IN THE UNITED STATES BANKRUPTCY COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

In re:

IMPEL PHARMACEUTICALS INC., et al.1

 Debtors.

Chapter 11

Case No. 23-80016 (SGJ)

(Jointly Administered)

DISCLOSURE STATEMENT FOR JOINT PLAN OF LIQUIDATION OF IMPEL 

PHARMACEUTICALS INC. AND IMPEL NEUROPHARMA AUSTRALIA PTY LTD.

SIDLEY AUSTIN LLP

Samuel A. Newman (admitted pro hac vice)

555 West Fifth Street

Los Angeles, California 90013

Telephone: (213) 896-6000

Facsimile: (213) 896-6600

Email: sam.newman@sidley.com

SIDLEY AUSTIN LLP

Jackson T. Garvey (admitted pro hac vice)

One South Dearborn

Chicago, IL 60603

Telephone: (312) 853-7000

Facsimile: (312) 853-7036

Email: jgarvey@sidley.com

Counsel to the Debtors and Debtors in Possession

SIDLEY AUSTIN LLP

Rakhee V. Patel (TX Bar No. 00797213)

Nathan C. Elner (admitted pro hac vice)

Parker G. Embry (TX Bar No. 24126826)

Chelsea M. McManus (TX Bar No. 24131499)

2021 McKinney Avenue, Suite 2000

Dallas, Texas 75201

Telephone: (214) 981-3300

Facsimile: (214) 981-3400

Email: rpatel@sidley.com

nelner@sidley.com

parker.embry@sidley.com

cmcmanus@sidley.com

1 The Debtors in this chapter 11 case, together with the last four digits of each Debtor’s federal tax identification 

number, are: Impel Pharmaceuticals Inc. (8238); and Impel NeuroPharma Australia Pty Ltd (N/A). The Debtors’ 

service address is 201 Elliot Avenue West, Suite 260, Seattle, WA 98119.

THIS IS NOT A SOLICITATION OF ACCEPTANCE OR REJECTION OF THE PLAN. 

ACCEPTANCES OR REJECTIONS MAY NOT BE SOLICITED UNTIL THE 

BANKRUPTCY COURT APPROVES A DISCLOSURE STATEMENT. THIS 

DISCLOSURE STATEMENT IS BEING SUBMITTED FOR APPROVAL, BUT HAS NOT 

YET BEEN APPROVED BY THE BANKRUPTCY COURT.

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This disclosure statement (this “Disclosure Statement”) provides information 

regarding the Joint Plan of Liquidation of Impel Pharmaceuticals Inc. and Impel 

NeuroPharma Australia Pty Ltd. (as may be amended, supplemented, or otherwise modified 

from time to time, the “Plan”),2 for which the Debtors will seek confirmation by the 

Bankruptcy Court. A copy of the Plan is attached hereto as Exhibit A and is incorporated 

herein by reference. The Debtors are providing the information in this Disclosure Statement 

to certain holders of Claims for the purpose of soliciting votes to accept or reject the Plan. 

[Pursuant to the PSA, the Plan is currently supported by the Debtors and certain 

Non-Company Parties that have executed the PSA.]

The Debtors urge each holder of a Claim or Interest to consult with its own advisors 

with respect to any legal, financial, securities, tax, or business advice in reviewing this 

Disclosure Statement, the Plan, and each proposed transaction contemplated by the Plan. 

The Debtors strongly encourage holders of Claims in Classes 3 and 4 to read this 

Disclosure Statement (including the Risk Factors described in Article XIV hereof) and the 

Plan in their entirety before voting to accept or reject the Plan. Assuming the requisite 

acceptances of the Plan are obtained, the Debtors will seek the Bankruptcy Court’s approval 

of the Plan at the Combined Hearing. 

RECOMMENDATION BY THE DEBTORS

EACH DEBTOR’S BOARD OF DIRECTORS HAS APPROVED THE 

TRANSACTIONS CONTEMPLATED BY THE PLAN AND DESCRIBED IN THIS 

DISCLOSURE STATEMENT, AND EACH DEBTOR BELIEVES THAT THE 

COMPROMISES CONTEMPLATED UNDER THE PLAN ARE FAIR AND 

EQUITABLE, MAXIMIZE THE VALUE OF EACH OF THE DEBTORS’ ESTATES, 

AND PROVIDE THE BEST RECOVERY TO STAKEHOLDERS. EACH OF THE 

DEBTORS THEREFORE STRONGLY RECOMMEND THAT ALL HOLDERS OF 

CLAIMS WHOSE VOTES ARE BEING SOLICITED SUBMIT BALLOTS TO ACCEPT

THE PLAN BY RETURNING THEIR BALLOTS SO AS TO BE ACTUALLY 

RECEIVED BY THE CLAIMS AND NOTICING AGENT BY NO LATER THAN 

[March 28] AT [4]:00 P.M. (PREVAILING CENTRAL TIME) PURSUANT TO THE 

INSTRUCTIONS SET FORTH HEREIN AND ON THE BALLOT.

2 Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Plan. The 

summary of the Plan provided herein is qualified in its entirety by reference to the Plan. In the case of any 

inconsistency between the Disclosure Statement and the Plan, the Plan will govern. 

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THE DEBTORS ARE NOT PROVIDING THE INFORMATION IN THIS 

DISCLOSURE STATEMENT TO HOLDERS OF CLAIMS FOR PURPOSES OF 

SOLICITING VOTES TO ACCEPT OR REJECT THE JOINT PLAN OF LIQUIDATION 

OF IMPEL PHARMACEUTICALS INC. AND IMPEL NEUROPHARMA AUSTRALIA PTY 

LTD. NOTHING IN THIS DISCLOSURE STATEMENT MAY BE RELIED UPON OR 

USED BY ANY ENTITY FOR THAT OR ANY OTHER PURPOSE. 

HOLDERS OF CLAIMS OR INTERESTS SHOULD NOT CONSTRUE THE 

CONTENTS OF THIS DISCLOSURE STATEMENT AS PROVIDING ANY LEGAL, 

BUSINESS, FINANCIAL, OR TAX ADVICE. THE DEBTORS URGE EACH HOLDER 

OF A CLAIM OR INTEREST TO CONSULT WITH ITS OWN ADVISORS WITH 

RESPECT TO ANY LEGAL, FINANCIAL, SECURITIES, TAX, OR BUSINESS ADVICE 

IN REVIEWING THIS DISCLOSURE STATEMENT, THE PLAN, AND THE 

PROPOSED TRANSACTIONS CONTEMPLATED THEREBY. FURTHERMORE, THE 

BANKRUPTCY COURT’S CONDITIONAL APPROVAL OF THE ADEQUACY OF THE 

INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT DOES NOT 

CONSTITUTE THE BANKRUPTCY COURT’S APPROVAL OF THE PLAN.

THIS DISCLOSURE STATEMENT CONTAINS, AMONG OTHER THINGS, 

SUMMARIES OF THE PLAN, CERTAIN STATUTORY PROVISIONS, AND CERTAIN 

EVENTS AND ANTICIPATED EVENTS IN THE CHAPTER 11 CASES. ALTHOUGH 

THE DEBTORS BELIEVE THAT THESE SUMMARIES ARE FAIR AND ACCURATE, 

THESE SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY TO THE EXTENT 

THAT THEY DO NOT SET FORTH THE ENTIRE TEXT OF SUCH DOCUMENTS OR 

STATUTORY PROVISIONS OR EVERY DETAIL OF SUCH EVENTS. IN THE EVENT 

OF ANY INCONSISTENCY OR DISCREPANCY BETWEEN A DESCRIPTION IN THIS 

DISCLOSURE STATEMENT AND THE TERMS AND PROVISIONS OF THE PLAN OR 

ANY OTHER DOCUMENTS INCORPORATED HEREIN BY REFERENCE, THE PLAN 

OR SUCH OTHER DOCUMENTS WILL GOVERN FOR ALL PURPOSES. FACTUAL 

INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT HAS BEEN 

PROVIDED BY THE DEBTORS’ MANAGEMENT EXCEPT WHERE OTHERWISE 

SPECIFICALLY NOTED. THE DEBTORS DO NOT REPRESENT OR WARRANT 

THAT THE INFORMATION CONTAINED HEREIN OR ATTACHED HERETO IS 

WITHOUT ANY MATERIAL INACCURACY OR OMISSION.

IN PREPARING THIS DISCLOSURE STATEMENT, THE DEBTORS RELIED 

ON FINANCIAL DATA DERIVED FROM THE DEBTORS’ BOOKS AND RECORDS 

AND ON VARIOUS ASSUMPTIONS REGARDING THE DEBTORS’ BUSINESSES. 

WHILE THE DEBTORS BELIEVE THAT SUCH FINANCIAL INFORMATION FAIRLY 

REFLECTS THE FINANCIAL CONDITION OF THE DEBTORS AS OF THE DATE 

HEREOF AND THAT THE ASSUMPTIONS REGARDING FUTURE EVENTS 

REFLECT REASONABLE BUSINESS JUDGMENTS, NO REPRESENTATIONS OR 

WARRANTIES ARE MADE AS TO THE ACCURACY OF THE FINANCIAL 

INFORMATION CONTAINED HEREIN OR ASSUMPTIONS REGARDING THE 

DEBTORS’ BUSINESSES AND THEIR FUTURE RESULTS AND OPERATIONS. THE 

DEBTORS EXPRESSLY CAUTION READERS NOT TO PLACE UNDUE RELIANCE 

ON ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN.

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THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE, AND MAY NOT 

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

WAIVER. THE DEBTORS OR ANY OTHER AUTHORIZED PARTY MAY SEEK TO 

INVESTIGATE, FILE, AND PROSECUTE CLAIMS AND MAY OBJECT TO CLAIMS 

AFTER THE CONFIRMATION OR EFFECTIVE DATE OF THE PLAN 

IRRESPECTIVE OF WHETHER THIS DISCLOSURE STATEMENT IDENTIFIES ANY 

SUCH CLAIMS OR OBJECTIONS TO CLAIMS.

THE DEBTORS ARE MAKING THE STATEMENTS AND PROVIDING THE 

FINANCIAL INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT AS 

OF THE DATE HEREOF, UNLESS OTHERWISE SPECIFICALLY NOTED. 

ALTHOUGH THE DEBTORS MAY SUBSEQUENTLY UPDATE THE INFORMATION 

IN THIS DISCLOSURE STATEMENT, THE DEBTORS HAVE NO AFFIRMATIVE 

DUTY TO DO SO, AND EXPRESSLY DISCLAIM ANY DUTY TO PUBLICLY UPDATE 

ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW 

INFORMATION, FUTURE EVENTS, OR OTHERWISE. HOLDERS OF CLAIMS OR 

INTERESTS REVIEWING THIS DISCLOSURE STATEMENT SHOULD NOT INFER 

THAT, AT THE TIME OF THEIR REVIEW, THE FACTS SET FORTH HEREIN HAVE 

NOT CHANGED SINCE THIS DISCLOSURE STATEMENT WAS FILED.

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION, 

MODIFICATION, OR AMENDMENT. THE DEBTORS RESERVE THE RIGHT TO 

FILE AN AMENDED OR MODIFIED PLAN AND RELATED DISCLOSURE 

STATEMENT FROM TIME TO TIME, SUBJECT TO THE TERMS OF THE PLAN AND 

THE PSA.

THE DEBTORS HAVE NOT AUTHORIZED ANY ENTITY TO GIVE ANY 

INFORMATION ABOUT OR CONCERNING THE PLAN OTHER THAN THAT WHICH 

IS CONTAINED IN THIS DISCLOSURE STATEMENT. THE DEBTORS HAVE NOT 

AUTHORIZED ANY REPRESENTATIONS CONCERNING THE DEBTORS OR THE 

VALUE OF THEIR PROPERTY OTHER THAN AS SET FORTH IN THIS DISCLOSURE 

STATEMENT.

IF THE PLAN IS CONFIRMED BY THE BANKRUPTCY COURT AND THE 

EFFECTIVE DATE OCCURS, ALL HOLDERS OF CLAIMS OR INTERESTS 

(INCLUDING THOSE HOLDERS OF CLAIMS OR INTERESTS WHO DO NOT 

SUBMIT BALLOTS TO ACCEPT OR REJECT THE PLAN, WHO VOTE TO REJECT 

THE PLAN, OR WHO ARE NOT ENTITLED TO VOTE ON THE PLAN) WILL BE 

BOUND BY THE TERMS OF THE PLAN AND THE LIQUIDATION TRANSACTIONS 

CONTEMPLATED THEREBY.

THE CONFIRMATION AND EFFECTIVENESS OF THE PLAN ARE SUBJECT 

TO CERTAIN MATERIAL CONDITIONS PRECEDENT DESCRIBED HEREIN AND 

SET FORTH IN ARTICLE VIII OF THE PLAN. THERE IS NO ASSURANCE THAT THE 

PLAN WILL BE CONFIRMED, OR IF CONFIRMED, THAT THE CONDITIONS 

REQUIRED TO BE SATISFIED FOR THE PLAN TO GO EFFECTIVE WILL BE 

SATISFIED (OR WAIVED).

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YOU ARE ENCOURAGED TO READ THE PLAN AND THIS DISCLOSURE

STATEMENT IN THEIR ENTIRETY BEFORE SUBMITTING YOUR BALLOT TO 

VOTE ON THE PLAN.

THE BANKRUPTCY COURT’S APPROVAL OF THIS DISCLOSURE 

STATEMENT DOES NOT CONSTITUTE A GUARANTEE BY THE BANKRUPTCY 

COURT OF THE ACCURACY OR COMPLETENESS OF THE INFORMATION 

CONTAINED HEREIN OR AN ENDORSEMENT BY THE BANKRUPTCY COURT OF 

THE MERITS OF THE PLAN.

THIS DISCLOSURE STATEMENT HAS BEEN PREPARED IN ACCORDANCE 

WITH SECTION 1125 OF THE BANKRUPTCY CODE AND BANKRUPTCY RULE 

3016(B) AND IS NOT NECESSARILY PREPARED IN ACCORDANCE WITH FEDERAL 

OR STATE SECURITIES LAWS OR OTHER SIMILAR LAWS. THIS DISCLOSURE 

STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED 

STATES SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) OR ANY 

SIMILAR FEDERAL, STATE, LOCAL, OR FOREIGN REGULATORY AGENCY, NOR 

HAS THE SEC OR ANY OTHER AGENCY PASSED UPON THE ACCURACY OR 

ADEQUACY OF THE STATEMENTS CONTAINED IN THIS DISCLOSURE 

STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL 

OFFENSE.

THE DEBTORS HAVE SOUGHT TO ENSURE THE ACCURACY OF THE 

FINANCIAL INFORMATION PROVIDED IN THIS DISCLOSURE STATEMENT; 

HOWEVER, THE FINANCIAL INFORMATION CONTAINED IN THIS DISCLOSURE 

STATEMENT OR INCORPORATED HEREIN BY REFERENCE HAS NOT BEEN, AND 

WILL NOT BE, AUDITED OR REVIEWED BY THE DEBTORS’ INDEPENDENT 

AUDITORS UNLESS EXPLICITLY PROVIDED OTHERWISE HEREIN.

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TABLE OF CONTENTS

ARTICLE I. QUESTIONS AND ANSWERS REGARDING THIS DISCLOSURE 

STATEMENT AND THE PLAN................................................................................................... 1

A. What is chapter 11?............................................................................................................. 1

B. Why are the Debtors sending me this Disclosure Statement? ............................................ 1

C. Am I entitled to vote on the Plan? ...................................................................................... 1

D. What will I receive from the Debtors if the Plan is consummated? ................................... 2

E. What will I receive from the Debtors if I hold an Allowed Administrative Claim or a 

Priority Tax Claim?..................................................................................................................... 2

F. Are any regulatory approvals required to consummate the Plan? ...................................... 2

G. What happens to my recovery if the Plan is not confirmed or does not go effective? ....... 2

H. If the Plan provides that I get a distribution, do I get it upon Confirmation or when the 

Plan goes effective, and what is meant by “Confirmation,” “Effective Date,” and 

“Consummation”?....................................................................................................................... 3

I. What are the sources of Cash and other consideration required to fund the Plan?............. 3

J. Is there potential litigation related to the Plan? .................................................................. 3

K. Does the Plan preserve Causes of Action? ......................................................................... 3

L. Will there be releases, exculpation, and injunction granted to parties in interest as part of 

the Plan?...................................................................................................................................... 3

M. When is the deadline to vote on the Plan? .......................................................................... 5

N. How do I vote on the Plan?................................................................................................. 5

O. Why is the Bankruptcy Court holding a Combined Hearing? ............................................ 5

P. What is the purpose of the Combined Hearing? ................................................................. 5

Q. Who do I contact if I have additional questions with respect to this Disclosure Statement 

or the Plan? ................................................................................................................................. 5

R. Do the Debtors recommend voting in favor of the Plan? ................................................... 6

S. Who supports the Plan? ...................................................................................................... 6

ARTICLE II. OVERVIEW OF THE PLAN ................................................................................. 6

A. Introduction......................................................................................................................... 6

B. The Plan .............................................................................................................................. 7

C. The Adequacy of This Disclosure Statement...................................................................... 7

D. Summary of Classes and Treatment of Claims or Interests................................................ 8

E. Solicitation Package............................................................................................................ 9

F. Voting and Confirmation of the Plan................................................................................ 10

1. Certain Factors to be Considered Prior to Voting.......................................................... 10

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2. Voting Procedures and Requirements............................................................................ 10

3. Plan Objection Deadline ................................................................................................ 11

4. Combined Hearing......................................................................................................... 11

5. Confirmation.................................................................................................................. 11

6. Acceptance..................................................................................................................... 12

7. Feasibility....................................................................................................................... 12

8. Best Interests Test; Liquidation Analysis...................................................................... 12

9. Compliance with Applicable Provisions of the Bankruptcy Code ................................ 13

10. Alternatives to Confirmation and Consummation of the Plan....................................... 13

G. Releases by the Debtors Set Forth in the Plan .................................................................. 14

ARTICLE III. THE DEBTORS’ CORPORATE HISTORY, STRUCTURE, AND BUSINESS 

OVERVIEW ................................................................................................................................. 14

A. Corporate History.............................................................................................................. 14

B. Business Operations.......................................................................................................... 14

C. The Debtors’ Prepetition Capital Structure....................................................................... 15

1. The Revenue Interest Financing Agreement.................................................................. 15

2. The Senior Secured Loans............................................................................................. 15

3. Amendments to the RIFA and Senior Secured Credit Documents................................ 16

4. Secured Debt as of the Petition Date ............................................................................. 18

5. Trade and Related Debt ................................................................................................. 19

6. Net Operating Losses and Research and Development Credits..................................... 19

7. Equity............................................................................................................................. 19

D. Additional Compensation Plans........................................................................................ 19

E. Litigation........................................................................................................................... 20

F. Events Leading to the Chapter 11 Filings......................................................................... 20

1. Declining Liquidity and a Failed Sale ........................................................................... 20

2. Unsuccessful Investment Outreach................................................................................ 21

3. February 2023 Reduction in Force ................................................................................ 21

4. Board Considers Strategic Alternatives and Hires Advisors......................................... 22

5. Prepetition Sale Process................................................................................................. 22

6. Teneo Implements Cost Cutting Measures to Preserve Assets...................................... 22

7. Engagement with Key Stakeholders.............................................................................. 23

8. Further Reductions In Force .......................................................................................... 23

9. Nasdaq Delisting............................................................................................................ 24

10. Stalking Horse and Chapter 11 Filing............................................................................ 24

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ARTICLE IV. EVENTS DURING THE CHAPTER 11 CASES................................................ 25

A. Commencement of the Chapter 11 Cases and the Debtors’ Professionals....................... 25

B. First Day Relief................................................................................................................. 25

C. Second Day Relief ............................................................................................................ 26

D. The Proposed Bidding Procedures.................................................................................... 27

E. Debtors’ Use of Cash Collateral ....................................................................................... 28

F. Bar Dates........................................................................................................................... 29

G. Proposed Confirmation Schedule ..................................................................................... 29

ARTICLE V. CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS ...... 30

A. Administrative Claims, Priority Tax Claims, and Statutory Fees..................................... 30

1. Administrative Claims................................................................................................... 30

2. Professional Compensation Claims............................................................................... 30

3. Priority Tax Claims........................................................................................................ 32

4. U.S. Trustee Statutory Fees ........................................................................................... 32

B. Classification of Claims and Interests............................................................................... 33

C. Treatment of Claims and Interests.................................................................................... 33

1. Class 1 – Other Secured Claims..................................................................................... 33

2. Class 2 – Other Priority Claims..................................................................................... 34

3. Class 3 – Prepetition Term Loan Claims....................................................................... 34

4. Class 4 – General Unsecured Claims............................................................................. 35

5. Class 5 – Intercompany Claims..................................................................................... 35

6. Class 6 –Existing Equity Interests ................................................................................. 36

D. Special Provision Governing Unimpaired Claims............................................................ 36

E. Elimination of Vacant Classes.......................................................................................... 36

F. Voting Classes, Presumed Acceptance by Non-Voting Classes....................................... 36

G. Controversy Concerning Impairment ............................................................................... 36

H. Subordination of Claims................................................................................................... 36

I. Confirmation Pursuant to Sections 1129(a)(10) and 1129(b) of the Bankruptcy Code ... 37

J. Insurance ........................................................................................................................... 37

ARTICLE VI. MEANS FOR IMPLEMENTATION OF THE PLAN ........................................ 37

A. General Settlement of Claims and Interests...................................................................... 37

B. Liquidation Transactions .................................................................................................. 37

1. Sale Transaction............................................................................................................. 38

2. Wind-Down.................................................................................................................... 38

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C. Sources of Consideration for Plan Distributions .............................................................. 38

D. Vesting of Assets .............................................................................................................. 39

E. Preservation of Causes of Action...................................................................................... 39

F. Corporate Action............................................................................................................... 39

G. Cancellation of Existing Securities and Agreements........................................................ 40

H. Effectuating Documents; Further Transactions................................................................ 40

I. Section 1146 Exemption from Certain Taxes and Fees.................................................... 40

J. Sale Order ......................................................................................................................... 40

K. Authority to Act ................................................................................................................ 41

L. Separate Plans................................................................................................................... 41

M. Registered form................................................................................................................. 41

ARTICLE VII. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

....................................................................................................................................................... 41

A. Assumption and Rejection of Executory Contracts and Unexpired Leases ..................... 41

B. Claims Based on Rejection of Executory Contracts or Unexpired Leases....................... 42

C. Reservation of Rights........................................................................................................ 42

D. Preexisting Obligations to the Debtors Under Executory Contracts and Unexpired Leases

42

E. Indemnification Obligations ............................................................................................. 43

F. D&O Liability Insurance Policies..................................................................................... 43

G. Employment Agreements.................................................................................................. 43

H. Modifications, Amendments, Supplements, Restatements, or Other Agreements........... 43

I. Nonoccurrence of Effective Date...................................................................................... 43

J. Employee Compensation and Benefits............................................................................. 43

ARTICLE VIII. PROVISIONS GOVERNING DISTRIBUTIONS ............................................ 44

A. Distributions on Account of Claims Allowed as of the Effective Date............................ 44

B. Compliance with Tax Requirements................................................................................. 44

C. Date of Distributions......................................................................................................... 45

D. Disbursing Agent .............................................................................................................. 45

E. Rights and Powers of Disbursing Agent........................................................................... 45

F. Surrender of Instruments................................................................................................... 45

G. Delivery of Distributions and Undeliverable or Unclaimed Distributions....................... 46

H. Manner of Payment........................................................................................................... 46

I. Foreign Currency Exchange Rate ..................................................................................... 46

J. Setoffs and Recoupment ................................................................................................... 46

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K. Minimum Distribution ...................................................................................................... 47

L. Allocations........................................................................................................................ 47

M. Distributions Free and Clear............................................................................................. 47

N. Claims Paid or Payable by Third Parties .......................................................................... 47

1. Claims Paid by Third Parties......................................................................................... 47

2. Claims Payable by Third Parties.................................................................................... 47

3. Applicability of Insurance Policies................................................................................ 48

O. No Postpetition Interest on Claims................................................................................... 48

ARTICLE IX. PROCEDURES FOR RESOLVING CONTINGENT, UNLIQUIDATED, AND 

DISPUTED CLAIMS ................................................................................................................... 48

A. Allowance of Claims......................................................................................................... 48

B. Claims Administration Responsibilities ........................................................................... 48

C. Estimation of Claims and Interests................................................................................... 48

D. Adjustment to Claims or Interests Without Objection...................................................... 49

E. Time to File Objections to Claims.................................................................................... 49

F. Disallowance of Claims or Interests................................................................................. 49

G. Disallowance of Late Claims............................................................................................ 49

H. Disputed Claims Process................................................................................................... 49

I. Amendments to Claims..................................................................................................... 50

J. No Distributions Pending Allowance ............................................................................... 50

K. Distributions After Allowance.......................................................................................... 50

ARTICLE X. CONDITIONS PRECEDENT TO THE EFFECTIVE DATE .............................. 50

A. Conditions Precedent to the Effective Date ...................................................................... 50

B. Waiver of Conditions........................................................................................................ 51

ARTICLE XI. RELEASE, INJUNCTION, AND RELATED PROVISIONS............................. 52

A. Releases by the Debtors.................................................................................................... 52

B. Releases by the Releasing Parties..................................................................................... 54

C. Exculpation ....................................................................................................................... 56

D. Injunction .......................................................................................................................... 57

E. No Discharge .................................................................................................................... 58

F. Release of Liens................................................................................................................ 58

G. Gatekeeper Provision........................................................................................................ 58

ARTICLE XII. RETENTION OF JURISDICTION .................................................................... 59

ARTICLE XIII. MISCELLANEOUS PROVISIONS.................................................................. 61

A. Immediate Binding Effect................................................................................................. 61

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B. Additional Documents...................................................................................................... 61

C. Substantial Consummation ............................................................................................... 61

D. Reservation of Rights........................................................................................................ 61

E. Successors and Assigns..................................................................................................... 61

F. Determination of Tax Liabilities....................................................................................... 61

G. Notices .............................................................................................................................. 62

H. Term of Injunctions or Stays............................................................................................. 63

I. Entire Agreement.............................................................................................................. 63

J. Plan Supplement ............................................................................................................... 63

K. Governing Law ................................................................................................................. 63

L. Nonseverability of Plan Provisions................................................................................... 63

M. Closing of the Chapter 11 Cases....................................................................................... 64

ARTICLE XIV. RISK FACTORS ............................................................................................... 64

A. Bankruptcy Law Considerations....................................................................................... 64

1. The Plan May Not Be Approved or Implemented......................................................... 64

2. Parties in Interest May Object to the Plan’s Classification of Claims and Interests...... 65

3. The Debtors’ Use of Cash Collateral May Be Terminated............................................ 65

4. The PSA May Be Terminated........................................................................................ 65

5. The Conditions Precedent to the Effective Date of the Plan May Not Occur ............... 66

6. The Debtors May Fail to Satisfy the Vote Requirements.............................................. 66

7. The Debtors May Not Be Able to Secure Confirmation of the Plan ............................. 66

8. The Debtors May Not Be Able to Secure Nonconsensual Confirmation Over Certain 

Impaired Non-Accepting Classes .................................................................................. 66

9. The Chapter 11 Cases May Be Converted to Cases Under Chapter 7 of the Bankruptcy 

Code ............................................................................................................................... 67

10. The Debtors May Object to the Amount or Classification of a Claim .......................... 67

11. Contingencies Could Affect Votes of Impaired Classes to Accept or Reject the Plan.. 67

12. Releases, Injunctions, and Exculpation Provisions May Not Be Approved.................. 67

B. Allowance of Claims......................................................................................................... 68

C. Risks Related to Recoveries Under the Plan..................................................................... 68

1. The Amounts of Allowed Claims May Adversely Affect the Recovery of Some Holders 

of Allowed Claims......................................................................................................... 68

2. Any Valuation of Any Assets to be Distributed Under the Plan Is Speculative............ 68

3. The Debtors Cannot Guarantee the Timing of Distributions......................................... 68

4. Certain Tax Implications of the Debtors’ Bankruptcy................................................... 68

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D. Risks Related to the Debtors’ Businesses......................................................................... 69

1. The Debtors Will Be Subject to the Risks and Uncertainties Associated with the 

Chapter 11 Cases............................................................................................................ 69

2. Operating in Bankruptcy for a Long Period of Time May Harm the Debtors’ Businesses

69

3. The Debtors’ Business Is Subject to Various Laws and Regulations That Can Adversely 

Affect the Cost, Manner, or Feasibility of Doing Business........................................... 70

4. The Loss of Key Personnel Could Adversely Affect the Debtors’ Operations............. 70

E. Disclosure Statement Disclaimer...................................................................................... 70

1. The Financial Information Contained in This Disclosure Statement Has Not Been 

Audited........................................................................................................................... 70

2. Information Contained in This Disclosure Statement Is For Soliciting Votes.............. 70

3. This Disclosure Statement Was Not Reviewed or Approved by the SEC..................... 70

4. This Disclosure Statement May Contain Forward Looking Statements........................ 71

5. No Legal or Tax Advice Is Provided to You by This Disclosure Statement................. 71

6. No Admissions Made..................................................................................................... 71

7. Failure to Identify Potential Objections......................................................................... 71

8. No Waiver of Right to Object or Right to Recover Transfers and Assets..................... 71

9. Information Was Provided by the Debtors and Was Relied Upon by the Debtors’ 

Advisors......................................................................................................................... 71

10. Potential Exists for Inaccuracies, and the Debtors Have No Duty to Update................ 72

11. No Representations Outside This Disclosure Statement are Authorized....................... 72

ARTICLE XV. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF 

CONSUMMATION OF THE PLAN........................................................................................... 72

A. Certain U.S. Federal Income Tax Consequences of the Plan to the Debtors.................... 74

1. U.S. Federal Income Tax Consequences to the Debtors................................................ 74

2. Cancellation of Debt and Reduction of Tax Attributes ................................................. 74

B. Certain U.S. Federal Income Tax Consequences of the Plan to U.S. Holders of Allowed 

Claims Entitled to Vote on the Plan.......................................................................................... 75

1. U.S. Federal Income Tax Consequences to U.S. Holders of Allowed Claims in Voting 

Classes............................................................................................................................ 75

2. Accrued Interest............................................................................................................. 76

3. Market Discount............................................................................................................. 76

4. Bad Debt Deduction....................................................................................................... 76

5. Medicare Surtax............................................................................................................. 76

C. Certain U.S. Federal Income Tax Consequences of the Plan to Non-U.S. Holders of 

Allowed Claims Entitled to Vote on the Plan........................................................................... 77

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1. Gain Recognition ........................................................................................................... 77

2. Interest on Allowed Claims ........................................................................................... 77

D. Information Reporting and Back-Up Withholding........................................................... 79

E. Importance of Obtaining Professional Tax Assistance..................................................... 79

ARTICLE XVI. ADDITIONAL INFORMATION...................................................................... 79

ARTICLE XVII. RECOMMENDATION AND CONCLUSION ............................................... 80

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EXHIBITS

Exhibit A Joint Plan of Liquidation of Impel Pharmaceuticals Inc. and Impel NeuroPharma 

Australia Pty Ltd.

