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Timestamp: 2019-04-21 04:40:08+00:00

Document:
FindACase | In re TK Holdings Inc.
In re TK Holdings Inc.
In re TK HOLDINGS INC., et al, Debtors.
The findings and conclusions set forth herein and in the record of the Confirmation Hearing constitute the Court's findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure, as made applicable herein by Bankruptcy Rules 7052 and 9014. To the extent any of the following findings of fact constitute conclusions of law, they are adopted as such. To the extent any of the following conclusions of law constitute findings of fact, they are adopted as such.
Venue, Core Proceeding (28 U.S.C. §§ 157(b)(2). 1334(a)). The Court has jurisdiction over the Debtors' Chapter 11 Cases pursuant to 28 U.S.C. §§ 157 and 1334, and the Amended Standing Order of Reference from the United States District Court for the District of Delaware dated February 29, 2012. Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409. Confirmation of the Plan is a core proceeding pursuant to 28 U.S.C. § 157(b) and this Court has jurisdiction to enter a final order with respect thereto. The Debtors are eligible debtors under section 109 of the Bankruptcy Code. The Debtors are proper plan proponents under section 1121(a) of the Bankruptcy Code.
On June 25, 2017 (the 'Petition Date"), each Debtor commenced with this Court a voluntary case under chapter 11 of the Bankruptcy Code (the "Chapter 11 Cases"). The Debtors are authorized to continue to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed or requested in these Chapter 11 Cases. Further, in accordance with an order of this Court [Docket No. 102], the Debtors' cases are being jointly administered pursuant to Bankruptcy Rule 1015(b).
On June 27, 2017, the Court entered the Interim Order Pursuant to 11 U.S.C. §§ 105, 361, 362, 363, 503, 506, and 507 and Fed.R.Bankr.P. 2002, 4001, 6003, 6004, and 9014 (I) Authorizing the Debtors to Enter into Accommodation Agreement and Access Agreement with Certain Customers, (II) Granting Adequate Protection In Connection therewith, (III) Modifying the Automatic Stay to Implement and Effectuate the Terms Thereof; and (IV) Scheduling a Final Hearing [Docket No. 107] the "Interim Adequate Protection Order"). On October 3, 2017, the Court entered the Final Order Pursuant to 11 U.S.C. §§ 105, 361, 362, 363, 503, 506, and 507 and Fed.R.Bankr.P. 2002, 4001, 6003, 6004, and 9014 (I) Authorizing the Debtors to Enter into Accommodation Agreement and Access Agreement with Certain Customers, (II) Granting Adequate Protection In Connection therewith, and (III) Modifying the Automatic Stay to Implement and Effectuate the Terms Thereof [Docket No. 953] (the "Final Adequate Protection Order" and, together with the Interim Adequate Protection Order, the "Adequate Protection Order"). Among other things, the Adequate Protection Order authorized the Debtors to enter into the Global Accommodation Agreement and granted the Adequate Protection Claims to the Consenting OEMs party to the Global Accommodation Agreement.
On July 7, 2017, the United States Trustee for Region 3 (the "U.S. Trustee") appointed the statutory committee of unsecured creditors pursuant to section 1102(a)(1) of the Bankruptcy Code (the "Creditors' Committee") and the statutory committee of tort claimant creditors pursuant to section 1102(a)(2) of the Bankruptcy Code (the "Tort Claimants' Committee" and, together with the Creditors' Committee, the "Committees").
On October 13, 2017, the Court, pursuant to sections 105 and 1109(b) of the Bankruptcy Code, entered an Amended Order appointing Roger Frankel as the legal representative (the "Future Claims Representative" or the "FCR") for individuals who sustain personal injuries after the Petition Date arising from or related to PSAN Inflators or their component parts manufactured by the Debtors or their affiliates prior to the Effective Date (such individuals as defined therein, the "Future Claimants"). The manufacture date of PSAN Inflators or their component parts manufactured by the Debtors occurs in close proximity to the date such products are incorporated into airbag systems and sold or supplied by the Debtors to an OEM.
The Court takes judicial notice of the docket of the Chapter 11 Cases maintained by the Clerk of the Court or its duly-appointed agent Prime Clerk LLC, including all pleadings and other documents filed, all orders entered, and all evidence and arguments made, proffered, or adduced at the hearings held before the Court during the pendency of these Chapter 11 Cases.
Each of the Debtors has met the burden of proving the elements of sections 1129(a) and (b) of the Bankruptcy Code by a preponderance of the evidence.
