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IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION In re: COLOR STAR GROWERS OF COLORADO, INC., VAST, INC., and COLOR STAR, LLC, Debtors.
§ § § § § § § §
Chapter 11 Case No. 13-42959 (Jointly Administered)
MOTION OF OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR APPROVAL OF ADDITIONAL DISCLOSURE TO GENERAL UNSECURED CREDITORS NO HEARING WILL BE CONDUCTED ON THIS MOTION UNLESS A WRITTEN RESPONSE IS FILED WITH THE CLERK OF THE UNITED STATES BANKRUPTCY COURT AND SERVED UPON THE PARTY FILING THIS MOTION WITHIN TWENTY-ONE (21) DAYS FROM DATE OF SERVICE UNLESS THE COURT SHORTENS OR EXTENDS THE TIME FOR FILING SUCH RESPONSE. IF NO RESPONSE IS TIMELY SERVED AND FILED, THIS PLEADING SHALL BE DEEMED TO BE UNOPPOSED, AND THE COURT MAY ENTER AN ORDER GRANTING THE RELIEF SOUGHT. IF A RESPONSE IS FILED AND SERVED IN A TIMELY MANNER, THE COURT WILL THEREAFTER SET A HEARING. IF YOU FAIL TO APPEAR AT THE HEARING, YOUR RESPONSE MAY BE STRICKEN. THE COURT RESERVES THE RIGHT TO SET A HEARING ON ANY MATTER. TO THE HONORABLE BRENDA T. RHOADES, CHIEF U.S. BANKRUPTCY JUDGE: NOW COMES the Official Committee of Unsecured Creditors (the "Committee") of Color Star Growers of Colorado, Inc., Vast, Inc., and Color Star, LLC (collectively, the "Debtors"), in the above-captioned bankruptcy cases and files its Motion for Approval of Additional Disclosure to General Unsecured Creditors (the "Motion"), respectfully stating as follows: I. 1.
PROCEDURAL BACKGROUND
On December 15, 2013 ("Petition Date"), the Debtors filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code thereby initiating the bankruptcy cases.
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Since the Petition Date, the Debtors have continued to operate and manage their
business as debtors-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. 3.
On January 14, 2014, the United States Trustee for the Eastern District of Texas
organized and appointed the Committee. 4.
This Court has jurisdiction over the Bankruptcy Case and the subject matter of
this Motion pursuant to 28 U.S.C. §§ 157 and 1334. Consideration of this Motion is a core proceeding under 28 U.S.C. § 157 (b)(2). II. 5.
BACKGROUND
Currently scheduled for hearing on September 22, 2014, is the Debtors' First
Amended Joint Plan of Liquidation for Color Star Growers of Colorado, Inc., Vast, Inc. and Color Star, LLC ("Plan") [Docket No. 431]. On August 5, 2014, the Debtors filed their Debtors' Motion for Entry of Order (A) Conditionally Approving Proposed Disclosure Statement in Support of First Amended Joint Chapter 11 Plan of Liquidation, (B) Scheduling a Hearing to Consider Final Approval of Disclosure Statement and Confirmation of the First Amended Joint Chapter 11 Plan of Liquidation, (C) Establishing Voting and Objection Deadlines, and (D) Approving Balloting, Solicitation, Notice and Voting Procedures ("Disclosure Statement Motion") [Docket No. 433]. 6.
By Order entered on August 6, 2014, this Court approved the Disclosure
Statement Motion [Docket No. 434] and directed the Debtors to serve, no later than August 8, Plan solicitation materials including the Disclosure Statement, the Order approving the Debtors' Disclosure Statement Motion, the Plan and ballots (“Disclosure Statement Order”). A true and correct copy of this Court's Disclosure Statement Order is attached hereto as Exhibit "A". 7.
Unfortunately, the Debtors and the Committee were unable to coordinate the
preparation of a support letter by counsel for the Committee prior to August 8, 2014. After consultation with the Debtors, Regions Bank and Comerica Bank, it was agreed that the Committee definitely should send a letter to all general unsecured creditors indicating the
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Committee's support for the Plan and providing certain information regarding the Plan and voting procedures ("Support Letter"). All parties believe that this was an important mailing to send to general unsecured creditors because the ballot which relates to the Plan provides for a particular "opt-in" to allow creditors to receive greater treatment under the Plan by releasing lenders of the Debtors from claims and causes of action. 8.
After meetings with the Debtors, Regions Bank and Comerica Bank, counsel for
the Committee did in fact prepare the Support Letter to be sent to all general unsecured creditors and due to the urgency of promptly providing the information contained in the Support Letter to general unsecured creditors, it was prepared and provided to Upshot Services on August 19, 2014, for service to general unsecured creditors. The Support Letter does not provide information that is different than the Solicitation Package previously approved by this Court (as defined in the Disclosure Statement Order).
The Support Letter describes the
Committee's support of the Plan and highlights for the benefit of general unsecured creditors the need to exercise the "opt in" provision on their ballots in order to obtain certain treatment potentially available under the Plan. A true and correct copy of the Support Letter is attached hereto as Exhibit "B." III. 9.
RELIEF REQUESTED
By this Motion, the Committee requests an order from this Court approving the
Support Letter as a good faith solicitation under Bankruptcy Code § 1125(e). The Committee drafted the letter in consultation with the Debtors, Regions Bank and Comerica Bank, transmitted the letter after receiving their consent, and the Committee believes that the letter appropriately provides information which will be helpful to general unsecured creditors. Upshot Services coordinated service of the Support Letter on August 19, 2014. 10.
Obviously, due to the time issues concerning voting on the Plan, it was
determined to make sending the Support Letter a priority, however all parties also support the
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Committee’s desire to submit the Support Letter to this Court for approval.
Out of an
abundance of caution, the Committee is filing this Motion nunc pro tunc. 1 11.
For all of the above reasons, the Committee believes that the preparation and
distribution of the Support Letter is in the best interests of the Committee, the Debtors and all parties in this case. The Committee requests that this Court grant this Motion and approve the Support Letter for transmission to voting creditors in connection with the Solicitation Package. IV.
PRAYER
WHEREFORE, PREMISES CONSIDERED, the Committee respectfully requests that the Court enter an order: (i) granting this Motion; and (ii) granting the Committee such other and further relief to which they may be entitled. RESPECTFULLY SUBMITTED this 20th day of August, 2014. MUNSCH HARDT KOPF & HARR, P.C. By: /s/ Raymond J. Urbanik Raymond J. Urbanik Texas Bar No. 20414050 Jay H. Ong Texas Bar No. 24028756 500 North Akard Street, Suite 3800 Dallas, Texas 75201-6659 Telephone: (214) 855-7500 Facsimile: (214) 855-7584 E-mail: [email protected] E-mail: [email protected] ATTORNEYS FOR THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF COLOR STAR GROWERS OF COLORADO, INC., VAST, INC. AND COLOR STAR, LLC
1
The Committee requested the Court consider this Motion at either a separate hearing, the hearing on confirmation of the Plan on September 22, 2014, or without the necessity of a hearing. Additionally, in the event that the Court believes that deadlines should be reset because of the additional disclosure, the parties understand that that is a possibility. MOTION OF OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR APPROVAL OF ADDITIONAL DISCLOSURE TO GENERAL UNSECURED CREDITORS – Page 4
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CERTIFICATE OF SERVICE I hereby certify that on this 20th day of August, 2014 a true and correct copy of the foregoing document was served on all parties requesting electronic service through the Court's ECF system. /s/ Raymond J. Urbanik Raymond J. Urbanik
MOTION OF OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR APPROVAL OF ADDITIONAL DISCLOSURE TO GENERAL UNSECURED CREDITORS – Page 5 MHDocs 5320190_2 14470.1
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EXHIBIT "A"
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IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION In re: COLOR STAR GROWERS OF COLORADO, INC., VAST, INC., and COLOR STAR, LLC, Debtors.
§ § § § § § § §
Chapter
11
Case No. 13-42959 (Jointly Administered)
ORDER GRANTING DEBTORS' MOTION FOR ENTRY OF ORDER (A) CONDITIONALLY APPROVING PROPOSED DISCLOSURE STATEMENT IN SUPPORT OF FIRST AMENDED JOINT CHAPTER 11 PLAN OF LIQUIDATION, (B) SCHEDULING A HEARING TO CONSIDER FINAL APPROVAL OF DISCLOSURE STATEMENT AND CONFIRMATION OF THE FIRST AMENDED JOINT CHAPTER 11 PLAN OF LIQUIDATION, (C) ESTABLISHING VOTING AND OBJECTION DEADLINES, AND (D) APPROVING BALLOTING, SOLICITATION, NOTICE, AND VOTING PROCEDURES Came on for consideration
the Debtors' Debtors' Motion for Entry of an Order (A)
Conditionally Approving Proposed Disclosure Statement for the Debtors' First Amended Joint Chapter 11 Plan of Liquidation, (B) Scheduling a Hearing to Consider Final Approval of Disclosure Statement and Confirmation of the Joint Chapter 11 Plan of Liquidation, (C) Establishing Voting and Objection Deadlines, and (D) Approving Balloting, Solicitation, Notice, and Voting Procedures [Docket No. 433] (the "Motion")
1
filed by Color Star Growers of
Colorado, Inc., a Colorado corporation ("Color Star"), Vast, Inc., a Texas corporation ("Vast"), and Color Star, LLC ("CSLLC," collectively with Color Star and Vast, the "Debtors"), and in light of the Debtors'
need for confirmation
of the Plan in an expedited manner pursuant to the
Global Settlement (as defined in the Plan), the manner in which the interests of all parties are served by an expedited confirmation
process, and pursuant to the authority granted by 11 U.S.C.
§§ l05(a) and I05(d)(2), the Court finds just cause exists to issue the following order:
I
Capitalized
terms not defined herein shall have the meaning ascribed to them in the Motion.
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IT IS THEREFORE
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ORDERED,
A.
The Motion is GRANTED
B.
The
Disclosure
CONDITIONALLY Bankruptcy
Rule 9006(c),
IS HEREBY
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GIVEN, THAT:
to the extent provided herein;
Statement
APPROVED
Procedure
AND NOTICE
Desc Exhibit
filed
on
August
5,
2014
pursuant to 11 U.S.C. § 105(d)(2)(vi), and Local Rule of Bankruptcy
is
hereby
Federal Rule of
Procedure
3017; final
approval of the Disclosure Statement will be combined with the hearing on Confirmation
of the
Plan as scheduled herein; C.
The Debtors are hereby authorized to make technical, conforming, and other non-
material changes to the Disclosure Statement prior to its transmittal to holders of Claims without the necessity of any further order of this Court; D.
The hearing to consider final approval of the Disclosure
Statement (if a written
objection has been timely filed) and to consider the confirmation of the Plan (the "Confirmation
Hearing") is fixed and shall be held on September Bankruptcy
Courtroom,
660 N. Central Expressway,
22, 2014 at 3:30 p.m. in the Plano Third Floor, Plano, Texas 75074, which
hearing may be adjourned or continued to a different date without further notice other than notice given in open court at such hearing; E.
The proposed form of the ballot (the "Ballot") attached to this Order as Exhibit
A, is hereby approved for use in soliciting votes on the Plan; F.
UpShot
Services
LLC, who this Court previously
approved
as the Debtors'
official balloting agent (the "Balloting Agent") [see Docket No. 108], will accordingly serve as the party responsible Plan, and determining
for receiving completed Ballots, determining
whether each particular Class of Claims under the Plan has accepted or
rejected the Plan (subject to final determination
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and tabulating votes on the
by this Court at the Confirmation
Hearing);
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The deadline
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for the receipt of completed
Balloting Agent is hereby fixed as September
Deadline").
and duly-executed
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Ballots by the
15, 2014 at 5:00 p.m. (CST) (the "Balloting
In the absence of entry of an order hereafter extending the Balloting Deadline or
otherwise permitting the late submission
of a particular Ballot, all properly completed Ballots
must be actually received by the Balloting Agent by no later than the Balloting Deadline in order for them to be deemed timely submitted, and counted.
All completed Ballots shall be sent to the
Balloting Agent at: COLOR STAR CLAIMS PROCESSING CENTER C/O UPSHOT SERVICES LLC 7808 CHERRY CREEK SOUTH DRIVE, SUITE 112 DENVER, CO 80231 ; H.
