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As Of Filer Filing For·On·As Docs:Size Issuer Agent 4/09/18 Rentech, Inc. 8-K:1,9 4/04/18 3:57M Donnelley … Solutions/FA |
Document/Exhibit Description Pages Size
1: 8-K Current Report HTML 18K
2: EX-2.1 Plan of Acquisition, Reorganization, Arrangement, HTML 370K
Liquidation or Succession
3: EX-99.1 Miscellaneous Exhibit HTML 519K
| EX-2.1 |
Exhibit 2.1
THIS DISCLOSURE STATEMENT HAS BEEN APPROVED ON AN INTERIM BASIS ONLY BY THE BANKRUPTCY COURT, SO THAT THE DEBTORS COULD BEGIN
SOLICITATION OF VOTES ON THE PLAN AND TO COMBINE THE HEARINGS ON FINAL APPROVAL OF THE DISCLOSURE STATEMENT AND CONFIRMATION OF THE PLAN. THE BANKRUPTCY COURT WILL CONSIDER APPROVAL OF THIS DISCLOSURE STATEMENT ON A FINAL BASIS AND CONFIRMATION OF
THE PLAN ON APRIL 4, 2018 AT 10:00 A.M. EST.
IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE
——————————————————————————————
x
In re: Chapter 11
Rentech WP U.S. Inc., et al.,1 Case No. 17-12958
(CSS)
Debtors.(Jointly Administered)
——————————————————————————————
x
DEBTORS’ SECOND AMENDED COMBINED DISCLOSURE STATEMENT AND CHAPTER 11 PLAN OF LIQUIDATION
YOUNG CONAWAY STARGATT & TAYLOR, LLP Michael R. Nestor (No. 3526)
Matthew B. Lunn
(No. 4119) Rodney Square
1000 North King Street
Wilmington, DE 19801
LATHAM & WATKINS LLP
Peter M. Gilhuly (admitted pro hac vice)
Kimberly A. Posin (admitted pro hac vice) Adam E. Malatesta (admitted pro hac vice) LATHAM & WATKINS LLP
355 South Grand Avenue, Suite 100
Los Angeles, CA 90071-1560
Counsel to the Debtors and Debtors-in-Possession
Dated: April 4, 2018
Wilmington, Delaware
The Debtors, together with the last four digits of each Debtor’s
U.S. federal tax identification number, are Rentech WP U.S. Inc. (7863) and Rentech, Inc. (7421). The address for the Debtors is 10880 Wilshire Boulevard, Suite 1101, Los Angeles, CA 90024.
TABLE OF CONTENTS
I. INTRODUCTION 1
II. DEFINITIONS AND CONSTRUCTION OF TERMS 2
A. Definitions 2
B. Interpretation; Application of Definitions and Rules of Construction 23
III. BACKGROUND AND
DISCLOSURES 24
A. General Background 24
1. Overview of Operations 24
2. Corporate Structure 27
3. The Debtors’ Secured Prepetition
Indebtedness 29
B. Events Precipitating the Chapter 11 Filing 34
C. The
Chapter 11 Cases 37
1. First Day Motions 37
2. Appointment of the Committee
and Retention of Committee Professionals 39
3. Employment of Professionals and Advisors 40
4. Claims Process and Bar Date 40
D. Certain Federal Income Tax Consequences 41
1. In General 41
2. U.S. Federal Income Tax Consequences to the Debtors 43
3. U.S. Federal
Income Tax Treatment of the Rentech Liquidation Trust 46
4. Disputed Claims Reserve 48
5. U.S. Federal Income Tax Consequences to Holders of Claims 49
6. Backup Withholding and
Information Reporting 51
E. Alternate Plan 53
F. The Non-Debtor Subsidiary
Sales 53
G. Best Interests Test 60
H. Releases 62
I. Certain Risk Factors to be Considered 62
1. Risk Factors that May Affect the Debtors’
Ability to Consummate this Combined Plan and Disclosure Statement 63
2. Risk Factors that may Affect Distributions under this Combined
i
Plan and Disclosure Statement 64
IV. TREATMENT OF
UNCLASSIFIED CLAIMS 64
A. Administrative Expense Claims 64
B. Priority Tax
Claims 65
C. Payment of Statutory Fees 65
V. SUMMARY OF DEBTORS’ ASSETS;
SUMMARY OF TREATMENT OF CLAIMS AND EQUITY INTERESTS AND ESTIMATED RECOVERIES 66
A. Summary of Assets 66
B. Summary of Treatment of Claims and Equity Interests and Estimated
Recoveries 66
VI. CONFIRMATION PROCEDURES 68
A. Confirmation Procedure 68
1. Confirmation Hearing 68
2. Procedure for Objections 68
3. Requirements for Confirmation 69
4. Classification of Claims and Equity Interests 70
5. Impaired Claims or Equity Interests 70
6. Confirmation Hearing Notice 71
7. Elimination ofVacant Classes 71
B. Bar Dates for Fee Claims 71
VII. CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS; ESTIMATED RECOVERIES 72
VIII. TREATMENT OF
CLAIMS AND EQUITY INTERESTS 73
A. Treatment of Claims 73
1. Class 1 –
Secured Claims 73
2. Class 2 – Priority Non-Tax Claims 74
3. Class 3
– General Unsecured Claims 75
4. Class 4 – Affiliate Claims 75
5.
Class 5 – Intercompany Claims 76
6. Class 6 – Rentech Equity Interests 77
7. Class 7 – Rentech WP Equity Interests 78
8. Class 8 – Other Equity Interests 79
B. Modification of Treatment of Claims and Equity Interests 79
ii
C. Cramdown and No Unfair Discrimination 79
IX.
PROVISIONS REGARDING THE RENTECH LIQUIDATION TRUST 80
A. Appointment of the Liquidation Trustee 80
B. Rights and Powers of the Liquidation Trustee 81
C. Post Confirmation Date Expenses of the
Liquidation Trustee 82
X. PROVISIONS GOVERNING DISTRIBUTIONS UNDER THIS COMBINED PLAN
AND DISCLOSURE STATEMENT 82
A. Method of Payment 82
B. Objections to and Resolution of Claims 82
C. Claims Objection Deadline 82
D. No Distribution Pending Allowance 83
E. Claims Reserve 83
F. Distribution After Allowance 83
G. Adjustments to Claims Without Objection 84
H. Voting Record Date 84
I. Delivery of Distributions 84
J. Unclaimed Distributions 85
K.
De Minimis Distributions 86
L. Setoff 86
XI. IMPLEMENTATION AND EFFECT OF CONFIRMATION OF COMBINED
PLAN AND DISCLOSURE STATEMENT 87
A. Means for Implementation of this Combined Plan and
Disclosure
Statement 87
B. Additional Means for Implementation 89
1. Preservation of Right to Conduct Investigations 89
2. Prosecution and Resolution of Causes
of Action 89
XII. EXCULPATION, RELEASES AND INJUNCTIONS 91
A. Exculpation 91
B. Releases by the Debtors 91
C. Releases by Holders of Claims and Other
Parties 92
D. Injunctions Relating to Releases 94
E. Injunctions to Protect
Plan Assets 94
iii
XIII. EXECUTORY CONTRACTS AND UNEXPIRED LEASES 95
A. Rejection of Executory Contracts and Unexpired Leases 95
B. Deadline for
Filing Proofs of Claim Relating to Executory Contracts and Unexpired Leases Rejected Pursuant to this Combined Plan and Disclosure Statement 95
C. Debtors’
Obligations Pursuant to their Corporate Charters, Bylaws or
other Organizational Documents 96
D. Debtors’ Insurance Policies 97
XIV. CONDITIONS PRECEDENT TO AND OCCURRENCE OF
CONFIRMATION
AND THE EFFECTIVE DATE 97
A. Conditions Precedent to
Confirmation 97
B. Conditions Precedent to the Effective Date 98
C.