Exhibit B Liquidation Analysis [to be filed subsequently with the Plan Supplement]

Exhibit C Plan Support Agreement

Exhibit D Corporate Organization Chart

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ARTICLE I.

QUESTIONS AND ANSWERS REGARDING THIS DISCLOSURE STATEMENT AND 

THE PLAN

A. What is chapter 11?

Chapter 11 is the principal business restructuring chapter of the Bankruptcy Code. 

In addition to permitting debtor rehabilitation, chapter 11 promotes equality of treatment for 

creditors and similarly situated equity interest holders, subject to the priority of distributions 

prescribed by the Bankruptcy Code. 

The commencement of a chapter 11 case creates an estate that comprises all of the 

legal and equitable interests of the debtor as of the date the chapter 11 case is commenced. The 

Bankruptcy Code provides that a debtor may continue to operate its business and remain in 

possession of its property as a “debtor in possession.”

Consummating a chapter 11 plan is the principal objective of a chapter 11 case. A 

bankruptcy court’s confirmation of a plan binds the debtor, any person acquiring property under 

the plan, any creditor or equity interest holder of the debtor, and any other entity as may be ordered 

by the bankruptcy court. Subject to certain limited exceptions, the order issued by a bankruptcy 

court confirming a plan provides for the treatment of the debtor’s liabilities in accordance with the 

terms of the confirmed plan.

B. Why are the Debtors sending me this Disclosure Statement?

The Debtors are seeking to obtain Bankruptcy Court approval of the Plan. Before 

soliciting acceptances of the Plan, section 1125 of the Bankruptcy Code requires the Debtors to 

prepare a disclosure statement containing adequate information of a kind, and in sufficient detail, 

to enable a hypothetical reasonable investor to make an informed judgment regarding acceptance 

of the Plan and to share such disclosure statement with all holders of claims whose votes on the 

Plan are being solicited. This Disclosure Statement is being submitted in accordance with these 

requirements.

C. Am I entitled to vote on the Plan?

Your ability to vote on, and your distribution under, the Plan, if any, depends on 

what type of Claim or Interest you hold and whether you held that Claim or Interest as of the 

Voting Record Date (i.e., as of [February 23], 2024). Each category of holders of Claims and 

Interests, pursuant to sections 1122(a) and 1123(a)(1) of the Bankruptcy Code, is referred to as a 

“Class.” Each Class’s respective voting status is set forth in Article III of the Plan and Article V

of this Disclosure Statement.

Except as otherwise provided in the Plan, nothing in the Plan shall affect the 

Debtors’ or the Plan Administrator’s rights regarding any Unimpaired Claims, including all rights 

regarding legal and equitable defenses to, or setoffs or recoupments against, any such Unimpaired 

Claims.

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D. What will I receive from the Debtors if the Plan is consummated?

A summary of the anticipated recovery to holders of Claims or Interests under the 

Plan is set forth in Article II.D. of this Disclosure Statement. Any estimates of Claims or Interests 

in this Disclosure Statement may vary from the final amounts allowed by the Bankruptcy Court. 

Your ability to receive distributions under the Plan depends upon the ability of the Debtors to 

obtain Confirmation and meet the conditions necessary to consummate the Plan.

THE PROJECTED RECOVERIES SET FORTH IN ARTICLE II.D. HEREIN 

ARE ESTIMATES ONLY AND THEREFORE ARE SUBJECT TO CHANGE. FOR A 

COMPLETE DESCRIPTION OF THE DEBTORS’ CLASSIFICATION AND TREATMENT 

OF CLAIMS AND INTERESTS, REFERENCE SHOULD BE MADE TO THE ENTIRE PLAN.3

E. What will I receive from the Debtors if I hold an Allowed Administrative 

Claim or a Priority Tax Claim?

In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative 

Claims, Professional Compensation Claims, and Priority Tax Claims have not been classified and, 

thus, are excluded from the Classes of Claims and Interests set forth in Article III of the Plan.

A description of these Claims and their treatment is included in Article II of the 

Plan and Article V of this Disclosure Statement. 

F. Are any regulatory approvals required to consummate the Plan?

At this time, the Debtors are evaluating which, if any, regulatory approvals are 

required to consummate the Plan. To the extent any such regulatory approvals or other 

authorizations, consents, rulings, or documents are necessary to implement and effectuate the Plan, 

however, it is a condition precedent to the Effective Date that they be obtained.

G. What happens to my recovery if the Plan is not confirmed or does not go 

effective?

In the event that the Plan is not confirmed or does not go effective, there is no 

assurance as to what precisely will happen. It is possible that any alternative may provide holders 

of Claims with less than they would have received pursuant to the Plan. For a more detailed 

description of potential consequences of extended Chapter 11 Cases, or of a liquidation scenario

under chapter 7 of the Bankruptcy Code, see Article XIV of this Disclosure Statement, and the 

Liquidation Analysis to be filed subsequent to the Filing of this Disclosure Statement as part of 

the Plan Supplement.

3 The recoveries set forth herein may change based upon changes in the amount of Claims that are “Allowed” as well 

as other factors related to the Sale Transaction.

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H. If the Plan provides that I get a distribution, do I get it upon Confirmation or 

when the Plan goes effective, and what is meant by “Confirmation,” “Effective 

Date,” and “Consummation”?

“Confirmation” of the Plan refers to approval of the Plan by the Bankruptcy Court. 

Confirmation of the Plan does not guarantee that you will receive the distribution indicated under 

the Plan. After Confirmation of the Plan by the Bankruptcy Court, there are conditions that need 

to be satisfied or waived so that the Plan can go effective. Initial distributions to holders of 

Allowed Claims will only be made on the date the Plan becomes effective—the “Effective Date”—

or as soon as reasonably practicable thereafter, as specified in the Plan. “Consummation” of the 

Plan refers to the occurrence of the Effective Date. See Article X of this Disclosure Statement, 

entitled “Conditions Precedent to the Effective Date,” for a discussion of conditions precedent to 

Consummation of the Plan.

I. What are the sources of Cash and other consideration required to fund the 

Plan?

The Debtors and the Plan Administrator, as applicable, shall fund distributions 

under the Plan with proceeds from the Sale Transaction and any other Distributable Cash, if any, 

all in accordance with the terms of the Plan and the Wind Down Budget.

J. Is there potential litigation related to the Plan?

Parties in interest may object to the approval of this Disclosure Statement and may 

object to Confirmation of the Plan, which objections potentially could give rise to litigation.

In the event that it becomes necessary to confirm the Plan over the rejection of 

certain Classes, the Debtors may seek confirmation of the Plan notwithstanding the dissent of such 

rejecting Classes. The Bankruptcy Court may confirm the Plan pursuant to the “cramdown” 

provisions of the Bankruptcy Code, which allows the Bankruptcy Court to confirm a plan that has 

been rejected by an impaired Class if it determines that the Plan satisfies section 1129(b) of the 

Bankruptcy Code.

K. Does the Plan preserve Causes of Action?

The Plan provides for the retention of all Causes of Action other than those that are 

expressly waived, relinquished, exculpated, released, compromised, or settled, as described in 

greater detail in Article IX of the Plan.

L. Will there be releases, exculpation, and injunction granted to parties in 

interest as part of the Plan?

Yes, the Plan proposes to release the Released Parties and to exculpate the 

Exculpated Parties. The Debtors will also seek findings of fact and conclusions of law with regards 

to officers’ and directors’ performance of their duties as officers and directors of the Debtors. The 

Debtors’ releases, third-party releases, exculpation, and injunction provisions included in the Plan 

are an integral part of the Debtors’ overall restructuring efforts [and were an essential element of 

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4

the negotiations among the Debtors and the Non-Company Parties in obtaining their support for 

the Plan pursuant to the terms of the PSA].

The Released Parties, the Exculpated Parties, and the Debtors’ directors and 

officers have made substantial and valuable contributions to the Debtors’ restructuring through 

efforts to negotiate and implement the Plan, which will maximize value of the Debtors for the 

benefit of all parties in interest. Accordingly, each of the Released Parties and the Exculpated 

Parties warrant the benefit of the release and exculpation provisions.

IMPORTANTLY, THE FOLLOWING PARTIES ARE INCLUDED IN THE 

DEFINITION OF “RELEASING PARTIES” AND WILL BE DEEMED TO HAVE 

EXPRESSLY, UNCONDITIONALLY, INDIVIDUALLY, AND COLLECTIVELY 

RELEASED AND DISCHARGED ALL CLAIMS AND CAUSES OF ACTION AGAINST 

THE DEBTORS AND THE RELEASED PARTIES: COLLECTIVELY, AND IN EACH 

CASE IN ITS CAPACITY AS SUCH: (A) THE DEBTORS, (B) THE WIND-DOWN 

DEBTORS, (C) THE PREPETITION TERM LOAN SECURED PARTIES, (D) THE 

CONSENTING UNSECURED CREDITORS, (E) ANY STATUTORY COMMITTEE AND 

EACH OF ITS MEMBERS, (F) THE HOLDERS OF ALL CLAIMS OR INTERESTS WHO 

VOTE TO ACCEPT THE PLAN, (G) THE HOLDERS OF ALL CLAIMS OR INTERESTS 

WHOSE VOTE TO ACCEPT OR REJECT THE PLAN IS SOLICITED BUT WHO DO 

NOT VOTE EITHER TO ACCEPT OR TO REJECT THE PLAN AND DO NOT OPT OUT 

OF GRANTING THE RELEASES SET FORTH HEREIN, (H) THE HOLDERS OF ALL 

CLAIMS OR INTERESTS WHO VOTE, OR ARE DEEMED TO VOTE, TO REJECT 

THE PLAN BUT DO NOT OPT OUT OF GRANTING THE RELEASES SET FORTH 

HEREIN, (I) THE HOLDERS OF ALL CLAIMS AND INTERESTS WHO ARE 

UNIMPAIRED UNDER THE PLAN, (J) WITH RESPECT TO EACH OF THE 

FOREGOING PERSONS, IN CLAUSES (A) THROUGH (I), EACH OF THEIR 

AFFILIATES, AND (K) WITH RESPECT TO EACH OF THE FOREGOING PERSONS 

IN CLAUSES (A) THROUGH (J), EACH OF THEIR AND THEIR AFFILIATES’ 

RESPECTIVE PREDECESSORS, SUCCESSORS, ASSIGNS, SUBSIDIARIES, 

AFFILIATES, CURRENT AND FORMER OFFICERS AND DIRECTORS, PRINCIPALS, 

EQUITY HOLDERS, MEMBERS, PARTNERS, MANAGERS, EMPLOYEES, AGENTS, 

ADVISORY BOARD MEMBERS, FINANCIAL ADVISORS, ATTORNEYS, 

ACCOUNTANTS, INVESTMENT BANKERS, CONSULTANTS, REPRESENTATIVES, 

MANAGEMENT COMPANIES, FUND ADVISORS, AND OTHER PROFESSIONALS, 

AND SUCH PERSONS’ RESPECTIVE HEIRS, EXECUTORS, ESTATES, AND 

NOMINEES, IN EACH CASE IN THEIR CAPACITY AS SUCH AND FOR WHICH 

SUCH ENTITY IS LEGALLY ENTITLED TO BIND SUCH PARTY TO THE RELEASES 

CONTAINED IN THE PLAN AND UNDER APPLICABLE LAW; PROVIDED THAT AN 

ENTITY SHALL NOT BE A RELEASING PARTY IF IT FILES WITH THE 

BANKRUPTCY COURT AN OBJECTION TO THE PLAN THAT IS NOT 

CONSENSUALLY RESOLVED BEFORE CONFIRMATION OR SUPPORTS ANY SUCH 

OBJECTION OR OBJECTOR. THE RELEASES ARE AN INTEGRAL ELEMENT OF 

THE PLAN.

Based on the foregoing, the Debtors believe that the release, exculpation, and 

injunction provisions in the Plan are necessary and appropriate and meet the requisite legal 

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standard promulgated by the United States Court of Appeals for the Fifth Circuit. Moreover, the 

Debtors will present evidence at the Combined Hearing to demonstrate the basis for and propriety 

of the release and exculpation provisions. The release, exculpation, and injunction provisions are 

contained in Article IX of the Plan and Article XI of this Disclosure Statement.

M. When is the deadline to vote on the Plan?

The Voting Deadline is [March 28], 2024, at 4:00 p.m. (prevailing Central Time).

N. How do I vote on the Plan?

Detailed instructions regarding how to vote on the Plan are contained on the ballot 

distributed to holders of Claims that are entitled to vote on the Plan (the “Ballot”). For your vote 

to be counted, the Ballot containing your vote must be properly completed, executed, and delivered 

as directed so that it is actually received by the Debtors’ Notice and Claims Agent, Omni Agent 

Solutions, Inc. (“Omni”), on or before the Voting Deadline of [March 28], 2024, at 4:00 p.m. 

(prevailing Central Time). 

O. Why is the Bankruptcy Court holding a Combined Hearing?

Section 1128(a) of the Bankruptcy Code requires the Bankruptcy Code to hold a 

hearing on Confirmation of the Plan and recognizes that any party in interest may object to 

Confirmation of the Plan. The Debtors have requested that the Court hold the Combined Hearing 

on [April 1, 2024 at 9:30 a.m., prevailing Central Time]. All parties in interest will be served 

notice of the time, date, and location of the Combined Hearing once scheduled. The Combined 

Hearing may be adjourned from time to time without further notice. 

P. What is the purpose of the Combined Hearing?

The confirmation of a plan by a bankruptcy court binds the debtor, any person 

acquiring property under a plan, any creditor or equity interest holder of a debtor, and any other 

person or entity as may be ordered by the bankruptcy court in accordance with the applicable 

provisions of the Bankruptcy Code. Because the Debtors are liquidating, they are not entitled to a 

discharge of obligations pursuant to section 1141 of the Bankruptcy Code with regard to any 

Holders of Claims or Interests.

Q. Who do I contact if I have additional questions with respect to this Disclosure 

Statement or the Plan?

If you have any questions regarding this Disclosure Statement or the Plan, please 

contact the Debtors’ Notice and Claims Agent via one of the following methods:

By regular mail, hand delivery, or overnight mail at:

Impel Ballot Processing

c/o Omni Agent Solutions, Inc.

5955 De Soto Ave., Suite 100

Woodland Hills, CA 91367

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By electronic mail at:

impelinquiries@omniagnt.com

By telephone (US & Canada toll-free) at:

(888) 202-6183

or

By telephone (international) at:

(747) 288-6396

Copies of the Plan, this Disclosure Statement, and any other publicly filed 

documents in the Chapter 11 Cases are available upon written request to the Notice and Claims 

Agent at the address above or by downloading the documents from the Debtors’ restructuring 

website at https://omniagentsolutions.com/impel (free of charge) or via PACER at 

https://www.pacer.gov (for a fee) upon filing. 

R. Do the Debtors recommend voting in favor of the Plan?

Yes. The Debtors believe that the Plan provides for a larger distribution to the 

Debtors’ stakeholders than would otherwise result from any other available alternative. The 

Debtors believe that the Plan is in the best interest of the Debtors’ stakeholders, and that any 

alternatives (to the extent they exist) fail to realize or recognize the value inherent under the Plan. 

S. Who supports the Plan?

[The Plan is supported by the Debtors and the Non-Company Parties that have 

executed the PSA.]

ARTICLE II. 

OVERVIEW OF THE PLAN

RECOMMENDATION BY THE DEBTORS

It is the Debtors’ opinion that confirmation and implementation of the Plan is in the best interests 

of the Debtors’ Estates and their creditors. Therefore, the Debtors recommends that all creditors 

whose votes are being solicited submit a ballot to accept the Plan. 

A. Introduction

The following is a brief overview of certain material provisions of the Plan. This 

overview is qualified by reference to the provisions of the Plan, which is attached hereto as Exhibit 

A, and the exhibits thereto, as amended from time to time. In the event that any inconsistency or 

conflict exists between this Disclosure Statement and the Plan, the terms of the Plan will control. 

Confirmation of the Plan and the occurrence of the Effective Date are subject to certain conditions, 

which are summarized in Article X. There is no assurance that these conditions will be satisfied 

or waived. At the Combined Hearing, the Bankruptcy Court will confirm the Plan only if all of 

the applicable requirements of section 1129 of the Bankruptcy Code are met. Among the 

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requirements for confirmation of a chapter 11 plan are that the plan: (i) is accepted by the requisite 

holders of claims or interests in impaired classes under the plan; (ii) is in the “best interests” of 

each holder of a claim or interest in each impaired class under the plan; (iii) is feasible; and 

(iv) complies with the applicable provisions of the Bankruptcy Code. In this instance, only holders 

of Claims in Classes 3 and 4 are entitled to vote to accept or reject the Plan. Because Class 6 will 

receive no distributions under the Plan, that Class is deemed to reject the Plan. Because Classes 1 

and 2 are unimpaired, they are deemed to vote to accept the Plan. Claims in Class 5 will either be 

reinstated or cancelled and thus will either be unimpaired or impaired under the Plan, respectively. 

Pursuant to section 1126(f) and section 1126(g) of the Bankruptcy Code, Claims in Class 5 will 

thus either be deemed to accept or reject the Plan and, accordingly, are not entitled to vote on the 

Plan. See Article II.F.5. for a discussion of the Bankruptcy Code’s requirements for Plan 

Confirmation.

B. The Plan

The Debtors filed for chapter 11 bankruptcy protection on December 19, 2023 (the 

“Petition Date”). The Debtors have sold substantially all of their assets pursuant to section 363(f) 

of the Bankruptcy Code prior to confirmation of the Plan. Subsequent to confirmation, the Debtors 

intend to enter the next phase of these Chapter 11 Cases, which involves the (i) wind-down of the 

Debtors; and (ii) the liquidation and distribution of the Debtors’ remaining assets after the 

consummation of the Sale Transaction, if any. 

A chapter 11 bankruptcy case permits a debtor to resolve its affairs and distribute 

the proceeds of its estate pursuant to a confirmed chapter 11 plan. To that end, the Debtors have 

filed the Plan, the terms of which are more fully described herein, contemporaneously with the 

filing of this Disclosure Statement. The Plan contemplates a liquidation of the Debtors and their 

Estates and is therefore referred to as a “plan of liquidation.” The primary objective of the Plan is 

to maximize the value of recoveries to holders of Allowed Claims and to distribute all property of 

the Debtors’ Estates that is or becomes available for distribution in accordance with the 

Bankruptcy Code and Plan. The Debtors assert that the Plan accomplishes this objective and is in 

the best interests of their Estates, and therefore seek to confirm the Plan. The Plan classifies 

holders of Claims or Interests according to the type and nature of the holder’s Claim or Interest, 

as more fully described below.

The Plan designates the Classes of Claims against and Interests in the Debtors and 

specifies which Classes are: (1) Impaired or Unimpaired by the Plan; (2) entitled to vote to accept 

or reject the Plan in accordance with section 1126 of the Bankruptcy Code; or (3) deemed to accept 

or reject the Plan. Claims against the Debtors and Interests in the Debtors are classified in six (6) 

separate Classes, as described herein.

C. The Adequacy of This Disclosure Statement

Before soliciting acceptances of a proposed chapter 11 plan, section 1125 of the 

Bankruptcy Code requires a plan proponent to prepare a written disclosure statement containing 

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

an informed judgment regarding acceptance of the plan. The Debtors are providing this Disclosure 

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Statement in accordance with those requirements. This Disclosure Statement includes, without 

limitation, information about:

• the Plan, including a summary, the procedures for voting on the Plan and projected 

recoveries thereunder (Article II hereof);

• the statutory requirements for confirming the Plan (Article II.F. hereof);

• the Debtors’ organizational structures, business operations, and financial obligations 

(Article III hereof);

• the events leading to the filing of the Debtors’ Chapter 11 Cases (Article III hereof);

• the major events during the Chapter 11 Cases, including significant pleadings filed in the 

Debtors’ Chapter 11 Cases (Article III hereof);

• certain risk factors that holders of Claims should consider before voting to accept or reject 

the Plan (Article XIV hereof);

• the classification and treatment of Claims or Interests under the Plan, including 

identification of the holders of Claims entitled to vote on the Plan (Article V hereof);

• the means for implementation of the Plan, the provisions governing distributions to certain 

holders of Claims pursuant to the Plan, the procedures for resolving Disputed Claims and 

other significant aspects of the Plan (Article VI hereof);

• the releases contemplated by the Plan that are integral to the overall settlement of Claims 

pursuant to the Plan (Article XI hereof); and

• certain United States federal income tax consequences of the Plan (Article XV hereof).

D. Summary of Classes and Treatment of Claims or Interests

The classification of Claims or Interests, the estimated aggregate amount of Claims 

in each Class, and the amount and nature of distributions to holders of Claims or Interests in each 

Class are summarized in the table below. In accordance with section 1123(a)(1) of the Bankruptcy 

Code, Administrative Claims and Priority Tax Claims have not been classified for purposes of 

voting or receiving distributions. For a discussion of certain additional matters related to 

Administrative Claims and Priority Tax Claims, see Article II of the Plan.

Each amount designated in the table below as “Estimated Percentage Recovery” 

for each Class is the quotient of the estimated Cash or other assets to be distributed to holders of 

Allowed Claims in that Class, divided by the estimated aggregate amount of Allowed Claims in 

that Class. In determining those amounts, the Debtors have assumed that the Plan is consummated 

as described herein.

For a discussion of various factors that could materially affect the amount of assets 

to be distributed pursuant to the Plan, see Article XIV of this Disclosure Statement.

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SUMMARY OF ESTIMATED RECOVERIES

Class Claim/Interest Treatment of 

Claim/Interest

Projected 

Allowed 

Amount of 

Claims4

Estimated % 

Recovery 

Under Plan

Class 1 Other Secured Claims Unimpaired; 

Not Entitled to Vote 

(Deemed to Accept)

$[●] [●]%

Class 2 Other Priority Claims Unimpaired; 

Not Entitled to Vote 

(Deemed to Accept)

$[●] [●]%

Class 3 Prepetition Term Loan 

Claims

Impaired;

Entitled to Vote

$[●] [●]%

Class 4 General Unsecured 

Claims

Impaired;

Entitled to Vote

$[●] [●]%

Class 5 Intercompany Claims Impaired/Unimpaired;

Deemed to 

reject/Presumed to 

Accept

$[●] [●]%

Class 6 Existing Equity 

Interests

Impaired;

Not Entitled to Vote 

(Deemed to Reject)

[●] [●]%

E. Solicitation Package

The package of materials (the “Solicitation Package”) to be sent to holders of 

Claims on the Plan will contain: 

the Disclosure Statement (including the Plan and all other exhibits hereto); 

the notice of the Combined Hearing; 

an appropriate form of Ballot, together with detailed voting instructions and a preaddressed, postage pre-paid return envelope; and 

any additional documents that the Bankruptcy Court has ordered to be made 

available.

The Solicitation Package may also be obtained free of charge from Omni, the 

Debtors’ Bankruptcy Court-appointed claims and noticing agent (the “Notice and Claims Agent”) 

by: (1) visiting https://omniagentsolutions.com/impel; (2) emailing the Notice and Claims Agent

at impelinquiries@omniagnt.com; or (3) calling (888) 202-6183.

4 With respect to the Prepetition Term Loan Claims, amounts are not inclusive of any allowed accrued but unpaid 

interest, fees, or other expenses. 

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F. Voting and Confirmation of the Plan

The Debtors seek entry of an order with respect to the motion for Combined 

Hearing, which will, among other things, (1) conditionally approve this Disclosure Statement 

pursuant to section 1125 of the Bankruptcy Code and (2) establish Plan voting tabulation 

procedures, which include certain vote tabulation rules that temporarily allow or disallow Claims 

for voting purposes (the “Tabulation Rules”) pursuant to section 502 of the Bankruptcy Code and 

Bankruptcy Rule 3018.

1. Certain Factors to be Considered Prior to Voting

There are a variety of factors that all holders of Claims entitled to vote on the Plan 

should consider prior to voting to accept or reject the Plan. These factors may impact recoveries 

under the Plan, including:

• the financial information contained in this Disclosure Statement has not been audited and 

is based on an analysis of data available at the time of the preparation of the Plan and this 

Disclosure Statement;

• although the Debtors assert that the Plan complies with all applicable provisions of the 

Bankruptcy Code, the Debtors can neither assure such compliance nor that the Bankruptcy 

Court will confirm the Plan; and 

• any delays of either Confirmation or Consummation could result in, among other things, 

increased Administrative Claims or Professional Compensation Claims, which would 

likely reduce the recoveries to the holders of Claims.

2. Voting Procedures and Requirements

Pursuant to the Bankruptcy Code, only classes of Claims against or Interests in a 

debtor that are “impaired” under the terms of a plan of liquidation or reorganization are entitled to 

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

attaching to the claims or interests of that class are modified, other than by curing defaults and 

reinstating maturity. Classes of Claims or Interests that are not impaired are not entitled to vote 

on the Plan and are conclusively presumed to have accepted the Plan. In addition, Classes of 

Claims or Interests that do not receive distributions under the Plan are not entitled to vote on the 

Plan and are deemed to have rejected the Plan. The classification of Claims or Interests is 

summarized, together with an indication of whether each Class of Claims or Interests is impaired 

or unimpaired, in Article II of the Disclosure Statement. [February 23], 2024 shall serve as the 

voting record date for administrative convenience, provided that any creditor who later files a valid 

and timely Proof of Claim is provided the appropriate Solicitation Package and right to vote or 

opt-out, as applicable, on a rolling basis (the “Voting Record Date”). The Voting Record Date 

shall be used for the purpose of determining which Holders of Filed or scheduled Claims in Classes 

3 and 4 are entitled to receive a Solicitation Package.

Voting on the Plan by each Holder of a Claim in Classes 3 and 4 is important. 

Please carefully follow all of the instructions contained on the Ballot(s) provided to you. All 

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Ballots must be completed and returned in accordance with the instructions provided. To be 

counted, your ballot or ballots must be received by 4:00 p.m., prevailing Central Time, on [March 

28], 2024 (the “Voting Deadline”) at the address set forth on the preaddressed envelope provided 

to you.

If you are entitled to vote and you did not receive a Ballot, received a damaged 

Ballot or lost your Ballot, please call or email the Debtors’ Notice and Claims Agent, at (833) 202-

6183. Also, this Disclosure Statement, the Plan and all of the related exhibits and schedules are 

available, without charge, to any party in interest at https://omniagentsolutions.com/impel.

Ballots cannot be transmitted orally, by email or by facsimile. Accordingly, you 

are urged to return your signed and completed Ballot, by hand delivery, overnight service, regular 

U.S. mail, or electronically via the Voting Agent’s e-Ballot portal promptly, so that it is received 

by the Voting Agent before the Voting Deadline.

3. Plan Objection Deadline

The deadline to file objections to the Confirmation of the Plan (the “Confirmation 

Objections”) is [March 27], 2024, at 4:00 p.m. (prevailing Central Time) (the “Objection

Deadline”). All Confirmation Objections must be in writing and must specify in detail the name 

and address of the objector, all grounds for the objection and the amount of the Claim or Interest 

held by the objector. Any Confirmation Objection must be filed with the Bankruptcy Court and 

served on the Debtors, any official committee of unsecured creditors appointed in the Chapter 11 

Cases (if any), and the Consenting Stakeholders on or before the Objection Deadline.