The deadline
for filing and serving Objections
to (1) final approval
of the
15,2014 at
Disclosure Statement; or (2) confirmation
of the Plan is hereby fixed as September
5:00 p.m. (CST)
Objection Deadline") pursuant to Federal Rule of
(the "Confirmation
Bankruptcy Procedure 3020(b)(l)
and all comments or objections not timely filed and served by
such deadline shall be deemed waived; 1.
The record date for determining the identity of holders of claims entitled to vote
on the Plan (the "Record Date") is hereby established as August 8, 2014;
J.
By no later than August 8, 2014, the Debtors will cause to be mailed or otherwise
delivered (subject to the exceptions set forth below) a copy (either via CD format, flash drive, or via paper) of the following materials (collectively,
the "Solicitation Package") to each of the
record holders of claims in Voting Classes, determined as of the Record Date:
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(i)
The Disclosure Statement (with all exhibits, including the PIan);
(ii)
This Order;
(iii)
An approved Ballot or Ballots;
(iv)
The Confirmation Hearing Notice; and
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A pre-addressed return envelope for use in returning the completed Ballot(s) to the Balloting Agent (the "Return Envelope");
In accordance
with II U.S.c.
§ I I 26(f), acceptances
and rejections will not be
solicited from any class that is not impaired under the Plan and the Debtors need not serve any Solicitation
Package
Confirmation
on the holders
of such claims.
Rather, the Debtors
shall serve the
Hearing Notice on such holders;
L.
The Debtors shall not be required to mail a Solicitation Package to the holder of
any Claim (on account of such Claim) that has been (a) disallowed, (b) withdrawn or otherwise expunged,
or (c) listed on the Debtors'
Schedules as disputed, contingent
which a proof of claim has not been filed, but shall serve the Confirmation
or unliquidated
for
Hearing Notice on
such holders; M.
The Debtors'
compliance
with the foregoing means of transmitting
Packages to holders of Claims in the Bankruptcy notice of the Confirmation
Cases will constitute
Solicitation
adequate and proper
Hearing, the Balloting Deadline, and the Confirmation
Objection
Deadline, consistent with the requirements of Fed. R. Bankr. P. 2002 and 3017; N.
The following
procedures
(collectively,
approved and shall apply to the determination
the "Voting Procedures") are hereby
and tabulation of votes on the Plan:
1.
Subject to the terms of the Global Settlement, with respect to a Claim as to which a proof of Claim has not been filed as of the Record Date, the voting amount of such Claim (subject to any applicable limitations set forth below) shall be equal to the amount listed, if any, in respect of such Claim in the Debtors' Schedules to the extent such Claim is not listed as contingent, unliquidated, undetermined or disputed. Such Claim shall be placed in the appropriate Class based upon the applicable Debtors' records and the classification scheme set forth in the Plan.
ii.
With respect to a proof of Claim which, according to the Clerk of the Bankruptcy Court's records, was not filed as of the Record Date and is not subject to the provisions of the immediately preceding paragraph, such Claim shall be provisionally disallowed for voting purposes.
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iii.
With respect to a liquidated, non-contingent, undisputed Claim as to which (i) a proof of Claim has been filed as of the Record Date, (ii) a Claim has been listed in the Debtors' Schedules that conflicts in amount with such proof of Claim, and (iii) an objection has not been filed, the classification of such Claim shall be that specified in such proof of Claim shall be accorded one vote and assigned a value, for purposes of § 1126(c) of the Bankruptcy Code (subject to any applicable limitations set forth below), equal to the lesser of (x) the amount of such Claim as listed in the Debtors' Schedules and (y) the amount of the proof of Claim.
iv.
With respect to a liquidated, non-contingent, undisputed Claim as to which (i) a proof of Claim has been filed as of the Record Date, (ii) a Claim is not listed in the Debtors' Schedules that conflicts in amount with such proof of Claim, and (iii) an objection has not been filed, the classification of such Claim shall be that specified in such proof of Claim and that proof of Claim shall be accorded one vote and assigned a value of one dollar for purposes of § 1126(c), subject to any applicable limitations set forth below.
v.
With respect to a proof of Claim which is the subject of an objection Filed by a Debtor, the Claim represented by such proof of Claim shall be provisionally disallowed for voting purposes, except to the extent and in the manner that (i) the Debtors indicate in their objection the extent to which such Claim should be allowed; or (ii) the Bankruptcy Court otherwise orders.
VI.
A timely filed proof of Claim that is designated as wholly unliquidated or contingent shall be accorded one vote and assigned a value of one dollar for purposes of § 1126( c) of the Bankruptcy Code, unless the Claim is disputed as set forth in the immediately preceding paragraph.
vii.
With respect to a Claim that has been estimated or otherwise allowed for voting purposes by order of the Bankruptcy Court, the amount and classification of such Claim shall be that set by the Bankruptcy Court.
viii.
With respect to a Claim, any portion of which is unliquidated, contingent or disputed, the holder of the Claim shall be entitled to vote that portion of the Claim that is liquidated, non-contingent and undisputed, subject to any limitations set forth herein and unless otherwise ordered by the Bankruptcy Court.
ix.
Holders of Claims shall not be entitled to vote Claims to the extent such Claims duplicate or have been superseded by other Claims of such holders of Claims.
x.
If the holder of a Claim submits more than one Ballot voting the same Claim or Interest prior to the deadline for submission of Ballots, the first
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of such Ballots Filed (and only such Ballot) shall be counted in accordance with the Voting Procedures unless either (i) the Debtors consent to the Filing and counting of a superseding Ballot, or (ii) the Bankruptcy Court, after notice and a hearing, orders otherwise. xi.
The authority of the signatory of each Ballot to complete and execute such Ballot shall be presumed.
xii.
A holder of a Claim must vote its entire Claim within a particular Class under the Plan either to accept or reject the Plan and may not split its vote. Accordingly, a Ballot (or multiple Ballots with respect to separate Claims within a single Class) that partially rejects and partially accepts the Plan or that indicates both a vote for and against the Plan will not be counted.
xiii.
Any Ballot which is executed and returned, but does not indicate an acceptance or rejection of the applicable Plan, shall be deemed to be an acceptance of the Plan.
xiv.
Any Ballot that is not signed will not be counted.
xv.
For the purpose of voting on the Plan, the Debtors will be deemed to be in constructive receipt of any Ballot timely delivered to any address designated for the receipt of Ballots cast in connection with the Plan.
xvi.
Any Ballot received by the Debtors after the end of the Voting Period shall not be accepted or used by the Debtors in connection with the Debtors' request for Confirmation of the Plan unless the Debtors, in their sole discretion, consent to the counting of such Ballot or the Bankruptcy Court orders such Ballot to be counted.
xvii.
All Ballots must be cast using the Ballots distributed to the holders of Claims. Votes cast in any manner other than by using such Ballots will not be counted.
Signed
~T~
on8/6/2014 SR
HONORABLE BRENDA T. RHOADES, UNITED STATES BANKRUPTCY JUDGE
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EXHIBIT A
BALLOT GardereO I - 6463848v.2
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IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION In re: COLOR STAR GROWERS OF COLORADO, INC., VAST, INC., and COLOR STAR, LLC, Debtors.
§ § § § § § §
Chapter 11 Case No. 13-42959 (Jointly Administered)
CLASS [INSERTI-IINSERT PLAN CLASS) BALLOT FOR ACCEPTING OR REJECTING FIRST AMENDED JOINT CHAPTER 11 PLAN OF LIQUIDA TION Color Star Growers of Colorado, Inc., a Colorado corporation ("'Color Star"), Vast, Inc., a Texas corporation ("Vast"), and Color Star, LLC ("CSLLC," collectively with Color Star and Vast, the "Debtors") jointly filed (as an exhibit to their Disclosure Statement, defined below) their First Amended Joint Chapter 11 Plan of Liquidation (the "PIan") in their bankruptcy cases. This Ballot has been provided to you for your use in voting on the Plan. In relation to your vote, on [INSERT DATE], the Bankruptcy Court conditionally approved the Debtors' Disclosure Statement in Support of First Amended Joint Chapter 11 Plan of Liquidation (the "Disclosure Statement"). The Disclosure Statement provides information to assist you in deciding how to vote your Ballot. A copy of the Disclosure Statement has been provided to you along with this Ballot. If you do not have a copy of the Disclosure Statement, you may obtain a copy from UpShot Services LLC's ("Upshot") website \lW\\.LJPsho(slCr\icc~.com!lColnrstar,or from counsel for the Debtors: Gardere Wynne Sewell LLP, Attn: Karen Oliver, 1601 Elm Street, Suite 3000, Dallas, Texas 75201 kolivcr((luankrc.com. Please note that the Bankruptcy Court's conditionaly approval of the Disclosure Statement does not constitute the Bankruptcy Court's approval or disapproval of the Plan. YOU SHOULD REVIEW THE DISCLOSURE STATEMENT AND PLAN BEFORE YOU VOTE. YOU SHOULD ALSO REVIEW THE ENCLOSED ORDER GRANTING DEBTORS' MOTION FOR ENTRY OF ORDER (A) CONDITIONALLY APPROVING PROPOSED DISCLOSURE STATEMENT IN SUPPORT OF FIRST AMENDED JOINT CHAPTER 11 PLAN OF LIQUIDATION, (B) SCHEDULING A HEARING TO CONSIDER FINAL APPROVAL OF DISCLOSURE STATEMENT AND CONFIRMATION OF THE FIRST AMENDED JOINT CHAPTER 11 PLAN OF LIQUIDATION, (C) ESTABLISHING VOTING AND OBJECTION DEADLINES, AND (D) APPROVING BALLOTING, SOLICITATION, NOTICE, AND VOTING PROCEDURES ("DISCLOSURE STATEMENT ORDER"), PRIOR TO COMPLETING THIS BALLOT. YOU MAY ALSO WISH TO SEEK LEGAL ADVICE CONCERNING THE PLAN AND THE CLASSIFICATION AND TREATMENT OF YOUR CLAIM UNDER THE PLAN BEFORE COMPLETING THIS BALLOT. IF YOU HOLD CLAIMS IN MORE THAN ONE CLASS UNDER THE PLAN YOU HAVE BEEN PROVIDED A SEPARATE BALLOT FOR EACH SUCH CLASS. THIS BALLOT IS TO BE USED SOLELY FOR VOTING IN RELATION TO YOUR CLASS [INSERT) CLAIM. BALLOTING DEADLINE To have your vote on the Plan count, you must complete, sign and return this Ballot to the Balloting Agent so that it is actually received by the Balloting Agent by no later than the Balloting Deadline. Balloting Deadline:
[INSERT] at 5:00 p.m. (CST)
Balloting Agent:
UpShot Services LLC [See next pagel
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DELIVER
BALLOTS
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Desc Exhibit
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TO:
By Overnight Carrier, or Hand Delivery:
United
States
Postal
Service
Color Star Growers Ballot Processing Center c/o UpShot Services LLC 7808 Cherry Creek South Drive, Suite 112 Denver, CO 80231
If your Ballot is not received by the Balloting Agent on or before the Balloting Deadline, and such deadline is not extended, your vote will not be counted. Ballots received by facsimile or other means of electronic submission other than the approved e-mail delivery will not be counted. If the Bankruptcy Court confirms the Plan, the Plan will be binding on you whether or not you vote.
AGGREGATE AMOUNT OF CLAIMS IN CLASS [INSERT). The undersigned certifies that as of [INSERT DATE], the Record Date, the undersigned was the Holder of an Allowed [INSERT PLAN CLASS] Claim in the aggregate amount set forth below:
ITEM 1.
AGGREGATE AMOUNT OF [PLAN CLASS] CLAIM: $ [Pre-printed] RECORD HOLDER: [Pre-printed]
I f you disagree with the information set forth above as to the present holder or the amount of this Claim, you must seek relieffrom the Bankruptcy Court to correct that information.
VOTE ON THE PLAN. The Holder of the Claims set forth in Item I above hereby votes with respect to his, her or its Claim as follows (check ONE box only):
ITEM 2.
o ITEM 3.
o
to ACCEPT the Plan
to REJECT the Plan
VOTE TO RELEASE LENDERS and MCG PURSUANT TO PLAN. The Holder of the Claims set forth in Item I hereby votes with respect to his, her or its Claim to accept or reject the Lenders and MCG Release set forth in Section 8.3 of the Plan (check ONE box only):
o to ACCEPT the Lenders and MCG Release set forth in Section 8.3 of the Plan
ISee next pagel
BALLOT GardereOI - 6463848v.2
o
to REJECT the Lenders and MCG Release set forth in Section 8.3 of the Plan
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CLAIMANT
[You MUST complete the following By signing this Ballot, the undersigned
Desc Exhibit
CERTIFICA
TIONS AND SIGNATURE
section of this Ballot in order for the Ballot to be valid and counted]
certifies the following:
A.
