4881-9366-8033 

IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE NORTHERN DISTRICT OF TEXAS 

DALLAS DIVISION 

 

 § 

In re: § Chapter 11 

 § 

COTTONWOOD FINANCIAL LTD., et al.,

1

 § Case No. 24-80035 (SWE) 

 § 

 Debtors. § (Jointly Administered) 

 § 

DEBTORS’ JOINT CHAPTER 11 PLAN OF LIQUIDATION 

Jason S. Brookner (TX Bar No. 24033684) 

Aaron M. Kaufman (TX Bar No. 24060067) 

Lydia R. Webb (TX Bar No. 24083758) 

GRAY REED 

1601 Elm Street, Suite 4600 

Dallas, TX 75201 

Telephone: (214) 954-4135 

Facsimile: (214) 953-1332 

Email: jbrookner@grayreed.com 

akaufman@grayreed.com 

lwebb@grayreed.com 

Counsel to the Debtors 

and Debtors in Possession 

 

 

1 The Debtors in these chapter 11 cases and the last four digits of each Debtors’ federal tax identification number are 

as follows: Cottonwood Financial Ltd. (1001); Cottonwood Financial Administrative Services, LLC (7228); 

Cottonwood Financial Texas, LLC (9059); Cottonwood Financial Idaho, LLC (5651); Cottonwood Financial 

Wisconsin, LLC (7075). The Debtors’ principal offices are located at 2100 W Walnut Hill Lane, Suite 300, Irving, 

TX 75038.

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TABLE OF CONTENTS 

ARTICLE I DEFINITIONS AND INTERPRETATION ......................................................................................... 1

A. Definitions......................................................................................................................................... 1

B. Rules of Interpretation and Construction. ......................................................................................... 6

ARTICLE II TREATMENT OF UNCLASSIFIED CLAIMS ................................................................................. 7

A. DIP Facility Claim. ........................................................................................................................... 7

B. Administrative Claims. ..................................................................................................................... 7

C. Professional Fee Claims. ................................................................................................................... 8

D. U.S. Trustee Fees. ............................................................................................................................. 8

E. Priority Tax Claims. .......................................................................................................................... 9

ARTICLE III CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS .................................................... 9

ARTICLE IV TREATMENT OF CLAIMS AND EQUITY INTERESTS ........................................................... 10

A. Class 1 – Priority Non-Tax Claims ................................................................................................. 10

B. Class 2 – Prepetition Secured Lender’s Secured Claims. ................................................................ 10

C. Class 3 – Other Secured Claims. ..................................................................................................... 11

D. Class 4 – General Unsecured Claims. ............................................................................................. 11

E. Class 5 – Intercompany Claims. ...................................................................................................... 11

F. Class 6 – Equity Interests. ............................................................................................................... 11

ARTICLE V IMPAIRMENT – ACCEPTANCE OR REJECTION OF THE PLAN .......................................... 11

A. Classes Entitled to Vote. .................................................................................................................. 11

B. Class Acceptance Requirement. ...................................................................................................... 12

C. Cramdown. ...................................................................................................................................... 12

D. Elimination of Classes. ................................................................................................................... 12

ARTICLE VI MEANS OF IMPLEMENTATION .................................................................................................. 12

A. Limited Substantive Consolidation. ................................................................................................ 12

B. Sources of Consideration for Plan Distributions. ............................................................................ 12

C. Cancellation of Existing Securities. ................................................................................................ 13

D. Corporate Action. ............................................................................................................................ 13

E. Retained Causes of Action. ............................................................................................................. 13

F. Effectuating Documents; Further Transactions. .............................................................................. 14

G. Exemption from Certain Transfer Taxes. ........................................................................................ 14

ARTICLE VII CONDITIONS PRECEDENT TO CONFIRMATION AND EFFECTIVENESS OF PLAN ... 14

A. Conditions to Confirmation of Plan. ............................................................................................... 14

B. Conditions to Effective Date of Plan. .............................................................................................. 15

C. Waiver of Conditions Precedent. ..................................................................................................... 15

D. Effect of Failure of Conditions........................................................................................................ 15

E. Reservation of Rights. ..................................................................................................................... 16

ARTICLE VIII EFFECT OF CONSUMMATION ................................................................................................. 16

A. Revesting of Assets. ........................................................................................................................ 16

B. Exculpation. .................................................................................................................................... 16

C. Releases by the Debtors. ................................................................................................................. 17

D. Injunction and Stay. ......................................................................................................................... 17

E. Gate Keeping. ................................................................................................................................. 18

F. Setoffs and Recoupment. ................................................................................................................ 18

G. Compromise of Controversies. ........................................................................................................ 18

H. Rejection of Contracts and Leases. ................................................................................................. 18

ARTICLE IX RETENTION OF JURISDICTION ................................................................................................. 19

ARTICLE X MISCELLANEOUS ........................................................................................................................... 20

A. Filing of Additional Documents. ..................................................................................................... 20

B. Schedules, Exhibits and Plan Supplement Incorporated. ................................................................ 20

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C. Amendment or Modification of the Plan. ........................................................................................ 20

D. Inconsistency. .................................................................................................................................. 21

E. Expedited Tax Determination. ......................................................................................................... 21

F. Binding Effect. ................................................................................................................................ 21

G. Severability. .................................................................................................................................... 21

H. No Admissions. ............................................................................................................................... 21

I. No Payment of Attorneys’ Fees. ...................................................................................................... 21

J. Notices. ........................................................................................................................................... 22

K. Governing Law. ............................................................................................................................... 22

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The Debtors Cottonwood Financial Ltd., Cottonwood Financial Administrative Services, 

LLC, Cottonwood Financial Texas, LLC, Cottonwood Financial Idaho, LLC, and Cottonwood 

Financial Wisconsin, LLC jointly propose this Debtors’ Joint Chapter 11 Plan of Liquidation

pursuant to section 1121(a) of the Bankruptcy Code. 

ARTICLE I 

DEFINITIONS AND INTERPRETATION 

A. Definitions. 

For the purpose of this Plan, the following terms shall have the respective meanings set 

forth below: 

1. Administrative Claim means any right to payment constituting a cost or expense of 

administration of the Chapter 11 Case pursuant to sections 503(b) or 507 of the Bankruptcy Code. 

2. Administrative Claim Bar Date means the deadline for the filing of any and all 

Administrative Claims, which shall be the first Business Day that is at least twenty-eight (28) days 

after the Effective Date.

3. Administrative Claim Reserve means the reserve established on or before the 

Effective Date by the Debtors, with the Prepetition Secured Lender’s written consent, from any 

and all available sources to be used solely for payment of Administrative Claims once such 

Administrative Claims become Allowed. 

4. Allowed means, with reference to any Claim or Equity Interest, any Claim or Equity 

Interest (i) for which a proof of claim or proof of interest has been filed and as to which no 

objection has been made or such other applicable period of limitation fixed by this Plan, the 

Bankruptcy Code, the Bankruptcy Rules, or the Bankruptcy Court, (ii) which appears in the 

Debtors’ Schedules and is not listed as contingent, liquidated or disputed, (iii) which is allowed by 

Final Order of the Bankruptcy Court, or (iv) which is expressly allowed under this Plan. 

5. APA means that certain Asset Purchase Agreement by and among Axcess Financial 

Holdings, Inc. and the Debtors dated May 1, 2024, as amended or supplemented and approved 

pursuant to the Sale Order. 

6. Assets means property of the Debtors’ Estates and proceeds thereof. 

7. Avoidance Actions means any and all actual or potential avoidance, recovery, 

subordination or other claims, causes of action or remedies that may be brought by or on behalf of 

the Debtors or their Estates or other authorized parties in interest under the Bankruptcy Code or 

applicable non-bankruptcy law, including claims, causes of action, or remedies under sections 502, 

510, 542, 544, 545, 547 through 553, and 724(a) of the Bankruptcy Code, or under similar or 

related local, state, federal, or foreign statutes or common law, including preference and fraudulent 

transfer and conveyance laws, in each case whether or not litigation to prosecute such claim(s), 

cause(s) of action or remedy(ies) were commenced prior to the Effective Date. 