The publication notice as provided in the Order For Authority to (I) Establish Deadlines for Filing Proofs of Claim, (IT) Establish the Form and Manner of Notice Thereof and (III) Approve Procedures for Providing Notice of Bar Date and Other Important Deadlines and Information to Potential PSAN Inflator Claimants [Docket No. 959], constituted adequate notice of the Bar Dates and other matters described therein on all unknown creditors, including PPICs, without regard to the additional elements of the Supplemental Notice Plan.
J- Modifications to the Third Amended Plan.
The modifications made to the Third Amended Plan since the solicitation (i) complied in all respects with section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019, (ii) do not adversely affect the treatment of any holder of Allowed Claims, and (iii) do not require re-solicitation of votes with respect to the Plan. Adequate and sufficient notice of such modifications has been given, no further notice is or shall be required, and such modifications are approved in full. The votes cast to accept the Third Amended Plan are deemed to have been cast with respect to the Plan. Pursuant to Section 12.3(a) of the Plan, after the Confirmation Date, so long as such action does not materially and adversely affect the treatment of holders of Allowed Claims pursuant to the Plan, subject to any applicable consent or approval rights, the Debtors may remedy any defect or omission or reconcile any inconsistencies in the Plan or this Order with respect to such matters as may be necessary to carry out the purposes or effects of the Plan, and any holder of a Claim or Interest that has accepted the Third Amended Plan shall be deemed to have accepted the Plan as further amended, modified, or supplemented.
On January 5, 2018, the Court entered the Solicitation Procedures Order, which, among other things, approved the Disclosure Statement as containing "adequate information" within the meaning of section 1125 of the Bankruptcy Code, authorized the Debtors to solicit acceptances and rejections of the Plan, and established February 6, 2018 at 4:00 p.m. (ET) as the deadline to vote to accept or reject the Plan (the "Voting Deadline"). On February 3, 2018, the Debtors extended the Voting Deadline to February 9, 2018 at 4:00 p.m. (ET) as set forth in the Notice of Extension of Voting Deadline to Accept or Reject Plan to February 9, 2018 at 4:00 P.M. (ET) [Docket No. 1907]. On February 8, 2018, the Debtors further extended the Voting Deadline to February 12, 2018 at 5:00 p.m. (ET) as set forth in the Notice of Further Extension of Voting Deadline to Accept or Reject Plan to February 12, 2018 at 5:00 P.M. (ET) [Docket No. 1907]. On February 11, 2018, the Debtors further extended the Voting Deadline to February 14, 2018 at 8:00 p.m. (ET) as set forth in the Notice of Adjourned Hearing to Consider Confirmation of Plan and Further Extension of Voting Deadline [Docket No. 2018], which deadline was further extended to 9:00 p.m. (ET) by notice posted on the website maintained by the Solicitation Agent.
The Solicitation Packages were transmitted and served in compliance with the Bankruptcy Rules, including Bankruptcy Rules 3017 and 3018, the Local Rules of Bankruptcy Practice and Procedure for the United States Bankruptcy Court for the District of Delaware (the "Local Rules"), and the Solicitation Procedures Order. The forms of the Ballots adequately addressed the particular needs of these Chapter 11 Cases and were appropriate for the holders of Claims in Class 3 (Mexico Class Action Claims and Mexico Labor Claims), Class 4 (OEM Unsecured Claims), Class 5 (PSAN PI/WD Claims), Class 6 (Other General Unsecured Claims), and Class 7 (Other PI/WD Claims) - the Classes of Claims entitled to vote to accept or reject the Plan (the "Voting Classes"). The period during which the Debtors solicited votes on the Plan was a reasonable period of time for the holders of Claims in the Voting Classes to make an informed decision to accept or reject the Plan. The Debtors were not required to solicit votes from the holders of Claims in Class 1 (Other Secured Claims) and Class 2 (Other Priority Claims) as each such Class is Unimpaired under the Plan and is conclusively presumed to have accepted the Plan under section 1126(f) of the Bankruptcy Code. The Debtors were not required to solicit votes from the holders of Claims or Interests in Class 8 (Intercompany Interests) and Class 9 (Subordinated Claims) as such holders are not entitled to receive a distribution under the Plan on account of their Claims or Interests, and, thus, pursuant to section 1126(g) of the Bankruptcy Code, the holders are deemed to reject the Plan. As described in and as evidenced by the Voting Certification and the Affidavit of Service, the transmittal and service of the Solicitation Packages was timely, adequate, and sufficient under the circumstances. The solicitation of votes on the Plan complied with the Solicitation Procedures, was appropriate and satisfactory based upon the circumstances of the Chapter 11 Cases, was conducted in good faith, and was in compliance with the provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and any other applicable rules, laws, and regulations.