I am the holder of a Claim within Class [INSERT] of the Plan ([INSERT CLASS NAME) or am an authorized signatory for such holder having full power and authority to vote and to make or forego the election as set forth herein.
B.
I have been provided with a copy of the Plan, Disclosure Statement and Disclosure Statement Order and acknowledge that the vote set forth on this Ballot is subject to all the terms and conditions set forth in the Plan, Disclosure Statement and Disclosure Statement Order; and
C.
I have not submitted any other Ballots relating to this Class of [INSERT CLASS NAME] that are inconsistent with the votes as set forth in this Ballot or that, if such other Ballots were previously submitted, they either have been or are hereby revoked or changed to reflect the vote set forth herein.
Dated:
_
Signature:
_
Printed Name:
_
Title:
_
(if signing on behalf of the holder of the claim) Address:
Telephone
_
No.:
_
Email Address:
_
Tax ID No.:
_
BALLOT GardereOI - 6463848v.2
RETURN THIS BALLOT SO THAT IT IS RECEIVED ON OR BEFORE 5:00 p.m. (CST), on IINSERT DA TEl, by UpShot, at the appropriate address indicated in the preceding instructions.
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EXHIBIT "B"
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MUNSCH HARDT KOPF & HARR PC ATTORNEYS
DALLAS
&
Desc Exhibit
3800 Lincoln Plaza 500 N, Akard Street Dallas, Texas 75201·6659
Main 214,855.7500 Fax 214.855,7584 rnunsch.com
COUNSELORS
I HOUSTON I AUSTIN
Direct Dial 214.855.7590 Direct Fax 214978.4374 [email protected]
August 19, 2014 A DENTION:
GENERAL
UNSECURED
CREDITORS
COLOR STAR GROWERS VAST, INC., and COLOR STAR, LLC
OF:
OF COLORADO,
INC.,
Jointly Administered as Case No. 13-42959 Dear Sir or Madam: This firm serves as counsel for the Official Committee of Unsecured Creditors (the "Committee") of Color Star Growers of Colorado, lnc., Vast, Inc., and Color Star, LLC (collectively, the "Debtors"), You should have received by mail a copy of the Debtors' First Amended Joint Chapter 11 Plan of Liquidation ("Pian") on a compact diskette, together with the following: Court's Order Granting the Debtors' Motion for Entry of an Order (A) Conditionally Approving the Proposed Disclosure Statement in Support of the Plan, (B) Scheduling a Hearing to Consider Final Approval of the Disclosure Statement and Confirmation of the Plan, (C) Establishing Voting and Objection Deadlines, and (0) Approving Balloting, Solicitation, Notice, and Voting Procedures
(1) The Bankruptcy
("Disclosure
Statement
Order");
(2) A Notice of Hearing on Confirmation of the Plan and Final Approval of the Disclosure Statement ("Confirmation Notice"); and (3) A Ballot for voting on the Plan that has been pre-filled with your address and claim information, together with a pre-addressed return envelope for use in returning the completed Ballot(s) to UpShot Services LLC, the Balloting Agent. A hearing to consider approval of the Plan is scheduled for September 22, 2014, at 3:30 p.rn., central time, at the United States Bankruptcy Court, 660 North Central Expressway, Suite 300B, Plano, Texas 75074. The purpose of this letter is to provide you additional information regarding the proposed Plan.
The Committee has played an active role in these bankruptcy cases and the Committee recommends acceptance of the Plan. The Plan has been proposed by the Debtors and is the result of negotiations that occurred between the Debtors, the Committee and other creditors of the Debtors. These negotiations culminated in a Global Settlement which was approved by the Bankruptcy Court on July 18, 2014. Through the use of funding made available through the Global Settlement, the Plan provides for the liquidation of the assets of Debtors' bankruptcy estates and provides for the
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To Creditors of Color Star Growers of Colorado, Inc. August 19, 2014 Page 2
distribution of the proceeds of such liquidation to the Debtors' creditors who are entitled to be beneficiaries of two (2) trusts created under the Plan, a "liquidation Trust" and a "litigation Trust." Under the Global Settlement and Plan, general unsecured creditors are placed in Class 8 and may share in distributions from the liquidation of assets held by the two trusts. Pursuant to the Global Settlement, the Debtors' lenders, Regions Bank, Comerica Bank and MCG Capital Corporation (collectively, the "Lenders") have released certain of their asserted liens in order to fund the trusts and provide for potential distributions from the proceeds of the assets of the trusts. In exchange for this consideration by the Lenders, any general unsecured creditor who wants to share in distributions from both the liquidation Trust and litigation Trust, must complete Item 3 on the Ballot and agree to release the Lenders from any claims that the general unsecured creditor may hold against them, if any. A general unsecured creditor who does not agree to release the Lenders is allowed to share in the liquidation Trust only. Attached to this letter as Exhibit "Au are the pages from the Plan that describe the treatment of creditor claims. If you would like to receive a complete paper copy of the Plan and Disclosure Statement, please contact undersigned counsel at 214-855-7590. The Disclosure Statement provides information to assist you in deciding how to vote on the Plan. The Court has approved the Disclosure Statement as providing adequate information to enable you to vote on the Plan and nothing in this letter is intended to vary from the Disclosure Statement. Please note that the Court's approval of the Disclosure Statement is not an endorsement or comment on the Plan. The Court will rule on the Plan at the confirmation hearing. You should review the Disclosure Statement and the Plan before you vote. You may wish to seek legal advice regarding the Plan and your classification and treatment under the Plan. COMPLETING BALLOTS The Plan may be confirmed only lf sufficient votes are cast in favor of the Plan. Your vote is important, and in order for your vote to count you must sign. complete and timely return your Ballot by the deadline stated in the Confirmation Notice (September 15, 2014, at 5:00 p.m.), NOTE: IF YOU HAVE ALREADY SUBMITTED A BALLOT, YOU SHOULD NOT SUBMIT A SECOND OR DUPLICATE BALLOT. All holders of Class 8 general unsecured claims have the option of completing "Item 3" on their Ballots ("Vote to Release Lenders and MCG Pursuant to Pian"). If you are the holder of a Class 8 general unsecured claim and you would like to receive a beneficial interest in the Litigation Trust and to participate in potential distributions from the litigation Trust, you MUST complete Item 3 and ACCEPT the release of the Lenders contained in section 8.3 of the Plan as follows.
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To Creditors of Color Star Growers of Colorado, Inc. August 19, 2014 Page 3
ITEM 2.
VOTE ON THE PL,i\N. The Holder of the Claims set forth in Item l above hereby votes with respect to his, her or its Claim as follows (check ONE box only):
o
to ACCEPT the Plan
to REJECT
the
Plan
VOTE TO ({FLEA S.t.Lf~NPERS and MeG PURSUANT TO PLAl':1. The Holder of'thc Claims set forth in ltem I hereby votes with respect to his. her or its Claim 10 accept or reject the Lenders and MeG Release set It1l111in Section 8.3 ofthe Plan (check ONE box only): to ACCEPT
set
forth
in
the Lenders and MeG Release 8.3 of the Plan
Section
Any creditor holding a Class beneficial interest in the Liquidation the Litigation Trust.
o
to REJECT the Lenders and MeG Release set forth in Section 8.3 of'the Plan
8 claim who does NOT complete Item 3 on the Ballot will receive a Trust only, and SHALL NOT participate
in any distributions
from
In conclusion, the Committee has reviewed the Plan, believes that the Plan is in the best interests of all unsecured creditors and supports acceptance of the Plan. If you have any questions,
please contact me at (214) 855-7590.
Thank you. Very truly yours, MUNSCH
RJU:pdm Enclosure
HARDT KOPF & HARR, P.C.
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ARTICLE III CONSOLIDATION OF THE ESTATES FOR ALL PURPOSES
3.1 Request for Substantive Consolidation. The Plan contemplates and is predicated on substantive consolidation of the Debtors into a single entity under the Plan. Entry of the Confirmation Order shall constitute approval, pursuant to Section 105(a) of the Bankruptcy Code, effective as of the Effective Date, of the substantive consolidation of the Debtors, the Estates and the Chapter I I Cases for all purposes related to the Plan, including, without limitation, for purposes of voting, confirmation, and distribution. 3.2 Effect of Substantive Consolidation. Except as expressly set forth in this Plan, as a result of the substantive consolidation of the assets and liabilities of the Debtors, on and after the Effective Date: (a) all assets and liabilities of the Debtors shall be deemed merged so that all assets of the Debtors shall be available to pay all of the liabilities under the Plan as if they were one company, (b) no distributions shall be made under the Plan on account of Intercompany Claims, (c) no distributions are anticipated to be made under the Plan on account of any Equity Interests, (d) all guarantees by any of the Debtors of the obligations of any other Debtor shall be deemed eliminated so that any claim against any Debtor and any guarantee thereof executed by any other Debtor and any joint or several liability of the Debtors shall be deemed to be one obligation of the consolidated Debtors, (e) every Claim tiled or to be tiled in the Chapter II Cases against any Debtor shall be deemed tiled against the consolidated Debtors, and shall be deemed one Claim against and obligation of the consolidated Debtors, and all duplicate proofs of Claim for the same Claim filed against more than one Debtor shall be deemed expunged, and (g) for purposes of determining the availability of the right of setoff under Section 553 of the Bankruptcy Code, the Debtors shall be treated as one consolidated entity so that, subject to other provisions of Section 553 of the Bankruptcy Code, debts due to any Debtor may be set off against the debts of any other Debtor. For the avoidance of doubt, this substantive consolidation shall not be construed as substantive consolidation for a purpose other than described in this Plan.
DESIGNATION
ARTICLE IV OF CLAIMS AND EQUITY INTERESTS
4.1 Summary. The following presupposes substantive consolidation. As a result, it classifies all Claims against and Equity Interests in any Debtor as one obligation of the consolidated Debtors. In accordance with § 1123(a)(1) of the Bankruptcy Code, Administrative Expense Claims and Priority Tax Claims have not been classified and are excluded from the Classes. A Claim or Equity Interest is classified in a particular Class only to the extent that the Claim or Equity Interest (a) qualifies within the description of that Class, (b) is an Allowed Claim or Allowed Equity Interest in that Class, and (c) has not been paid, released or otherwise satisfied before the Effective Date. A proof of Claim asserting a Claim which could be included properly in more than one Class is only entitled to inclusion within a particular Class to the extent that it qualifies under the description of such Class, and shall be included within a different Class(es) to the extent that it qualities under the description of such different Class(es). FIRST AMENDED JOINT PLAN OF LIQUIDATION FOR COLOR STAR GROWERS OF COLORADO, INC., VAST, INC., AND COLOR STAR, LLC - Page 14 2996042 v3 (40658.0000:2.000) OanlcrcOl - 6474630v.5
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4.2 Classified Claims and Equity Interests. The following table is a summary of the classification and status of Claims and Equity Interests under the Plan: Status
Class Class I: Secured Claims of Lenders
Impaired -- entitled to vote
Class 2: Secured Claim ofMCG
Impaired -- entitled to vote
Class 3: Secured Tax Claims
Unimpaired -- deemed to have accepted the Plan Impaired -- entitled to vote
Class 4: Other Secured Claims Class 5: Priority Non-Tax Claims Class 6: Lenders' Deficiency Claims
Unimpaired -- deemed to have accepted the Plan Impaired -- entitled to vote
Class 7: MCG Deficiency Claim
Impaired -- entitled to vote
Class 8: Class 8 Unsecured Claims -subsections (a) and (b) Class 9: Subordinated Claims
Impaired -- entitled to vote
Class 10: Equity Interests
Impaired -- entitled to vote
Impaired -- entitled to vote
4.3 Controversy Concerning Classification, Impairment or Voting Rights. In the event a controversy or dispute should arise involving issues related to the classitication, impairment or voting rights with respect to any Claim or Equity Interest, whether before or after the Confirmation Date, the Bankruptcy Court may, after notice and a hearing, determine such controversy. Without limiting the foregoing, the Bankruptcy Court may estimate for voting purposes the amount of any contingent or unliquidated Claim if the fixing or liquidation of, as the case may be, would unduly delay the administration of the Chapter II Case. 4.4 Nonconsensual Confirmation. If any Class of Claims is determined to be Impaired by the Bankruptcy Court, and if such Impaired Class of Claims votes not to accept the Plan by the requisite statutory majority required by Section 1126(c) of the Bankruptcy Code, the Debtors reserve the right to: (a) reclassify any Claim, including reclassifying any Impaired Claim as Unimpaired; (b) amend the Plan; or (c) ask the Bankruptcy Court to confirm the Plan under Section 1J 29(b) of the Bankruptcy Code.