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8. Ballot means the ballot provided to holders of Claims to indicate their votes to 

accept or reject the Plan. 

9. Bankruptcy Code means title 11 of the United States Code, as amended from time 

to time. 

10. Bankruptcy Court means the United States Bankruptcy Court for the Northern 

District of Texas, Dallas Division, or any other court of the United States having jurisdiction over 

the Chapter 11 Cases. 

11. Bankruptcy Rules means the Federal Rules of Bankruptcy Procedure as 

promulgated by the United States Supreme Court under section 2075 of title 28 of the United States 

Code, as amended and in effect from time to time. 

12. Bar Date means the last date to file proofs of claim against the Debtors, which is 

July 5, 2024 for all creditors except Governmental Units, and August 23, 2024 for Governmental 

Units. 

13. Business Day means any day other than a Saturday, Sunday, or “legal holiday” as 

defined in Bankruptcy Rule 9006(a). 

14. Cash means legal tender of the United States of America. 

15. Causes of Action means any claims, causes of action, interests, damages, remedies, 

demands, rights, actions (including Avoidance Actions), suits, debts, sums of money, obligations, 

judgments, liabilities, accounts, defenses, offsets, counterclaims, crossclaims, powers, privileges, 

licenses, liens, indemnities, guaranties, and franchises of any kind or character whatsoever, 

whether known or unknown, foreseen or unforeseen, now existing or hereafter arising, contingent 

or non-contingent, liquidated or unliquidated, choate or inchoate, secured or unsecured, assertable, 

directly or derivatively, matured or unmatured, suspected or unsuspected, in contract, tort, law, 

equity, or otherwise, owned by or otherwise accruing to the Debtors and their Estates, whether 

arising before, on, or after the Petition Date. 

16. Chapter 11 Cases means the above-captioned jointly administered chapter 11 

bankruptcy cases of the Debtors. 

17. Claim means a claim against a Debtor within the meaning of section 101(5) of the 

Bankruptcy Code. 

18. Class means any group of Claims or Equity Interests classified by this Plan pursuant 

to sections 1122 and 1123(a)(1) of the Bankruptcy Code. 

19. Collateral means any property or interest in property of the Estates of the Debtors 

subject to a Lien, charge, or other encumbrance to secure the payment or performance of a Claim, 

which Lien, charge or other encumbrance is not subject to avoidance or otherwise invalid under 

the Bankruptcy Code or applicable state or federal law. 

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20. Conditional Approval Order means the Bankruptcy Court’s Order (I) 

Conditionally Approving the Disclosure Statement, (II) Scheduling a Combined Confirmation 

Hearing to Consider Final Approval of the Disclosure Statement and Confirmation of the Debtors’ 

Plan, (III) Approving the Solicitation Procedures and Dates, Deadlines, and Notices Related 

Thereto, and (IV) Granting Related Relief.

21. Confirmation Date means the date on which the clerk of the Bankruptcy Court 

enters the Confirmation Order on the docket. 

22. Confirmation Hearing means the hearing conducted by the Bankruptcy Court 

pursuant to sections 1128(a) and 1129 of the Bankruptcy Code to consider confirmation of the 

Plan, as such hearing may be adjourned or continued from time to time. 

23. Confirmation Order means the order of the Bankruptcy Court confirming this Plan 

pursuant to section 1129 of the Bankruptcy Code. 

24. CRO means Karen Nicolaou, the duly appointed Chief Restructuring Officer in 

these Chapter 11 Cases. 

25. Debtor means any one of the Debtors, as the context may require. 

26. Debtors means Cottonwood Financial Ltd., Cottonwood Financial Administrative 

Services, LLC, Cottonwood Financial Texas, LLC, Cottonwood Financial Idaho, LLC, and 

Cottonwood Financial Wisconsin, LLC, collectively, in their capacities as debtors and debtors in 

possession under sections 1107 and 1108 of the Bankruptcy Code. 

27. DIP Facility means the senior secured postpetition financing facility approved by 

the DIP Order and as amended by the Sale Order. 

28. DIP Facility Claim means the Claim of the DIP Lender under the DIP Facility and 

the DIP Order, including all amounts in principal, interest, and fees owed under the DIP Facility, 

Claims related to adequate protection, and all reasonable and documented out-of-pocket fees, 

costs, disbursements, and expenses of the DIP Lender and of the DIP Lender’s counsel. 

29. DIP Lender means Nehimba Holdings, LLC, in its capacity as DIP Lender (as that 

term is defined in the DIP Order). 

30. DIP Order means the Final Order (I) Authorizing the Debtors to (A) Obtain 

Postpetition Financing and (B) Utilize Cash Collateral, (II) Granting Liens and Superpriority 

Administrative Expense Claims, (III) Granting Adequate Protection, (IV) Modifying the Automatic 

Stay, and (V) Granting Related Relief [Docket Nos. 153 and 157] entered by on March 22, 2024.

31. Disclosure Statement means that certain disclosure statement relating to the Plan, 

including all exhibits and schedules thereto, as the same may be amended, supplemented, or 

otherwise modified from time to time, as approved by the Bankruptcy Court pursuant to sections 

1125 and 1126 of the Bankruptcy Code. 

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32. Effective Date means the first Business Day on which all the conditions precedent 

to the effectiveness of the Plan specified in ARTICLE VII.B hereof shall have been satisfied or 

waived as provided in ARTICLE VII.C hereof; provided, however, that if a stay, injunction or 

similar prohibition of the Confirmation Order is in effect, the Effective Date shall be the first 

Business Day after such stay, injunction or similar prohibition is no longer in effect. 

33. Equity Interest means any “equity security,” as that term is defined in 

section 101(16) of the Bankruptcy Code in respect of the Debtors, including the general 

partnership interest of Cottonwood Financial Management, Inc. in Debtor Cottonwood Financial 

Ltd. 

34. Estates means the estates of the Debtors as created under section 541 of the 

Bankruptcy Code. 

35. Exculpated Parties means (1) the Debtors, (2) Trevor L. Ahlberg, solely in his 

capacity as the Chief Executive Officer and principal of the Debtors and their general partner 

Cottonwood Financial Management, Inc., and (3) Karen G. Nicolaou, in her capacity as the 

Debtors’ Chief Restructuring Officer. 

36. Final Decree means the decree contemplated by Bankruptcy Rule 3022. 

37. Final Order means an order or judgment of a court of competent jurisdiction that 

has been entered on the docket maintained by the clerk of such court and has not been reversed, 

vacated or stayed and as to which (a) the time to appeal, petition for certiorari, or move for a stay, 

new trial, reargument, or rehearing has expired and as to which no appeal, petition for certiorari

or other proceedings for a stay, new trial, reargument or rehearing shall then be pending or (b) if 

an appeal, writ of certiorari, stay, new trial, reargument or rehearing thereof has been sought, (i) 

such order or judgment shall have been affirmed by the highest court to which such order was 

appealed, certiorari shall have been denied or a stay, new trial, reargument or rehearing shall have 

been denied or resulted in no modification of such order and (ii) the time to take any further appeal, 

petition for certiorari, or move for a stay, new trial, reargument or rehearing shall have expired; 

provided, however, that no order or judgment shall fail to be a “Final Order” solely because of the 

possibility that a motion pursuant to section 502(j) or 1144 of the Bankruptcy Code or under Rule 

60 of the Federal Rules of Civil Procedure, or Bankruptcy Rule 9024 has been or may be filed with 

respect to such order or judgment. 

38. General Unsecured Claim means any Claim against a Debtor that is not an 

Administrative Claim, a Priority Tax Claim, a DIP Facility Claim, a Priority Non-Tax Claim, a 

Prepetition Lender Secured Claim, a Professional Fee Claim, an Other Secured Claim, or an Equity 

Interest. 