M. Notice. The transmittal and service of the Solicitation Packages were adequate and sufficient under the circumstances, and all parties required to be given notice of the Confirmation Hearing (including the deadline for filing and serving objections to confirmation of the Plan) have been given due, proper, timely, and adequate notice in accordance with the Solicitation Procedures Order and in compliance with the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and applicable non-bankruptcy law and such parties have had an opportunity to appear and be heard with respect thereto. No other or further notice is required.
N. Voting. Votes to accept or reject the Third Amended Plan have been solicited and tabulated fairly, in good faith, and in a manner consistent with the Solicitation Procedures Order, the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and applicable non-bankruptcy law.
On January 23, 2018, the Debtors filed the Initial Plan Supplement, containing the following documents: (i) updated Post-Closing Date structure for Reorganized Takata, Warehousing Entity, and TK Global LLC, (ii) list of material definitive documents relating to Restructuring Transactions, (iii) schedule of Allowed OEM Claims of Consenting OEMs, (iv) Indemnity Agreement, (v) TK Global Operating Agreement, (vi) Plan Administrator Agreement, (vii) Plan Administrator qualifications, (viii) Transition Services Agreement, (ix) Shared Services Agreement, (x) Reorganized TK Holdings Organizational Documents, (xi) Reorganized TK Holdings Trust Agreement, (xii) Schedule of Causes of Action (including Avoidance Actions) not Acquired by the Plan Sponsor or Waived Pursuant to Section 10.11 of the Plan, (xiii) PSAN PI/WD Trust Agreement, (xiv) PSAN PI/WD TDP, (xv) Participating OEM Contribution Agreement, (xvi) Claims Estimation Report, (xvii) Other PI/WD Claims Analysis, and (xviii) the identities of the Legacy Trustee, the OEM Claims Administrator, the initial PSAN PI/WD Trustee, the initial members of the PSAN PI/WD Trust Advisory Committee, and the initial members of the PSAN PI/WD OEM Advisory Committee. On February 11, 2018, the Debtors filed the First Amended Plan Supplement, containing a revised version of the PSAN PI/WD TDP. On February 16, 2018, the Debtors filed the Second Amended Plan Supplement, containing a revised version of the PSAN PI/WD Trust Agreement and a revised version of the Participating OEM Contribution Agreement. All such materials comply with the terms of the Plan, and the filing and notice of such documents, including the notice of filing of the Plan Supplement, is good and proper in accordance with the Bankruptcy Code, the Bankruptcy Rules, and all other applicable rules, laws, and regulations, and no other or further notice is or shall be required. All documents included in the Plan Supplement are integral to, part of, and incorporated by reference into the Plan. Subject to the terms of the Plan, the Debtors reserve all rights to, and, to the extent required by the Settlement Term Sheets, shall, alter, amend, update, or modify the Plan Supplement before the Effective Date subject to compliance with the Bankruptcy Code and the Bankruptcy Rules, provided that no such alteration, amendment, update, or modification shall be inconsistent with the terms of this Order or the Plan.
All Claims against the Debtors arising out of or related to (a) the complaint filed by the State of Hawai'i ("Hawai'i), by its Office of Consumer Protection, in Hawai'i state court (the "Hawai'i Proceeding"), asserting Causes of Action for unfair or deceptive acts or practices pursuant to Hawai'i Revised Statute chapters 480 and 487 and applicable Hawai'i common law and seeking a permanent injunction barring the Debtors "from engaging in their unfair and deceptive conduct, " civil penalties per violation in accordance with H.R.S. §§ 480-15, restitution and disgorgement (collectively with any similar or related Claims asserted by Hawai'i in any proof of claim filed in these Chapter 11 Cases, the "Hawai'i Claim"); (b) the complaint filed by the Government of the United States Virgin Islands (“USV”) in USVI state court (the "US VI Proceeding") asserting Causes of Action under certain USVI consumer protection laws, the USVI Criminally Influenced and Corrupt Organizations Act (14 V.I.C. §§600-14), the USVI Consumer Fraud & Deceptive Business Practices Act (12A V.I.C. §301), and USVI common law, seeking civil penalties, administrative fines, restitution, disgorgement, and an injunction requiring the defendants to cease their alleged violations of the law and to expand their public education efforts (collectively with any similar or related Claims asserted by the USVI in any proof of claim filed in these Chapter 11 Cases, the "USVI Claim"), and (c) the complaint filed by the State of New Mexico ("New Mexico") in New Mexico state court (the "New Mexico Proceeding") alleging violations of New Mexico's Unfair Practices Act (N.M. Stat. Ann. § 57-12-1, et seq.), seeking disgorgement as well as five thousand dollars ($5, 000) per defective airbag inflator that entered into New Mexico and five thousand dollars ($5, 000) a day for each day that the Debtors allegedly hid or obscured defects in airbag inflators (collectively with any similar or related Claims asserted by New Mexico in any proof of claim filed in these Chapter 11 Cases, the "New Mexico Claim") are properly classified as Class 9 (Subordinated Claims).