Establishing the Effective Date 98
D. Effect of Failure of Conditions 98
E.
Waiver of Conditions to Effective Date 99
XV. RETENTION OF JURISDICTION 99
XVI. MISCELLANEOUS PROVISIONS 102
A. Books and Records 102
B. Transfer of the Debtors’ Assets 102
C. Termination of Injunctions or Stays 103
D. Amendment or Modification of this Combined Plan and Disclosure
Statement
103
E. Severability 103
F. Revocation or Withdrawal of this Combined Plan and
Disclosure
Statement 104
G. Binding Effect 104
H. Notices 104
I. Governing Law 104
J. Withholding and Reporting Requirements 105
K. Headings 106
L. Exhibits/Schedules 106
M. Filing of Additional Documents 106
N. No Admissions 106
O. Successors and Assigns 106
iv
P. Reservation of Rights 106
Q. Implementation 107
R. Inconsistency 107
S. Dissolution of the Debtors 107
T. Termination of the Liquidation Trustee 107
U. Compromise of Controversies 108
V. Request for Expedited Determination of Taxes 108
W. Fee Claims 108
X. Postpetition Interest 109
Y. Dissolution of the Committee 109
Z. Exemption from Certain Taxes and Fees 110
v
NOTICE
THERE HAS BEEN NO INDEPENDENT AUDIT OF THE
FINANCIAL INFORMATION CONTAINED IN THIS COMBINED PLAN AND DISCLOSURE STATEMENT. THIS COMBINED PLAN AND DISCLOSURE STATEMENT WAS COMPILED FROM INFORMATION OBTAINED FROM NUMEROUS SOURCES BELIEVED TO BE ACCURATE TO THE BEST OF THE DEBTORS’
KNOWLEDGE, INFORMATION AND BELIEF. NO GOVERNMENTAL AUTHORITY HAS PASSED ON, CONFIRMED OR DETERMINED THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED HEREIN.
NOTHING STATED HEREIN SHALL BE DEEMED OR CONSTRUED AS AN ADMISSION OF ANY FACT OR LIABILITY BY ANY PARTY, OR BE ADMISSIBLE IN ANY PROCEEDING INVOLVING THE DEBTORS
OR ANY OTHER PARTY, OR BE DEEMED CONCLUSIVE EVIDENCE OF THE TAX OR OTHER LEGAL EFFECTS OF THIS COMBINED PLAN AND DISCLOSURE STATEMENT ON THE DEBTORS OR HOLDERS OF CLAIMS OR EQUITY INTERESTS. CERTAIN STATEMENTS CONTAINED HEREIN, BY NATURE, ARE
FORWARD-LOOKING AND CONTAIN ESTIMATES AND ASSUMPTIONS. THERE CAN BE NO ASSURANCE THAT SUCH STATEMENTS WILL REFLECT ACTUAL OUTCOMES.
THE STATEMENTS CONTAINED HEREIN
ARE MADE AS OF THE DATE HEREOF, UNLESS ANOTHER TIME IS SPECIFIED. THE DELIVERY OF THIS COMBINED PLAN AND DISCLOSURE STATEMENT SHALL NOT BE DEEMED OR CONSTRUED TO CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AT ANY TIME
AFTER THE DATE HEREOF.
HOLDERS OF CLAIMS AND EQUITY INTERESTS SHOULD NOT CONSTRUE THE CONTENTS OF THIS COMBINED PLAN AND DISCLOSURE STATEMENT AS PROVIDING ANY
LEGAL, BUSINESS, FINANCIAL OR TAX ADVICE. THEREFORE, EACH SUCH HOLDER SHOULD CONSULT WITH ITS OWN LEGAL, BUSINESS, FINANCIAL AND TAX ADVISORS AS TO ANY SUCH MATTERS CONCERNING THIS COMBINED PLAN AND DISCLOSURE STATEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY.
EACH HOLDER OF A CLAIM OR EQUITY INTEREST SHOULD CONSIDER CAREFULLY ALL OF THE INFORMATION IN THIS COMBINED PLAN AND DISCLOSURE STATEMENT,
INCLUDING THE RISK FACTORS DESCRIBED IN GREATER DETAIL HEREIN.
I. INTRODUCTION
Rentech WP U.S. Inc. and Rentech,
Inc. (collectively, the “Debtors”) hereby propose the Debtors’ Combined Plan and Disclosure Statement pursuant to Bankruptcy Code Sections 1125 and 1129. The Debtors are the proponents of this Combined Plan and Disclosure Statement
within the meaning of Bankruptcy Code Section 1129. This Combined Plan and Disclosure Statement contemplates the (a) the sale of a wood pellet production facility located in Atikokan, Ontario (the “Atikokan Facility”) that was owned
by one of the Debtors’ Canadian non-Debtor subsidiaries, RTK WP2 Canada (the “Atikokan Sale”); (b) the sales of substantially all of the assets of certain of the Debtors’ wholly owned, US non-Debtor subsidiaries (the
“Non- Debtor Subsidiary Sales”), including Fulghum Fibres, Inc., Fulghum Fibres Collins, Inc., Fulghum Fibres Florida, Inc., Schuyler Wood Pellet, LLC, Deposit Wood Pellet, LLC, and New England Wood Pellet, LLC (collectively, the
“Non-Debtor Subsidiary Sellers”), and (c) the monetization of the Debtors’ interests in the other Non-Debtor Subsidiaries.
This Combined Plan
and Disclosure Statement constitutes a liquidating chapter 11 plan for the Debtors and provides for the Distribution of the Debtors’ assets already liquidated or to be liquidated over time to the Holders of Allowed Claims and Allowed Equity
Interests in accordance with the terms of this Combined Plan and Disclosure Statement and the priority of claims provisions of the Bankruptcy Code.
Pursuant to
this Combined Plan and Disclosure Statement, the proceeds of the Non-Debtor Subsidiary Sales and the Atikokan Sale will be used to satisfy Allowed Administrative Expense Claims, Allowed Priority Tax Claims, Allowed Fee Claims, Allowed Secured
Claims, Allowed Priority Non-Tax Claims, and Wind-Down Expenses in full. After payment of the aforementioned Claims, all remaining funds, including funds realized from the
monetization of the Debtors’ interests in other Non-Debtor Subsidiaries as well as proceeds from
any Causes of Action pursued by the Liquidation Trustee, will be distributed to Holders of Allowed General Unsecured Claims on a Pro
Rata basis. Holders of Allowed Affiliate Claims, Allowed Intercompany Claims, and Allowed Equity Interests will only receive a Distribution under this Combined Plan and Disclosure Statement if the Holders of Allowed Claims in Classes of a higher
priority are paid in full.
