entitled 

to or receive Cash or other property allocated for distribution to any other Class or to a Holder of 

a Claim, except as expressly specified in the Plan. The Liquidating Trustee shall not distribute any 

Cash or other property allocated to a Class, member of any Class or a Holder of a Claim to any 

other Class or member thereof or Holder of a Claim, except as expressly specified in the Plan or 

the Confirmation Order. 

3. Claims May Be in More Than One Class 

A Claim is part of a particular Class only to the extent that the Claim qualifies within the 

definition of that Class and such Claim is part of a different Class to the extent that the remainder 

of the Claim qualifies within the description of a different Class. 

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4. Summary of Claims 

 Not including unsecured rejection damage claims, and assuming that certain objections to 

claims, to be filed, which seek to reclassify certain claims or disallow duplicative claims are 

sustained, the following is an approximate summary of claims (scheduled and filed). 

The creditors by class currently consist of: 8

 Secured Tax Claims (Class 1); 

 Secured Claim of City of Hollywood (Class 2); 

 Secured Claim of United Leasing, Inc. (Class 3); 

 Secured Lender’s claim (Class 4); 

 Secured Mechanic’s Lien Claims (Class 5); 

 Other Secured Claims (Class 6); 

 Priority Deposit Claims (Class 7); 

 Priority Tax Claims; 

 General Unsecured Claims (Class 8); and 

 Equity Interests in the Debtor (Class 9). 

The secured claims are comprised of 7 secured tax claims in the aggregate approximate 

amount of $1,077,000 (Class 1), the City of Hollywood’s claim in the approximate amount of 

$10,604.54 (Class 2), United Leasing, Inc.’s purchase money security claim in the amount of 

$104,799 (Class 3), the Secured Lender’s claim in the approximate amount of $47,190,000 (Class 

4), plus 6 construction/mechanic secured claims in the aggregate approximate amount of 

$8,053,000 (Class 5), plus other secured claims in the aggregate approximate amount of $720,000 

(Class 6). Any deficiency claims of holders of Allowed Secured Claims resulting from the sale of 

the collateral shall be Allowed General Unsecured Claims and treated pari passu with Class 8. 

Priority Deposit Claims (Class 7) is comprised of the holders of Allowed Priority Deposit 

Claims. Section § 507(a)(7) of the Bankruptcy Code (2019) establishes a priority for “allowed 

unsecured claims of individuals, to the extent of $3,025.00 for each such individual, arising from 

the deposit, before the commencement of the case, of money in connection with the purchase, . . . 

of property, for the personal, family or household use of such individuals, that were not delivered 

or provided.” Class 7 is comprised of 2 claims filed in the amount of $263,025; however, per the 

statutory cap set forth in 11 U.S.C. § 507(a)(7) of $3,025, in no event shall any priority deposit 

claim exceed $3,025. Thus, Allowed Priority Deposit Claims shall not exceed $6,050. 

Priority Tax Claims comprise 3 claims filed in the aggregate approximate amount of 

$21,300. 

General Unsecured Claims (Class 8) comprise approximately 410 claims (filed and/or 

scheduled) in the aggregate approximate amount of $8,500,000 plus any deficiency claims of 

holders of Allowed Secured Claims resulting from the sale of the Collateral. 

 

8

 All claims are subject to review and objection, including reclassification of claims. 

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Equity Interests in the Debtor (Class 9) consist of any equity interests in the Debtor. All 

such equity interests will be canceled as of the Effective Date. 

E. Rejection of Executory Contracts 

Each Executory Contract that has not previously been rejected or assumed and assigned 

shall be rejected as of the Confirmation Date (which rejection shall be effective on the Effective 

Date), and such rejected Executory Contracts shall no longer represent the binding obligations of 

the Debtor after the Confirmation Date. Entry of the Confirmation Order shall constitute approval 

of such rejections under Bankruptcy Code sections 365 and 1123. The owner of any property 

located at the Condo-Hotel and subject to a rejected executory contract shall be provided access to 

the Condo-Hotel (by either the Debtor or Secured Lender, as the case may be) for a period of thirty 

(30) days following notice of such rejection to retrieve such property, failing which the property 

will be deemed abandoned by the owner of the property to the Liquidating Trust. 

F. Rejection Claims 

Any Claim arising out of the rejection of an Executory Contract pursuant to the 

Confirmation Order must be filed with the Bankruptcy Court on or before thirty (30) days from 

the date of the Confirmation Order (the “Rejection Claim Bar Date”), and shall be served on 

counsel for the Debtor and the U.S. Trustee. Any such Claims not filed by the Rejection Claim 

Bar Date shall be discharged and forever barred. Each Allowed Claim arising from the rejection 

of an Executory Contract shall be treated as an Allowed General Unsecured Claim. 

G. Injunction Under the Plan 

The Plan contains an injunction as follows: 

As of the Confirmation Date, except as otherwise provided in the Plan or the Confirmation 

Order, all Persons that have held, currently hold or may hold a Claim, Equity Interest or other debt 

or liability that is treated pursuant to the terms of the Plan are enjoined from taking any of the 

following actions on account of any such Claims, Equity Interests, debts or liabilities, other than 

actions brought to enforce any rights or obligations under the Plan, against the Debtor, the 

Liquidating Trustee, the Estate, the Remaining Assets or Estate property: (i) commencing or 

continuing in any manner any action or other proceeding; (ii) enforcing, attaching, collecting or 

recovering in any manner any judgment, award, decree or order; (iii) creating, perfecting or 

enforcing any lien or encumbrance; (iv) asserting a setoff of any kind against any debt, liability or 

obligation; and (v) commencing or continuing, in any manner or in any place, any action that does 

not comply with or is inconsistent with the provisions of the Plan or the Confirmation Order. 

VII. MEANS FOR EXECUTION AND IMPLEMENTATION OF THE PLAN 

A. Introduction 

The Plan will be implemented through a distribution of the proceeds of the liquidation of 

the Remaining Assets and the continued prosecution of Causes of Action through a liquidating 

trust (the “Liquidating Trust”). The Debtor shall complete the sale of all of its tangible assets 

during this Chapter 11 Case (the “Asset Sales”). The following discussion outlines the general 

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 25 

terms of certain actions that will be taken to close the transactions contemplated by the Plan. 

B. Sale of the Collateral 

As described in the Plan and Secured Lender Sale Motion, the Bankruptcy Court, the 

Debtor, or a designee may, if necessary, conduct an auction sale of the Collateral for the highest 

or best offer in accordance with the Plan, the Secured Lender Sale Motion and any order granting 

the Secured Lender Sale Motion. The sale of the Collateral at an auction or otherwise shall be done 

in connection with and as part of the implementation of the Plan for all purposes, including 

specifically Section 1146(a) of the Bankruptcy Code. 

Upon conclusion of any auction for the Collateral, the Debtor shall seek an order of the 

Bankruptcy Court approving the sale of the Collateral as contemplated in and pursuant to the Plan, 

the Secured Lender Sale Motion and any order granting the Secured Lender Sale Motion. 

If the Secured Lender is the successful purchaser of the Collateral at an auction or otherwise 

pursuant to the Plan, the Secured Lender Sale Motion and any order granting the Secured Lender 

Sale Motion, the Secured Lender or its nominee or designee may take title to the Collateral subject 

to the Mortgage, which Mortgage may be assigned to any such nominee’s or designee’s lender. 

C. Secured Lender Settlement 

The Plan shall constitute a settlement and compromise of all claims and causes of action 

by and between the Debtor and the Debtor’s bankruptcy estate and the Secured Lender pursuant 

to and under Bankruptcy Rule 9019 (the “Secured Lender Settlement”). Pursuant to the Secured 

Lender Settlement, the Secured Lender has agreed (i) to be the Stalking Horse Purchaser for the 

Debtor’s Properties, subject in all events to the receipt of higher and/or better bids, (ii) to fund the 

Protective Advance Claim pursuant to the Cash Collateral Orders, and (iii) to fund the Secured 

Lender Contribution. In exchange, the Secured Lender shall be entitled to the Third Party Release 

as set forth below and the Debtor has agreed as follows: 

 

The Debtor, on behalf of itself, the Debtor’s bankruptcy estates, any person or entity 

claiming by or through the Debtor’s bankruptcy estate, and each of their officers, directors, 

shareholders, members, managers, agents, employees, attorneys, partners, associates and insurers, 

including specifically Moses Bensusan (collectively the “Debtor Releasors”) agree to and shall be 

deemed to have fully and generally released and discharged the Secured Lender and each of its 

officers, directors, shareholders, members, managers, agents, employees, attorneys, partners, 

associates and insurers (collectively the “Secured Lender Released Parties”) from and against any 

and all manner of claims, whether asserted or unasserted, contemplated or raised, causes of actions, 

suits, debts, dues, accounts, bonds, covenants, contracts, agreements, judgments, losses, damages, 

liabilities and demands of any kind whatsoever in law or in equity, whether known or unknown, 

suspected or unsuspected, contingent or fixed, including attorneys’ fees and costs that any of the 

Debtor Releasors now have, have had or in the future may have against any of the Secured Lender 

Released Parties arising out of, related to or in connection with, directly or indirectly, the Debtor, 

the Debtor’s bankruptcy estate, the Mortgage, the Properties, and/or the facts and circumstances 

related thereto (the “Debtor Released Claims”). Notwithstanding anything herein to the contrary, 

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the release of the Secured Lender Released Parties herein shall not release the Secured Lender 

from any of its obligations under this Plan or the Secured Lender Sale Motion. 

The obligations of the Debtor and the Secured Lender shall be subject to the entry of an 

order of the Bankruptcy Court, which may be part of the Confirmation Order, approving the 

Secured Lender Settlement under the pursuant to Bankruptcy Rule 9019 in a form and content, 

and with findings, reasonably acceptable to the Secured Lender, including that the Secured Lender 

Settlement is fair and reasonable and falls well above the lowest point in the range of 

reasonableness. 

Additionally, the Debtor released the Secured Lender in connection with the Cash 

Collateral Orders and the Challenge period therein has since expired with no claims being asserted 

against the Secured Lender. 

The standards for approval of a settlement are well settled and requires a consideration of 

the reasonableness of the proposed settlement. See, e.g., Protective Comm. for Indep. Stockholders 

of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424 (1968); In re W.T. Grant Co., 699 F.2d 

599, 608 (2d Cir. 1983); Florida Trailer and Equip. Co. v. Deal, 284 F.2d 567, 571 (5th Cir. 1960). 

The inquiry need only determine whether the settlement falls below the lowest point of the range 

of reasonableness. See W.T. Grant Co., 699 F.2d at 608; see also In re Martin, 91 F.3d 389 (3rd 

Cir. 1996); In re Van Diepen, P.A., 236 Fed. Appx. 498, 501 (11th Cir. 2007). Certain factors are 

used in evaluating a settlement, including: (i) the probability of success in litigation, (ii) the likely 

difficulties in collection; (iii) the complexity of the litigation involved, and the expense, 

inconvenience and delay necessarily attending it; and (iv) the paramount interest of the creditors. 

Wallis v. Justice Oaks II, Ltd., 898 F.2d 1544, 1549 (11th Cir, 1990). 

The Debtor asserts that the Secured Lender Settlement falls well above the lowest point in 

the range of reasonableness when considering these factors. There are significant risks inherent in 

all litigation and the Secured Lender may ultimately prevail in any litigation it brings, particularly 

as the Debtor believes it has no legitimate defenses to any litigation brought by the Secured Lender. 

If the Secured Lender prevails in claims against the Debtor, it will be able to collect a large portion 

of the debt by foreclosing the Debtor’s interest (as well as the interest of any and all junior 

lienholders) on the Properties. The complexity of the litigation involved and attendant expense, 

inconvenience and delay militates in favor of approval of the Secured Lender Settlement. While 

the claims litigated between the Debtor and the Secured Lender are likely typical, they will require 

potential discovery, and the expense of these efforts will be prohibitive to the Debtor and decrease 

potential recovery to other creditors. Finally, the Secured Lender Settlement gives certainty and 

avoids risk, expense and delay attendant with litigation. Importantly, pursuant to the Secured 

Lender Settlement, the Secured Lender will make the Secured Lender Contribution to provide for 

recovery by other creditors, which would not exist absent such settlement. As such, the Secured 

Lender Settlement is in the paramount interest of the creditors. 

Notwithstanding the foregoing, a replacement stalking horse purchaser shall be permitted 

to replace the Secured Lender, provided the replacement stalking horse bid is no less than 

$43,000,000 and such stalking horse bidder provides a contract deposit equal to no less than five 

percent (5%) of the stalking horse purchase price. 

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D. Purpose of the Liquidating Trustee 

The liquidating trustee (“Liquidating Trustee”), selected on or before Confirmation and 

appointed by the Bankruptcy Court, will hold and monetize all the Remaining Assets for the benefit 

of the Creditors of the Debtor’s Estate, and for payments of all Allowed Claims in accordance with 

the provisions of this Plan, pursuant to a liquidating trust agreement (the “Liquidating Trust 

Agreement”). The Liquidating Trustee will not be selected nor supervised by the United States 

Trustee, and will not be bonded in favor of the United States in an amount set by the United States 

Trustee. 

E. Authority and Limitations of Liquidating Trustee 

All remaining rights and claims of the Debtor's Estate at the time of confirmation of the 

Liquidating Plan, including but not limited to the right to object to claims or to pursue causes of 

actions including, but not limited to actions under Chapter 5 of the Bankruptcy Code, shall be 

assigned to the Liquidating Trust upon confirmation of the Liquidating Plan. 

The Liquidating Trust and Liquidating Trustee is entitled to section 108(a) tolling insofar 

as the Liquidating Trustee is acting on behalf of, as an agent of, and/or as a representative of the 

Debtor's estate to pursue claims that belonged to the Debtor for the benefit of the Debtor's creditors. 

The Liquidating Trustee shall have the power and authority to perform the following acts 

(subject to Court approval), in addition to any powers granted by law or conferred to it by any 

other provision of the Plan of the Liquidating Trust Agreement; provided however, that 

enumeration of the following powers shall not be considered in any way to limit or control the 

power of the Liquidating Trustee to act as specifically authorized by any other provision of the 

Plan or Liquidating Trust Agreement and to act in such manner as the Liquidating Trustee may 

deem necessary or appropriate to discharge all obligations assumed by the Liquidating Trustee or 

provided herein and to conserve and protect Remaining Assets or to confer on the Creditors the 

benefits intended to be conferred upon them by this Plan: 

(a) To open and maintain bank accounts on behalf of or in the name of the 

Liquidating Trust, calculate and make Distributions and take other actions 

consistent with the Plan and the implementation thereof, including the 

establishment, re-evaluation, adjustment and maintenance of appropriate 

reserves, in the name of the Liquidating Trust. 

(b) To receive, conserve and manage the assets of the trust (the “Trust Assets,” 

as further defined in the Plan). 

(c) To hold legal title to any and all Trust Assets. 

(d) Subject to the applicable provisions of the Plan, to prosecute, collect and 

liquidate the Trust Assets. 

(e) To take discovery from third parties, including but not limited to, issuing 

Fed.R.Bankr.P. 2004 subpoenas and discovery requests. 

(f) Make decisions regarding the retention or engagement of Trustee’s 

Professionals and to pay, from the Trust Assets and the proceeds thereof, 

the fees and charges incurred by the Liquidating Trust and the fees and 

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expenses of Liquidating Trustee’s Professionals, as well as the 

disbursements, expenses or related support services relating to the 

implementation of the Plan and performance by the Liquidating Trustee of 

his duties under the Liquidating Trust Agreement. 

(g) To pay all lawful, expenses, debts, charges and liabilities of the Liquidating 

Trust. 

(h) To wind down the affairs of the Liquidating Trust including the filing of 

final tax returns, establish any administrative reserves necessary to close the 

Trust and make all Distributions to the Beneficiaries provided for or 

contemplated by the Plan. 

(i) To withhold from the amount distributable to any Person such amount as 

may be sufficient to pay any tax or other charge which the Liquidating 

Trustee has determined, in its sole discretion, may be required to be 

withheld therefrom under the income tax laws of the United States or of any 

state or political subdivision thereof. In the exercise of its discretion and 

judgment, the Trustee may enter into agreements with taxing or other 

governmental authorities for the payment of such amounts as may be 

withheld in accordance with the provisions of this section. 

(j) To enter into any agreement or execute any document required by or 

consistent with the Plan and perform all obligations thereunder. 

(k) To abandon in any commercially reasonable manner, including 

abandonment or donation to a charitable organization of its choice, any 

assets if it concludes that they are of no significant value or benefit to the 

Liquidating Trust. 

(l) If any of the Trust Assets are situated in any state or other jurisdiction in 

which the Liquidating Trustee is not qualified to act as trustee, to nominate 

and appoint a Person duly qualified to act as trustee in such state or 

jurisdiction and require from each such trustee some form of adequate 

security as designated by the Liquidating Trustee; confer upon such trustee 

all the rights, powers, privileges and duties of Trustee, subject to the 

conditions and limitations of this Liquidating Trust, except as modified or 

limited by the Liquidating Trustee and except where the conditions and 

limitations may be modified by the laws of such state or other jurisdiction 

(in which case, the laws of the state or other jurisdiction in which such 

trustee is acting shall prevail to the extent necessary); require such other 

trustee to be answerable to the Liquidating Trustee for all monies, assets 

and other property that may be received in connection with the 

administration of all property; and remove such other trustee, with or 

without cause, and appoint a successor trustee at any time by the execution 

by the Liquidating Trustee of a written instrument declaring such other 

trustee removed from office, and specifying the effective date and time of 

removal. 

(m) Except as otherwise set forth in the Liquidating Trust Agreement, to have 

exclusive power to prosecute and/or settle all causes of actions including, 

without limitation, Avoidance Actions or any other causes of action or 

counterclaims (collectively, the “Actions”) and exercise, participate in or 

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initiate any proceeding before the Bankruptcy Court or any other court of 

competent and appropriate jurisdiction and voluntarily participate as a party 

or otherwise in any administrative proceeding, arbitration, mediation, or 

other nonjudicial proceeding and litigate or settle such Actions on behalf of 

the Liquidating Trust, and pursue such actions to settlement or final order, 

all in accordance with the terms of the Liquidating Trust Agreement. 

(n) To hold any unclaimed Distributions or payment to a Beneficiary (as 

defined in the Liquidating Trust) in accordance with the Liquidating Trust 

Agreement, the Confirmation Order and the Plan. 

(o) To purchase or create and carry all insurance policies and pay all insurance 

premiums and costs it deems necessary or advisable. 

(p) To implement and/or enforce all provisions of the Plan. 

(q) To collect and liquidate all Trust Assets pursuant to the Plan, the 

Confirmation Order and the Liquidating Trust Agreement and to ultimately 

close the Chapter 11 Case. 

(r) To object to Claims and supervise and administer the resolution, settlement 

and payment of such Claims and the distribution to the Beneficiaries in 

accordance with the Liquidating Trust Agreement and the Plan. 

Specifically, the Liquidating Trustee may compromise or settle any such 

Claim (disputed or otherwise) free of any restrictions other than those 

restrictions expressly imposed by the Plan, the Confirmation Order or the 

Liquidating Trust Agreement. 

(s) Exercise such rights of setoff as the Debtor or the Estate may have had 

against any Beneficiary and/or seek Court approval of such exercise. 

(t) Voluntarily engage in arbitration or mediation with regard to any dispute 

(u) To (i) seek a determination of tax liability under section 505 of the 

Bankruptcy Code, (ii) file, if necessary, any and all tax information returns 

required with respect to the Liquidating Trust treating the Liquidating Trust 

as a grantor trust pursuant to Treas. Reg. 1.67-4(a) or otherwise, (iii) make 

tax elections by and on behalf of the Liquidating Trust and (iv) pay taxes, if 

any, payable by the Liquidating Trust. 

(v) To make all distributions to holders of Allowed Claims provided for or 

contemplated by the Plan. 

(w) Resolve issues pertaining to the retention or disposal of the Liquidating 

Trust's administrative and business records. 

(x) To perform any other actions or duties required to be performed by the 

Liquidating Trustee pursuant to the provisions of the Plan and/or 

Confirmation Order. 

Limitations on the Liquidating Trustee. Notwithstanding anything in the Liquidating Trust 

Agreement to the contrary, the Liquidating Trustee shall not do or undertake any of the following: 

(a) Take any action in contravention of the Plan, the Confirmation Order or the 

Liquidating Trust Agreement. 

(b) Take any action that would significantly jeopardize treatment of the 

Liquidating Trust as a “liquidating trust” for federal income tax purposes. 

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(c) Grant liens on any of the Trust Assets. 

(d) Guaranty any debt. 

(e) Loan Trust Assets to the Liquidating Trustee. 

(f) Purchase Trust Assets from the Liquidating Trust. 

(g) Transfer Trust Assets to another trust with respect to which the Liquidating 

Trustee serves as trustee. 

(h) Settle any Actions. 

F. Operations of the Liquidating Debtor 

On the Effective Date, the Debtor will be deemed dissolved, to the extent its operations 

have continued post-petition such operations will cease, and the Remaining Assets assigned and 

transferred to the Liquidating Trust, which will be managed by the Liquidating Trustee. 

Except as otherwise provided in the Plan, all Cash shall be invested by the Liquidating 

Trustee with sole and absolute discretion in only (i) direct obligations of, or obligations guaranteed 

by, the United States of America and in compliance with Section 345 of the Bankruptcy Code; (ii) 

obligations of any agency or corporation which is or may hereafter be created by or pursuant to an 

act of the Congress of the United States as an agency or instrumentality thereof; (iii) AAA rated 

tax-free securities issued by municipalities or state governments or agencies; or (iv) such other 

obligations or instruments as may from time to time be approved for such investments by the 

Court; provided, however, that the Liquidating Trustee may, to the extent deemed necessary by 

the Liquidating Trustee with sole and absolute discretion to implement the provisions of this 

Agreement, deposit moneys in demand deposits (including money market funds) at any U.S. 

Trustee approved bank, trust company or other financial institution which has, at the time of such 

deposit a capital stock and surplus aggregating at least $100,000,000. The investment powers of 

the Liquidating Trustee, other than those reasonably necessary to maintain the value of the 

Remaining Assets, shall be limited to powers to invest in demand and time deposits, such as shortterm certificates of deposit, in banks or other savings or financial institutions, or other temporary, 

liquid investments, such as U.S. Treasury Bills. Such investments shall mature in such amounts 

and at such times as may be deemed necessary by the Liquidating Trustee with sole and absolute 

discretion to provide funds when needed to make payments from the Remaining Assets, as the 

case may be. 

In no case shall any party dealing with the Liquidating Trustee in any manner whatsoever 

in relation to the Remaining Assets or to any part or parts thereof, be obligated to see that the 

provisions of the Plan or any direction from the Court have been complied with, or be obligated 

or privileged to inquire into the authority of the Liquidating Trustee to act, or to inquire into any 

other limitation or restriction of the power and authority of the Liquidating Trustee, but as to any 

party dealing with the Liquidating Trustee in any manner whatsoever in relation to the Remaining 

Assets, the power of the Liquidating Trustee to act or otherwise deal with the Remaining Assets 

shall be absolute. 

The Liquidating Trustee shall be responsible for making distributions to holders of 

Allowed Claims from the General Distribution Fund pursuant to Articles II and III of the Plan. 

Under no circumstances shall the Liquidating Trustee have any power to engage in any trade or 

business or any other similar activity except as specifically provided herein or otherwise 

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

The Liquidating Trustee shall keep an accounting of receipts and disbursements, which 

shall be open to inspection and review by the Court and creditors of the Debtor (upon reasonable 

notice, and without unduly interfering with the operations of the Liquidating Trustee). 

All costs, expenses and obligations incurred by the Liquidating Trustee in administering 

the Remaining Assets or in any manner connected, incidental or related thereto, including but not 

limited to the fees and expenses of professionals retained by the Liquidating Trustee and its 

professionals to assist in carrying out its duties pursuant to the Plan, post-confirmation U.S. Trustee 

fees, and fees and expenses of the Liquidating Trustee and its professionals in pursuing ongoing 

litigation, shall be a charge against the Remaining Assets, and the Liquidating Trustee shall pay 

same, maintaining at all times adequate reserves for such payments prior to making distributions 

to the Creditors. 

The Liquidating Trustee shall maintain an adequate reserve fund after payment of all fees, 

expenses, taxes, etc. which shall be available to cover all expenses and costs associated with 

carrying out the provisions of the Plan. The balance of the reserve fund shall be included in the 

final disbursement to holders of Allowed Claims prior to dissolution of the Liquidating Trustee’s 

corporate existence. 

Neither the Liquidating Trustee, or any partner, director, officer, affiliate, employee, 

employer, professional, agent or representative of the Liquidating Trustee (“Indemnified 

Persons”) shall be personally liable in connection with the affairs of the Liquidating Trust to any 

person, including any Beneficiary of the Liquidating Trust, or to the Liquidating Trust, except for 

acts or omissions of the Indemnified Person that constitute any self-dealing, breach of fiduciary 

duty, fraud, gross negligence or willful misconduct. Persons dealing with Indemnified Persons in 

connection with the Liquidating Trust, or seeking to assert claims against the Liquidating Trust, 

shall have recourse only to the Trust Assets to satisfy any liability incurred by the Indemnified 

Persons to such persons in carrying out the terms of this Trust Agreement, except for acts or 

omissions of the Indemnified Persons that constitute any self-dealing, breach of fiduciary duty, 

fraud, gross negligence or willful misconduct. 

 Except as otherwise set forth in the Plan or Confirmation Order, Indemnified Persons, 

including, without limitation, any firm in which the Liquidating Trustee is a partner, member, 

shareholder or employee (“Firm”), shall be defended, held harmless and indemnified from time 

to time by the Liquidating Trust against any and all losses, claims, costs, expenses and liabilities 

to which such Indemnified Persons may be subject by reason of such Indemnified Party’s 

execution in good faith of its duties pursuant to the discretion, power and authority conferred on 

such person by the Liquidating Trust Agreement, the Plan or the Confirmation Order; provided, 

however, that the indemnification obligations arising pursuant to this section shall not indemnify 

any Indemnified Person for any actions taken by an Indemnified Person which constitute fraud, 

willful misconduct or gross negligence of his or her duties hereunder, or willful material breach of 

the Plan. Satisfaction of any obligation of an Indemnified Person arising pursuant to the terms of 

this section shall be payable only from the Trust Assets and such right to payment shall be prior 

and superior to any rights of Beneficiaries to receive a Distribution of the Trust Assets. 