4. Combined Hearing

Section 1128(a) of the Bankruptcy Code requires the Bankruptcy Court, after 

notice, to hold a hearing on confirmation of the Plan. The Debtors are requesting that the 

Bankruptcy Court conditionally approve this Disclosure Statement and set a Combined Hearing to 

approve this Disclosure Statement on a final basis and confirm the Plan. The Combined Hearing 

may, however, be continued or adjourned from time to time without further notice to parties in 

interest other than an adjournment announced in open court or a notice of adjournment Filed with 

the Bankruptcy Court and served in accordance with the Bankruptcy Rules. Subject to section 

1127 of the Bankruptcy Code [and the PSA], the Plan may be modified, if necessary, prior to, 

during, or as a result of the Combined Hearing without further notice to parties in interest.

5. Confirmation

To confirm the Plan, the Bankruptcy Code requires that the Bankruptcy Court make 

a series of findings concerning the Plan and the Debtors, including that:5

• the Plan has classified Claims and Interests in a permissible manner;

5 The descriptions contained herein are only a summary of certain confirmation requirements; they are not exhaustive 

of all confirmation requirements and should not be construed as such.

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• the Plan complies with the applicable provisions of the Bankruptcy Code;

• the Debtors have complied with the applicable provisions of the Bankruptcy Code;

• the Debtors, as proponents of the Plan, have proposed the Plan in good faith and not by any 

means forbidden by law;

• the disclosure required by section 1125 of the Bankruptcy Code has been made;

• the Plan that has been accepted by the requisite votes, except to the extent that cramdown 

is available under section 1129(b) of the Bankruptcy Code, of creditors and equity interest 

holders the Plan is feasible;

• all U.S. Trustee Fees due and owing have been paid or the Plan provides for the payment 

thereof on the Effective Date; and 

• the Plan is in the “best interests” of all holders of Claims or Interests in an impaired Class 

by providing to those holders on account of their Claims or Interests property of a value, 

as of the Effective Date, that is not less than the amount that each holder would receive or 

retain in a chapter 7 liquidation, unless each holder of a Claim or Interest in that Class has 

accepted the Plan.

6. Acceptance

A plan is accepted by an impaired class of claims if holders of at least two-thirds in 

dollar amount and a majority in number of claims of that class vote to accept the plan. Only those 

holders of claims who actually vote (and are entitled to vote) to accept or to reject a plan count in 

this tabulation.

7. Feasibility

Section 1129(a)(11) of the Bankruptcy Code requires that confirmation of a plan 

not be likely to be followed by the liquidation, or the need for further financial reorganization, of 

the debtor or any successor to the debtor (unless liquidation or reorganization is proposed in the 

Plan). Because the Plan proposes a liquidation of all of the Debtors’ assets, for purposes of this 

test the Debtors have analyzed the ability of the Plan Administrator to meet its obligations under 

the Plan. Based on the Debtors’ analysis, including the information contained in Exhibit B

regarding recoveries available to holders of Allowed Claims under the Plan, the Plan Administrator 

will have sufficient assets to accomplish its tasks under the Plan. Therefore, the Debtors have 

determined that their liquidation pursuant to the Plan will meet the feasibility requirements of the 

Bankruptcy Code. 

8. Best Interests Test; Liquidation Analysis

Notwithstanding acceptance of the Plan by each impaired Class, to confirm the 

Plan, the Bankruptcy Court must determine that the Plan is in the best interests of each holder of a 

Claim or Interest in any impaired Class who has not voted to accept the Plan. Accordingly, if an 

impaired Class does not unanimously accept the Plan, the “best interests” test requires that the 

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Bankruptcy Court find that the Plan provides to each member of that impaired Class a recovery on 

account of the holder’s Claim or Interest that has a value, as of the Effective Date, at least equal to 

the value of the distribution that the holder would receive if the Debtors were liquidated under 

chapter 7 of the Bankruptcy Code on the Effective Date.

To address the best interests test, subsequent to the Filing of this Disclosure 

Statement, the Debtors will prepare and File the Liquidation Analysis as part of the Plan 

Supplement. 

Because the Plan proposes a liquidation of all the Debtors’ assets, the Debtors have 

analyzed factors that will impact recoveries (the “Recoveries”) available to creditors in each 

scenario. These factors include professionals’ fees and expenses, asset disposition expenses, 

applicable taxes, potential Claims arising during the pendency of the Plan or chapter 7 cases and 

trustee fees and expenses. The Liquidation Analysis will include a summary of the Recoveries 

under the Plan and in a hypothetical chapter 7 liquidation.

In summary, the Debtors will demonstrate in the Liquidation Analysis that a chapter 

7 liquidation would result in diminution in the Recoveries to be realized by holders of Allowed 

Claims, as compared to the proposed distributions under the Plan. Consequently, the Debtors will 

demonstrate in the Liquidation Analysis that the Plan will provide a greater ultimate return to 

holders of Allowed Claims than would a chapter 7 liquidation of the Debtors. 

9. Compliance with Applicable Provisions of the Bankruptcy Code

Section 1129(a)(1) of the Bankruptcy Code requires that the Plan comply with the 

applicable provisions of the Bankruptcy Code. The Debtors considered each of these issues in the 

development of the Plan and have determined that the Plan complies with all provisions of the 

Bankruptcy Code.

10. Alternatives to Confirmation and Consummation of the Plan

The Debtors evaluated alternatives to the Plan, including alternative structures and 

terms of the Plan. While the Debtors concluded that the Plan is the best alternative and will 

maximize recoveries by Holders of Allowed Claims, if the Plan is not confirmed, the Debtors, or 

(subject to the Debtors’ exclusive periods under the Bankruptcy Code to file and solicit 

acceptances of a plan or plans) any other party in interest in the Chapter 11 Cases could attempt to 

formulate and propose a different plan. Further, if no plan under chapter 11 of the Bankruptcy 

Code can be confirmed, the Chapter 11 Cases may be converted to chapter 7 cases. In liquidation 

cases under chapter 7 of the Bankruptcy Code, a trustee would be appointed to liquidate the 

remaining assets of the Debtors and distribute proceeds to creditors. The proceeds of the 

liquidation would be distributed to the respective creditors of the Debtors in accordance with the 

priorities established by the Bankruptcy Code. For further discussion of the potential impact on 

the Debtors of the conversion of the Chapter 11 Cases to chapter 7 liquidation, see Article XIV.A

of this Disclosure Statement. The Debtors have determined that confirmation and Consummation 

of the Plan is preferable to the available alternatives.

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G. Releases by the Debtors Set Forth in the Plan

Article IX of the Plan provides that each Released Party is deemed released by the 

Debtors and their Estate from any and all claims and Causes of Action except as set forth therein.

The Debtors have determined that applicable law and the facts support those releases and that the 

Bankruptcy Court can and should approve them.

ARTICLE III.

THE DEBTORS’ CORPORATE HISTORY, STRUCTURE, AND BUSINESS 

OVERVIEW

A. Corporate History

Impel Pharmaceuticals Inc. (“Impel”) was founded in 2008 as a pharmaceutical

company in Washington, to pursue the development and research of pharmacokinetics and their 

application to treatments of central nervous system diseases. Impel is an innovator in acute 

migraine treatment space, with a focus on drugs and delivery mechanisms targeting the upper nasal 

cavity for effective, flexible treatment. Impel is incorporated under the laws of the State of 

Delaware, and its subsidiary, Impel NeuroPharma Australia Pty Ltd., is organized under the laws 

of Australia. The subsidiary historically supported the parent company’s clinical trials, as recently 

as 2019.

Prior to April 2021, Impel was privately owned. In April 2021, Impel conducted 

an initial public offering and began trading on the Nasdaq Global Select Market.

Impel’s common stock was publicly traded and listed on the Nasdaq Stock Market 

(“Nasdaq”) under the symbol “IMPLQ,” until the trading of Impel’s stock was suspended on

December 18, 2023, and later delisted, effective as of January 8, 2024. Impel’s shares are currently 

traded on the over the counter on the OTC Pink market.

B. Business Operations

As of the Petition Date, the Debtors were one of only a handful of publicly traded 

companies focused on development and commercialization of treatments of central nervous system 

diseases, and specifically the acute treatment of migraines, in the United States. Combining 

product efficacy and safety, time to market, price, reduction of adverse side effects experienced, 

and convenience of administration and drug delivery created an opportunity for Impel to develop 

a strong market share for therapies targeting migraines. Impel’s market success was built on its 

valuable assets, including Trudhesa, its marquee migraine drug, and its proprietary Precision 

Olfactory Delivery device used to administer Trudhesa. Impel built its business around such

intellectual property, which it combined with a worldwide supply chain that can support at least 

1.5 million doses a year. Impel’s valuable patent portfolio contains 19 U.S.-issued patents and 89 

patents issued in non-U.S. jurisdictions. Impel also has 66 additional patent applications pending. 

Impel’s intellectual property is rounded out by other brand rights, including trademarks protecting 

its drug and devices in the market.

As of the Petition Date, the Debtors employed approximately 36 employees, of 

which nearly all are full- or part-time salaried workers. In addition, as of the Petition Date, the 

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Debtors supplement their employee workforce with an additional 2 independent contractors and 

consultants. None of the Debtors’ employees are represented by a labor union or covered by 

collective bargaining agreements. 

Further details regarding the Debtors’ business and operations may be found in the 

Declaration of Brandon Smith, Chief Restructuring Officer of the Debtors, in Support of the 

Debtors’ Chapter 11 Proceedings (the “First Day Declaration”) [Docket No. 15].

C. The Debtors’ Prepetition Capital Structure

As of the Petition Date, Impel had approximately $121 million in funded, secured 

debt obligations.

1. The Revenue Interest Financing Agreement

On March 17, 2022, Impel entered into that certain Revenue Interest Financing 

Agreement and related security agreements (the “RIFA”) with certain purchasers party thereto 

(collectively, the “Revenue Purchasers”) in the original principal amount of $50 million in 

exchange for tiered royalty payments on worldwide net sales from Trudhesa, as follows: 7.75% on 

annual United States net sales up to $150.0 million; 4.75% on annual United States net sales 

between $150 million and $300 million; 0.75% on annual United States net sales greater than 

$300.0 million; and 10% of any upfront payments, milestone payments and royalties received by 

Impel from licensing or partnerships relating to Trudhesa outside the United States.

The RIFA was collateralized by a perfected security interest in (i) accounts 

receivable arising from the net sales of Trudhesa and (ii) intellectual property that was claiming or 

covering Trudhesa, or any method of using, making, or manufacturing Trudhesa, including 

regulatory approvals, clinical data, and all other Trudhesa assets. The RIFA had no guarantors or 

other obligors other than Impel. 

The RIFA was terminated on September 5, 2023 in connection with the Second 

Senior Secured Credit Agreement Amendment (defined below). 

2. The Senior Secured Loans

On March 17, 2022, Impel entered into that certain Credit Agreement and Guaranty 

(as from time to time amended and restated, the “Senior Secured Credit Agreement” and the loans 

made thereunder, the “Senior Secured Loans”) and related security agreements (together with the 

Senior Secured Credit Agreement, the “Senior Credit Documents”), dated as of March 17, 2022, 

with Oaktree as administrative agent, and the lenders party thereto (collectively, the “Senior 

Secured Lenders”) in the original principal amount of $50.0 million. The Senior Secured Loans 

mature on March 17, 2027, and bear interest at a rate of the Secured Overnight Financing Rate 

(“SOFR”) + 10.75% (with a SOFR floor of 1.00%). Under the Senior Credit Documents, Impel 

is required to make quarterly interest-only payments, with the remaining balance of principal and 

interest due on maturity. Under the Senior Credit Documents, Impel is subject to a minimum 

liquidity requirement of $12.5 million unrestricted cash balance at all times (the “Minimum 

Liquidity Covenant”). 

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The Senior Secured Loans are secured by substantially all real, personal, and mixed 

property of Impel, including equity interests. The Senior Secured Loans have no guarantors or 

other obligors other than Impel. 

On July 19, 2023, Impel provided notice to Oaktree that Impel was in breach of the 

Minimum Liquidity Covenant. Impel’s breach of the Minimum Liquidity Covenant constituted 

an event of default under the Senior Secured Credit Agreement and triggered, among other things, 

the application of a higher default rate of interest on the Senior Secured Loans.

3. Amendments to the RIFA and Senior Secured Credit Documents

Subsequently, Impel, Oaktree, the Revenue Purchasers, and the Senior Secured 

Lenders entered into two amendments to both the Senior Secured Credit Agreement and the RIFA, 

the second of which resulted in the termination of the RIFA. After the RIFA was terminated, 

Impel, Oaktree, and the Senior Secured Lenders entered into two additional amendments to the 

Senior Secured Credit Agreement and four letter agreements granting Impel certain relief and 

modifying the terms of the Senior Secured Credit Agreement.6

Pursuant to the First Amendment to Credit Agreement and Guaranty and Revenue 

Interest Financing Agreement, dated as of August 21, 2023 (the “First Senior Secured Credit

Agreement Amendment”), the Senior Secured Lenders provided an incremental $12 million of 

aggregate principal amount of Senior Secured Loans, of which (i) $3 million consisted of new 

money Senior Secured Term Loans and (ii) $9 million was made pursuant to an exchange of $9 

million of obligations owed to the Revenue Purchasers under the RIFA for $9 million of Senior 

Secured Loans. Under the First Senior Secured Credit Agreement Amendment, the parties agreed 

that the Default Rate (as defined in the Senior Secured Credit Agreement) would no longer apply 

and the non-default interest rate under the Senior Secured Credit Agreement would be increased 

to SOFR + 10.75%. 

On September 5, 2023, Impel entered into the Second Amendment to Credit 

Agreement and Guaranty and Revenue Interest Financing Agreement with Oaktree, the Revenue 

Purchasers, and the Senior Secured Lenders (the “Second Senior Secured Credit Agreement 

Amendment”). In connection with the Second Senior Secured Credit Agreement Amendment: 

• The Senior Secured Lenders agreed to provide Impel with up to $20 million of Tranche B 

Term Loans (as defined in the Senior Secured Credit Agreement) under the Senior Secured 

Credit Agreement; 

• Impel drew down $4.5 million of Tranche B Term Loans, which amount was placed into a 

blocked account, to be released to Impel upon Impel’s board of directors (the “Board”) 

notifying Oaktree that Impel, in good faith, expected to commence proceedings under 

6 Impel, Oaktree, and the Senior Secured Lenders entered into a letter agreement dated as of October 19, 2023, a letter 

agreement dated as of November 7, 2023, a letter agreement dated as of December 14, 2023 and a letter agreement 

dated as of December 16, 2023.

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chapter 11 of the Bankruptcy Code and required such amounts to finance preparations for 

such chapter 11 filing (the “Blocked Account”);

• Certain Senior Secured Lenders exchanged $3.0 million of previously-existing Senior 

Secured Loans on a dollar-for-dollar basis for Tranche B Term Loans;

• The Senior Secured Lenders exchanged (i) all of the then-accrued $51.4 million of Senior 

Secured Loans (inclusive of interest) attributable to the initial funding under the Senior 

Secured Credit Agreement and (ii) $9.1 million of Senior Secured Loans (inclusive of 

interest) made in connection with the First Senior Secured Credit Agreement Amendment, 

in each case on a dollar-for-dollar basis for Tranche A Term Loans (as defined in the Senior 

Secured Credit Agreement); 

• The Revenue Purchasers exchanged $36.0 million of obligations under the RIFA on a 

dollar-for-dollar basis for Tranche A Term Loans, and the RIFA, including all remaining 

obligations of Impel as well as any rights of the Revenue Purchasers to future revenue 

interest payments, was terminated; 

• Oaktree and the Senior Secured Lenders agreed to forbear from remedies with respect to 

Impel’s failure to comply with the Minimum Liquidity Covenant until December 31, 2023, 

unless earlier terminated under the terms of the Senior Secured Credit Agreement 

(the “Forbearance Period”) in exchange for Impel’s payment to the Senior Secured Lenders 

of an in-kind $5 million forbearance fee in the form of Tranche A Term Loans; 

• The Senior Secured Credit Agreement was amended to permit all interest on the Senior 

Secured Loans to be paid in kind through the Forbearance Period; and

• The as-amended Senior Secured Credit Agreement provided for up to an additional $12.5 

million of Tranche B Loans to be made available to Impel over the remainder of 2023, 

subject to the satisfaction of certain strategic milestones and covenants (the “Prepetition 

Milestones” and the Senior Secured Loans to be made in connection therewith 

the “Milestone Payments”). 

On October 2, 2023, Impel entered into that certain Third Amendment to Credit 

Agreement and Guaranty with Oaktree and the Senior Secured Lenders (the “Third Senior Secured 

Credit Agreement Amendment”). Pursuant to the Third Senior Secured Credit Agreement 

Amendment, Oaktree and the Senior Secured Lenders waived certain events of default under the 

Senior Secured Credit Agreement and modified the terms of the Prepetition Milestones, including 

to permit $5 million of Milestone Payments to be made concurrently therewith, notwithstanding 

such events of default, and to modify the terms of certain later Prepetition Milestones. 

On October 19, 2023, Impel entered into that certain letter agreement with Oaktree 

and the Senior Secured Lenders (the “October 19 Letter Agreement”). Pursuant to the October 19 

Letter Agreement, Impel, Oaktree and the Senior Secured Lenders agreed to modify terms of the 

Senior Secured Credit Agreement relating to a requirement that Impel cause an independent 

director to be appointed to the Board.

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On November 3, 2023, Impel entered into that certain Fourth Amendment to Credit 

Agreement and Guaranty with Oaktree and the Senior Secured Lenders (the “Fourth Senior 

Secured Credit Agreement Amendment”). Pursuant to the Fourth Senior Secured Credit 

Agreement Amendment, the timing of certain Prepetition Milestones was modified.

On November 7, 2023, Impel entered into that certain letter agreement with Oaktree 

and the Senior Secured Lenders (the “November 7 Letter Agreement”). Pursuant to the 

November 7 Letter Agreement, Impel, Oaktree and the Senior Secured Lenders agreed to modify 

certain terms of the Senior Secured Credit Agreement restricting Impel from making payments to 

any directors, officers, equityholders or other persons who are “insiders” pursuant to 

Section 101(31) of the Bankruptcy Code or any affiliates thereof.

On December 14, 2023, Impel entered into that certain letter agreement with 

Oaktree and the Senior Secured Lenders (the “December 14 Letter Agreement”). Pursuant to the 

December 14 Letter Agreement, Impel, Oaktree and the Senior Secured Lenders agreed to further 

modify certain terms of the Senior Secured Credit Agreement restricting Impel from making 

payments to any directors, officers, equityholders or other persons who are “insiders” pursuant to 

Section 101(31) of the Bankruptcy Code or any affiliates thereof.

On December 16, 2023, Impel entered into that certain letter agreement with 

Oaktree and the Senior Secured Lenders (the “December 16 Letter Agreement and, together with 

the First Senior Secured Credit Agreement Amendment, Second Senior Secured Credit Agreement 

Amendment, Third Senior Secured Credit Agreement Amendment, October 19 Letter Agreement, 

Fourth Senior Secured Credit Agreement Amendment, November 7 Letter Agreement, and 

December 14 Letter Agreement, the “Senior Secured Credit Agreement Amendments”). Pursuant 

to the December 16 Letter Agreement, Impel, Oaktree and the Senior Secured Lenders agreed that 

the Senior Secured Lenders would fund an additional $2.5 million in Tranche B Term Loans 

notwithstanding (i) the occurrence and continuation of certain Events of Default (as defined in the 

Senior Secured Credit Agreement) and (ii) the non-satisfaction of certain conditions precedent to 

the availability of such Tranche B Term Loans. 

4. Secured Debt as of the Petition Date

As of the Petition Date, the amount outstanding under the Senior Secured Credit 

Agreement was approximately $127 million, as follows: 

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Principal Interest Total

Tranche A $101,505,257.60 $4,892,109.99 $106,397,367.59

Tranche B $20,020,022.95 $609,073.11 $20,629,096.06

Total $121,525,280.55 $5,501,183.10 $127,026,463.65

5. Trade and Related Debt

As of the Petition Date, the Debtors estimate that they had approximately $2.1

million in obligations to trade and other general unsecured creditors. These amounts consist 

primarily of accounts payable to various trade creditors and other third-party service providers as 

of the Petition Date.

6. Net Operating Losses and Research and Development Credits

Impel has incurred significant net operating losses (“NOLs”) and research and 

development credits (“R&D Credits”) since its inception. As of December 31, 2022, Impel had 

generated federal NOLs of $271.3 million and $153.4 million of state NOLs. Impel also had $8.4 

million of R&D Credits. Further, Impel estimates that they may generate additional NOLs and 

R&D Credits in the 2023 tax year. The NOLs and R&D Credits are potentially of significant value 

as they may be used, under certain circumstances, to offset future taxable income or federal tax 

liabilities in future years. 

7. Equity

Impel’s equity is publicly traded over the counter, with Impel authorized to issue 

10 million shares of preferred stock and 300 million shares of common stock. As of December 

14, 2023, Impel had no preferred shares issued or outstanding and approximately 23.9 million 

shares of common stock issued and outstanding.

D. Additional Compensation Plans

The Debtors maintain certain employee programs to motivate, reward, and retain 

certain of their non-insider Employees and consultants (the “Additional Compensation Plans”).

The Debtors offer every full-time employee, both exempt and non-exempt, the benefit of equity 

ownership in the company through stock option grants (the “Stock-Based Compensation”). Stock 

options granted generally become exercisable over a four-year period from the grant date, and

options generally expire 10 years after the grant date. As of the Petition Date, all stock options 

have strike prices significantly below the current publicly traded share price deeming them almost 

worthless. 

As of September 30, 2023, the Company’s equity incentive plans authorized a total 

of 7,776,500 shares, of which 3,285,815 shares were available for future grant, and 4,490,685 

shares are outstanding. As of the Petition Date, none of the shares in the equity incentive plan 

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could be exercised for a profit. The Debtors will not issue any Stock-Based Compensation during 

these Chapter 11 Cases.

Further, the Debtors’ sales representatives are eligible for sales incentive bonuses, 

or commissions, that are calculated based on sales numbers of each employee and paid quarterly 

(the “Commissions”). The sales representatives are paid Commissions based on their sales each 

month paid in arrears. The Debtors estimate that, as of the Petition Date, they pay approximately 

$170,000 monthly on account of the Commissions. As of the Petition Date, the Debtors estimate 

they owe approximately $225,000 on account of Commissions, which includes amounts due for 

November and an estimate for the accrued amount for December through the Petition Date. The 

Debtors have received authorization from the Bankruptcy Court [Docket No. 50] to pay the 

Commissions in the ordinary course and consistent with past practice during the administration of 

these chapter 11 cases.

E. Litigation

The Debtors are not currently party to or otherwise involved any litigation.

F. Events Leading to the Chapter 11 Filings

Impel launched Trudhesa in October of 2021 with a lean sales team, and by the end 

of the fourth quarter of 2021, had secured the key managed care contracts needed to support the 

launch of Trudhesa and bring it to market. Initial uptake of Trudhesa by prescribing physicians 

and patients was promising, and Impel met its sales guidance for the fourth quarter of 2021.

Following the initial aggressive growth of Trudhesa, Impel saw the effort needed 

to partner with new potential prescribers of Trudhesa begin to increase and sales growth slowed. 

However, following an increase in the size of Impel’s sales team in the third quarter of 2022, sales 

growth picked back up in the fourth quarter of 2022.

1. Declining Liquidity and a Failed Sale

Since its inception, Impel has incurred losses from operations and generated 

negative cash flows from operating activities. In 2022, Impel achieved 55% of its corporate sales 

goals and the trend continued into the first half of 2023. Impel has therefore been dependent on 

its ability to raise additional capital to continue business operations. 

From Impel’s inception, Impel consummated a number of successful capital raise 

efforts, including: 

• Initial Public Offering: In April 2021, Impel issued and sold approximately 

5.33 million shares of common stock through its initial public offering, which 

brought in net proceeds of approximately $72.0 million.

• Follow-On Public Offering: In September 2021, Impel issued and sold 

approximately 3.45 million shares of common stock through a follow-on public 

offering, which brought in net proceeds of approximately $48.3 million. 

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From its inception, Impel has raised a total of $405.3 million in proceeds from 

issuance of its common stock, proceeds pursuant to the RIFA, sale and issuance of redeemable 

convertible preferred stock, convertible notes, debt, and warrants as of September 30, 2023. 

Beginning in August 2022, Impel began talks with a potential strategic purchaser 

of Impel’s assets. Those discussions continued until approximately January 2023 and the potential 

acquirer submitted a letter of intent to acquire Impel. However, as discussions continued, the 

potential acquirer terminated discussions and the transaction did not close. 

2. Unsuccessful Investment Outreach

At the time the contemplated sale collapsed, Impel had less than twelve months of 

cash on hand. Facing diminishing liquidity, the Board determined to pursue an additional round 

of financing to meet Impel’s liquidity needs and worked with Cowen and Company, LLC (“TD 

Cowen”), its investment banker from previous financings, to assist with a potential public offering 

in September 2022. Impel and TD Cowen continued to reach out to potential investors to 

determine the feasibility of an equity transaction into December 2022. 

In first quarter of 2023, after extensive discussions and consideration of several 

presentations from Impel’s advisors and TD Cowen, the Board determined that it was in the best 

interest of Impel to continue investing in sales and marketing efforts to support growth of Trudhesa 

and demonstrate the attractiveness of the product to potential financing sources and strategic 

partners. 

In June 2023, the Board determined to again pursue an equity financing transaction 

and engaged SVB Securities LLC (“Leerink”). Leerink developed a targeted investor list, prepared 

marketing materials, and conducted extensive outreach to targeted investors. Leerink progressed 

the financing search with a number of interested parties, and Leerink reported that it had received 

contingent orders from a number of interested parties, but all of them were dependent on finding 

a “lead” investor. After multiple rounds of diligence with potential lead investors, ultimately no 

investor agreed to the role and, the Debtors were ultimately unable to secure incremental financing. 

3. February 2023 Reduction in Force

In mid-2022, Impel decided to investigate potential cost cutting measures to 

preserve its liquidity. On February 2, 2023, Impel announced its decision to implement an 

operational streamlining plan that would result in a reduction in force of approximately 16% of 

Impel’s workforce at the time (the “RIF”). The goal of the RIF was to reprioritize Impel’s spending 

to focus on promoting Trudhesa, and as a result, the Board made the decision to halt research and 

development efforts on INP105. The Board approved the RIF following extensive discussions on 

February 14, 2023.

As a result of the RIF, Impel incurred approximately $1 million in severance 

obligations and payroll taxes and reduced annual employee salary costs by approximately $3.6 

million.

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4. Board Considers Strategic Alternatives and Hires Advisors

In July 2023, Impel was not in compliance with the Minimum Liquidity Covenant 

of its Senior Credit Documents. 

In July 2023, the Board met to consider next steps to address the ongoing liquidity 

crisis. In August 2023, Impel’s cash flow forecast indicated that its liquidity runway would run 

out by the first week of September 2023. The Board instructed management to engage advisors to 

help review and evaluate various strategic alternatives available to Impel so that Impel could 

maintain its optionality while preserving assets and maximizing value for creditors and other 

parties in interest.

On August 7, 2023, the Board engaged Teneo Capital LLC (“Teneo”), to serve as 

financial advisor to Impel. On August 16, 2023, Impel engaged Sidley Austin LLP (“Sidley”), as 

legal counsel, to assist it in evaluation of potential restructuring transactions, including through a 

section 363 sale, strategic alternative process, or the amendment of its existing debt. On September 

15, 2023, the Board approved the retention of Moelis & Company LLC (“Moelis”), as investment 

banker, to assist in marketing the Debtors’ assets and soliciting potential purchasers. 

Given the Debtors’ liquidity position, the Board tasked Impel’s management team 

and advisors with the evaluation of all strategic alternatives, including potential bridge financing, 

alternative capital raises, and a sale of the Debtors’ assets so that the Debtors could maintain 

optionality while preserving assets and maximizing value for creditors and other parties in 

interests.

5. Prepetition Sale Process

Beginning in September 2023, Impel—through Moelis—began canvassing the 

market for capital raise opportunities and developed a marketing strategy. Additionally, the 

Debtors issued a press release on October 5, 2023 announcing the initiation of an exploration of 

strategic alternatives, including a potential sale of the Debtors’ assets (in part or in whole), a 

merger, or other strategic transaction. Shortly after Moelis was engaged, they contacted or 

received inbound interest from approximately 93 strategic and financial parties regarding a 

potential transaction, including certain of Impel’s existing lenders. Following this display of 

interest, Moelis held calls or exchanged emails with 84 of the interested parties and ultimately 

granted data room access to approximately 22 of those interested. Moelis then conducted 

functional area presentations with 15 parties in connection with this process. 

Ultimately, Impel received four non-binding offers (the “NBOs”). All of the NBOs

required the transaction to be completed pursuant to sections 105, 363 and 365 of the Bankruptcy 

Code.