Except as otherwise provided by Order of the Bankruptcy Court, Distributions on account of Allowed Administrative Expense Claims will be
made by the Debtors or the Post- Effective Date Debtors on the Effective Date or as soon thereafter as is practicable by the Post- Effective Date Debtors or the Liquidation Trustee, and Distributions on account of all other
Allowed Claims or Allowed Equity Interests will occur each time the Rentech Liquidation
Trust’s Cash reserves exceed the Cash Balance Threshold of $5,000,000 or such lesser amount as
determined in the discretion of the Liquidation Trustee.
Subject to the restrictions on
modifications set forth in Bankruptcy Code Section
1127 and Bankruptcy Rule 3019 and those restrictions on modifications set forth in Section
XVI.D. of this Combined Plan and Disclosure Statement, the Debtors expressly reserve the right to alter, amend or modify this Combined Plan and Disclosure Statement, including the
Plan Supplement, one or more times, before substantial consummation thereof, including as disclosed more fully in Section XVI.D. of this Combined Plan and Disclosure Statement.
II. DEFINITIONS AND CONSTRUCTION OF TERMS A. Definitions
As used herein, the following terms
have the respective meanings specified below, unless the context otherwise requires:
1. “Administrative Expense Bar Date” means the Business Day that is
thirty (30)
days after service of notice of the Effective Date.
2
2. “Administrative Expense Claim” means any right to payment constituting a cost or expense of administration of the Chapter
11 Cases under Bankruptcy Code Sections 503(b) and 507(a)(2) including, without limitation, (a) any actual and necessary costs and expenses of preserving the Estates, (b) all compensation and reimbursement of expenses to the extent Allowed
by the Bankruptcy Court under Bankruptcy Code Sections 328, 330 or 503, (c) any fees or charges assessed against the Estates under Section 1930 of Title 28 of the United States Code, and (d) all Claims arising under Bankruptcy Code
Section 503(b)(9).
3. “Advisors” shall have the meaning set forth in Section III.F. of this Combined
Plan and Disclosure Statement.
4. “Affiliate” has the meaning set forth in
Bankruptcy Code Section 101(2).
5. “Affiliate Claim” means a Claim against a Debtor held by an Affiliate of a
Debtor.
6. “Allowed” means, with respect to Claims: (a) any Claim, proof of
which was Filed (or for which Claim, under this Combined Plan and Disclosure Statement, the Bankruptcy Code, or a Final Order of the Bankruptcy Court, a proof of claim is not or shall not be required to be Filed); (b) any Claim which has been
or hereafter is listed by the Debtors in the Schedules as liquidated in amount and not disputed or contingent and for which no proof of claim has been Filed; or (c) any Claim allowed pursuant to this Combined Plan and Disclosure Statement or a
Final Order of the Bankruptcy Court; provided that with respect to any Claim described in clauses (a) and (b), such Claim shall be considered Allowed only if and to the extent that with respect to such Claim, no objection to the allowance
thereof has been interposed within the applicable period fixed by this Combined Plan and Disclosure Statement, the Bankruptcy Code,
3
the Bankruptcy Rules or the Bankruptcy Court, or such objection is interposed and the Claim is subsequently Allowed by a Final Order.
7. “AMT” shall have the meaning set forth in Section III.D.2. of this Combined
Plan and Disclosure Statement.
8. “Articles Amendment” means the Articles of
Amendment of the Amended and Restated Articles of Incorporation, as Amended, of Rentech, Inc., as included in the Plan Supplement.
9. “Atikokan Facility”
shall have the meaning set forth in Article I of this
Combined Plan and Disclosure Statement.
10. “Atikokan Sale” shall have the meaning set forth in Article I of this Combined
Plan and Disclosure Statement.
11. “Avoidance Actions” means any
and all rights to recover or avoid transfers or liens under chapter 5 of the Bankruptcy Code or otherwise, including, but not limited to, Bankruptcy Code Sections 506(d), 522, 541, 542, 543, 544, 545, 547, 548, 549, 550, or 553, or otherwise under
the Bankruptcy Code or under similar or related state or federal statutes and common law, including, without limitation, all preference, fraudulent conveyance, fraudulent transfer, and/or other similar avoidance claims, rights, and causes of action,
whether or not litigation has been commenced as of the Effective Date to prosecute such Avoidance Actions.
12. “Ballot” means the ballot used to vote to
accept or reject this Combined Plan and
Disclosure Statement.
13.
“Balloting Agent” means Prime Clerk, in its capacity as the Bankruptcy Court- approved solicitation, claims and noticing agent.
4
14. “Bankruptcy Code” means title 11 of the United States Code, as amended from time to time.
15. “Bankruptcy Court” means the United States Bankruptcy Court for the District of Delaware.
16. “Bankruptcy Exception” shall have the meaning set forth in Section III.D.2. of this Combined Plan and Disclosure Statement.
17. “Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure, as amended from time to time.
18. “Bar Date Motion” means the Debtors’ Motion for Entry of an Order Pursuant to Fed. R. Bankr. P. 3003(c)(3) and Del. Bankr. L.R. 2002-1(e) Establishing Bar Dates
and Related Procedures for Filing Proofs of Claim (Including for Administrative Expense Claims Arising Under 11 U.S.C. § 503(b)(9)) and Approving the Form and Manner of Notice Thereof [Docket No. 48] filed in the Chapter 11 Cases.
19. “Bar Date Order” means the Order Pursuant to Fed. R. Bankr. P. 3003(c)(3) and Del. Bankr. L.R. 2002-1(e) Establishing Bar Dates and Related
Procedures for Filing Proofs of Claim (Including for Administrative Expense Claims Arising Under 11 U.S.C. § 503(b)(9)) and Approving the Form and Manner of Notice Thereof[Docket No. 134] entered in the Chapter 11 Cases.
20. “Bar Dates” means the General Bar Date, the Supplemental Bar Date, and the
Governmental Bar Date.
21. “BMO” means Bank of Montreal.
22. “Books and Records” shall have the meaning set forth in Section XVI.A. of this Combined Plan and Disclosure Statement.
5
23. “Business Day” means any day other than a Saturday, Sunday or any other day on which commercial banks in New York,
New York are required or authorized to close by law or executive order.
24. “Cash” means legal tender of the United States of America and
equivalents thereof.
25. “Cash Balance Threshold” means $5,000,000 or such lesser amount as determined in the discretion of the Post-Effective Date
Debtors or the Liquidation Trustee.
26. “Cash Collateral” means all property constituting cash collateral as defined in
Bankruptcy Code Section 363(a).
27. “Causes of Action” means the Avoidance
Actions and all other claims, actions, causes of action, choses in action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages,
judgments, third-party claims, counterclaims, and crossclaims of any Debtor and/or any of the Estates against any Entity, based in law or equity, including, but not limited to, under the Bankruptcy Code, whether direct, indirect, derivative, or
otherwise and whether asserted or unasserted, and any and all commercial tort claims against any party, including the Debtors’ current and former directors and officers or Non-Debtor Subsidiaries and their Related Persons; and subject, however,
to any releases provided in this Combined Plan and Disclosure Statement, the Confirmation Order or any other Final Order of the Bankruptcy Court.
28. “Chapter
11 Cases” means the cases under chapter 11 of the Bankruptcy Code commenced by the Debtors, styled as Rentech WP U.S. Inc., et al., under Case No. 17-12958 (CSS), currently pending in the Bankruptcy Court.
29. “Claim” has the meaning set forth in Bankruptcy Code Section 101(5).