Q. The Hawai'i Proceeding, the USVI Proceeding, and the New Mexico Proceeding are subject to the Plan Injunction.
R. Plan Compliance with the Bankruptcy Code (11 U.S.C. § 1129(a)(1)). The Plan complies with the applicable provisions of the Bankruptcy Code, thereby satisfying section 1129(a)(1) of the Bankruptcy Code.
(a) Proper Classification n 1 U.S.C. §§ 1122. 1123(a)(1)).
In addition to Administrative Expense Claims, Fee Claims, Adequate Protection Claims, and Priority Tax Claims, which need not be classified, Articles III and IV of the Plan classify nine (9) Classes of Claims against and Interests in the Debtors, based on differences in the legal nature or priority of such Claims against and Interests in each Debtor. The Claims and Interests placed in each Class are substantially similar to other Claims and Interests, as the case may be, in each such Class. Valid business, factual, and legal reasons exist for separately classifying the various Classes of Claims and Interests created under the Plan. The Plan therefore satisfies sections 1122 and 1123(a)(1) of the Bankruptcy Code.
(b) Specified Unimpaired Classes (11 U.S.C. § 1123(a)(1)).
Articles III and IV of the Plan specify that Class 1 (Other Secured Claims) and Class 2 (Other Priority Claims) are Unimpaired under the Plan within the meaning of section 1124 of the Bankruptcy Code, thereby satisfying section 1123(a)(2) of the Bankruptcy Code.
(c) Specified Treatment of Impaired Classes (11 U.S.C. § (a)(1)).
Articles III and IV of the Plan designate Class 3 (Mexico Class Action Claims and Mexico Labor Claims), Class 4 (OEM Unsecured Claims), Class 5 (PSAN PI/WD Claims), Class 6 (Other General Unsecured Claims), Class 7 (Other PI/WD Claims), Class 8 (Intercompany Interests), and Class 9 (Subordinated Claims) as Impaired within the meaning of section 1124 of the Bankruptcy Code and specify the treatment of the Claims and Interests in such Classes, thereby satisfying section 1123(a)(3) of the Bankruptcy Code.
(d) Equal Treatment (11 U.S.C. § 1123(a)(1)).
The Plan provides for the same treatment by the Debtors for each Claim or Interest in each respective Class unless the holder of a particular Claim or Interest has agreed to a less favorable treatment of such Claim or Interest, thereby satisfying section 1123(a)(4) of the Bankruptcy Code.
(e) Implementation of the Plan (11 U.S.C. § 1123(a)(1)). The Plan and the various documents and agreements set forth in the Plan Supplement as well as the exhibits and schedules to the Plan provide adequate and proper means for the implementation of the Plan, thereby satisfying section 1123(a)(5) of the Bankruptcy Code, including (i) the sale of the Purchased Assets to the Plan Sponsor free and clear of all Claims, interests, Liens, other encumbrances, and liabilities of any kind or nature whatsoever, except for the Assumed Liabilities and Permitted Liens, in accordance with the terms of the Plan and the U.S. Acquisition Agreement and the allocation of Cash Proceeds, (ii) the vesting of the PSAN Assets in Reorganized Takata, (iii) the vesting of the Warehoused PSAN Assets and Other Excluded Assets in the applicable Legacy Entity, (iv) the provision of the Plan Sponsor Backstop Funding (if any) in accordance with the Plan and the Plan Sponsor Backstop Funding Agreement, (v) the continued corporate existence of the Reorganized Debtors, (vi) the consummation of the Plan Settlement, including payment of the Plan Settlement Payment, (vii) the establishment and funding of the Support Party Creditor Fund, (viii) the execution of the Reorganized TK Holdings Trust Agreement and the establishment of the Reorganized TK Holdings Trust, (ix) the establishment of TK Global LLC and the Warehousing Entity and the funding thereof through, among other things, the Warehousing Entity Reserve and the Post-Closing Reserve, (x) the establishment and funding of the PSAN PI/WD Trust, (xi) the transfer of the PI/WD Insurance Rights to the PSAN PI/WD Trust, (xii) the creation of the Claims Reserves and the Recovery Funds to make Distributions to holders of Allowed General Unsecured Claims, (xiii) the provisions for the Plan Sponsor Contribution and any TKJP Contribution Amount for the benefit of PSAN PI/WD Claims, solely as an administrative convenience for the settling parties, and the establishment and funding of the Plan Settlement Fund, (xiv) the consummation of the TKC and Mexico restructuring transactions contemplated by Sections 5.11 and 5.13 of the Plan, respectively, (xv) the funding of the TSAC DOJ Restitution Claim Funding Deficiency in accordance with Section 5.12 of the Plan, and (xvi) the taking of all necessary or appropriate actions by the Debtors or the Reorganized Debtors, as applicable, to effectuate the Restructuring Transactions and the Plan.