39. Governmental Unit has the meaning ascribed to such term in section 101(27) of the 

Bankruptcy Code. 

40. Intercompany Claim means a claim held by one Debtor against another Debtor. 

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41. Local Rules means the Bankruptcy Local Rules of the United States Bankruptcy 

Court for the Northern District of Texas, as the same may be amended or modified from time to 

time. 

42. Other Secured Claim means a Secured Claim that is not a Prepetition Lender 

Secured Claim. 

43. Petition Date means February 25, 2024. 

44. Permitted Lien(s) has the meaning as defined in Article I of the APA.

45. Person means an individual, partnership, corporation, limited liability company, 

cooperative, trust, unincorporated organization, association, joint venture, government or agency 

or political subdivision thereof or any other form of legal entity. 

46. Plan means this Chapter 11 Plan, as the same may be amended, supplemented or 

otherwise modified from time to time, including any exhibits and schedules hereto. 

47. Plan Supplement means the compilation of documents and forms of documents, 

schedules and exhibits to be filed as set forth in the Conditional Approval Order and as may be 

amended, supplemented or otherwise modified from time to time in accordance with the terms 

hereof and in accordance with the Bankruptcy Code and the Bankruptcy Rules, containing, without 

limitation any documents necessary for the execution and implementation of the Plan. 

48. Prepetition Secured Lender means Third Coast Bank, SSB, in its capacity as lender 

pursuant to that certain loan agreement with Debtor Cottonwood Financial Ltd, dated as of 

December 9, 2020, with Debtors Cottonwood Financial Texas, LLC and Cottonwood Financial 

Administrative Services, LLC as guarantors of such loan. 

49. Prepetition Secured Lender Claim means the Secured Claim held by the Prepetition 

Secured Lender arising pursuant to the Prepetition Loan Documents which, as of the First Petition 

Date, aggregate $26,653,286.61, which was stipulated and allowed under the terms of the DIP 

Order and includes the Diminution in Value Claims for Cash Collateral and Non-Cash Collateral 

as provided and defined under the DIP Order. For the avoidance of doubt, such amount shall be 

deemed an Allowed Claim under this Plan. 

50. Priority Claim Reserve means the reserve established on or before the Effective 

Date by the Debtors, with the Prepetition Secured Lender’s written consent, from any and all 

available sources to be used solely for payment of Priority Non-Tax Claims and Priority Tax 

Claims once such Claims become Allowed.

51. Priority Non-Tax Claim means any Claim that is entitled to priority in payment 

pursuant to sections 507(a)(4) or (5) of the Bankruptcy Code and that is not a Claim or a Priority 

Tax Claim. 

52. Priority Tax Claim means any Claim of a Governmental Unit of the kind entitled 

to priority in payment as specified in sections 502(i) and 507(a)(8) of the Bankruptcy Code. 

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53. Professional Fee Claim means any Claim by a Professional Person under sections 

330, 331 or 503 of the Bankruptcy Code for allowance of compensation and/or reimbursement of 

expenses in the Chapter 11 Cases. 

54. Professional Person means any Person retained or to be compensated by the 

Debtors pursuant to sections 327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy Code. 

55. Purchaser shall mean Axcess Financial Holdings, Inc. 

56. Retained Causes of Action means Causes of Action identified in the Plan 

Supplement to be reserved, retained and assigned pursuant to this Plan.

57. Sale means the transaction or transactions contemplated under the APA and 

approved by the Bankruptcy Court pursuant to the Sale Order. 

58. Sale Order means the Bankruptcy Court’s Order (I) Approving the Sale of 

Substantially All of the Debtors’ Assets Free and Clear of Liens, Claims and Interests; and (II) 

Granting Related Relief [Docket No. 301]. 

59. Schedules means, collectively, Schedules A through J and the Statement of 

Financial Affairs, as filed by each Debtor in the Chapter 11 Cases, as the same may be amended 

from time to time. 

60. Secured Claim means a Claim, other than a Prepetition Secured Lender Claim, 

secured by a Lien that is valid, perfected and enforceable, and not avoidable, upon property in 

which a Debtor has an interest, to the extent of the value, as of the Effective Date, of such interest 

or Lien as determined by a Final Order of the Bankruptcy Court pursuant to section 506 of the 

Bankruptcy Code, or as otherwise agreed to in writing by the Debtor in question and the holder of 

such Claim. 

61. TreeMac Stipulation means the Stipulation and Agreed Order Among the Debtors, 

TreeMac Funding Group, LLC, and Third Coast Bank [Docket No. 316]. 

62. Voting Deadline means the date by which Ballots for accepting or rejecting the Plan 

must be received, as set forth under the Conditional Approval Order. 

63. Wind Down Officer shall be the Debtors’ CRO who shall have the full and final 

authority to administer the terms of the Plan. 

B. Rules of Interpretation and Construction. 

(a) Interpretation. Unless otherwise specified herein, all section, article, and exhibit 

references in the Plan are to the respective Section in, Article of, and Exhibit to, the Plan, as the 

same may be amended, waived or modified from time to time. All headings in this Plan are for 

convenience of reference only and shall not limit or otherwise affect the provisions of the Plan. 

(b) Construction and Application of Bankruptcy Code Definitions. Unless otherwise 

defined herein, words and terms defined in section 101 of the Bankruptcy Code shall have the 

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same meanings when used in the Plan. Words or terms used but not defined herein shall have the 

meanings ascribed to such terms or words, if any, in the Bankruptcy Code. The rules of 

construction contained in section 102 of the Bankruptcy Code shall apply to the construction of 

the Plan. 

(c) Other Terms. The words “herein,” “hereof,” “hereto,” “hereunder,” and other 

words of similar import refer to the Plan as a whole and not to any particular Article, Section, 

Subsection, or Clause contained in the Plan. 

(d) Time. In computing any period of time prescribed or allowed by the Plan, the 

provisions of Bankruptcy Rule 9006(a) shall apply. 

ARTICLE II 

TREATMENT OF UNCLASSIFIED CLAIMS 

A. DIP Facility Claim. 

The DIP Facility Claim shall be paid in accordance with the terms of the Sale Order. To 

the extent any amounts remain unpaid under the DIP Facility and DIP Order, the Debtors shall pay 

any such remaining amounts due on or before the Effective Date. For the avoidance of doubt, the 

releases set forth in Paragraph 30 of the DIP Order shall remain in full effect and will not be 

modified, altered, or abridged in any way as a result of this Plan or the Confirmation Order. In 

addition to such releases previously approved under the DIP Order, upon the closing of the Sale 

and payment of the DIP Facility Claim, the Debtors and the DIP Lender shall be deemed to have 

released and discharged all rights, obligations, and defenses against one another arising from or 

related to the DIP Order and the DIP Facility Claim from and after the Petition Date. 

B. Administrative Claims. 

All Administrative Claims against the Debtors, other than Professional Fee Claims and the 

DIP Facility Claim, shall be treated as follows: 

(a) Time for Filing. All holders of Administrative Claims, other than the DIP Lender 

or Professional Persons holding Professional Fee Claims, shall file with the Bankruptcy Court a 

request for payment of such Claims on or before the Administrative Claim Bar Date. Any such 

request must be served on the Debtors, their counsel, and counsel to the Prepetition Secured 

Lender, and must, at a minimum, set forth (i) the name of the holder of the Administrative Claim; 

(ii) the amount of the Administrative Claim; and (iii) the legal and factual bases for the 

Administrative Claim. A failure to file any such request in a timely fashion will result in the 

Administrative Claim in question being discharged and its holder forever barred from asserting 

such Administrative Claim against the Debtors or any other Person. 