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The Liquidating Trustee shall not be liable for any act it may do, or omit to do hereunder 

or acting in good faith and in the exercise of his, her or its best judgment, and the fact that such act 

or omission was advised, directed or approved by an attorney acting as attorney for the Liquidating 

Trustee shall be conclusive evidence of such good faith and best judgment. However, the limited 

liability described in this paragraph shall not apply to any self-dealing, breach of fiduciary duty, 

fraud, gross negligence or willful misconduct by the Liquidating Trustee’s officers or employees. 

The Liquidating Trustee shall maintain a bond in favor of the estate in an amount to be 

determined prior to or at the Confirmation Hearing and established in the Confirmation Order, 

which will be paid by the estate for the benefit of holders of Allowed Claims of the estate. 

G. Compensation of Liquidating Trustee 

The Liquidating Trustee shall be paid in accordance with section 326 of the Bankruptcy 

Code. 

H. Dissolution of Corporate Existence 

On the Effective Date, the Debtor will be deemed dissolved without the necessity of any 

further action, notice or filing. 

I. Termination of Employees/Limitation of Liability/Release of Professionals 

The Debtor does not have employees. However, as of the Effective Date, the Debtor's 

officers and directors, including, without limitation, the Debtor's President, shall be terminated for 

all purposes. On the ninety first (91) day after the Effective Date, any causes of action, claims, 

liabilities, counterclaims, and damages belonging to the Debtor, the Estate or the holder of any 

claim (regardless of whether such Claim is ultimately Allowed or Disallowed) relating to 

participation in the Debtor's bankruptcy case against such officers, directors or employees of the 

Debtor, shall be released, except for any acts of self-dealing, breach of fiduciary duty, fraud, gross 

negligence, professional negligence, or willful misconduct. Moreover, as of the Effective Date, the 

Debtor and the Estate shall release each attorney, accountant or other professional employed by 

the Debtor from any and all causes of action, claims, liabilities, counterclaims and damages 

relating in any manner to such professional's participation in this Chapter 11 Case, except for any 

acts of self-dealing, breach of fiduciary duty, fraud, gross negligence, professional negligence, or 

willful misconduct. 

VIII. RISK FACTORS IN CONNECTION WITH THE PLAN 

A Claimholder should carefully consider the following factors, as well as the other 

information contained in this Disclosure Statement (as well as the documents delivered herewith 

or incorporated by reference herein), before deciding whether to vote to accept or to reject the 

Plan. 

The principal purpose of the Debtor’s Bankruptcy Case is the formulation of the Plan, 

which liquidates the Debtor’s business and operations and establishes how Claims against and 

Equity Interests in the Debtor will be satisfied. Under the Plan, certain Claims may receive partial 

distributions, and other Claims may not receive any distributions at all. Equity Interests will 

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receive no distributions. 

A. Bankruptcy Considerations 

Although the Debtor believes the Plan will satisfy all requirements necessary for 

confirmation by the Bankruptcy Court, there can be no assurance that the Bankruptcy Court will 

confirm the Plan as proposed. Moreover, there can be no assurance that modifications of the Plan 

will not be required for confirmation or that such modifications would not necessitate the resolicitation of votes. 

In addition, the occurrence of the Effective Date is conditioned on the satisfaction (or 

waiver) of the conditions precedent set forth in Article IX of the Plan, and there can be no assurance 

that such conditions will be satisfied or waived. In the event the conditions precedent described in 

Article IX of the Plan have not been satisfied, or waived (to the extent possible) by the Debtor or 

applicable parties (as provided for in the Plan) as of the Effective Date, then the Confirmation 

Order will be vacated, no Distributions will be made pursuant to the Plan, and the Debtor and all 

holders of Claims and Equity Interests will be restored to the status quo ante as of the day 

immediately preceding the Confirmation Date as though the Confirmation Date had never 

occurred. 

Section 1122 of the Bankruptcy Code provides that a plan may place a claim or an equity 

interest in a particular class only if such claim or equity interest is substantially similar to the other 

claims or equity interests in such class. The Debtor believes that the classification of Claims and 

Equity Interests under the Plan complies with the requirements set forth in the Bankruptcy Code 

because each Class of Claims and Equity Interests encompass Claims or Equity Interests, as 

applicable, that are substantially similar to the other Claims and Equity Interests in each such Class. 

Nevertheless, there can be no assurance that the Bankruptcy Court will reach the same conclusion. 

B. Claims Estimates May Be Incorrect 

There can be no assurance that the estimated Claim amounts set forth herein are correct. 

The actual allowed amounts of Claims may differ materially from the estimates. 

C. No Duty to Update Disclosures 

The Debtor has no duty to update the information contained in this Disclosure Statement 

as of the date hereof, unless otherwise specified herein, or unless the Debtor is 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. 

D. Representations Outside this Disclosure Statement 

This Disclosure Statement contains representations concerning or related to the Debtor and 

the Plan that are 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 Plan should not be 

relied upon by holders of Claims that are entitled to vote to accept or reject the Plan. 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 42 of 130
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E. No Admission 

The information and representations contained herein shall not be construed to constitute 

an admission of, or be deemed evidence of, any legal effect of the Plan on the Debtor or holders 

of Claims and Equity Interests. 

F. Tax and Other Related Considerations 

A discussion of potential tax consequences of the Plan is provided in Section XI hereof; 

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 advice from their own independent tax, legal or other professional advisors based on their 

own individual circumstances. 

IX. LEGAL PROCEEDINGS 

A. Retention of Causes of Action 

Pursuant to the Bankruptcy Code, a debtor may seek to recover, through adversary 

proceedings in the bankruptcy court, certain transfers of the debtor's property, including payments 

of cash, made while the debtor was insolvent during the ninety (90) days immediately prior to the 

commencement of the bankruptcy case (or, in the case of a transfer to, or on behalf of, an "insider," 

one year prior to the commencement of the bankruptcy case) in respect of antecedent debts to the 

extent the transferee received more than it would have received on accounts of such pre-existing 

debt had the debtor been liquidated under chapter 7 of the Bankruptcy Code. Such adversary 

proceedings typically arise under sections 542, 543, 544, 547 through 551, and/or 553 of the 

Bankruptcy Code. 

However, there are certain defenses to claims seeking to avoid and recover transfers made 

by a debtor described above. For example, transfers made in the ordinary course of the debtor's 

and the transferee's business according to ordinary business terms are not recoverable. 

Furthermore, if the transferee extended credit contemporaneously with or subsequent to the 

payment, and prior to the commencement of the bankruptcy case, for which the defendant was not 

repaid, such extension constitutes an offset against an otherwise recoverable transfer of property. 

If a payment is recovered by a debtor, the defendant has a general unsecured claim against the 

debtor to the extent of the recovery. 

During the ninety (90) day period immediately preceding the Petition Date, while the 

Debtor was presumed to be insolvent, the Debtor made various payments and other transfers of its 

property to creditors on account of antecedent debts. In addition, during the one-year period before 

the Petition Date, the Debtor may have made certain transfers of its property to, or for the benefit 

of, certain "insiders." Some of the aforementioned payments or transfers may be subject to 

adversary proceedings seeking to avoid and recover the payments or transfers by the Debtor's 

bankruptcy Estate pursuant to sections 329, 542, 543, 544, 547 through 551, and/or 553 of the 

Bankruptcy Code. 

The Liquidating Trustee will hold all Claims, Causes of Action, and other legal and 

equitable rights that the Debtor had (or had power to assert) immediately prior to confirmation of 

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the Plan, including actions for the avoidance and recovery of Estate property under Bankruptcy 

Code sections 329 and 550, or transfers avoidable under sections 542, 543, 544, 547 through 551, 

and/or 553 of the Bankruptcy Code. The Plan preserves all of the Debtor's rights in respect of all 

Claims and Causes of Action, transfers the Debtor's rights in respect of such Claims and Causes 

of Action to the Liquidating Trust, and empowers the Liquidating Trustee on behalf of the 

Liquidating Trust to investigate, prosecute, collect, and/or settle the Claims and Causes of Action 

as the Liquidating Trustee, in his business judgment, may deem appropriate. 

The Debtor's Schedules of Assets and Liabilities, as amended, identify creditors whose 

Claims are disputed, and the Debtor's Statement of Financial Affairs identifies the parties (known 

to the Debtor as of the Petition Date) who received payments and transfers from the Debtor, which 

payments and transfers may be avoidable under the Bankruptcy Code. Moreover, the Liquidating 

Trustee will investigate Avoidance Actions and Causes of Action the Liquidating Trust may have 

against both insiders and third parties, including but not limited to directors, officers, affiliates, 

parent companies, subsidiaries, landlords, contract counterparties, service providers, employees, 

and/or investors. Said Avoidance Actions and Causes of Action include, but are not limited to, 

potential causes of action for breach of contract, negligence, and/or intentional torts against the 

Debtor's members, officers, directors, affiliates, employees, agents, landlords, and/or partners. 

However, the Debtor is preserving all Causes of Action against Secured Lender for any amounts 

due and owing by Secured Lender pursuant to the APA (and Final Sale Order) not yet paid, and 

Secured Lender is preserving all Causes of Action against the Debtor and the Estate for any of the 

Debtor’s obligations owing to Secured Lender under the APA. The Liquidating Trustee will 

investigate potential objections to Claims, Avoidance Actions, and Causes of Action; therefore, 

the Debtor is unable to provide any meaningful estimate of amounts that could be recovered. THE 

PLAN DOES NOT, AND IS NOT INTENDED TO, RELEASE ANY SUCH 

AFOREMENTIONED AVOIDANCE ACTIONS, CAUSES OF ACTION, OR OBJECTIONS 

TO PROOFS OF CLAIM. ENTRY OF THE CONFIRMATION ORDER SHALL NOT 

CONSTITUTE A WAIVER OR RELEASE BY THE DEBTOR OR ITS ESTATE OF ANY 

AVOIDANCE ACTION, CAUSE OF ACTION, OR OBJECTION TO PROOF OF CLAIM, 

EXCEPT AS EXPRESSLY PROVIDED FOR BY THE PLAN OR BY FINAL ORDER OF THE 

BANKRUPTCY COURT. ON AND AFTER THE EFFECTIVE DATE, AND PURSUANT TO 

BANKRUPTCY CODE SECTION 1123(b)(3), THE LIQUIDATING TRUSTEE SHALL BE 

DESIGNATED REPRESENTATIVE OF THE ESTATE WITH RESPECT TO, AND SHALL BE 

ASSIGNED, ALL AVOIDANCE ACTIONS AND CAUSES OF ACTION ARISING UNDER 

SECTIONS 542, 543, 544, 547 THROUGH 551, AND 553 OF THE BANKRUPTCY CODE 

AND ALL CAUSES OF ACTION BELONGING TO THE DEBTOR WHICH EXIST OUTSIDE 

OF BANKRUPTCY (THE "TRANSFERRED CAUSES OF ACTION"). THE LIQUIDATING 

TRUSTEE SHALL BE AUTHORIZED TO INVESTIGATE, ENFORCE, PROSECUTE, 

SETTLE, COLLECT, OR COMPROMISE THE TRANSFERRED CAUSES OF ACTION. 

Creditors should understand that legal rights, Claims, and Causes of Action the Debtor may 

have against them, if any exist, are retained under the Plan for prosecution unless a specific order 

of the court authorizes the Debtor to release such legal rights, Claims, and Causes of Action. AS 

SUCH, CREDITORS ARE CAUTIONED NOT TO RELY ON (I) THE ABSENCE OF THE 

LISTING OF ANY LEGAL RIGHT, CLAIMS, OR RIGHT OF ACTION AGAINST A 

PARTICULAR CREDITOR IN THE DISCLOSURE STATEMENT, PLAN, SCHEDULES OF 

ASSETS AND LIABILITIES, OR STATEMENT OF FINANCIAL AFFAIRS OR (II) THE 

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ABSENCE OF LITIGATION OR DEMAND PRIOR TO THE EFFECTIVE DATE OF THE 

PLAN AS ANY INDICATION THAT THE DEBTOR DOES NOT POSSESS OR DOES NOT 

INTEND TO PROSECUTE A PARTICULAR RIGHT, CLAIM, OR RIGHT OF ACTION IF A 

PARTICULAR CREDITOR VOTES TO ACCEPT THE PLAN. IT IS THE EXPRESSED 

INTENTION OF THE PLAN TO PRESERVE ALL RIGHTS, CLAIMS, AND CAUSES OF 

ACTION OF THE DEBTOR, WHETHER NOW KNOWN OR UNKNOWN, FOR THE 

BENEFIT OF THE DEBTOR'S ESTATE AND ITS CREDITORS. 

IN REVIEWING THIS DISCLOSURE STATEMENT AND THE PLAN, AND IN 

DETERMINING WHETHER TO VOTE IN FAVOR OF OR AGAINST THE PLAN, 

CREDITORS AND INTEREST HOLDERS (INCLUDING PARTIES THAT RECEIVED 

PAYMENTS FROM THE DEBTOR WITHIN NINETY (90) DAYS PRIOR TO THE PETITION 

DATE) SHOULD CONSIDER THAT A CAUSE OF ACTION MAY EXIST AGAINST THEM, 

THAT THE PLAN PRESERVES ALL AVOIDANCE ACTIONS, CAUSES OF ACTION, AND 

OBJECTIONS TO CLAIMS, AND THAT THE PLAN AUTHORIZES THE LIQUIDATING 

TRUST TO PROSECUTE THE SAME. 

X. ALTERNATIVES TO PLAN AND LIQUIDATION ANALYSIS 

There are three possible consequences if the Plan is rejected or if the Bankruptcy Court 

refuses to confirm the Plan: (a) the Bankruptcy Court could dismiss the Debtor’s Chapter 11 

Bankruptcy Case, (b) the Debtor’s Chapter 11 Bankruptcy Case could be converted to a liquidation 

case under Chapter 7 of the Bankruptcy Code, or (c) the Bankruptcy Court could consider an 

alternative plan of liquidation proposed by the Debtor or by some other party. 

A. Dismissal 

The most remote possibility is dismissal. If the Debtor’s Bankruptcy Case were to be 

dismissed, the Debtor would no longer have the protection of the Bankruptcy Court and the 

applicable provisions of the Bankruptcy Code. Dismissal would force a race among creditors to 

take over and dispose of the Debtor’s available assets. Even the most diligent unsecured creditors 

would likely fail to realize any significant recovery on their claims. 

B. Chapter 7 Liquidation 

A straight liquidation bankruptcy, or Chapter 7 case, requires liquidation of the bankruptcy 

debtor’s assets by an impartial trustee. In a Chapter 7 case, the amount unsecured creditors receive 

depends on the net estate available after all assets of the debtor have been reduced to cash. The 

cash realized from liquidation of the debtor’s assets would be in accordance with the order of 

distribution prescribed in Bankruptcy Code section 507. 

If the Plan or an alternative plan is not confirmed, it is likely that the Debtor’s Bankruptcy 

Case will be converted to a case under Chapter 7 of the Bankruptcy Code, in which case a trustee 

would be appointed to monetize the Debtor’s assets for distribution to creditors in accordance with 

the priorities established by the Bankruptcy Code. Whether a bankruptcy case is one under Chapter 

7 or Chapter 11, Secured Claims, Administrative Claims (to the extent allowed by the Court), and 

Priority Unsecured Claims, are entitled to be paid in full before unsecured creditors receive any 

funds. 

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If the Debtor’s Bankruptcy Case is converted to Chapter 7, the present Administrative 

Claims may have a priority lower than priority claims generated by the Chapter 7 case, such as the 

Chapter 7 trustee’s fees or the fees of attorneys, accountants and other professionals engaged by 

the trustee. 

If this Bankruptcy Case is converted, the Bankruptcy Court will appoint a trustee to 

monetize the Debtor’s property and assets and distribute the proceeds to creditors in accordance 

with the Bankruptcy Code’s priority scheme. It is likely that the Chapter 7 trustee would have little 

or no experience or knowledge of the Debtor’s businesses or their records or assets. A substantial 

period of education, which would include added time and cost, would be required in order for any 

Chapter 7 trustee to wind the case up effectively. 

The Chapter 7 trustee would be entitled to receive the compensation allowed under 

Bankruptcy Code section 326. The trustee’s compensation is based on 25% of the first $5,000 or 

less; 10% of any amount in excess of $5,000 but not in excess of $50,000; 5% of any amount in 

excess of $50,000 but not in excess of $1 million; and reasonable compensation not to exceed 3% 

of any amount in excess of $1 million, on all funds disbursed or turned over in the bankruptcy case 

by the trustee to parties in interest (excluding the Debtor, but including the holders of Secured 

Claims). The trustee would be compensated for any distribution made to secured creditors and 

administrative claimants. The trustee’s compensation would be paid as a cost of administration of 

the Chapter 7 estate, and may have priority over the costs and expenses incurred in the Chapter 11 

case and any payment to unsecured creditors. 

It is very likely that the Chapter 7 trustee would retain his own professionals (including 

attorneys and financial advisors) whose fees would also constitute priority claims in the Chapter 7 

case, with a priority that may be higher than those claims arising as part of the administration of 

the Chapter 11 case. The Plan Proponent anticipates that a new set of professionals would incur 

substantial time and expense familiarizing themselves with the complexity of this case, with no 

corresponding benefit. The fees to be paid to these new professionals would be paid in full prior 

to any distribution to unsecured creditors. Even if a trustee were to retain MRB as litigation counsel 

on a pure contingency basis, a trustee would likely retain separate general counsel who would be 

completely new to the case and incur substantial fees becoming educated about the history of the 

case and the Causes of Action. 

The Plan Proponent believes that liquidation under Chapter 7 would result in smaller 

distributions being made to Claimholders than those provided for in the Plan. Pursuant to the terms 

of the proposed Plan, the Secured Lender has committed to providing the Secured Lender’s 

Contribution which will be used to pay pro rata distributions to holders of allowed priority and 

general unsecured claims. The Secured Lender Contribution will not be paid in the event this case 

converts to Chapter 7. Moreover, as previously noted, conversion to Chapter 7 would give rise to 

(a) additional administrative expenses involved in the appointment of a trustee and attorneys and 

other professionals to assist such trustee and (b) additional expenses and Claims, some of which 

would be entitled to priority. In a Chapter 7 liquidation, it is expected that general unsecured 

creditors would receive a lower recovery on their claims. The Liquidation Analysis is attached as 

“Exhibit 2.” The Debtor prepared a Liquidation Analysis under two (2) separate scenarios: (1) the 

first assumes no conversion to Chapter 7 and that the Estate will not realize any additional 

recoveries from the prosecution of litigation claims; and (2) the second assumes conversion to 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 46 of 130
 38 

Chapter 7, that the Estate will not realize any additional recoveries from the prosecution of 

litigation claims, and the Chapter 7 trustee will seek his/her trustee distribution on the disbursement 

of $43,000,000, plus $50,000 for the administrative professional fees of the Chapter 7 trustee. 

These amounts are not estimates or upper-bounds of potential recoveries, but merely illustrative 

because the amount of net litigation recoveries cannot be estimated with any certainty since all 

litigation contains inherent risks and is subject to many factors. While there can be no assurances 

regarding the amount of any additional litigation revenues received by the Estate, the Debtor 

reasonably believes that the Liquidating Trustee’s retention will yield a significant savings to the 

Estate and its creditors. The Liquidation Analysis does not include the fees and costs that may be 

incurred, if any, in the event of an appeal of the order confirming the Plan. 

C. Alternative Plan 

No alternative plan has been filed. 

XI. Injunction and Releases 

As of the Confirmation Date, except as otherwise provided in the Plan or the 

Confirmation Order, all Persons that have held, currently hold or may hold a Claim, Equity 

Interest or other debt or liability that is treated pursuant to the terms of the Plan are enjoined 

from taking any of the following actions on account of any such Claims, Equity Interests, 

debts or liabilities, other than actions brought to enforce any rights or obligations under the 

Plan or against the Debtor, the Liquidating Trustee, the Estate, the Trust Assets or Estate 

property: (i) commencing or continuing in any manner any action or other proceeding; (ii) 

enforcing, attaching, collecting or recovering in any manner any judgment, award, decree 

or order; (iii) creating, perfecting or enforcing any lien or encumbrance; (iv) asserting a 

setoff of any kind against any debt, liability or obligation; and (v) commencing or continuing, 

in any manner or in any place, any action that does not comply with or is inconsistent with 

the provisions of the Plan or the Confirmation Order. 

On the Effective Date, to the fullest extent permissible under applicable law, as such 

law may be extended or interpreted subsequent to the Effective Date, in exchange for the 

Secured Lender Contribution and the other obligations of the Secured Lender hereunder 

and in the Secured Lender Sale Motion, in consideration for the obligations under the Plan, 

the rights as otherwise set forth in the Plan to distributions (if any), and the Cash and other 

contracts, instruments, releases, agreements or documents to be delivered in connection with 

the Plan (if any), each Person or Entity that has held, holds or may hold a Claim or Interest, 

as applicable, in the Chapter 11 Case will be deemed to forever release, waive, and discharge 

all claims, demands, debts, rights, causes of action or liabilities against the Secured Lender 

and its present or former officers, directors, shareholders, members, managers, agents, 

employees, attorneys, partners, associates and insurers advisors, attorneys or brokers, 

whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or 

unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or 

otherwise that are based in whole or in part on any act or omission, transaction, event or 

other occurrence arising out of, related to or in connection with, directly or indirectly, the 

Debtor, the Debtor’s bankruptcy estate, the Mortgage, the Properties, and/or the facts and 

circumstances related thereto. 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 47 of 130
 39 

XII. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN 

A summary description of certain material United States federal income tax consequences 

of the Plan is provided below. This description is for informational purposes only and, due to lack 

of definitive judicial or administrative authority or interpretation, substantial uncertainties exist 

with respect to various tax consequences of the Plan as discussed herein. Only the principal United 

States federal income tax consequences of the Plan to the Debtor and to holders of Claims who are 

entitled to vote or to accept or reject the Plan are described below. No rulings or determination of 

the IRS or any other tax authorities have been sought or obtained with respect to any tax 

consequences of the Plan, and the discussion below is not binding upon the IRS or such other 

authorities. No representations are being made regarding the particular tax consequences of the 

confirmation and consummation of the Plan to the Debtor or any holder of the Claim. No assurance 

can be given that the IRS would not assert, or that a court would not sustain, a different position 

from any discussed herein. 

The discussion of the United States federal income tax consequences below is based on the 

Internal Revenue Code of 1986, as amended (the “Tax Code”), Treasury Regulations, judicial 

authorities, published positions of the IRS and other applicable authorities, all as in effect on the 

date of this document and all of which are subject to change or differing interpretations (possibly 

with retroactive effect). 

The following discussion does not address foreign, state or local tax consequences of the 

Plan, nor does it purport to address the United States federal income tax consequences of the Plan 

to special classes of taxpayers (e.g., banks and certain other financial institutions, insurance 

companies, tax-exempt organizations, governmental entities, Person that are, or hold their Claims 

through, pass-through entities, Persons whose functional currency is not the United States dollar, 

foreign Persons, dealers in securities or foreign currency, employees, Persons who received their 

Claims pursuant to the exercise of an employee stock option or otherwise as compensation and 

Persons holding Claims that are hedge against, or that are hedged against, currency risk or that are 

part of a straddle, constructive sale or conversion transaction). Furthermore, the following 

discussion does not address United States federal taxes other than income taxes. 

Each Claimholder is strongly urged to consult its own tax advisor regarding the United 

States federal, state, and local and foreign tax consequences of the transactions described herein 

and in the Plan. The following summary is not a substitute for careful tax planning and advice 

based on individual circumstances. All creditors are advised to consult their own tax advisors. 

A. United States Federal Income Tax Consequences to the Debtor 

Cancellation of Indebtedness Income

Upon implementation of the Plan, the amount of the Debtor’s aggregate outstanding 

indebtedness will be reduced substantially. In general, the discharge of a debt obligation in 

exchange for an amount of cash and other property having a fair market value (or, if applicable, in 

the case of a new debt instrument, an “issue price”) less than the “adjusted issue price” of the debt 

gives rise to cancellation of indebtedness (“COD”) income that passes through from the debtor to 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 48 of 130
 40 

partners on Schedule K-1; COD income will not be taxable to a partner if the partner is bankrupt 

or insolvent, to the extent of such insolvency. 

B. United States Federal Income Tax Consequences to Claimholders of Debtor 

The United States federal income tax consequences to Claimholders (including the 

character, timing and amount of income, gain or loss recognized) will depend upon, among other 

things, (1) whether the Claim and the consideration received in respect thereof are “securities” for 

the United States federal income tax purposes; (2) the manner in which a holder acquired a Claim; 

(3) the length of time the Claim has been held; (4) whether the Claim was acquired at a discount; 

(5) whether the holder has taken a bad debt deduction with respect to the Claim (or any portion 

thereof) in the current or prior years; (6) whether the holder has previously included in its taxable 

income accrued but unpaid interest with respect to the Claim; (7) the holder’s method of tax 

accounting; and (8) whether the Claim is an installment obligation for United States federal income 

tax purposes. Therefore, Claimholders should consult their own tax advisors for information that 

may be relevant to their particular situations and circumstances and the particular tax consequences 

to them of the transactions contemplated by the Plan. 

1. Gain or Loss Recognition on the Satisfaction of Claims 

Each Creditor will generally recognize gain or loss with respect to its Claim in an amount 

equal to the difference between (i) the “amount realized” with respect to its Claim and (ii) the tax 

basis of its Claim. A Creditor’s “amount realized” will equal the sum of the cash and the fair 

market value of other property, including New Common Stock, if any, received by the Creditor. 