TREATMENT 5.1
Administrative
ARTICLE V OF UNCLASSIFIED
CLAIMS
Claims.
5.1.1 Time for Filing Administrative Claims. All requests for payment of Administrative Claims (other than Professional Fee Claims) incurred, accrued, or in existence prior to April J, 2014, must have been tiled by the Administrative Claim Bar FIRST AMENDED JOINT PLAN OF LIQUIDATION FOR COLOR STAR GROWERS OF COLORADO, INC., VAST, INC., AND COLOR STAR, LLC - Page 15 2996042 v3 (40658.00002.000) Gardcretl I • 474630v.5
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Date. Any such Administrative Claim tor which an application or request was not filed by the Administrative Claim Bar Date is released and forever barred, and shall not be entitled to Distributions under this Plan. For any Administrative Claim (other than Professional Fee Claims) incurred, accrued, or in existence after March 31, 2014, an application or request for payment must be filed in the Bankruptcy Court within fifteen (15) days after the Effective Date. Such an application or request must include, at a minimum, (a) the name of the holder of the Claim, (b) the amount of the Claim, (c) the basis for the Claim, and (d) all documents supporting such Claim. Failure to me and serve the application required in this Plan shall result in the Administrative Claim being released and forever barred. The United States Trustee is not required to file an application for the allowance of an Administrative Claim with regards to fees due in accordance with 28 U.S.c. § 1930(a)(6). 5.1.2 Treatment of Administrative Claims. Except to the extent that any Person entitled to payment of an Administrative Claim agrees otherwise, or as otherwise provided in the Global Settlement, each holder of an Allowed Administrative Claim (other than Professional Fee Claims) shall, in full and final satisfaction of any Administrative Claim, receive Cash in amount equal to such Allowed Administrative Claim on or as soon as reasonably practicable following the later to occur of: (a) the Effective Date and (b) the date on which such Administrative Claim becomes an Allowed Administrative Claim; provided, however, Allowed Administrative Claims representing liabilities incurred in the ordinary course of business by the Debtors may be paid in full in the ordinary course of business in accordance with the terms and subject to the conditions of any agreements governing, instruments evidencing, or other documents relating to such transactions, provided that either (x) such Allowed Administrative Claims were included in the cash collateral budgets previously approved by Lenders, or (y) Lenders approve such payment in writing. 5.2 Professional Compensation and Reimbursement Claims. All requests for allowance and payment of Professional Fee Claims must be filed with the Bankruptcy Court and served on the Debtors or the Trustees, as applicable, no later than thirty (30) days after the Effective Date. Any such Professional Fee Claim tor which an application or request for payment is not filed with the Bankruptcy Court within that time period shall be released and forever barred, and shall not be entitled to Distributions under the Plan. Objections to the payment of such Professional Fee Claims must be filed no later than seven (7) days prior to the hearing on such Claims. All Professional Fee Claims shall be paid in accordance with the applicable provisions of the Bankruptcy Code and Bankruptcy Rules, as well as the terms outlined in the Global Settlement and any prior orders entered by the Bankruptcy Court. No Professional Fee Claim shall be Allowed on account of services rendered or expenses incurred by a professional prior to the Effective Date unless payment for such services and expenses has been allowed and approved by the Bankruptcy Court. 5.3 Allowed Priority Tax Claim. Except to the extent that a holder of an Allowed Priority Tax Claim has been paid by the Debtors prior to the Effective Date, and unless otherwise FIRST AMENDED .fOINT PLAN OF LIQUIDATION FOR COLOR STAR GROWERS OF COLORADO, INC., VAST, INC., ANI> COLOR STAR, LLC - Page 16 ~996042 vJ (40658.00002.000) Gurderctll - 6474630v.5
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agreed to in writing by the Trustees and the holder, each holder of an Allowed Priority Tax Claim shall be paid out of Available Cash in an amount equal to the unpaid portion of such Allowed Priority Tax Claim on the first Distribution Date following the Allowance Date for such Claim; provided, however, that any Claim or demand for payment of a Subordinated Tax Penalty Claim shall be Disallowed pursuant to the Plan, and the holder of an Allowed Priority Tax Claim shall not be allowed to assess or attempt to collect such penalty from the Debtors, their Estates, the Liquidation Trust or the Litigation Trust. To the extent that there is insufficient Available Cash to pay all Claims that have priority over any Allowed Priority Tax Claims, no Distributions will be made on account of Allowed Priority Tax Claims until the Liquidation Trust holds sufficient Available Cash to pay all Claims holding priority over such Allowed Priority Tax Claims in full, and the Disputed Claim Reserve is fully funded. For the avoidance of doubt, the Debtors and Estates retain all rights under § 505 of the Bankruptcy Code with respect to any Priority Tax Claim, all of which rights are deemed automatically transferred to the Liquidation Trust on the Effective Date. 5.4 Payment of Statutory Fees and Post-Petition Date Taxes. Notwithstanding anything herein, all fees payable pursuant to 28 V.S.c. § 1930 and all Claims of Governmental Unit of the type described in § 503(b)(1 )(B)-(C) of the Bankruptcy Code shall be treated as Allowed Administrative Claims when such amounts become due and payable by the Debtors, the Liquidation Trust or the Litigation Trust under applicable non-bankruptcy law. Such dates shall be the Allowance Date.
TREATMENT 6.1
ARTICLE VI OF CLAIMS AND EQUITY INTERESTS
Class 1: Secured Claims of Lenders.
6.1.1 Impairment and Voting. Class 1 is Impaired under the Plan. Class 1 shall include only Secured Claims of the Lenders. Each holder of a Class 1 Claim is entitled to vote to accept or reject the Plan. 6.1.2 Claim and Lien Determination. The Class 1 Claim shall be an Allowed Claim. Pursuant to the terms of the Global Settlement, Regions, as agent for the Lenders shall, except as provided below in section 6.1.4, retain its Lien in the Collateral that secured the Class 1 Claims on the Effective Date in the same priority as existed at the time such lien arose. 6.1.3 Treatment. Each Class I Claim shall be satisfied by (a) surrender of the Collateral to Regions as agent for Lenders (other than (i) the Collateral released by Lenders pursuant to the Global Settlement, and (ii) the contents-based flood-loss insurance Causes of Action that shall be transferred to the Liquidation Trust subject to Lenders' liens), and the automatic stay shall be lifted with respect to any such returned Collateral so that the Claimant may liquidate such Collateral under applicable state law and apply the proceeds to the Class 1 Claims, or (b) payment of the proceeds upon liquidation of the Collateral that secures the Class 1 Claims, including any proceeds of FIRST AMENDED JOINT PLAN OF LIQUIDATION FOR COLOR STAR GROWERS OF COLORADO, INC., VAST, INC., AND COLOR STAR, LLC - Page 17
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the contents-based flood-loss insurance Causes of Action in excess of $13 7,500 from the policy issued by AIG, no later than the Distribution Date. 6.1.4 Release of Liens. Notwithstanding anything in this Plan to the contrary, all liens held by the Lenders in the Commercial Tort Claims shall be released on the Effective Date of the Plan. 6.2
Class 2: Secured Claim of MCG.
6.2.1 Impairment and Voting. Class 2 is Impaired under the Plan. Class 2 shall include only the Secured Claim of MCG. Each holder of a Class 2 Claim is entitled to vote to accept or reject the Plan. 6.2.2 Claim and Lien Determination. The Class 2 claim shall be an Allowed Claim. Pursuant to the terms of the Global Settlement, except as provided below in section 6.2.4, each holder of a Class 2 Claim shall retain its Lien in the Collateral that secured the Class 2 Claim on the Effective Date in the same priority as existed at the time such lien arose. 6.2.3 Treatment. Each Class 2 Claim that is an Allowed Claim shall be satisfied by (a) surrender of the Collateral to Regions as agent for the Lenders (other than (i) the Collateral released pursuant to the Global Settlement, and (ii) the contents-based flood-loss insurance Causes of Action which shall be transferred to the Liquidation Trust subject to MCG's liens), if any, or (b) payment of the proceeds upon liquidation of the Collateral that secures the Class 2 Claims, including any proceeds of the contents-based flood-loss insurance Causes of Action in excess of $137,500 from the policy issued by ArG, no later than the Distribution Date. 6.2.4 Release of Liens. Notwithstanding anything in this Plan to the contrary, all liens held by a holder of a Class 2 Claim in the Commercial Tort Claims shall be released on the Effective Date of the Plan. 6.3
Class 3: Secured Tax Claims.
6.3.1 Impairment and Voting. Class 3 is Unimpaired under the Plan. Each holder of a Class 3 Claim is presumed to have accepted the Plan. 6.3.2 Claim and Lien Determination. Until paid in full, each holder of a Class 3 Claim that is an Allowed Claim shall retain its Lien in the Collateral that secured the Class 3 Claim in the same priority as existed at the time such lien arose. 6.3.3 Treatment. Each Class 3 Claim that is an Allowed Claim shall be satisfied as provided in the Sale Orders.
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Class 4: Other Secured Claims.
6.4.1 Impairment and Voting. Class 4 is Impaired under the Plan. Class 4 shall include only Allowed Other Secured Claims. Each holder of a Class 4 Claim is entitled to vote to accept or reject the Plan. 6.4.2 Claim and Lien Determination. Each holder of a Class 4 Claim shall retain its Lien in the Collateral that secured the Class 4 Claim on the Effective Date in the same priority at that time. The amount, validity, extent, value, and priority of each Class 4 Claim will be subject to determination by the Bankruptcy Court at a later date or pursuant to an agreement between the Liquidation Trustee and the holder of such Class 4 Claim. 6.4.3 Treatment. Each Class 4 Claim that is an Allowed Claim shall be satisfied by (a) return of the Collateral to the holder of each Class 4 Claim in full and final satisfaction of that holder's Class 4 Claim, or (b) payment of the proceeds upon liquidation of the Collateral that secures the Class 4 Claim, less any expenses incurred in the liquidation no later than the Distribution Date. Any Deficiency Claim of the holder of a Class 4 Claim shall be included in Class 8. 6.4.4 Surcharge. The Debtors and the Estates reserve all rights to surcharge the holder ofa Class 4 Claim and any collateral securing the same under § 506(c) or other applicable law, which such rights are deemed transferred to the Liquidation Trust on the Effective Date. 6.5
Class 5: Priority Non-Tax Claims.
6.5.1 Impairment and Voting. Class 5 is Unimpaired under the Plan. Holders of Allowed Priority Non-Tax Claims are presumed to have accepted the Plan. 6.5.2 Treatment. Except to the extent that a holder of an Allowed Priority Non- Tax Claim has been paid prior to the Effective Date, or agrees to different treatment, each holder of an Allowed Priority Non-Tax Claim against the Debtors and/or the Estates shall receive Cash in an amount equal to the Allowed amount of such Priority Non-Tax Claim as soon as reasonably practicable after the Effective Date. 6.6
Class 6: Deficiency Claims of Lenders.
6.6.1 Impairment and Voting. Class 6 is Impaired under the Plan. Class 6 shall include only the Lenders' Deficiency Claims. Each holder of a Class 6 Claim is entitled to vote to accept or to reject the Plan. 6.6.2 Treatment. The Lenders' Deficiency Claims shall be an Allowed Class 6 Claim. The amount of the Allowed Class 6 Claim shall be reduced for any payments of money received by the Lenders on account of their Allowed Class 1 Claim from and after FIRST AMENDED JOINT PLAN OF LIQUIDATION FOR COLOR STAR GROWERS OF COLORADO, INC., VAST, INC., AND COLOR STAR, LLC - Page 19
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IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION In re: COLOR STAR GROWERS OF COLORADO, INC., VAST, INC., and COLOR STAR, LLC, Debtors.