(b) Objection and Allowance. An Administrative Claim (other than the DIP Facility 

Claim or Professional Fee Claims) for which a request for payment has been properly filed shall 

become an Allowed Administrative Claim unless an objection is filed by the date that is thirty (30) 

days after a request for payment of such Administrative Claim is filed in accordance with 

subsection (a) above. If an objection is timely filed, the Administrative Claim in question shall 

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become an Allowed Administrative Claim only to the extent so Allowed by Final Order of the 

Bankruptcy Court. 

(c) Payment. Except to the extent that a holder of an Allowed Administrative Claim 

(other than the DIP Facility Claim or Professional Fee Claims) agrees to a different treatment of 

such Claim, each holder of an Allowed Administrative Claim shall receive, on account of and in 

full satisfaction of such Claim, Cash from the Administrative Claim Reserve in an amount equal 

to the Allowed amount of such Administrative Claim on (or as soon as reasonably practicable 

after) the later of (A) the Effective Date or (B) fifteen (15) days after entry of an order by the 

Bankruptcy Court allowing such Administrative Claim. Allowed Administrative Claims shall be 

paid from the Administrative Claim Reserve. To the extent the funds remaining in the 

Administrative Claim Reserve are insufficient to pay the Allowed Administrative Claims in full, 

the Debtors shall provide written notice to the Prepetition Secured Lender, and the Prepetition 

Secured Lender shall have five (5) business days to raise objection to the proposed payment out 

of the Debtors’ remaining Cash. 

C. Professional Fee Claims. 

(a) Time for Filing. Every Professional Person holding a Professional Fee Claim, other 

than the Professional Fee Claim of the Prepetition Secured Lender (as set forth below), that has 

not previously been the subject of a final fee application and accompanying Bankruptcy Court 

order approving the same shall file a final application for payment of fees and reimbursement of 

expenses no later than Administrative Claim Bar Date. Any such final fee application shall 

conform to and comply with all applicable provisions of the Bankruptcy Code, the Bankruptcy 

Rules, and the Local Rules. 

(b) Objections and Allowance. The last date to object to any final fee application shall 

be the twenty-fourth (24th) day after such fee application has been filed with the Bankruptcy Court. 

All final fee applications shall be set for hearing on the same day, if necessary and as the 

Bankruptcy Court’s calendar permits, after consultation with counsel to the Debtors and the 

Prepetition Secured Lender. 

(c) Payment. Professional Fee Claims shall be paid from the Administrative Claim 

Reserve, and to the extent amounts remaining in the Administrative Claim Reserve are insufficient 

to pay the Allowed Professional Fee Claims in full, the Debtors shall provide written notice to the 

Prepetition Secured Lender, and the Prepetition Secured Lender shall have five (5) business days 

to raise objection to the proposed payment out of the Debtors’ remaining Cash. 

(d) Payment of Prepetition Secured Lender’s Professional Fees. Any amounts due to 

the Prepetition Secured Lender’s or the DIP Lender’s professionals shall be paid from the 

Administrative Claim Reserve on the Effective Date, or within a reasonable time thereafter, 

pursuant to the DIP Order and the Sale Order without having to file a final fee application. 

D. U.S. Trustee Fees. 

All fees payable under section 1930 of title 28 of the United States Code shall be paid from 

the Debtors’ available Cash in the Administrative Claim Reserve on or before the Effective Date 

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or when such amounts are due in the ordinary course. All such fees that arise after the Effective 

Date but before the closing of the Chapter 11 Cases shall be paid by the Debtors. 

E. Priority Tax Claims. 

(a) Time for Filing. Holders of Priority Tax Claims shall file such Priority Tax Claims 

on or before the applicable Bar Date. Nothing in this Plan shall alter or extend such Bar Date. 

(b) Objections and Allowance. The last date to object to any timely filed Priority Tax 

Claim shall be thirty (30) days after the Government Bar Date, unless extended by an order of the 

Bankruptcy Court or an agreement with the holder of such Priority Tax Claim. 

(c) Payment. Allowed Priority Tax Claims shall be paid from the Priority Claim 

Reserve, and to the extent amounts remaining in the Priority Claim Reserve are insufficient to pay 

the Allowed Priority Tax Claims in full, the Debtors shall provide written notice to the Prepetition 

Secured Lender, and the Prepetition Secured Lender shall have five (5) business days to raise 

objection to the proposed payment out of the Debtors’ remaining Cash. 

(d) Retention of Liens. Any Allowed Priority Tax Claim that is not a Permitted Lien 

under the APA shall attach to the portion of the Debtors’ available Cash resulting from the Sale 

attributable to the property against which an applicable lien, in the order of their priority, with the 

same validity, force, and effect, subject to any claims and defenses the Debtors and Estates may 

possess with respect thereto. 

(e) Interest. To the extent interest is required to be paid on any Priority Tax Claim, the 

rate of such interest shall be the rate determined under applicable nonbankruptcy law, as set forth 

in section 511 of the Bankruptcy Code. To the extent the holder of an Allowed Priority Tax Claim 

has a Lien on a Debtor’s property, such Lien shall remain in place until such Allowed Priority Tax 

Claim has been paid in full. 

ARTICLE III

CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS 

All Claims against, and Equity Interests in, the Debtors are classified for all purposes, 

including voting, confirmation, and distribution, as follows: 

Class Designation Impairment Entitled to Vote 

Class 1 Priority Non-Tax Claims Unimpaired No (deemed to accept) 

Class 2 Prepetition Secured Lender Claim Impaired Yes 

Class 3 Other Secured Claims Impaired Yes 

Class 4 General Unsecured Claims Impaired No (deemed to reject) 

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Class Designation Impairment Entitled to Vote 

Class 5 Intercompany Claims Impaired No (deemed to reject) 

Class 6 Equity Interests Impaired No (deemed to reject) 

Administrative Claims, Professional Fee Claims, DIP Lender Claims, and Priority Tax 

Claims are not classified for purposes of voting or receiving distributions under the Plan, pursuant 

to section 1123(a)(1) of the Bankruptcy Code. Instead, all such Claims shall be treated separately 

as unclassified claims on the terms previously set forth in Article II of this Plan. 

ARTICLE IV

TREATMENT OF CLAIMS AND EQUITY INTERESTS 

A. Class 1 – Priority Non-Tax Claims 

The Debtors or the Prepetition Secured Lender may object to any Priority Non-Tax Claims 

on or before thirty (30) days after the Effective Date, unless such deadline is extended by an order 

of the Bankruptcy Court or agreement with the holder of the applicable Priority Non-Tax Claim. 

Except to the extent that a holder of an Allowed Priority Non-Tax Claim against a Debtor agrees 

to a less favorable treatment, each such holder shall receive, in full satisfaction of such Claim, 

payment in full in Cash from the Priority Claim Reserve on (or as soon as reasonably practicable 

after) the later of (A) the Effective Date or (B) fifteen (15) days after such Priority Non-Tax Claim 

becomes Allowed. To the extent amounts remaining in the Priority Claim Reserve are insufficient 

to pay the Allowed Priority Non-Tax Claims in full, the Debtors shall provide written notice to the 

Prepetition Secured Lender, and the Prepetition Secured Lender shall have five (5) business days 

to raise objection to the proposed payment out of the Debtors’ remaining Cash. 

B. Class 2 – Prepetition Secured Lender’s Secured Claims. 

In final satisfaction of the Prepetition Secured Lender Claim, the Prepetition Secured 

Lender shall receive: (i) on the closing date of the Sale, all amounts required under the Sale Order 

and TreeMac Stipulation, including a one-time Cash payment in the amount of $1,300,000.00; 

(ii) on or as soon as practicable following the Effective Date, (a) a one-time Cash payment of the 

total amount of Cash held by the Debtors on the Effective Date, minus the amounts necessary and 

agreed upon by the Prepetition Secured Lender to establish and fund the Administrative Claim 

Reserve and the Priority Claim Reserve as required in ARTICLE II hereof, and (b) the assignment 

and transfer of the Debtors’ Retained Causes of Action pursuant to section 363(b) of the 

Bankruptcy Code in a form of assignment approved by the Prepetition Secured Lender and 

included in a Plan Supplement; and (iii) upon entry of a Final Decree in these Chapter 11 Cases, 

all remaining Cash owned or held by the Debtors, wherever located, in all of the Debtors’ bank 

accounts (including money, coins or notes held in foreign bank accounts in non-U.S. currency or 

tender), including the net proceeds realized and any funds held back from the sale of the Debtors’ 

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assets from the Petition Date through the entry of a Final Decree. All rights of setoff and 

recoupment are reserved by the Prepetition Secured Lender. 