2. Character of Gain or Loss 

In general, the character of any gain or loss recognized by a Creditor as capital or ordinary 

will depend on whether the Claim constitutes a capital asset in the hands of the Creditor. To the 

extent a debt instrument is acquired after its original issuance for less than the issue price of such 

instrument, however, it may have market discount. A holder of a Claim with market discount must 

treat any gain recognized on the satisfaction of such Claim as ordinary income to the extent that it 

does not exceed the market discount that has already been accrued with respect to such Claim. 

3. Information Reporting and Backup Withholding 

Certain payments, including payments in respect of accrued interest or market discount, 

are generally subject to information reporting by the payor to the IRS. Moreover, such reportable 

payments are subject to backup withholding under certain circumstances. Under the Tax Code’s 

backup withholding rules, a United States holder may be subject to backup withholding at the 

applicable rate with respect to certain distributions or payments pursuant to the Plan, unless the 

holder comes within certain exempt categories (which generally include corporations) and, when 

required, demonstrates this fact or provides a correct United States taxpayer identification number 

and certifies under penalty of perjury that the holder is a U.S. Person, the taxpayer identification 

number is correct and that the holder is not subject to backup withholding because of a failure to 

report all dividend and interest income. 

Backup withholding is not an additional tax. Amounts withheld under the backup 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 49 of 130
 41 

withholding rules may be credited against a holder’s United States federal income tax liability, and 

a holder may obtain a refund of any excess amounts withheld under the backup withholding rules 

by filing an appropriate claim for refund with the IRS. 

C. Importance of Obtaining Professional Tax Assistance 

THE FOREGOING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF 

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN 

AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING WITH A TAX 

PROFESSIONAL. THE ABOVE DISCUSSION IS FOR INFORMATIONAL PURPOSES 

ONLY AND IS NOT TAX ADVICE. THE TAX CONSEQUENCES ARE IN MANY CASES 

UNCERTAIN AND MAY VARY DEPENDING ON A CLAIMHOLDER’S PARTICULAR 

CIRCUMSTANCES. ACCORDINGLY, CLAIMHOLDERS ARE STRONGLY URGED TO 

CONSULT THEIR TAX ADVISORS ABOUT THE UNITED STATES FEDERAL, STATE, 

AND LOCAL, AND APPLICABLE FOREIGN INCOME AND OTHER TAX 

CONSEQUENCES OF THE PLAN, INCLUDING WITH RESPECT TO TAX REPORTING 

AND RECORD KEEPING REQUIREMENTS. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

 

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 42 

XIII. CONCLUSION 

This Disclosure Statement provides information regarding the Debtor's bankruptcy and the 

potential benefits that might accrue to holders of Claims against and Equity Interests in the Debtor 

under the Plan as proposed. The Debtor believes that the recoveries under the Plan to the holders 

of Allowed Claims will exceed the recoveries that may be available under chapter 7 liquidation. 

The Debtor has reached an agreement with the Liquidating Trustee whereby the Liquidating 

Trustee will receive compensation as described herein. The Plan Proponent, therefore, urges 

interested parties to vote in favor of the Plan. 

Costa Hollywood Property Owner LLC, 

a Delaware limited liability company 

 By: Costa Hollywood Development Holdings LLC, 

a Delaware limited liability company 

 Its: Manager and Sole Member 

 By: Liberty Grande, LLC 

a Florida limited liability company 

 Its: Sole Member 

 By: ____________________________ 

Moses Bensusan 

Its: Manager and Sole Member 

E-filed by: s/ James C. Moon 

James C. Moon, Esquire 

Florida Bar No. 938211 

jmoon@melandrussin.com 

Peter D. Russin, Esquire 

Florida Bar No. 765902 

prussin@melandrussin.com 

MELAND RUSSIN & BUDWICK, P.A. 

3200 Southeast Financial Center 

200 South Biscayne Boulevard 

Miami, Florida 33131 

Telephone: (305) 358-6363 

Telecopy: (305) 358-1221 

Attorneys for Debtor in Possession 

 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 51 of 130
UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF FLORIDA 

MIAMI DIVISION 

www.flsb.uscourts.gov

In re: Chapter 11 

COSTA HOLLYWOOD PROPERTY OWNER, LLC1 Case No. 19-22483-AJC 

 

 Debtor. 

 / 

FIRST AMENDED 

CHAPTER 11 PLAN OF LIQUIDATION PROPOSED BY THE DEBTOR 

MELAND RUSSIN & BUDWICK, P.A. 

Peter D. Russin, Esquire 

Florida Bar No. 765902 

prussin@melandrussin.com

James C. Moon, Esquire 

Florida Bar No. 938211 

jmoon@melandrussin.com

Meaghan E. Murphy, Esquire 

Florida Bar No. 102770 

mmurphy@melandrussin.com 

3200 Southeast Financial Center 

200 South Biscayne Boulevard 

Miami, Florida, 33131 

Telephone: (305) 358-6363 

Telecopy: (305) 358-1221 

Attorneys for the Debtor in Possession 

Dated: April 22, 2020 

 

1

 The Debtor’s current mailing address is 777 North Ocean Drive, Hollywood, FL 33019. The Debtor’s EIN is 47-

4883778. 

Exhibit 1

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 52 of 130
TABLE OF CONTENTS 

i 

 

Pages 

INTRODUCTION .......................................................................................................................... 1

ARTICLE I DEFINITIONS; RULES OF INTERPRETATION; COMPUTATION OF 

TIME .................................................................................................................................. 1

1.1 Scope of Definitions. ............................................................................................... 1

1.2 Definitions. .............................................................................................................. 1

1.3 Interpretation. ......................................................................................................... 9

1.4 Computation of Time............................................................................................... 9

2.1 Administrative Expense Claims and Professional Claims. ..................................... 9

2.2 Priority Claims...................................................................................................... 10

2.3 Claims for Statutory Fees. .................................................................................... 10

ARTICLE III CLASSIFICATION, IMPAIRMENT AND TREATMENT OF CLAIMS 

AND EQUITY INTERESTS .......................................................................................... 11

3.1 Classification. ....................................................................................................... 11

3.2 Separate Classes and Treatment ........................................................................... 15

3.3 Claims May Be in More Than One Class ............................................................. 15

3.4 Class 1 – Secured Tax Claims .............................................................................. 15

3.5 Class 2 – Allowed Secured Claim of City of Hollywood ...................................... 15

3.6 Class 3 – Allowed Secured Claim of United Leasing, Inc. ................................... 15

3.7 Class 4 - Allowed Secured Claim of 777 N. Ocean Drive, LLC (Secured 

Lender) .................................................................................................................. 16

3.8 Class 5 – Allowed Secured Mechanic’s Lien Claims ............................................ 16

3.9 Class 6 – Allowed Other Secured Claims ............................................................. 17

3.10 Class 7 – Allowed Priority Deposit Claims. ......................................................... 17

3.11 Class 8 – Allowed General Unsecured Claims ..................................................... 17

3.12 Class 9 – Equity Interests ..................................................................................... 18

ARTICLE IV MEANS OF IMPLEMENTING THE PLAN ................................................. 18

4.1 Funding of Plan. .................................................................................................... 18

4.2 Secured Lender Settlement. .................................................................................. 18

4.3 Dissolution of Corporate Entity. ........................................................................... 20

4.4 Corporate Action. .................................................................................................. 20

4.5 Cancelled Documents. .......................................................................................... 20

4.6 Investments. .......................................................................................................... 20

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 53 of 130
ii 

4.7 Release of Liens. ................................................................................................... 21

4.8 Further Actions to Effectuate Plan. ....................................................................... 21

ARTICLE V THE LIQUIDATING TRUSTEE...................................................................... 21

5.1 Selection of Liquidating Trustee. .......................................................................... 21

5.2 Purpose of the Liquidating Trustee....................................................................... 21

5.3 Compensation. ...................................................................................................... 21

5.4 Payment of Professionals Retained by the Liquidating Trustee. .......................... 21

5.5 Resignation, Death or Removal of the Liquidating Trustee. ................................ 22

5.6 Authority and Limitations. .................................................................................... 22

5.7 Liquidating Trustee’s Limitation of Liability and Indemnification Rights. .......... 24

5.8 Operations of the Debtor. ..................................................................................... 25

5.9 Vesting of Assets of the Debtor. ............................................................................ 27

ARTICLE VI PROVISIONS GOVERNING DISTRIBUTION ........................................... 28

6.1 Distributions. ........................................................................................................ 28

6.2 Delivery of Distributions....................................................................................... 29

6.3 Unclaimed Property. ............................................................................................. 29

6.4 No Interest Unless Otherwise Provided. ............................................................... 29

6.5 De Minimis Distributions. ..................................................................................... 29

6.6 Manner of Payment. .............................................................................................. 29

6.7 Timing of Distributions. ........................................................................................ 29

6.9 Fractional Cents. .................................................................................................. 30

ARTICLE VII PROCEDURES FOR RESOLVING AND TREATING DISPUTED AND 

CONTINGENT CLAIMS .............................................................................................. 30

Prosecution of Objections. .................................................................................... 30

Administration of Disputed Claims. ...................................................................... 30

Estimation of Claims. ............................................................................................ 31

Objections to Fully Impaired Claims. ................................................................... 31

Disallowance of Claims. ....................................................................................... 32

ARTICLE VIII EXECUTORY CONTRACTS AND UNEXPIRED LEASES ................... 32

8.1 General Treatment: Rejected if not Previously Assumed. .................................... 32

8.2 Bar to Rejection Damages. ................................................................................... 32

8.3 Rejection Claims. .................................................................................................. 32

ARTICLE IX CONDITIONS PRECEDENT TO EFFECTIVENESS OF PLAN .............. 33

9.1 Conditions to Effectiveness of Plan. ........................................................................... 33 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 54 of 130
iii 

9.2 Notice of Confirmation of the Plan. ........................................................................... 33 

ARTICLE X RETENTION OF JURISDICTION .................................................................. 33

10.1 Retention of Jurisdiction. ...................................................................................... 33

10.2 Abstention and Other Courts. ............................................................................... 35

ARTICLE XI INJUNCTION AND RELEASE ...................................................................... 35

11.1 Injunction. ............................................................................................................. 35

11.2 Releases................................................................................................................. 35

ARTICLE XII MISCELLANEOUS PROVISIONS .............................................................. 36

12.1 Section 1146 Exemption ........................................................................................ 36

12.2 Severability. .......................................................................................................... 36

12.3 Setoffs and Recoupments. ...................................................................................... 36

12.4 Binding Effect. ....................................................................................................... 37

12.5 Governing Law...................................................................................................... 37

12.6 Timing of Distributions. ........................................................................................ 37

12.7 Payment of Statutory Fees and Compliance with Reporting Requirements. ........ 37

12.8 Termination of Independent Contractors and Limitation of 

Liability/Release of Professional. ......................................................................... 37

12.9 Tax Liability. ......................................................................................................... 38

12.10 Revocation or Withdrawal of Plan: ...................................................................... 38

12.11 Nonmaterial Modifications. .................................................................................. 38

12.12 Material Modifications. ........................................................................................ 38

12.13 Cramdown. ............................................................................................................ 38

12.14 Notices................................................................................................................... 39

12.15 Successors and Assigns. ........................................................................................ 39

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 55 of 130
1 

INTRODUCTION 

Costa Hollywood Property Owner, LLC, debtor in possession in the above-captioned 

Chapter 11 Case (the “Debtor”) proposes the following First Amended Chapter 11 Plan of 

Liquidation (as amended from time to time, and including all addenda, exhibits, schedules and 

other attachments hereto, as any of the same may be amended from time to time, all of which are 

incorporated herein by reference, the “Plan”), pursuant to the provisions of chapter 11 of the 

Bankruptcy Code (as defined in Section 1.2. below). 

For a discussion of the Debtor’s history, business, operations, assets and liabilities and for 

a summary and analysis of the Plan, reference should be made to the Disclosure Statement. All 

Creditors are encouraged to read the Disclosure Statement and the Plan carefully before voting to 

accept or reject the Plan. 

ARTICLE I 

DEFINITIONS; RULES OF INTERPRETATION; COMPUTATION OF TIME 

1.1 Scope of Definitions.

For purposes of the Plan, except as expressly provided or unless the context otherwise 

requires, all capitalized terms not otherwise defined shall have the meanings assigned to them in 

Article I of the Plan. Any term used in the Plan that is not defined herein, but that is used in the 

Bankruptcy Code or the Bankruptcy Rules (as defined below), shall have the meaning assigned to 

that term in the Bankruptcy Code or the Bankruptcy Rules, as the case may be. Whenever the 

context requires, such terms shall include the plural as well as the singular number, the masculine 

gender shall include the feminine and the feminine gender shall include the masculine. 

1.2 Definitions. 

a) “Actions” or “Causes of Action” means, except as provided otherwise in 

the Plan, the Confirmation Order or any document, instrument, release or other agreement entered 

into in connection with the Plan, all claims, actions, choses in action, causes of action, suits, debts, 

dues, sums of money, accounts, rights to payment, reckonings, bonds, bills, specialties, 

controversies, variances, trespasses, damages, judgments, third-party claims, counterclaims and 

cross claims (including, but not limited to, any Avoidance Actions) whether known or unknown, 

fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured and whether 

assertible directly or derivatively in law, equity, or otherwise, that are or may be pending on the 

Effective Date or instituted by the Liquidating Trustee after the Effective Date against any Person 

based on law or equity, including, but not limited to, under the Bankruptcy Code, whether direct, 

indirect, derivative, or otherwise and whether asserted or unasserted, known or unknown. Actions 

include, without limitation, those which are: (i) property of the bankruptcy estate 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 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 56 of 130
2 

state securities laws; (ix) direct or derivative claims or causes of action of any type or kind; (x) 

against any and all current and/or former officers and directors of the Debtor, including but not 

limited to for breach of fiduciary duty or aiding and abetting breach of fiduciary duty; (xi) under 

and pursuant to any policies for insurance, including for bad faith, maintained by the Debtor, 

including, without limitation, any liability insurance policy; (xii) for theft of corporate opportunity; 

(xiii) for collection on accounts, accounts receivables, loans, notes receivables or other rights to 

payment; (xiv) 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; (xv) 

which arise under or as a result of any section of the Bankruptcy Code; and (xvi) for common law 

torts or aiding and abetting common law torts. 

b) “Administrative Bar Date” means the date fixed by the Bankruptcy Court 

as the last date for filing requests for allowance and payment of Administrative Expense Claims 

as set forth in Article II, Section 2.1(b). 

c) “Administrative Expense Claim” means a Claim for costs and expenses of 

administration allowed under sections 503, 507(a)(1) or 507(b) of the Bankruptcy Code, including, 

without limitation, any actual and necessary expenses of preserving the Estate of the Debtor, any 

actual and necessary expenses of operating the business of the Debtor, all compensation or 

reimbursement of expenses to the extent allowed pursuant to Sections 330 or 503 of the 

Bankruptcy Code, the Protective Advance Claim (as defined herein), and any fees or charges 

assessed against the Estate of the Debtor under section 1930, chapter 123 of title 28 of the United 

States Code. 

d) “Affiliate” means any Person that is an “affiliate” of the Debtor within the 

meaning of section 101(2) of the Bankruptcy Code. 

e) “Allowed” when used with respect to a Claim, means a Claim: (a) which 

has been listed on the Schedules of the Debtor as other than disputed, contingent or unliquidated 

and as to which no proof of Claim or objection has been timely filed; (b) as to which a proof of 

Claim has been timely filed and either (i) no objection thereto has been timely filed or (ii) the 

Claim has been allowed (but only to the extent allowed) by a Final Order of the Bankruptcy Court; 

(c) which has been allowed under the provisions of this Plan; (d) which is a Professional Claim for 

which a fee award amount has been approved by Final Order of the Bankruptcy Court; or (e) which 

is allowed pursuant to any stipulation of amount and nature of Claim executed by the Liquidating 

Trustee and Holder of the Claim on or after the Effective Date. For the avoidance of doubt, other 

than the Claims of Secured Lender, all claims against the Debtor, including those identified as 

"Allowed" herein, remain subject to review by parties-in-interest, including the Debtor, any 

official committee appointed by the United States Trustee, and the Liquidating Trustee, and to 

objection. To the extent any claim is referred to herein as "Allowed", it is only for purposes of 

providing a description of such claim's treatment under the Plan if ultimately allowed. In the event 

an objection is filed to a claim deemed "Allowed" for purposes of voting on the Plan, the claim 

may later be disallowed by the Court. 

f) “Avoidance Action” means a Cause of Action assertible by the Debtor or 

Liquidating Trustee, as successor to the Debtor, under sections 544, 547, 548, 549 or 550 of the 

Bankruptcy Code. 

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3 

g) “Ballot” means the ballot, the form of which has been approved by the 

Bankruptcy Court, accompanying the Disclosure Statement provided to each Holder of a Claim 

entitled to vote to accept or reject this Plan. 

h) “Bankruptcy Code” means title 11 of the United States Code, sections 101 

et seq., as now in effect or as hereafter amended. 

i) “Bankruptcy Court” means the United States Bankruptcy Court for the 

Southern District of Florida, or such other court having jurisdiction over the Chapter 11 Case. 

j) “Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure, as 

amended and the local bankruptcy rules for the Bankruptcy Court as now in effect or as the same 

may from time to time hereafter be amended. 

k) “Bar Date” means January 27, 2020 (excluding government claims which 

must be filed by March 17, 2020) the date or dates established by the Bankruptcy Court as the last 

date for filing proofs of claim against the Debtor. 

l) “Beneficiary” means holder of an Allowed Claim. 

m) “Bidding Procedures Order” means that certain Order of the Bankruptcy 

Court granting the Secured Lender Sale Motion to the extent of approving certain bidding 

procedures and related protections and scheduling in connection with the Debtor’s proposed sale 

of the Properties. 

n) “Business Day” means any day that is not a Saturday, a Sunday or “legal 

holiday” as such term is defined in Bankruptcy Rule 9006(a). 

o) “Cash” means cash or cash equivalents, including but not limited to, wire 

transfers, checks and other readily marketable direct obligations of the United States of America 

and certificates of deposit issued by banks. 

p) “Cash Collateral Orders” shall mean those certain Interim Cash Collateral 

Orders [ECF Nos. 69, 129] and/or the Final Cash Collateral Order [ECF No. 189]. 

q) “Chapter 11 Case” means the chapter 11 case pending for the Debtor in the 

Bankruptcy Court case number 19-22483-AJC. 

r) “Claim” has the same meaning ascribed in 11 U.S.C. § 101(5). 

s) “Class” means a category of Holders of Claims or Equity Interests as set 

forth in Article III of the Plan. 

t) “Confirmation Date” means the date on which the Bankruptcy Court enters 

the Confirmation Order on its docket. 

u) “Confirmation Hearing” means the hearing before the Bankruptcy Court 

pursuant to section 1128 of the Bankruptcy Code to consider confirmation of this Plan. 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 58 of 130
4 

v) “Confirmation Order” means the order of the Bankruptcy Court confirming 

this Plan pursuant to section 1129 of the Bankruptcy Code; as such order may be amended, 

modified or supplemented. 

w) “Creditor” has the same meaning ascribed in 11 U.S.C. § 101(10) and shall 

refer to any Holder of a Claim against the Debtor or Holder of any Claim against property of the 

Debtor as defined in section 102(2) of the Bankruptcy Code. 

x) “Debtor” means Costa Hollywood Property Owner, LLC. 

y) “Debtor in Possession” means the Debtor with the status and rights 

conferred by sections 1107 and 1108 of the Bankruptcy Code. 

z) “Disclosure Statement” means the disclosure statement for the Plan 

approved by the Bankruptcy Court pursuant to section 1125 of the Bankruptcy Code (including all 

schedules and exhibits thereto) as such disclosure statement may be amended or modified from 

time to time. 

aa) “Disclosure Statement Approval Order” means that certain order of the 

Bankruptcy Court, dated [TBD], 2020 [ECF No. TBD] approving, among other things, the 

Disclosure Statement as containing adequate information pursuant to Section 1125 of the 

Bankruptcy Code, and setting various deadlines in connection with Confirmation of the Plan. 

bb) “Disputed Claim” means any Claim against the Debtor or property of the 

Debtor to the extent that: (a) the Allowance of such Claim is the subject of an objection, appeal or 

motion to estimate that has been timely filed by a party in interest and which objection, appeal or 

motion has not been determined by a Final Order. In the event that any part of a Claim is disputed, 

such Claim in its entirety shall be deemed to constitute a Disputed Claim for purposes of 

distribution under this Plan unless the Debtor or the Liquidating Trustee, as applicable, and the 

Holder thereof agree otherwise. 

cc) “Disputed Claims Reserve” means a reserve established to receive and hold, 

in a segregated account in a domestic banking institution, to be established by the Liquidating 

Trustee, Cash in an amount equal to the aggregate of amounts thereof or such other amounts as the 

parties may agree or the Bankruptcy Court may order, that would have been distributed on the 

Effective Date on account of such Disputed Claims against the Debtor or its property (had they 

been Allowed at that time). 

dd) “Effective Date” means the Business Day designated by the Proponent 

which is at least ten days after the date on which all of the conditions specified in Article IX of 

this Plan are first satisfied or waived. 

ee) “Entity” has the meaning ascribed in 11 U.S.C. § 101(15). 

ff) “Equity Interest” means any ownership interest or share in any of the Debtor 

(including, without limitation all rights to obtain such an interest or share in any of the Debtor). 

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gg) “Estate” means the estate created in this Chapter 11 Case for the Debtor 

pursuant to section 541 of the Bankruptcy Code. 

hh) “File,” “Filed” or “Filing” means file, filed or filing with the Bankruptcy 

Court or its authorized designee in this Chapter 11 Case. 

ii) “General Distribution Fund” means the fund created as of the Effective Date 

under the control of the Liquidating Trustee into which the following amounts shall be deposited 

in accordance with this Plan (i) that portion of the Secured Lender’s Contribution designated as 

the Professional Claims’ Fund, which shall be used by the Liquidating Trustee to pay Allowed 

Professional Claims, (ii) that portion of the Secured Lender’s Contribution designated as the 

Unsecured Creditors’ Fund, which shall be used by the Liquidating Trustee solely to make a 

distribution to holders of Allowed Priority Claims and Allowed General Unsecured Claims under 

the Plan, (iii) that portion of the Secured Lender’s Contribution designated as the Liquidating Trust 

Fund, which shall be used to fund the operations and efforts of the Liquidating Trustee after the 

Effective Date, and (iv) any and all proceeds of Trust Assets generated by the Liquidating Trustee 

after the Effective Date. 

jj) “General Unsecured Claim” means a Claim that is not an Administrative 

Expense, a Secured Claim, a Priority Claim or a Subordinated Claim. 

kk) “Holder” means an Entity or individual holding a Claim or any authorized 

agent who has completed, executed and delivered a Ballot in accordance with the applicable voting 

instructions. 

ll) “Condo-Hotel” shall mean the Debtor’s business located at 777 North 

Ocean Drive, Hollywood, FL 33019. 

mm) “Impaired” means impaired within the definition of section 1124 of the 

Bankruptcy Code. 

nn) “Insider” has the meaning ascribed in 11 U.S.C. § 101(31). 

oo) “Lien” means any mortgage, lien, pledge, security interest or other charge 

or encumbrance or security device of any kind affecting any asset or any property of the Debtor 

contemplated by section 101(37) of the Bankruptcy Code. 

pp) “Liquidating Trust Agreement” shall mean the Costa Hollywood Property 

Owner, LLC Liquidating Trust Agreement, a copy of which will be supplemented as Exhibit “A.” 

qq) “Liquidating Trust” shall mean the Costa Hollywood Property Owner, LLC 

Liquidating Trust. 

rr) “Liquidating Trustee” shall mean a disinterested person selected on or 

before Confirmation and appointed by the Bankruptcy Court to undertake the acts and obligations 

set forth in this Plan. 

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ss) “Liquidating Trust Fund” shall have the meaning set forth in the Secured 

Lender’s Contribution. 

tt) “Mortgage” shall mean that certain Certificate of Future Advance and 

Amended and Restated Mortgage and Security Agreement, dated as of July 1, 2016, which was 

recorded on July 20, 2016 in the Official Records of Broward County, Florida as Instrument No. 