6. Teneo Implements Cost Cutting Measures to Preserve Assets

Simultaneously with the prepetition marketing and sale process, Impel engaged 

Teneo to evaluate its financial situation and recommend cost cutting measures that would preserve 

the company’s liquidity while the strategic alternative process was underway. From August 2023 

through the Petition Date, Teneo and management repeatedly met to establish an understanding 

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of the major categories of expenses, Impel’s upcoming payables, and the consequences of 

deferring payment to some or all of Impel’s vendors. During this time, Impel continued to engage 

with its vendors to maximize the liquidity available. 

Upon its retention in August 2023, Teneo developed a cash forecasting tool that 

was updated on a weekly basis and reported to the company as well as Oaktree every week. Teneo, 

along with management, also began presenting to key stakeholders with regular updates on Impel’s 

liquidity management recommendations. Impel then implemented a number of measures to 

preserve liquidity and minimize unnecessary disbursements while maintaining flexibility as it 

explored various strategic alternatives. Teneo also regularly attended Impel Board meetings to 

report on liquidity in the context of various strategic alternatives discussions.

7. Engagement with Key Stakeholders

From August 2023 to the Petition Date, Impel, including its management team and 

advisors evaluated various strategic options, including both in-court and out-of-court solutions. In 

sum, Impel evaluated a number of potential options, including: (a) a chapter 11 reorganization 

transaction proposal and (b) a section 363 sale process with the Stalking Horse Purchaser (as 

defined below). Ultimately, the Debtors were able to successfully negotiate a sale process with 

the Stalking Horse Purchaser and their key stakeholders, including the Senior Secured Lenders, 

who support a sale of the Debtors’ assets and a prompt confirmation of the Plan, as detailed below.

a. Senior Credit Agreement Amendments

In July 2023, Impel proactively began negotiating with Oaktree and the Senior 

Secured Lenders to obtain incremental financing. As a result of these negotiations, Impel was able 

to secure incremental financing to extend its liquidity runway to support the sales process via the 

Secured Senior Credit Agreement Amendments. Collectively, the Senior Secured Credit 

Agreement Amendments provided Impel with up to an incremental $20 million of runway with 

which to evaluate its strategic alternatives. 

In addition to these incremental financing discussions, Impel engaged with the 

Senior Secured Lenders regarding potential long term solutions, but by early December 2023, 

Impel had still not received an acceptable transaction proposal from the Senior Secured Lenders 

that would provide a long term solution.

8. Further Reductions In Force

On August 25, 2023, Impel announced the second reduction in force, resulting in 

approximately $130,000 in severance, PTO and payroll taxes and reduced annual employee salary 

costs by approximately $2.6 million.

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On December 13, 2023, Impel announced the third reduction in force, resulting in 

approximately $180,000 in severance costs and reduced annual employee salary costs by 

approximately $7.2 million.7

9. Nasdaq Delisting

On April 17, 2023, Impel received two notices of non-compliance from Nasdaq 

indicating that it was not in compliance because, for the preceding 30 days, the Market Value of 

Publicly-held Securities was below the minimum $15 million required for continued listing on 

Nasdaq and Impel failed to maintain a minimum Market Value of Listed Securities of $50 million. 

The letters indicated that Impel had until October 9, 2023, to regain compliance. 

On October 10, 2023, Impel received a letter indicating that it had not regained 

compliance, and its common stock would be suspended from Nasdaq on October 19, 2023, unless 

Impel requested an appeal. Impel submitted an appeal to the Nasdaq hearings panel on 

October 16, 2023, which stayed such delisting until the hearing could occur. This hearing was 

scheduled for December 14, 2023. However, due to this impending chapter 11 filing, Impel 

withdrew its appeal on December 14, 2023. Therefore Impel’s common stock was suspended from 

trading on Nasdaq as of December 18, 2023 and has been formally delisted as of January 8, 2024.

10. Stalking Horse and Chapter 11 Filing

Since July 2023, the Board has received consistent updates from Impel’s 

management and professionals on the status of Impel’s evaluation of strategic alternatives. On 

December 18, 2023, after a careful examination of the strategic alternatives available to the 

Debtors and after discussions with Impel’s advisors, the Board concluded that selecting 

JN Bidco LLC (“JN Bidco”) as the stalking horse bidder for the Debtors’ assets 

(the “Stalking Horse Purchaser”) and executing an in-court sale process pursuant to Section 363 

of the Bankruptcy Code would be the best path to maximize the value of the Debtors’ assets. 

Prior to filing these Chapter 11 Cases, the Debtors negotiated and entered into an 

agreement with the Stalking Horse Purchaser, whereby the Stalking Horse Purchaser has agreed 

to serve as the Stalking Horse Purchaser pursuant to the terms of that certain asset purchase 

agreement, dated December 18, 2023 (the “Stalking Horse APA”) for the sale of all of the Debtors’ 

assets. The Stalking Horse APA provided for the acquisition of the Debtors’ assets as a going 

concern and marketing process in these Chapter 11 Cases, with the Stalking Horse APA subject to 

higher and better offers. 

The Stalking Horse APA was the culmination of the prepetition marketing process 

and provided the necessary momentum to launch a post-petition marketing and auction process to 

maximize the value of the Debtors’ assets. 

7 Contemporaneously therewith, Impel implemented a retention program with respect to 10 employees. The majority 

of eligible employees, including insiders, received payments equal to approximately 5% of their respective salaries. 

The cost under such retention program was approximately $780,000.

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To facilitate a competitive post-petition auction process, the Debtors filed the 

Bidding Procedures Motion (as defined below), with the bid from the Stalking Horse Purchaser 

serving as an initial opening bid (the “Stalking Horse Bid”). Pursuant to the Bidding Procedures

(as defined below), interested parties—including those contacted by the Debtors and their advisors 

prepetition—had the opportunity to submit bids for the purchase of the Debtors’ assets along a sale 

timeline established by the Bidding Procedures (as defined below).

Pursuant to the Bidding Procedures (as defined below), interested parties had

approximately 35 days from the Petition Date to submit bids in accordance with the Bidding 

Procedures (as defined below). The Court approved this timeline as sufficient to run a 

comprehensive sale process—particularly in light of the extensive marketing process conducted 

by the Debtors prepetition. Further, the Court approved the entirety of the Sale Transaction on 

February 2, 2024, via the Sale Order.

The Debtors have determined that an expeditious sale process and resolution of these 

Chapter 11 Cases is necessary to preserve their limited liquidity and ensure the greatest 

possible recovery for its stakeholders. 

ARTICLE IV.

EVENTS DURING THE CHAPTER 11 CASES

A. Commencement of the Chapter 11 Cases and the Debtors’ Professionals

On December 19, 2023 (the “Petition Date”), the Debtors filed petitions for relief 

under chapter 11 of the Bankruptcy Code. 

The Debtors have retained Omni as their Notice and Claims Agent, effective as of 

the Petition Date. The Debtors have additionally retained Sidley, as Debtors’ counsel, Fenwick & 

West LLP, as special corporate counsel, Teneo, as financial advisor, and Moelis, as investment 

banker. 

B. First Day Relief

On or soon after the Petition Date, the Debtors filed a number of motions and other 

pleadings (collectively the “First Day Motions”) to ensure an orderly transition into chapter 11, 

including the following:

• motion to jointly administer these Chapter 11 Cases for procedural purposes only

[Docket No. 3];

• motion to authorize the Debtors’ use of cash collateral [Docket No. 14];

• motion relating to the continued use of the Debtor’s existing cash management 

system and certain related relief [Docket No. 6];

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• motion for authority to pay certain prepetition employee-related obligations and 

certain related relief [Docket No. 13];

• motion for authority to pay certain prepetition taxes and fees and certain related 

relief [Docket No. 5];

• motion to establish procedures for determining adequate assurance for the provision 

of utility services and to prohibit utility service providers from altering, refusing, 

or discontinuing service and certain related relief [Docket No. 7];

• motion for authority to maintain certain insurance policies and programs, to honor 

insurance obligations and for certain related relief [Docket No. 8]; 

• motion for entry of an order approving notification and hearing procedures for 

certain transfers of common stock [Docket No. 9];

• motion to authorize the Debtor to redact certain personally identifiable information 

and waive the requirements to file a list of all equity security holders [Docket No. 

12];

• motion to pay certain prepetition claims of 503(b)(9) claimants and lien and foreign 

claimants [Docket No. 11];

• application to retain Omni as the Debtors’ Notice and Claims Agent [Docket No. 

16]; and

• motion to continue prepetition customer programs [Docket No. 10].

The Debtors have received orders granting the relief requested in all of the First 

Day Motions on a final basis from the Bankruptcy Court.

C. Second Day Relief

On or around December 27, 2023, the Debtors filed a number of motions and other 

pleadings (collectively the “Second Day Motions”) to ensure the preservation of value of the 

Debtors’ assets through the Chapter 11 Cases:

• motion to approve bid procedures and authorizing the sale of the Debtors’ assets 

free and clear [Docket No. 18];

• motion to set bar dates for filing proofs of claim [Docket No. 95];

• motion to employ and retain Sidley as Debtors’ counsel [Docket No. 94];

• motion to employ and retain Fenwick as special corporate counsel [Docket No. 93];

• motion to retain Teneo [Docket No. 92];

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• motion to employ and retain Moelis [Docket No. 91];

• motion to establish interim compensation procedures [Docket No. 90]; and

• motion to retain and compensate ordinary course professionals [Docket No. 89].

The Debtors have received orders granting the relief requested in the Second Day 

Motions on a final basis from the Bankruptcy Court.

D. The Proposed Bidding Procedures

On the Petition Date, the Debtors filed a combined motion seeking approval of the 

bidding procedures (the “Bidding Procedures”) and the Stalking Horse APA, the Debtors’ Motion 

for Entry of an Order (I)(a) Approving the Bid Procedures; (b) Authorizing the Debtors to Select 

JN Bidco LLC as the Stalking Horse Purchaser Substantially Along the Terms Defined in the 

Stalking Horse APA and Approving Bid Protections; (c) Establishing Bid Deadlines, an Auction, 

and a Sale Hearing; (d) Approving the Form and Manner of Sale Notice; (e) Approving 

Assignment and Assumption Procedures; (f) Approving the Form and Manner of Potential 

Assumption and Assignment Notice; (II)(a) Authorizing the Sale of the Assets Free and Clear; and 

(b) Approving the Assumption and Assignment of Designated Contracts; and (III) Granting

Related Relief Filed by Debtor Impel Pharmaceuticals Inc. [Docket No. 18] (the “Bidding 

Procedures Motion”). The Debtors sought prompt approval of the Bidding Procedures Motion on 

an expedited basis, consistent with the milestones embodied in the Cash Collateral Order (as 

defined below). The Bidding Procedures Motion, and the Bidding Procedures therein, were

approved by the Bankruptcy Court on a final basis on January 10, 2024 in the Order (I)(a) 

Approving the Bid Procedures; (b) Authorizing the Debtors to Select JN Bidco LLC as the Stalking 

Horse Purchaser Substantially Along the Terms Defined in the Stalking Horse APA and Approving 

Bid Protections; (c) Establishing Bid Deadlines, an Auction, and a Sale Hearing; (d) Approving 

the Form and Manner of Sale Notice; (e) Approving Assignment and Assumption Procedures; (f) 

Approving the Form and Manner of Potential Assumption and Assignment Notice; (II)(a) 

Authorizing the Sale of the Assets Free and Clear; and (b) Approving the Assumption and 

Assignment of Designated Contracts; and (III) Granting Related Relief [Docket No. 137].

As more fully described in the Bidding Procedures Motion, the Bidding Procedures 

contain provisions relating to, among other things, (a) participation requirements, (b) access to due 

diligence, (c) requirements for Qualified Bids (as defined in the Bidding Procedures Motion), 

(d) designation of Qualified Bidders (as defined in the Bidding Procedures Motion), (e) credit bids, 

(f) auction procedures (as applicable); and (g) the selection of any Winning Bid, Back-Up Bid, or 

Stalking Horse Bid (each as defined in the Bidding Procedures Motion).

In addition, as noted in the Bidding Procedures, the sale process is governed by the 

following proposed dates and deadlines:

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Sale Process Milestones

Date and Time Event or Deadline

January 5, 2024 Initial Cure Notice Deadline

January 10, 2024 at 9:30 a.m. CT Bid Procedures Hearing

January 11, 2024 Service and Publication of Sale Notice

January 23, 2024 at 4:00 p.m. CT Bid Deadline

As soon as reasonably practicable following the Bid 

Deadline

Determination of Qualified Bids

January 25, 2024, at 4:00 p.m. CT Sale Objection Deadline 

January 26, 2024, at 4:00 p.m. CT Cure Objection Deadline 

January 29, 2024 at 9:00 a.m. CT Auction (if necessary)

As soon as reasonably practicable following the Auction Deadline to File Notice of Winning Bid

January 30, 2024 at 4:00 p.m. CT Post-Auction Objection Deadline

February 1, 2024 at 9:30 a.m. CT Sale Hearing

E. Debtors’ Use of Cash Collateral

On the Petition Date, the Debtors filed a motion seeking approval of their use of 

cash collateral [Docket No. 14] (the “Cash Collateral” and such motion the “Cash Collateral 

Motion”). The Bankruptcy Court granted the Cash Collateral Motion and the requested relief 

therein in an interim order [Docket No. 73] at the First Day Hearing. The Bankruptcy Court 

granted the Cash Collateral Motion on a final basis in a final order [Docket No. 149] (the “Cash 

Collateral Order”) at the Second Day Hearing.

As more fully described in the Cash Collateral Order, the Debtors’ use of Cash 

Collateral is governed by provisions (a) setting forth an Approved Budget (as defined in the Cash 

Collateral Motion; (b) setting forth events of default and procedures for termination of the use of 

Cash Collateral; (c) granting adequate protection liens, priority and superpriority claims, and 

professional fees and expenses to the Holders of Prepetition Term Loan Claims; and (d) related 

protections to facilitate the Debtors’ access to cash collateral.

In addition, as noted in the Cash Collateral Order and authorized in the Cash 

Collateral Order, the use of Cash Collateral is governed by the following milestones:

Cash Collateral Order Milestones

Date and Time

(all in Central Time)

Event or Deadline

December 20, 2023 Deadline to File First Day Motions

December 22, 2023 Deadline for the Court to enter an Interim Order 

Approving the Use of Cash Collateral

January 11, 2024 Deadline for Court to enter an Order Approving Bid 

Procedures 

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January 23, 2024 Deadline for Court to enter a Final Order Approving the 

Use of Cash Collateral 

February 5, 2024 Deadline for Court to enter an Order Approving the Sale

February 14, 2024 Deadline to Close Sale

February 27, 2024 Deadline to obtain Approval of a Disclosure Statement 

in Accordance with a Chapter 11 Plan

April 2, 2024 Deadline for Court to enter an Order Approving 

Disclosure Statement and Plan

April 17, 2024 Effective Date Deadline

F. Bar Dates

The Debtors have filed a motion to establish bar dates, which was approved on a 

final basis in an order [Docket No. 142] (the “Bar Date Order”) by the Bankruptcy Court. The 

General Bar Date (as defined in the Bar Date Order) is February 18, 2024 at 4:00 p.m (prevailing 

Central Time). The Governmental Bar Date (as defined in the Bar Date Order) is June 16, 2024 

at 4:00 p.m. (prevailing Central Time).

G. Proposed Confirmation Schedule

Pursuant to the Debtors’ motion seeking conditional approval of this Disclosure 

Statement, solicitation procedures, and the scheduling of the Combined Hearing (the “DS 

Motion”), filed contemporaneously herewith, and the milestones set forth in the Cash Collateral 

Order, the proposed schedule and deadlines for Confirmation include:

Event Date

Voting Record Date February [23], 2024

Solicitation Commencement Date No later than three (3) Business Days after 

entry of this Order. 

Objection Deadline March [27], 2024 at 4:00 p.m., CST

Voting Deadline March [28], 2024 at 4:00 p.m., CST

Release Opt-Out Deadline March [28], 2024 at 4:00 p.m., CST

Combined Hearing April [1], 2024 at [9:30 a.m.] CST

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ARTICLE V.

CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS

A. Administrative Claims, Priority Tax Claims, and Statutory Fees

In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims 

(including Professional Compensation Claims) and Priority Tax Claims have not been classified 

and, thus, are excluded from the Classes of Claims and Interests set forth in Article III hereof.

1. Administrative Claims

Except to the extent that a Holder of an Allowed Administrative Claim agrees to a 

less favorable treatment, each Holder of an Allowed Administrative Claim (other than a 

Professional Compensation Claim) shall receive, in full and final satisfaction of such Claim, (1) 

Cash in an amount equal to such Allowed Administrative Claim in accordance with the following: 

(i) if Allowed on or prior to the Effective Date, then on the Effective Date or as soon as reasonably 

practicable thereafter, (ii) if not Allowed as of the Effective Date, then no later than forty-five (45) 

days after the date on which an order Allowing such Administrative Claim becomes a Final Order, 

or (iii) at such time and upon such terms as set forth in a Final Order of the Bankruptcy Court; or 

(2) such other treatment consistent with the provisions of section 1129(a)(9) of the Bankruptcy 

Code. 

Except for Professional Compensation Claims, and notwithstanding any prior 

Filing or Proof of Claim, Proofs of Claim seeking the allowance and payment of Administrative 

Claims must be Filed and served on the Debtors or the Plan Administrator (as applicable) and their 

counsel by no later than the Administrative Claims Bar Date pursuant to the procedures set forth 

in the Confirmation Order and the notice of the occurrence of the Effective Date. The burden of 

proof for the allowance of Administrative Claims remains on the Holder of the Administrative 

Claims. 

Except as otherwise provided in Articles II.B, II.C, or II.D herein, holders of 

Administrative Claims that do not File and serve a Proof of Claim or application for payment 

of administrative expenses requesting the allowance of an Administrative Claim by the 

Administrative Claims Bar Date shall be forever barred, estopped, and enjoined from 

asserting Administrative Claims against the Debtors, the Plan Administrator, the Estates, or 

the Debtors’ assets and properties, and any Administrative Claims shall be deemed 

disallowed as of the Effective Date unless otherwise ordered by the Bankruptcy Court. 

2. Professional Compensation Claims

a. Final Fee Applications and Payment of Professional Compensation

Claims

All Professionals (other than OCPs) seeking awards by the Bankruptcy Court of 

compensation for services rendered or reimbursement of expenses incurred through and including 

the Confirmation Date under sections 327, 328, 330, 331, 503(b)(2), 503(b)(3), 503(b)(4), 

503(b)(5), or 1103 of the Bankruptcy Code shall (1) file, on or before the date that is forty five 

(45) days after the Confirmation Date, their respective applications for final allowances of 

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compensation for services rendered and reimbursement of expenses incurred; and (2) be paid in 

full, in Cash, from the Professional Fee Reserve Account in such amounts as are Allowed by the 

Bankruptcy Court or authorized to be paid in accordance with the order(s) relating to or allowing 

any such Professional Compensation Claim. Objections to Professional Compensation Claims 

must be Filed and served no later than twenty-one (21) days after the Filing of the Professional 

Compensation Claim.

b. Administrative Claims of OCPs

All requests for payment of Professional Compensation Claims of OCPs shall be made 

pursuant to the OCP Order. To the extent any Professional Compensation Claims of the OCPs 

have not been Allowed pursuant to the OCP Order on or before the Effective Date, the amount of 

Professional Compensation Claims owing to the OCPs shall be paid in Cash to such OCPs by the 

Debtor or the Plan Administrator (as applicable) from the Professional Fee Reserve Account as 

soon as reasonably practicable after such Professional Compensation Claims are Allowed pursuant 

to the OCP Order.

c. Post-Confirmation Date Fees and Expenses

Except as otherwise specifically provided in the Plan, from and after the Confirmation 

Date, the Debtors or Plan Administrator (as applicable) shall, in the ordinary course of business 

and without any further notice to or action, order, or approval of the Bankruptcy Court, pay in 

Cash the reasonable and documented legal, professional, or other fees and expenses related to 

implementation of the Plan and Consummation incurred by the Debtors or the Plan Administrator 

(as applicable). Upon the Confirmation Date, any requirement that Professionals comply with 

sections 327 through 331, 363, and 1103 of the Bankruptcy Code in seeking retention or 

compensation for services rendered after such date shall terminate, and the Debtors or Plan 

Administrator (as applicable) may employ and pay any Professional in the ordinary course of 

business without any further notice to or action, order, or approval of the Bankruptcy Court.

Except as otherwise specifically provided in the Plan, from and after the Confirmation 

Date, the Debtors shall pay, within ten business days after submission of a detailed invoice to the 

Debtors such reasonable claims for compensation or reimbursement of expenses incurred by the 

Professionals of the Debtors. If the Debtors, in consultation with the Prepetition Term Loan 

Administrative Agent, dispute the reasonableness of any such invoice, the Debtors or the affected 

Professional may submit such dispute to the Bankruptcy Court for a determination of the 

reasonableness of any such invoice, and the disputed portion of such invoice shall not be paid until 

the dispute is resolved.

d. Professional Fee Reserve Account

On the Effective Date, the Debtors shall fund an amount in Cash into the Professional Fee 

Reserve Account equal to (a) the aggregate accrued and unpaid Professional Compensation Claims 

as of the Effective Date (which shall be estimated by each applicable Professional in its reasonable 

discretion based on the amount of then-accrued Professional Compensation Claims plus a 

reasonable estimate of fees and expenses that will accrue up until the Effective Date), less (b) any 

amount then held in the Professional Fee Reserve Account.

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Funds held in the Professional Fee Reserve Account shall be held for the benefit of the 

Professionals and shall not be property of the Estates. The Professionals shall reasonably and in 

good faith estimate their Professional Compensation Claims before and as of the Effective Date, 

taking into account any prior payments, and shall deliver such estimates to the Debtors no later 

than five (5) Business Days prior to the anticipated Effective Date.

Professional Compensation Claims shall be paid in full without interest or earning 

therefrom, in Cash, from the Professional Fee Reserve Account, in such amounts as are Allowed 

by the Bankruptcy Court as soon as reasonably practicable after such Professional Compensation 

Claims are allowed. The obligations of the Estates with respect to Professional Compensation 

Claims shall not be limited by nor deemed limited to the balance of funds held in the Professional 

Fee Reserve Account. To the extent that funds held in the Professional Fee Reserve Account are 

insufficient to satisfy the amount of accrued Professional Compensation Claims owing to the 

Professionals, such Professionals shall have an Allowed Administrative Claim for any such 

deficiency. No Liens, claims, or interests shall encumber the Professional Fee Reserve Account 

in any way, other than customary liens in favor of the depository bank at which the Professional 

Fee Reserve Account is maintained. 

All requests for payment of Professional Compensation Claims for services rendered and 

reimbursement of expenses incurred through the Effective Date shall be filed no later than fortyfive (45) days after the Effective Date. The Bankruptcy Court shall determine the Allowed 

amounts of such Professional Compensation Claims after notice and a hearing in accordance with 

the procedures established by the Bankruptcy Code. To the extent any Cash is remaining in the 

Professional Fee Reserve Account following irrevocable payment in full of all Allowed 

Professional Compensation Claims (including Allowed Professional Compensation Claims arising 

after the Confirmation Date), such Cash shall be transferred to the Wind-Down Debtors for 

payment in accordance with the terms of the Plan. 

3. Priority Tax Claims

Except to the extent that a Holder of an Allowed Priority Tax Claim agrees to a less 

favorable treatment, each holder of an Allowed Priority Tax Claim shall receive, in full and final 

satisfaction, settlement, release, and discharge of such Claim, treatment in a manner consistent 

with section 1129(a)(9)(C) of the Bankruptcy Code, which treatment shall be reasonably 

acceptable to the Prepetition Term Loan Administrative Agent.

4. U.S. Trustee Statutory Fees

All U.S. Trustee Statutory Fees due and payable prior to the Effective Date shall be paid 

by the Debtors. On and after the Effective Date, the Plan Administrator shall pay any and all U.S. 

Trustee Statutory Fees when due and payable, and shall file with the Bankruptcy Court quarterly 

reports in a form reasonably acceptable to the U.S. Trustee. Each of the Debtors and the Plan 

Administrator, as applicable, shall remain obligated to pay quarterly fees to the U.S. Trustee until 

the earliest of that particular Debtor’s case being closed, dismissed, or converted to a case under 

chapter 7 of the Bankruptcy Code.

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B. Classification of Claims and Interests

Except for the Claims addressed in Article II of the Plan, all Claims and Interests are 

classified in the Classes set forth below in accordance with sections 1122 and 1123(a)(1) of the 

Bankruptcy Code. A Claim or an 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 Class 

to the extent that any portion of the Claim or Interest qualifies within the description of such other 

Class. A Claim also is classified in a particular Class for the purpose of receiving distributions 

under the Plan only to the extent that such Claim is an Allowed Claim in that Class and has not 

been otherwise paid, released, or satisfied at any time.

The classification of Claims against and Interests in the Debtors pursuant to the Plan is as 

follows:

Class Claims and Interests Status Voting Rights

Class 1 Other Secured Claims Unimpaired Not Entitled to Vote (Presumed to 

Accept)

Class 2 Other Priority Claims Unimpaired Not Entitled to Vote (Presumed to 

Accept)

Class 3 Prepetition Term Loan 

Claims

Impaired Entitled to Vote

Class 4 General Unsecured 

Claims

Impaired Entitled to Vote

Class 5 Intercompany Claims Unimpaired/Impaired Not Entitled to Vote (Presumed to 

Accept)/Not Entitled to Vote 

(Deemed to Reject)

Class 6 Existing Equity 

Interests

Impaired Not Entitled to Vote (Deemed to 

Reject)

C. Treatment of Claims and Interests

1. Class 1 – Other Secured Claims

i. Classification: Class 1 consists of all Other Secured Claims against 

the Debtors. 

ii. Treatment: Except to the extent the Holder of an Allowed Other 

Secured Claim agrees to less favorable treatment, each Holder of an Allowed Other Secured Claim 

shall receive, in full and final satisfaction, settlement, release, and discharge of such Claim, at the

Debtors’ option and with the consent (in each case not to be unreasonably withheld or delayed) of 

the Prepetition Term Loan Administrative Agent: (a) payment in full in cash; (b) the collateral 

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securing its Allowed Other Secured Claim; (c) Reinstatement of its Allowed Other Secured Claim; 

or (d) such other treatment rendering its Allowed Other Secured Claim Unimpaired in accordance 

with section 1124 of the Bankruptcy Code. 

iii. Voting: Class 1 is Unimpaired, and Holders of Other Secured 

Claims are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the 

Bankruptcy Code. Therefore, Holders of Class 1 Other Secured Claims are not entitled to vote to 

accept or reject the Plan.

2. Class 2 – Other Priority Claims

i. Classification: Class 2 consists of all Other Priority Claims against 

the Debtors. 

ii. Treatment: Except to the extent the Holder of an Allowed Other 

Priority Claim agrees to less favorable treatment, each holder of an Allowed Other Priority Claim 

shall receive, in full and final satisfaction, settlement, release, and discharge of such Claim, 

treatment in a manner consistent with section 1129(a)(9) of the Bankruptcy Code, which treatment 

shall be reasonably acceptable to the Prepetition Term Loan Administrative Agent. 

iii. Voting: Class 2 is Unimpaired, and Holders of Other Priority Claims 

are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy 

Code. Therefore, Holders of Class 2 Other Priority Claims are not entitled to vote to accept or 

reject the Plan.

3. Class 3 – Prepetition Term Loan Claims

i. Classification: Class 3 consists of the Prepetition Term Loan

Claims against the Debtors.

ii. Treatment: On the Effective Date, the Prepetition Term Loan 

Claims shall be Allowed and deemed to be Allowed Claims in the full amount due and payable 

under the Prepetition Term Loan Documents, including all principal, any accrued and unpaid 

interest at the applicable rate through the Effective Date, and all accrued and unpaid fees, expenses, 

and non-contingent indemnity payable under the Prepetition Term Loan Documents (including the 

fees and expenses of the Prepetition Term Loan Advisors). Except to the extent the holder of an 

Allowed Prepetition Term Loan Claim agrees to less favorable treatment, each Holder of an 

Allowed Prepetition Term Loan Claim shall receive, in full and final satisfaction, settlement, 

release, and discharge of such Claim, on the Effective Date or as soon as reasonably practicable 

thereafter:

a. its pro rata share of all Distributable Cash of the Debtors or the 

Wind-Down Debtors (as applicable), less (i) an amount of Cash 

required to pay Administrative Claims and Priority Tax Claims 

Allowed as of the Effective Date, and the funding of the WindDown Budget, (ii) Cash required to fund the Professional Fee 

Reserve Account in accordance with the Plan; (iii) the General 

Unsecured Creditor Distribution, and (vi) an amount of Cash 

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required to pay Claims in Classes 1 and 2 as provided in the Plan;8

and

b. its pro rata share of the Contingent Sale Proceeds.

iii. Voting: Class 3 is Impaired, and Holders of Allowed Prepetition 

Term Loan Claims are entitled to vote to accept or reject the Plan. 