The Debtors shall provide the Prepetition Secured Lender with reasonable access to the 

books and records of the Debtors concerning the Retained Causes of Action. 

C. Class 3 – Other Secured Claims. 

For each holder of an Allowed Other Secured Claim that holds a first priority Lien on any 

Collateral as of the Effective Date, such holder shall receive the Collateral on the Effective Date 

or as soon as practicable thereafter. To the extent the value of the Collateral securing an Allowed 

Other Secured Claim is insufficient to satisfy the Allowed Other Secured Claim, such holder of 

such Allowed Other Secured Claim will receive a Class 4 General Unsecured Claim for the 

remaining portion of its Other Secured Claim, which amount shall be treated as an Allowed 

General Unsecured Claim pursuant in ARTICLE IV.D of this Plan. 

D. Class 4 – General Unsecured Claims. 

Holders of General Unsecured Claims shall receive and retain nothing under the Plan on 

account of such General Unsecured Claims. Holders of General Unsecured Claims are 

conclusively deemed to have rejected the Plan. 

E. Class 5 – Intercompany Claims. 

On the Effective Date, all Intercompany Claims against a Debtor shall be settled, cancelled, 

released, and discharged without payment or distribution of any Cash or other property. Holders 

of Intercompany Claims are conclusively deemed to have rejected the Plan. 

F. Class 6 – Equity Interests. 

On the Effective Date, all Equity Interests in each Debtor shall be cancelled and of no 

further force or effect. Holders of Equity Interests shall neither retain nor receive any property 

under the Plan on account of such Equity Interests. 

ARTICLE V

IMPAIRMENT – ACCEPTANCE OR REJECTION OF THE PLAN 

A. Classes Entitled to Vote. 

The holders of Claims in Class 1 are unimpaired and are conclusively deemed to have 

accepted the Plan and are not entitled to vote to accept or reject the Plan. The holders of Claims 

in Class 2 and Class 3 are impaired and entitled to vote to accept or reject the Plan. The holders 

of Claims and Equity Interests in Classes 4, 5, and 6 are impaired and will neither receive nor 

retain any property under the Plan. Accordingly, such holders of Claims and Equity Interests in 

Classes 4, 5, and 6 are conclusively deemed to reject the Plan and are not entitled to vote to accept 

or reject the Plan. 

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B. Class Acceptance Requirement. 

A Class of impaired Claims entitled to vote on the Plan shall have accepted the Plan if the 

holders of at least two-thirds (2/3) in amount and more than one-half (1/2) in number of Claims in 

such Class who have voted on the Plan have voted to accept the Plan. A Class of impaired Equity 

Interests shall have accepted the Plan if at least two-thirds (2/3) in amount of Equity Interests in 

such Class who have voted on the Plan have voted to accept the Plan. 

C. Cramdown. 

To the extent that any Class is impaired under the Plan and such Class fails to accept the 

Plan in accordance with section 1126(c) or (d) of the Bankruptcy Code, the Debtors hereby request 

that the Bankruptcy Court confirm the Plan in accordance with section 1129(b) of the Bankruptcy 

Code. 

D. Elimination of Classes. 

Any Class that does not contain any Allowed Claims or any Claims temporarily Allowed 

for voting purposes under Bankruptcy Rule 3018, as of the date of the commencement of the 

Confirmation Hearing, shall be deemed not included in this Plan for purposes of (i) voting to accept 

or reject this Plan and (ii) determining whether such Class has accepted or rejected this Plan under 

section 1129(a)(8) of the Bankruptcy Code. 

ARTICLE VI

MEANS OF IMPLEMENTATION 

A. Limited Substantive Consolidation. 

(a) As a result of the DIP Order, the Plan provides for recoveries on account of Allowed 

Claims in Classes 1, 2, and 3 regardless of the Debtor entity against which such Allowed Claims 

are asserted. The Debtors shall not be consolidated for any other purpose. To the extent necessary, 

the Plan shall serve as a motion seeking, and entry of the Confirmation Order shall constitute, the 

approval, pursuant to section 105(a) of the Bankruptcy Code and Bankruptcy Rule 9019, effective 

as of the Effective Date, of the limited consolidation for voting and distribution on account of 

Allowed Claims in Classes 1, 2, and 3.

(b) For the avoidance of doubt, the limited consolidation described in this Section shall 

not affect the legal and corporate structures of the Debtors. In addition, such consolidation shall 

not constitute a waiver of the mutuality requirement for setoff under section 553 of the Bankruptcy 

Code.

B. Sources of Consideration for Plan Distributions. 

All monetary distributions under this Plan will be made by the Debtors from Cash available 

from and after the Effective Date. 

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C. Cancellation of Existing Securities.

As soon as practicable after the Effective Date, except as otherwise provided for herein or 

any other document incorporated in the Plan, all Equity Interests and any other certificate, security, 

share, note, bond, indenture, purchase right, option, warrant, certificates of designations or other 

instrument or documents directly or indirectly evidencing or creating any indebtedness or 

obligation of or ownership interest in the Debtors giving rise to any Claim or Equity Interest, to 

the extent not already cancelled, shall be deemed cancelled and of no further force or effect, 

without the requirement for any further action on the part of the Bankruptcy Court or any other 

Person. As soon as practicable following the Effective Date, the Wind Down Officer, on behalf 

of the Debtors, shall take any and all steps necessary to complete the corporate dissolution of the 

Debtors. Pending the completion of the dissolution of the Debtors by the Wind Down Officer, the 

Debtors and the Equity Interests therein may continue to exist for the sole purpose of allowing the 

Wind Down Officer to implement the terms and provisions of this Plan. For the avoidance of 

down, and notwithstanding any non-bankruptcy law, the holders of any Equity Interest in the 

Debtors shall neither receive nor retain any equitable rights or interests whatsoever. 

D. Corporate Action.

Upon the Effective Date, the Wind Down Officer shall replace all employees, officers, 

managers, and directors of all governing bodies for all Debtors. Any and all actions contemplated 

under the Plan shall be deemed authorized and approved in all respects. From and after the 

Effective Date, the Wind Down Officer shall have sole and absolute authority to perform all 

matters required under the Plan on behalf of the Debtor, including: (i) distributions to the 

Prepetition Secured Lender in accordance with the terms of this Plan; (ii) management of any bank 

accounts to establish, fund, and make payments from, the Administrative Claim Reserve and the 

Priority Claim Reserve in accordance with the provisions of this Plan; (iii) retention of 

Armanino LLP to prepare and file final tax returns for the Debtors; (iv) any and all other tasks 

which the Wind Down Officer determines to be necessary to administer the Plan and the 

transactions contemplated herein. Any corporate action required by or in connection with the Plan, 

shall be deemed to have occurred and shall be in effect without any requirement of further action 

by any Equity Interest holders, directors, officers or managers of the Debtors. The authorizations 

and approvals contemplated by this Section shall be effective notwithstanding any requirements 

under non-bankruptcy law. 

E. Retained Causes of Action.

Except as otherwise provided in this Plan, an agreement or document entered into in 

connection with the Plan, or in a Final Order of the Bankruptcy Court (including, but not limited 

to, the Sale Order, the TreeMac Stipulation, or DIP Order), pursuant to sections 363(b) and 

1123(b)(3) of the Bankruptcy Code, the Debtors reserve and, as of the Effective Date, assign to 

the Prepetition Secured Lender, consistent with ARTICLE IV.B of the Plan, the Retained Causes 

of Action. On and after the Effective Date, the Prepetition Secured Lender or its designee may 

pursue Retained Causes of Action in satisfaction of the Prepetition Secured Lender Claim. 