1138200788, by and from the Debtor to the Secured Lender and which encumbers the Properties 

as a first mortgage lien. 

uu) “Person” means an individual, corporation, limited partnership, general 

partnership, association, limited liability company, estate, trust, joint venture, unincorporated 

organization, any governmental unit, other entity or group. 

vv) “Petition Date” means September 19, 2019, the date on which the Debtor 

commenced its Chapter 11 Case by filing a petition for relief under chapter 11 of the Bankruptcy 

Code. 

ww) “Plan” means this chapter 11 liquidating plan, either in its present form or 

as it may be altered, amended, or modified from time to time in accordance with the provisions of 

the Bankruptcy Code and the Bankruptcy Rules. 

xx) “President” of the Debtor shall mean Moses Bensusan. 

yy) “Priority Claim” means a Claim to the extent that it is of the kind described 

in, and entitled to priority under sections 507(a)(3), (a)(4), (a)(5), (a)(6), (a)(7), (a)(8) or (a)(9) of 

the Bankruptcy Code. 

zz) “Priority Deposit Claim” means an unsecured claim of an individual, to the 

extent of $3,025.00 for each such individual, arising from the deposit, before the commencement 

of the case, of money in connection with the purchase, . . . of property, for the personal, family or 

household use of such individuals, that were not delivered or provided pursuant to section 

507(a)(7) of the Bankruptcy Code. A Priority Deposit Claim is a type of Priority Non-Tax Claim. 

aaa) “Priority Non-Tax Claim” means a Claim to the extent that it is of the kind 

described in, and entitled to priority under sections 507(a)(3), (a)(4), (a)(5), (a)(6), (a)(7) or (a)(9) 

of the Bankruptcy Code, that is not a Priority Tax Claim. 

bbb) “Priority Tax Claim” means a Claim of a governmental unit of the kind 

specified in subsection 507(a)(8) of the Bankruptcy Code. 

ccc) “Protective Advance Claim” shall mean any claim of Secured Lender 

arising under the Cash Collateral Orders, including but not limited to, amounts owed to the Secured 

Lender under any Debtor-in-Possession loan authorized and funded pursuant thereto, and any 

super-priority administrative expense claim granted to the Secured Lender thereunder. 

ddd) “Professional” means any professional employed or to be compensated 

pursuant to sections 327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy Code. 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 61 of 130
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eee) “Professional Claim” means a Claim for compensation and/or 

reimbursement of expenses pursuant to section 327, 328, 330, 331 or 503(b) of the Bankruptcy 

Code in connection with an application made to the Bankruptcy Court in this Chapter 11 Case. 

fff) “Professional Claims Fund” shall have the meaning set forth in the Secured 

Lender’s Contribution. 

ggg) “Proponent” means the Debtor as proponent of the Plan. 

hhh) “Properties” shall mean all of the real and personal property owned by the 

Debtor and located at or used in connection with the operations of the property commonly known 

as 327 & 319 Pierce Street and 330 & 348 Indiana Street, Hollywood, FL 33019. 

iii) “Pro Rata Share” means, with respect to any distribution on account of any 

Allowed Claim in any Class, the ratio of (a) the amount of such Allowed Claim to (b) the sum of 

(i) all Allowed Claims in such Class and (ii) the aggregate maximum allowable amount of all 

Disputed Claims in such Class for which a reserve must be established under the Plan. 

jjj) “Rejection Claim” means a Claim for damages resulting from the rejection 

of an executory contract by the Debtor pursuant to Section 8.3 of the Plan. 

kkk) “Sale Order” shall mean that certain Order of the Bankruptcy Court granting 

the Secured Lender Sale Motion and approving the sale of the Debtor’s Properties to the Secured 

Lender or the highest and/or best bidder therefor. 

lll) “Schedules” means the Debtor’s schedules of assets and liabilities filed 

with the clerk of the Bankruptcy Court pursuant to Bankruptcy Rule 1007, as they have been or 

may be amended or supplemented from time to time in accordance with Bankruptcy Rule 1009. 

mmm) “Secured Tax Claim” means a Secured Claim for taxes or assessments held 

by a Governmental Unit, to the extent, if any, that such taxes and assessments are entitled to a 

security interest under applicable non-bankruptcy law that as priority over Secured Lender’s 

Claim, as well as holders of tax certificates. 

nnn) “Secured Claim” means a Claim that is secured by a Lien on, or security 

interest in, property of the Debtor, or that has the benefit of rights of setoff under section 553 of 

the Bankruptcy Code, but only to the extent of the value of the creditor’s interest in the Debtor’s 

interest in such property, or to the extent of the amount subject to setoff, which value shall be 

determined as provided in section 506 of the Bankruptcy Code. 

ooo) “Secured Lender” means 777 N. Ocean Drive, LLC. 

ppp) “Secured Lender’s Contribution” means the aggregate amount contributed 

by the Secured Lender on and subject to the occurrence of the Effective Date of the Plan and the 

approval of the Secured Lender Settlement (i) for the payment of Allowed Professional Claims 

(the “Professional Claims’ Fund”), (ii) for distribution to the Holders of Allowed Priority Claims 

and Allowed General Unsecured Claims under the Plan in the amount of $475,000.00 (the 

“Unsecured Creditors’ Fund”); and (iii) a contribution to the Liquidated Trust on the Effective 

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8 

Date for purposes of funding the Liquidating Trust in the amount of $100,000.00, plus $100,000 

of the funds currently held in escrow by GreenbergTraurig on behalf of Stewart Title Guaranty 

Company, to be funded upon turnover of such funds to the Estate (the “Liquidating Trust Fund”). 

qqq) “Secured Lender Sale Motion” shall mean that certain Motion For The 

Entry Of (A) An Order Approving Bidding Procedures, (B) Approving Certain Protections to 

Stalking Horse Purchaser, (C) Approving Notice Procedures, and (D) an Order (i) Approving the 

Stalking Horse Purchase and Sale Agreement, (ii) Authorizing the Sale of Substantially all of the 

Assets of the Debtor Free and Clear of All Liens, Claims, Encumbrances and Other Interests, (iii) 

Scheduling Dates to Conduct Auction and Hearing to Consider Final Approval of Sale, and (iv) 

Granting Related Relief [ECF No. TBD] to be filed by the Debtor pursuant to the terms of which 

the Debtor proposes to sell the Properties to the Secured Lender or the highest or best bidder in 

connection therewith and pursuant to the Bidding Procedures Order 

rrr) “Secured Lender Settlement” means that certain settlement and compromise 

by and between the Debtor and the Secured Lender under and pursuant to Bankruptcy Rule 9019 

as more particularly described in the Plan. 

sss) “Subordinated Claim” means, in accordance with section 510(b) of the 

Bankruptcy Code, any Claim arising from rescission of a purchase or sale of a security of the 

Debtor, for damages arising from the purchase or sale of such a security or for reimbursement of 

contribution allowed under section 502 of the Bankruptcy Code on account of such a Claim or for 

any fine or penalty. 

ttt) “Trust Assets” means any and all Cash, assets, or other property of the 

Debtor of every kind and character existing and remaining with the Debtor as of the Effective Date 

and which is not otherwise subject to the Secured Lender’s cash collateral in accordance with the 

Cash Collateral Orders, including without limitation (i) the General Distribution Fund (to be used 

solely for the purposes set forth therein), and (ii) Causes of Actions that are property of the Estate. 

uuu) “Turnover Action” means the adversary proceeding commenced on April 

10, 2020 (20-01129-AJC) by Debtor against Greenberg Traurig, P.A. and Stewart Title Guaranty 

Corporation pursuant to 28 U.S.C. § 2201, Fla. Stat. Ch.86, 11 U.S.C. § 542, seeking, inter alia, 

an order directing the turnover of funds held in escrow by Greenberg Traurig P.A. on behalf of 

Stewart Title Guaranty Company. 

vvv) “Unimpaired” means any Claim that is not Impaired within the meaning of 

section 1124 of the Bankruptcy Code. 

www) “Unsecured Creditors’ Fund” shall have the meaning set forth in the 

Secured Lender’s Contribution. 

xxx) “Voting Deadline” means the date set in an order of the Bankruptcy Court 

as the deadline for the return of Ballots accepting or rejecting the Plan. 

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1.3 Interpretation. 

 For purposes of the Plan, (a) any reference in the Plan to a contract, instrument, release, 

indenture or other agreement or document being in a particular form or on particular terms and 

conditions means that such document shall be substantially in such form or substantially on such 

terms and conditions; (b) any reference in the Plan to an existing document or exhibit filed or to 

be filed means such document or exhibit, as it may have been or may be amended, modified or 

supplemented; (c) unless otherwise specified, all references in the Plan to Articles, Sections, 

Schedules and Exhibits are references to Articles, Sections, Schedules and Exhibits of or to the 

Plan (d) the words “herein” and “hereto” refer to the Plan in their entirety rather than to a particular 

portion of the Plan; (e) captions and headings to Articles and Sections are inserted for convenience 

of reference only and are not intended to be a part of or to affect the interpretation of the Plan; and 

(f) the rules of construction set forth in section 102 of the Bankruptcy Code and in the Bankruptcy 

Rules shall apply. 

1.4 Computation of Time. 

 In computing any period of time prescribed or allowed by the Plan, unless otherwise 

expressly provided, the provisions of Bankruptcy Rule 9006 shall apply. 

ARTICLE II 

PROVISIONS FOR PAYMENT OF ALLOWED ADMINISTRATIVE EXPENSE 

CLAIMS, PROFESSIONAL CLAIMS, PRIORITY CLAIMS, PROTECTIVE ADVANCE 

CLAIMS AND STATUTORY FEES 

2.1 Administrative Expense Claims and Professional Claims.

 All Administrative Expense Claims of the Debtor shall be treated as follows: 

a) Each Holder of an Allowed Administrative Expense Claim shall receive the 

full amount thereof without interest in Cash, except to the extent that any Holder of an Allowed 

Administrative Expense Claim agrees to less favorable treatment thereof, as soon as practicable 

after the later of (i) the Effective Date or as soon as practicable thereafter, (ii) the date that is 10 

Business Days after an order of the Bankruptcy Court allowing such Administrative Expense 

Claim becomes a Final Order or (iii) as mutually agreed by the Liquidating Trustee and the Holder 

of such Allowed Administrative Expense Claim and approved by the Court. 

b) All requests for payment of Administrative Expense Claims (or any other 

means of preserving and obtaining payment of Administrative Expense Claims found to be 

effective by the Bankruptcy Court) (other than payment of the Protective Advance Claim) shall be 

filed by any applicable Bar Date established by the Bankruptcy Court; and if such requests for 

payment of Administrative Expense Claims are not so filed, the Holders of such Claims shall be 

forever barred and shall not be able to assert such Claims in any manner against the Debtor, the 

Secured Lender, the Liquidating Trustee, or the Trust Assets of the Debtor. 

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c) Each Holder of an Allowed Professional Claim shall be paid from the 

Professional Claims’ Fund included in the Secured Lender’s Contribution. 

d) 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 respective Petition Date 

through the Confirmation Hearing. 

2.2 Priority Claims. 

Each Holder of an Allowed Priority Claim shall receive on account of such Claim, (a) 

Cash equal to the amount of such Allowed Priority Claim, without post-petition interest or penalty, 

on the later of (i) the Effective Date or as soon as practicable thereafter or (ii) the date that is 10 

Business Days after an order of the Bankruptcy Court allowing such Priority Tax Claim becomes 

a Final Order; or (b) deferred cash payment in the amount of allowed claims; or (c) such other 

treatment as each Holder and the Liquidating Trustee may agree. The Holders of such Claims shall 

be forever barred and shall not be able to assert such Claims in any manner against the Debtor, the 

Secured Lender, the Liquidating Trustee, or the Trust Assets of the Debtor. Allowed Priority 

Claims shall be paid from the Unsecured Creditors’ Fund included in the Secured Lender’s 

Contribution. 

2.3 Claims for Statutory Fees. 

 Liquidating Trustee shall pay within ten (10) days after the Effective Date all fees incurred 

under 28 U.S.C. §1930 (a)(6) for the period ending on the Effective Date. All fees payable pursuant 

to 28 U.S.C. § 1930 after the Effective Date will be assessed based solely on the disbursements 

made by the Liquidating Trustee and shall be paid by the Liquidating Trustee through the earlier 

of the closing of the Bankruptcy Case by the issuance of a final decree by the Bankruptcy Court 

or upon entry of an order dismissing or converting the Bankruptcy Case to Chapter 7. The 

Liquidating Trustee shall provide an appropriate affidavit indicating the cash disbursements for 

the period ending on the Confirmation Date and all relevant periods thereafter. 

2.4 Protective Advance Claim. 

The Protective Advance Claim shall be allowed in the full amount due and owing under 

the Cash Collateral Orders as of the Effective Date, including any and all expenditures related to 

the Properties referenced in said orders made by Secured Lender to pay pre and post-petition real 

estate taxes due at the Properties or any other pre and post-petition expenses including, without 

limitation, maintenance and other capital advances. Except to the extent that the holder of a 

Protective Advance Claim agrees in writing to a different treatment, to the extent not otherwise 

repaid prior to the Effective Date, the amount of Protective Advance Claim will be added to the 

Secured Lender’s Allowed Secured Claim and treated in accordance with Class 2 herein. 

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11 

ARTICLE III 

CLASSIFICATION, IMPAIRMENT AND TREATMENT OF 

CLAIMS AND EQUITY INTERESTS 

3.1 Classification. 

 All Claims and Equity Interests, except Administrative Expenses, Priority Tax Claims, 

Claims for Statutory Fees and the Protective Advance Claim, are placed in Classes as set forth 

below. A Claim or Interest is classified in a particular Class only to the extent that the Claim or 

Interest qualifies within the description of that Class and is classified in other Classes to the extent 

that any remainder of the Claim or Interest qualifies within the description of such other Classes. 

A Claim also is classified in a particular Class for the purpose of receiving distributions pursuant 

to the Plan only to the extent that such Claim is an Allowed Claim in that Class, and such Claim 

has not been disallowed, paid or released prior to the Effective Date. 

Class Claim Treatment Voting Rights 

Class 1 Secured Tax 

Claims 

Unimpaired. 

If Secured Lender closes on the purchase of 

the Properties as set forth in the Plan, then 

the Class 1 Claim shall be paid in full at 

closing and fully satisfied upon such 

closing. In the event the Secured Lender is 

not the successful purchaser for the 

Properties, then the Class 1 Claim shall be 

paid from the sale proceeds of such sale as 

a first priority lien thereon, and upon such 

payment the Class 1 Claim shall be deemed 

paid in full and fully satisfied. 

Not Entitled to 

Vote 

Class 2 Allowed Secured 

Claim of City of 

Hollywood 

Unimpaired. 

If Secured Lender closes on the purchase of 

the Properties as set forth in the Plan, then 

the Class 2 Claim shall be paid in full at 

closing and fully satisfied upon such 

closing. In the event the Secured Lender is 

not the successful purchaser for the 

Properties, then the Class 2 Claim shall be 

paid from the sale proceeds of such sale, 

and upon such payment the Class 2 Claim 

shall be deemed paid in full and fully 

satisfied. 

Not Entitled to 

Vote 

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12 

Class 3 Allowed Secured 

Claim of United 

Leasing, Inc. 

Impaired. 

To the extent that United Leasing, Inc. has 

an Allowed Secured Claim and such claim 

is higher in legal priority than that of the 

Secured Lender, if Secured Lender closes 

on the purchase of the Properties as set 

forth in the Plan, then the Class 3 Claim 

shall be paid in full at closing and fully 

satisfied upon such closing. In the event the 

Secured Lender is not the successful 

purchaser for the Properties, then the Class 

3 Claim shall be paid from the sale 

proceeds of such sale, and upon such 

payment the Class 3 Claim shall be deemed 

paid in full and fully satisfied. 

To the extent that United Leasing, Inc.’s 

Allowed Secured Claim is subordinate in 

priority to the Secured Lender, United 

Leasing, Inc.’s Allowed Secured Claim shall 

be treated as a Class 6 Claim. 

Entitled to Vote

Class 4 Allowed Secured 

Claim of 777 N. 

Ocean Drive, 

LLC (Secured 

Lender) 

Impaired. 

The Secured Lender has an Allowed Secured 

Claim in the amount of $47,189,513.79 plus 

interest, attorneys’ fees and expenses, and 

the Protective Advance Claim. Pursuant to 

the Secured Lender Sale Motion to be filed 

contemporaneously with or subsequent to 

the Plan, the Debtor will seek to sell the 

Properties to the Secured Lender as the 

Stalking Horse Bidder, subject to the receipt 

of higher and/or better bids. The Secured 

Lender has agreed to acquire the Properties 

for an initial credit bid in the amount of 

$43,000,000.00, subject to the right to 

increase the purchase price through a credit 

bid up to and in the full amount of its Class 

4 Claim. 

In the event the Secured Lender is not the 

successful purchaser for the Properties, then 

the Class 4 Claim shall be paid from the sale 

Entitled to Vote

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13 

proceeds of such sale and all then existing 

cash collateral after the payment of the Class 

1 Claims, Class 2 Claim and Class 3 Claim 

(to the extent the Class 3 Claim has higher 

legal priority than Secured Lender’s Class 4 

Claim). 

In either case, pursuant to the Secured 

Lender Settlement, the Secured Lender shall 

make the Secured Lender Contribution on 

the Effective Date, subject to the entry of an 

Order of the Bankruptcy Court approving 

the Secured Lender Settlement under 

Bankruptcy Rule 9019 as more fully set 

forth below. 

To the extent there are proceeds from the 

Turnover Action, such proceeds shall, in the 

Debtor’s sole discretion, either be paid upon 

the Confirmation Date or anytime thereafter 

to Secured Lender to either (1) reimburse the 

Secured Lender for funds it has or will 

advance to the Debtor pursuant to any order 

entered by the Court on the use of Cash 

Collateral or DIP Financing or (2) pay the 

amounts that Secured Lender may have to 

pay in connection with the Plan, including 

without limitation, the payments relating to 

the Secured Lender Contribution. The 

remainder of any proceeds from the 

Turnover Action shall be paid to the Secured 

Lender upon the Confirmation Date or 

anytime thereafter.. 

Class 5 Allowed Secured 

Mechanic’s Lien 

Claims 

Impaired. 

Paid in order of legal priority in class from 

the net proceeds of the sale of the Properties 

after all Class 1 Claims, Class 2 Claims, 

Class 3 Claims (to the extent the Class 3 

Claim has legal priority higher than the 

Class 4 Claim) and Class 4 Claims are paid 

in full. Any deficiency claim will be treated 

as Class 8 Allowed General Unsecured 

Claim. 

Entitled to vote.

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Class 6 Allowed Other 

Secured Claims 

Impaired. 

Paid in order of legal priority in class from 

the net proceeds of the sale of the Properties 

after all Class 1 Claims, Class 2 Claims, 

Class 3 Claims and Class 4 Claims are paid 

in full. Any deficiency claim will be treated 

as Class 8 Allowed General Unsecured 

Claim. 

Entitled to vote.

Class 7 Allowed Priority 

Deposit Claims 

Unimpaired. 

Unless such Holder agrees to accept a lesser 

treatment of an Allowed Priority Deposit 

Claim, each Holder of an Allowed Priority 

Deposit Claim shall receive, as soon as 

practicable in the discretion of the 

Liquidating Trustee, up to $3,025 of the 

Unsecured Creditors’ Fund before payment 

of or reserve for the Allowed General 

Unsecured Claims. Any deficiency claim 

will be treated as Class 8 Allowed General 

Unsecured Claim. 

Not entitled to 

vote. 

Class 8 Allowed General 

Unsecured Claims 

Impaired. 

Unless such Holder agrees to accept a lesser 

treatment of an Allowed General Unsecured 

Claim, each Holder of an Allowed General 

Unsecured Claim shall receive, as soon as 

practicable in the discretion of the 

Liquidating Trustee, (i) a Pro Rata Share of 

the Unsecured Creditors’ Fund after 

payment of or reserve for the Allowed 

Priority Claims therefrom, and (ii) 

distributions from the Trust Assets after the 

Effective Date in the discretion of the 

Liquidating Trustee. 

Entitled to vote.

Class 9 Equity Interests in 

the Debtor 

Impaired. 

Equity Interests shall be canceled as of the 

Effective Date. 

Not entitled to 

vote 

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15 

3.2 Separate Classes and Treatment 

 No Class, member of any Class or Holder of any Claim against the Debtor shall be entitled 

to or receive Cash or other property allocated for distribution to any other Class or to a Holder of 

a Claim, except as expressly specified in the Plan. The Liquidating Trustee shall not distribute any 

Cash or other property allocated to a Class, member of any Class or a Holder of a Claim to any 

other Class or member thereof or Holder of a Claim, except as expressly specified in the Plan or 

the Confirmation Order. 

3.3 Claims May Be in More Than One Class

 A Claim is part of a particular Class only to the extent that the Claim qualifies within the 

definition of that Class and such Claim is part of a different Class to the extent that the remainder 

of the Claim qualifies within the description of a different Class. 

3.4 Class 1 – Secured Tax Claims 

Subject to the provisions of Article VI of the Plan with respect to Disputed Claims, in full 

satisfaction, release and discharge of the Secured Tax Claims, the holders of Secured Tax Claims 

on the Effective Date, or as soon as practicable after such Claims become Allowed Claims, each 

holder of a Secured Tax Claim shall receive from the proceeds of the sale of the Properties payment 

in full of its Allowed Claim, or as may be otherwise agreed in writing between the Debtor and the 

holder of such Claim. 

3.5 Class 2 – Allowed Secured Claim of City of Hollywood 

Subject to the provisions of Article VI of the Plan with respect to Disputed Claims, in full 

satisfaction, release and discharge of its Allowed Secured Claim, City of Hollywood, on the 

Effective Date, or as soon as practicable after such Claim becomes an Allowed Claim, shall receive 

from the proceeds of the sale of the Properties payment in full of its Allowed Claim, or as may be 

otherwise agreed in writing between the Debtor and City of Hollywood. 

3.6 Class 3 – Allowed Secured Claim of United Leasing, Inc.

Subject to the provisions of Article VI of the Plan with respect to Disputed Claims, to the 

extent that United Leasing, Inc. has an Allowed Secured Claim and such claim is higher in legal 

priority than that of the Secured Lender, on the Effective Date, or as soon as practicable after such 

Claim becomes an Allowed Claim, United Leasing, Inc. shall receive from the proceeds of the sale 

of the Properties payment in full of its Allowed Claim, or as may be otherwise agreed in writing 

between the Debtor and United Leasing, Inc. 

To the extent that United Leasing, Inc.’s Allowed Secured Claim is subordinate in legal 

priority to the Secured Lender, United Leasing, Inc.’s Allowed Secured Claim shall be treated as 

a Class 6 Claim. 

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3.7 Class 4 - Allowed Secured Claim of 777 N. Ocean Drive, LLC (Secured Lender) 

Secured Lender has an Allowed Secured Claim in the amount of $47,189,513.79 plus 

interest, attorneys’ fees and expenses and the Protective Advance Claim. Pursuant to the Secured 

Lender Sale Motion to be filed contemporaneously with or subsequent to the Plan, the Debtor will 

seek to sell the Properties to the Secured Lender as the Stalking Horse Bidder, subject to the receipt 

of higher and/or better bids. The Secured Lender has agreed to acquire the Properties for an initial 

credit bid in the amount of $43,000,000, subject to the right to increase the purchase price through 

a credit bid up to and in the full amount of its Class 4 Claim. In the event the Secured Lender is 

not the successful purchaser for the Properties, then the Class 4 Claim shall be paid from the sale 

proceeds of such sale after the payment of the Class 1 Claims, Class 2 Claim and Class 3 Claim 

(to the extent the Class 3 Claim has higher legal priority than Secured Lender’s Class 4 Claim). 

In either case, pursuant to the Secured Lender Settlement, the Secured Lender shall make 

the Secured Lender Contribution on the Effective Date, subject to the entry of an Order of the 

Bankruptcy Court approving the Secured Lender Settlement under Bankruptcy Rule 9019 as more 

fully set forth below. 

On the Effective Date, Secured Lender, or its nominee, shall either (i) purchase and take 

title to the Properties pursuant to the Bidding Procedures Order and the Sale Order free and clear 

of any and all liens, claims, encumbrances or interests of any kind as set forth therein, or (ii) be 

paid Cash in respect of its Allowed Secured Claim from the proceeds of the sale of the Properties 

to the successful purchaser pursuant to the Bidding Procedures Order and the Sale Order. 

To the extent there are proceeds from the Turnover Action, such proceeds shall, in the 

Debtor’s sole discretion, either be paid upon the Confirmation Date or anytime thereafter. to 

Secured Lender to either (1) reimburse the Secured Lender for funds it has or will advance to the 

Debtor pursuant to any order entered by the Court on the use of Cash Collateral or DIP Financing 

or (2) pay the amounts that Secured Lender may have to pay in connection with the Plan, including 

without limitation, the payments relating to the Secured Lender Contribution. The remainder of 

any proceeds from the Turnover Action shall be paid to the Secured Lender upon the. Confirmation 

Date or anytime thereafter. 

Notwithstanding the foregoing, a replacement stalking horse purchaser shall be permitted 

to replace the Secured Lender, provided the replacement stalking horse bid is no less than 

$43,000,000 and such stalking horse bidder provides a contract deposit equal to no less than five 

percent (5%) of the stalking horse purchase price. 

3.8 Class 5 – Allowed Secured Mechanic’s Lien Claims 

Subject to the provisions of Article VII of the Plan with respect to Disputed Claims, in full 

satisfaction, release and discharge of all Allowed Secured Mechanic’s Lien Claims (except 

deficiency claims), on the Effective Date, the Holders of Allowed Class 5 Claims shall receive, in 

order of legal priority within the class, the net proceeds from the sale of the Properties after the 

payment in full of the Class 1 Claims, Class 2 Claim, Class 3 Claim (to the extent the Class 3 

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Claim has legal priority higher than the Class 4 Claim) and the Class 4 Claim. Any deficiency 

claim will be treated as a Class 8 Allowed General Unsecured Claim. 

3.9 Class 6 – Allowed Other Secured Claims 

Subject to the provisions of Article VII of the Plan with respect to Disputed Claims, in full 

satisfaction, release and discharge of all Allowed Other Secured Claims (except deficiency 

claims), on the Effective Date, the Holders of Allowed Class 4 Claims shall receive, in order of 

legal priority within the class, the net proceeds from the sale of the Properties after the payment in 

full of the Class 1 Claims, Class 2 Claim, Class 3 Claim (to the extent the Class 3 Claim has legal 

priority higher than the Class 4 Claim) and the Class 4 Claim. Any deficiency claim will be treated 

as a Class 8 Allowed General Unsecured Claim. 

3.10 Class 7 – Allowed Priority Deposit Claims. 

Class 6 is comprised of the holders of Allowed Priority Deposit Claims. Section § 

507(a)(7) of the Bankruptcy Code establishes a priority for “allowed unsecured claims of 

individuals, to the extent of $3,025 for each such individual, arising from the deposit, before the 

commencement of the case, of money in connection with the purchase, . . . of property, for the 

personal, family or household use of such individuals, that were not delivered or provided.” Unless 

such Holder agrees to accept a lesser treatment of an Allowed Priority Deposit Claim, each Holder 

of an Allowed Priority Deposit Claim shall receive, as soon as practicable in the discretion of the 

Liquidating Trustee, up to $3,025 of the Unsecured Creditors’ Fund before payment of or reserve 

for the Allowed General Unsecured Claims. Any deficiency claim will be treated as Class 8 

Allowed General Unsecured Claim. 

Claimants Whose Purchase and Sale Agreement(s) Have Been Properly Terminated 

In the event it is adjudicated by the Court that a purchaser is entitled to a return of its 

deposit, or if the purchaser has properly terminated its Purchase and Sale Agreement, the purchaser 

shall be entitled to the return of the portion of its deposit currently held in escrow. The balance of 

the deposit claim shall be treated as an Allowed General Unsecured Claim (Class 8), as described 

below. The Debtor is unaware of any such claimants. 