6
30. “Claims Objection Deadline” means the first Business Day that is one hundred and twenty (120) days after the
Effective Date or such later date as may be approved by Order of the Bankruptcy Court upon motion of the Post-Effective Date Debtors or the Liquidation Trustee. The filing of such a motion shall automatically extend the Claims Objection Deadline
until entry of an order on account of such motion, in accord with Local Rule 9006-2.
31. “Class” means any group of substantially similar Claims or
Equity Interests classified by this Combined Plan and Disclosure Statement pursuant to Bankruptcy Code Sections 1122 and 1123(a)(1).
32. “Clerk” means
the clerk of the Bankruptcy Court.
33. “COD” shall have the meaning set forth in Section III.D.2. of this Combined Plan and Disclosure Statement.
34. “Combined Plan and Disclosure Statement” means this combined disclosure statement and chapter 11 plan of liquidation including, without limitation,
all exhibits, supplements, appendices, and schedules hereto, either in their present form or as the same may be altered, amended, or modified from time to time through the Confirmation Date.
35. “Committee” shall have the meaning set forth in Section III.C.2. of this Combined Plan and Disclosure Statement.
36. “Conditional Approval and Procedures Order” means the Order of the Bankruptcy Court approving the adequacy of disclosures in this Combined Plan and Disclosure
Statement on an interim basis, approving notice and solicitation procedures for voting to accept or reject this Combined Plan and Disclosure Statement, scheduling the Confirmation Hearing, and setting the Confirmation Objection Deadline.
8
37. “Confirmation Date” means the date on which the Confirmation Order is entered on the Docket.
38. “Confirmation Hearing” means the hearing held by the Bankruptcy Court to (i) consider confirmation of this Combined Plan and Disclosure Statement pursuant to
Bankruptcy Code Section 1129 and (ii) address final approval of the adequacy of the disclosures contained in this Combined Plan and Disclosure Statement pursuant to Bankruptcy Code Section 1125, as such hearing may be adjourned or
continued from time to time.
39. “Confirmation Hearing Notice” shall have the meaning set forth in Section VI.A.6. of this Combined Plan and Disclosure
Statement.
40. “Confirmation Objection Deadline” means the deadline to object to (i) confirmation of this Combined Plan and Disclosure Statement and
(ii) final approval of the adequacy of disclosures in this Combined Plan and Disclosure Statement, as set forth in the Confirmation Hearing Notice.
41.
“Confirmation Order” means the Order of the Bankruptcy Court confirming this Combined Plan and Disclosure Statement pursuant to Bankruptcy Code Section 1129.
42. “Creditor” means any Person that is the Holder of a Claim against either of the Debtors.
43. “CVR” shall have the meaning set forth in Section III.A.3(a)(l). of this Combined Plan and Disclosure Statement.
44. “CVR Common Units” shall have the meaning set forth in Section III.A.3(a)(l). of this Combined Plan and Disclosure Statement.
45. “CVR Unit Transfer” shall have the meaning set forth in Section III.A.3(a)(1).
of this Combined Plan and Disclosure Statement.
8
46. “Debtors” means, collectively, Rentech WP U.S. Inc. and Rentech, Inc.
47. “Debtors-in-Possession” means the Debtors in their capacity as debtors-in- possession in the Chapter 11 Cases pursuant to
Bankruptcy Code Sections 1101, 1107(a), and 1108.
48. “Disputed Claim” means any Claim that (a) is listed on the Schedules as disputed, contingent
or unliquidated, and as to which no proof of claim has been filed in a non- contingent and unliquidated amount, or (b) which is objected to in whole or in part prior to the Claims Objection Deadline and
that has not been resolved by settlement or Final Order.
49. “Disputed Claims Reserve” means the reserve maintained by the Liquidation Trustee for any
distributable amounts required to be set aside on account of Disputed Claims, the amount of which will be distributed (net of any expenses, including any taxes relating thereto), as provided in this Combined Plan and Disclosure Statement and in the
Liquidation Trust Agreement, as such Disputed Claims are resolved by Final Order, and such amounts shall be distributable in respect of such Disputed Claims as such amounts would have been distributable had the Disputed Claims been Allowed Claims as
of the Effective Date.
50. “Distribution” means any distribution to the Holders of Allowed Claims or Allowed Equity Interests.
51. “Distribution Date” means each date upon which the Rentech Liquidation Trust’s Cash reserves exceed the Cash Balance Threshold or as soon thereafter as a
Distribution is practicable.
52. “Docket” means the docket in the Chapter 11 Cases maintained by the Clerk.
53. “Drax” means Drax Power Limited.
9
54. “Drax Contract” shall have the meaning set forth in Section III.B. of this Combined Plan and Disclosure Statement.
55. “Effective Date” means the date on which the conditions specified in Sections XIV.A. and XIV.B. of this Combined Plan and Disclosure Statement have
been satisfied or waived.
56. “Entity” means an entity as defined in Bankruptcy Code Section 101(15).
57. “Equity Interests” means all Rentech Equity Interests, all Rentech WP Equity Interests and all Other Equity Interests.
58. “Estates” means the estates of the Debtors created upon the commencement of the Chapter 11 Cases pursuant to Bankruptcy Code Section 541.
59. “Exchange Agreement” shall have the meaning set forth in Section III.A.3(a)(1). of this Combined Plan and Disclosure Statement.
60. “Exculpated Parties” means the Debtors, the directors and officers of the Debtors who served during any portion of these Chapter 11 Cases, the Debtors’
professionals retained in these Chapter 11 Cases, the Committee, the members of the Committee in their capacity as such, the individuals who sat on the Committee, in their capacity as such, and the Committee’s professionals retained in these
Chapter 11 Cases.
61. “Executory Contract” means any executory contract or unexpired lease as of the Petition Date between the Debtors and any other
Person or Persons, specifically excluding contracts and agreements entered into pursuant to this Combined Plan and Disclosure Statement.
62. “Fee Claim”
means a Claim under Bankruptcy Code Sections 328, 330(a), 331, or 503 for compensation of a Professional or other Entity for services rendered or expenses
incurred
in the Chapter 11 Cases.
10
63. “File,” “Filed” or “Filing” means file, filed or filing with the Bankruptcy Court in the Chapter 11
Cases.
64. “Final Order” means an Order of the Bankruptcy Court or a court of competent jurisdiction to hear appeals from the Bankruptcy Court, that has
not been reversed, stayed, modified or amended and as to which the time to appeal, to petition for certiorari, or to move for reargument or rehearing has expired and as to which no appeal, petition for certiorari, or other proceedings for reargument
or rehearing shall then be pending; provided, however, that the possibility that a motion under Rule 59 or 60 of the Federal Rules of Civil Procedure, or any analogous rule under the Bankruptcy Rules or applicable state court rules of civil
procedure, may be Filed with respect to such order shall not cause such order not to be a Final Order.
65. “First Day Declaration” means the Declaration
of Paul Summers, Chief Financial Officer of Rentech WP U.S. Inc. and Rentech, Inc., in Support of Chapter 11 Petitions and First Day Pleadings [Docket No. 13] filed in the Chapter 11 Cases.
66. “First Day Motions” means those motions enumerated in Section III.C.1. of this Combined Plan and Disclosure Statement.
67. “Fulghum” means Fulghum US and Fulghum SA.