No Entity may rely on the absence of a specific reference in the Plan, the Plan Supplement, 

or the Disclosure Statement to any Retained Cause of Action against it as any indication that the 

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Prepetition Secured Lender will not pursue any and all available Retained Causes of Action against 

it. Unless any Retained Cause of Action against an Entity is expressly waived, relinquished, 

exculpated, released, compromised, or settled in the Plan or a Final Order of the Bankruptcy Court, 

the Debtors expressly reserve all Retained Causes of Action for later adjudication by the 

Prepetition Secured Lender, and, therefore no preclusion doctrine, including the doctrines of res 

judicata, collateral estoppel, issue preclusion, claim preclusion (judicial, equitable, or otherwise), 

or laches, shall apply to such Retained Causes of Action upon, after, or as a consequence of Plan 

confirmation or occurrence of the Effective Date. 

F. Effectuating Documents; Further Transactions.

On and after the Effective Date, the Debtors and the CRO are authorized to and may issue, 

execute, deliver, file, or record such contracts, securities, instruments, releases, and other 

agreements or documents and take such actions as may be necessary or appropriate to effectuate, 

implement, and further evidence the terms and conditions of the Plan in the name of and on behalf 

of the Debtors, without the need for any approvals, authorization, or consents except for those 

expressly required pursuant to the Plan. 

G. Exemption from Certain Transfer Taxes.

Pursuant to section 1146(a) of the Bankruptcy Code, the following will not be subject to 

any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, sales or use tax, 

mortgage tax, 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 forego the collection of any such tax or governmental assessment and 

accept for filing and recordation any of the foregoing instruments or other documents without the 

payment of any such tax or governmental assessment: (a) the creation of any mortgage, deed of 

trust, lien or other security interest under or pursuant to this Plan; (b) the release or assignment of 

liens; (c) the transfer of any assets of the Debtors’ Estates to the Prepetition Secured Lender; or 

(d) the making or delivery of any deed or other instrument of transfer under, in furtherance of, in 

connection with or pursuant to this Plan, including any restructuring, disposition, liquidation or 

dissolution, deeds, bills of sale or assignments executed in connection with any of the foregoing. 

ARTICLE VII 

CONDITIONS PRECEDENT TO CONFIRMATION AND 

EFFECTIVENESS OF PLAN 

A. Conditions to Confirmation of Plan. 

Confirmation of the Plan shall not occur, and the Confirmation Order shall not be entered, 

until each of the following conditions precedent have been satisfied or waived: 

(a) An order, finding that the Disclosure Statement contains adequate information 

pursuant to section 1125 of the Bankruptcy Code shall have been entered; and 

(b) The Confirmation Order shall be in a form and substance reasonably satisfactory to 

the Debtors and the Prepetition Secured Lender. 

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B. Conditions to Effective Date of Plan. 

The Effective Date of the Plan shall not occur until each of the following conditions 

precedent have been satisfied or waived: 

(a) The clerk of the Bankruptcy Court shall have entered the Confirmation Order in the 

Chapter 11 Cases and there shall not be a stay or injunction (or similar prohibition) in effect with 

respect thereto; 

(b) Closing of the Sale; and 

(c) All other actions and all agreements, instruments or other documents necessary to 

implement the terms and provisions of the Plan shall have been executed and delivered by the 

parties thereto, and, in each case, all conditions to their effectiveness shall have been satisfied or 

waived as provided therein. 

Within two (2) Business Days of the Effective Date, the Debtors shall file a notice of the 

occurrence of the Effective Date and the Administrative Claim Bar Date and serve the same on all 

creditors and parties in interest. 

C. Waiver of Conditions Precedent. 

Any of the foregoing conditions (with the exception of the conditions set forth in ARTICLE 

VII.A(b) and ARTICLE VII.B(a)) may be waived by agreement of the Debtors and the Prepetition 

Secured Lender without notice to or order of the Bankruptcy Court. The failure to satisfy or waive 

any condition may be asserted by the Debtors and the Prepetition Secured Lender regardless of the 

circumstances giving rise to the failure of such condition to be satisfied (including any action or 

inaction by the Debtors and the Prepetition Secured Lender). The failure of the Debtors and the 

Prepetition Secured Lender to exercise any of the foregoing rights shall not be deemed a waiver of 

any other rights and each such right will be deemed an on-going right that may be asserted at any 

time. 

D. Effect of Failure of Conditions. 

If the foregoing conditions have not been satisfied or waived in the manner provided in 

ARTICLE VII.B and ARTICLE VII.C hereof, then (i) the Confirmation Order shall be of no further 

force or effect; (ii) no distributions under the Plan shall be made; (iii) the Debtors and all holders 

of Claims against and Equity Interests in the Debtors shall be restored to the status quo ante as of 

the day immediately preceding the Confirmation Date as though the Confirmation Date had never 

occurred; (iv) all of the Debtors’ obligations with respect to Claims and Equity Interests shall 

remain unaffected by the Plan; (v) nothing contained in this Plan shall be deemed to constitute a 

waiver or release of any Claims by or against the Debtors or any other Person or to prejudice in 

any manner the rights of the Debtors or any Person in any further proceedings involving the 

Debtors; and (vi) this Plan shall be deemed withdrawn. Upon such occurrence, the Debtors shall 

file a written notification with the Bankruptcy Court and serve it on the parties appearing on the 

master service list maintained in the Chapter 11 Cases. 

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E. Reservation of Rights. 

The Plan shall have no force or effect unless and until the Effective Date occurs. Prior to 

the Effective Date, neither the filing of the Plan, any statement or provision contained in the Plan, 

nor action taken by the Debtors with respect to the Plan shall be, or shall be deemed to be, an 

admission or waiver of any rights of any of the Debtors or any other party with respect to any 

Claims or Equity Interests or any other matter. 

ARTICLE VIII 

EFFECT OF CONSUMMATION 

A. Revesting of Assets. 

(a) On the Effective Date, pursuant to sections 1141(b) and (c) of the Bankruptcy Code, 

the Estates’ Assets (other than the Retained Causes of Action transferred to the Prepetition Secured 

Lender pursuant to ARTICLE IV.B and ARTICLE VI.E of this Plan) shall vest in the Debtors, free 

and clear of all Claims, Liens, encumbrances, charges and other interests, except (i) as otherwise 

provided in this Plan and (ii) the liens and security interests granted to the Prepetition Secured 

Lender under its loan documents and under the DIP Order. 

(b) Notwithstanding the foregoing, on and after the Effective Date, the Debtors (by and 

through their Wind Down Officer) shall be authorized, but not directed, to abandon any remaining 

Assets that are not necessary to implement the terms and provisions of this Plan. The Debtors (by 

and through their Wind Down Officer) shall further be authorized, but not directed, to abandon or 

destroy, or cause to be abandoned or destroyed, any books and records not taken by the Purchaser 

under the terms of the APA and Sale Order or otherwise provided to the Prepetition Secured Lender 

pursuant to this Plan. 

B. Exculpation. 

Upon the Effective Date, to the fullest extent permissible under applicable law, no 

Exculpated Party shall have or incur, and each Exculpated Party is released and exculpated from, 

any liability to any holder of a Claim or Equity Interest, or any other party in interest, for any claim 

or cause of action arising from, relating to, or connected with the administration of the Chapter 11 

Cases, the Sale, the Disclosure Statement, the preparation of the Plan, the solicitation of 

acceptances of the Plan, the pursuit of confirmation of the Plan, the occurrence of the Effective 

Date, or the administration of the Plan or property to be distributed under the Plan, except for 

claims related to any act or omission that is determined in a Final Order of a court of competent 

jurisdiction to have constituted actual fraud, willful misconduct, or gross negligence. The 

Exculpated Parties shall be deemed to have, participated in good faith in connection with the above 

and entitled to the protection of section 1125(e) of the Bankruptcy Code. Each Exculpated Party 

shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and 

responsibilities pursuant to the Plan. 