Claimants Who Breached or Defaulted Under Their Purchase and Sale Agreement 

In the event a purchaser breached or defaulted under their Purchase and Sale Agreement, 

the Debtor is entitled to retain the purchaser’s entire deposit and the purchaser shall have no claim 

against the Debtor. 

3.11 Class 8 – Allowed General Unsecured Claims

 Subject to the provisions of Article VII of the Plan with respect to Disputed Claims, in full 

satisfaction, release and discharge of all Class 8 Claims, on the Effective Date or as soon as 

practicable thereafter in the discretion of the Liquidating Trustee, each holder of an Allowed 

General Unsecured Claim shall receive on account of such claim (i) a Pro Rata Share of the 

Unsecured Creditors’ Fund after payment of or reserve for the Allowed Priority Claims therefrom, 

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and (ii) distributions from the Trust Assets after the Effective Date in the discretion of the 

Liquidating Trustee. 

3.12 Class 9 – Equity Interests

 On the Effective Date, all Equity Interests shall be extinguished and canceled. Class 9 is 

deemed to reject the Plan. 

ARTICLE IV 

MEANS OF IMPLEMENTING THE PLAN 

4.1 Funding of Plan. 

 The Sale of the Properties by the Debtor, including specifically in accordance with the 

Secured Lender Sale Motion, shall occur as follows: 

 The Bankruptcy Court, the Debtor, or a designee may, if necessary, conduct an auction sale 

of the Properties for the highest or best offer in accordance with this Plan, the Secured Lender Sale 

Motion, and the Sale Order. The sale of the Properties at an auction or otherwise pursuant to this 

Plan, the Secured Lender Sale Motion and the Sale Order shall be done in connection with and as 

part of the implementation of this Plan for all purposes, including specifically Section 1146(a) of 

the Bankruptcy Code. 

 Upon conclusion of any auction process for the Properties, the Debtor shall seek an order 

of the Bankruptcy Court approving the sale of the Properties as contemplated in and pursuant to 

this Plan, the Secured Lender Sale Motion and the Sale Order. 

 If the Secured Lender is the successful purchaser of the Properties at an auction or 

otherwise pursuant to this Plan, the Secured Lender Sale Motion and Sale Order, the Secured 

Lender or its nominee or designee may take title to the Properties subject to the Mortgage, which 

Mortgage may be assigned to any such nominee’s or designee’s lender. In the event Secured 

Lender or its nominee or designee elects to take title to the Properties subject to the Mortgage, then 

the Debtor shall have no further financing obligation to Secured Lender or its designee under and 

in respect of the Mortgage and shall be released from any and all liability to Secured Lender or 

any such nominee or designee upon closing. 

4.2 Secured Lender Settlement.

The Plan shall constitute a settlement and compromise of all claims and causes of action 

by and between the Debtor and the Debtor’s bankruptcy estate and the Secured Lender pursuant 

to and under Bankruptcy Rule 9019 (the “Secured Lender Settlement”). Pursuant to the Secured 

Lender Settlement, the Secured Lender has agreed (i) to be the Stalking Horse Purchaser for the 

Debtor’s Properties, subject in all events to the receipt of higher and/or better bids, (ii) to fund the 

Protective Advance Claim pursuant to the Cash Collateral Orders, and (iii) to fund the Secured 

Lender Contribution. In exchange, the Secured Lender shall be entitled to the Third Party Release 

as set forth below and the Debtor has agreed as follows: 

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The Debtor, on behalf of itself, the Debtor’s bankruptcy estates, any person or entity 

claiming by or through the Debtor’s bankruptcy estate, and each of their officers, directors, 

shareholders, members, managers, agents, employees, attorneys, partners, associates and insurers, 

including specifically Moses Bensusan (collectively the “Debtor Releasors”) agree to and shall be 

deemed to have fully and generally released and discharged the Secured Lender and each of its 

officers, directors, shareholders, members, managers, agents, employees, attorneys, partners, 

associates and insurers (collectively the “Secured Lender Released Parties”) from and against any 

and all manner of claims, whether asserted or unasserted, contemplated or raised, causes of actions, 

suits, debts, dues, accounts, bonds, covenants, contracts, agreements, judgments, losses, damages, 

liabilities and demands of any kind whatsoever in law or in equity, whether known or unknown, 

suspected or unsuspected, contingent or fixed, including attorneys’ fees and costs that any of the 

Debtor Releasors now have, have had or in the future may have against any of the Secured Lender 

Released Parties arising out of, related to or in connection with, directly or indirectly, the Debtor, 

the Debtor’s bankruptcy estate, the Mortgage, the Properties, and/or the facts and circumstances 

related thereto (the “Debtor Released Claims”). Notwithstanding anything herein to the contrary, 

the release of the Secured Lender Released Parties herein shall not release the Secured Lender 

from any of its obligations under this Plan or the Secured Lender Sale Motion. 

Additionally, the Debtor released the Secured Lender in connection with the Cash 

Collateral Orders and the Challenge period therein has since expired with no claims being asserted 

against the Secured Lender. 

The obligations of the Debtor and the Secured Lender shall be subject to the entry of an 

order of the Bankruptcy Court, which may be part of the Confirmation Order, approving the 

Secured Lender Settlement under the pursuant to Bankruptcy Rule 9019 in a form and content, 

and with findings, reasonably acceptable to the Secured Lender, including that the Secured Lender 

Settlement is fair and reasonable and falls well above the lowest point in the range of 

reasonableness. 

The standards for approval are well settled and requires a consideration of the 

reasonableness of the proposed settlement. See, e.g., Protective Comm. for Indep. Stockholders of 

TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424 (1968); In re W.T. Grant Co., 699 F.2d 

599, 608 (2d Cir. 1983); Florida Trailer and Equip. Co. v. Deal, 284 F.2d 567, 571 (5th Cir. 1960). 

The inquiry need only determine whether the settlement falls below the lowest point of the range 

of reasonableness. See W.T. Grant Co., 699 F.2d at 608; see also In re Martin, 91 F.3d 389 (3rd 

Cir. 1996); In re Van Diepen, P.A., 236 Fed. Appx. 498, 501 (11th Cir. 2007). Certain factors are 

used in evaluating a settlement, including: (i) the probability of success in litigation, (ii) the likely 

difficulties in collection; (iii) the complexity of the litigation involved, and the expense, 

inconvenience and delay necessarily attending it; and (iv) the paramount interest of the creditors. 

Wallis v. Justice Oaks II, Ltd., 898 F.2d 1544, 1549 (11th Cir, 1990). 

The Debtor asserts that the Secured Lender Settlement falls well above the lowest point in 

the range of reasonableness when considering these factors. There are significant risks inherent in 

all litigation and the Secured Lender may ultimately prevail in any litigation is brings, particularly 

as the Debtor believes it has no legitimate defenses to any litigation brought by the Secured Lender. 

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If the Secured Lender prevails in claims against the Debtor, it will be able to collect a large portion 

of the debt by foreclosing the Debtor’s interest (as well as the interest of any and all junior 

lienholders) on the Properties. The complexity of the litigation involved and attendant expense, 

inconvenience and delay militates in favor of approval of the Secured Lender Settlement. While 

the claims litigated between the Debtor and the Secured Lender are likely typical, they will require 

potential discovery, and the expense of these efforts will be prohibitive to the Debtor and decrease 

potential recovery to other creditors. Finally, the Secured Lender Settlement gives certainty and 

avoids risk, expense and delay attendant with litigation. Importantly, pursuant to the Secured 

Lender Settlement, the Secured Lender will make the Secured Lender Contribution to provide for 

recovery by other creditors, which would not exist absent such settlement. As such, the Secured 

Lender Settlement is in the paramount interest of the creditors. 

4.3 Dissolution of Corporate Entity.

 On the Effective Date, the Debtor will be deemed dissolved without the necessity of any 

further action, notice or filing. 

4.4 Corporate Action. 

 Upon entry of the Confirmation Order, the transfers and dissolutions contemplated by this 

Article shall be deemed authorized and approved in all respects. On the Effective Date, the matters 

provided under the Plan involving the corporate structures of the Debtor shall be deemed to have 

occurred and shall be in effect from and after the Effective Date pursuant to applicable state laws 

without any requirement of further action by the member, managing member, stockholder or 

directors of the Debtor. On the Effective Date, the Liquidating Trustee shall be authorized and 

directed to take all necessary and appropriate actions to effectuate the transactions contemplated 

by the Plan and the Disclosure Statement. Upon the sale of the Properties, the Debtor and any of 

its principals shall resign from the board of the Condominium Association. 

4.5 Cancelled Documents. 

 As of the Effective Date, any security, note, instrument or other document evidencing a 

Claim against or Equity Interest in the Debtor shall be canceled, null and void, except for the right, 

if any, to receive a distribution under this Plan. However, this provision shall not apply to any 

security, note, instrument or other document executed in connection with Secured Lender’s Claim 

if Secured Lender agrees that such claim shall survive and if such obligation is assumed by 

purchaser with the consent of Secured Lender. 

4.6 Investments. 

 All Trust Assets of the Debtor shall be collected by the Liquidating Trustee, and pending 

distribution, such funds shall be held in accounts or otherwise invested in accordance with section 

345 of the Bankruptcy Code or as otherwise permitted by Final Order of the Bankruptcy Court. 

The distributable Cash will be held by the Liquidating Trustee until it is distributed to any Holder 

of an Allowed Claim against the Debtor pursuant to the Plan. 

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4.7 Release of Liens. 

 Except as otherwise provided in the Plan or in any contract, instrument or other agreement 

or document created in connection with the Plan, on the Effective Date, all mortgages, deeds of 

trust, Liens or other security interests against the property of the Debtor’s Estate shall be released, 

and the Liquidating Trustee shall own and hold good and marketable title to such property of the 

Estate. However, this provision shall not apply to any security, note, instrument or other document 

executed in connection with Secured Lender’s Claim if Secured Lender agrees that such claim 

shall survive and if such obligation is assumed by purchaser with the consent of Secured Lender. 

4.8 Further Actions to Effectuate Plan. 

 On the Effective Date or as soon thereafter as practicable, (a) the members of the board of 

directors of the Debtor shall be deemed to have resigned, (b) the President of the Debtor shall 

resign and have no further obligations with respect to the Plan, the Debtor or the case, and (c) all 

employment contracts with the Debtor (e.g. 1099 independent contractors) not previously assumed 

or rejected shall be deemed to be rejected. 

ARTICLE V 

THE LIQUIDATING TRUSTEE 

5.1 Selection of Liquidating Trustee. 

 The Confirmation Order shall appoint the Liquidating Trustee. The manner for selecting 

the Liquidating Trustee shall be established prior to Confirmation on notice to all parties. 

5.2 Purpose of the Liquidating Trustee. 

 The Liquidating Trustee will hold and monetize all the Trust Assets for the benefit of the 

Creditors of the Debtor’s Estate, and for payments of all Allowed Claims in accordance with the 

provisions of this Plan. The Liquidating Trustee will not be selected nor supervised by the United 

States Trustee and will not be bonded in favor of the United States in an amount set by the United 

States Trustee. 

5.3 Compensation.

 The Liquidating Trustee shall be paid in accordance with section 326 of the Bankruptcy 

Code. 

5.4 Payment of Professionals Retained by the Liquidating Trustee. 

 Professionals retained by the Liquidating Trustee shall submit monthly invoices to the 

Liquidating Trustee. The Liquidating Trustee may pay 80% of fees and 100% of disbursements 

for the amounts requested from the Trust Assets and the proceeds thereof. The remaining 20% of 

fees shall be paid when fee applications are filed and approved by the Court. 

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5.5 Resignation, Death or Removal of the Liquidating Trustee. 

 The Liquidating Trustee may be removed by the Bankruptcy Court upon application for 

good cause shown. In the event of the resignation, removal, death or incapacity of the Liquidating 

Trustee, the Debtor, in consultation with the United States Trustee shall, with Bankruptcy Court 

approval, designate another Person to become Liquidating Trustee and thereupon the successor 

Liquidating Trustee, without any further action, who shall become fully vested with all of the 

rights, powers, duties and obligations of his or her predecessor. 

5.6 Authority and Limitations. 

 

 The Liquidating Trust and Liquidating Trustee is entitled to section 108(a) tolling insofar 

as the Liquidating Trustee is acting on behalf of, as an agent of, and/or as a representative of the 

Debtor's estate to pursue claims that belonged to the Debtor for the benefit of the Debtor's creditors. 

The Liquidating Trustee shall have the power and authority to perform the following acts 

(subject to Court approval where applicable), in addition to any powers granted by law or conferred 

to it by any other provision of the Plan or the Liquidating Trust Agreement; provided however, 

that enumeration of the following powers shall not be considered in any way to limit or control the 

power of the Liquidating Trustee to act as specifically authorized by any other provision of this 

Plan or Liquidating Trust Agreement and to act in such manner as the Liquidating Trustee may 

deem necessary or appropriate to discharge all obligations assumed by the Liquidating Trustee or 

provided herein and to conserve and protect Remaining Assets or to confer on the Creditors the 

benefits intended to be conferred upon them by this Plan: 

(a) To open and maintain bank accounts on behalf of or in the name of the 

Liquidating Trust, calculate and make Distributions and take other actions 

consistent with the Plan and the implementation thereof, including the 

establishment, re-evaluation, adjustment and maintenance of appropriate 

reserves, in the name of the Liquidating Trust. 

(b) To receive, conserve and manage the Trust Assets. 

(c) To hold legal title to any and all Trust Assets. 

(d) Subject to the applicable provisions of the Plan, to prosecute, collect and 

liquidate the Trust Assets. 

(e) To take discovery from third parties, including but not limited to, issuing 

Fed.R.Bankr.P. 2004 subpoenas and discovery requests. 

(f) Make decisions regarding the retention or engagement of the Liquidating 

Trustee’s Professionals and to pay, from the Trust Assets and the proceeds 

thereof, the fees and charges incurred by the Liquidating Trust and the fees 

and expenses of the Liquidating Trustee’s Professionals, as well as the 

disbursements, expenses or related support services relating to the 

implementation of the Plan and performance by the Liquidating Trustee of 

his duties under the Trust Agreement. 

(g) To pay all lawful, expenses, debts, charges and liabilities of the Liquidating 

Trust. 

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(h) To wind down the affairs of the Liquidating Trust including the filing of 

final tax returns, establish any administrative reserves necessary to close the 

Liquidating Trust and make all Distributions to the Beneficiaries provided 

for or contemplated by the Plan. 

(i) To withhold from the amount distributable to any Person such amount as 

may be sufficient to pay any tax or other charge which the Liquidating 

Trustee has determined, in its sole discretion, may be required to be 

withheld therefrom under the income tax laws of the United States or of any 

state or political subdivision thereof. In the exercise of its discretion and 

judgment, the Trustee may enter into agreements with taxing or other 

governmental authorities for the payment of such amounts as may be 

withheld in accordance with the provisions of this section. 

(j) To enter into any agreement or execute any document required by or 

consistent with the Plan and perform all obligations thereunder. 

(k) To abandon in any commercially reasonable manner, including 

abandonment or donation to a charitable organization of its choice, any 

assets if it concludes that they are of no significant value or benefit to the 

Liquidating Trust. 

(l) Except as otherwise set forth in the Trust Agreement, to have exclusive 

power to prosecute and/or settle all causes of actions including, without 

limitation, Avoidance Actions or any other causes of action or 

counterclaims (collectively, the “Actions”) and exercise, participate in or 

initiate any proceeding before the Bankruptcy Court or any other court of 

competent and appropriate jurisdiction and voluntarily participate as a party 

or otherwise in any administrative proceeding, arbitration, mediation, or 

other nonjudicial proceeding and litigate or settle such Actions on behalf of 

the Trust, and pursue such actions to settlement or final order, all in 

accordance with the terms of the Liquidating Trust Agreement. 

(m) To hold any unclaimed Distributions or payment to a Beneficiary in 

accordance with the Liquidating Trust Agreement, the Confirmation Order 

and the Plan. 

(n) To purchase or create and carry all insurance policies and pay all insurance 

premiums and costs it deems necessary or advisable. 

(o) To implement and/or enforce all provisions of the Plan. 

(p) To collect and liquidate all Trust Assets pursuant to the Plan, the 

Confirmation Order and the Liquidating Trust Agreement and to ultimately 

close the Chapter 11 Case. 

(q) To object to Claims and supervise and administer the resolution, settlement 

and payment of such Claims and the distribution to the Beneficiaries in 

accordance with the Liquidating Trust Agreement and the Plan. 

Specifically, the Liquidating Trustee may compromise or settle any such 

Claim (disputed or otherwise) free of any restrictions other than those 

restrictions expressly imposed by the Plan, the Confirmation Order or the 

Liquidating Trust Agreement. 

(r) Exercise such rights of setoff as the Debtor or the Estate may have had 

against any Beneficiary and/or seek Court approval of such exercise. 

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(s) Voluntarily engage in arbitration or mediation with regard to any dispute 

(t) To (i) seek a determination of tax liability under section 505 of the 

Bankruptcy Code, (ii) file, if necessary, any and all tax information returns 

required with respect to the Liquidating Trust treating the Liquidating Trust 

as a grantor trust pursuant to Treas. Reg. 1.67-4(a) or otherwise, (iii) make 

tax elections by and on behalf of the Liquidating Trust and (iv) pay taxes, if 

any, payable by the Liquidating Trust. 

(u) To make all distributions to holders of Allowed Claims provided for or 

contemplated by the Plan. 

(v) Resolve issues pertaining to the retention or disposal of the Liquidating 

Trust's administrative and business records. 

(w) To perform any other actions or duties required to be performed by the 

Trustee pursuant to the provisions of the Plan and/or Confirmation Order. 

Notwithstanding anything in the Liquidating Trust Agreement to the contrary, the Liquidating 

Trustee shall not do or undertake any of the following: 

(a) Take any action in contravention of the Plan, the Confirmation Order or the 

Liquidating Trust Agreement. 

(b) Take any action that would significantly jeopardize treatment of the 

Liquidating Trust as a “liquidating trust” for federal income tax purposes. 

(c) Grant liens on any of the Trust Assets. 

(d) Guaranty any debt. 

(e) Loan Trust Assets to the Liquidating Trustee. 

(f) Purchase Trust Assets from the Liquidating Trust. 

(g) Transfer Trust Assets to another trust with respect to which the Liquidating 

Trustee serves as trustee. 

The Liquidating Trustee will not need to obtain Bankruptcy Court approval to implement 

the terms of the Plan or to take actions authorized by the Plan, other than: (i) the sale or liquidation 

of assets; (ii) settlement of any Cause of Action; (iii) objecting to Claims, and resolving Disputed 

Claims; (iv) granting releases pursuant to settlements entered into on behalf of the Estate; or (v) 

the retention or payment of professionals or advisors. Except as provided in this Plan, payment of 

the monthly fee to the Liquidating Trustee shall not require separate Bankruptcy Court approval. 

The United States Trustee shall have no responsibility for supervising the Liquidating Trustee or 

the administration of the case following the Effective Date. 

5.7 Liquidating Trustee’s Limitation of Liability and Indemnification Rights. 

Neither the Liquidating Trustee or any partner, director, officer, affiliate, employee, 

employer, professional, agent or representative of the Liquidating Trustee (“Indemnified 

Persons”), shall be personally liable in connection with the affairs of the Liquidating Trust to any 

person, including any Beneficiary of the Liquidating Trust, or to the Liquidating Trust, except for 

acts or omissions of the Indemnified Person that constitute any self-dealing, breach of fiduciary 

duty, fraud, gross negligence or willful misconduct. Persons dealing with Indemnified Persons in 

connection with the Liquidating Trust, or seeking to assert claims against the Liquidating Trust, 

shall have recourse only to the Trust Assets to satisfy any liability incurred by the Indemnified 

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Persons to such persons in carrying out the terms of this Trust Agreement, except for acts or 

omissions of the Indemnified Persons that constitute any self-dealing, breach of fiduciary duty, 

fraud, gross negligence or willful misconduct.

 Except as otherwise set forth in the Plan or Confirmation Order, Indemnified Persons, 

including, without limitation, any firm in which the Liquidating Trustee is a partner, member, 

shareholder or employee (“Firm”), shall be defended, held harmless and indemnified from time 

to time by the Liquidating Trust against any and all losses, claims, costs, expenses and liabilities 

to which such Indemnified Persons may be subject by reason of such Indemnified Party’s 

execution in good faith of its duties pursuant to the discretion, power and authority conferred on 

such person by the Liquidating Trust Agreement, the Plan or the Confirmation Order; provided, 

however, that the indemnification obligations arising pursuant to this section shall not indemnify 

any Indemnified Person for any actions taken by an Indemnified Person which constitute fraud, 

willful misconduct or gross negligence of his or her duties hereunder, or willful material breach of 

the Plan. Satisfaction of any obligation of an Indemnified Person arising pursuant to the terms of 

this section shall be payable only from the Trust Assets and such right to payment shall be prior 

and superior to any rights of Beneficiaries to receive a Distribution of the Trust Assets. 

5.8 Operations of the Debtor. 

a) On the Effective Date, the Debtor will be deemed dissolved, to the extent 

its operations have continued post-petition such operations will cease, and 

the Trust Assets assigned and transferred to the Liquidating Trust, which 

will be managed by the Liquidating Trustee. 

b) Except as otherwise provided in this Plan, all Cash shall be invested by the 

Liquidating Trustee with sole and absolute discretion in only (i) direct 

obligations of, or obligations guaranteed by, the United States of America 

and in compliance with Section 345 of the Bankruptcy Code; (ii) obligations 

of any agency or corporation which is or may hereafter be created by or 

pursuant to an act of the Congress of the United States as an agency or 

instrumentality thereof; (iii) AAA rated tax-free securities issued by 

municipalities or state governments or agencies; or (iv) such other 

obligations or instruments as may from time to time be approved for such 

investments by the Court; provided, however, that the Liquidating Trustee 

may, to the extent deemed necessary by the Liquidating Trustee with sole 

and absolute discretion to implement the provisions of this Agreement, 

deposit moneys in demand deposits (including money market funds) at any 

U.S. Trustee approved bank, trust company or other financial institution 

which has, at the time of such deposit a capital stock and surplus 

aggregating at least $100,000,000. The investment powers of the 

Liquidating Trustee, other than those reasonably necessary to maintain the 

value of the Trust Assets, shall be limited to powers to invest in demand and 

time deposits, such as short-term certificates of deposit, in banks or other 

savings or financial institutions, or other temporary, liquid investments, 

such as U.S. Treasury Bills. Such investments shall mature in such amounts 

and at such times as may be deemed necessary by the Liquidating Trustee 

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with sole and absolute discretion to provide funds when needed to make 

payments from the Trust Assets, as the case may be. 

c) In no case shall any party dealing with the Liquidating Trustee in any 

manner whatsoever in relation to the Trust Assets or to any part or parts 

thereof, be obligated to see that the provisions of the Plan or any direction 

from the Court have been complied with, or be obligated or privileged to 

inquire into the authority of the Liquidating Trustee to act, or to inquire into 

any other limitation or restriction of the power and authority of the 

Liquidating Trustee, but as to any party dealing with the Liquidating Trustee 

in any manner whatsoever in relation to the Trust Assets, the power of the 

Liquidating Trustee to act or otherwise deal with the Trust Assets shall be 

absolute. 

d) The Liquidating Trustee shall be responsible for making distributions to 

holders of Allowed Claims pursuant to Articles III and VI of the Plan. Under 

no circumstances shall the Liquidating Trustee have any power to engage 

in any trade or business or any other similar activity except as specifically 

provided herein or otherwise reasonably necessary and advisable for the 

orderly liquidation of the Trust Assets Notwithstanding this provision, in 

the event Secured Lender is not the purchaser pursuant to the Asset 

Purchase Agreement, Secured Lender shall be paid directly from the sale 

proceeds within five (5) days after the sale under the Asset Purchase 

Agreement closes 

e) The Liquidating Trustee shall keep an accounting of receipts and 

disbursements, which shall be open to inspection and review by the Court 

and Creditors (upon reasonable notice, and without unduly interfering with 

the operations of the Liquidating Trustee). 

f) All costs, expenses and obligations incurred by the Liquidating Trustee in 

administering the Trust Assets or in any manner connected, incidental or 

related thereto, including but not limited to the fees and expenses of 

professionals retained by the Liquidating Trustee and its professionals to 

assist in carrying out its duties pursuant to the Plan, post-confirmation U.S. 

Trustee fees, and fees and expenses of the Liquidating Trustee and its 

professionals in pursuing ongoing litigation, shall be a charge against the 

Trust Assets, and the Liquidating Trustee shall pay same, maintaining at all 

times adequate reserves for such payments prior to making distributions to 

the Creditors. 

g) The Liquidating Trustee shall maintain an adequate reserve fund after 

payment of all fees, expenses, taxes, etc. which shall be available to cover 

all expenses and costs associated with carrying out the provisions of the 

Plan. The balance of the reserve fund shall be included in the final 

disbursement to holders of Allowed Claims prior to dissolution of the 

Liquidating Trustee’s corporate existence. 

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h) The Liquidating Trustee and its officers and employees shall not be liable 

for any act they may do, or omit to do hereunder or acting in good faith and 

in the exercise of his, her or its best judgment, and the fact that such act or 

omission was advised, directed or approved by an attorney acting as 

attorney for the Liquidating Trustee shall be conclusive evidence of such 

good faith and best judgment. However, this subparagraph 5.7(h) shall not 

apply to any self-dealing, breach of fiduciary duty, gross negligence or 

willful misconduct by the Liquidating Trustee’s officers or employees. 

i) The Liquidating Trustee shall maintain a bond in favor of the estate in an 

amount to be determined prior to or at the Confirmation Hearing and 

established in the Confirmation Order, which will be paid by the estate for 

the benefit of holders of Allowed Claims of the estate. 