68. “Fulghum APA” shall
have the meaning set forth in Section III.F. of this Combined Plan and Disclosure Schedule.
69. “Fulghum SA” means the South American non-debtor
subsidiaries of Fulghum Fibres, Inc.
70. “Fulghum US” means Fulghum Fibres, Inc. and its U.S. non-debtor subsidiaries.
71. “Fulghum/FFI APA” shall have the meaning set forth in Section III.F. of this Combined Plan and Disclosure Schedule.
11
72. “General Bar Date” means February 20, 2018 at 5:00p.m. (Prevailing Eastern Time).
73. “General Unsecured Claim” means any Claim against the Debtors that arose or is deemed by the Bankruptcy Code or Bankruptcy Court, as the case may be, to have arisen
before the Petition Date and that is not: (i) an Administrative Expense Claim, (ii) a Priority Tax Claim, (iii) a Fee Claim, (iv) a Secured Claim, (v) a Priority Non-Tax Claim, (vi) an Affiliate Claim, or (vii) an
Intercompany Claim.
74. “Governmental Bar Date” means June 18, 2018 at 5:00p.m. (Prevailing Eastern Time).
75.“Governmental Unit” has the meaning set forth in Bankruptcy Code Section 101(27).
76.“GSO” shall have the meaning set forth in Section III.A.3(a)(l). of this Combined Plan and Disclosure Statement.
77. “Holder” means the beneficial holder of any Claim or Equity Interest.
78.
“Impaired” means “impaired” as the term is used in Bankruptcy Code Sections 1123(a)(4) and 1124.
79. “Insurance Policies” means all
insurance policies of the Debtors.
80. “Intercompany Claims” means (i) any account reflecting intercompany book entries by one Debtor with respect
to the other Debtor, or (ii) any Claim that is not reflected in such book entries and is held by a Debtor against the other Debtor, in each case accruing before or after the Petition Date through the Effective Date, including, but not limited
to, any Claim for reimbursement, payment as guarantor or surety, or any Claim for contribution or expenses that were allocable between the Debtors.
12
81. “lntercreditor Agreement” shall have the meaning set forth in Section III.A.3(b). of this Combined Plan and Disclosure
Statement.
82. “IRC” shall have the meaning set forth in Section III.D.l. of this Combined Plan and Disclosure Statement.
83. “Letters of Credit” shall have the meaning set forth in Section III.A.3(b). of this Combined Plan and Disclosure Statement.
84. “Lien” means any mortgage, pledge, deed of trust, assessment, security interest, lease, lien, adverse claim, levy, charge or other encumbrance of any kind, including
any “lien” as defined in Bankruptcy Code Section 101(37), or a conditional sale contract, title retention contract or other contract to give any of the foregoing.
85. “Liquidation Analysis” shall have the meaning set forth in Section III.G. of this Combined Plan and Disclosure Statement.
86. “Liquidation Trust Agreement” means an agreement in substantially the form as the agreement attached hereto as Exhibit A.
87. “Liquidation Trust Assets” means all assets of the Debtors’ Estates, including all Causes of Action not otherwise expressly released
pursuant to this Combined
Plan and Disclosure Statement, the Confirmation Order or any Final Order, transferred and assigned to the Rentech Liquidation Trust on or after the Effective Date.
88. “Liquidation Trustee” means a Person appointed pursuant to Article IX of this Combined Plan and Disclosure Statement to serve as trustee of the
Rentech Liquidation Trust, and to carry out the duties and responsibilities set forth herein and in the Liquidation Trust Agreement, on behalf of the Estates and the Post-Effective Date Debtors, which initial Liquidating Trustee shall be appointed
by the Debtors with the consent of the Committee.
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89. “Local Rules” means the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the
District of Delaware.
90. “NEWP” means New England Wood Pellet, LLC and its non-debtor subsidiaries.
91. “NEWP APA” shall have the meaning set forth in Section III.F. of this Combined Plan and Disclosure Statement.
92. “Non-Debtor Subsidiaries” means the 37 direct and indirect non-debtor subsidiaries of Rentech, Inc., as shown on the corporate organizational chart attached hereto as
Exhibit B.
93. “Non-Debtor Subsidiary Sales” means, collectively, the sales of substantially all of the assets of each of the Non-Debtor Subsidiary
Sellers.
94. “Non-Debtor Subsidiary Sellers” shall have the meaning set forth in Article I of this Combined Plan and Disclosure Statement.
95. “NOLs” shall have the meaning set forth in Section III.D.2. of this Combined Plan and Disclosure Statement.
96. “OPG” mean Ontario Power Generation.
97. “Order” means an order or
judgment of the Bankruptcy Court as entered on the Docket.
98. “Ordinary Course Professionals Motion” means the Debtors’ Motion for Order Under 11
U.S.C. §§ 105(a), 327, 330, and 331 Authorizing Employment and Payment of Professionals Utilized in Ordinary Course of Business [Docket No. 94] filed in the
Chapter 11 Cases.
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99. “Ordinary Course Professionals Order” means the Order Under 11 U.S.C. §§ 105(a), 327, 330, and 331 Authorizing
Employment and Payment of Professionals Utilized in Ordinary Course of Business [Docket No. 197] entered in the Chapter 11 Cases.
100. “Other Equity
Interests” means any equity interests in Rentech, Inc. other than Rentech Equity Interests, including, but not limited to, all authorized and unissued and issued but not outstanding shares of common stock of Rentech, Inc. together with any
warrants, options or contract rights to purchase or acquire such interests at any time.
101. “Outstanding Fees” shall have the meaning set forth in
Section III.A.3(b). of this Combined Plan and Disclosure Statement.
102. “Oversight Committee” means the members of the Committee that have agreed to
serve on the Oversight Committee of the Rentech Liquidation Trust after the Effective Date or such other Persons as may be approved by the Bankruptcy Court thereafter.
103. “Person” means a person as defined in Bankruptcy Code Section 101(41), including an individual, a corporation, a partnership, an association, a joint stock
company, a joint venture, an estate, a trust, an unincorporated association or organization, a governmental unit or any agency or subdivision thereof or any other Entity.
104. “Petition Date” means December 19, 2017.
105. “Plan Documents”
means this Combined Plan and Disclosure Statement, the Plan Supplement, and all of the exhibits and schedules attached to any of the foregoing.
106. “Plan
Supplement” means the appendix of schedules and exhibits Filed with the Bankruptcy Court on March 14, 2018 [Docket No. 290] and April 2, 2018 [Docket No. 329], as
15
may be modified and/or supplemented. The Plan Supplement included the Articles Amendment and identified the individual who will act as
the Liquidation Trustee.2
107. “Post-Effective Date Debtors” means the Debtors from and after the Effective Date.
108. “Prepetition Agent” means Credit Suisse AG, Cayman Islands Branch, as the Administrative Agent under the Prepetition Credit Agreement.
109. “Prepetition Collateral” shall have the meaning set forth in Section III.A.3(b). of this Combined Plan and Disclosure Statement.
110. “Prepetition Credit Agreement” means that certain Second Amended and Restated Term Loan Credit Agreement, dated as of April 1, 2016, by and among Rentech
Nitrogen Holdings, Inc., as Borrower, the Prepetition Agent and the Prepetition Lenders, as has been and may be amended, restated, supplemented or otherwise modified from time to time.
111. “Prepetition Documents” shall have the meaning set forth in Section III.A.3(b). of this Combined Plan and Disclosure Statement.