4. Class 4 – General Unsecured Claims 

i. Classification: Class 4 consists of the General Unsecured Claims 

against the Debtors. 

ii. Treatment: Except to the extent the holder of an Allowed General 

Unsecured Claim agrees to less favorable treatment, on the Effective Date, each holder of an 

Allowed General Unsecured Claim shall receive its pro rata share of the General Unsecured 

Creditor Distribution. The Prepetition Term Loan Secured Parties will not participate in the 

General Unsecured Creditor Distribution on account of any deficiency claim.

iii. Voting: Class 4 is Impaired, and Holders of General Unsecured 

Claims are entitled to vote to accept or reject the Plan.

5. Class 5 – Intercompany Claims

i. Classification: Class 5 consists of Intercompany Claims between 

and among the Debtors. 

ii. Treatment: On the Effective Date, each Allowed Intercompany 

Claim shall be, at the option of the applicable Debtor, either:

a. Reinstated;

b. cancelled, released, and extinguished, rendering such claim without 

further force or effect; or

c. otherwise addressed at the option of each applicable Debtor such 

that Holders of Intercompany Claims will not receive any 

distribution on account of such Intercompany Claims. 

iii. Voting: Class 5 is conclusively deemed to have accepted the Plan 

pursuant to section 1126(f) of the Bankruptcy Code or rejected the Plan pursuant to section 1126(g) 

of the Bankruptcy Code. Therefore, Holders of Class 5 Intercompany Claims are not entitled to 

vote to accept or reject the Plan.

8 Pursuant to paragraph 28 of the Cash Collateral Order, cash proceeds of the Sale Transaction will be distributed to 

the Prepetition Term Loan Administrative Agent for the benefit of Class 3 as provided in the Cash Collateral Order 

as soon as practically possible following closing of the Sale Transaction.

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6. Class 6 –Existing Equity Interests

i. Classification: Class 6 consists of all Existing Equity Interests in 

the Debtors. 

ii. Treatment: On the Effective Date, each holder of each Existing 

Equity Interest in any of the Debtors shall have such Interest cancelled, released, and extinguished 

and without any distribution or compensation.

iii. Voting: Class 6 is Impaired, and Holders of Existing Equity 

Interests are conclusively deemed to have rejected the Plan pursuant to section 1126(g) of the 

Bankruptcy Code. Therefore, Holders of Class 6 Existing Equity Interests are not entitled to vote 

to accept or reject the Plan. 

D. Special Provision Governing Unimpaired Claims

Except as otherwise provided in the Plan, nothing under the Plan shall affect the rights of 

the Debtors or the Plan Administrator with respect to any Unimpaired Claims, including all legal 

rights in respect of and equitable defenses to, or setoffs or recoupments against, any such 

Unimpaired Claims.

E. Elimination of Vacant Classes

Any Class that, as of the commencement of the Combined Hearing, does not have at least 

one Holder of a Claim or Interest that is Allowed in an amount greater than zero for voting purposes 

shall be considered vacant, deemed eliminated from the Plan for purposes of voting to accept or 

reject the Plan, and disregarded for purposes of determining whether the Plan satisfies section 

1129(a)(8) of the Bankruptcy Code with respect to such Class.

F. Voting Classes, Presumed Acceptance by Non-Voting Classes

With respect to each Debtor, if a Class contained Claims eligible to vote and no holder of 

Claims eligible to vote in such Class votes to accept or reject the Plan, the Plan shall be presumed 

accepted by the holders of such Claims in such Class.

G. Controversy Concerning Impairment

If a controversy arises as to whether any Claim or any Class of Claims is Impaired, the 

Bankruptcy Court shall, after notice and a hearing, determine such controversy on or before the 

Combined Hearing.

H. Subordination of Claims

The allowance, classification, and treatment of all Allowed Claims and Interests and the 

respective distributions and treatments under the Plan shall take into account and conform to the 

relative priority and rights of the Claims and Interests in each Class in connection with any 

contractual, legal, and equitable subordination rights relating thereto, whether arising under 

general principles of equitable subordination, contract, section 510(b) of the Bankruptcy Code, or 

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otherwise. Pursuant to section 510 of the Bankruptcy Code, the Debtors or the Plan Administrator 

(as applicable) reserve the right to re-classify any Allowed Claim or Allowed Interest in 

accordance with any contractual, legal, or equitable subordination relating thereto.

I. Confirmation Pursuant to Sections 1129(a)(10) and 1129(b) of the Bankruptcy 

Code

Section 1129(a)(10) of the Bankruptcy Code shall be satisfied for purposes of Confirmation 

by acceptance of the Plan by one or more of the Classes entitled to vote pursuant to this Article III 

of the Plan. The Debtors hereby request confirmation of the Plan under section 1129(b) of the 

Bankruptcy Code with respect to any Class that is deemed to reject the Plan pursuant to section 

1126(g) of the Bankruptcy Code. The Debtors reserve the right to request confirmation of the Plan 

under section 1129(b) of the Bankruptcy Code with respect to any voting Class that votes to reject 

the Plan.

J. Insurance

Notwithstanding anything to the contrary in the Plan, if any Claim is subject to coverage 

under an Insurance Policy, payments on account of such Claim will first be made from proceeds 

of such Insurance Policy in accordance with the terms thereof, with the balance of such Claim, if 

any, treated in accordance with the provisions of the Plan governing the Class applicable to such 

Claim. 

ARTICLE VI.

MEANS FOR IMPLEMENTATION OF THE PLAN

A. General Settlement of Claims and Interests

Pursuant to section 1123(b)(2) of the Bankruptcy Code and Bankruptcy Rule 9019, and in 

consideration for the distributions, releases, and other benefits provided pursuant to the Plan, upon 

the Effective Date, the provisions of the Plan shall constitute a good faith compromise and 

settlement of Claims, Interests, and controversies relating to the contractual, legal, and 

subordination rights that a creditor or an Interest holder may have with respect to any Allowed 

Claim or Interest or any distribution to be made on account of such Allowed Claim or Interest. 

The entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval of the 

compromise or settlement of all such Claims, Interests, and controversies, as well as a finding by 

the Bankruptcy Court that such compromise or settlement is in the best interests of the Debtors, 

their Estates, and holders of such Claims and Interests, and is fair, equitable, and reasonable.

B. Liquidation Transactions

On or before the Effective Date, the Debtors or the Plan Administrator shall enter into and 

take any actions that may be necessary or appropriate to effectuate the Sale Transaction or the 

Wind-Down of the Debtors, as applicable, including but not limited to: (1) the execution and 

delivery of appropriate agreements or other documents of consolidation, conversion, disposition, 

transfer, or dissolution containing terms that are consistent with the terms of the Plan and that 

satisfy the requirements of applicable law; (2) the execution and delivery of any appropriate 

instruments of transfer, assignment, assumption, or delegation of any asset, property, right, 

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liability, debt, duty, or obligation on terms consistent with the Plan; (3) the filing of appropriate 

documents with the appropriate governmental authorities pursuant to applicable law; and (4) any 

and all other actions that the Debtors or the Plan Administrator determine are necessary or 

appropriate to effectuate the Plan. 

1. Sale Transaction

The Debtors have engaged in a process for the sale of substantially all of their assets, on 

the terms set forth in the Transaction Documents. On February 2, 2024, the Court entered the 

Sale Order approving the terms of the Sale Transaction. The Debtors have closed the Sale 

Transaction in advance of the hearing to approve this Disclosure Statement on a conditional 

basis.

2. Wind-Down 

Following the Effective Date, the Plan Administrator shall wind-down the affairs and 

operations of the Debtors and their Estates (the “Wind-Down”) including, but not limited to: 

(i)liquidating the Debtors’ assets remaining after consummation of the Sale Transaction, if any, 

including through the prosecution of any claims or causes of action of the Debtors preserved herein 

and (ii) distributing the Distributable Cash and other assets of the Debtors pursuant to the terms of 

the Plan. The Debtors shall consult with the Prepetition Term Loan Administrative Agent on all 

aspects of the Wind-Down. 

The responsibilities and authority of the Plan Administrator shall include the following 

rights and responsibilities: (i) preserving and liquidating the Debtors’ remaining assets;

(ii) administering and paying taxes, including, among other things, (a) filing tax returns (to the 

extent not the obligation of any Purchaser), and (b) representing the interest and account of the 

Debtors before any taxing authority in all matters; (iii) retaining and paying, without the need for 

retention or fee applications, professionals in connection with the Plan Administrator’s 

performance of its duties under the Plan; (iv) distributing information statements as required for 

U.S. federal income tax and other applicable tax purposes; (v) Filing an application for entry by 

the Bankruptcy Court of a final decree closing the Chapter 11 Cases; (vi) making distributions to 

Professionals for Allowed Professional Compensation Claims from the Professional Fee Reserve 

Account; (vii) making distributions of the Distributable Cash; (viii) procuring the necessary 

insurance to facilitate the Wind-Down, including appropriate D&O Liability Insurance Policies; 

and (ix) such other responsibilities as may be vested in the Plan Administrator pursuant to the Plan

or an order of the Bankruptcy Court (including, without limitation, the Confirmation Order), or as 

may be necessary and proper to carry out the provisions of the Plan. 

C. Sources of Consideration for Plan Distributions

Subject to the provisions of the Plan concerning the Professional Fee Reserve Account and 

the Wind-Down Budget, the Debtors or the Plan Administrator (as applicable) shall fund 

distributions under the Plan with the remaining proceeds from the Sale Transaction and the 

Distributable Cash, if any, all in accordance with the terms herein. 

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D. Vesting of Assets

Except as otherwise provided in the Plan or the Sale Order, on and after the Effective Date, 

pursuant to sections 1141(b) and (c) of the Bankruptcy Code, all assets of the Estates not sold 

pursuant to the Sale Transaction, including all claims, rights, and Causes of Action and any 

property acquired by the Debtors under or in connection with the Plan, shall vest in each respective 

Debtor free and clear of all Claims, Liens, encumbrances, charges, and other interests. Subject to 

the terms of the Plan, on or after the Effective Date, the Plan Administrator may use, acquire, and 

dispose of such unsold assets, and may prosecute, compromise, or settle any Claims and Causes 

of Action without supervision of or approval by the Bankruptcy Court and free and clear of any 

restrictions of the Bankruptcy Code or the Bankruptcy Rules other than restrictions expressly 

imposed by the Plan or the Confirmation Order. 

E. Preservation of Causes of Action

In accordance with section 1123(b) of the Bankruptcy Code, the Plan Administrator shall 

retain and may enforce all rights to commence and pursue, as appropriate, any and all Causes of 

Action of the Debtors that are not otherwise transferred or sold pursuant to the Sale Transaction or 

distributed pursuant to the Plan, whether arising before or after the Petition Date, and the Plan 

Administrator’s rights to commence, prosecute, or settle such Causes of Action shall be preserved 

notwithstanding the occurrence of the Effective Date, other than the Causes of Action released by 

the Debtors pursuant to the releases and exculpations contained in the Plan, including in Article IX 

of the Plan, which shall be deemed released and waived by the Debtors and the Plan Administrator 

as of the Effective Date. No Entity (other than the Released Parties) may rely on the absence of a 

specific reference in the Plan, the Plan Supplement, or the Disclosure Statement to any Cause of 

Action against it as any indication that the Debtors or the Plan Administrator, as applicable, will 

not pursue any and all available Causes of Action of the Debtors against it.

F. Corporate Action

On the Effective Date and following satisfaction of the Debtors’ distribution and funding 

requirements set forth in the Plan, the Debtors shall be dissolved for all purposes unless the Plan 

Administrator determines that dissolution can have any adverse impact on the Value of the 

Debtors’ assets; provided, that neither the Debtors nor any party released pursuant to Article IX of 

the Plan shall be responsible for any liabilities that may arise as a result of non-dissolution of the 

Debtors; provided further, that nothing in the Plan shall be construed as relieving the Debtors or 

the Plan Administrator (as applicable) of their duties to pay U.S. Trustee Statutory Fees as required 

by the Bankruptcy Code and applicable law until such time as a final decree is entered in the 

Debtors’ Chapter 11 Cases or the cases are dismissed or converted to cases under chapter 7 of the 

Bankruptcy Code. The Plan Administrator shall submit with the appropriate governmental 

agencies a copy of the Confirmation Order, which Confirmation Order shall suffice for purposes 

of obtaining a Certificate of Dissolution from the applicable Secretary of State or equivalent body.

Without limiting the foregoing, on the Effective Date and following satisfaction of the 

Debtors’ distribution and funding requirements set forth in the Plan, the Debtors shall have no 

further duties or responsibilities in connection with implementation of the Plan, and the directors 

and officers of the Debtors shall be deemed to have resigned. From and after the Effective Date, 

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the Plan Administrator shall be authorized to act on behalf of the Estates, provided that the Plan 

Administrator shall have no duties other than as expressly set forth in the Plan or the Confirmation 

Order.

G. Cancellation of Existing Securities and Agreements

Except for the purpose of evidencing a right to a distribution under the Plan and except as 

otherwise set forth in the Plan, on the Effective Date, all agreements, instruments, notes, 

certificates, indentures, mortgages, securities and other documents evidencing any Claim or 

Interest, and any rights of any Holder in respect thereof, shall be deemed cancelled and of no 

further force or effect and the obligations of the Debtors thereunder shall be deemed fully satisfied, 

released, and discharged and, as applicable, shall be deemed to have been surrendered to the Plan 

Administrator. The holders of or parties to such cancelled instruments, securities, and other 

documentation shall have no rights arising from or related to such instruments, securities, or other 

documentation or the cancellation thereof, except the rights provided for pursuant to the Plan.

H. Effectuating Documents; Further Transactions

Upon entry of the Confirmation Order, the Debtors or the Plan Administrator (as 

applicable) shall be authorized to execute, deliver, file, or record such contracts, instruments, 

releases, consents, certificates, resolutions, programs, and other agreements or documents, and 

take such acts and actions as may be reasonable, necessary, or appropriate to effectuate, implement, 

consummate, and/or further evidence the terms and conditions of the Plan and any transactions 

described in or contemplated by the Plan. The Debtor, the Plan Administrator, all Holders of 

Claims receiving distributions pursuant to the Plan, and all other parties in interest shall, from time 

to time, prepare, execute, and deliver any agreements or documents, and take any other actions as 

may be necessary or advisable to effectuate the provisions and intent of the Plan.

I. Section 1146 Exemption from Certain Taxes and Fees

Pursuant to section 1146(a) of the Bankruptcy Code, any transfers of property pursuant to 

the Plan shall not be subject to any document recording tax, stamp tax, conveyance fee, intangibles 

or similar tax, mortgage tax, stamp act, real estate transfer tax, mortgage recording tax, or other 

similar tax or governmental assessment, and upon entry of the Confirmation Order, the appropriate 

state or local governmental officials or agents shall forgo the collection of any such tax or 

governmental assessment and accept for filing and recordation all such instruments or other 

documents governing or evidencing such transfers without the payment of any such tax, 

recordation fee, or governmental assessment.

J. Sale Order

Notwithstanding anything to the contrary herein, nothing in the Plan shall affect, impair or 

supersede the Sale Order or Transaction Documents, each of which remains in full force and effect 

and governs in the event of any inconsistency with the Plan.

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K. Authority to Act

Prior to, on, or after the Effective Date (as appropriate), all matters expressly provided for 

under the Plan that would otherwise require approval of the stockholders, security holders, officers, 

directors, or other owners of the Debtors shall be deemed to have occurred and shall be in effect 

prior to, on, or after the Effective Date (as applicable) pursuant to the applicable law of the state(s) 

in which the Debtors are formed, without any further vote, consent, approval, authorization, or 

other action by such stockholders, security holders, officers, directors, or other owners of the 

Debtor or notice to, order of, or hearing before, the Bankruptcy Court.

L. Separate Plans

Notwithstanding the combination of separate plans of liquidation for the Debtors set forth 

in the Plan for purposes of economy and efficiency, the Plan constitutes a separate chapter 11 plan 

for each Debtor. Accordingly, if the Bankruptcy Court does not confirm the Plan with respect to 

one or more Debtors, it may still confirm the Plan with respect to any other Debtor that satisfies 

the confirmation requirements of section 1129 of the Bankruptcy Code.

M. Registered form

Any assignment of rights to Contingent Sale Proceeds shall be made only through a book 

entry system maintained by Debtor (on its own behalf and as an agent of the buyer of the assets 

sold in the Sale Transaction). The foregoing sentence shall be construed so that the obligation to 

pay any Contingent Sale Proceeds shall be treated as an obligation that is maintained in “registered 

form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Internal Revenue 

Code of 1986, as amended.

ARTICLE VII.

TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

A. Assumption and Rejection of Executory Contracts and Unexpired Leases

On the Effective Date, except as otherwise provided herein (which exclusion includes the 

Indemnification Obligations, the D&O Liability Insurance Policies, and the Employment 

Agreements), all Executory Contracts or Unexpired Leases not previously assumed, assumed and

assigned, or rejected pursuant to an order of the Bankruptcy Court, will be deemed rejected, in 

accordance with the provisions and requirements of sections 365 and 1123 of the Bankruptcy Code 

other than those Executory Contracts or Unexpired Leases that (i) are the subject of a motion to 

assume that is pending on the Confirmation Date; or (ii) have been identified on the Assumed 

Contracts Schedule.

Assumption of any Executory Contract or Unexpired Lease pursuant to the Transaction

Documents or the Plan, and payment of any cure amounts relating thereto, shall, upon satisfaction 

of the applicable requirements of section 365 of the Bankruptcy Code, result in the full, final, and 

complete release and satisfaction of any Claims or defaults, whether monetary or nonmonetary, 

including defaults or provisions restricting the change in control of ownership interest composition 

or other bankruptcy-related defaults, arising under any assumed Executory Contract or Unexpired 

Lease at any time prior to the effective date of assumption.

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B. Claims Based on Rejection of Executory Contracts or Unexpired Leases

If the rejection of an Executory Contract or Unexpired Lease pursuant to the Plan and 

Confirmation Order results in a Claim, then, unless otherwise ordered by the Court, such Claim 

shall be forever barred and shall not be enforceable against the Debtors, the Estates, the Plan 

Administrator, or any of their respective assets and properties unless a Proof of Claim is Filed with 

the Notice and Claims Agent and served upon counsel to the Plan Administrator within thirty (30) 

days of the Effective Date.

The foregoing applies only to Claims arising from the rejection of an Executory Contract 

or Unexpired Lease under the Plan and Confirmation Order; any other Claims held by a party to a 

rejected Executory Contract or Unexpired Lease shall have been evidenced by a Proof of Claim 

Filed by the applicable Bar Date or shall be barred and unenforceable. Claims arising from the 

rejection of Executory Contracts or Unexpired Leases under the Plan and Confirmation Order shall 

be classified as General Unsecured Claims and shall, if Allowed, be treated in accordance with the 

provisions herein.

Any Claims arising from the rejection of an Executory Contract or Unexpired Lease 

pursuant to the Plan and Confirmation Order that are not timely Filed within thirty (30) 

days of the Effective Date will be disallowed automatically, forever barred from assertion, 

and shall not be enforceable against, as applicable, the Debtors, the Estates, the Plan 

Administrator, or any of their respective assets and properties.

C. Reservation of Rights

Neither the exclusion nor the inclusion by the Debtors of any contract or lease on any 

exhibit, schedule, or other annex to the Plan or in the Plan Supplement, nor anything contained in 

the Plan, shall constitute an admission by the Debtors that any such contract or lease is or is not an 

Executory Contract or Unexpired Lease or that the Debtors, the Plan Administrator, or their 

respective affiliates has any liability thereunder. Except as explicitly provided in the Plan, nothing 

in the Plan shall waive, excuse, limit, diminish, or otherwise alter any of the defenses, claims, 

Causes of Action, or other rights of the Debtors or the Plan Administrator under any executory or 

non-executory contract or unexpired or expired lease. If there is a dispute regarding whether a 

contract or lease is or was executory or unexpired at the time of its assumption under the Plan, the 

Debtors or Liquidating Debtors, as applicable, shall have thirty (30) days following entry of a Final 

Order resolving such dispute to alter their treatment of such contract or lease.

D. Preexisting Obligations to the Debtors Under Executory Contracts and 

Unexpired Leases

Rejection of any Executory Contract or Unexpired Lease pursuant to the Plan or otherwise 

shall not constitute a termination of preexisting obligations owed to the Debtors under such 

Executory Contracts or Unexpired Leases. In particular, notwithstanding any non-bankruptcy law 

to the contrary, the Debtors expressly reserve and do not waive any right to receive, or any 

continuing obligation of a counterparty to provide, warranties, indemnity or continued 

maintenance obligations.

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E. Indemnification Obligations

Each of the Debtors’ Indemnification Obligations shall not be discharged, impaired, or 

otherwise affected by the Plan. The Indemnification Obligations shall be deemed Executory 

Contracts assumed or assumed and assigned by the Debtors under the Plan. 

F. D&O Liability Insurance Policies

Each D&O Liability Insurance Policy to which the Debtors are a party as of the Effective 

Date shall be deemed an Executory Contract and shall be automatically assumed or assumed and 

assigned by the applicable Debtor, effective as of the Effective Date, pursuant to sections 365 and 

1123 of the Bankruptcy Code. For the avoidance of doubt, coverage for defense and indemnity 

under the D&O Liability Insurance Policies shall remain available to all individuals within the 

definition of “Insured” in the D&O Liability Insurance Policies. In addition, after the Effective 

Date, all officers, directors, agents, or employees of the Debtors who served in such capacity at 

any time before the Effective Date shall be entitled to the full benefits of the D&O Liability 

Insurance Policies (including any “tail” policy) in effect or purchased as of the Effective Date for 

the full term of such policy regardless of whether such officers, directors, agents, and/or employees 

remain in such positions after the Effective Date, in each case, to the extent set forth in the D&O 

Liability Insurance Policies. 

G. Employment Agreements

Any Employment Agreement not assumed and assigned pursuant to the Transaction

Documents as part of the Sale Transaction shall be assumed by the Plan Administrator on the 

Effective Date of the Plan.

H. Modifications, Amendments, Supplements, Restatements, or Other 

Agreements

Modifications, amendments, supplements, and restatements to a prepetition Executory 

Contract and/or Unexpired Lease that have been executed by the Debtors during the Chapter 11 

Cases shall not be deemed to alter the prepetition nature of the Executory Contract or Unexpired 

Lease.

I. Nonoccurrence of Effective Date

In the event that the Effective Date does not occur, the Bankruptcy Court shall retain 

jurisdiction with respect to any request to extend the deadline for assuming or rejecting Unexpired 

Leases pursuant to section 365(d)(4) of the Bankruptcy Code.

J. Employee Compensation and Benefits

All employment policies, and all compensation and benefits plans, policies, and programs 

of the Debtors applicable to their respective employees, retirees, and nonemployee directors, 

including all savings plans, retirement plans, healthcare plans, disability plans, severance benefit 

plans, incentive plans, and life and accidental death and dismemberment insurance plans, are 

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deemed to be, and shall be treated as, Executory Contracts under the Plan and, on the Effective 

Date, shall be rejected pursuant to sections 365 and 1123 of the Bankruptcy Code.

ARTICLE VIII.

PROVISIONS GOVERNING DISTRIBUTIONS

A. Distributions on Account of Claims Allowed as of the Effective Date

As of the close of business on the Distribution Record Date, the various transfer registers 

for each of the Classes of Claims or Interests as maintained by the Debtors, or their respective

agents, shall be deemed closed, and there shall be no further changes in the record holders of any 

of the Claims or Interests. The Disbursing Agent shall have no obligation to recognize any 

ownership transfer of the Claims or Interests occurring on or after the Distribution Record Date. 

The Disbursing Agent shall be entitled to recognize and deal for all purposes hereunder only with 

those record holders stated on the transfer ledgers as of the close of business on the Distribution 

Record Date, to the extent applicable.

Except as otherwise provided herein, the Disbursing Agent shall make distributions to 

Holders of Allowed Claims as of the Distribution Record Date at the address for each such Holder 

as indicated on the Debtors’ records as of the date of any such distribution; provided, that the 

manner of such distributions shall be determined at the discretion of the Disbursing Agent; 

provided further, that to the extent a Proof of Claim has been filed, the address for each Holder of 

an Allowed Claim shall be deemed to be the address set forth in any Proof of Claim Filed by that 

Holder. The Disbursing Agent shall make all distributions for Class 3 Claims to the Prepetition 

Term Loan Administrative Agent, who shall then distribute such individual amounts to the 

Prepetition Term Loan Secured Parties in accordance with the Prepetition Term Loan Documents.

B. Compliance with Tax Requirements

In connection with the Plan, any Person issuing any instrument or making any distribution 

or payment in connection therewith, shall comply with all applicable withholding and reporting 

requirements imposed by any federal, state, or local taxing authority. In the case of a non-Cash 

distribution that is subject to withholding, the distributing party may require the intended recipient 

of such distribution to provide the withholding agent with an amount of Cash sufficient to satisfy 

such withholding tax as a condition to receiving such distribution or withhold an appropriate 

portion of such distributed property and either (1) sell such withheld property to generate Cash 

necessary to pay over the withholding tax (or reimburse the distributing party for any advance 

payment of the withholding tax) or (2) pay the withholding tax using its own funds and retain such 

withheld property. The distributing party shall have the right not to make a distribution under the 

Plan until its withholding or reporting obligation is satisfied pursuant to the preceding sentences. 

Any amounts withheld pursuant to the Plan shall be deemed to have been distributed to and 

received by the applicable recipient for all purposes of the Plan.

Any party entitled to receive any property as an issuance or distribution under the Plan

shall, upon request, deliver to the withholding agent or such other Person designated by the Plan 

Administrator the appropriate IRS Form requested by the Plan Administrator to reduce or eliminate 

any required federal, state, or local withholding. If the party entitled to receive such property as 

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an issuance or distribution fails to comply with any such request for a one hundred eighty (180) 

day period beginning on the date after the date such request is made, the amount of such issuance 

or distribution shall irrevocably revert to the Plan Administrator and any Claim in respect of such 

distribution under the Plan shall be discharged and forever barred from assertion against such 

Debtor, the Plan Administrator, or their respective property.

Notwithstanding the above, each Holder of an Allowed Claim or Interest that is to receive 

a distribution under the Plan shall have the sole and exclusive responsibility for the satisfaction 

and payment of any tax obligations imposed on such Holder by any Governmental Unit, including 

income, withholding, and other tax obligations, on account of such Plan Distribution.

C. Date of Distributions

Distributions made after the Effective Date to holders of Allowed Claims shall be deemed 

to have been made on the Effective Date and no interest shall accrue or be payable with respect to 

such Claims or any distribution related thereto. In the event that any payment or act under the Plan

is required to be made or performed on a date that is not a Business Day, then the making of such 

payment or the performance of such act may be completed on or as soon as reasonably practicable 

after the next succeeding Business Day, but shall be deemed to have been completed as of the 

required date.

D. Disbursing Agent

Except as may be otherwise provided in the Sale Order or Cash Collateral Order, all 

distributions under the Plan shall be made by the Disbursing Agent on and after the Effective Date

and as provided herein. The Disbursing Agent shall not be required to give any bond or surety or 

other security for the performance of its duties. The Debtors shall use commercially reasonable 

efforts to provide the Disbursing Agent with the amounts of Claims and the identities and addresses 

of Holders of Claims, in each case, as set forth in the Debtors’ books and records. The Debtors 

shall cooperate in good faith with the Disbursing Agent to comply with the reporting and 

withholding requirements outlined in the Plan.

E. Rights and Powers of Disbursing Agent

The Disbursing Agent may (1) effect all actions and execute all agreements, instruments, 

and other documents necessary to carry out the provisions of the Plan; (2) make all distributions 

contemplated hereby; and (3) perform such other duties as may be required of the Disbursing 

Agent pursuant to the Plan or as deemed by the Disbursing Agent to be necessary and proper to 

implement the provisions hereof.

F. Surrender of Instruments

As a condition precedent to receiving any distribution under the Plan, each holder of a 

certificated instrument or note must surrender such instrument or note held by it to the Plan 

Administrator or its designee. Any holder of such instrument or note that fails to (1) surrender the 

instrument or note; or (2) execute and deliver an affidavit of loss or indemnity reasonably 

satisfactory to the Plan Administrator and furnish a bond in form, substance, and amount 

reasonably satisfactory to the Plan Administrator within six (6) months of being entitled to such 

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distribution shall be deemed to have forfeited all rights and claims and may not participate in any 

distribution hereunder.

G. Delivery of Distributions and Undeliverable or Unclaimed Distributions

Subject to applicable Bankruptcy Rules, all distributions to Holders of Allowed Claims 

shall be made by the Disbursing Agent, who shall transmit such distributions to the applicable 

Holders of Allowed Claims or their designees.

If any distribution to a holder of an Allowed Claim (1) is returned as undeliverable for lack 

of a current address or otherwise; or (2) is not cashed or otherwise presented for collection by the 

holder of the Allowed Claim within ninety (90) calendar days after the mailing of such distribution, 

the Plan Administrator shall be authorized to cancel such distribution check and file with the 

Bankruptcy Court the name and last known address of the holder of undeliverable distribution or 

uncashed distribution, as applicable. If, after the passage of thirty (30) calendar days after such 

Filing, the payment or distribution on the Allowed Claim still cannot be made, then (1) the holder 

of such Claim shall cease to be entitled to the undeliverable distribution or uncashed distribution, 

which will revert to the Plan Administrator for distribution in accordance with the terms of the 

Plan; and (2) the Allowed Claim of such holder shall be deemed disallowed and expunged for 

purposes of further distributions under the Plan.