§ § § § § § § §
Chapter 11 Case No. 13-42959 (Jointly Administered)
MOTION OF OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR APPROVAL OF ADDITIONAL DISCLOSURE TO GENERAL UNSECURED CREDITORS NO HEARING WILL BE CONDUCTED ON THIS MOTION UNLESS A WRITTEN RESPONSE IS FILED WITH THE CLERK OF THE UNITED STATES BANKRUPTCY COURT AND SERVED UPON THE PARTY FILING THIS MOTION WITHIN TWENTY-ONE (21) DAYS FROM DATE OF SERVICE UNLESS THE COURT SHORTENS OR EXTENDS THE TIME FOR FILING SUCH RESPONSE. IF NO RESPONSE IS TIMELY SERVED AND FILED, THIS PLEADING SHALL BE DEEMED TO BE UNOPPOSED, AND THE COURT MAY ENTER AN ORDER GRANTING THE RELIEF SOUGHT. IF A RESPONSE IS FILED AND SERVED IN A TIMELY MANNER, THE COURT WILL THEREAFTER SET A HEARING. IF YOU FAIL TO APPEAR AT THE HEARING, YOUR RESPONSE MAY BE STRICKEN. THE COURT RESERVES THE RIGHT TO SET A HEARING ON ANY MATTER. TO THE HONORABLE BRENDA T. RHOADES, CHIEF U.S. BANKRUPTCY JUDGE: NOW COMES the Official Committee of Unsecured Creditors (the "Committee") of Color Star Growers of Colorado, Inc., Vast, Inc., and Color Star, LLC (collectively, the "Debtors"), in the above-captioned bankruptcy cases and files its Motion for Approval of Additional Disclosure to General Unsecured Creditors (the "Motion"), respectfully stating as follows: I. 1.
PROCEDURAL BACKGROUND
On December 15, 2013 ("Petition Date"), the Debtors filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code thereby initiating the bankruptcy cases.
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Since the Petition Date, the Debtors have continued to operate and manage their
business as debtors-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. 3.
On January 14, 2014, the United States Trustee for the Eastern District of Texas
organized and appointed the Committee. 4.
This Court has jurisdiction over the Bankruptcy Case and the subject matter of
this Motion pursuant to 28 U.S.C. §§ 157 and 1334. Consideration of this Motion is a core proceeding under 28 U.S.C. § 157 (b)(2). II. 5.
BACKGROUND
Currently scheduled for hearing on September 22, 2014, is the Debtors' First
Amended Joint Plan of Liquidation for Color Star Growers of Colorado, Inc., Vast, Inc. and Color Star, LLC ("Plan") [Docket No. 431]. On August 5, 2014, the Debtors filed their Debtors' Motion for Entry of Order (A) Conditionally Approving Proposed Disclosure Statement in Support of First Amended Joint Chapter 11 Plan of Liquidation, (B) Scheduling a Hearing to Consider Final Approval of Disclosure Statement and Confirmation of the First Amended Joint Chapter 11 Plan of Liquidation, (C) Establishing Voting and Objection Deadlines, and (D) Approving Balloting, Solicitation, Notice and Voting Procedures ("Disclosure Statement Motion") [Docket No. 433]. 6.
By Order entered on August 6, 2014, this Court approved the Disclosure
Statement Motion [Docket No. 434] and directed the Debtors to serve, no later than August 8, Plan solicitation materials including the Disclosure Statement, the Order approving the Debtors' Disclosure Statement Motion, the Plan and ballots (“Disclosure Statement Order”). A true and correct copy of this Court's Disclosure Statement Order is attached hereto as Exhibit "A". 7.
Unfortunately, the Debtors and the Committee were unable to coordinate the
preparation of a support letter by counsel for the Committee prior to August 8, 2014. After consultation with the Debtors, Regions Bank and Comerica Bank, it was agreed that the Committee definitely should send a letter to all general unsecured creditors indicating the
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Committee's support for the Plan and providing certain information regarding the Plan and voting procedures ("Support Letter"). All parties believe that this was an important mailing to send to general unsecured creditors because the ballot which relates to the Plan provides for a particular "opt-in" to allow creditors to receive greater treatment under the Plan by releasing lenders of the Debtors from claims and causes of action. 8.
After meetings with the Debtors, Regions Bank and Comerica Bank, counsel for
the Committee did in fact prepare the Support Letter to be sent to all general unsecured creditors and due to the urgency of promptly providing the information contained in the Support Letter to general unsecured creditors, it was prepared and provided to Upshot Services on August 19, 2014, for service to general unsecured creditors. The Support Letter does not provide information that is different than the Solicitation Package previously approved by this Court (as defined in the Disclosure Statement Order).
The Support Letter describes the
Committee's support of the Plan and highlights for the benefit of general unsecured creditors the need to exercise the "opt in" provision on their ballots in order to obtain certain treatment potentially available under the Plan. A true and correct copy of the Support Letter is attached hereto as Exhibit "B." III. 9.
RELIEF REQUESTED
By this Motion, the Committee requests an order from this Court approving the
Support Letter as a good faith solicitation under Bankruptcy Code § 1125(e). The Committee drafted the letter in consultation with the Debtors, Regions Bank and Comerica Bank, transmitted the letter after receiving their consent, and the Committee believes that the letter appropriately provides information which will be helpful to general unsecured creditors. Upshot Services coordinated service of the Support Letter on August 19, 2014. 10.
Obviously, due to the time issues concerning voting on the Plan, it was
determined to make sending the Support Letter a priority, however all parties also support the
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Committee’s desire to submit the Support Letter to this Court for approval.
Out of an
abundance of caution, the Committee is filing this Motion nunc pro tunc. 1 11.
For all of the above reasons, the Committee believes that the preparation and
distribution of the Support Letter is in the best interests of the Committee, the Debtors and all parties in this case. The Committee requests that this Court grant this Motion and approve the Support Letter for transmission to voting creditors in connection with the Solicitation Package. IV.
PRAYER
WHEREFORE, PREMISES CONSIDERED, the Committee respectfully requests that the Court enter an order: (i) granting this Motion; and (ii) granting the Committee such other and further relief to which they may be entitled. RESPECTFULLY SUBMITTED this 20th day of August, 2014. MUNSCH HARDT KOPF & HARR, P.C. By: /s/ Raymond J. Urbanik Raymond J. Urbanik Texas Bar No. 20414050 Jay H. Ong Texas Bar No. 24028756 500 North Akard Street, Suite 3800 Dallas, Texas 75201-6659 Telephone: (214) 855-7500 Facsimile: (214) 855-7584 E-mail: [email protected] E-mail: [email protected] ATTORNEYS FOR THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF COLOR STAR GROWERS OF COLORADO, INC., VAST, INC. AND COLOR STAR, LLC
1
The Committee requested the Court consider this Motion at either a separate hearing, the hearing on confirmation of the Plan on September 22, 2014, or without the necessity of a hearing. Additionally, in the event that the Court believes that deadlines should be reset because of the additional disclosure, the parties understand that that is a possibility. MOTION OF OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR APPROVAL OF ADDITIONAL DISCLOSURE TO GENERAL UNSECURED CREDITORS – Page 4
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CERTIFICATE OF SERVICE I hereby certify that on this 20th day of August, 2014 a true and correct copy of the foregoing document was served on all parties requesting electronic service through the Court's ECF system. /s/ Raymond J. Urbanik Raymond J. Urbanik
MOTION OF OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR APPROVAL OF ADDITIONAL DISCLOSURE TO GENERAL UNSECURED CREDITORS – Page 5 MHDocs 5320190_2 14470.1
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EXHIBIT "A"
Desc Exhibit
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Desc Exhibit
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IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION In re: COLOR STAR GROWERS OF COLORADO, INC., VAST, INC., and COLOR STAR, LLC, Debtors.
§ § § § § § § §
Chapter
11
Case No. 13-42959 (Jointly Administered)
ORDER GRANTING DEBTORS' MOTION FOR ENTRY OF ORDER (A) CONDITIONALLY APPROVING PROPOSED DISCLOSURE STATEMENT IN SUPPORT OF FIRST AMENDED JOINT CHAPTER 11 PLAN OF LIQUIDATION, (B) SCHEDULING A HEARING TO CONSIDER FINAL APPROVAL OF DISCLOSURE STATEMENT AND CONFIRMATION OF THE FIRST AMENDED JOINT CHAPTER 11 PLAN OF LIQUIDATION, (C) ESTABLISHING VOTING AND OBJECTION DEADLINES, AND (D) APPROVING BALLOTING, SOLICITATION, NOTICE, AND VOTING PROCEDURES Came on for consideration
the Debtors' Debtors' Motion for Entry of an Order (A)
Conditionally Approving Proposed Disclosure Statement for the Debtors' First Amended Joint Chapter 11 Plan of Liquidation, (B) Scheduling a Hearing to Consider Final Approval of Disclosure Statement and Confirmation of the Joint Chapter 11 Plan of Liquidation, (C) Establishing Voting and Objection Deadlines, and (D) Approving Balloting, Solicitation, Notice, and Voting Procedures [Docket No. 433] (the "Motion")
1
filed by Color Star Growers of
Colorado, Inc., a Colorado corporation ("Color Star"), Vast, Inc., a Texas corporation ("Vast"), and Color Star, LLC ("CSLLC," collectively with Color Star and Vast, the "Debtors"), and in light of the Debtors'
need for confirmation
of the Plan in an expedited manner pursuant to the
Global Settlement (as defined in the Plan), the manner in which the interests of all parties are served by an expedited confirmation
process, and pursuant to the authority granted by 11 U.S.C.
§§ l05(a) and I05(d)(2), the Court finds just cause exists to issue the following order:
I
Capitalized
terms not defined herein shall have the meaning ascribed to them in the Motion.
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IT IS THEREFORE
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ORDERED,
A.
The Motion is GRANTED
B.
The
Disclosure
CONDITIONALLY Bankruptcy
Rule 9006(c),
IS HEREBY
Desc Main
GIVEN, THAT:
to the extent provided herein;
Statement
APPROVED
Procedure
AND NOTICE
Desc Exhibit
filed
on
August
5,
2014
pursuant to 11 U.S.C. § 105(d)(2)(vi), and Local Rule of Bankruptcy
is
hereby
Federal Rule of
Procedure
3017; final
approval of the Disclosure Statement will be combined with the hearing on Confirmation
of the
Plan as scheduled herein; C.
The Debtors are hereby authorized to make technical, conforming, and other non-
material changes to the Disclosure Statement prior to its transmittal to holders of Claims without the necessity of any further order of this Court; D.
The hearing to consider final approval of the Disclosure
Statement (if a written
objection has been timely filed) and to consider the confirmation of the Plan (the "Confirmation
Hearing") is fixed and shall be held on September Bankruptcy
Courtroom,
660 N. Central Expressway,
22, 2014 at 3:30 p.m. in the Plano Third Floor, Plano, Texas 75074, which
hearing may be adjourned or continued to a different date without further notice other than notice given in open court at such hearing; E.
The proposed form of the ballot (the "Ballot") attached to this Order as Exhibit
A, is hereby approved for use in soliciting votes on the Plan; F.
UpShot
Services
LLC, who this Court previously
approved
as the Debtors'
official balloting agent (the "Balloting Agent") [see Docket No. 108], will accordingly serve as the party responsible Plan, and determining
for receiving completed Ballots, determining
whether each particular Class of Claims under the Plan has accepted or
rejected the Plan (subject to final determination
GardereO 1 - 6480773v.2
and tabulating votes on the
by this Court at the Confirmation
Hearing);
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for the receipt of completed
Balloting Agent is hereby fixed as September
Deadline").
and duly-executed
Desc Exhibit
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Ballots by the
15, 2014 at 5:00 p.m. (CST) (the "Balloting
In the absence of entry of an order hereafter extending the Balloting Deadline or
otherwise permitting the late submission
of a particular Ballot, all properly completed Ballots
must be actually received by the Balloting Agent by no later than the Balloting Deadline in order for them to be deemed timely submitted, and counted.
All completed Ballots shall be sent to the
Balloting Agent at: COLOR STAR CLAIMS PROCESSING CENTER C/O UPSHOT SERVICES LLC 7808 CHERRY CREEK SOUTH DRIVE, SUITE 112 DENVER, CO 80231 ; H.