5.9 Vesting of Assets of the Debtor.

 On the Effective Date, except as otherwise provided in the Plan, all right, title and interest 

in and to the Trust Assets of the Debtor shall vest in, and be transferred and assigned to the 

Liquidating Trust, free and clear of any and all Liens and other interests. However, this provision 

shall not apply to any mortgage, security, note, instrument or other document executed in 

connection with Secured Lender’s Claim if Secured Lender agrees that such claim shall survive 

and if such obligation is assumed by purchaser with the consent of Secured Lender. All of the 

Debtor's rights in respect of all Claims and Causes of Action (including without limitation 

Avoidance Actions) shall be transferred to the Liquidating Trust, the Liquidating Trustee shall be 

designated the representative of the Debtor’s estate for all purposes under Section 1123 of the 

Bankruptcy Code and the Liquidating Trustee on behalf of the Liquidating Trust shall be 

empowered to investigate, prosecute, collect, and/or settle the Claims and Causes of Action as the 

Liquidating Trustee, in his business judgment, may deem appropriate. 

The Debtor's Schedules of Assets and Liabilities, as may be amended, identify creditors 

whose Claims are disputed, and the Debtor's Statement of Financial Affairs identifies the parties 

(known to the Debtor as of the Petition Date) who received payments and transfers from the 

Debtor, which payments and transfers may be avoidable under the Bankruptcy Code. Moreover, 

the Liquidating Trustee shall investigate Causes of Action (including without limitation Avoidance 

Actions) the Debtor may have against both insiders and third parties, including but not limited to 

directors, officers, affiliates, parent companies, subsidiaries, landlords, contract counterparties, 

service providers, employees, and/or investors. Said Causes of Action include, but are not limited 

to, potential causes of action for breach of contract, negligence, and/or intentional torts against the 

Debtor's members, officers, directors, affiliates, employees, agents, landlords, and/or partners. A 

list of potential litigation targets is attached as “Exhibit B.” The Debtor has not completed its 

investigation of potential objections to Claims and Causes of Action; therefore, the Debtor is 

unable to provide any meaningful estimate of amounts that could be recovered. THE PLAN 

DOES NOT, AND IS NOT INTENDED TO, RELEASE ANY SUCH AFOREMENTIONED 

CAUSES OF ACTION (INCLUDING WITHOUT LIMITATION AVOIDANCE 

ACTIONS), OR OBJECTIONS TO PROOFS OF CLAIM. ENTRY OF THE 

CONFIRMATION ORDER SHALL NOT CONSTITUTE A WAIVER OR RELEASE BY 

THE DEBTOR OR ITS ESTATE OF ANY AVOIDANCE ACTION, CAUSE OF ACTION, 

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OR OBJECTION TO PROOF OF CLAIM, EXCEPT AS EXPRESSLY PROVIDED FOR 

BY THE PLAN OR BY FINAL ORDER OF THE BANKRUPTCY COURT. ON AND 

AFTER THE EFFECTIVE DATE, AND PURSUANT TO BANKRUPTCY CODE 

SECTION 1123(b)(3), THE LIQUIDATING TRUST SHALL BE DESIGNATED 

REPRESENTATIVE OF THE ESTATE WITH RESPECT TO, AND SHALL BE 

ASSIGNED, ALL AVOIDANCE ACTIONS AND CAUSES OF ACTION ARISING 

UNDER SECTIONS 542, 543, 544, 547 THROUGH 551, AND 553 OF THE BANKRUPTCY 

CODE AND ALL CAUSES OF ACTION BELONGING TO THE DEBTOR WHICH 

EXIST OUTSIDE OF BANKRUPTCY (THE "TRANSFERRED CAUSES OF ACTION"). 

THE LIQUIDATING TRUSTEE SHALL BE AUTHORIZED TO INVESTIGATE, 

ENFORCE, PROSECUTE, SETTLE, COLLECT, OR COMPROMISE THE 

TRANSFERRED CAUSES OF ACTION. 

Creditors should understand that legal rights, Claims, and Causes of Action the Debtor may 

have against them, if any exist, are retained under the Plan for prosecution unless a specific order 

of the court authorizes the Debtor to release such legal rights, Claims, and Causes of Action. AS 

SUCH, CREDITORS ARE CAUTIONED NOT TO RELY ON (I) THE ABSENCE OF THE 

LISTING OF ANY LEGAL RIGHT, CLAIMS, OR RIGHT OF ACTION AGAINST A 

PARTICULAR CREDITOR IN THE DISCLOSURE STATEMENT, PLAN, SCHEDULES 

OF ASSETS AND LIABILITIES, OR STATEMENT OF FINANCIAL AFFAIRS OR (II) 

THE ABSENCE OF LITIGATION OR DEMAND PRIOR TO THE EFFECTIVE DATE 

OF THE PLAN AS ANY INDICATION THAT THE DEBTOR DOES NOT POSSESS OR 

DOES NOT INTEND TO PROSECUTE A PARTICULAR RIGHT, CLAIM, OR RIGHT 

OF ACTION IF A PARTICULAR CREDITOR VOTES TO ACCEPT THE PLAN. IT IS 

THE EXPRESSED INTENTION OF THE PLAN TO PRESERVE ALL RIGHTS, 

CLAIMS, AND CAUSES OF ACTION OF THE DEBTOR, WHETHER NOW KNOWN 

OR UNKNOWN, FOR THE BENEFIT OF THE DEBTOR'S ESTATE AND ITS 

CREDITORS. 

IN REVIEWING THE DISCLOSURE STATEMENT AND THE PLAN, AND IN 

DETERMINING WHETHER TO VOTE IN FAVOR OF OR AGAINST THE PLAN, 

CREDITORS AND INTEREST HOLDERS (INCLUDING PARTIES THAT RECEIVED 

PAYMENTS FROM THE DEBTOR WITHIN NINETY (90) DAYS PRIOR TO THE 

PETITION DATE) SHOULD CONSIDER THAT A CAUSE OF ACTION MAY EXIST 

AGAINST THEM, THAT THE PLAN PRESERVES ALL AVOIDANCE ACTIONS, 

CAUSES OF ACTION, AND OBJECTIONS TO CLAIMS, AND THAT THE PLAN 

AUTHORIZES THE LIQUIDATING TRUST TO PROSECUTE THE SAME. 

ARTICLE VI 

PROVISIONS GOVERNING DISTRIBUTION 

6.1 Distributions.

Any payment or distribution pursuant to this Plan, to the extent posted in the United States 

Mail, shall be deemed made when deposited by the Liquidating Trustee, or an agent authorized by 

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29 

the Liquidating Trustee, into the United States Mail. Payments of Cash shall be made by check 

drawn on a domestic bank or by wire transfer from a domestic bank. 

6.2 Delivery of Distributions. 

 Distributions and deliveries to Holders of Allowed Claims shall be made at the addresses 

set forth on the proofs of Claim or proofs filed by such Holders (or at the last known addresses of 

such Holders if no proof of Claim is filed; or if the Liquidating Trustee has been notified of a 

change of address, at the address set forth in such notice). 

6.3 Unclaimed Property. 

 If any distribution remains unclaimed for a period of 90 days after it has been delivered (or 

attempted to be delivered) in accordance with the Plan to the Holder entitled thereto, such 

unclaimed property shall be forfeited by such Holder whereupon all right, title and interest in and 

to the unclaimed property shall be held in reserve by the Liquidating Trustee to be distributed to 

other Creditors in accordance with this Plan. The Liquidating Trustee shall not attempt to make 

further distribution to the Holders of such unclaimed property. Distributions unclaimed for a period 

of 90 days after they have been delivered (or attempted to be delivered) in accordance with the 

Plan to the Holders entitled thereto that (i) are intended to be final distributions; and (ii) do not 

exceed $10,000 in the aggregate, shall, as soon thereafter as practicable, be donated to the 

Bankruptcy Bar Foundation for the Southern District of Florida. 

6.4 No Interest Unless Otherwise Provided. 

 No interest shall be paid on any Claim unless, and only to the extent permitted, by 

applicable bankruptcy law. 

6.5 De Minimis Distributions.

 No distribution of less than twenty-five dollars ($25) shall be made to any Holder of an 

Allowed Claim. Such undistributed amount will be retained by the Liquidating Trustee to be 

distributed pro rata at the time of final distributions to Holders of Claims in accordance with the 

Plan. 

6.6 Manner of Payment.

 At the option of the Liquidating Trustee, any Cash payment to be made by any Person 

pursuant to the Plan may be made by a check or wire transfer or as otherwise required or provided 

in applicable agreements. 

6.7 Timing of Distributions.

 The timing of distributions shall be in accordance with the provisions of Articles II and VI 

of the Plan. 

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 6.8 W-9 Requests. 

 Any Holder of an Allowed Claim that fails to return a W9 within sixty (60) days of a 

request for same by the Liquidating Trustee shall forfeit its/his/her right to a distribution and shall 

cease being a Holder of an Allowed Claim, unless otherwise agreed to in writing by the Liquidating 

Trustee. 

6.9 Fractional Cents. 

 When any payment of a fraction of a cent would otherwise be called for, the actual payment 

shall reflect a rounding of such fraction to the nearest whole cent (rounding down in the case of 

$0.50 or less and rounding up in the case of more than $0.50). 

ARTICLE VII 

PROCEDURES FOR RESOLVING AND 

TREATING DISPUTED AND CONTINGENT CLAIMS 

Prosecution of Objections. 

 On or before 6 months after the Effective Date (unless such deadline is extended by the 

Bankruptcy Court), the Liquidating Trustee shall file objections to Claims. 

Administration of Disputed Claims. 

a) No Distribution on Account of Disputed Claims. Notwithstanding any other 

provision in the Plan, no distributions shall be made under the Plan on 

account of any Disputed Claim. With respect to each Class set forth in 

Article III, in determining the amount of Distributions due to the Holders of 

Allowed Claims in such Class and to be reserved for Disputed Claims, the 

calculation of Pro Rata Share shall be made following the funding of a 

reserve in respect of all Disputed Claims in such Class pursuant to section 

7.2(c) below. 

b) Disputed Claims Reserve. In determining the amount of distributions to be 

made under the Plan to Holders of Allowed Claims, the appropriate 

distributions required by the Plan shall be made according to estimates and 

subject to the provisions of the Plan. To protect the interests of Holders of 

Disputed Claims, the Liquidating Trustee shall establish a Disputed Claims 

Reserve for each Disputed Claim. The Liquidating Trustee shall fund the 

Disputed Claims Reserve with Cash in an amount that represents the Pro 

Rata Share of the Cash that would otherwise be distributed to the Holders 

of each Disputed Claim if such Claim was Allowed in the amount set forth 

on the Holder’s proof of Claim or as estimated by the Bankruptcy Court. 

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c) Distribution After Allowance. As soon as practicable after a Disputed Claim 

becomes an Allowed Claim, the Holder of such Allowed Claim shall receive 

from its Disputed Claims Reserve a distribution in an amount equal to the 

distribution that such Holder would have received had such Disputed Claim 

been an Allowed Claim on the Effective Date. Distributions to each Holder 

of a Disputed Claim, to the extent that such Claim becomes an Allowed 

Claim, shall be made, without interest, in accordance with the Class of 

Claims to which such Claim belongs. 

d) Distribution After Disallowance. If and when a Disputed Claim or any 

portion thereof becomes a Disallowed Claim, the Pro Rata Share of the 

distributions to which each Holder of an Allowed Claim in the Class of 

Claims to which such Claim belongs is entitled, shall increase 

commensurately. Accordingly, the Liquidating Trustee shall have the right 

to make subsequent distributions in accordance with the provisions of the 

Plan. 

Estimation of Claims. 

 The Liquidating Trustee may, at any time, request that the Bankruptcy Court estimate any 

contingent or unliquidated Claim pursuant to section 502(c) of the Bankruptcy Code regardless of 

whether the Debtor or the Liquidating Trustee has previously objected to such Claim or whether 

the Bankruptcy Court has ruled on any such objection. The Bankruptcy Court will retain 

jurisdiction to estimate any Claim at any time during litigation concerning any objection to any 

Claim, including during the pendency of any appeal relating to any such objection. In the event 

that the Bankruptcy Court estimates any contingent or unliquidated Claim, that estimated amount 

will constitute either the Allowed amount of such Claim or a maximum limitation on such Claim, 

as determined by the Bankruptcy Court. If the estimated amount constitutes a maximum limitation 

on such Claim, the Debtor (and, after the Effective Date, the Liquidating Trustee) may elect to 

pursue any supplemental proceedings to object to any ultimate payment on such Claim. All of the 

aforementioned Claims objections, estimation and resolution procedures are cumulative and not 

necessarily exclusive of one another. Claims may be estimated and subsequently compromised, 

settled, withdrawn or resolved by any mechanism approved by the Bankruptcy Court, except that 

after the Effective Date, the Liquidating Trustee may compromise, settle or resolve any such 

Claims without Bankruptcy Court approval. 

Objections to Fully Impaired Claims. 

 Certain Claims and all Equity Interests are fully Impaired under the Plan and not entitled 

to any distribution under the Plan. As a result, the Debtor does not intend to object to any such 

Claims or Equity Interests since the allowance or disallowance of such Claims or Equity Interests 

will have no impact on the Debtor or its Estate. However, the Debtor (and after the Effective Date, 

the Liquidating Trustee) reserve the right to file objections to such Claims and Equity Interests at 

any time they deem appropriate, if ever, until the closing of this Chapter 11 Case. 

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Disallowance of Claims. 

 Under section 502(d) of the Bankruptcy Code, any Claim asserted by a Creditor shall be 

disallowed in its entirety if such Creditor has received a transfer that is voidable under the 

Bankruptcy Code and has failed to surrender such transfer after written demand made by the 

Liquidating Trustee. 

ARTICLE VIII 

EXECUTORY CONTRACTS AND UNEXPIRED LEASES 

8.1 General Treatment: Rejected if not Previously Assumed. 

 Except for those executory contracts and unexpired leases (a) that are the subject of prior 

orders of the Bankruptcy Court approving their assumption and assignment or rejection, or (b) that 

are the subject of a motion pending as of the Confirmation Date, or (c) are assumed and assigned 

in accordance with the sale of the Properties pursuant to the Secured Lender Sale Motion, the 

Bidding Procedures Order and the Sale Order, are rejected. The owner of any property located at 

the Condo-Hotel and subject to a rejected executory contract shall be provided access to the 

Condo-Hotel (by either the Debtor or Secured Lender, as the case may be) for a period of thirty 

(30) days following notice of such rejection to retrieve such property, failing which the property 

will be deemed abandoned by the owner of the property. 

8.2 Bar to Rejection Damages.

 If the rejection of an executory contract or an unexpired lease by the Debtor results in 

damages to the other party or parties to such contract or lease, a Claim for such damages shall be 

forever barred and shall not be enforceable against the Debtor or its properties or agents, 

successors, or assigns, unless a proof of Claim is filed with the Bankruptcy Court and served upon 

the Liquidating Trustee by the earlier of: (a) 30 days after notice of the Confirmation Date or 

(b) such other deadline as the Court has or may set for asserting a Claim for such damages. 

8.3 Rejection Claims.

 Any Rejection Claim arising from the rejection of an unexpired lease or executory contract 

not barred by Section 8.2 of the Plan shall be treated as a General Unsecured Claim pursuant to 

Article III of this Plan. Nothing contained herein shall be deemed an admission by the Debtor that 

such rejection gives rise to or results in a Claim or shall be deemed a waiver by the Debtor or the 

Liquidating Trustee of any objections to such Claim if asserted. 

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ARTICLE IX 

CONDITIONS PRECEDENT TO EFFECTIVENESS OF PLAN 

9.1 Conditions to Effectiveness of Plan.

 The Effective Date of the Plan shall not occur unless and until the following conditions 

shall have been satisfied or waived by the Debtor with the consent of the Secured Lender: (a) 14 

days shall have passed from the Confirmation Date; (b) the Bankruptcy Court shall have approved 

the Secured Lender Settlement pursuant to Bankruptcy Rule 9019 and shall have entered the 

Confirmation Order, in form and substance acceptable to the Debtor and the Secured Lender; (c) 

the Bankruptcy Court shall have approved the information contained in the Disclosure Statement 

as adequate pursuant to section 1125 of the Bankruptcy Code; (d) all documents, instruments and 

agreements provided for under this Plan or necessary to implement this Plan shall have been 

executed and delivered by the parties thereto, unless such execution or delivery has been waived 

by the parties benefited thereby, in form and substance satisfactory to the Debtor; (e) there is 

sufficient Cash of the Debtor to pay all Allowed Administrative Claims and Allowed Priority 

Claims; (f) no order of a court restraining the Debtor from consummating the Plan shall have been 

entered and shall remain in effect; and (g) Secured Lender (or the highest and best bidder therefor) 

shall have closed on the purchase of the Debtor’s Properties pursuant to the Secured Lender Sale 

Motion, the Bidding Procedures Order and the Sale Order. 

9.2 Notice of Confirmation of the Plan. 

 Notice of entry of the Confirmation Order shall be provided as required by Bankruptcy 

Rule 3020(c)(2). 

ARTICLE X 

RETENTION OF JURISDICTION 

10.1 Retention of Jurisdiction.

 Pursuant to sections 1334 and 157 of title 28 of the United States Code, the Bankruptcy 

Court shall retain jurisdiction of all matters arising in, arising under, and related to the Chapter 11 

Case and the Plan, for the purposes of sections 105(a) and 1142 of the Bankruptcy Code, and for, 

among other things, the following purposes: 

a) to hear and to determine any and all objections to or applications concerning 

the allowance of Claims or Equity Interests or the allowance, classification, 

priority, compromise, estimation, or payment of any Claim or Equity 

Interest; 

b) to hear and determine any and all fee applications and any other applications 

for allowance and/or payment of other fees or expenses to be paid or 

reimbursed from the Debtor’s Estate under the Bankruptcy Code, and any 

and all objections thereto; 

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c) to hear and determine pending applications for the rejection, assumption, or 

assumption and assignment of unexpired leases and executory contracts and 

the allowance of Claims resulting therefrom, and to determine the rights of 

any party in respect of the assumption or rejection of any executory contract 

or lease; 

d) to hear and determine any and all adversary proceedings, applications, or 

contested matters, including any remands from any appeals; 

e) to hear and to determine all controversies, disputes, and suits which may 

arise in connection with the execution, interpretation, implementation, 

consummation, or enforcement of the Plan, any documents related to the 

Plan, including Exhibits to the Plan, if any, or in connection with the 

enforcement of any remedies made available under the Plan; 

f) to liquidate any disputed, contingent, or unliquidated Claims or to estimate 

any Disputed Claims; 

g) to ensure that distributions to Holders of Allowed Claims are accomplished 

as provided herein; 

h) to enter and to implement such orders as may be appropriate in the event 

the Confirmation Order is for any reason stayed, reversed, revoked, 

modified, or vacated; 

i) to enable the Liquidating Trustee to prosecute any and all proceedings 

which may be brought to set aside Liens or encumbrances and to recover 

any transfers, assets, properties or damages to which the Liquidating 

Trustee may be entitled under applicable provisions of the Plan, the 

Bankruptcy Code or any federal, state or local laws, including Actions, 

controversies, disputes and conflicts between the Liquidating Trustee and 

any other party, including but not limited to any Avoidance Actions, 

objections to Claims, motions for subordination on any grounds and claims 

preserved under the Plan and pursuant to the Confirmation Order; 

j) to consider any modification of the Plan pursuant to section 1127 of the 

Bankruptcy Code, to cure any defect or omission or to reconcile any 

inconsistency in any order of the Bankruptcy Court, including, without 

limitation, the Confirmation Order; 

k) to enter and to implement such orders as may be necessary or appropriate 

to execute, interpret, implement, consummate or enforce the terms and 

conditions of this Plan and the transactions contemplated hereunder; 

l) to hear and to determine any other matter not inconsistent with the 

Bankruptcy Code and title 28 of the United States Code that may arise in 

connection with or related to the Plan; 

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m) to hear and determine all suits, motions or controversies regarding or 

relating to any proposed consolidation of the Debtor with all or any NonDebtor Affiliates; 

n) to substantively consolidate any affiliates of the Debtor with the Debtor; 

and 

o) to enter a final decree closing this Chapter 11 Case. 

10.2 Abstention and Other Courts.

 If the Bankruptcy Court abstains from exercising, or declines to exercise, jurisdiction or is 

otherwise without jurisdiction over any matter arising out of or relating to this Chapter 11 Case, 

this section of the Plan shall have no effect upon and shall not control, prohibit, or limit the exercise 

of jurisdiction by any other court having competent jurisdiction with respect to such matter. 

Nothing herein shall preclude the Liquidating Trustee from prosecuting a Cause of Action in a 

forum other than the Bankruptcy Court. 

ARTICLE XI 

INJUNCTION AND RELEASE 

11.1 Injunction.

As of the Confirmation Date, except as otherwise provided in the Plan or the 

Confirmation Order, all Persons that have held, currently hold or may hold a Claim, Equity 

Interest or other debt or liability that is treated pursuant to the terms of the Plan are enjoined 

from taking any of the following actions on account of any such Claims, Equity Interests, 

debts or liabilities, other than actions brought to enforce any rights or obligations under the 

Plan or against the Debtor, the Liquidating Trustee, the Estate, the Trust Assets or Estate 

property: (i) commencing or continuing in any manner any action or other proceeding; (ii) 

enforcing, attaching, collecting or recovering in any manner any judgment, award, decree 

or order; (iii) creating, perfecting or enforcing any lien or encumbrance; (iv) asserting a 

setoff of any kind against any debt, liability or obligation; and (v) commencing or continuing, 

in any manner or in any place, any action that does not comply with or is inconsistent with 

the provisions of the Plan or the Confirmation Order. 

11.2 Releases. 

On the Effective Date, to the fullest extent permissible under applicable law, as such 

law may be extended or interpreted subsequent to the Effective Date, in exchange for the 

Secured Lender Contribution and the other obligations of the Secured Lender hereunder 

and in the Secured Lender Sale Motion, in consideration for the obligations under the Plan, 

the rights as otherwise set forth in the Plan to distributions (if any), and the Cash and other 

contracts, instruments, releases, agreements or documents to be delivered in connection with 

the Plan (if any), each Person or Entity that has held, holds or may hold a Claim or Interest, 

as applicable, in the Chapter 11 Case will be deemed to forever release, waive, and discharge 

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all claims, demands, debts, rights, causes of action or liabilities against the Secured Lender 

and its present or former officers, directors, shareholders, members, managers, agents, 

employees, attorneys, partners, associates and insurers advisors, attorneys or brokers, 

whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or 

unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or 

otherwise that are based in whole or in part on any act or omission, transaction, event or 

other occurrence arising out of, related to or in connection with, directly or indirectly, the 

Debtor, the Debtor’s bankruptcy estate, the Mortgage, the Properties, and/or the facts and 

circumstances related thereto. 

ARTICLE XII 

MISCELLANEOUS PROVISIONS 

12.1 Section 1146 Exemption 

 To the fullest extent permitted under section 1146(a) of the Bankruptcy Code, the 

execution, delivery or recording of an instrument of transfer made after the Plan is confirmed, or 

the transfer or sale of any real, personal or other Property, or interest by the Debtor or Liquidating 

Trustee made after the Plan is confirmed, shall be considered a transfer made after confirmation 

of the Plan and shall not be taxed under any state or local law imposing a stamp tax, transfer tax 

or similar tax or fee. Consistent with the foregoing, pursuant to § 1142(b) of the Bankruptcy Code 

each recorder of deeds or similar official for any county, city or governmental unit in which any 

instrument hereunder is to be recorded shall, pursuant to the Confirmation Order, be ordered and 

directed to accept such instrument, without requiring the payment of any documentary stamp tax, 

deed stamps, stamp tax, transfer tax, mortgage recording tax, intangible tax or similar tax. 

 For avoidance of doubt, the sale of the Properties to the Secured Lender or successful 

bidder pursuant to the Secured Lender Sale Motion shall have the full benefit of Section 1146(a) 

of the Bankruptcy Code. In addition, if the Secured Lender or its designee is the successful 

purchaser of the Properties, then in the event the Secured Lender or its designee sells the Properties 

within one (1) year after the Effective Date, such sale and the Secured Lender/its designee shall 

have the full benefit of Section 1146(a) of the Bankruptcy Code. 

12.2 Severability. 

Should the Bankruptcy Court determine that any provision of the Plan is unenforceable 

either on its face or as applied to any Claim or Equity Interest or transaction, the Proponent may 

modify the Plan in accordance with sections 12.10 or 12.11 of the Plan, as applicable, so that such 

provision shall not be applicable to the Holder of any Claim or Equity Interest. 

12.3 Setoffs and Recoupments. 

The Liquidating Trustee may, but shall not be required to, set off against or recoup from 

any Claim and the payments or other distributions to be made pursuant to this Plan in respect of 

such Claim, Claims of any nature whatsoever that the Liquidating Trustee may have against the 

Holder of such Claim, but neither the failure to do so nor the allowance of any Claim hereunder 

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37 

shall constitute a waiver or release by the Liquidating Trustee of any such Claim that the Debtor 

may have against such Holder. 

12.4 Binding Effect. 

 Upon the entry of the Confirmation Order, all provisions of the Plan shall be binding upon, 

and shall inure to the benefit of, the Debtor, the Liquidating Trustee, the Holders of Claims and 

Equity Interests, and such Persons’ respective successors and assigns. 

12.5 Governing Law. 

Unless a rule of law or procedure supplied by federal law (including the Bankruptcy Code 

and Bankruptcy Rules) is applicable, or a specific choice of law provision is provided, the laws of 

the State of Florida shall govern the construction and implementation of the Plan and any 

agreements, documents, and instruments executed in connection with the Plan, without regard to 

conflicts of law. 

12.6 Timing of Distributions.

Any payment or distribution required to be made hereunder on a day other than a Business 

Day shall be due and payable on the next succeeding Business Day. 

12.7 Payment of Statutory Fees and Compliance with Reporting Requirements.

 All fees payable pursuant to section 1930 of title 28 of the United States Code, as 

determined by the Bankruptcy Court at the Confirmation Hearing, shall be paid on the Effective 

Date. All fees payable subsequent to the Effective Date under section 1930(a)(6) of title 28 of the 

United States Code shall be paid by the Liquidating Trustee. All post-confirmation reporting 

requirements shall also be complied with, including the reporting of disbursement activity. 

12.8 Termination of Independent Contractors and Limitation of Liability/Release of 

Professional. 