H. Manner of Payment

Except as specifically provided herein, at the option of the Debtors or the Plan 

Administrator, as applicable, any Cash payment to be made under the Plan may be made by a 

check or wire transfer or as otherwise required or provided in applicable agreements or customary 

practices of the Debtors.

I. Foreign Currency Exchange Rate

As of the Effective Date, any Claim asserted in currency other than U.S. dollars shall be 

automatically deemed converted to the equivalent U.S. dollar value using the exchange rate for the 

applicable currency as published in The Wall Street Journal, on the Petition Date.

J. Setoffs and Recoupment

The Debtors and the Plan Administrator, pursuant to the Bankruptcy Code (including 

section 553 of the Bankruptcy Code), and applicable bankruptcy and/or non-bankruptcy law, 

without the approval of the Bankruptcy Court and upon no less than fourteen (14) calendar days’ 

notice to the applicable Holder of a Claim, or as may be agreed to by the Holder of a Claim, may, 

but shall not be required to, set off against or recoup against any Allowed Claim and the 

distributions to be made pursuant to the Plan on account of such Allowed Claim, any claims of 

any nature whatsoever that the Debtors or their Estates may have against the Holder of such 

Allowed Claim; provided, that neither the failure to effect such a setoff or recoupment nor the 

allowance of any Claim hereunder shall constitute a waiver or release by the Debtors or the Plan 

Administrator of any such claim the Debtors or their Estates may have against the holder of such 

Claim.

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K. Minimum Distribution

No payment of Cash in an amount of less than one hundred U.S. dollars ($100.00) shall be 

required to be made on account of any Allowed Claim. Such undistributed amount may instead 

be used in accordance with the Plan and the Wind-Down Budget. If the Cash available for the 

final distribution is less than the cost to distribute such funds, the Plan Administrator may donate 

such funds to the unaffiliated charity of its choice. 

L. Allocations

Except as otherwise provided in the Plan or as otherwise required by law, distributions with 

respect to an Allowed Claim shall be allocated first to the principal portion of such Allowed Claim 

(as determined for U.S. federal income tax purposes) and, thereafter, to the remaining portion of 

such Allowed Claim, if any.

M. Distributions Free and Clear

Except as otherwise provided in the Plan, any distribution or transfer made under the Plan, 

including distributions to any Holder of an Allowed Claim, shall be free and clear of any Liens, 

Claims, encumbrances, charges, and other interests, and no other entity shall have any interest, 

whether legal, beneficial, or otherwise, in property distributed or transferred pursuant to the Plan.

N. Claims Paid or Payable by Third Parties

1. Claims Paid by Third Parties

If a Holder of a Claim receives a payment or other satisfaction of its Claim other than 

through the Debtors or Plan Administrator on account of such Claim, such Claim shall be reduced 

by the amount of such payment or satisfaction without an objection to such Claim having to be 

Filed and without any further notice to or action, order, or approval of the Bankruptcy Court, and 

if the Claim was paid or satisfied in full other than through the Debtors or the Plan Administrator, 

then such Claim shall be disallowed and any recovery in excess of a single recovery in full shall 

be paid over to the Plan Administrator without an objection to such Claim having to be Filed and 

without any further notice to or action, order, or approval of the Bankruptcy Court. To the extent 

a Holder of a Claim receives a distribution on account of such Claim and receives payment or 

satisfaction from a party that is not the Debtors or the Plan Administrator on account of such Claim, 

such Holder shall, within fourteen (14) calendar days of receipt thereof, repay or return the 

distribution to the Debtors or the Plan Administrator, to the extent the Holder’s total recovery on 

account of such Claim from the third party and under the Plan exceeds the amount of such Claim 

as of the date of any such distribution under the Plan.

2. Claims Payable by Third Parties

No distributions under the Plan shall be made on account of an Allowed Claim that is 

payable pursuant to one of the Debtors’ Insurance Policies until the holder of such Allowed Claim 

has exhausted all remedies with respect to such Insurance Policy. To the extent that one or more 

of the Debtors’ insurers agrees to satisfy in full or in part a Claim (if and to the extent adjudicated 

by a court of competent jurisdiction), then immediately upon such insurers’ agreement, the 

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applicable portion of such Claim may be expunged without an objection to such Claim having to 

be Filed and without any further notice to or action, order, or approval of the Bankruptcy Court.

3. Applicability of Insurance Policies

Except as otherwise provided in the Plan, distributions to Holders of Allowed Claims shall 

be in accordance with the provisions of any applicable insurance policy. Except as set forth in 

Article IX of the Plan, nothing in the Plan shall constitute or be deemed a waiver of any Cause of 

Action that the Debtors or any Entity, including the Plan Administrator, may hold against any other 

Entity, including insurers under any policies of insurance, nor shall anything contained herein 

constitute or be deemed a waiver by such insurers of any defenses, including coverage defenses, 

held by such insurers.

O. No Postpetition Interest on Claims

Unless otherwise specifically provided for in the DIP Orders, the Plan, or the Confirmation 

Order, or required by applicable bankruptcy and non-bankruptcy law, postpetition interest shall 

not accrue or be paid on any prepetition Claims, and no Holder of a Claim shall be entitled to 

interest accruing on or after the Petition Date on such Claim.

ARTICLE IX.

PROCEDURES FOR RESOLVING CONTINGENT, UNLIQUIDATED, AND DISPUTED 

CLAIMS

A. Allowance of Claims

After the Effective Date, the Plan Administrator shall have and retain any and all rights 

and defenses that the Debtor had with respect to any Claim or Interest immediately prior to the 

Effective Date.

B. Claims Administration Responsibilities

Except as otherwise specifically provided in the Plan, after the Effective Date, the Plan 

Administrator shall have the sole authority to: (1) File, withdraw, or litigate to judgment, 

objections to Claims or Interests; (2) settle or compromise any Disputed Claim without any further 

notice to or action, order, or approval by the Bankruptcy Court; and (3) administer and adjust the 

Claims Register to reflect any such settlements or compromises without any further notice to or 

action, order, or approval by the Bankruptcy Court.

C. Estimation of Claims and Interests

Before or after the Effective Date, the Debtors or the Plan Administrator may (but are not 

required to) at any time request that the Bankruptcy Court estimate any Disputed Claim that is 

contingent or unliquidated pursuant to section 502(c) of the Bankruptcy Code for any reason, 

regardless of whether any party previously has objected to such Claim or whether the Bankruptcy 

Court has ruled on any such objection, and the Bankruptcy Court shall retain jurisdiction to

estimate any such Claim, including during the litigation of any objection to any Claim or during 

the appeal relating to such objection.

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Notwithstanding any provision to the contrary herein, a Claim that has been expunged or 

disallowed from the Claims Register, but that either is subject to appeal or has not been the subject 

of a Final Order, shall be deemed to be estimated at zero dollars ($0.00) unless otherwise ordered 

by the Bankruptcy Court. In the event that the Bankruptcy Court estimates any contingent or 

unliquidated Claim, that estimated amount shall constitute a maximum limitation on such Claim 

for all purposes under the Plan (including for purposes of distributions), and the Debtors or the 

Plan Administrator (as applicable) may elect to pursue any supplemental proceedings to object to 

any ultimate distribution on such Claim.

D. Adjustment to Claims or Interests Without Objection

Any Claim that has been paid, satisfied, or assumed by the Stalking Horse Purchaser in the 

Sale Transaction, or any Claim that has been amended or superseded, may be adjusted or expunged 

on the Claims Register by the Debtors or the Plan Administrator (as applicable) without an 

objection to such Claim having to be Filed and without any further notice to or action, order, or 

approval of the Bankruptcy Court. 

E. Time to File Objections to Claims

Except as otherwise provided herein, any objections to Claims shall be Filed on or before 

the Claims Objection Bar Date (as such date may be extended upon presentment of an order to the 

Bankruptcy Court by the Plan Administrator or the Debtors).

F. Disallowance of Claims or Interests

Except as otherwise expressly set forth herein, all Claims and Interests of any Entity from 

which property is sought by the Debtors under sections 542, 543, 550, or 553 of the Bankruptcy 

Code or that the Debtors or the Plan Administrator allege is a transferee of a transfer that is 

avoidable under sections 522(f), 522(h), 544, 545, 547, 548, 549, or 724(a) of the Bankruptcy 

Code shall be disallowed if: (1) the Entity, on the one hand, and the Debtors or the Plan 

Administrator on the other hand, agree or the Bankruptcy Court has determined by Final Order 

that such Entity or transferee is liable to turn over any property or monies under any of the 

aforementioned sections of the Bankruptcy Code; and (2) such Entity or transferee has failed to 

turn over such property by the date set forth in such agreement or final order.

G. Disallowance of Late Claims

Except as provided herein or otherwise agreed to by the Debtors or Plan Administrator, as 

applicable, any holder of a Claim Filed via Proof of Claim after the Bar Date shall not receive any 

distributions on account of such Claims, unless on or before the Combined Hearing such late Claim 

has been deemed timely Filed by a Final Order. 

H. Disputed Claims Process

All Claims held by Persons or Entities against whom or which the Debtor has commenced 

a proceeding asserting a Cause of Action under sections 542, 543, 544, 545, 547, 548, 549, or 550 

of the Bankruptcy Code or that is a transferee of a transfer avoidable under section 522(f), 522(h), 

544, 545, 548, 549 or 724(a) of the Bankruptcy Code shall be deemed Disputed Claims pursuant 

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to section 502(d) of the Bankruptcy Code and holders of such Claims shall not be entitled to vote 

to accept or reject the Plan. A Claim deemed Disputed pursuant to Article VII.H. of the Plan shall 

continue to be Disputed for all purposes until the relevant proceeding against the Holder of such 

Claim has been settled or resolved by a Final Order and any sums due to the Debtor or the Plan 

Administrator from such holder have been paid.

I. Amendments to Claims

Except as provided herein, on or after the Effective Date, without the prior authorization 

of the Bankruptcy Court or the Plan Administrator, a Claim may not be Filed or amended and any 

such new or amended Claim Filed shall be deemed disallowed in full and expunged without any 

further notice to or action, order, or approval of the Bankruptcy Court.

J. No Distributions Pending Allowance

If an objection to a Claim, Proof of Claim, or portion thereof is Filed, no payment or 

distribution provided under the Plan shall be made on account of such Claim, Proof of Claim, or 

portion thereof unless and until the Disputed Claim becomes an Allowed Claim.

K. Distributions After Allowance

To the extent that a Disputed Claim ultimately becomes an Allowed Claim, 

distributions shall be made to the Holder of such Allowed Claim in accordance with the provisions 

of the Plan. As soon as practicable after the date that the order or judgment of the Bankruptcy 

Court allowing any Disputed Claim becomes a Final Order, the Disbursing Agent shall provide to 

the Holder of such Claim the distribution to which such Holder is entitled under the Plan as of the 

Effective Date, without any interest, dividends, or accruals to be paid on account of such Claim. 

No interest shall accrue or be paid on any Claim with respect to the period from the Effective Date

to the date a final distribution is made on account of such Claim.

ARTICLE X.

CONDITIONS PRECEDENT TO THE EFFECTIVE DATE

A. Conditions Precedent to the Effective Date

The occurrence of the Effective Date of the Plan is subject to each of the following 

conditions precedent (the “Conditions Precedent to the Effective Date”):

1. the Bankruptcy Court shall have entered the Confirmation Order, which shall:

a. authorize the Debtors to take all actions necessary to enter into, implement, and 

consummate the contracts, instruments, releases, leases, indentures, and other 

agreements or documents created in connection with the Plan;

b. decree that the provisions in the Confirmation Order and the Plan are nonseverable 

and mutually dependent;

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c. authorize the Debtors, as applicable/necessary, to implement the Liquidation 

Transactions and make all distributions and issuances as required under the Plan;

d. authorize the implementation of the Plan in accordance with its terms; and

e. provide that, pursuant to section 1146 of the Bankruptcy Code, the assignment or 

surrender of any lease or sublease, and the delivery of any deed or other instrument 

or transfer order, in furtherance of, or in connection with the Plan, including any 

deeds, bills of sale, or assignments executed in connection with any disposition or 

transfer of assets contemplated under the Plan, shall not be subject to any stamp, 

real estate transfer, mortgage recording, or other similar tax to the fullest extent 

permissible; 

2. the Debtors shall have obtained all authorizations, consents, regulatory approvals, rulings, 

or documents that are necessary to implement and effectuate the Plan;

3. the final version of each of the Plan and all documents contained in any supplement to the 

Plan, including the Plan Supplement and all of the schedules, documents, and exhibits 

contained therein shall have been Filed and in a form reasonably acceptable to the 

Prepetition Term Loan Administrative Agent; 

4. the Debtors shall have fully funded the Professional Fee Reserve Account and Wind-Down 

Budget; 

5. all reasonable and documents professional fees and expenses of the Prepetition Term Loan 

Advisors shall have been paid in full;

6. to the extent invoiced, the payment in cash in full of all Liquidation Expenses;

7. the Sale Transaction shall have been consummated substantially on the terms described in 

the Bid Procedures Order; and

8. the Debtors shall have implemented the Liquidation Transactions and all transactions 

contemplated in the Plan in a manner consistent with the Plan.

B. Waiver of Conditions

The Debtors, with the express prior written consent of the Prepetition Term Loan 

Administrative Agent and, with respect solely to conditions (c) and (e), above, the Required 

Unsecured Creditor Plan Sponsors (in each case not to be unreasonably withheld or delayed) solely

to the extent the Consenting Unsecured Creditors are materially and adversely affected, may waive 

any one or more of the Conditions Precedent to the Effective Date.

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ARTICLE XI.

RELEASE, INJUNCTION, AND RELATED PROVISIONS

A. Releases by the Debtors

Pursuant to section 1123(b) of the Bankruptcy Code, for good and valuable 

consideration, as of the Effective Date, each of the Released Parties is unconditionally, 

irrevocably, generally, individually, and collectively, released, acquitted, and discharged by 

the Debtors, the Wind-Down Debtors, and each of their Estates, including any successors to 

the Debtors or any Estate’s representative appointed or selected pursuant to section 

1123(b)(3) of the Bankruptcy Code, from any and all Causes of Action, including any 

Avoidance Actions or derivative Causes of Action asserted or assertable by or on behalf of a 

Debtor, a Wind-Down Debtor, or any of their Estates, any Causes of Action that any Debtor, 

Wind-Down Debtor, or any of their Estates would have been legally entitled to assert in its 

own right (whether individually or collectively) or on behalf of the Holder of any Claim 

against or Interest in a Debtor or other Entity, whether known or unknown, foreseen or 

unforeseen, asserted or unasserted, matured or unmatured, existing or hereafter arising, in 

law, equity, contract, tort, or otherwise that the Debtors, Wind-Down Debtors, or their 

Estates (whether individually or collectively) ever had, now has, or thereafter can, shall, or 

may have, based on or relating to, or in any manner arising from, in whole or in part: (a) the 

Debtors, the Debtors’ in- or out-of-court restructuring efforts, the Marketing Process, 

intercompany transactions, the Chapter 11 Cases, the purchase, sale, or rescission of any 

security of the Debtors, any Sale Transaction, the formulation, preparation, dissemination, 

negotiation, or filing of the Transaction Documents, PSA, the Disclosure Statement, or the 

Plan, including the Plan Supplement; (b) any Liquidation Transaction, contract, instrument, 

release, or other agreement or document (including any legal opinion requested by any 

Entity regarding any transaction, contract, instrument, document, or other agreement 

contemplated by the Plan or the reliance by any Released Party on the Plan or the 

Confirmation Order in lieu of such legal opinion) created or entered into in connection with 

the Sale Transaction, the PSA, the Disclosure Statement, or the Plan, including the Plan 

Supplement; (c) the business or contractual arrangements between any Debtor and any 

Released Party, whether before or during the Debtors’ Chapter 11 Cases, or the 

restructuring of Claims and Interests before or during the Chapter 11 Cases; (d) the subject 

matter of, or the transactions or events giving rise to, any Claim or Interest that is affected 

by or classified in the Plan; (e) the filing of the Chapter 11 Cases, the pursuit of Confirmation, 

the pursuit of consummation of the Plan, the administration and implementation of the Plan, 

including any issuance or distribution of securities pursuant to the Plan, or the distribution 

of property under the Plan or any other related agreement; or (f) any other act or omission, 

transaction, agreement, event, or other occurrence taking place on or before the Effective 

Date arising from or relating to any of the foregoing, including, without limitation, the 

Prepetition Loan Documents, any Interests, and all matters relating thereto. 

Notwithstanding anything to the contrary in the foregoing, the releases set 

forth above shall not release: (a) to the extent that any Claims or other Causes of Action 

against the Debtors are not released pursuant to the Plan, are not discharged pursuant to 

the Plan, or are Disputed, any rights of the Debtors and the Wind-Down Debtors to assert 

any and all counterclaims, crossclaims, offsets, indemnities, claims for contribution, 

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defenses, and similar claims or other Causes of Action in response to such Causes of Action; 

(b) any commercial Cause of Action arising in the ordinary course of business, such as 

accounts receivable and accounts payable on account of goods and services being performed; 

(c) any post-Effective Date obligations of any party or Entity under the Plan, any Liquidation 

Transaction, or any other document, instrument, or agreement executed to implement the 

Plan (including those set forth in the Plan Supplement); (d) the Retained Causes of Action, 

or (e) any obligations of any party or Entity under the Transaction Documents.

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s 

approval, pursuant to Bankruptcy Rule 9019, of the Debtor Release, which includes by 

reference each of the related provisions and definitions contained in the Plan, and further, 

shall constitute the Bankruptcy Court’s finding that the Debtor Release is: (a) essential to 

the Confirmation of the Plan; (b) an exercise of the Debtors’ business judgment; (c) in 

exchange for the good and valuable consideration and substantial contributions provided by 

the Released Parties; (d) a good faith settlement and compromise of the Causes of Action 

released by the Debtor Release; (e) in the best interests of the Debtors and all Holders of 

Claims and Interests; (f) fair, equitable, and reasonable; (g) given and made after due notice 

and opportunity for hearing; and (h) a bar to any of the Debtors, the Wind-Down Debtors, 

and the Estates, including any successors to the Debtors or any Estate’s representative 

appointed or selected pursuant to section 1123(b)(3) of the Bankruptcy Code, asserting any 

Cause of Action released pursuant to the Debtor Release.

Each of the Debtors expressly acknowledges that although ordinarily a general 

release may not extend to Claims or Causes of Action that each Debtor does not know or 

suspect to exist in its favor, which if known by it may have materially affected its settlement 

with the party released, they have carefully considered, and taken into account in 

determining to enter into the above releases described in this Plan, the possible existence of 

such unknown losses or Claims or Causes of Action. Without limiting the generality of the 

foregoing, each Debtor expressly waives and relinquishes any and all rights and benefits such 

party may have or conferred upon it under any federal, state, or local statute, rule, 

regulation, or principle of common law or equity that provides that a release does not extend 

to Claims or Causes of Action that the claimant does not know or suspect to exist in its favor 

at the time of providing the release or that may in any way limit the effect or scope of the 

releases with respect to released Claims or Causes of Action that such party did not know or 

suspect to exist in such party’s favor at the time of providing the release, which in each case 

if known by it may have materially affected its settlement with any Released Party, including, 

without limitation, California Civil Code § 1542, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE 

CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT 

TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE 

RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE 

MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE 

DEBTOR OR RELEASED PARTY.

Each of the Debtors expressly acknowledges that the releases and covenants 

not to sue contained in the Plan are effective regardless of whether those released matters or 

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released Claims or Causes of Action are presently known or unknown, suspected or 

unsuspected, or foreseen or unforeseen.

Notwithstanding anything herein to the contrary, the Prepetition Term Loan 

Secured Parties shall not be deemed to release any direct claims they may have against 

former directors and officers of the Debtors who were not directors or officers as of the 

Petition Date.

B. Releases by the Releasing Parties

As of the Effective Date, each of the Releasing Parties other than the Debtors 

shall, and shall be deemed to have, expressly, absolutely, unconditionally, irrevocably, 

generally, individually, and collectively, released, acquitted, and discharged each of the 

Released Parties from any and all Causes of Action, including any Avoidance Actions or 

derivative Causes of Action asserted or assertable by or on behalf of a Debtor, Wind-Down

Debtor, or any of their Estates, and any Causes of Action asserted or assertable by or on 

behalf of the Holder of any Claim or Interest or other Entity, whether known or unknown, 

foreseen or unforeseen, asserted or unasserted, matured or unmatured, existing or hereafter 

arising, in law, equity, contract, tort, or otherwise that the Releasing Parties (whether 

individually or collectively) ever had, now have, or thereafter can, shall, or may have, based 

on or relating to, or in any manner arising from, in whole or in part: (a) the Debtors, the 

Debtors’ in- or out-of-court restructuring efforts, the Marketing Process, intercompany 

transactions, the Chapter 11 Cases, the purchase, sale, or rescission of any security of the 

Debtors, the formulation, preparation, dissemination, negotiation, or filing of the 

Transaction Documents, the PSA, the Disclosure Statement, or the Plan, including the Plan 

Supplement; (b) any Liquidation Transaction, contract, instrument, release, or other 

agreement or document (including any legal opinion requested by any Entity regarding any 

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

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

legal opinion) created or entered into in connection with the Sale Transaction, the PSA, the 

Disclosure Statement, or the Plan, including the Plan Supplement; (c) the business or 

contractual arrangements between any Debtor and any Releasing Party, whether before or 

during the Debtors’ restructuring, or the restructuring of Claims and Interests before or 

during the Chapter 11 Cases; (d) the subject matter of, or the transactions or events giving 

rise to, any Claim or Interest that is affected by or classified in the Plan; (e) the filing of the 

Chapter 11 Cases, the pursuit of Confirmation, the pursuit of consummation of the Plan, the 

administration and implementation of the Plan, including any issuance or distribution of 

securities pursuant to the Plan, or the distribution of property under the Plan or any other 

related agreement; or (f) any other act or omission, transaction, agreement, event, or other 

occurrence taking place on or before the Effective Date arising from or relating to any of the 

foregoing, including, without limitation, the Prepetition Loan Documents, and all matters 

relating thereto.

Notwithstanding anything to the contrary in the foregoing, the releases set 

forth above shall not release, prejudice, limit, impact, or otherwise impair: (a) to the extent 

that any Causes of Action against any Releasing Party are not released or discharged 

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pursuant to the Plan, any rights of such Releasing Party to assert any and all counterclaims, 

crossclaims, offsets, indemnities, claims for contribution, defenses, and similar claims in 

response to such Causes of Action; (b) any rights of the Prepetition Term Loan 

Administrative Agent to (i) payment of fees, expenses, and indemnification obligations as 

against any money or property distributable to holders of Claims under the Prepetition Term 

Loan Credit Agreement, respectively, including any rights to priority of payment and/or to 

exercise charging liens or (ii) seek compensation and/or reimbursement of fees and expenses 

in accordance with the terms of the Plan and Confirmation Order, as applicable; (c) any 

Prepetition Term Loan Secured Party from pursuing claims in its own name against Adrian 

Adams; (d) any commercial Cause of Action arising in the ordinary course of business, such 

as accounts receivable and accounts payable on account of goods and services being 

performed; (e) any post-Effective Date obligations of any party or Entity under the Plan, any 

Liquidation Transaction, or any document, instrument, or agreement executed to implement 

the Plan (including those set forth in the Plan Supplement); (f) any obligations of any party 

or Entity under the Transaction Documents; or (g) any direct claims the Prepetition Term 

Loan Secured Parties may have against former directors and officers of the Debtors who 

were not directors or officers as of the Petition Date.

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s 

approval, pursuant to Bankruptcy Rule 9019, of the Third-Party Release, which includes by 

reference each of the related provisions and definitions contained herein, and, further, shall 

constitute the Bankruptcy Court’s finding that the Third-Party Release is: (a) essential to 

the Confirmation of the Plan; (b) given in exchange for the good and valuable consideration 

and substantial contributions provided by the Released Parties; (c) a good faith settlement 

and compromise of the Causes of Action released by the Third-Party Release; (d) in the best 

interests of the Debtors and their Estates; (e) fair, equitable, and reasonable; (f) given and 

made after due notice and opportunity for hearing; (g) consensual; and (h) a bar to any of 

the Releasing Parties asserting any Claim or Cause of Action released pursuant to the ThirdParty Release.

Each of the Releasing Parties expressly acknowledges that although ordinarily 

a general release may not extend to Claims or Causes of Action that the Releasing Party does 

not know or suspect to exist in its favor, which if known by it may have materially affected 

its settlement with the party released, they have carefully considered, and taken into account 

in determining to enter into the above releases described in this Plan, the possible existence 

of such unknown losses or Claims or Causes of Action. Without limiting the generality of the 

foregoing, each Releasing Party expressly waives and relinquishes any and all rights and 

benefits such party may have or conferred upon it under any federal, state, or local statute, 

rule, regulation, or principle of common law or equity that provides that a release does not 

extend to Claims or Causes of Action that the claimant does not know or suspect to exist in 

its favor at the time of providing the release or that may in any way limit the effect or scope 

of the releases with respect to released Claims or Causes of Action that such party did not 

know or suspect to exist in such party’s favor at the time of providing the release, which in 

each case if known by it may have materially affected its settlement with any Released Party, 

including, without limitation, California Civil Code § 1542, which provides:

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A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE 

CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT 

TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE 

RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE 

MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE 

DEBTOR OR RELEASED PARTY.

Each of the Releasing Parties expressly acknowledges that the releases and covenants 

not to sue contained in the Plan are effective regardless of whether those released matters or 

released Claims or Causes of Action are presently known or unknown, suspected or 

unsuspected, or foreseen or unforeseen.

C. Exculpation

To the fullest extent permitted by applicable law, no Exculpated Party will 

either have or incur any liability to any person or Entity for, and each Exculpated Party is 

hereby released and exculpated from, any Cause of Action related to any act or omission in 

connection with, relating to, or arising out of, the Debtors’ restructuring efforts, the Chapter 

11 Cases, preparation for the Chapter 11 Cases, the filing of the Chapter 11 Cases, 

formulation, preparation, dissemination, negotiation, filing, or termination of the 

Transaction Documents, the Plan Support Agreement, the Disclosure Statement, or the Plan, 

including the Plan Supplement, or any Liquidation Transaction, contract, instrument, 

release, or other agreement or document (including providing any legal opinion requested 

by any Entity regarding any transaction, contract, instrument, document, or other 

agreement contemplated by the Plan or the reliance by any Exculpated Party on the Plan or 

the Confirmation Order in lieu of such legal opinion) created or entered into in connection 

with any of the foregoing, the Sale Transaction, the funding of the Plan, the occurrence of 

the Effective Date, the pursuit of Confirmation, the pursuit of consummation, the 

administration and implementation of the Plan, the issuance of securities pursuant to the 

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

for claims related to any act or omission that is determined in a Final Order to have 

constituted actual fraud, gross negligence, or willful misconduct, but in all respects such 

Persons will be entitled to reasonably rely upon the advice of counsel with respect to their 

duties and responsibilities pursuant to the Plan. The foregoing shall not be deemed to 

release, affect, or limit any post-Effective Date rights or obligations of the Exculpated Parties 

under the Plan, any Liquidation Transaction, or any other document, instrument, or 

agreement executed to implement the Plan (including those set forth in the Plan 

Supplement).

The Exculpated Parties have, and upon consummation of the Plan shall be 

deemed to have, participated in good faith and in compliance with the applicable laws with 

regard to the solicitation of, and distribution of consideration pursuant to, the Plan and, 

therefore, are not, and on account of such distributions shall not be, liable at any time for 

the violation of any applicable law, rule, or regulation governing the solicitation of 

acceptances or rejections of the Plan or such distributions made pursuant to the Plan.

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The exculpation will be in addition to, and not in limitation of, all other 

releases, indemnities, exculpations, and any other applicable law or rules protecting such 

Exculpated Parties from liability.

Notwithstanding anything herein to the contrary, the Prepetition Term Loan 

Secured Parties shall not be deemed to release any direct claims they may have against 

former directors and officers of the Debtors who were not directors or officers as of the 

Petition Date.

D. Injunction

Except as otherwise expressly provided in the Plan or for obligations issued or 

required to be paid pursuant to the Plan or the Confirmation Order, all Entities that have 

held, hold, or may hold claims or interests that have been released pursuant to the Plan 

provisions setting forth the releases granted by the Debtors or the Releasing Parties, or 

discharged pursuant to the Plan, or are subject to exculpation pursuant to the article of the 

Plan which provides for the exculpation of the Exculpated Parties, shall be permanently 

enjoined, from and after the Effective Date, from taking any of the following actions against, 

as applicable, the Debtors, Wind-Down Debtors, the Exculpated Parties, or the Released 

Parties: (a) commencing or continuing in any manner any action or other proceeding of any 

kind on account of or in connection with or with respect to any such claims or interests; (b) 

enforcing, attaching, collecting, or recovering by any manner or means any judgment, 

award, decree, or order against such Entities on account of or in connection with or with 

respect to any such claims or interests; (c) creating, perfecting, or enforcing any lien or 

encumbrance of any kind against such Entities or the property or the estates of such Entities 

on account of or in connection with or with respect to any such claims or interests; (d) 

asserting any right of setoff, subrogation, or recoupment of any kind against any obligation 

due from such Entities or against the property of such Entities on account of or in connection 

with or with respect to any such claims or interests unless such Entity has, on or before the 

Effective Date, asserted such setoff right in a document filed with the Bankruptcy Court 

explicitly preserving such setoff, and notwithstanding an indication of a claim or interest or 

otherwise that such Entity asserts, has, or intends to preserve any right of setoff pursuant to 

applicable law or otherwise; and (e) commencing or continuing in any manner any action or 

other proceeding of any kind on account of or in connection with or with respect to any such 

claims or interests released or settled pursuant to the Plan.