(f) Non-Voting Equity Securities (11 U.S.C. $ 1123(a)(6)). The certificate of incorporation, articles of incorporation, limited liability company agreement, operating agreement, or similar governing document, as applicable, of each Debtor has been or will be amended on or prior to the Effective Date to prohibit the issuance of non-voting equity securities to the extent prohibited by section 1123(a)(6) of the Bankruptcy Code, thereby satisfying section 1123(a)(6) of the Bankruptcy Code.
(g) Designation of Directors and Officers (11 U.S.C. § 1123(a)(7)). The Plan Supplement and Sections 5.7 through 5.9 of the Plan contain provisions with respect to the manner of selection of directors and officers of Reorganized Takata, TK Global LLC, and the Warehousing Entity that are consistent with the interests of creditors, equity security holders, and public policy, thereby satisfying section 1123(a)(7) of the Bankruptcy Code. The Debtors have identified the directors and officers of each Reorganized Debtor in the Plan Supplement to the extent such information is available.
(h) Impairment/Unimpairment of Classes of Claims and Interests (11 U.S.C. $ 1123(b)(1)). Pursuant to Articles III and IV of the Plan, as set forth in section 1123(b)(1) of the Bankruptcy Code, Class 1 (Other Secured Claims) and Class 2 (Other Priority Claims) are Unimpaired and Class 3 (Mexico Class Action Claims and Mexico Labor Claims), Class 4 (OEM Unsecured Claims), Class 5 (PSAN PI/WD Claims), Class 6 (Other General Unsecured Claims), Class 7 (Other PI/WD Claims), Class 8 (Intercompany Interests), and Class 9 (Subordinated Claims) are Impaired.
(i) Assumption and Rejection (11 U.S.C. $ 1123(b)(2)). Article VIII of the Plan, subject to the provisions of Section 5.19(h) of the Plan and Section 2.7(g) of the U.S. Acquisition Agreement, addresses the assumption and rejection of executory contracts and unexpired leases, and meets the requirements of section 365(b) of the Bankruptcy Code. In accordance with Section 8.2 of the Plan, the Debtors have filed and served, as set forth in the Affidavits of Service [Docket Nos. 1750, 1905], the Notice of Filing of Proposed Cure Costs for Executory Contracts and Unexpired Leases [Docket No. 1703] (the "Initial Cure Amount Notice"), and the Notice of Filing of Amendments to Proposed Cure Costs for Executory Contracts and Unexpired Leases [Docket No. 1859] (the "Notice of First Amendments to the Cure Amount Notice") on parties to executory contracts and unexpired leases setting forth the proposed Cure Amount (if any). On February 15, 2018, the Debtors further filed the Notice of Filing of Second Amendments to Proposed Cure Costs for Executory Contracts and Unexpired Leases [Docket No. 2091] (the "Notice of Second Amendments to the Cure Amount Notice, " and together with the Initial Cure Amount Notice and the Notice of First Amendments to the Cure Amount Notice, the "Cure Amount Notice").