The deadline
for filing and serving Objections
to (1) final approval
of the
15,2014 at
Disclosure Statement; or (2) confirmation
of the Plan is hereby fixed as September
5:00 p.m. (CST)
Objection Deadline") pursuant to Federal Rule of
(the "Confirmation
Bankruptcy Procedure 3020(b)(l)
and all comments or objections not timely filed and served by
such deadline shall be deemed waived; 1.
The record date for determining the identity of holders of claims entitled to vote
on the Plan (the "Record Date") is hereby established as August 8, 2014;
J.
By no later than August 8, 2014, the Debtors will cause to be mailed or otherwise
delivered (subject to the exceptions set forth below) a copy (either via CD format, flash drive, or via paper) of the following materials (collectively,
the "Solicitation Package") to each of the
record holders of claims in Voting Classes, determined as of the Record Date:
GardereO I - 6480773v2
(i)
The Disclosure Statement (with all exhibits, including the PIan);
(ii)
This Order;
(iii)
An approved Ballot or Ballots;
(iv)
The Confirmation Hearing Notice; and
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A pre-addressed return envelope for use in returning the completed Ballot(s) to the Balloting Agent (the "Return Envelope");
In accordance
with II U.S.c.
§ I I 26(f), acceptances
and rejections will not be
solicited from any class that is not impaired under the Plan and the Debtors need not serve any Solicitation
Package
Confirmation
on the holders
of such claims.
Rather, the Debtors
shall serve the
Hearing Notice on such holders;
L.
The Debtors shall not be required to mail a Solicitation Package to the holder of
any Claim (on account of such Claim) that has been (a) disallowed, (b) withdrawn or otherwise expunged,
or (c) listed on the Debtors'
Schedules as disputed, contingent
which a proof of claim has not been filed, but shall serve the Confirmation
or unliquidated
for
Hearing Notice on
such holders; M.
The Debtors'
compliance
with the foregoing means of transmitting
Packages to holders of Claims in the Bankruptcy notice of the Confirmation
Cases will constitute
Solicitation
adequate and proper
Hearing, the Balloting Deadline, and the Confirmation
Objection
Deadline, consistent with the requirements of Fed. R. Bankr. P. 2002 and 3017; N.
The following
procedures
(collectively,
approved and shall apply to the determination
the "Voting Procedures") are hereby
and tabulation of votes on the Plan:
1.
Subject to the terms of the Global Settlement, with respect to a Claim as to which a proof of Claim has not been filed as of the Record Date, the voting amount of such Claim (subject to any applicable limitations set forth below) shall be equal to the amount listed, if any, in respect of such Claim in the Debtors' Schedules to the extent such Claim is not listed as contingent, unliquidated, undetermined or disputed. Such Claim shall be placed in the appropriate Class based upon the applicable Debtors' records and the classification scheme set forth in the Plan.
ii.
With respect to a proof of Claim which, according to the Clerk of the Bankruptcy Court's records, was not filed as of the Record Date and is not subject to the provisions of the immediately preceding paragraph, such Claim shall be provisionally disallowed for voting purposes.
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iii.
With respect to a liquidated, non-contingent, undisputed Claim as to which (i) a proof of Claim has been filed as of the Record Date, (ii) a Claim has been listed in the Debtors' Schedules that conflicts in amount with such proof of Claim, and (iii) an objection has not been filed, the classification of such Claim shall be that specified in such proof of Claim shall be accorded one vote and assigned a value, for purposes of § 1126(c) of the Bankruptcy Code (subject to any applicable limitations set forth below), equal to the lesser of (x) the amount of such Claim as listed in the Debtors' Schedules and (y) the amount of the proof of Claim.
iv.
With respect to a liquidated, non-contingent, undisputed Claim as to which (i) a proof of Claim has been filed as of the Record Date, (ii) a Claim is not listed in the Debtors' Schedules that conflicts in amount with such proof of Claim, and (iii) an objection has not been filed, the classification of such Claim shall be that specified in such proof of Claim and that proof of Claim shall be accorded one vote and assigned a value of one dollar for purposes of § 1126(c), subject to any applicable limitations set forth below.
v.
With respect to a proof of Claim which is the subject of an objection Filed by a Debtor, the Claim represented by such proof of Claim shall be provisionally disallowed for voting purposes, except to the extent and in the manner that (i) the Debtors indicate in their objection the extent to which such Claim should be allowed; or (ii) the Bankruptcy Court otherwise orders.
VI.
A timely filed proof of Claim that is designated as wholly unliquidated or contingent shall be accorded one vote and assigned a value of one dollar for purposes of § 1126( c) of the Bankruptcy Code, unless the Claim is disputed as set forth in the immediately preceding paragraph.
vii.
With respect to a Claim that has been estimated or otherwise allowed for voting purposes by order of the Bankruptcy Court, the amount and classification of such Claim shall be that set by the Bankruptcy Court.
viii.
With respect to a Claim, any portion of which is unliquidated, contingent or disputed, the holder of the Claim shall be entitled to vote that portion of the Claim that is liquidated, non-contingent and undisputed, subject to any limitations set forth herein and unless otherwise ordered by the Bankruptcy Court.
ix.
Holders of Claims shall not be entitled to vote Claims to the extent such Claims duplicate or have been superseded by other Claims of such holders of Claims.
x.
If the holder of a Claim submits more than one Ballot voting the same Claim or Interest prior to the deadline for submission of Ballots, the first
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of such Ballots Filed (and only such Ballot) shall be counted in accordance with the Voting Procedures unless either (i) the Debtors consent to the Filing and counting of a superseding Ballot, or (ii) the Bankruptcy Court, after notice and a hearing, orders otherwise. xi.
The authority of the signatory of each Ballot to complete and execute such Ballot shall be presumed.
xii.
A holder of a Claim must vote its entire Claim within a particular Class under the Plan either to accept or reject the Plan and may not split its vote. Accordingly, a Ballot (or multiple Ballots with respect to separate Claims within a single Class) that partially rejects and partially accepts the Plan or that indicates both a vote for and against the Plan will not be counted.
xiii.
Any Ballot which is executed and returned, but does not indicate an acceptance or rejection of the applicable Plan, shall be deemed to be an acceptance of the Plan.
xiv.
Any Ballot that is not signed will not be counted.
xv.
For the purpose of voting on the Plan, the Debtors will be deemed to be in constructive receipt of any Ballot timely delivered to any address designated for the receipt of Ballots cast in connection with the Plan.
xvi.
Any Ballot received by the Debtors after the end of the Voting Period shall not be accepted or used by the Debtors in connection with the Debtors' request for Confirmation of the Plan unless the Debtors, in their sole discretion, consent to the counting of such Ballot or the Bankruptcy Court orders such Ballot to be counted.
xvii.
All Ballots must be cast using the Ballots distributed to the holders of Claims. Votes cast in any manner other than by using such Ballots will not be counted.
Signed
~T~
on8/6/2014 SR
HONORABLE BRENDA T. RHOADES, UNITED STATES BANKRUPTCY JUDGE
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EXHIBIT A
BALLOT GardereO I - 6463848v.2
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IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION In re: COLOR STAR GROWERS OF COLORADO, INC., VAST, INC., and COLOR STAR, LLC, Debtors.
§ § § § § § §
Chapter 11 Case No. 13-42959 (Jointly Administered)
CLASS [INSERTI-IINSERT PLAN CLASS) BALLOT FOR ACCEPTING OR REJECTING FIRST AMENDED JOINT CHAPTER 11 PLAN OF LIQUIDA TION Color Star Growers of Colorado, Inc., a Colorado corporation ("'Color Star"), Vast, Inc., a Texas corporation ("Vast"), and Color Star, LLC ("CSLLC," collectively with Color Star and Vast, the "Debtors") jointly filed (as an exhibit to their Disclosure Statement, defined below) their First Amended Joint Chapter 11 Plan of Liquidation (the "PIan") in their bankruptcy cases. This Ballot has been provided to you for your use in voting on the Plan. In relation to your vote, on [INSERT DATE], the Bankruptcy Court conditionally approved the Debtors' Disclosure Statement in Support of First Amended Joint Chapter 11 Plan of Liquidation (the "Disclosure Statement"). The Disclosure Statement provides information to assist you in deciding how to vote your Ballot. A copy of the Disclosure Statement has been provided to you along with this Ballot. If you do not have a copy of the Disclosure Statement, you may obtain a copy from UpShot Services LLC's ("Upshot") website \lW\\.LJPsho(slCr\icc~.com!lColnrstar,or from counsel for the Debtors: Gardere Wynne Sewell LLP, Attn: Karen Oliver, 1601 Elm Street, Suite 3000, Dallas, Texas 75201 kolivcr((luankrc.com. Please note that the Bankruptcy Court's conditionaly approval of the Disclosure Statement does not constitute the Bankruptcy Court's approval or disapproval of the Plan. YOU SHOULD REVIEW THE DISCLOSURE STATEMENT AND PLAN BEFORE YOU VOTE. YOU SHOULD ALSO REVIEW THE ENCLOSED ORDER GRANTING DEBTORS' MOTION FOR ENTRY OF ORDER (A) CONDITIONALLY APPROVING PROPOSED DISCLOSURE STATEMENT IN SUPPORT OF FIRST AMENDED JOINT CHAPTER 11 PLAN OF LIQUIDATION, (B) SCHEDULING A HEARING TO CONSIDER FINAL APPROVAL OF DISCLOSURE STATEMENT AND CONFIRMATION OF THE FIRST AMENDED JOINT CHAPTER 11 PLAN OF LIQUIDATION, (C) ESTABLISHING VOTING AND OBJECTION DEADLINES, AND (D) APPROVING BALLOTING, SOLICITATION, NOTICE, AND VOTING PROCEDURES ("DISCLOSURE STATEMENT ORDER"), PRIOR TO COMPLETING THIS BALLOT. YOU MAY ALSO WISH TO SEEK LEGAL ADVICE CONCERNING THE PLAN AND THE CLASSIFICATION AND TREATMENT OF YOUR CLAIM UNDER THE PLAN BEFORE COMPLETING THIS BALLOT. IF YOU HOLD CLAIMS IN MORE THAN ONE CLASS UNDER THE PLAN YOU HAVE BEEN PROVIDED A SEPARATE BALLOT FOR EACH SUCH CLASS. THIS BALLOT IS TO BE USED SOLELY FOR VOTING IN RELATION TO YOUR CLASS [INSERT) CLAIM. BALLOTING DEADLINE To have your vote on the Plan count, you must complete, sign and return this Ballot to the Balloting Agent so that it is actually received by the Balloting Agent by no later than the Balloting Deadline. Balloting Deadline:
[INSERT] at 5:00 p.m. (CST)
Balloting Agent:
UpShot Services LLC [See next pagel
BALLOT GardereOI - 6463848v.2
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DELIVER
BALLOTS
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Desc Exhibit
Desc Main
TO:
By Overnight Carrier, or Hand Delivery:
United
States
Postal
Service
Color Star Growers Ballot Processing Center c/o UpShot Services LLC 7808 Cherry Creek South Drive, Suite 112 Denver, CO 80231
If your Ballot is not received by the Balloting Agent on or before the Balloting Deadline, and such deadline is not extended, your vote will not be counted. Ballots received by facsimile or other means of electronic submission other than the approved e-mail delivery will not be counted. If the Bankruptcy Court confirms the Plan, the Plan will be binding on you whether or not you vote.
AGGREGATE AMOUNT OF CLAIMS IN CLASS [INSERT). The undersigned certifies that as of [INSERT DATE], the Record Date, the undersigned was the Holder of an Allowed [INSERT PLAN CLASS] Claim in the aggregate amount set forth below:
ITEM 1.
AGGREGATE AMOUNT OF [PLAN CLASS] CLAIM: $ [Pre-printed] RECORD HOLDER: [Pre-printed]
I f you disagree with the information set forth above as to the present holder or the amount of this Claim, you must seek relieffrom the Bankruptcy Court to correct that information.
VOTE ON THE PLAN. The Holder of the Claims set forth in Item I above hereby votes with respect to his, her or its Claim as follows (check ONE box only):
ITEM 2.
o ITEM 3.
o
to ACCEPT the Plan
to REJECT the Plan
VOTE TO RELEASE LENDERS and MCG PURSUANT TO PLAN. The Holder of the Claims set forth in Item I hereby votes with respect to his, her or its Claim to accept or reject the Lenders and MCG Release set forth in Section 8.3 of the Plan (check ONE box only):
o to ACCEPT the Lenders and MCG Release set forth in Section 8.3 of the Plan
ISee next pagel
BALLOT GardereOI - 6463848v.2
o
to REJECT the Lenders and MCG Release set forth in Section 8.3 of the Plan
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CLAIMANT
[You MUST complete the following By signing this Ballot, the undersigned
Desc Exhibit
CERTIFICA
TIONS AND SIGNATURE
section of this Ballot in order for the Ballot to be valid and counted]
certifies the following:
A.