112. “Prepetition Facility” means loans made by the Prepetition Lenders pursuant to the Prepetition Credit Agreement.
113. “Prepetition L/C Collateral” shall have the meaning set forth in Section III.A.3(b). of this Combined Plan and Disclosure Statement.
114. “Prepetition L/C Credit Agreement” shall have the meaning set forth in Section III.A.3(b). of this Combined Plan and Disclosure Statement.
2 A copy of this Combined
Plan and Disclosure Statement, the Confirmation Hearing Notice, and the Plan Supplement (once filed) are or will be available free of charge on the
website maintained by Prime Clerk, at http://cases.primeclerk.com/rentech. Physical copies of this Combined Plan and Disclosure Statement, the Confirmation Hearing Notice, and the Plan Supplement can be obtained by contacting Prime Clerk at
(866) 365-3445.
16
115. “Prepetition L/C Liens” shall have the meaning set forth in Section III.A.3(b). of this Combined Plan and Disclosure
Statement.
116. “Prepetition L/C Obligations” shall have the meaning set forth in Section
III.A.3(b). of this Combined Plan and Disclosure Statement.
117. “Prepetition L/C
Security Agreement” shall have the meaning set forth in
Section III.A.3(b). of this Combined Plan and Disclosure Statement.
118. “Prepetition Lenders” means the lenders party from time to time to the
Prepetition Credit Agreement.
119. “Prepetition Liens” shall have
the meaning set forth in Section III.A.3(b) of this
Combined Plan and Disclosure Statement.
120. “Prepetition Obligations” shall have the meaning set forth in Section III.A.3(b). of this Combined Plan and Disclosure Statement.
121. “Prepetition Term Loan Borrower” shall have the meaning set forth in Section
III.A.3(a). of this Combined Plan and Disclosure Statement.
122.
“Prepetition Term Loan Collateral” shall have the meaning set forth in Section
III.A.3(a). of this Combined Plan and Disclosure Statement.
123. “Prepetition Term Loan Documents” shall have the meaning set forth in
Section
III.A.3(a). of this Combined Plan and Disclosure Statement.
124. “Prepetition Term Loan Guaranty” shall have the meaning set forth in Section
III.A.3(a). of this Combined Plan and Disclosure Statement.
125. “Prepetition Term Loan
Liens” shall have the meaning set forth in Section
III.A.3(a). of this Combined Plan and Disclosure Statement.
126. “Prepetition Term Loan Obligations” shall have the meaning set forth in
Section III.A.3(a)(2). of this Combined Plan and Disclosure Statement.
127. “Prepetition
Term Loan Security Agreement” shall have the meaning set forth in Section III.A.3(a). of this Combined Plan and Disclosure Statement.
128. “Prime
Clerk” means Prime Clerk LLC, the Debtors’ claims and noticing agent and voting agent.
129. “Priority Non-Tax Claim” means a Claim that is
accorded priority in right of payment under Bankruptcy Code Section 507, other than a Priority Tax Claim or an Administrative Expense Claim.
130.
“Priority Tax Claim” means a Claim that is entitled to priority under Bankruptcy
Code Section 507(a)(8).
131. “Privilege” means the attorney-client privilege, work product protections or other immunities (including without limitation those related to common interests or
joint defense with other parties), or protections from disclosure of any kind held by the Debtors or their Estates.
132. “Pro Rata” means the proportion
that an Allowed Claim or Allowed Equity Interest in a particular Class bears to the aggregate amount of Allowed Claims or Allowed Equity Interests in that Class.
133. “Professional” means any professional person employed in the Chapter 11 Cases pursuant to Bankruptcy Code Sections 327, 328, 363 or 1103 or
otherwise pursuant to an Order of the Bankruptcy Court.
134. “OSL” means Quebec Stevedoring Limited.
135. “Rejection Bar Date” means the deadline to file a proof of claim for damages relating to the rejection of an Executory Contract, which is the later of (a) the
General Bar Date
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or (b) 5:00 p.m. (EST) on the date that is thirty (30) days from the date that the Debtors provide written notice of the
rejection date to the affected creditor (unless the order authorizing such rejection provides otherwise).
136. “Released Claims” shall have the meaning
set forth in Section XII.D. of this
Combined Plan and Disclosure Statement.
137. “Related Persons” means, with respect to any Person, such Person’s predecessors, successors, assigns, and present and former principals,
employees, agents, officers, directors, managers, partners, members, the Professionals, and any Person claiming by or through them.
138. “Release
Opt-Out” shall have the meaning set forth in Section XII.C. of this
Combined Plan and Disclosure Statement.
139. “Released Parties” means, collectively, and in each case in their capacities as such: (a) the Debtors; (b) the Prepetition Agent; (c) the Prepetition
Lenders; (d) BMO; and (e) the Committee and its current and former members in their individual capacities as members of the Committee; and with respect to each of the foregoing entities, such entities’ predecessors, successors,
assigns, subsidiaries, affiliates, managed accounts and funds, current and former officers and directors, principals, equity holders, members, partners, managers, employees, subcontractors, agents, advisory board members, financial advisors,
attorneys, accountants, investment bankers, consultants, representatives, management companies, fund advisors (and employees thereof), and other professionals, and such entities’ respective heirs, executors, estates, servants, and nominees, in
each case in their capacity as such.
140. “Rentech” means the Non-Debtor Subsidiaries and the Debtors, collectively.
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141. “Rentech Canada” means Rentech, Inc.’s direct and indirect Canadian non-debtor subsidiaries, as well as non-Canadian
non-debtor subsidiary RTK (Luxembourg) WP S.A.R.L.
142. “Rentech Equity Interests” means all issued and
outstanding shares of common stock of Rentech, Inc.
143. “Rentech Liquidation Trust” shall have the meaning set forth in the Liquidation
Trust Agreement.
144. “Rentech Nitrogen” shall have the meaning set forth in Section
III.A.3(a). of this
Combined Plan and Disclosure Statement.
145.
“Rentech US” means Rentech, Inc., Rentech WP, and all other direct and indirect
U.S. non-debtor subsidiaries of Rentech, Inc. other than NEWP and Fulghum
US.
146. “Rentech WP” means Debtor Rentech WP U.S. Inc.
147.
“Rentech WP Equity Interests” means all issued and outstanding shares of common stock of Rentech WP.
148. “RNP” shall have the meaning set
forth in Section III.A.3(a)(1). of this
Combined Plan and Disclosure Statement.
149. “RPA” means RPA Advisors, LLC, the Debtors’ financial advisor.
150. “RTK WP Canada” shall have the meaning set forth in Section III.A.1(a)(3). of this Combined Plan and Disclosure Statement.
151. “RTK WP2 Canada” means RTK WP2 Canada, ULC, an unlimited liability
company
incorporated in British Columbia, Canada.
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152. “Sale Motion” means Motion of the Debtors for Entry of an Order Authorizing the Debtors to Approve the Sale of Assets of
Non-Debtor Subsidiaries and the Taking of Corporate Action in Connection Therewith [Docket No. 54] filed in the Chapter 11 Cases.
153. “Schedules”
means the schedules of assets and liabilities and the statement of financial affairs Filed by each Debtor in the Chapter 11 Cases on December 29, 2017 [Docket Nos. 63 through 66], and any and all amendments and modifications thereto, including
the amendments Filed on February 23, 2018 [Docket No. 259] and March 26, 2018 [Docket No.