(j) If an executory contract or unexpired lease is not listed on the Cure Amount Notice, the Cure Amount for such executory contract or unexpired lease shall be deemed to be zero dollars ($0); provided, however, that the foregoing shall not apply if the counterparty to such executory contract or unexpired lease otherwise filed a proof of Claim with the Court with respect to such executory contract or unexpired lease; and, provided, further, that the Contract Notices (as defined below) shall not apply to any OEM Assumed Contracts. Furthermore, notwithstanding anything to the contrary herein or in any Contract Notice, the assumption, assignment, cure and/or other assumption of liabilities under, and/or rejection of any contract between the Debtors and the OEMs shall be governed in all respects by Section 8.4 of the Plan and, as between the Consenting OEMs and the Plan Sponsor, the Indemnity Agreement. On January 31, 2017, the Debtors filed the (i) Notice of Assumption of Executory Contracts and Unexpired Leases by Reorganized Takata [Docket No. 1857], (ii) Notice of Assumption of Executory Contracts and Unexpired Leases by the Warehousing Entity [Docket No. 1858], and (iii) Notice of Rejection of Executory Contracts and Unexpired Leases [Docket No. 1860] (collectively, the "Initial Notices of Assumed and Rejected Contracts"). On February 15, 2018, the Debtors further filed the (i) Notice of Amendments to Schedule of Executory Contacts and Unexpired Leases to be Rejected [Docket No. 2092], (ii) Notice of Amendments to Schedule of Executory Contracts and Unexpired Leases to be Assumed by Reorganized Takata [Docket No. 2093], and (iii) Notice of Amendments to Schedule of Executory Contracts and Unexpired Leases to be Assumed and Assigned to the Warehousing Entity [Docket No. 2094] (collectively, the "Amended Notices of Assumed and Rejected Contracts, " and together with the Cure Amount Notice, the "Contract Notices"). The time given to parties in interest to object to the assumption, assumption and assignment, and rejection of their executory contracts or expired leases was good and sufficient and no other or further notice is required. Notwithstanding anything in this Order, the Plan, the Disclosure Statement, or any of the Contract Notices to the contrary, any Cure Dispute that has not been resolved on or prior to the Confirmation Hearing shall be adjourned to a later date to be determined by the Court in accordance with section 8.2(c) of the Plan. All rights, remedies, and/or claims arising from or relating to such Cure Disputes are preserved.
(k) Settlement and Retention of Claims and Causes of Action and Reservation of Rights)11 U.S.C. § 1123(b)(3)). Pursuant to section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019 and in consideration for the distributions and other benefits, including releases, provided under the Plan (as supplemented by the documents memorializing the Plan Settlement), the provisions of the Plan constitute a good faith compromise or settlement of all Claims, Interests, and controversies resolved thereunder, and the entry of this Order constitutes approval of the compromise or settlement of all such Claims, Interests, and controversies, as well as a finding by the Court that such compromise and settlement is (i) in the best interests of the Debtors, their Estates, and their respective property and stakeholders, including the holders of Claims and Interests, and (ii) fair, equitable, and within the range of reasonableness. Further, in accordance and compliance with section 1123(b)(3)(A) of the Bankruptcy Code, Section 10.12 of the Plan properly retains certain Causes of Action of the Debtors and, in accordance and compliance with section 1123(b)(3)(B) of the Bankruptcy Code, Section 5.6(b) of the Plan properly transfers and provides for commencement and pursuit of Causes of Action that are expressly preserved and not released under the Plan by the Reorganized TK Holdings Trust.
(1) Sale of Substantially All Assets (11 U.S.C. § 1123(b¶4Y). The Plan provides for the sale, transfer, and/or conveyance of substantially all of the Debtors' non-PSAN assets to the Plan Sponsor pursuant to the U.S. Acquisition Agreement. Thus, the Plan complies with section 1123(b)(4) of the Bankruptcy Code.
(m) Unaffected Rights of Holders of Classes of Claims (11 U.S.C. § 1123(b)(5)). In accordance and in compliance with section 1123(b)(5) of the Bankruptcy Code, the Plan properly modifies the rights of holders of Claims in Class 3 (Mexico Class Action Claims and Mexico Labor Claims), Class 4 (OEM Unsecured Claims), Class 5 (PSAN PI/WD Claims), Class 6 (Other General Unsecured Claims), and Class 7 (Other PI/WD Claims). The Plan leaves unaffected the rights of holders of Claims in Class 1 (Other Secured Claims) and Class 2 (Other Priority Claims). Thus, the Plan complies with section 1123(b)(5) of the Bankruptcy Code.
(n) Additional Plan Provisions (11 U.S.C. § 1123(b)(6)). The permissive provisions of the Plan are appropriate and consistent with the applicable provisions of the Bankruptcy Code, thereby satisfying section 1123(b)(6) of the Bankruptcy Code. The failure to address specifically a provision of the Bankruptcy Code in this Order shall not diminish or impair the effectiveness of this Order.
(o) Debtors Are Not Individuals (11 U.S.C. § 1123)(c)). The Debtors are not individuals. Accordingly, section 1123(c) of the Bankruptcy Code is inapplicable in these Chapter 11 Cases.