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C. Releases by the Debtors. 

On the Effective Date, unless expressly preserved under ARTICLE VI.E of this Plan, the 

Debtors shall fully and forever release, acquit, discharge and dismiss any and all claims, 

obligations, suits, judgments, damages, rights, remedies, Causes of Action, and liabilities of any 

nature, whether known or unknown, foreseen or unforeseen, liquidated or unliquidated, matured 

or unmatured, contingent or non-contingent, existing or hereafter arising, in law, equity or 

otherwise, and each of their respective present or former members, principals, managers, officers, 

directors, employees, partners, affiliates, funds, advisors, attorneys, agents and representatives and 

their respective property. As set forth more fully in ARTICLE II.A of this Plan, the Debtors and 

the DIP Lender shall be deemed to have released one another from any and all rights, obligations, 

and defenses arising or related in any way to the DIP Order and the DIP Facility Claim and after 

the Petition Date. For the avoidance of doubt, nothing in this Article VIII.C shall release or effect 

any direct claim or cause of action held by the Prepetition Secured Lender. 

D. Injunction and Stay. 

(a) From and after the Effective Date, and except as otherwise expressly provided in 

this Plan, all Persons who have held, hold, or may hold Claims against or Equity Interests in any 

Debtor are permanently enjoined from (i) commencing or continuing in any manner any action or 

other proceeding of any kind on any such Claim or Equity Interest against the Estates, or other 

entity released, discharged or exculpated hereunder, (ii) the enforcement, attachment, collection or 

recovery by any manner or means of any judgment, award, decree or order against any of the 

Debtors’ Estates with respect to any such Claim or Equity Interest, (iii) creating, perfecting or 

enforcing any encumbrance of any kind against any of the Debtors’ Estates, or against the property 

or interests in property of any of the Debtors’ Estates, as applicable with respect to any such Claim 

or Equity Interest, except as to any liens or security interests held by the Prepetition Secured 

Lender which existed as of the Petition Date or granted after the Petition Date, (iv) asserting any 

right of setoff, subrogation or recoupment of any kind against any obligation due from any of the 

Debtors’ Estates, or against the property or interests in property of any of the Debtors’ Estates with 

respect to any such Claim or Equity Interest except as provided in this Plan, or (v) pursuing any 

Claim released or exculpated under the Plan. For the avoidance of doubt, nothing in this Article 

VIII.C shall enjoin or stay any direct claim or cause of action held by the Prepetition Secured 

Lender. 

(b) Each holder of a Claim or Equity Interest shall be bound by the injunction 

provisions set forth in this Section. The Debtors or the Exculpated Parties shall be entitled to seek 

sanctions by motion for contempt or other appropriate proceeding for any violations of the 

Confirmation Order or this Plan, including the Exculpation, Injunction and Stay, and Gate Keeping 

provisions set forth in this Plan. 

(c) Unless otherwise provided, all injunctions or stays arising under or entered during 

the Debtors’ Chapter 11 Cases under sections 105 or 362 of the Bankruptcy Code, or otherwise, 

and in existence on the Confirmation Date, shall remain in full force and effect until the Effective 

Date. 

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E. Gate Keeping. 

No Person or Entity may commence or pursue a claim or cause of action of any kind against 

the Debtors or any Exculpated Party that relates to or is reasonably likely to relate to any act or 

omission in connection with, relating to, or arising out of a claim or cause of action subject to the 

Sections B, C, and D of this ARTICLE VIII, including any claim or cause of action that was 

asserted or assertable on behalf of the Debtor, including any derivative, alter ego, successor 

liability, or similar claims and Causes of Action based on general harm to the Debtor, holders of 

Claims and Equity Interests, or any other party in interest, or a theory of lack of separation between 

the Debtors and an Exculpated Party, without the Bankruptcy Court (i) first determining, upon 

motion that attaches a copy of the proposed complaint or petition, and after notice and a hearing, 

that such claim or cause of action represents a direct (as opposed to derivative) and colorable claim 

of any kind and (ii) specifically authorizing such Person to bring such claim or cause of action 

against the Debtors or any Exculpated Party. At the hearing on such motion, the Bankruptcy Court 

shall have sole and exclusive jurisdiction to assess whether the proposed complaint or petition 

satisfies the applicable Federal Rules of Civil Procedure (or other applicable rules of procedure) 

and to determine whether such claim or cause of action represents a colorable claim of any kind. 

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 claims or 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 reserves jurisdiction to adjudicate any such claims 

to the maximum extent provided by applicable law. For the avoidance of doubt, the provision of 

this Article VIII.E shall not apply to the commencement or filing of any direct claim or cause of 

action against any non-Debtor, entity or person by the Prepetition Secured Lender. 

F. Setoffs and Recoupment. 

The Debtors may, but shall not be required to, setoff against or recoup from any Claim or 

Equity Interest any rights to payment that any of the Debtors may have against the holder of such 

Claim or Equity Interest. Neither the failure of the Debtors to setoff or recoup, nor the Allowance 

of any Claim or Equity Interest shall constitute a waiver or release by any of the Debtors of any 

right to payment or right of setoff or recoupment. 

G. Compromise of Controversies. 

In consideration for the distributions and other benefits provided under the Plan, the 

provisions of the Plan constitute a good faith compromise and settlement of all Claims and 

controversies resolved under the Plan, and the entry of the Confirmation Order shall constitute the 

Bankruptcy Court’s approval of such compromise and settlement under Bankruptcy Rule 9019. 

H. Rejection of Contracts and Leases. 

Except as otherwise provided herein, or in any contract, instrument, release, indenture, or 

other agreement or document entered into in connection with the Plan, as of the Effective Date, 

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each Debtor shall be deemed to have rejected each executory contract and unexpired lease to which 

it is a party, unless such contract or lease (i) was previously assumed, assumed and assigned or 

rejected by the Debtors, (ii) previously expired or terminated pursuant to its own terms, (iii) is the 

subject of a motion to assume, assume and assign, or reject filed by the Debtors on or before the 

Effective Date. The Confirmation Order shall constitute an order of the Bankruptcy Court under 

sections 365 and 1123(b) of the Bankruptcy Code approving the contract and lease rejections 

described above, as of the Effective Date. The rejections set forth in this Section H shall include 

rejecting any obligations of the Debtors pursuant to their corporate charters, by-laws, limited 

liability company agreements, or other organizational documents and agreements to indemnify any 

officers or directors of the Debtors for any prepetition actions or failures to act. 

Unless otherwise specified, each executory contract and unexpired lease shall include any 

and all modifications, amendments, supplements, restatements or other agreements made directly 

or indirectly by any agreement, instrument, or other document that in any manner affects such 

executory contract or unexpired lease. 