313].
154. “Secured Claim” means a Claim (i) that is secured by a Lien on property in which the Estates have an interest, which Lien is not subject to avoidance under the
Bankruptcy Code or otherwise invalid under the Bankruptcy Code or applicable state law, or a Claim that is subject to a valid right of the Creditor of setoff against amounts owed to the Debtors; (ii) to the extent of the value of the
Holder’s interest in the Estates’ interest in such property or to the extent of the amount subject to a valid right of setoff, as applicable; and (iii) the amount of which (A) is undisputed by the Debtors or (B) if disputed
by the Debtors, such dispute is settled by written agreement between the Debtors or the Liquidation Trustee and the Holder of such Claim or determined, resolved, or adjudicated by Final Order.
155. “Service” shall have the meaning set forth in Section III.D.l. of this Combined
Plan and Disclosure Statement.
156. “Statutory Fees” means any and
all fees payable to the U.S. Trustee pursuant to
Section 1930 of Title 28 of the United States Code and any interest thereupon.
157. “Supplemental Bar Date” means March 21, 2018, as set forth in the Amended
Notice of Supplemental Bar Date [Docket No. 266].
21
158. “Tax Information” means any information relating to the tax obligations of the Debtors or the Rentech Liquidation Trust
as determined to be needed by the Debtors or the Liquidation Trustee, as applicable, including, without limitation, a Form W-8, a Form W-9, and information or certifications from brokers for Holders of Equity Interests holding in street name
regarding the identity of such Holders and the number of Equity Interests held by such Holders as of the Effective Date.
159. “Tembec” means Tembec
(General Partnership).
160. “Unclaimed Distribution Deadline” means one hundred and twenty (120) days from the date the Liquidation Trustee and/or
the Post-Effective Date Debtors make a Distribution of Cash or other property under this Combined Plan and Disclosure Statement to a Holder of an Allowed Claim or Allowed Equity Interest.
161. “Unclaimed Distribution” means a Distribution that is not claimed by a Holder of an Allowed Claim or Allowed Equity Interest on or prior to the Unclaimed
Distribution Deadline.
162. “Unimpaired” means not Impaired.
163.
“U.S. Trustee” means the Office of the United States Trustee for the District of
Delaware.
164. “Voting Deadline” means March 28, 2018 at 5:00p.m. (EST), the deadline to deliver to Prime Clerk, so as to be actually received on such date, a properly
executed and completed Ballot.
165. “Voting Record Date” means February 14, 2018, as established by the
Bankruptcy Court pursuant to the Conditional Approval and Procedures Order.
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166. “Wawa Facility” shall have the meaning set forth in Section III.A.l(a)(3). of this
Combined Plan and Disclosure Statement.
167. “Wells Fargo” means Wells Fargo
Securities, LLC.
168. “Wind-Down Expenses” means any reasonable costs and expenses necessary to wind down the Estates and/or the Debtors after the
Effective Date, including, without limitation, any reasonable compensation and reimbursement of expenses paid to the Liquidation Trustee, professionals and consultants retained by the Liquidation Trustee, and the payment of Statutory Fees and taxes
required to be paid in connection with dissolving the Debtors.
B. Interpretation; Application of Definitions and Rules of Construction
Wherever from the context it appears appropriate, each term stated in either the singular or the plural shall include both the singular and the plural and pronouns stated in the
masculine, feminine or neuter gender shall include the masculine, feminine and neuter. Unless otherwise specified, all section, article, schedule or exhibit references in this Combined Plan and Disclosure Statement are to the respective section in,
Article of, Schedule to, or Exhibit to this Combined Plan and Disclosure Statement. The words “herein,” “hereof,” “hereto,” “hereunder” and other words of similar import refer to this Combined Plan and
Disclosure Statement as a whole and not to any particular section, subsection or clause contained in this Combined Plan and Disclosure Statement. The rules of construction contained in Bankruptcy Code Section 102 shall apply to the construction
of this Combined Plan and Disclosure Statement. A term used herein that is not defined herein, but that is used in the Bankruptcy Code, shall have the meaning ascribed to that term in the Bankruptcy Code. The headings in this Combined Plan and
Disclosure Statement are for convenience of reference only and shall not limit or otherwise affect
the provisions of this Combined Plan and Disclosure Statement.
23
III. BACKGROUND AND DISCLOSURES
On the Petition
Date, the Debtors filed voluntary petitions for relief pursuant to chapter 11 of the Bankruptcy Code initiating these Chapter 11 Cases. After the Petition Date, the Debtors have remained in possession of their assets and management of their business
as debtors-in-possession pursuant to Bankruptcy Code Sections 1107 and 1108.
A. General Background
Below is a summary of the Debtors’ business and organizational structure, and the events leading to the Debtors’ Chapter 11 filings.3 In addition, below is a summary of
certain of the key events in the Chapter 11 Cases.
1. Overview of Operations
Rentech is a wood fibre processing company with three core businesses: (i) contract wood handling and chipping services; (ii) the manufacture and sale of
wood pellets for the U.S. heating market; and (iii) the manufacture, aggregation, and sale of wood pellets for the utility and industrial power generation market. Rentech is effectively comprised of the following
segments: (1) NEWP; (2) Fulghum US; (3) Fulghum SA;4 (4) Rentech Canada;5 and (5) Rentech
US.
a. Operations
(1) Wood Handling and Chipping Services – Fulghum
The majority of Fulghum’s
customers are large pulp, paper, and packaging manufacturers who use wood chips from Fulghum’s mills to manufacture products such as
3 Further information
regarding such matters can be found in the First Day Declaration, which is
incorporated by reference herein. Copies of the First Day Declaration and all other
filings in the Chapter 11 Cases can be obtained and viewed free of charge at the following web address: http://cases.primeclerk.com/rentech.
4 Fulghum Fibres, Inc.
also owns 50% of Fulghum Fibres New Zealand Limited, which is non-operational.
5 RTK (Luxembourg) WP S.A.R.L. is the parent of many of Rentech’s Canadian
entities, and is included as part of Rentech Canada for purposes herein.
24
boxboard, containerboard, paper, and medium density fiberboard for building products. Fulghum US sells wood chips to customers in the
United States, while Fulghum SA provides services to customers in South America and sells wood chips to customers in Japan. The majority of Fulghum’s customers use wood chips from Fulghum’s 26 mills.6
Fulghum US’s revenue is primarily generated from fees under exclusive processing agreements. Each of Fulghum US’s mills typically operates under an exclusive processing
agreement with a single customer. At its mills, Fulghum US is paid a processing fee based on tons processed, with minimum volume base rates and a reduced fee rate for higher volumes.
Fulghum SA’s operations include chipping services that earn fees based on a per ton processing fee structure. Its operations also involve the sale of wood chips for export,
the local sale of bark for industrial heat and utility applications, the management of forestland, and the buying and trading of wood chips.
(2) Wood Pellets
– NEWP
NEWP, whose facilities and customers are located in the Northeastern United States,7 is one of the largest producers of wood pellets for the United
States residential and commercial heating markets. NEWP primarily sells its wood pellets to big-box and specialty retailers, including lawn and garden centers, heating supply stores, hardware stores, markets, and convenience stores. It also sells
pellets in bulk to large institutions, including schools, universities, and governmental agencies, to heat buildings.