(p) Cure of Defaults (11 U.S.C. § 1123(d)). Sections 8.3 (subject to the provisions of Section 5.19(h) of the Plan) and 8.4 of the Plan, provide for the satisfaction (or, in the case of Consenting OEM PSAN Cure Claims, the settlement) of default Claims associated with each executory contract and unexpired lease to be assumed pursuant to the Plan in accordance with section 365(b)(1) of the Bankruptcy Code other than OEM Assumed Contracts. All Cure Amounts will be determined in accordance with the underlying agreements and applicable non-bankruptcy law. Thus, the Plan complies with section 1123(d) of the Bankruptcy Code.
S. Bankruptcy Rule 3016. In accordance with Bankruptcy Rule 3016(a), the Plan is dated and identifies the Debtors as proponents. The Debtors appropriately filed the Disclosure Statement and the Plan with the Court, thereby satisfying Bankruptcy Rule 3016(b).
T. The Debtors' Compliance with the Bankruptcy Code (11 U.S.C. § 1129(a)(2)).
The Debtors have complied with the applicable provisions of the Bankruptcy Code, thereby satisfying section 1129(a)(2) of the Bankruptcy Code. Specifically, the Debtors have complied with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, applicable non-bankruptcy law, and the Solicitation Procedures Order in transmitting the Disclosure Statement, the Plan, the Plan Supplement, the Ballots, and related documents and notices and in soliciting and tabulating votes on the Plan.
U. Plan Proposed in Good Faith (11 U.S.C. § 1129(a)(3)). The Debtors have proposed the Plan (and all documents necessary to effectuate the Plan) in good faith and not by any means forbidden by law, thereby satisfying section 1129(a)(3) of the Bankruptcy Code. The Debtors' good faith is evident from the facts and record of these Chapter 11 Cases, including testimony adduced at the Confirmation Hearing, the contents of the Confirmation Declarations, and the record of the Confirmation Hearing and these Chapter 11 Cases. The Plan was proposed with the legitimate and honest purpose of maximizing the value of the Debtors' Estates and recoveries to holders of Claims under the circumstances of the Chapter 11 Cases. The Plan (including the Plan Supplement and all other documents necessary to effectuate the Plan) was negotiated at arm's length among representatives of the Debtors, the Restructuring Support Parties, the Committees, the Future Claims Representative, and their respective professionals. Each of the Restructuring Support Parties, the Committees, and the Future Claims Representative supports confirmation of the Plan. Further, the Plan's classification, indemnification, exculpation, release, and injunction provisions, including Sections 5.19(j), 10.5, 10.6, 10.7, and 10.8 of the Plan, have been negotiated in good faith and at arm's length, and are consistent with sections 105, 1122, 1123(b)(3)(A), 1123(b)(6), 1129, and 1142 of the Bankruptcy Code.
V. Payment for Services or Costs and Expenses (11 U.S.C. § 1129(a¶41). Any payment made or to be made by any of the Debtors for services or for costs and expenses in or in connection with the Chapter 11 Cases, or in connection with the Plan and incident to the Chapter 11 Cases has been approved by, or is subject to the approval of, the Court as reasonable, thereby satisfying section 1129(a)(4) of the Bankruptcy Code.
W. Directors. Officers, and Insiders (11 U.S.C. $ 1129(a)(5)). The Debtors have complied with section 1129(a)(5) of the Bankruptcy Code. The identity and affiliations of the persons proposed to serve as the initial directors and officers of the Reorganized Takata, TK Global LLC, and the Warehousing Entity upon the Effective Date of the Plan, and the identity of and nature of any compensation for any insider to be employed or retained by Reorganized Takata, TK Global LLC, and the Warehousing Entity, have been fully disclosed to the extent such information is available, and the appointment to, or continuance in, such offices of such persons is consistent with the interests of holders of Claims against and Interests in the Debtors and with public policy.
X. No Rate Changes (11 U.S.C. $ 1129(a)(6)). The Plan does not provide for rate changes by any of the Reorganized Debtors. Thus, section 1129(a)(6) of the Bankruptcy Code is not applicable in these Chapter 11 Cases.
Y. Best Interest of Creditors (11 U.S.C. § 1129(a)(7)). The Plan satisfies section 1129(a)(7) of the Bankruptcy Code. The liquidation analysis provided in the Disclosure Statement and other evidence proffered or adduced at the Confirmation Hearing (i) are persuasive and credible, (ii) have not been controverted by other evidence, and (iii) establish that each holder of an Impaired Claim or Interest either has accepted the Plan or will receive or retain under the Plan, on account of such Claim or Interest, property of a value, as of the Effective Date, that is not less than the amount that such holder would receive or retain if the Debtors were liquidated under chapter 7 of the Bankruptcy Code on such date.