I am the holder of a Claim within Class [INSERT] of the Plan ([INSERT CLASS NAME) or am an authorized signatory for such holder having full power and authority to vote and to make or forego the election as set forth herein.
B.
I have been provided with a copy of the Plan, Disclosure Statement and Disclosure Statement Order and acknowledge that the vote set forth on this Ballot is subject to all the terms and conditions set forth in the Plan, Disclosure Statement and Disclosure Statement Order; and
C.
I have not submitted any other Ballots relating to this Class of [INSERT CLASS NAME] that are inconsistent with the votes as set forth in this Ballot or that, if such other Ballots were previously submitted, they either have been or are hereby revoked or changed to reflect the vote set forth herein.
Dated:
_
Signature:
_
Printed Name:
_
Title:
_
(if signing on behalf of the holder of the claim) Address:
Telephone
_
No.:
_
Email Address:
_
Tax ID No.:
_
BALLOT GardereOI - 6463848v.2
RETURN THIS BALLOT SO THAT IT IS RECEIVED ON OR BEFORE 5:00 p.m. (CST), on IINSERT DA TEl, by UpShot, at the appropriate address indicated in the preceding instructions.
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EXHIBIT "B"
Desc Exhibit
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MUNSCH HARDT KOPF & HARR PC ATTORNEYS
DALLAS
&
Desc Exhibit
3800 Lincoln Plaza 500 N, Akard Street Dallas, Texas 75201·6659
Main 214,855.7500 Fax 214.855,7584 rnunsch.com
COUNSELORS
I HOUSTON I AUSTIN
Direct Dial 214.855.7590 Direct Fax 214978.4374 [email protected]
August 19, 2014 A DENTION:
GENERAL
UNSECURED
CREDITORS
COLOR STAR GROWERS VAST, INC., and COLOR STAR, LLC
OF:
OF COLORADO,
INC.,
Jointly Administered as Case No. 13-42959 Dear Sir or Madam: This firm serves as counsel for the Official Committee of Unsecured Creditors (the "Committee") of Color Star Growers of Colorado, lnc., Vast, Inc., and Color Star, LLC (collectively, the "Debtors"), You should have received by mail a copy of the Debtors' First Amended Joint Chapter 11 Plan of Liquidation ("Pian") on a compact diskette, together with the following: Court's Order Granting the Debtors' Motion for Entry of an Order (A) Conditionally Approving the Proposed Disclosure Statement in Support of the Plan, (B) Scheduling a Hearing to Consider Final Approval of the Disclosure Statement and Confirmation of the Plan, (C) Establishing Voting and Objection Deadlines, and (0) Approving Balloting, Solicitation, Notice, and Voting Procedures
(1) The Bankruptcy
("Disclosure
Statement
Order");
(2) A Notice of Hearing on Confirmation of the Plan and Final Approval of the Disclosure Statement ("Confirmation Notice"); and (3) A Ballot for voting on the Plan that has been pre-filled with your address and claim information, together with a pre-addressed return envelope for use in returning the completed Ballot(s) to UpShot Services LLC, the Balloting Agent. A hearing to consider approval of the Plan is scheduled for September 22, 2014, at 3:30 p.rn., central time, at the United States Bankruptcy Court, 660 North Central Expressway, Suite 300B, Plano, Texas 75074. The purpose of this letter is to provide you additional information regarding the proposed Plan.
The Committee has played an active role in these bankruptcy cases and the Committee recommends acceptance of the Plan. The Plan has been proposed by the Debtors and is the result of negotiations that occurred between the Debtors, the Committee and other creditors of the Debtors. These negotiations culminated in a Global Settlement which was approved by the Bankruptcy Court on July 18, 2014. Through the use of funding made available through the Global Settlement, the Plan provides for the liquidation of the assets of Debtors' bankruptcy estates and provides for the
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Desc Exhibit
To Creditors of Color Star Growers of Colorado, Inc. August 19, 2014 Page 2
distribution of the proceeds of such liquidation to the Debtors' creditors who are entitled to be beneficiaries of two (2) trusts created under the Plan, a "liquidation Trust" and a "litigation Trust." Under the Global Settlement and Plan, general unsecured creditors are placed in Class 8 and may share in distributions from the liquidation of assets held by the two trusts. Pursuant to the Global Settlement, the Debtors' lenders, Regions Bank, Comerica Bank and MCG Capital Corporation (collectively, the "Lenders") have released certain of their asserted liens in order to fund the trusts and provide for potential distributions from the proceeds of the assets of the trusts. In exchange for this consideration by the Lenders, any general unsecured creditor who wants to share in distributions from both the liquidation Trust and litigation Trust, must complete Item 3 on the Ballot and agree to release the Lenders from any claims that the general unsecured creditor may hold against them, if any. A general unsecured creditor who does not agree to release the Lenders is allowed to share in the liquidation Trust only. Attached to this letter as Exhibit "Au are the pages from the Plan that describe the treatment of creditor claims. If you would like to receive a complete paper copy of the Plan and Disclosure Statement, please contact undersigned counsel at 214-855-7590. The Disclosure Statement provides information to assist you in deciding how to vote on the Plan. The Court has approved the Disclosure Statement as providing adequate information to enable you to vote on the Plan and nothing in this letter is intended to vary from the Disclosure Statement. Please note that the Court's approval of the Disclosure Statement is not an endorsement or comment on the Plan. The Court will rule on the Plan at the confirmation hearing. You should review the Disclosure Statement and the Plan before you vote. You may wish to seek legal advice regarding the Plan and your classification and treatment under the Plan. COMPLETING BALLOTS The Plan may be confirmed only lf sufficient votes are cast in favor of the Plan. Your vote is important, and in order for your vote to count you must sign. complete and timely return your Ballot by the deadline stated in the Confirmation Notice (September 15, 2014, at 5:00 p.m.), NOTE: IF YOU HAVE ALREADY SUBMITTED A BALLOT, YOU SHOULD NOT SUBMIT A SECOND OR DUPLICATE BALLOT. All holders of Class 8 general unsecured claims have the option of completing "Item 3" on their Ballots ("Vote to Release Lenders and MCG Pursuant to Pian"). If you are the holder of a Class 8 general unsecured claim and you would like to receive a beneficial interest in the Litigation Trust and to participate in potential distributions from the litigation Trust, you MUST complete Item 3 and ACCEPT the release of the Lenders contained in section 8.3 of the Plan as follows.
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Desc Exhibit
To Creditors of Color Star Growers of Colorado, Inc. August 19, 2014 Page 3
ITEM 2.
VOTE ON THE PL,i\N. The Holder of the Claims set forth in Item l above hereby votes with respect to his, her or its Claim as follows (check ONE box only):
o
to ACCEPT the Plan
to REJECT
the
Plan
VOTE TO ({FLEA S.t.Lf~NPERS and MeG PURSUANT TO PLAl':1. The Holder of'thc Claims set forth in ltem I hereby votes with respect to his. her or its Claim 10 accept or reject the Lenders and MeG Release set It1l111in Section 8.3 ofthe Plan (check ONE box only): to ACCEPT
set
forth
in
the Lenders and MeG Release 8.3 of the Plan
Section
Any creditor holding a Class beneficial interest in the Liquidation the Litigation Trust.
o
to REJECT the Lenders and MeG Release set forth in Section 8.3 of'the Plan
8 claim who does NOT complete Item 3 on the Ballot will receive a Trust only, and SHALL NOT participate
in any distributions
from
In conclusion, the Committee has reviewed the Plan, believes that the Plan is in the best interests of all unsecured creditors and supports acceptance of the Plan. If you have any questions,
please contact me at (214) 855-7590.
Thank you. Very truly yours, MUNSCH
RJU:pdm Enclosure
HARDT KOPF & HARR, P.C.
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ARTICLE III CONSOLIDATION OF THE ESTATES FOR ALL PURPOSES
3.1 Request for Substantive Consolidation. The Plan contemplates and is predicated on substantive consolidation of the Debtors into a single entity under the Plan. Entry of the Confirmation Order shall constitute approval, pursuant to Section 105(a) of the Bankruptcy Code, effective as of the Effective Date, of the substantive consolidation of the Debtors, the Estates and the Chapter I I Cases for all purposes related to the Plan, including, without limitation, for purposes of voting, confirmation, and distribution. 3.2 Effect of Substantive Consolidation. Except as expressly set forth in this Plan, as a result of the substantive consolidation of the assets and liabilities of the Debtors, on and after the Effective Date: (a) all assets and liabilities of the Debtors shall be deemed merged so that all assets of the Debtors shall be available to pay all of the liabilities under the Plan as if they were one company, (b) no distributions shall be made under the Plan on account of Intercompany Claims, (c) no distributions are anticipated to be made under the Plan on account of any Equity Interests, (d) all guarantees by any of the Debtors of the obligations of any other Debtor shall be deemed eliminated so that any claim against any Debtor and any guarantee thereof executed by any other Debtor and any joint or several liability of the Debtors shall be deemed to be one obligation of the consolidated Debtors, (e) every Claim tiled or to be tiled in the Chapter II Cases against any Debtor shall be deemed tiled against the consolidated Debtors, and shall be deemed one Claim against and obligation of the consolidated Debtors, and all duplicate proofs of Claim for the same Claim filed against more than one Debtor shall be deemed expunged, and (g) for purposes of determining the availability of the right of setoff under Section 553 of the Bankruptcy Code, the Debtors shall be treated as one consolidated entity so that, subject to other provisions of Section 553 of the Bankruptcy Code, debts due to any Debtor may be set off against the debts of any other Debtor. For the avoidance of doubt, this substantive consolidation shall not be construed as substantive consolidation for a purpose other than described in this Plan.
DESIGNATION
ARTICLE IV OF CLAIMS AND EQUITY INTERESTS
4.1 Summary. The following presupposes substantive consolidation. As a result, it classifies all Claims against and Equity Interests in any Debtor as one obligation of the consolidated Debtors. In accordance with § 1123(a)(1) of the Bankruptcy Code, Administrative Expense Claims and Priority Tax Claims have not been classified and are excluded from the Classes. A Claim or Equity Interest is classified in a particular Class only to the extent that the Claim or Equity Interest (a) qualifies within the description of that Class, (b) is an Allowed Claim or Allowed Equity Interest in that Class, and (c) has not been paid, released or otherwise satisfied before the Effective Date. A proof of Claim asserting a Claim which could be included properly in more than one Class is only entitled to inclusion within a particular Class to the extent that it qualifies under the description of such Class, and shall be included within a different Class(es) to the extent that it qualities under the description of such different Class(es). FIRST AMENDED JOINT PLAN OF LIQUIDATION FOR COLOR STAR GROWERS OF COLORADO, INC., VAST, INC., AND COLOR STAR, LLC - Page 14 2996042 v3 (40658.0000:2.000) OanlcrcOl - 6474630v.5
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4.2 Classified Claims and Equity Interests. The following table is a summary of the classification and status of Claims and Equity Interests under the Plan: Status
Class Class I: Secured Claims of Lenders
Impaired -- entitled to vote
Class 2: Secured Claim ofMCG
Impaired -- entitled to vote
Class 3: Secured Tax Claims
Unimpaired -- deemed to have accepted the Plan Impaired -- entitled to vote
Class 4: Other Secured Claims Class 5: Priority Non-Tax Claims Class 6: Lenders' Deficiency Claims
Unimpaired -- deemed to have accepted the Plan Impaired -- entitled to vote
Class 7: MCG Deficiency Claim
Impaired -- entitled to vote
Class 8: Class 8 Unsecured Claims -subsections (a) and (b) Class 9: Subordinated Claims
Impaired -- entitled to vote
Class 10: Equity Interests
Impaired -- entitled to vote
Impaired -- entitled to vote
4.3 Controversy Concerning Classification, Impairment or Voting Rights. In the event a controversy or dispute should arise involving issues related to the classitication, impairment or voting rights with respect to any Claim or Equity Interest, whether before or after the Confirmation Date, the Bankruptcy Court may, after notice and a hearing, determine such controversy. Without limiting the foregoing, the Bankruptcy Court may estimate for voting purposes the amount of any contingent or unliquidated Claim if the fixing or liquidation of, as the case may be, would unduly delay the administration of the Chapter II Case. 4.4 Nonconsensual Confirmation. If any Class of Claims is determined to be Impaired by the Bankruptcy Court, and if such Impaired Class of Claims votes not to accept the Plan by the requisite statutory majority required by Section 1126(c) of the Bankruptcy Code, the Debtors reserve the right to: (a) reclassify any Claim, including reclassifying any Impaired Claim as Unimpaired; (b) amend the Plan; or (c) ask the Bankruptcy Court to confirm the Plan under Section 1J 29(b) of the Bankruptcy Code.