 The Debtor does not have employees. However, as of the Effective Date, the Debtor's 

officers and directors, including without limitation, the Debtor’s President, shall be terminated for 

all purposes. On the ninety first (91) day after the Effective Date, any causes of action, claims, 

liabilities, counterclaims, and damages belonging to the Debtor, the Estate or the holder of any 

claim (regardless of whether such Claim is ultimately Allowed or Disallowed) relating to 

participation in the Debtor's bankruptcy case against such officers, directors or employees of the 

Debtor, shall be released, except for any acts of self-dealing, breach of fiduciary duty, fraud, gross 

negligence, professional negligence, or willful misconduct. Moreover, as of the Effective Date, the 

Debtor and the Estate shall release each attorney, accountant or other professional employed by 

the Debtor from any and all causes of action, claims, liabilities, counterclaims and damages 

relating in any manner to such professional's participation in this Chapter 11 Case, except for any 

acts of self-dealing, breach of fiduciary duty, fraud, gross negligence, professional negligence, or 

willful misconduct. 

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12.9 Tax Liability. 

The Liquidating Trustee is hereby authorized to request an expedited determination under section 

505(b) of the Bankruptcy Code of the tax liability of the Debtor for all taxable periods ending after 

the Petition Date through, and including, the Effective Date. 

12.10 Revocation or Withdrawal of Plan:

a) The Proponent reserves the right to revoke or withdraw the Plan prior to the 

Effective Date. If the Plan is revoked or withdrawn, then the result shall be 

the same as if the Confirmation Order was not entered and the Effective 

Date did not occur. The Confirmation Order shall be null and void and of 

no effect if the Plan is terminated after the Confirmation Date but before the 

Effective Date. 

b) If the Plan is revoked or withdrawn prior to the Confirmation Date, nothing 

contained herein shall be deemed to constitute a waiver or release of any 

Claims by or against the Debtor or any other Person or to prejudice in any 

manner the rights of such entity or any Person in any further proceedings 

involving such entity or Person. 

12.11 Nonmaterial Modifications.

 The Proponent may, with the approval of the Bankruptcy Court and without notice to 

Holders of Claims and Equity Interests, correct any nonmaterial defect, omission, or inconsistency 

in the Plan in such manner and to such extent as may be necessary or desirable. 

12.12 Material Modifications.

Modifications of this Plan may be proposed in writing by the Proponent at any time before 

Confirmation, provided that this Plan, as modified, meets the requirements of sections 1122 and 

1123 of the Bankruptcy Code, and the Debtor shall have complied with section 1125 of the 

Bankruptcy Code. This Plan may be modified at any time after Confirmation and before any 

distributions are made pursuant to the Plan, provided that the Plan, as modified, meets the 

requirements of sections 1122 and 1123 of the Bankruptcy Code and the Bankruptcy Court, after 

notice and a hearing, confirms the Plan, as modified, under section 1129 of the Bankruptcy Code 

and the circumstances warrant such modification. 

12.13 Cramdown.

 This section shall constitute the Debtor’s request, pursuant to section 1129(b)(1)of the 

Bankruptcy Code, that the Bankruptcy Court confirm the Plan notwithstanding the fact that the 

requirements of section 1129(a)(8) of the Bankruptcy Code may not be met. 

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12.14 Notices.

 Any notice required or permitted to be provided under the Plan shall be in writing and 

served by either (a) certified mail, return receipt requested, postage prepaid, (b) hand delivery or 

(c) prepaid overnight delivery service and addressed as follows: 

 To the Debtor: 

(1) Meland Russin & Budwick 

 200 South Biscayne Boulevard, Suite 3200 

 Miami, Florida 33131 

 Attention: Peter D. Russin, Esquire 

 Attention: James C. Moon, Esquire 

(2) Moses Bensusan, President 

Costa Hollywood Property Owner, LLC 

777 North Ocean Drive 

Hollywood, FL 33019 

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK] 

12.15 Successors and Assigns.

The rights, benefits and obligations of any Person named or referred to in the Plan shall be 

binding on, and shall inure to the benefit of, the heirs, executors, administrators, successors and/or 

assigns of such Person. 

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40 

Costa Hollywood Property Owner, LLC, 

a Delaware limited liability company 

 By: Costa Hollywood Development Holdings LLC, 

a Delaware limited liability company 

 Its: Manager and Sole Member 

 By: Liberty Grande, LLC 

a Florida limited liability company 

 Its: Sole Member 

 By: ____________________________ 

Moses Bensusan 

Its: Manager and Sole Member 

E-filed by: s/ Peter D. Russin 

Peter D. Russin, Esquire 

Florida Bar No. 765902 

prussin@melandrussin.com 

James C. Moon, Esquire 

Florida Bar No. 938211 

jmoon@melandrussin.com

MELAND RUSSIN & BUDWICK, P.A. 

3200 Southeast Financial Center 

200 South Biscayne Boulevard 

Miami, Florida 33131 

Telephone: (305) 358-6363 

Telecopy: (305) 358-1221 

Attorneys for Debtor in Possession 

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connection with the Chapter 1 1 Plan of Liquidation Proposed by the Debtor (the "Plan"),1 whichis pending confirmation by the Bankruptcy Court by Order (the "Confirmation Order"), and

provides for, inter alia:

(a) The transfer of the Assets of the Debtor and the Debtor's chapter 11 estate (the

"Estate") required by the Plan to be transferred as of the Effective Date to the Liquidating Trust

for distribution to the holders of Allowed Claims (the "Beneficiaries") pursuant to and in

accordance with this Trust Agreement, the Plan and the Confirmation Order;

(b) For federal income tax purposes, (i) the Beneficiaries of the Liquidating Trust to

be treated as the grantees of the Liquidating Trust and deemed to be the owners of the TrustAssets and (ii) the Debtor to treat the transfer of the Trust Assets to the Liquidating Trust as a

deemed transfer to such Beneficiaries followed by a deemed transfer by such Beneficiaries to theLiquidating Trust;

(c) The management of the Trust Assets by the Trustee; and(d) The liquidation of the Trust Assets and, after payment of expenses in accordance

with the terms of this Agreement, the distribution of the proceeds of such liquidation to the

Beneficiaries as set forth in the Plan and Confirmation Order.

NOW, THEREFORE, pursuant to the Plan and in consideration of the promises, the

mutual agreements of the parties contained herein, and other good and valuable consideration,

Any capitalized term contained herein without definition shall have the definition set forth in the Plan.

ip

1 ,\A

Exhibit 

A
1.1 Purpose of the Liquidating Trust. The Debtor and the Trustee, pursuant to the

Plan and the Confirmation Order and in accordance with the Bankruptcy Code, applicable tax

statutes, rules and regulations, to the extent incorporated in this Trust Agreement, hereby

constitute and create the Liquidating Trust for the purpose of liquidating the Trust Assets with no

objective to continue or engage in the conduct of a trade or business. In particular, the

Liquidating Trust, through the Trustee, shall (i) collect and reduce the Trust Assets to Cash, (ii)

resolve any issues concerning the amount of the Claims of the Beneficiaries, (iii) prosecute,

abandon, settle and/or defend any claims or causes of action (the "Actions") which are a part of

the Trust Assets; (iv) file tax returns for the Trust, (v) make distributions to the Beneficiaries

pursuant to the Plan and this Trust Agreement, and (vi) perform all actions required under the

Plan and take such steps as are reasonably necessary to accomplish such purpose, all as more

fully provided in, and subject to the terms and provisions of the Plan, the Confirmation Order

and this Trust Agreement. The Liquidating Trust shall not have authority to engage in a trade or

business, and no portion of the Trust Assets shall be used in the conduct of a trade or business,

except as is reasonably necessary to the prompt and orderly collection and reduction to the Trust

Assets to Cash and closing the case.

1.2 Name of the Liquidating Trust. The Liquidating Trust established hereby shall

be known as the "Costa Hollywood Property Owner, LLC Liquidating Trust." In connection with

2
Trust as of the Effective Date, to have and to hold unto the Trustee and his successors in trust

and to be applied as specified in the Plan, Confirmation Order and this Trust Agreement. To the

extent required, the Debtor shall cause the Trust Assets to be transferred to the Liquidating Trust.

Upon the transfer of the Trust Assets to the Liquidating Trustee, and except as otherwise

provided herein or in the Plan, such assets shall become Trust Assets and the Debtor shall retain

no interest in such Assets. On the Effective Date, the Debtor shall execute and deliver or cause to

be executed and delivered to or upon the order of the Trustee all such documents, in recordable

form where necessary or appropriate, and the Debtor shall take or cause to be taken such further

or other action, as the Trustee may deem appropriate, to vest or perfect in or confirm to the

Trustee, or upon the order of the Trustee, title to and possession of all of the Trust Assets.

1.4 Acceptance by Trustee. The Trustee hereby accepts (a) the appointment to serve

as Trustee; (b) the transfer ofthe Trust Assets 011 behalf ofthe Liquidating Trust; and (c) the trust

imposed on him by this Trust Agreement. The Trustee agrees to receive, hold, administer and

distribute the Trust Assets and the income derived therefrom, if any, pursuant to the terms of the

Plan, Confirmation Order and this Trust Agreement.

ARTICLE II

TRUSTEE - GENERALLY

iiV"

2.1 Appointment. The initial Tmstee shall be Maria Yip.

3
deems appropriate which are not in conflict with the Plan, Confirmation Order, this Trust

Agreement, or the interests of the Beneficiaries. The Trustee shall devote such time as is

necessary to fulfill all of its duties as Trustee.

2.4 Resignation, Death or Removal of Trustee. The Trustee may resign upon

application to the Bankruptcy Court for good cause shown. The Trustee may also be removed by

the Bankruptcy Court upon application for good cause. "Cause" for removal of the Trustee shall

include negligence, fraud, wrongful action or inaction in the perfonnance of his duties. Upon the

resignation, death or removal of the Trustee, the Debtor, in consultation with the United States

Trustee, shall, with Bankruptcy Court approval, designation another person as a successor

Trustee, and thereupon such successor, without any further action, shall become fully vested with

all of the rights, powers, duties and obligation of his, her or its predecessor.

2.5 Trust Continuance. The death, resignation or removal of the Trustee shall not

terminate the Liquidating Trust or revoke any existing agency (other than any agency of such

Trustee as a Liquidating Trustee) created pursuant to this Trust Agreement or invalidate any

action theretofore taken by the Trustee. By accepting the position as Trustee, any successor

Trustee agrees that the provisions of this Trust Agreement shall be binding upon and inure to the

benefit of such successor Trustee and all his, her or its heirs and legal and personal

representatives, successors or assigns.

4
Agreement, subject to Bankruptcy Court approval, including, without limitation, any accounting

firm of which such Trustee is a partner or otherwise affiliated from time to time (the "Trustee's

Professionals"). The Trustee's Professionals shall submit monthly invoices to the Trustee, and

the Trustee may pay 80% offees and 1 00% of disbursements for the amounts requested from the

Trust Assets and the proceeds thereof. The remaining 20% shall be paid when fee applications

are filed and approved by the Court, as described in section 2.8 herein. The Trustee's

Professionals may only be paid from the Trust Assets and the proceeds thereof to the extent there

are sufficient funds available from which to make such payments, and the Trustee shall not be

personally liable to any of the Trustee's Professionals for any unpaid invoices or claims for

services rendered.

2.8 Court Approval for Payment. The Trustee shall seek Bankruptcy Court

authorization before the final payment of any fees and expenses to the Tmstee or Trustee's

Professionals, by the filing offinal fee application in the Bankruptcy Court.

ARTICLE III

POWERS AND LIMITATIONS OF TRUSTEE

3.1 General Powers of Trustee. In connection with the administration of the

Liquidating Trust, except as otherwise set forth herein, the Tmstee is authorized to perform only

those acts necessary and desirable to accomplish the purposes of the Liquidating Trust. The

Liquidating Trust shall succeed to all of the rights of the Debtor necessary to protect, conserve

n/° s|* 5
subject to, the foregoing, the Trustee shall be expressly authorized:

(a) To open and maintain bank accounts on behalf of or in the name of the

Liquidating Trust, calculate and make Distributions and take other actions consistent with the

Plan and the implementation thereof, including the establishment, re-evaluation, adjustment and

maintenance of appropriate reserves, in the name ofthe Liquidating Trust.

(b) To receive, conserve and manage the Trust Assets.

(c) To hold legal title to any and all Trust Assets.

(d) Subject to the applicable provisions of the Plan, to prosecute, collect and

liquidate the Trust Assets.

(e) To take discovery from third parties, including but not limited to, issuing

Fed.R.Bankr.P. 2004 subpoenas and discovery requests.

(f) Make decisions regarding the retention or engagement of Trustee's

Professionals and to pay, from the Trust Assets and the proceeds thereof, the fees and charges

incurred by the Liquidating Trust and the fees and expenses of Trustee's Professionals, as well as

the disbursements, expenses or related support services relating to the implementation of the Plan

and performance by the Trustee of its duties under this Trust Agreement.

(g) To pay all lawful, expenses, debts, charges and liabilities of the

Liquidating Trust.

i«, iov>

6
may be sufficient to pay any tax or other charge which the Trustee has determined, in its sole

discretion, may be required to be withheld therefrom under the income tax laws of the United

States or of any state or political subdivision thereof. In the exercise of its discretion and

judgment, the Trustee may enter into agreements with taxing or other governmental authorities

for the payment of such amounts as may be withheld in accordance with the provisions of this

section.

0) To enter into any agreement or execute any document required by or

consistent with the Plan and perform all obligations thereunder.

(k) To abandon in any commercially reasonable manner, including

abandonment or donation to a charitable organization of its choice, any assets ifit concludes that

they are of no significant value or benefit to the Liquidating Trust.

(1) Except as otherwise set forth in this Trust Agreement, to have exclusive

power to prosecute and/or settle all causes of actions including, without limitation, Avoidance

Actions or any other causes of action or counterclaims as described in the Plan and Disclosure

Statement (collectively, the "Actions") and exercise, participate in or initiate any proceeding

before the Bankruptcy Court or any other court of competent and appropriate jurisdiction and

voluntarily participate as a party or otherwise in any administrative proceeding, arbitration,

mediation, or other nonjudicial proceeding and litigate or settle such Actions on behalf of the

1 1 if*0ftP 1

1
To purchase or create and carry all insurance policies and pay all (n)

insurance premiums and costs it deems necessary or advisable.

(o) To implement and/or enforce all provisions ofthe Plan.

(P) To collect and liquidate all Trust Assets pursuant to the Plan, the

Confirmation Order and this Trust Agreement and to ultimately close the Chapter 1 1 Case.

(q) To object to Claims and supervise and administer the resolution,

settlement and payment of such Claims and the distribution to the Beneficiaries in accordance

with this Trust Agreement and the Plan. Specifically, the Trustee may compromise or settle any

such Claim (disputed or otherwise) free of any restrictions other than those restrictions expressly

imposed by the Plan, the Confirmation Order or this Trust Agreement.

(r) Exercise such rights of setoff as the Debtor or the Estate may have had

against any Beneficiary and/or seek Court approval of such exercise.

(s) Voluntarily engage in arbitration or mediation with regard to any dispute

(t) To (i) seek a determination of tax liability under section 505 of the

Bankruptcy Code, (ii) file, if necessary, any and all tax information returns required with respect

to the Liquidating Trust heating the Liquidating Trust as a grantor trust pursuant to Treas. Reg.

1 .67~4(a) or otherwise, (iii) make tax elections by and on behalf ofthe Liquidating Trust and (iv)

pay taxes, ifany, payable by the General Liquidating Trust.

if*0 r3

8
(w) To perform any other actions or duties required to be performed by the

Trustee pursuant to the provisions ofthe Plan and/or Confirmation Order

3.2 Limitations on the Trustee. Notwithstanding anything in this Trust Agreement

to the contrary, the Trustee shall not do or undertake any of the following:

(a) Take any action in contravention of the Plan, the Confirmation Order or

this Trust Agreement.

(b) Take any action that would significantly jeopardize treatment of the

Liquidating Trust as a "liquidating trust" for federal income tax purposes.

(c) Grant liens on any ofthe Trust Assets.

(d) Guaranty any debt.

(e) Loan Trust Assets to the Trustee.

(f) Purchase Trust Assets from the Liquidating Trust.

(g) Transfer Trust Assets to another trust with respect to which the Trustee

serves as trustee.

3.3 Trustee Conflicts of Interest. If the Trustee determines, in the exercise of the

Trustee's discretion, that he has a material conflict of interest with respect to any matter, the

Trustee, after notice to the United States Trustee, may request the Bankruptcy Court to approve

the Trustee's choice of a designee to act on behalf of the Liquidating Trust solely with respect to

jl4 "3

9
ARTICLE V

LIABILITY OF TRUSTEE

5.1 Trustee's of Care; Exculpation. Neither the Trustee nor any partner, director,

officer, affiliate, employee, employer, professional, agent or representative of the Trustee

("Indemnified Persons") shall be personally liable in connection with the affairs of the

Liquidating Trust to any Person, including any Beneficiary of the Liquidating Trust, or to the

Liquidating Trust, except for acts or omissions of the Indemnified Person that constitute fraud,

willful misconduct, or gross negligence. Persons dealing with Indemnified Persons in connection

with the Liquidating Trust, or seeking to assert claims against the Liquidating Trust, shall have

recourse only to the Trust Assets to satisfy any liability incurred by the Indemnified Persons to

such persons in canying out the terms of this Trust Agreement, except for acts or omissions of

the Indemnified Persons that constitute fraud, willful misconduct or gross negligence.

5.2 Indemnification. Except as otherwise set forth in the Plan or Confirmation Order,

Indemnified Persons, including, without limitation, any firm in which the Trustee is a partner,

member, shareholder or employee ("Firm") shall be defended, held harmless and indemnified

from time to time by the Liquidating Trust against any and all losses, claims, costs, expenses and

liabilities to which such Indemnified Persons may be subject by reason of such Indemnified

Party's execution in good faith of its duties pursuant to the discretion, power and authority

conferred on such Person by this Trust Agreement, the Plan or the Confirmation Order; provided.

10
Person arising pursuant to the terms of this Section 5.2 shall be payable only from the Trust

Assets and such right to payment shall be prior and superior to any rights of Beneficiaries to

receive a Distribution of the Trust Assets.

5.3 No Liability for Acts of Predecessor Trustees. No successor Trustee shall be in

any way liable for the acts or omissions of any predecessor Trustee unless a successor Trustee

expressly assumes such responsibility.

5.4 Reliance by Trustee and Directors on Documents, Mistake of Fact or Advice

of Counsel. Except as otherwise provided in this Trust Agreement, the Trustee may rely, and

shall be protected from liability for acting, upon any resolution, certificate, statement,

instrument, opinion, report, notice, request, consent, order or other paper or document reasonably

believed by the Trustee, as the case may be, to be genuine and to have been presented by an

authorized party. The Trustee shall not be liable if it acts based on a mistake of fact before

having actual knowledge of an event or for any action taken or suffered by such person if such

person has reasonably relied upon the advice of counsel or other professionals engaged by tire

Trustee in accordance with this Trust Agreement.

5.5 Insurance. The Trustee may purchase errors and omissions insurance for himself

(and any Trustee Firm) with regard to any liabilities, losses, damages, claims, costs and expenses

such Person may incur, including but not limited to attorneys' fees, arising out of or due to its

actions or omissions, or consequences of such actions or omissions, other than as a result of its

ii
6.1 General. The Trustee shall have all duties specified in the Plan, the Confirmation

Order and this Trust Agreement as being the responsibility of the Trustee.

6.2 Books and Records. The Trustee shall maintain, in respect of the Liquidating

Trust, books and records relating to the Trust Assets, income realized therefrom and expenses of

and claims against or assumed by the Liquidating Trust, in such detail and for such period of

time as may be necessary to enable it to make full and proper reports in respect thereof. Except

as expressly provided in this Trust Agreement, the Plan or the Confirmation Order, nothing in

this Trust Agreement is intended to require the Trustee to file any accounting or seek approval of

any court with respect to the administration of the Liquidating Trust, or as a condition for

making any payment or Distribution out ofthe Trust Assets.

6.3 Asset Valuation. As soon as practicable after the Effective Date, the Trustee shall

apprise the Beneficiaries of the value of the Trust Assets. The valuation shall be used

consistently by all parties (including the Trustee and Beneficiaries) for all federal income tax

purposes. Any dispute regarding the valuation of Assets shall be resolved by the Bankruptcy

Court.

6.4 Interim Reports to Court. Beginning with a date which is fifteen (15) days after

the end of the first full month following the Effective Date, and continuing on the fifteenth (15th)

day after the end of each succeeding quarter until the Final Distribution Date, the Trustee will

file written reports (the "Liquidating Trustee Accounting Reports") with the Bankruptcy Court.

MH!\ 10 70

12
6.5 Final Report To Court Prior to Final Distribution. Before making his Final

Distribution, the Trustee shall file a written report with the Bankruptcy Court (which report shall

constitute the final accounting of the Liquidating Trust) showing the assets administered, the

distributions made by the Trustee and the Final Distributions to be made by the Trustee (the "Final Liquidating Trustee Accounting Report'). The Trustee shall provide notice by regular,

first-class mail to all Beneficiaries of the filing of the Final Liquidating Trustee Accounting

Report. Any Beneficiary who fails to file and serve on the Trustee a written objection to any

Liquidating Trustee Accounting Reports or to the Final Liquidating Trustee Accounting Report

within twenty (20) days after such report or account is filed shall be deemed to have assented

thereto and approved the contents thereof. Any objection to any report or accounting shall be

resolved by the Bankruptcy Court. If no objection is filed to the Final Liquidating Trustee

Accounting Report within the time frame set forth above, then, upon making the Final

Distribution in the manner set forth in the Final Liquidating Trustee Accounting Report, the

Trustee and all Liquidating Trustee Professionals shall be: (a) fully discharged of their duties

hereunder and under the Liquidating Trust Agreement; and (b) fully discharged and released

from all duties, liabilities and obligations of every kind and nature to the Beneficiaries, except as

is expressly set forth in this Trust Agreement to the contrary; provided, however, that the

foregoing shall not relieve the Trustee from liability for gross negligence, fraud, willful

3

13
may be, shall render a final accounting (the "Outgoing Trustee s FinalAccounting") containing

at least the following information:

(a) A description of the Trust Assets as of the last day of such Trustee's

service hereunder;

(b) A summarized accounting in sufficient detail of all gains, losses, receipts,

disbursements and other transactions in connection with the Liquidating Trust and the Trust

Assets during the Trustee's term of service, including their source and nature;

(c) Separate entries for all receipts of principal and income;

(d) The ending balance of all Trust Assets as of the date of the Trustee's

accounting, including the Cash balance on hand and the name and location of the depository

where it is kept; and

(e) All known liabilities owed by the Liquidating Trust.

The Outgoing Trustee's Final Accounting shall be presented to the Bankruptcy Court for

approval. The United States Trustee shall give notice that the Outgoing Trustee's Final

Accounting has been filed and an opportunity to have a hearing on the approval of the Outgoing

Trustee's Final Accounting and the discharge of the Trustee.

14
operate to terminate the Liquidating Trust, nor shall it entitle the representative or creditors of the

deceased, incapacitated or bankrupt Beneficiary to an accounting or to take any action in any

court or elsewhere for the distribution of the Trust Assets or for a petition thereof nor shall it

otherwise affect the rights and obligations of the Beneficiary under this Trust Agreement or in

the Liquidating Trust.

7.2 Standing of Beneficiary. Except as expressly provided in this Trust Agreement,

the Plan or the Confirmation Order, a Beneficiary does not have standing to direct the Trustee to

do or not to do any act or to institute any action or proceeding at law or in equity against any

party (other than the Trustee) upon or with respect to the Trust Assets.

7.3 Release of Liability by Beneficiary. A Beneficiary shall not release the Trustee

from any duty, responsibility, restriction or liability as to such Beneficiary that would otherwise

be imposed under this Trust Agreement unless such relief is approved by Final Order of the

Bankruptcy Court.

ARTICLE VIII

DISTRIBUTIONS

8.1 Distributions from Trust Assets. All Distributions of Trust Assets made by the

Trustee to the Beneficiaries shall be made only in accordance with the Plan, the Confirmation

Order and this Trust Agreement, and only to the extent that the Liquidating Trust has sufficient

Trust Assets (or income and proceeds realized from the Trust Assets) from which to make such

TO

3

15
the Liquidating Trust from which to make a Distribution, the Trustee may make Distributions on

an interim basis to the Beneficiaries from all net Cash income and all other Cash held in the

Liquidating Trust; provided, however, that the Liquidating Trust may retain such amounts (a) as

are reasonably necessary to meet contingent liabilities of the Liquidating Trust, (b) to pay

reasonable administrative expenses including, without limitation, the compensation to and

reasonable, actual and necessary costs and expenses of the Trustee, including, without limitation,

the fees and expenses of Trustee's Professionals, in connection with the performance of the

Trustee's duties in connection with this Trust Agreement, and (c) to satisfy all other liabilities

incurred or assumed by the Liquidating Trust (or to which the Trust Assets are otherwise subject)

in accordance with the Plan, the Confirmation Order and this Trust Agreement. All such

Distributions shall be made as provided, and subject to any withholding, in this Trust Agreement,

the Plan or the Confirmation Order. Additionally, the Trustee may withhold from amounts

distributable to the Beneficiaries any and all amounts, determined in the Trustee's reasonable

sole direction, to be required for any trust expense or by any law, regulation, rule, ruling.

directive or other governmental requirement. In no event shall the Trustee be required to make

any Distribution ifthe same would be administratively burdensome or unreasonably expensive in

relation to the dollar amount ofthe total cash to be distributed.

Notwithstanding any provision in the Plan to the contrary, no partial payments and no

partial Distributions will be made with respect to a Disputed Claim until the resolution of such

|/(| lu>v> 3

16
amount of the Disputed Claim or until such Disputed Claim is resolved by settlement or Final

Order.