ARTICLE IX

RETENTION OF JURISDICTION 

The Bankruptcy Court shall have exclusive jurisdiction of all matters arising out of, or 

related to, the Debtors’ Chapter 11 Cases and the Plan pursuant to, and for the purposes of, sections 

105(a) and 1142 of the Bankruptcy Code and for, among other things, the following purposes: 

(a) To hear and determine pending applications for the assumption, assignment or 

rejection of executory contracts or unexpired leases and the allowance of Claims resulting 

therefrom; 

(b) To determine any and all adversary proceedings, applications, and contested 

matters in the Chapter 11 Cases and grant or deny any application involving the Debtors that may 

be pending on the Effective Date or that are retained and preserved by the Debtors herein; 

(c) To ensure that distributions to holders of Allowed Claims and Allowed Equity 

Interests are effected as provided in the Plan; 

(d) To hear and determine any timely objections to Administrative Claims or to proofs 

of Claim and Equity Interests, including any objections to the classification of any Claim or Equity 

Interest; 

(e) To enter and implement such orders as may be appropriate in the event the 

Confirmation Order is for any reason stayed, revoked, modified, or vacated; 

(f) To take any action and issue such orders, after the occurrence of the Effective Date, 

as may be necessary to construe, enforce, implement, execute, and consummate the Plan or any 

prior order of the Bankruptcy, or to maintain the integrity of the Plan, the Sale, or any prior order 

entered by the Bankruptcy Court during these Chapter 11 Cases; 

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(g) To consider any amendments to or modifications of the Plan, or to cure any defect 

or omission, or to reconcile any inconsistency in any order of the Bankruptcy Court, including the 

Confirmation Order; 

(h) To hear and determine all requests for payment of Professional Fee Claims; 

(i) To hear and determine disputes arising in connection with the interpretation, 

implementation, or enforcement of the Plan, the Confirmation Order, the documents that are 

ancillary to and aid in effectuating the Plan or any agreement, instrument, or other document 

governing or relating to any of the foregoing; 

(j) To hear and determine matters concerning state, local, and federal taxes in 

accordance with sections 346, 505, and 1146 of the Bankruptcy Code (including the expedited 

determination of taxes under section 505(b) of the Bankruptcy Code); 

(k) To hear any other matter not inconsistent with the Bankruptcy Code; 

(l) To hear and determine all disputes involving the existence, scope, and nature of the 

exculpations and releases granted hereunder; 

(m) To issue injunctions and effect any other actions that may be necessary or desirable 

to restrain interference by any entity with the consummation or implementation of the Plan; and 

(n) To enter a Final Decree closing the Chapter 11 Cases. 

ARTICLE X

MISCELLANEOUS 

A. Filing of Additional Documents. 

The Debtors or the Wind Down Officer may file such agreements and other documents as 

may be necessary or appropriate to effectuate and further evidence the terms and conditions of the 

Plan. 

B. Schedules, Exhibits and Plan Supplement Incorporated. 

All exhibits and schedules to the Plan, if any, and the documents contained in the Plan 

Supplement, if any, are incorporated into and are a part of the Plan as if fully set forth herein. 

C. Amendment or Modification of the Plan. 

Subject to section 1127 of the Bankruptcy Code and, to the extent applicable, sections 1122, 

1123, and 1125 of the Bankruptcy Code, alterations, amendments or modifications of the Plan may 

be proposed in writing by the Debtors at any time prior to or after the entry of the Confirmation 

Order. Holders of Claims and Equity Interests that have accepted the Plan shall be deemed to have 

accepted the Plan, as altered, amended, or modified; provided, however, that any holders of Claims 

and Equity Interests who were deemed to accept the Plan because such Claims and Equity Interests 

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were unimpaired shall continue to be deemed to accept the Plan only if, after giving effect to such 

amendment or modification, such Claims and Equity Interests continue to be unimpaired. 

D. Inconsistency. 

In the event of any inconsistency among the Plan, the Disclosure Statement, and any exhibit 

or schedule to the Disclosure Statement, the provisions of the Plan shall govern. In the event of 

any inconsistency between the Plan and the Confirmation Order, the Confirmation Order shall 

govern. 

E. Expedited Tax Determination. 

The Debtors or the Wind Down Officer may request an expedited determination of taxes 

under section 505(b) of the Bankruptcy Code for all returns filed for, or on behalf of, the Debtors 

for any and all taxable periods ending after the Petition Date through, and including, the Effective 

Date. 

F. Binding Effect. 

Except as otherwise provided in section 1141(d)(3) of the Bankruptcy Code and subject to 

the occurrence of the Effective Date, on and after the Confirmation Date, the provisions of the Plan 

shall bind any holder of a Claim against, or Equity Interest in, the Debtors and such holder’s 

respective successors and assigns, whether or not the Claim or Equity Interest of such holder is 

impaired under the Plan and whether or not such holder has accepted the Plan. 

G. Severability. 

If the Bankruptcy Court determines that any provision of this Plan is unenforceable either 

on its face or as applied to any Claim or Equity Interest, the Debtors may modify this Plan in 

accordance with ARTICLE XC hereof so that such provision shall not be applicable to the holder 

of any Claim or Equity Interest. Any determination of unenforceability shall not (i) limit or affect 

the enforceability and operative effect of any other provisions of this Plan; or (ii) require the 

resolicitation of any acceptance or rejection of this Plan unless otherwise ordered by the 

Bankruptcy Court. 

H. No Admissions. 

If the Effective Date does not occur, the Plan shall be null and void in all respects, and 

nothing contained in the Plan shall (a) constitute a waiver or release of any claims by or against, 

or any interests in, any Debtor, (b) prejudice in any manner the rights of any Debtor or any other 

party in interest, or (c) constitute an admission of any sort by any Debtor or other party in interest. 

I. No Payment of Attorneys’ Fees. 

Except for the Professional Fee Claims of Professional Persons and the fees and costs of 

the Prepetition Secured Lender and the DIP Lender, no attorneys’ fees shall be paid by the Debtors 

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22 

4881-9366-8033 

with respect to any Claim or Equity Interest unless otherwise specified in this Plan or a Final Order 

of the Bankruptcy Court. 

J. Notices. 

All notices, requests, and demands to or upon the Debtors to be effective shall be in writing 

(including by facsimile transmission) 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 

facsimile transmission, when received and telephonically confirmed, addressed as follows: 

HARNEY PARTNERS 

Attention: Karen Nicolaou 

Chief Restructuring Officer for Cottonwood 

Financial Ltd., et al.

3500 Maple Avenue, Suite 350 

Dallas, TX 75219 

Telephone: (469) 445-1002 

Email:knicolaou@harneypartners.com 

with a copy to: 

GRAY REED 

Attention: Jason S. Brookner 

Aaron M. Kaufman 

Lydia R. Webb 

1601 Elm Street, Suite 4600 

Dallas, TX 75201 

Telephone: (214) 954-4135 

Facsimile: (214) 953-1332 

Email:jbrookner@grayreed.com, 

akaufman@grayreed.com 

lwebb@grayreed.com 

K. Governing Law. 

Except to the extent that the Bankruptcy Code or other federal law is applicable, or to the 

extent an exhibit to the Plan provides otherwise (in which case the governing law specified therein 

shall be applicable to such exhibit), the rights, duties and obligations arising under the Plan shall 

be governed by, and construed and enforced in accordance with, the laws of the State of Texas, 

without giving effect to the principles of conflict of laws that would require application of the laws 

of another jurisdiction. 

 

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23 

4881-9366-8033 

Dated: June 14, 2024 

Dallas, Texas 

COTTONWOOD FINANCIAL LTD. 

By: /s/ Karen Nicolaou 

Karen Nicolaou, Chief Restructuring Officer 

COTTONWOOD FINANCIAL 

ADMINISTRATIVE SERVICES, LLC 

By: //s/ Karen Nicolaou 

Karen Nicolaou, Chief Restructuring Officer 

COTTONWOOD FINANCIAL TEXAS, LLC 

By: /s/ Karen Nicolaou 

Karen Nicolaou, Chief Restructuring Officer 

COTTONWOOD FINANCIAL IDAHO, LLC 

By: /s/ Karen Nicolaou 

Karen Nicolaou, Chief Restructuring Officer 

COTTONWOOD FINANCIAL WISCONSIN, LLC 

By: /s/ Karen Nicolaou 

Karen Nicolaou, Chief Restructuring Officer 

Jason S. Brookner (TX Bar No. 24033684) 

Aaron M. Kaufman (TX Bar No. 24060067) 

Lydia R. Webb (TX Bar No. 24083758) 

GRAY REED 

1601 Elm Street, Suite 4600 

Dallas, TX 75201 

Telephone: (214) 954-4135 

Facsimile: (214) 953-1332 

Email: jbrookner@grayreed.com

akaufman@grayreed.com 

lwebb@grayreed.com 

Counsel to the Debtors 

and Debtors in Possession

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