Upon the Bankruptcy Court’s entry of the Confirmation Order, all Holders of 

Claims and Interests and other parties in interest, along with their respective present or 

former employees, agents, officers, directors, or principals, shall be enjoined from taking any 

actions to interfere with the implementation or consummation of the Plan by the Debtors, 

the Plan Administrator, and their respective affiliates, employees, advisors, officers and 

directors, or agents. 

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E. No Discharge

Because the Debtors are liquidating and will not engage in business after 

consummation of the Plan, they are not entitled to a discharge of obligations pursuant to 

section 1141 of the Bankruptcy Code with regard to any holders of Claims or Interests.

F. Release of Liens

Except as otherwise provided herein or in any contract, instrument, release, or other 

agreement or document created pursuant to the Plan, on the Effective Date and concurrently 

with the applicable distributions made pursuant to the Plan and, in the case of a Secured 

Claim, satisfaction in full of the portion of the Secured Claim that is Allowed as of the 

Effective Date in accordance with the terms of the Plan, all mortgages, deeds of trust, Liens, 

pledges, or other security interests against any property of the Estate shall be fully released 

and discharged, and all of the right, title, and interest of any holder of such mortgages, deeds 

of trust, Liens, pledges, or other security interests shall revert to the Debtors and their 

successors and assigns.

If any Holder of an Other Secured Claim or any agent for such Holder has filed or 

recorded publicly any Liens and/or security interests to secure such Holder’s Other Secured Claim, 

as soon as practicable on or after the date such Holder has been satisfied in full pursuant to the 

Plan, such Holder (or the agent for such holder) shall take any and all steps requested by the Plan 

Administrator that are necessary or desirable to record or effectuate the cancellation and/or 

extinguishment of such Liens and/or security interests, including the making of any applicable 

filings or recordings, and the Plan Administrator shall be entitled to make any such filings or 

recordings on such holder’s behalf.

G. Gatekeeper Provision

No party may commence, continue, amend, or otherwise pursue, join in, or 

otherwise support any other party commencing, continuing, amending, or pursuing, a Cause of 

Action of any kind against the Debtors, the Plan Administrator, the Exculpated Parties, or the 

Released Parties that relates to, or is reasonably likely to relate to any act or omission in connection 

with, relating to, or arising out of, a Cause of Action subject to Article IX.A, Article IX.B, and 

Article IX.C of the Plan without first (a) requesting a determination from the Bankruptcy Court, 

after notice and a hearing, that such Cause of Action represents a colorable claim against a Debtor, 

Plan Administrator, Exculpated Party, or Released Party and is not a Claim that the Debtors 

released under the Plan, which request must attach the complaint or petition proposed to be filed 

by the requesting party and (b) obtaining from the Bankruptcy Court specific authorization for 

such party to bring such Cause of Action against any such Debtor, Plan Administrator, Exculpated 

Party, or Released Party. For the avoidance of doubt, any party that obtains such determination 

and authorization and subsequently wishes to amend the authorized complaint or petition to add 

any Causes of Action not explicitly included in the authorized complaint or petition must obtain 

authorization from the Bankruptcy Court before filing any such amendment in the court where 

such complaint or petition is pending. The Bankruptcy Court will have sole and exclusive 

jurisdiction to determine whether a Cause of Action is colorable and, only to the extent legally 

permissible, will have jurisdiction to adjudicate the underlying colorable Cause of Action.

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ARTICLE XII.

RETENTION OF JURISDICTION

On and after the Effective Date, the Bankruptcy Court shall retain exclusive jurisdiction, 

pursuant to 28 U.S.C. §§ 1334 and 157, over all matters arising in or related to the Chapter 11 

Cases for, among other things, the following purposes:

1. Allow, disallow, determine, liquidate, classify, estimate, or establish the priority, 

secured or unsecured status, or amount of any Claim or Interest, including the resolution of any 

request for payment of any Administrative Claim and the resolution of any and all objections to 

the secured or unsecured status, priority, amount, or allowance of Claims or Interests.

2. Resolve any cases, controversies, suits, or disputes that may arise in connection 

with Claims, including Claim objections, allowance, disallowance, subordination, estimation and 

distribution.

3. Decide and resolve all matters related to the granting and denying, in whole or in 

part of, any applications for allowance of compensation or reimbursement of expenses to 

Professionals authorized pursuant to the Bankruptcy Code or the Plan.

4. Resolve any matters related to: (a) the assumption or assumption and assignment 

of any Executory Contract or Unexpired Lease to which a Debtor is party or with respect to which 

a Debtor may be liable and to hear, determine, and, if necessary, liquidate, any cure amount arising 

therefrom; and/or (b) any dispute regarding whether a contract or lease is or was executory or 

expired.

5. Adjudicate, decide or resolve any motions, adversary proceedings, contested, or 

litigated matters, and any other matters, and grant or deny any applications involving the Debtors 

that may be pending on the Effective Date.

6. Adjudicate, decide, or resolve any and all matters related to section 1141 of the 

Bankruptcy Code.

7. Adjudicate, decide or resolve any motions, adversary proceedings, contested, or 

litigated matters.

8. Enter and implement such orders as may be necessary or appropriate to execute, 

implement, or consummate the provisions of the Plan and all contracts, instruments, releases, and 

other agreements or documents created in connection with the Plan or the Disclosure Statement.

9. Resolve any cases, controversies, suits, disputes, or Causes of Action that may arise 

in connection with the interpretation or enforcement of the Plan or any Entity’s obligations 

incurred in connection with the Plan.

10. Issue injunctions, enter and implement other orders or take such other actions as 

may be necessary or appropriate to restrain interference by any Entity with enforcement of the 

Plan.

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11. Resolve any cases, controversies, suits, disputes, or Causes of Action with respect 

to the releases, injunctions, and other provisions contained in the Plan and enter such orders as 

may be necessary or appropriate to implement such releases, injunctions, and other provisions.

12. Enter and implement such orders as are necessary or appropriate if the 

Confirmation Order is for any reason modified, stayed, reversed, revoked, or vacated.

13. Determine any other matters that may arise in connection with or related to the Cash 

Collateral Order and the Debtors’ use of Cash Collateral, the Transaction Documents, the Plan 

Support Agreement, this Disclosure Statement, the Plan, and the Confirmation Order.

14. Ensure that distributions to holders of Allowed Claims are accomplished pursuant 

to the provisions of the Plan.

15. Resolve any cases, controversies, suits, disputes, or Causes of Action with respect 

to the repayment or return of distributions and the recovery of additional amounts owed by any 

holder for amounts not timely repaid.

16. Adjudicate any and all disputes arising from or relating to distributions under the 

Plan.

17. Consider any modifications of the Plan, to cure any defect or omission, or to 

reconcile any inconsistency in any Bankruptcy Court order, including the Confirmation Order.

18. Hear and determine disputes arising in connection with the interpretation, 

implementation, or enforcement of the Plan or the Confirmation Order.

19. Hear and determine matters concerning state, local, and federal taxes in accordance 

with sections 346, 505, and 1146 of the Bankruptcy Code.

20. To recover all assets of the Debtors and property of the Debtors’ Estates, wherever 

located.

21. To hear and determine any Causes of Action that may be brought by the Plan 

Administrator.

22. To hear and determine any other rights, claims, or Causes of Action held by or 

accruing to the Debtors or the Plan Administrator pursuant to the Bankruptcy Code or any 

applicable state or federal statute or legal theory.

23. Enter an order or final decree concluding or closing the Chapter 11 Cases.

24. Enforce all orders previously entered by the Bankruptcy Court.

25. Hear any other matter over which the Court has jurisdiction.

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ARTICLE XIII.

MISCELLANEOUS PROVISIONS

A. Immediate Binding Effect

Notwithstanding Bankruptcy Rules 3020(e), 6004(h), 7062, or otherwise, upon the 

occurrence of the Effective Date, the terms of the Plan shall be immediately effective and 

enforceable and deemed binding upon and inure to the benefit of the Debtors, the Plan

Administrator, the holders of Claims and Interests, the Released Parties, and each of their 

respective successors and assigns. Any action to be taken on the Effective Date may be taken on 

or as soon as reasonably practicable thereafter.

B. Additional Documents

On or before the Effective Date, the Debtors may File with the Bankruptcy Court such 

agreements and other documents as may be necessary or appropriate to effectuate and further 

evidence the terms and conditions of the Plan. The Debtors or the Plan Administrator (as 

applicable) and all Holders of Claims or Interests receiving distributions pursuant to the Plan and 

all other parties in interest shall, from time to time, prepare, execute, and deliver any agreements 

or documents and take any other actions as may reasonably be necessary or advisable to effectuate 

the provisions and intent of the Plan or the Confirmation Order.

C. Substantial Consummation

On the Effective Date, the Plan shall be deemed to be substantially consummated (within 

the meaning set forth in section 1101 of the Bankruptcy Code) pursuant to section 1127(b) of the 

Bankruptcy Code.

D. Reservation of Rights

The Plan shall have no force or effect unless and until the Bankruptcy Court enters the 

Confirmation Order. None of the Filing of the Plan, any statement or provision contained in the 

Plan, or the taking of any action by the Debtors with respect to the Plan, the Disclosure Statement, 

or the Plan Supplement shall be or shall be deemed to be an admission or waiver of any rights of 

the Debtors with respect to the Holders of Claims or Interests prior to the Effective Date.

E. Successors and Assigns

The rights, benefits, and obligations of any Entity named or referred to in the Plan shall be 

binding on, and shall inure to the benefit of any heir, executor, administrator, successor or assign, 

beneficiaries or guardian, if any, of each Entity.

F. Determination of Tax Liabilities

As of the Effective Date, the Plan Administrator (to the extent not the responsibility of the 

Stalking Horse Purchaser) will be responsible for preparing and filing any tax forms or returns on 

behalf of the Debtors’ Estates; provided, that the Plan Administrator shall not be responsible for 

preparing or filing any tax forms for Holders of Interests in the Debtors (which Interests shall be 

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cancelled pursuant to the Plan), but shall provide such Holders with any information reasonably 

required to prepare such forms. The Debtors and the Plan Administrator shall have the right to 

request an expedited determination of any tax liability pursuant to section 505 of the Bankruptcy 

Code, including on any unpaid liability of the Debtors’ Estates for any tax incurred during the 

administration of these Chapter 11 Cases.

G. Notices

In order for all notices, requests, and demands to or upon the Debtors and the Plan 

Administrator, as the case may be, to be effective such notices, requests and demands shall be in 

writing (including by electronic mail) and, unless otherwise expressly provided herein, shall be 

deemed to have been duly given or made when actually delivered or, in the case of notice by email, 

when received, and served on or delivered to the following parties:

Debtors Counsel to the Debtors

Impel Pharmaceuticals Inc.

c/o Teneo

280 Park Avenue

New York, NY 10017

Attention: Brandon Smith, 

Chief Restructuring Officer

Email: brandon.smith@teneo.com

Sidley Austin LLP

2021 McKinney Ave. Suite 2000

Dallas, Texas 75201

Facsimile: (214) 981-3400

Attn: Samuel A. Newman

 Rakhee V. Patel

 Jackson T. Garvey

Email: sam.newman@sidley.com

 rpatel@sidley.com

 jgarvey@sidley.com

Plan Administrator Counsel to the Plan Administrator

To be included in the Plan Supplement. To be included in the Plan Supplement.

Counsel to the Prepetition Term Loan Administrative Agent

Sullivan & Cromwell LLP

125 Broad Street

New York, NY 10004

Facsimile: (212) 558-3588

Attn: Ari B. Blaut

Benjamin S. Beller

Email: blauta@sullcrom.com

bellerb@sullcrom.com

After the Effective Date, Persons or Entities that wish to continue to receive documents 

pursuant to Bankruptcy Rule 2002 must File a renewed request to receive documents pursuant to 

Bankruptcy Rule 2002. After the Effective Date, the Plan Administrator is authorized to limit the 

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list of Entities receiving documents pursuant to Bankruptcy Rule 2002 to those Entities that Filed 

such renewed requests.

H. Term of Injunctions or Stays

Except as otherwise provided in the Plan, to the maximum extent permitted by applicable 

law and subject to the Bankruptcy Court’s post-confirmation jurisdiction to modify the injunctions 

and stays under the Plan (1) all injunctions with respect to or stays against an action against 

property of the Debtors or the Debtors’ Estates arising under or entered during the Chapter 11 

Cases under sections 105 or 362 of the Bankruptcy Code, and in existence on the date the 

Confirmation Order is entered, shall remain in full force and effect until such property is no longer 

property of the Debtors or the Debtors’ Estates; and (2) all other injunctions and stays arising under 

or entered during the Chapter 11 Cases under sections 105 or 362 of the Bankruptcy Code shall 

remain in full force and effect until the earliest of (i) the date that the Chapter 11 Cases are closed 

pursuant to a final order of the Bankruptcy Court, or (ii) the date that the Chapter 11 Cases are 

dismissed pursuant to a final order of the Bankruptcy Court. All injunctions or stays contained in 

the Plan or the Confirmation Order shall remain in full force and effect indefinitely.

I. Entire Agreement

On the Effective Date, the Plan and the Plan Supplement supersede all previous and 

contemporaneous negotiations, promises, covenants, agreements, understandings, and 

representations on such subjects, all of which have become merged and integrated into the Plan.

J. Plan Supplement

All exhibits and documents included in the Plan Supplement are incorporated into and are 

a part of the Plan as if set forth in full in the Plan. Copies of such exhibits and documents shall be 

made available upon written request to the Debtors’ counsel or the Plan Administrator’s counsel 

(as applicable) at the address above or by downloading such exhibits and documents free of charge 

from the Notice and Claims Agent’s website. All documents in the Plan Supplement are 

considered an integral part of the Plan and shall be deemed approved by the Bankruptcy Court 

pursuant to the Confirmation Order.

K. Governing Law

Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy 

Code and Bankruptcy Rules) or unless otherwise specifically stated, the laws of the State of Texas, 

without giving effect to the principles of conflict of laws, shall govern the rights, obligations, 

construction, and implementation of the Plan, any agreements, documents, instruments, or 

contracts executed or entered into in connection with the Plan (except as otherwise set forth in 

those agreements, in which case the governing law of such agreement shall control), and corporate 

governance matters.

L. Nonseverability of Plan Provisions

If any term or provision of the Plan is held by the Bankruptcy Court to be invalid, void, or 

unenforceable, the Bankruptcy Court shall have the power to alter and interpret such term or 

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provision to make it valid or enforceable to the maximum extent practicable, consistent with the 

original purpose of the term or provision held to be invalid, void, or unenforceable, and such term 

or provision shall then be applicable as altered or interpreted. Notwithstanding any such holding, 

alteration, or interpretation, the remainder of the terms and provisions of the Plan will remain in 

full force and effect and will in no way be affected, impaired, or invalidated by such holding, 

alteration, or interpretation.

The Confirmation Order shall constitute a judicial determination and shall provide that 

each term and provision of the Plan, as it may have been altered or interpreted in accordance with 

the foregoing, is the following: (1) valid and enforceable pursuant to its terms; (2) integral to the 

Plan and may not be deleted or modified without the consent of the Debtors or the Plan 

Administrator (as applicable); and (3) nonseverable and mutually dependent.

M. Closing of the Chapter 11 Cases

After the full administration of the Chapter 11 Cases, the Plan Administrator shall 

promptly File with the Bankruptcy Court all documents required by Bankruptcy Rule 3022, a 

motion pursuant to Local Rule 3022-1(a), and any applicable order of the Bankruptcy Court to 

close the Chapter 11 Cases.

ARTICLE XIV.

RISK FACTORS

Prior to voting on the Plan, Holders of Claims in Classes 3 and 4, as well as entities 

in non-voting Classes, should consider carefully the risk factors described below, as well as all of 

the information contained in this Disclosure Statement, including the Exhibits hereto. These risk 

factors should not, however, be regarded as constituting the only risks involved in connection with 

the Plan and its implementation. See Article XV of this Disclosure Statement for a discussion of 

tax law considerations.

A. Bankruptcy Law Considerations

The occurrence or non-occurrence of any or all of the following contingencies, and 

any others, could affect distributions available to holders of Allowed Claims under the Plan but 

will not necessarily affect the validity of the vote of the Impaired Classes to accept or reject the 

Plan or necessarily require a re-solicitation of the votes of holders of Claims in such Impaired 

Classes.

1. The Plan May Not Be Approved or Implemented

The Plan may not be approved by the Bankruptcy Court, or if approved, the 

Conditions Precedent to the Effective Date may not occur. If the Liquidation Transactions are not 

implemented, the Debtors will consider all available restructuring alternatives, including filing an 

alternative chapter 11 plan, converting to a chapter 7 plan, and any other transaction that would 

maximize the value of the Debtors’ Estates. The terms of any alternative restructuring proposal 

may be less favorable to holders of Claims against and Interests in the Debtors than the terms of 

the Plan as described in this Disclosure Statement. 

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Any material delay in the Confirmation of the Plan, the Chapter 11 Cases, or the 

threat of rejection of the Plan by the Bankruptcy Court would add substantial expense and 

uncertainty to the process.

The uncertainty surrounding a prolonged restructuring would have other adverse 

effects on the Debtors. For example, it would adversely affect:

• The Debtors’ ability to raise additional capital;

• The Debtors’ liquidity;

• How the Debtors’ businesses are viewed by regulators, investors, lenders, and 

credit ratings agencies; 

• The Debtors’ enterprise value; and

• The Debtors’ business relationships with customers and vendors.

2. Parties in Interest May Object to the Plan’s Classification of Claims and 

Interests

There is no guarantee that the Bankruptcy Court will agree with the classification 

of Claims and Interests as proposed by the Plan. Section 1122 of the Bankruptcy Code provides 

that a chapter 11 plan may place a claim or an equity interest in a particular class only if that claim 

or interest is substantially similar to the other claims or interests in that class. As is described 

herein, the Debtors believes that the Plan’s classification of Claims and Interests complies with 

the requirements under the Bankruptcy Code. Nevertheless, there can be no assurance that the 

Bankruptcy Court will reach the same conclusion.

3. The Debtors’ Use of Cash Collateral May Be Terminated

Upon commencing the Chapter 11 Cases, the Debtors will ask the Bankruptcy 

Court to authorize the Debtors to use cash collateral to fund the Chapter 11 Cases and to provide 

customary adequate protection in accordance with the terms of the Cash Collateral Motion [and 

PSA]. Such access to cash collateral will provide liquidity during the pendency of the Chapter 11 

Cases. There can be no assurance that the Bankruptcy Court will approve such use of cash 

collateral on the terms requested. Moreover, if the Chapter 11 Cases take longer than expected to 

conclude, the Debtors may exhaust their available cash collateral. There is no assurance that the 

Debtors will be able to obtain an extension of the right to obtain further postpetition financing 

and/or use cash collateral, in which case, the liquidity necessary for the orderly functioning of the 

Debtors’ businesses may be impaired materially.

4. [The PSA May Be Terminated

As more fully described in the PSA, the PSA may be terminated upon the 

occurrence of certain events, including, among others, the Debtors’ failure to meet specified 

milestones relating to filing, confirmation, and consummation of the Plan, and breaches by the 

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Debtors and/or the Non-Company Parties of their respective obligations under the PSA. In the 

event that the PSA is terminated, the Debtors may seek a non-consensual restructuring alternative.]

5. The Conditions Precedent to the Effective Date of the Plan May Not 

Occur

As more fully set forth in Article VIII of the Plan, the confirmation and Effective 

Date of the Plan are subject to a number of conditions precedent. If such conditions precedent are 

not waived or not met, the confirmation and Effective Date of the Plan will not take place. In the 

event that the Effective Date does not occur, the Debtors may seek confirmation of a new plan or 

be forced to pivot to a chapter 7 liquidation.

6. The Debtors May Fail to Satisfy the Vote Requirements

If votes are received in number and amount sufficient to enable the Bankruptcy 

Court to confirm the Plan, the Debtors intend to seek, as promptly as practicable thereafter, 

confirmation of the Plan. In the event that sufficient votes are not received, the Debtors may need 

to seek to confirm an alternative chapter 11 plan or transaction[, subject to the terms of the PSA]. 

There can be no assurance that the terms of any such alternative chapter 11 plan or other transaction 

would be similar or as favorable to the holders of Interests and Allowed Claims as those proposed 

in the Plan and the Debtors do not believe that any such transaction exists or is likely to exist that 

would be more beneficial to the Estates than the Plan.

7. The Debtors May Not Be Able to Secure Confirmation of the Plan

There is no guarantee that the Plan will be confirmed. If the Plan, or a substantially 

similar plan, is not confirmed, the terms and timing of any plan of liquidation ultimately confirmed 

in the Chapter 11 Case, and the treatment of Claims and Interest will be unknown. In addition, if 

the Plan is not confirmed, a significant risk exists that the Chapter 11 Cases may be converted to 

cases under chapter 7. In that event, the Debtors believe that creditor recoveries would be 

substantially diminished.

8. The Debtors May Not Be Able to Secure Nonconsensual Confirmation 

Over Certain Impaired Non-Accepting Classes

In the event that any impaired class of claims or interests does not accept a 

chapter 11 plan, a bankruptcy court may nevertheless confirm a plan at the proponents’ request if 

at least one impaired class (as defined under section 1124 of the Bankruptcy Code) has accepted 

the plan (with such acceptance being determined without including the vote of any “insider” in 

such class), and, as to each impaired class that has not accepted the plan, the bankruptcy court 

determines that the plan “does not discriminate unfairly” and is “fair and equitable” with respect 

to the dissenting impaired class(es). The Debtors believe that the Plan satisfies these requirements, 

and the Debtors may request such nonconsensual Confirmation in accordance with subsection 

1129(b) of the Bankruptcy Code. Nevertheless, there can be no assurance that the Bankruptcy 

Court will reach this conclusion. In addition, the pursuit of nonconsensual confirmation or 

Consummation of the Plan may result in, among other things, increased expenses relating to 

professional compensation.

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9. The Chapter 11 Cases May Be Converted to Cases Under Chapter 7 of the 

Bankruptcy Code

If the Bankruptcy Court finds that it would be in the best interest of creditors and/or 

the debtor in a chapter 11 case, the Bankruptcy Court may convert a chapter 11 bankruptcy case 

to a case under chapter 7 of the Bankruptcy Code. In such event, a chapter 7 trustee would be 

appointed or elected to liquidate the debtor’s assets for distribution in accordance with the 

priorities established by the Bankruptcy Code. The Debtors believe that liquidation under chapter 

7 would result in significantly smaller distributions being made to creditors than those provided 

for in a chapter 11 plan because of (a) additional administrative expenses involved in the 

appointment of a chapter 7 trustee, and (b) additional expenses and Claims, some of which would 

be entitled to priority, that would be generated during the liquidation.

10. The Debtors May Object to the Amount or Classification of a Claim

Except as otherwise provided in the Plan, the Debtors reserve the right to object to 

the amount or classification of any Claim under the Plan[, subject to the terms of the PSA]. The 

estimates set forth in this Disclosure Statement cannot be relied upon by any Holder of a Claim 

where such Claim is subject to an objection. Any Holder of a Claim that is subject to an objection 

thus may not receive its expected share of the estimated distributions described in this Disclosure 

Statement.

11. Contingencies Could Affect Votes of Impaired Classes to Accept or Reject 

the Plan

The distributions available to Holders of Allowed Claims under the Plan can be 

affected by a variety of contingencies, including, without limitation, whether the Bankruptcy Court 

orders certain Allowed Claims to be subordinated to other Allowed Claims. The occurrence of any 

and all such contingencies, which could affect distributions available to Holders of Allowed 

Claims under the Plan, will not affect the validity of the vote taken by the Impaired Classes to 

accept or reject the Plan or require any sort of revote by the Impaired Classes.

The estimated Claims and creditor recoveries set forth in this Disclosure Statement 

are based on various assumptions, and the actual Allowed amounts of Claims may significantly 

differ from the estimates. Should one or more of the underlying assumptions ultimately prove to 

be incorrect, the actual Allowed amounts of Claims may vary from the estimated Claims contained 

in this Disclosure Statement. Moreover, the Debtors cannot determine with any certainty at this 

time, the number or amount of Claims that will ultimately be Allowed. Such differences may 

materially and adversely affect, among other things, the percentage recoveries to Holders of

Allowed Claims under the Plan.

12. Releases, Injunctions, and Exculpation Provisions May Not Be Approved

The Debtors understand that certain parties may believe that they have valid 

objections to the release and exculpation provisions in the Plan. The Debtors believe that any such 

objection is without merit; however, in the event that such objection is sustained by the Bankruptcy 

Court and such release and/or exculpation provisions are modified or stricken from the Plan, the 

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other Parties to the Plan Support Agreement may withdraw their support for the Plan, which may 

result in the Debtors being unable to confirm the Plan or any other chapter 11 plan.

B. Allowance of Claims

This Disclosure Statement has been prepared based on preliminary information 

concerning the Debtors’ books and records. The actual amount of Allowed Claims may differ 

from the Debtors’ current estimates.

C. Risks Related to Recoveries Under the Plan

1. The Amounts of Allowed Claims May Adversely Affect the Recovery of 

Some Holders of Allowed Claims

The distributions available to Holders of Allowed Claims in Classes 3 and 4 under 

the Plan can be affected by a variety of contingencies, including, without limitation, the amount of 

Allowed Administrative Claims, Priority Tax Claims, Other Secured Claims, and Other Priority 

Claims, thereby reducing the amount of distributions available for other Holders of Allowed 

Claims. Additionally, the allowance of more claims in Classes 3 and 4 will reduce recoveries in 

those Classes, respectively, because the distribution is an amount split pro rata among the Claims 

in those Classes. The Debtors cannot determine with any certainty at this time the number or 

amount of such Claims that will ultimately be Allowed. Thus, the projected recoveries for Holders 

of Allowed Claims in Classes 3 and 4 disclosed in this Disclosure Statement are highly speculative.

2. Any Valuation of Any Assets to be Distributed Under the Plan Is 

Speculative

Any valuation of any of the assets to be distributed under the Plan is necessarily 

speculative. Accordingly, the ultimate value, if any, of these assets could materially affect, among 

other things, recoveries to the Holders of Allowed Claims in Classes 3 and 4.

3. The Debtors Cannot Guarantee the Timing of Distributions

The timing of actual distributions to Holders of Allowed Claims may be affected 

by many factors that cannot be predicted. Therefore, the Debtors cannot guarantee the timing of 

any recovery on an Allowed Claim.

4. Certain Tax Implications of the Debtors’ Bankruptcy

Holders of Allowed Claims should carefully review Article XV of this Disclosure 

Statement, “Certain U.S. Federal Income Tax Consequences of Consummation of the Plan,” for a 

description of certain tax implications of the Plan and the Debtors’ Chapter 11 Cases. 

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D. Risks Related to the Debtors’ Businesses

1. The Debtors Will Be Subject to the Risks and Uncertainties Associated with 

the Chapter 11 Cases

For the duration of the Chapter 11 Cases, the Debtors’ ability to consummate the 

Liquidation Transactions will be subject to the risks and uncertainties associated with bankruptcy. 

These risks include the following: (a) ability to develop, confirm, and consummate the Liquidation

Transactions specified in the Plan; (b) ability to obtain Bankruptcy Court approval with respect to 

motions Filed in the Chapter 11 Cases from time to time; (c) ability of third parties to seek and 

obtain Bankruptcy Court approval to terminate or shorten the exclusivity period for the Debtors to 

propose and confirm a chapter 11 plan, to appoint a chapter 11 trustee, or to convert the Chapter 

11 Cases to chapter 7 proceedings; and (d) the actions and decisions of the Debtors’ creditors and 

other third parties who have interests in the Chapter 11 Cases that may be inconsistent with the 

Debtors’ plans.

These risks and uncertainties could affect the Debtors’ businesses and operations 

in various ways. For example, negative events associated with the Chapter 11 Cases could 

adversely affect the Debtors’ relationships with suppliers, service providers, customers, 

employees, and other third parties, which in turn could adversely affect the Sale Transaction. Also, 

the Debtors will need the prior approval of the Bankruptcy Court for transactions outside the 

ordinary course of business, which may limit the Debtors’ ability to respond timely to certain 

events or take advantage of certain opportunities. Because of the risks and uncertainties associated 

with the Chapter 11 Cases, the Debtors cannot accurately predict or quantify the ultimate impact 

of events that occur during the Chapter 11 Cases that may be inconsistent with the Debtors’ plans.