Z. Acceptance by Certain Classes (11 U.S.C. § 1129(a)(8)). Class 1 (Other Secured Claims) and Class 2 (Other Priority Claims) are Classes of Unimpaired Claims that are conclusively presumed to have accepted the Plan in accordance with section 1126(f) of the Bankruptcy Code. As reflected in the Voting Certification, Class 3 (Mexico Class Action Claims and Mexico Labor Claims), Class 4 (OEM Unsecured Claims), Class 5 (PSAN PI/WD Claims), Class 6 (Other General Unsecured Claims) at IIM, SMX, and TDM, and Class 7 (Other PI/WD Claims) have voted to accept the Plan in accordance with section 1126(c) of the Bankruptcy Code. Class 6 (Other General Unsecured Claims) at the TKH Debtors has voted to reject the Plan, and Class 8 (Intercompany Interests) and Class 9 (Subordinated Claims) are Classes of Impaired Claims or Interests that are deemed to have rejected the Plan in accordance with section 1126(g) of the Bankruptcy Code. Therefore, section 1129(a)(8) of the Bankruptcy Code has not been satisfied with respect to the rejecting Classes. Accordingly, confirmation of the Plan is sought pursuant to section 1129(b) of the Bankruptcy Code with respect to the rejecting Classes.
AA. Treatment of Administrative Expense Claims. Priority Tax Claims, and Other Priority Claims (11 U.S.C. § 1129(a)(9)). The treatment of Allowed Administrative Expense Claims, Adequate Protection Claims, and Fee Claims pursuant to Sections 2.3, 2.4, and 2.5, respectively, of the Plan satisfies the requirements of section 1129(a)(9)(A) of the Bankruptcy Code. The treatment of Other Priority Claims pursuant to Article IV of the Plan satisfies the requirements of section 1129(a)(9)(B) of the Bankruptcy Code. The treatment of Priority Tax Claims pursuant to Section 2.6 of the Plan satisfies the requirements of section 1129(a)(9)(C) of the Bankruptcy Code. The Debtors have sufficient Cash to pay Allowed Administrative Expense Claims, Fee Claims, Other Priority Claims, and Priority Tax Claims and to provide the treatment of Adequate Protection Claims set forth in the Plan through the payment of the Plan Settlement Payment.
BB. Acceptance by Impaired Class (11 U.S.C. § 1129(a)(10)). Class 3 (Mexico Class Action Claims and Mexico Labor Claims), Class 4 (OEM Unsecured Claims), Class 5 (PSAN PI/WD Claims), Class 6 (Other General Unsecured Claims) at IIM, SMX, and TDM, and Class 7 (Other PI/WD Claims) are each Impaired and have accepted the Plan.Accordingly, at least one Class of Claims against the Debtors that is Impaired under the Plan has voted to accept the Plan by the requisite majorities, determined without including any acceptance of the Plan by any insider, thereby satisfying the requirements of section 1129(a)(10) of the Bankruptcy Code.
CC. Feasibility 1I U.S.C. § 1129(a)(11)).
The information in the Disclosure Statement (including the financial projections attached thereto), the Bowling Declaration, and the evidence proffered or adduced at the Confirmation Hearing (i) are persuasive and credible, (ii) have not been controverted by other evidence, and (iii) establish that the Plan is feasible and that there is a reasonable prospect of Reorganized Takata, TK Global LLC, and the Warehousing Entity being able to meet their financial obligations under the Plan and their business in the ordinary course and that confirmation of the Plan is not likely to be followed by the liquidation or the need for further financial reorganization of Reorganized Takata, TK Global LLC, or the Warehousing Entity, thereby satisfying the requirements of section 1129(a)(l 1) of the Bankruptcy Code.
DD. Payment of Statutory Fees (11 U.S.C. § 1129(a)(12)). The Plan provides that all fees payable under section 1930 of title 28 of the United States Code, as determined by the Court, have been or will be paid on or before the Effective Date pursuant to Section 12.5 of the Plan, thereby satisfying the requirements of section 1129(a)(12) of the Bankruptcy Code.
EE. Benefit Plans (11 U.S.C. § 1129(a)(13)). The Plan complies with section 1129(a)(13) of the Bankruptcy Code by reason of the provisions of Section 8.7 of the Plan and the Order Pursuant to 11 U.S.C. §§ 105(a), 363(b), and 1114(e) and Fed.R.Bankr.P. 9019(a) (I) Authorizing Debtors to Enter Into Settlement and Release Agreements with the Covered Executives And (II) Authorizing Debtors to Terminate or Cease Providing Retiree Benefits, entered on February 1, 2018 [Docket No. 1879].

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