TREATMENT 5.1
Administrative
ARTICLE V OF UNCLASSIFIED
CLAIMS
Claims.
5.1.1 Time for Filing Administrative Claims. All requests for payment of Administrative Claims (other than Professional Fee Claims) incurred, accrued, or in existence prior to April J, 2014, must have been tiled by the Administrative Claim Bar FIRST AMENDED JOINT PLAN OF LIQUIDATION FOR COLOR STAR GROWERS OF COLORADO, INC., VAST, INC., AND COLOR STAR, LLC - Page 15 2996042 v3 (40658.00002.000) Gardcretl I • 474630v.5
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Date. Any such Administrative Claim tor which an application or request was not filed by the Administrative Claim Bar Date is released and forever barred, and shall not be entitled to Distributions under this Plan. For any Administrative Claim (other than Professional Fee Claims) incurred, accrued, or in existence after March 31, 2014, an application or request for payment must be filed in the Bankruptcy Court within fifteen (15) days after the Effective Date. Such an application or request must include, at a minimum, (a) the name of the holder of the Claim, (b) the amount of the Claim, (c) the basis for the Claim, and (d) all documents supporting such Claim. Failure to me and serve the application required in this Plan shall result in the Administrative Claim being released and forever barred. The United States Trustee is not required to file an application for the allowance of an Administrative Claim with regards to fees due in accordance with 28 U.S.c. § 1930(a)(6). 5.1.2 Treatment of Administrative Claims. Except to the extent that any Person entitled to payment of an Administrative Claim agrees otherwise, or as otherwise provided in the Global Settlement, each holder of an Allowed Administrative Claim (other than Professional Fee Claims) shall, in full and final satisfaction of any Administrative Claim, receive Cash in amount equal to such Allowed Administrative Claim on or as soon as reasonably practicable following the later to occur of: (a) the Effective Date and (b) the date on which such Administrative Claim becomes an Allowed Administrative Claim; provided, however, Allowed Administrative Claims representing liabilities incurred in the ordinary course of business by the Debtors may be paid in full in the ordinary course of business in accordance with the terms and subject to the conditions of any agreements governing, instruments evidencing, or other documents relating to such transactions, provided that either (x) such Allowed Administrative Claims were included in the cash collateral budgets previously approved by Lenders, or (y) Lenders approve such payment in writing. 5.2 Professional Compensation and Reimbursement Claims. All requests for allowance and payment of Professional Fee Claims must be filed with the Bankruptcy Court and served on the Debtors or the Trustees, as applicable, no later than thirty (30) days after the Effective Date. Any such Professional Fee Claim tor which an application or request for payment is not filed with the Bankruptcy Court within that time period shall be released and forever barred, and shall not be entitled to Distributions under the Plan. Objections to the payment of such Professional Fee Claims must be filed no later than seven (7) days prior to the hearing on such Claims. All Professional Fee Claims shall be paid in accordance with the applicable provisions of the Bankruptcy Code and Bankruptcy Rules, as well as the terms outlined in the Global Settlement and any prior orders entered by the Bankruptcy Court. No Professional Fee Claim shall be Allowed on account of services rendered or expenses incurred by a professional prior to the Effective Date unless payment for such services and expenses has been allowed and approved by the Bankruptcy Court. 5.3 Allowed Priority Tax Claim. Except to the extent that a holder of an Allowed Priority Tax Claim has been paid by the Debtors prior to the Effective Date, and unless otherwise FIRST AMENDED .fOINT PLAN OF LIQUIDATION FOR COLOR STAR GROWERS OF COLORADO, INC., VAST, INC., ANI> COLOR STAR, LLC - Page 16 ~996042 vJ (40658.00002.000) Gurderctll - 6474630v.5
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agreed to in writing by the Trustees and the holder, each holder of an Allowed Priority Tax Claim shall be paid out of Available Cash in an amount equal to the unpaid portion of such Allowed Priority Tax Claim on the first Distribution Date following the Allowance Date for such Claim; provided, however, that any Claim or demand for payment of a Subordinated Tax Penalty Claim shall be Disallowed pursuant to the Plan, and the holder of an Allowed Priority Tax Claim shall not be allowed to assess or attempt to collect such penalty from the Debtors, their Estates, the Liquidation Trust or the Litigation Trust. To the extent that there is insufficient Available Cash to pay all Claims that have priority over any Allowed Priority Tax Claims, no Distributions will be made on account of Allowed Priority Tax Claims until the Liquidation Trust holds sufficient Available Cash to pay all Claims holding priority over such Allowed Priority Tax Claims in full, and the Disputed Claim Reserve is fully funded. For the avoidance of doubt, the Debtors and Estates retain all rights under § 505 of the Bankruptcy Code with respect to any Priority Tax Claim, all of which rights are deemed automatically transferred to the Liquidation Trust on the Effective Date. 5.4 Payment of Statutory Fees and Post-Petition Date Taxes. Notwithstanding anything herein, all fees payable pursuant to 28 V.S.c. § 1930 and all Claims of Governmental Unit of the type described in § 503(b)(1 )(B)-(C) of the Bankruptcy Code shall be treated as Allowed Administrative Claims when such amounts become due and payable by the Debtors, the Liquidation Trust or the Litigation Trust under applicable non-bankruptcy law. Such dates shall be the Allowance Date.
TREATMENT 6.1
ARTICLE VI OF CLAIMS AND EQUITY INTERESTS
Class 1: Secured Claims of Lenders.
6.1.1 Impairment and Voting. Class 1 is Impaired under the Plan. Class 1 shall include only Secured Claims of the Lenders. Each holder of a Class 1 Claim is entitled to vote to accept or reject the Plan. 6.1.2 Claim and Lien Determination. The Class 1 Claim shall be an Allowed Claim. Pursuant to the terms of the Global Settlement, Regions, as agent for the Lenders shall, except as provided below in section 6.1.4, retain its Lien in the Collateral that secured the Class 1 Claims on the Effective Date in the same priority as existed at the time such lien arose. 6.1.3 Treatment. Each Class I Claim shall be satisfied by (a) surrender of the Collateral to Regions as agent for Lenders (other than (i) the Collateral released by Lenders pursuant to the Global Settlement, and (ii) the contents-based flood-loss insurance Causes of Action that shall be transferred to the Liquidation Trust subject to Lenders' liens), and the automatic stay shall be lifted with respect to any such returned Collateral so that the Claimant may liquidate such Collateral under applicable state law and apply the proceeds to the Class 1 Claims, or (b) payment of the proceeds upon liquidation of the Collateral that secures the Class 1 Claims, including any proceeds of FIRST AMENDED JOINT PLAN OF LIQUIDATION FOR COLOR STAR GROWERS OF COLORADO, INC., VAST, INC., AND COLOR STAR, LLC - Page 17
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the contents-based flood-loss insurance Causes of Action in excess of $13 7,500 from the policy issued by AIG, no later than the Distribution Date. 6.1.4 Release of Liens. Notwithstanding anything in this Plan to the contrary, all liens held by the Lenders in the Commercial Tort Claims shall be released on the Effective Date of the Plan. 6.2
Class 2: Secured Claim of MCG.
6.2.1 Impairment and Voting. Class 2 is Impaired under the Plan. Class 2 shall include only the Secured Claim of MCG. Each holder of a Class 2 Claim is entitled to vote to accept or reject the Plan. 6.2.2 Claim and Lien Determination. The Class 2 claim shall be an Allowed Claim. Pursuant to the terms of the Global Settlement, except as provided below in section 6.2.4, each holder of a Class 2 Claim shall retain its Lien in the Collateral that secured the Class 2 Claim on the Effective Date in the same priority as existed at the time such lien arose. 6.2.3 Treatment. Each Class 2 Claim that is an Allowed Claim shall be satisfied by (a) surrender of the Collateral to Regions as agent for the Lenders (other than (i) the Collateral released pursuant to the Global Settlement, and (ii) the contents-based flood-loss insurance Causes of Action which shall be transferred to the Liquidation Trust subject to MCG's liens), if any, or (b) payment of the proceeds upon liquidation of the Collateral that secures the Class 2 Claims, including any proceeds of the contents-based flood-loss insurance Causes of Action in excess of $137,500 from the policy issued by ArG, no later than the Distribution Date. 6.2.4 Release of Liens. Notwithstanding anything in this Plan to the contrary, all liens held by a holder of a Class 2 Claim in the Commercial Tort Claims shall be released on the Effective Date of the Plan. 6.3
Class 3: Secured Tax Claims.
6.3.1 Impairment and Voting. Class 3 is Unimpaired under the Plan. Each holder of a Class 3 Claim is presumed to have accepted the Plan. 6.3.2 Claim and Lien Determination. Until paid in full, each holder of a Class 3 Claim that is an Allowed Claim shall retain its Lien in the Collateral that secured the Class 3 Claim in the same priority as existed at the time such lien arose. 6.3.3 Treatment. Each Class 3 Claim that is an Allowed Claim shall be satisfied as provided in the Sale Orders.
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Class 4: Other Secured Claims.
6.4.1 Impairment and Voting. Class 4 is Impaired under the Plan. Class 4 shall include only Allowed Other Secured Claims. Each holder of a Class 4 Claim is entitled to vote to accept or reject the Plan. 6.4.2 Claim and Lien Determination. Each holder of a Class 4 Claim shall retain its Lien in the Collateral that secured the Class 4 Claim on the Effective Date in the same priority at that time. The amount, validity, extent, value, and priority of each Class 4 Claim will be subject to determination by the Bankruptcy Court at a later date or pursuant to an agreement between the Liquidation Trustee and the holder of such Class 4 Claim. 6.4.3 Treatment. Each Class 4 Claim that is an Allowed Claim shall be satisfied by (a) return of the Collateral to the holder of each Class 4 Claim in full and final satisfaction of that holder's Class 4 Claim, or (b) payment of the proceeds upon liquidation of the Collateral that secures the Class 4 Claim, less any expenses incurred in the liquidation no later than the Distribution Date. Any Deficiency Claim of the holder of a Class 4 Claim shall be included in Class 8. 6.4.4 Surcharge. The Debtors and the Estates reserve all rights to surcharge the holder ofa Class 4 Claim and any collateral securing the same under § 506(c) or other applicable law, which such rights are deemed transferred to the Liquidation Trust on the Effective Date. 6.5
Class 5: Priority Non-Tax Claims.
6.5.1 Impairment and Voting. Class 5 is Unimpaired under the Plan. Holders of Allowed Priority Non-Tax Claims are presumed to have accepted the Plan. 6.5.2 Treatment. Except to the extent that a holder of an Allowed Priority Non- Tax Claim has been paid prior to the Effective Date, or agrees to different treatment, each holder of an Allowed Priority Non-Tax Claim against the Debtors and/or the Estates shall receive Cash in an amount equal to the Allowed amount of such Priority Non-Tax Claim as soon as reasonably practicable after the Effective Date. 6.6
Class 6: Deficiency Claims of Lenders.
6.6.1 Impairment and Voting. Class 6 is Impaired under the Plan. Class 6 shall include only the Lenders' Deficiency Claims. Each holder of a Class 6 Claim is entitled to vote to accept or to reject the Plan. 6.6.2 Treatment. The Lenders' Deficiency Claims shall be an Allowed Class 6 Claim. The amount of the Allowed Class 6 Claim shall be reduced for any payments of money received by the Lenders on account of their Allowed Class 1 Claim from and after FIRST AMENDED JOINT PLAN OF LIQUIDATION FOR COLOR STAR GROWERS OF COLORADO, INC., VAST, INC., AND COLOR STAR, LLC - Page 19
1'1