2. Operating in Bankruptcy for a Long Period of Time May Harm the Debtors’ 

Businesses

A long period of operations under Bankruptcy Court protection could have a 

material adverse effect on the Sale Transaction and the Debtors’ liquidity. So long as the 

proceedings related to the Chapter 11 Cases continue, senior management will be required to spend 

a significant amount of time and effort dealing with the restructuring instead of focusing 

exclusively on maximizing the value of the assets through a sale. A prolonged period of operating 

under Bankruptcy Court protection also may make it more difficult to retain management and other 

key personnel necessary to the success of the Debtors’ sale process. 

So long as the proceedings related to the Chapter 11 Cases continue, the Debtors 

will be required to incur substantial costs for professional fees and other expenses associated with 

the administration of the Chapter 11 Cases. The chapter 11 proceedings also require the Debtors 

to draw on cash collateral to finance the case. If the Debtors are unable to fully maximize their 

draw under the Cash Collateral Order and/or fail to comply with a provision thereof, which failure 

consequently reduces the Debtors’ access to funding for the Chapter 11 Cases, the chances of 

conversion to a chapter 7 proceeding may be increased, and, as a result, creditor recoveries may 

be significantly impaired.

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3. The Debtors’ Business Is Subject to Various Laws and Regulations That 

Can Adversely Affect the Cost, Manner, or Feasibility of Doing Business

The Debtors’ operations are subject to various federal, state and local laws and

regulations, including occupational health and safety laws. The Debtors may be required to make 

large expenditures to comply with such regulations. Failure to comply with these laws and 

regulations may result in the suspension or termination of operations and subject the Debtors to 

administrative, civil and criminal penalties, which could have a material adverse effect on the 

recoveries set forth in the Plan.

4. The Loss of Key Personnel Could Adversely Affect the Debtors’ Operations

The Debtors’ operations are dependent on a relatively small group of key 

management personnel and a highly-skilled employee base. The Debtors’ recent liquidity issues 

and the Chapter 11 Cases have created distractions and uncertainty for key management personnel 

and employees. As a result, the Debtors have experienced and may continue to experience 

increased levels of employee attrition. Because competition for experienced personnel can be 

significant, the Debtors may be unable to find acceptable replacements with comparable skills and 

experience and the loss of such key management personnel could adversely affect the Debtors’ 

ability to operate their businesses for the benefit of maximizing value until consummation of the 

Sale Transaction.

E. Disclosure Statement Disclaimer

1. The Financial Information Contained in This Disclosure Statement Has Not 

Been Audited

In preparing this Disclosure Statement, the Debtors and their advisors relied on 

financial data derived from the Debtors’ books and records that was available at the time of such 

preparation. Although the Debtors have used their reasonable business judgment to ensure the 

accuracy of the financial information, and any conclusions or estimates drawn from that financial 

information, provided in this Disclosure Statement, and although the Debtors believe that the 

financial information herein fairly reflects the financial condition of the Debtors, the Debtors are

unable to warrant that the financial information contained herein, or any conclusions or estimates 

drawn therefrom, is without inaccuracies.

2. Information Contained in This Disclosure Statement Is For Soliciting Votes

The information contained in this Disclosure Statement is for the purpose of 

soliciting acceptances of the Plan and may not be relied upon for any other purpose.

3. This Disclosure Statement Was Not Reviewed or Approved by the SEC

This Disclosure Statement was not filed with the SEC under the Securities Act or 

applicable state securities laws. Neither the SEC nor any state regulatory authority has passed 

upon the accuracy or adequacy of this Disclosure Statement or the exhibits or the statements 

contained in this Disclosure Statement.

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4. This Disclosure Statement May Contain Forward Looking Statements

This Disclosure Statement may contain “forward looking statements” within the 

meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, 

as amended. Statements containing words such as “may,” “believe,” “anticipate,” “expect,” 

“intend,” “plan,” “project,” “projections,” “business outlook,” “estimate,” or similar expressions 

constitute forward-looking statements and may include, without limitations, information regarding 

the Debtors’ expectations with respect to future events. These forward-looking statements are 

subject to a number of risks, uncertainties and assumptions, including those risks described in this 

Article.

5. No Legal or Tax Advice Is Provided to You by This Disclosure Statement

This Disclosure Statement is not legal advice to you. The contents of this 

Disclosure Statement should not be construed as legal, business or tax advice. Each Holder of a 

Claim or an Interest should consult his or her own legal counsel, accountant or other applicable 

advisor with regard to any legal, tax and other matters concerning his, her or its Claim or Interest.

This Disclosure Statement may not be relied upon for any purpose other than to determine how to 

vote on the Plan or object to Confirmation of the Plan. 

6. No Admissions Made

The information and statements contained in this Disclosure Statement will neither 

(a) constitute an admission of any fact or liability by any entity (including, without limitation, the 

Debtors) nor (b) be deemed evidence of the tax or other legal effects of the Plan on the Debtors, 

Holders of Allowed Claims or Interests, or any other parties in interest.

7. Failure to Identify Potential Objections

No reliance should be placed on the fact that a particular Cause of Action or 

potential objection to a particular Claim or Interest is, or is not, identified in this Disclosure 

Statement. The Plan Administrator may, pursuant to the Plan, object to applicable Claims or 

Interests after the Effective Date of the Plan irrespective of whether this Disclosure Statement 

identifies a particular Cause of Action or objection to a Claim.

8. No Waiver of Right to Object or Right to Recover Transfers and Assets

The vote by a Holder of a Claim or Interest for or against the Plan does not 

constitute a waiver or release of any claims, causes of action or rights of the Debtors (or any entity, 

as the case may be) to object to that Holder’s Claim or Interest, or recover any preferential, 

fraudulent or other voidable transfer of assets, regardless of whether any claims or causes of action 

of the Debtors or their Estates are specifically or generally identified in this Disclosure Statement.

9. Information Was Provided by the Debtors and Was Relied Upon by the 

Debtors’ Advisors

The Debtors’ advisors have relied upon information provided by the Debtors in 

connection with the preparation of this Disclosure Statement. Although the Debtors’ advisors have 

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performed certain limited due diligence in connection with the preparation of this Disclosure 

Statement, they have not independently verified the information contained in this Disclosure 

Statement. 

10. Potential Exists for Inaccuracies, and the Debtors Have No Duty to Update

The statements contained in this Disclosure Statement are made by the Debtors as 

of the date of this Disclosure Statement, unless otherwise specified in this Disclosure Statement, 

and the delivery of this Disclosure Statement after the date of this Disclosure Statement does not 

imply that there has not been a change in the information set forth in this Disclosure Statement 

since that date. While the Debtors have used their reasonable business judgment to ensure the 

accuracy of all of the information provided in this Disclosure Statement and in the Plan, the 

Debtors nonetheless cannot, and do not, confirm the current accuracy of all statements appearing 

in this Disclosure Statement. Further, although the Debtors may subsequently update the 

information in this Disclosure Statement, the Debtors have no affirmative duty to do so unless 

ordered to do so by the Bankruptcy Court.

11. No Representations Outside This Disclosure Statement are Authorized

No representations concerning or relating to the Debtors, the Chapter 11 Cases, or 

the Plan are authorized by the Bankruptcy Court or the Bankruptcy Code, other than as set forth 

in this Disclosure Statement. Any representations or inducements made to secure your acceptance 

or rejection of the Plan that are other than as contained in, or included with, this Disclosure 

Statement should not be relied upon by you in arriving at your decision. You should promptly 

report unauthorized representations or inducements to counsel to the Debtors and the U.S. Trustee.

ARTICLE XV.

CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF CONSUMMATION 

OF THE PLAN

The following discussion summarizes certain U.S. federal income tax 

consequences of the implementation of the Plan to the Debtors and certain Holders of Allowed 

Claims. The following summary is based on the Internal Revenue Code of 1986, as amended (the 

“IRC”), Treasury Regulations promulgated thereunder, judicial decisions, administrative rules and 

pronouncements as in effect on the date hereof. Changes in such rules or new interpretations 

thereof may have retroactive effect and could significantly affect the U.S. federal income tax 

consequences described herein. This summary addresses certain U.S. federal income tax 

consequences only to Holders of Claims that are entitled to vote (i.e., Holders of Claims in Classes 

3 and 4) and it does not address the U.S. federal income tax consequences to Holders of Interests 

or to Holders of Claims that are not entitled to vote on the Plan. The U.S. federal income tax 

consequences of the Plan are complex and are subject to significant uncertainties. 

This discussion does not address all aspects of U.S. federal income taxation that 

may be relevant to a particular Holder of an Allowed Claim in light of such Holder’s particular 

facts and circumstances (such as the effects of Section 451(b) of the IRC conforming the timing 

of certain income accruals to financial statements). In addition, this summary addresses only U.S. 

federal income taxes. Thus, the following discussion does not address foreign, state, or local tax 

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consequences, or any estate, gift, or other non-income tax consequences, of the Plan, nor does it 

purport to address the U.S. federal income tax consequences of the Plan to Holders of Allowed 

Claims that are subject to special treatment under the IRC (such as Persons who are related to the 

Debtors within the meaning of the IRC, Holders liable for the alternative minimum tax, Holders 

whose functional currency is not the U.S. dollar, Holders that received their Claims as 

compensation, broker dealers, banks, mutual funds, insurance companies, financial institutions, 

small business investment companies, regulated investment companies, tax exempt organizations, 

governmental entities, pass-through entities such as partnerships or S corporations and investors 

therein, and Holders of Claims who are themselves in bankruptcy). Accordingly, this summary 

should not be relied upon for purposes of determining the specific tax consequences of the Plan 

with respect to a particular Holder of a Claim.

If a partnership (including any entity or arrangement treated as a partnership for 

U.S. federal income tax purposes) holds an Allowed Claim, the tax treatment of a partner or other 

investor in such partnership will generally depend upon the status of the partner or investor and 

the activities of the partnership. If you are a partner or other investor in a partnership holding an 

Allowed Claim, you should consult your tax advisors.

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of Allowed 

Class 3 or 4 Claims that is: (A) an individual citizen or resident of the United States for U.S. federal 

income tax purposes; (B) a corporation (or other entity treated as a corporation for U.S. federal 

income tax purposes) created or organized under the laws of the United States, any state thereof 

or the District of Columbia; (C) an estate the income of which is subject to U.S. federal income 

taxation regardless of the source of such income; or (D) a trust (1) if a court within the United 

States is able to exercise primary jurisdiction over the trust’s administration and one or more 

United States persons have authority to control all substantial decisions of the trust or (2) that has 

a valid election in effect under applicable Treasury Regulations to be treated as a United States 

person (as defined in the IRC), and a “Non-U.S. Holder” is a Holder (other than an entity treated 

as a partnership for U.S. federal income tax purposes) that is not a U.S. Holder.

The following discussion assumes that the Plan will be implemented as described 

herein and does not address the tax consequences if the Plan is not carried out. Furthermore, this 

discussion assumes that Holders of Allowed Claims only hold Claims in a single Class. This 

discussion further assumes that the various debt and other arrangements to which a Debtor is a 

party will be respected for U.S. federal income tax purposes in accordance with their form. In 

addition, a substantial amount of time may elapse between the confirmation date and the receipt 

of a final distribution under the Plan. Events subsequent to the date of this Disclosure Statement, 

such as additional tax legislation, court decisions or administrative changes, could affect the U.S. 

federal income tax consequences of the Plan and the transactions contemplated thereunder. 

This summary of the U.S. federal income tax consequences of the Plan is not 

binding on the Internal Revenue Service (“IRS”), and no ruling will be sought or has been sought 

from the IRS with respect to any of the tax aspects of the Plan, no opinion of counsel has been 

obtained or will be obtained by the Debtors with respect thereto, and no tax opinion is given by 

this Disclosure Statement. The U.S. federal income tax consequences of certain aspects of the 

Plan may therefore be uncertain due to the lack of applicable legal authority and may be subject to 

administrative or judicial interpretations that differ from the discussion below. 

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The following discussion is not exhaustive and the U.S. federal income tax 

consequences to each Holder of an Allowed Claim will differ and will depend on factors specific 

to each such Holder, including (A) whether the Holder’s Allowed Claim (or portion thereof) 

constitutes a claim for principal or interest; (B) the origin of the Holder’s Allowed Claim; (C) 

whether the Holder reports income using the accrual or cash basis method; (D) whether the Holder 

receives distributions under the Plan in more than one taxable year; (E) whether the Holder has 

previously included in income any accrued but unpaid interest with respect to the Allowed Claim; 

and (F) whether the Holder has previously taken a bad debt deduction or otherwise recognized a 

loss with respect to the Allowed Claim. The discussion is not a substitute for careful tax planning 

and professional tax advice based upon the individual circumstances of each Holder of an Allowed 

Claim. Accordingly, each Holder of an Allowed Claim is strongly urged to consult with its own 

tax advisor regarding the U.S. federal, state, local, and foreign income and other tax consequences 

of the Plan.

A. Certain U.S. Federal Income Tax Consequences of the Plan to the Debtors.

1. U.S. Federal Income Tax Consequences to the Debtors

The proposed Sale Transaction contemplated by the Plan is expected to be treated 

as a taxable sale of the Debtors’ assets for U.S. federal income tax purposes. As a result, the 

Debtors generally will recognize taxable gain or loss equal to the “amount realized” on the Sale 

Transaction, less the aggregate adjusted basis in the assets that are subject to the Sale Transaction. 

The amount realized will be equal to (i) the cash proceeds from the Sale Transaction plus (ii) the 

fair market value of the right to receive the Contingent Sale Proceeds.

The Debtors do not anticipate that the Sale Transaction will generate material 

taxable gain.

Furthermore, the Debtors estimate that, as of December 30, 2022, they had 

approximately $271.3 million of federal net operating losses (“NOLs”) and it is expected that the 

Debtors generated additional NOLs during the 2023 and 2024 tax years. The Debtors believe that 

at least some of the NOLs will be available to offset a significant portion of any such gain. The 

Debtors continue to analyze their tax liability for the 2024 tax year and may hold back a small 

amount of the proceeds from the Sale Transaction in reserve until the final tax liability amount is 

determined. 

2. Cancellation of Debt and Reduction of Tax Attributes

In general, absent an exception, a taxpayer will realize and recognize cancellation 

of indebtedness income (“COD Income”) upon satisfaction of its outstanding indebtedness for total 

consideration less than the amount of such indebtedness. Under section 108 of the IRC, a taxpayer 

will not, however, be required to include COD Income in gross income if the taxpayer is under the 

jurisdiction of a court in a case under chapter 11 of the Bankruptcy Code and the discharge of debt 

occurs pursuant to that proceeding (the “Bankruptcy Exception”). The Debtors expect the 

consummation of the Plan will produce COD Income. Because the cancellation of the Debtors’ 

indebtedness will occur in a case brought under the Bankruptcy Code, the Debtors will be under 

the jurisdiction of the Bankruptcy Court in such case and the cancellation of the Claims will be 

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pursuant to the Plan, the Debtors will not be required to include any COD income realized as a 

result of the implementation of the Plan in taxable income under the Bankruptcy Exception. 

Instead, as a consequence of such exclusion, a taxpayer-debtor must reduce its tax 

attributes by the amount of COD Income that it excluded from gross income pursuant to section 

108 of the IRC. Such reduction in tax attributes occurs only after the tax for the year of the debt 

discharge has been determined. In general, tax attributes will be reduced in the following order: 

(a) net operating losses and carryforwards; (b) general business credit carryovers; (c) minimum 

tax credit carryovers; (d) capital loss carryovers; (e) tax basis in assets; (f) passive activity loss and 

credit carryovers; and (g) foreign tax credits carryovers. Any excess COD Income over the amount 

of available tax attributes will generally not give rise to U.S. federal income tax and will generally 

have no other U.S. federal income tax impact. Alternatively, a debtor with COD Income may elect 

first to reduce the basis of its depreciable assets pursuant to section 108(b)(5) of the IRC.

As discussed above, the Debtors estimate that as of December 30, 2022 they had 

approximately $271.3 million of NOLs and it is expected that the Debtors generated additional 

losses during the 2023 and 2024 tax years. These losses and certain other of the Debtors’ tax 

attributes may be subject to reduction by reason of COD Income realized upon consummation of 

the Plan. The Debtors have not yet determined the amount of their tax attributes that will be 

reduced by COD Income. If the Debtors are liquidated following consummation of the Plan, 

however, any such tax attributes are not expected to have meaningful value.

B. Certain U.S. Federal Income Tax Consequences of the Plan to U.S. Holders of 

Allowed Claims Entitled to Vote on the Plan

1. U.S. Federal Income Tax Consequences to U.S. Holders of Allowed Claims 

in Voting Classes

In accordance with the Plan, each Holder of Allowed Claims in Classes 3 and 4 will 

receive the proceeds from the Sale Transaction, or, in the event that such Holder determines to 

exercise its right to credit bid resulting in the sale of the assets of Impel, as the case may be, to the 

Holder under the Stalking Horse APA, ownership of such assets. Each U.S. Holder of an Allowed

Claim in Classes 3 and 4 will recognize gain or loss upon consummation of the Plan equal to the 

difference between the “amount realized” by such U.S. Holder and such U.S. Holder’s adjusted tax

basis in its Claim (other than any tax basis attributable to accrued but unpaid interest and possibly 

accrued original issue discount (“OID”)). The amount realized will include (a) the amount of any 

Cash received from the Debtor (or, if such Holder receives the ownership of the assets of Impel, 

the fair market value of such assets received), and (b) the fair market value of the Holder’s pro rata 

share of the Contingent Sale Proceeds, if any, less the amount (if any) allocable to accrued but 

unpaid interest, as discussed below under the heading “Accrued Interest.” Any such gain or loss

realized by a U.S. Holder generally should constitute capital gain or loss to such U.S. Holder, 

unless such Claim is not a capital asset in the hands of such U.S. Holder. If an Allowed Claim in 

Classes 3 or 4, as applicable, is a capital asset and it has been held for more than one year, the U.S.

Holder will realize long-term capital gain or loss. The deductibility of capital losses is subject to 

limitations.

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2. Accrued Interest

A U.S. Holder of an Allowed Claim generally will recognize ordinary income to 

the extent that such Holder receives Cash or property that is allocable to accrued but unpaid interest 

that such Holder has not yet included in its income. If an Allowed Claim includes interest, and if 

the U.S. Holder receives less than the amount of the Allowed Claim pursuant to the Plan, the U.S. 

Holder must allocate the Plan consideration between principal and interest. The Plan provides that 

all distributions to a U.S. Holder of an Allowed Claim will apply first to the principal amount of 

such Claim until such principal amount is paid in full and then to any interest accrued on such 

Claim prior to the Petition Date, and the remaining portion of such distributions, if any, shall apply 

to any interest accrued on such Claim after the Petition Date. There is no assurance, however, that 

the IRS will respect this treatment and will not determine that all or a portion of amounts 

distributed to such U.S. Holder, and attributable to principal under the Plan, is properly allocable 

to interest. U.S. Holders of Allowed Claims are urged to consult their own tax advisors in this 

regard. If the Plan consideration allocable to interest with respect to an Allowed Claim is less than 

the amount that the U.S. Holder has previously included as interest income, the previously included 

but unpaid interest may be deducted, generally as a loss.

3. Market Discount

A U.S. Holder of an Allowed Claim that purchased its Claims from a prior holder 

at a “market discount” (relative to the principal amount of the Claims at the time of acquisition) 

may be subject to the market discount rules of the IRC. In general, a debt instrument is considered 

to have been acquired with “market discount” if the holder’s adjusted tax basis in the debt 

instrument is less than (i) its stated principal amount or (ii) in the case of a debt instrument issued 

with OID, its adjusted issue price, in each case, by at least a de minimis amount.

Under the market discount rules, the U.S. Holder is required to treat any gain on 

the sale, exchange, retirement or other disposition of the Allowed Claim (other than in respect of 

a Claim for accrued but unpaid interest) as ordinary income to the extent of the market discount 

that the U.S. Holder has not previously included in income and which is treated as having accrued 

on the Allowed Claim at the time of its payment or disposition.

4. Bad Debt Deduction

A U.S. Holder who receives in respect of an Allowed Claim an amount less than 

the U.S. Holder’s tax basis in the Claim may be entitled in the year of receipt (or in an earlier or 

later year) to a bad debt deduction in some amount under IRC Section 166(a). The rules governing 

the character, timing and amount of bad debt deductions place considerable emphasis on the facts 

and circumstances of the U.S. Holder, the obligor and the instrument with respect to which a 

deduction is claimed. U.S. Holders of Allowed Claims, therefore, are urged to consult their tax 

advisors with respect to their ability to take such a deduction.

5. Medicare Surtax

Subject to certain limitations and exceptions, U.S. Holders who are individuals, 

estates or trusts may be required to pay a 3.8% Medicare surtax on all or part of that U.S. Holder’s 

“net investment income,” which includes, among other items, dividends on stock and interest 

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(including original issue discount) on debt, royalties and capital gains from the sale or other taxable 

disposition of stock or debt. U.S. Holders should consult their own tax advisors regarding the 

effect, if any, of this surtax on their receipt of distributions pursuant to the Plan.

C. Certain U.S. Federal Income Tax Consequences of the Plan to Non-U.S.

Holders of Allowed Claims Entitled to Vote on the Plan

Whether a Non-U.S. Holder of Allowed Claims in Classes 3 and 4 realizes gain or 

loss on the consummation of the Plan and the amount of such gain or loss is determined in the 

same manner as set forth above in connection with U.S. Holders under the Article VI.B.

1. Gain Recognition

Any gain recognized by a Non-U.S. Holder of Allowed Claims in Classes 3 and 4 

generally will not be subject to U.S. federal income tax with respect to property (including Cash) 

received in exchange for such Claim, unless:

• such Non-U.S. Holder is engaged in a trade or business in the United States to 

which such gain is “effectively connected” for U.S. federal income tax purposes 

(and, if required, by an applicable income tax treaty, the Non-U.S. Holder maintains 

a permanent establishment or fixed base in the United States to which gain is 

attributable); or

• if such Non-U.S. Holder is an individual, such Holder is present in the United States 

for 183 days or more during the taxable year of the disposition and certain other 

requirements are met.

Gain described in the first situation above generally will be subject to U.S. federal 

income tax on a net income basis at the regular rates. A Non-U.S. Holder that is a foreign 

corporation also may be subject to a branch profits tax at a rate of 30 percent (or such lower rate 

specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for 

certain items.

Gain described in the second situation above will be subject to U.S. federal income 

tax at a rate of 30 percent (or such lower rate specified by an applicable income tax treaty), which 

may be offset by certain U.S. source capital losses of the Non-U.S. Holder (even though the 

individual is not considered a resident of the United States), provided the Non-U.S. Holder has 

timely filed U.S. federal income tax returns with respect to such losses.

Non-U.S. Holders should consult their tax advisors regarding any applicable 

income tax treaties that may provide for different rules. 

2. Interest on Allowed Claims

Payments to a Non-U.S. Holder that are attributable to accrued but untaxed interest 

on its Claim generally will not be subject to U.S. federal income or withholding tax, provided that 

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the withholding agent has received or receives, prior to payment, appropriate documentation 

(generally, IRS Form W-8BEN or W-8BEN-E) establishing that the Non-U.S. Holder is not a U.S. 

person, unless: 

(i) the Non-U.S. Holder actually or constructively owns 10 percent or more of the total 

combined voting power of all classes of the Debtors’ stock entitled to vote (after 

application of certain attribution rules);

(ii) the Non-U.S. Holder is a “controlled foreign corporation” that is a “related person” 

with respect to the Debtors as described in Section 881(c)(3)(C) of the IRC;

(iii) the Non-U.S. Holder is a bank receiving interest described in Section 881(c)(3)(A) 

of the IRC; or

(iv) such interest is effectively connected with the conduct by the Non-U.S. Holder of 

a trade or business within the United States and, if required by an applicable income 

tax treaty, is attributable to a U.S. permanent establishment or fixed base of the 

Non-U.S. Holder (in which case, provided the Non-U.S. Holder provides a properly 

executed IRS Form W-8ECI (or successor form) to the withholding agent, the NonU.S. Holder (x) generally will not be subject to withholding tax, but (y) will be 

subject to U.S. federal income tax in the same manner as a U.S. Holder (unless an 

applicable income tax treaty provides otherwise), and a Non-U.S. Holder that is a 

corporation for U.S. federal income tax purposes may also be subject to a branch 

profits tax with respect to such Non-U.S. Holder’s effectively connected earnings 

and profits that are attributable to the accrued but untaxed interest at a rate of 

30 percent (or at a reduced rate or exemption from tax under an applicable income 

tax treaty)).

A Non-U.S. Holder that does not qualify for exemption from withholding tax

pursuant to clauses (i)–(iv) above generally will be subject to withholding of U.S. federal income 

tax on such interest or imputed interest at a 30 percent rate (or at a reduced rate or exemption from 

tax under an applicable income tax treaty). To claim such treaty exemption, the Non-U.S. Holder 

must provide the applicable withholding agent with a properly executed IRS Form W-8BEN or 

W-8BEN-E (or other applicable documentation) claiming a reduction in or exemption from 

withholding tax under the benefit of an income tax treaty between the United States and the country 

in which the Non-U.S. Holder resides or is established. For purposes of providing a properly 

executed IRS Form W-8BEN or W-BENE, special procedures are provided under applicable 

Treasury Regulations for payments through qualified foreign intermediaries or certain financial 

institutions that hold customers’ securities in the ordinary course of their trade or business.

The certifications described above must be provided to the applicable withholding 

agent prior to the payment of interest and must be updated periodically. Non-U.S. Holders that do 

not timely provide the applicable withholding agent with the required certification, but that qualify 

for a reduced rate under an applicable income tax treaty, may obtain a refund of any excess 

amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders 

should consult their tax advisors regarding their entitlement to benefits under any applicable 

income tax treaty.

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D. Information Reporting and Back-Up Withholding

Generally, information reporting requirements will apply to all payments or 

distributions under the Plan, unless you are an exempt recipient. Additionally, a U.S. Holder may 

be subject to backup withholding at applicable rates, unless the U.S. Holder (1) is a person exempt 

from backup withholding and, when required, demonstrates this or (2) timely provides a correct 

taxpayer identification number (“TIN”) (generally in the form of a properly executed IRS Form

W-9 (or a suitable substitute form) for a U.S. Holder, or applicable IRS Form W-8 (or a suitable 

substitute form) and timely provides the other information, makes the representations required by 

such form and complies with the other requirements of the backup withholding rules. A U.S. 

Holder may become subject to backup withholding if, among other things, the U.S. Holder (1) fails 

to properly report interest and dividends for U.S. federal income tax purposes or (2) in certain 

circumstances, fails to certify, under penalty of perjury, that it has furnished a correct TIN. A U.S. 

Holder that does not timely provide a correct TIN also may be subject to penalties imposed by the 

IRS. Backup withholding is not an additional tax. Any amounts withheld under the backup 

withholding rules will be allowed as a refund or a credit against your U.S. federal income tax 

liability provided the required information is properly furnished to the IRS.

Under Sections 1471 to 1474 of the Tax Code (commonly referred to as the Foreign 

Account Tax Compliance Act (“FATCA”)), unless otherwise subject to an exception, foreign 

financial institutions and certain other foreign entities must report certain information with respect 

to their U.S. account holders and investors or be subject to 30% withholding on the receipt of 

“withholdable payments.” For this purpose, “withholdable payments” are generally U.S. source 

payments of fixed or determinable, annual or periodical income (including interest). FATCA 

withholding will apply even if the applicable payment would not otherwise be subject to U.S. 

federal nonresident withholding tax. 

Each Non-U.S. Holder should consult its own tax advisor regarding the possible 

impact of these rules, including the availability of an exemption on such Non-U.S. Holder’s 

ownership of the consideration being received under the Plan.

E. Importance of Obtaining Professional Tax Assistance

The foregoing is intended to be only a summary of certain U.S. federal income tax 

consequences of the Plan and is not a substitute for careful tax planning with a tax professional. 

The U.S. federal, state, local, and foreign income and other tax consequences of the Plan are 

complex and in some cases uncertain. Such consequences may also vary based on the individual 

circumstances of each Holder of an Allowed Claim. Accordingly, each Holder of an Allowed 

Claim is strongly urged to consult with its own tax advisor regarding the U.S. federal, state, local, 

and foreign income and other tax consequences of the Plan.

ARTICLE XVI.

ADDITIONAL INFORMATION

Any statements in this Disclosure Statement concerning the provisions of any 

document are not necessarily complete, and in each instance reference is made to such document 

for the full text thereof. Certain documents described or referred to in this Disclosure Statement 

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have not been attached as exhibits because of the impracticability of furnishing copies of these 

documents to all recipients of this Disclosure Statement. The Debtors will file all exhibits to the 

Plan with the Bankruptcy Court and make them available for review by no later than seven days 

before the deadline to object to Confirmation.

ARTICLE XVII.

RECOMMENDATION AND CONCLUSION

For all of the reasons set forth in this Disclosure Statement, the Debtors believes 

that the Confirmation and consummation of the Plan is preferable to all other alternatives. 

Consequently, the Debtors urge all Holders of Claims in Classes 3 and 4, the only Classes entitled 

to vote on the Plan, to vote to accept the Plan and to evidence their acceptance by duly completing 

and returning their ballots so that they will be received on or before the Voting Deadline.

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