8.3 Non-Cash Property. If, in the Trustee's judgment, any Trust Asset which is not

cash cannot be sold in a commercially reasonable manner, the Trustee shall have the right to

abandon or otherwise dispose of such property, including by donation of such property to a

charity designated by the Trustee. Until such time as the Bankruptcy Case is closed, notice of

such sale, transfer or abandonment shall be filed with the Bankruptcy Court. Except in the case

of willful misconduct, no party in interest shall have a cause of action against the Liquidating

Trust, the Trustee, or any partner, director, officer, employee, consultant of or professional

employed by the Trustee in connection with the Liquidating Trust arising from or related to the

disposition of non-Cash property in accordance with this Section 8.3

8.4 Method of Cash Distributions. Any Cash Distribution to be made by the

Liquidating Trust pursuant to the Plan will be in U.S. dollars and may be made, at the sole

discretion of the Trustee, by draft, check, wire transfer, or as otherwise required or provided in

any relevant agreement or applicable law.

8.5 Distributions on Non-Business Days. Any payment or Distribution due on a day

other than a Business Day shall be made, without interest, on the next Business Day.

yyy%

* M

17
negotiated within 90 days ofthe date of such Distribution shall be forfeited.

ARTICLE IX

TAXES

9.1 Income Tax Status. Consistent with the Revenue Procedure 94-45, 1994-28

I.R.B. 124, the Liquidating Trust shall be treated as a liquidating trust pursuant to Treasury

Regulation Section 30 1.7701 -4(d) and as a grantor trust pursuant to Sections 671-677 of the

Internal Revenue Code. As such, the Beneficiaries will be treated as both the grantors and the

deemed owners of the Liquidating Trust. Any items of income, deductions and credit loss of the

Liquidating Trust shall be allocated for federal income tax purposes, to the Liquidating Trust.

9.2 Tax Returns. In accordance with Treasury Regulation Section 1.671 -4(a), the

Liquidating Trust shall file with the Internal Revenue Service annual tax returns on Form 1041

together with the separate statements required under such Regulation. In addition, the Trustee

shall file in a timely manner such other tax returns as are required by applicable law and pay any

taxes shown as due thereon.

9.3 Withholding of Taxes Related to Liquidating Trust Operations. To the extent

that the operation of the Liquidating Trust or the liquidation of the Trust Assets creates a tax

liability in excess of applicable net operating losses, the Liquidating Trust shall promptly pay

such tax liability and any such payment shall be considered a cost and expense of the operation

of the Liquidating Trust payable from the Trust Assets or the proceeds of Trust Assets. The

^/wf\ v> v>

18
units for the payment of such amounts as may be withheld.

No later than the time required under applicable law after the end of each calendar year,

the Trustee shall cause to be filed all required federal, state and other tax returns. As the Trust is

to be treated as a Grantor Trust, all items of income will be treated as income subject to tax on a

current basis. Further, for federal income tax purposes, all items of income, gain, loss, and

deduction ofthe Trust for such calendar year shall be allocated to all Beneficiaries on a pro rata

basis, based on either their Allowed Claim(s) or, in the case of Disputed Claims, the greater of

(a) the amount of the claim as scheduled by the Debtor in its bankruptcy Schedules and

Statement of Financial Affairs filed by the Debtor in the Chapter 1 1 Case and (b) the amount set

forth in any proof of claim filed by the Beneficiary in the Chapter 11 Case. Such pro-rata

allocation will be calculated as of the end of each calendar year and, with respect to each

Disputed Claim, until such claim either becomes an Allowed Claim or is disallowed. Further,

such pro rata allocation in regard to Disputed Claims shall not in itself entitle any Beneficiary to

any payment and shall be irrespective of whether any payments are actually disbursed to such

Beneficiary.

ARTICLE X

TERMINATION OF TRUST

9.1 Maximum Term. The Liquidating Trust shall commence as ofthe Effective Date

shall continue and remain in full force and until (i) the conclusion by settlement or Final Order of

Mrio

19
Agreement, (iii) all tax returns and any other filings or reports have been filed with the

appropriate state or federal regulatory authorities and all time periods and all opportunity for

such authorities to challenge such final tax returns have expired, and (iv) the order closing the

Chapter 1 1 Case is a Final Order (the "Trust Term").

9.2 Distribution Upon Termination. Upon the termination of the Liquidating Trust,

the Trustee shall distribute the remaining Trust Assets, if any, to the Beneficiaries, in accordance

with the Plan, Confirmation Order and this Trust Agreement.

9.3 Winding Up and Discharge of the Trustee. For the purposes of winding up the

affairs of the Liquidating Trust at its termination, the Trustee shall continue to act as Trustee

until its duties have been fully discharged. After doing so. the Trustee, its agents and employees

and the Directors, their agents and employees shall have no further duties or obligations

hereunder, except as required by this Trust Agreement, the Plan, or applicable law concerning

the termination of a trust. Upon a motion by the Trustee, the Bankruptcy Court may enter an

order relieving the Trustee, its agents and employees of any further duties, discharging the

Trustee and releasing its bond, ifany.

ARTICLE XI

ADMINISTRATIVE EXPENSES

11.1 Trust Administrative Expenses. The cost and expenses of the Liquidating Trust,

including, without limitation, the compensation to and the reimbursement of reasonable, actual

iP

20
amounts from the Trust Assets, that the Trustee deems necessary, to wind down the Trust and

close the Bankruptcy Case. In the event that the Trustee is holding funds after making the final

distributions to Beneficiaries, on account of excess reserved amounts or distributions returned to

the Trust due to Beneficiaries failing to negotiate distributions issued by check, the Trustee may

donate such remaining funds to a not for profit organization of its choosing.

ARTICLE XII

MISCELLANEOUS PROVISIONS

12.1 Amendments. The Trustee may propose to the Bankruptcy Court the

modification, supplementation or amendment of this Trust Agreement. Such modification,

supplementation or amendment shall be in writing and filed with the Bankruptcy Court. No

modification, supplementation or amendment of this Trust Agreement shall be effective except

upon a Final Order of the Court.

12.2 Waiver. No failure by the Trustee to exercise or delay in exercising any right,

power or privilege hereunder shall operate as a waiver, nor shall any single or partial exercise of

any right, power or privilege hereunder preclude any further exercise thereof, or of any other

right, power or privilege.

12.3 Cumulative Rights and Remedies. The rights and remedies provided in this

Trust Agreement are cumulative and are not exclusive of any rights under law or in equity.

iP -slflk

21
12.5 Irrevocability. The Liquidating Trust is irrevocable.

12.6 Relationship to the Plan. The principal purpose of this Trust Agreement is to aid

in the implementation of the Plan and, therefore, this Trust Agreement incorporates and is

subject to the provisions of the Plan and the Confirmation Order. In the event that any provision

of this Trust Agreement is found to be inconsistent with a provision of the Plan or the

Confirmation Order, the provisions ofthe Plan or the Confirmation Order shall control.

12.7 Division of Trust. Under no circumstances shall the Trustee have the right or

power to divide the Liquidating Trust unless authorized to do so by the Bankruptcy Court.

12.8 Governing Law. This Trust Agreement shall be governed and construed in

accordance with the laws of the State of Florida, without giving effect to rules governing the

conflict of laws.

12.9 Retention of Jurisdiction. Notwithstanding the Effective Date and to the fullest

extent permitted by law, the Bankruptcy Court shall retain exclusive jurisdiction over the

Liquidating Trust after the Effective Date, including, without limitation, jurisdiction to resolve

any and all controversies, suits and issues that may arise in connection therewith, including,

without limitation, this Trust Agreement, or any entity's obligations incurred in connection

herewith, including without limitation, any action against the Trustee or any professional

retained by the Trustee or the Liquidating Trust, in each case in its capacity as such. Each party

to this Trust Agreement hereby irrevocably consents to the exclusive jurisdiction of the J

22
Each party further irrevocably agrees that (i) any action to enforce, interpret or construe any

provision of this Trust Agreement will be brought only in the Bankruptcy Court and (ii) all

detemiinations, decisions, rulings and holdings of the Bankruptcy Court shall be final and non

appealable and not subject to reargument or reconsideration. Each party hereby irrevocably

consents to the service by certified or registered mail, return receipt requested, to be sent to its

address set forth in Section 12.12 of this Trust Agreement may designate from time to time by

notice given in the manner provided above, of any process in any action to enforce, interpret or

construe any provision of this Trust Agreement.

12.10 Severability. In the event that any provision of this Trust Agreement or the

application thereof to any person or circumstance shall be determined by the Bankruptcy Court

or another court of competent jurisdiction to be invalid or unenforceable to any extent, the

remainder of this Trust Agreement, or the application of such provision to persons or

circumstances, other than those as to which it is held invalid or unenforceable, shall not be

affected thereby, and such provision of this Trust Agreement shall be valid and enforced to the

fullest extent permitted by law.

12.11 Limitation of Benefits. Except as otherwise specifically provided in this Trust

Agreement, the Plan or the Confirmation Order, nothing herein is intended or shall be construed

to confer upon or to give any person other than the parties hereto and the Beneficiaries any rights

or remedies under or by reason ofthis Trust Agreement.

3

23
addresses.

Ifto the Debtor:

Moses Bensusan, President

Costa Hollywood Property Owner, LLC

777 North Ocean Drive

Hollywood, FL 33019

With a copy to:

Meland Russin & Budwick, P.A.

200 South Biscayne Boulevard, Suite 3200

Miami, FL 33131

Attn: Peter D. Russin, Esq.

Attn: James C. Moon, Esq.

Ifto the Trustee:

Maria Yip

Yip Associates

2 S. Biscayne Blvd., Suite 2690

Miami, FL 33131

Notice of any application to the Bankruptcy Court shall also be provided to the Office ofthe

United States address as follows:

Office ofthe United States Trustee:

51 S.W. First Avenue, Suite 1204

Miami, Florida

Attn: Johanna P. Armengol, Esq.

The parties may designate in writing from time to time other and additional places to

which notices may be sent. All demands, requests, consents, notices and communications shall

be deemed to have been given (a) at the time of actual delivery thereof, (b) if given by certified

24
covenant and agree to execute and deliver all such documents and notices and to take all such

further actions as may reasonably be required from time to time to carry out the intent and

purposes of this Trust Agreement, and to consummate the transactions contemplated hereby.

12.14 Integration. This Trust Agreement, the Plan and the Confirmation Order

constitute the entire agreement with, by and among the parties, and there are no representations,

warranties, covenants or obligations except

a set forth herein, in the Plan and in the Confirmation

Order. This Trust Agreement, together with the Plan and the Confirmation Order, supersede all

prior and contemporaneous agreements, understandings, negotiations and discussions, written or

oral, of the parties hereto, relating to any transaction contemplated hereunder. Except as

otherwise provided herein, the Plan or Confirmation Order, nothing herein is intended or shall be

construed to confer upon or give any person other than the parties hereto and the Beneficiaries

any rights or remedies under or by reason ofthis Trust Agreement.

12.15 Successors or Assigns. The terms of this Agreement shall be binding upon and

shall inure to the benefit ofthe parties hereto and their respective successors and assigns.

12.16 Interpretation. The enumeration and section headings contained in this Trust

Agreement are solely for convenience of reference and shall not affect the meaning or

interpretation of this Trust Agreement or of any term or provision hereof. Unless the context

otherwise requires, whenever used in this Trust Agreement the singular shall include the plural

and the plural shall include the singular, and words importing the masculine gender shall include

p*/

-5 jrtV0 25
12.17 Counterparts. This Agreement may be signed by the parties hereto in

counterparts, which, when taken together, shall constitute one and the same document.

IN WITNESS WHEREOF, the parties hereto have either executed and acknowledged this

Trust Agreement or caused it to be executed and acknowledged on their behalf by their duly

authorized officers all as of the date first above written.

Costa Hollywood Property Owner, LLC

By:

Maria Yip, Liquidating Trustee

26
i

26

the feminine and the neuter, if appropriate, and vice versa, and words importing persons shall 

include partnerships, associations and corporations. The words “herein,” “hereby,” and 

“hereunder” and words with similar import, refer to this Trust Agreement as a whole and not to 

any particular section or subsection hereof unless the context requires otherwise.

12.17 Counterparts. This Agreement may be signed by the parties hereto in 

counterparts, which, when taken together, shall constitute one and the same document.

IN WITNESS WHEREOF, the parties hereto have either executed and acknowledged this

Trust Agreement or caused it to be executed and acknowledged on their behalf by their duly

authorized officers all as of the date first above written.

Costa Hollywood Property Owner, LLC

By:

Maria Yip, Liquidating Trustee

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 122 of 130
List of Potential Litigation Targets 

Aimbridge Hospitality, LLC 

Booking.com B.V. 

Evolution Hospitality, LLC 

Expedia Inc. 

Guest supply, Inc. 

Hotelier linen Services 

Sabre Hospitality Solutions 

Unique Hotel Solutions 

Yes Hotel Services, Inc. 

AFCO Insurance Premium Finance 

ASG Maintenance Group LLC 

Boucher Brothers Hollywood Beach 

City of Hollywood 

Comcast 

Florida Power & Light Co 

Frank, Weinberg & Black, P.L. 

Johnson Controls Fire Protection, LP 

Liberty Grande LLC 

Beauchamp Construction Co., Inc. 

Alexey Burya 

Costa Investors Manager, LLC 

Costa Investors, LLC 

Airstron 

Debtor’s management, directors, owners, officers and/or executives 

Entities affiliated with the Debtor 

9217-2659 Quebec Inc. 

Aachen LLC 

Abimat LLC 

ADK Holdings LLC 

AIGUL LLC 

Alegria, LLC 

Alejandro Pieve 

Alexandra Pelts 

Amab Investments LLC 

Amab Investments LLC 

Anatoly Vasilyev 

Andreanna Rentals LLC 

Anmary LLC 

Athos Diacono LLC 

Belet Investments, LLC 

BERECOSTA 333 LLC 

Betje Investments, LLC 

Blanca and Robertilio Bermudez 

Blue Jasmine Investments, LLC 

Exhibit B

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 123 of 130
BOSS Matias Investments 

Bugada and Carneiro LLC 

Buttonwood Partners Asset Management LLC 

Casa Hollywood LLC 

Celebration Multiservices LLC 

Chaceada LLC 

Chaceada LLC 

CHC Investment N417 LLC 

CHC Investments N526 LLC 

CHN528, LLC 

CISS Inventment Corporation 

Condos Miami LLC 

Costa Hollywood N229 LLC 

Costa Hollywood S303 Inc. 

Costa Hollywood S317, LLC 

Costa Hollywood S328 LLC 

Costa Hollywood S330 LLC 

Costa Hollywood S415 LLC 

Costa Hollywood S419 LLC 

Costa Hollywood S420 LLC 

Costa Hollywood S427 LLC 

Costa Hollywood S428 LLC 

Costa Hollywood S515 LLC 

Costa Hollywood S532 LLC 

Costa Jai 18 LLC 

Costa Monrovia Properties, LLC 

Cumbre CP LLC 

Cumbre CP LLC 

Dania International Investment,LLC 

Daniel Ades and Jose Gonzalez 

Daniel Ades and Sol Belen Ades 

Dark Hole LLC 

Demax LLC 

Derland Corporation 

Double P Group LLC 

Dream Properties FL, LLC 

Dream Properties FL, LLC 

Duo Soli LLC 

Eduardo Eleicegui 

El Sheik Corp 

Elvigia Paredes de Jauregui 

Emphrye Networks Corp 

Estragiz LLC 

FASEJU LLC 

Flario Investments, LLC 

FLDO LLC 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 124 of 130
Future Investors Group LLC 

Gabriela Eleonora Borroni 

Gaby Kociak 

Gavin Henry 

Gogrow Consulting, LLC 

Guimaraes LLC 

H L Alves Properties, LLC 

H L Alves Properties, LLC. 

Haim Tbeili 

Hector Suazo and Maritza Suazo 

Heleana Corp 

High Horizons, LLC 

Hilda Cristina Tamayo and Juan Saldarria 

Holly Beach Inc. 

Hollywood Rental Properties Inc. 

Hollywood Rental Properties Inc. 

Illusion Investments LLC 

Investissement Pierre Brisson, Inc. 

Isaac Dahan 

Island PropertyEnterprises LLC 

J Maia, LLC 

JAI Properties Corp 

JAI Properties Corp 

JCL Costa Holding Corp 

Jesus Manuel Campos Lopez 

Johanne Lebrun 

Jorge Salvat 

Juan Ignacio Maggi 

Kalevala, LLC 

Kaminka LLC 

Kellbrick LLC 

Kissian Inc. 

KSA Properties LLC 

Landflex Corporation 

Leaf Group Investment LLC 

Leaf Group Investment LLC 

Los 3 Panas LLC 

Los Dos Jugadores 

Los Nobles 6 LLC 

Lulauma LLC 

Lumath USA LLC 

Lumath USA, LLC 

Luz Marina Cevallos 

Mabe Group LLC 

Maleylu, LLC 

Marcelo Goldberg 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 125 of 130
Marco Antonio Lopes de Almeida 

Marco Antonio Moura Esteves 

Mariana Mincev 

Mark Andre Dayan Management LCC 

Mark Tesoreiro 

Martusan Investments LLC 

MECG Commercial 2 LLC 

METRUSA LLC 

Miami Real Exposure, LLC 

Migajas LLC 

MOGF Hollywood Inc. 

MOGF Hollywood Inc. 

MOGF Hollywood Inc. 

MOGF Hollywood Inc. 

MRE7C LLC 

Nakamura Mattedi 

New Edge Properties LLC 

New Know Consulting LLC 

NGM Management LLC 

Nicholas Bays and Geraldeline Bays 

Olantalia LLC 

Oleg Mergasov 

OMCH Properties Inc 

Palm Beauty of Florida, LLC 

Panflona Corp 

Paraggi Group LLC 

Patricia Abate 

Patriot Saha, LLC 

Pavel Vasilyev 

Perkins 99 Corp 

Punta Colorada LLC 

Quadrex 1, LLC 

Queen International Services, LLC 

Rapallo Group, LLC 

RBP Management Partners, Inc. 

RBP Management Partners, Inc. 

RBP Management Partners, Inc. 

Real Estate Hope LLC 

Richard's Holding LLC 

Robea LLC 

Roberto Melo 

Rodsol Investments Corp 

Rogerio Silva P.A. 

Ron Investments USA LLC 

Rubi II Investments LLC 

Sagek Inc. 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 126 of 130
Salomon Resler 

San Clau, Inc. 

San Franscisco Partners, LLC 

Sandro Santarossa and Anna Manna-Santaro 

Sangetha Rajalakshmi Ganesan 

Segra Grup LLC 

Seria Manisalu LLC 

Shelton Florida LLC 

Shelton Florida LLC 

Slampol LLC 

Slara Investment LLC 

Sofel Investments LLC 

Solari Company LLC 

Sonkat LLC 

Sonya R. Chada 

Spital Fields LLC 

Sunburst LLC 

The Blue Investments PFFM, LLC 

The Meeting Group Corporation 

Tomafabe, LLC 

Trafalgar LLC 

Vanuatu LLC 

Veccal Group, LLC 

VIFA Investments, LLC 

VNK 430 LLC 

Whats Contact LLC 

Whats Contact LLC 

Wildcat Highlands, LLC 

William Scott Fitzpatrick 

Ximec I, LLC 

Ytafres LLC 

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 127 of 130
Assets C11 Value C7 Value

Sale Proceeds (Note 1) 43,000,000.00 $  43,000,000.00 $  

Professional Claims' Fund (Note 2) 400,000.00 $        ‐ $                      

Unsecured Creditors' Fund (Note 3) 475,000.00 $        ‐ $                      

Liquidating Trust Fund (Note 4) 200,000.00 $        ‐ $                      

Litigation Claims Recovery (Note 5) ‐ $                       ‐ $                      

Total Assets: $  43,000,000.00 44,075,000.00 $  

Liabilities C11 Value C7 Value

Property Transfer Taxes (Note 6) ‐ $                       301,000.00 $       

Trustee's Statutory Fee (Note 7) ‐ $                       1,355,570.00 $    

Liquidating Trust Administrative Expenses 200,000.00 $       

Administrative Expense Claims (Note 8) ‐ $                       200,000.00 $       

Professional Claims (Note 9) 400,000.00 $        400,000.00 $       

Priority Tax Claims 21,300.00 $           21,300.00 $          

Class 1: Secured Tax Claims 1,077,000.00 $    1,077,000.00 $    

Class 2: Allowed Secured Claim of City of Hollywood 10,604.54 $           10,604.54 $          

Class 3: Allowed Secured Claim of United Leasing, Inc. (Note 10) $104,799.00 104,799.00 $       

Class 4: Allowed Secured Claim of 777 N. Ocean Drive, LLC  $ 47,190,000.00 $  47,190,000.00

Class 5: Allowed Secured Mechanic’s Lien Claims  $   8,053,000.00 $    8,053,000.00

Class 6: Allowed Other Secured Claims $       720,000.00 $       720,000.00

Class 7: Allowed Priority Deposit Claims $            6,050.00 $            6,050.00

Class 8: Allowed General Unsecured Claims (Note 11) $    8,500,000.00 $    8,500,000.00

Class 9: Equity Interests in the Debtor $                      ‐ $                      ‐

Total Liabilities: $ 66,282,753.54 $  67,939,323.54

Distribution C11 Value C7 Value

Property Transfer Taxes $                       301,000.00 ‐ $       

Trustee's Statutory Fee  $                       1,355,570.00 ‐ $    

Liquidating Trust Administrative Expenses $       200,000.00 $                      ‐

Administrative Expense Claims $                       200,000.00 ‐ $       

Professional Claims $       400,000.00 $       400,000.00

Priority Tax Claims $          21,300.00 $          21,300.00

Class 1: Secured Tax Claims $    1,077,000.00 $    1,077,000.00

Class 2: Allowed Secured Claim of City of Hollywood $          10,604.54 $          10,604.54

Class 3: Allowed Secured Claim of United Leasing, Inc.  $       104,799.00 $       104,799.00

Class 4: Allowed Secured Claim of 777 N. Ocean Drive, LLC  $ 41,786,296.46 $  39,529,726.46

Class 7: Allowed Priority Deposit Claims $            6,050.00 $                      ‐

Classes 5, 6 and 8 $       468,950.00 $                      ‐

Class 9: Equity Interests in the Debtor $                      ‐ $                      ‐

Total Distribution: $ 44,075,000.00 $  43,000,000.00

SUMMARY OF FEASIBILITY AND LIQUIDATION ANALYSIS

Purpose of Liquidation Analysis

This liquidation analysis (the “Analysis ”) was prepared solely for the inclusion in the Disclosure Statement in compliance

with the United States Bankruptcy Code. The Analysis involves estimating the proceeds that are expected to be

generated in the liquidation of the assets of the Estate and reducing such amount by secured claims, costs of liquidation,

post‐confirmation administrative claims, administrative expenses and priority claims, to arrive at estimated net

proceeds available for distribution to unsecured creditors. The Analysis is based on the assumptions discussed in the

notes below.

Exhibit 2

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 128 of 130
Note 1: In accordance with the Plan and the Secured Lender Sale Motion, the Debtor will seek to sell the Properties to

the Secured Lender as the Stalking Horse Bidder, which will initial credit bid in the amount of $43,000,000 (which credit

bid may be increased up to the full amount of the Secured Lender's Class 2 Allowed Secured Claim), subject to higher

and better offers. Accordingly, in a Chapter 11 scenario, this figure does not represent cash sale proceeds available for

distribution. In a Chapter 7 scenario, the Debtor has assumed a similar $43,000,000 purchase price, all of which would

be subject to distribution in accordance with priority.

Note 5: For the purposes of this Analysis, in either a Chapter 11 or Chapter 7 scenario, the Debtor assumes that the

Estate will not realize any additional recoveries from the prosecution of litigation claims

Note 9: For the purposes of this Analysis, a figure of $400,000 is assumed for the purposes of consistency with the

Professional Claims' Fund assumed amount.

Note 4: The Liquidating Trust Fund is part of the Secured Lender's Contribution for purposes of funding the Liquidating

Trust in accordance with the Plan. As set forth in the Plan, $100,000 of this amount will be contributed by the Secured

Lender on the Effective Date, and $100,000 of the funds currently held in esrow by GreenbergTraurig on behalf of

Stewart Title Guaranty Company shall be funded upon turnover of such funds to the Estate. The remainder of such

recovered funds constitute the Secured Lender's cash collateral. 

Note 6: Transfer taxes are customarily paid by the seller of property. If the Properties are sold pursuant to the Plan,

transfer taxes are avoided pursuant to § 1146(a) of the Bankruptcy Code. However, transfer taxes must be paid at

closing if the Properties are sold in a Chapter 7.

Reservation of Rights

The Debtor reserves all of its rights in connection with the estimated values of recoveries as set forth herein and the

ability to pursue additional claims and causes of action and objections to claims. This analysis shall not be deemed a

waiver of or estoppel in connection with such rights.  

Continues on Next Page

Note 7: This amount is comprised of the Chapter 7 Trustee’s statutory fee formula under § 326 of the Bankruptcy Code

and is calculated based on an assumed $42,699,000 disbursement ($43,000,000 less property transfer taxes) in a

Chapter 7 case, as well as an additional estimated $50,000.00 for the administrative professional fees of the Chapter 7

trustee.

Note 2: The Professional Claims' Fund is part of the Secured Lender's Contribution for payment of Allowed Professional

Claims in accordance with the Plan. For the purposes of this Analysis, a figure of $400,000 is assumed, however, the

actual amount of the Professional Claims' Fund will be based upon the submission of fee applications and Court

approval. 

Note 3: The Unsecured Creditors' Fund is part of the Secured Lender's Contribution for payment of Allowed Priority

Claims and Allowed General Unsecured Claims in accordance with the Plan.

Note 8: This is an assumed figure and presumes that administrative claims will arise as a result of the Debtor

discontinuing operations upon conversion to Chapter 7.

Note 10: For the purposes of this Analysis, the Debtor assumes that United Leasing Inc.'s Class 3 Claim is higher in legal

priority than the Secured Lender's Class 4 Claim and thus will be paid in full from the sale of the Properties.

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 129 of 130
Note 11: This amount does not include any deficiency claims of holders of Allowed Secured Claims resulting from the

sale of the Properties.

Case 19-22483-AJC Doc 288 Filed 04/24/20 Page 130 of 130