(3) Industrial Wood Pellets-Rentech Canada
6 Fulghum US operates 22 wood chipping mills in the United States and Fulghum SA operates four wood chipping mills in South America.
7 NEWP’s facilities are located in Jaffrey, New Hampshire, Deposit, New York, Schuyler, New York, and
Youngsville, Pennsylvania.
25
Rentech Canada’s wood pellet business consists of its wood pellet production facility in Wawa, Ontario (the “Wawa
Facility”) and used to include the Atikokan Facility before it was sold by RTK WP2 Canada, an unlimited liability company incorporated in British Columbia, Canada, on January 22, 2018. The Wawa Facility is owned by RTK WP Canada, ULC
(“RTK WP Canada”), an unlimited liability company incorporated in British Columbia, Canada. The wood pellets produced at the Atikokan Facility were used primarily for utility power generation in Canada, while the wood pellets produced at
the Wawa Facility were used primarily for utility power generation in the United Kingdom.
The Wawa Facility experienced significant equipment and operating
challenges subsequent to the replacement of problematic conveyors. Ultimately, Rentech concluded that it was not economical to pursue additional capital investments in the Wawa Facility or to continue to operate the facility given the substantial
penalties that were continuing to accrue under the Drax Contract because the Wawa Facility was unable to operate at full capacity. In February
2017, Rentech
decided to idle the Wawa Facility and reduce production at the Atikokan Facility because, among other reasons: (i) Rentech Canada was experiencing difficulty ramping up production and additional capital would have been required to increase
production to levels near the design capacity of the facilities; (ii) projected operating costs exceeded original expectations; (iii) there was uncertainty regarding future profitability of the facilities; and (iv) there were
significant equipment issues at the Wawa Facility.8
i) Winding Down of Rentech Canada
The Wawa Facility is subject to a number of construction lien claims, and the assets of RTK WP Canada are secured in favor of the Prepetition Agent. RTK WP Canada
8 Although the Wawa Facility is idled, a small workforce remains in place to maintain the facility, so that it can resume operations with minimal costs and time.
26
submitted an application to the Ontario Superior Court of Justice requesting an order appointing a receiver over its assets, including
the Wawa Facility, which is RTK WP Canada’s only asset with significant value. Grant Thornton Limited is serving as the receiver in RTK WP Canada’s receivership proceeding, Court File No. CV-17-588590-00CL. The Wawa Facility is expected to
be liquidated within this receivership in 2018. The proceeds from the sale will be used to pay the construction lien claimants. Rentech does not anticipate that proceeds from this liquidation will exceed the amounts owing to RTK WP Canada’s
secured creditors.
Certain proceeds of the sale of the Atikokan Facility were deposited into trust to satisfy the disputed claim of a construction lien claimant
pending the resolution of such claim and remaining proceeds were paid to the Prepetition Agent, who has a lien on all of the assets of RTK WP2 Canada.
b. Offices
and Employees
The Debtors have 13 full-time employees, eight of whom work at the Debtors’ offices in Los Angeles, California, two of whom work at the
Debtors’ offices in Jaffrey, New Hampshire, two of whom work at the Debtors’ offices in Atlanta, Georgia, and one of whom works remotely from Manhattan Beach, California. The Debtors’ employees provide financial, accounting, legal,
human resource, and other administrative services that support Rentech’s operating entities.9 None of the Debtors’ employees are represented by a labor union.
2. Corporate Structure
Rentech, Inc. was incorporated under the laws of the state of Colorado
on December 18, 1981. Rentech, Inc. is the direct parent of Rentech WP and directly or indirectly
9 Rentech leases 600 square feet of office space in
Washington, DC, where it previously had its headquarters, and 900 square feet in Los Angeles, California. Rentech Canada, Fulghum, and NEWP lease office space in Thunder Bay, Ontario, Augusta, Georgia, and Jaffrey, New Hampshire, respectively.
27
owns the Non-Debtor Subsidiaries. Rentech, Inc. is a public holding company, and its operations relate to the governance and operation
of the Rentech organization as a whole.
Rentech WP, which was incorporated under the laws of the state of Delaware on January 24, 2013, is a wholly owned
subsidiary of Rentech, Inc. and the parent of Fulghum US, Fulghum SA, NEWP, and certain other Non-Debtor Subsidiaries. Rentech WP is a holding company and has no operations or employees.
a. Initial Public Offering and Listing of Common Stock
In April 1991, Rentech, Inc. completed
an initial public offering of its common stock and was listed on the Nasdaq Capital Market (formerly the Nasdaq SmallCap Market) under the symbol “RNTK”. On June 17, 1999, Rentech, Inc.‘s symbol on the Nasdaq Capital Market
changed to “RNTKC”. From August 17, 1999 to April 4, 2000, Rentech, Inc. traded on the OTC Bulletin Board under the symbol “RNTK”. From April 5, 2000 to August 12, 2013, the stock traded on the NYSE American Stock
Exchange (formerly the American Stock Exchange and NYSE Alternext U.S.) under the symbol “RTK”. From August 13, 2013 to October 13,
2017, the
stock traded on the Nasdaq Capital Market under that same symbol. On October 16,
2017, the listing of Rentech, Inc.’s shares was transferred to the OTCQB
Market, where they are currently trading under the symbol “RTKH”.
As of December 13, 2017, Rentech, Inc. had (i) approximately
23.2 million common shares outstanding, of which approximately 331,024 were held by members of Rentech, Inc.’s Board of Directors and its named executive officers, and (ii) approximately 1.8 million shares of common stock
issuable pursuant to stock options, stock warrants, and restricted stock
units.
28
3. The Debtors’ Secured Prepetition Indebtedness a. Prepetition Credit Agreement
Rentech Nitrogen Holdings, Inc. (the “Prepetition Term Loan Borrower” or
“Rentech Nitrogen”), a non-Debtor subsidiary of Rentech, Inc., is party to the Prepetition Credit Agreement (together with all other loan documents,
security instruments, and other documents related to, referenced in, or executed in connection with the Prepetition Credit Agreement prior to the Petition Date, the “Prepetition Term Loan Documents”) with the Prepetition Lenders and the
Prepetition Agent, pursuant to which the Prepetition Lenders made certain loans and
other financial accommodations to the Prepetition Term Loan Borrower.
In connection with the Prepetition Credit Agreement, the Debtors and certain non-
Debtor subsidiaries entered into that certain Second Amended and Restated Guaranty Agreement (the “Prepetition Term Loan Guaranty”), dated as of April 1, 2016, in favor
of the Prepetition Agent for the benefit of the Prepetition Lenders. Under the Prepetition Term Loan Guaranty, the Debtors guaranteed the Prepetition Term Loan Borrower’s payment of the Prepetition Term Loan Obligations and its performance
under the Prepetition Credit Agreement. The Debtors and certain Non-Debtor subsidiaries also entered into that certain Security Agreement (the “Prepetition Term Loan Security Agreement”), dated as of February 12, 2015, with the
Prepetition Agent, for the benefit of the Prepetition Lenders, to secure the Prepetition Term Loan Obligations of the Prepetition Term Loan Borrower.10 Pursuant to the Prepetition Term Loan Documents, the Debtors granted to the Prepetition Lenders
security interests in and liens on certain assets of the Debtors as described in the Prepetition Term Loan Security Agreement (the
10 Rentech Canada also entered
into that certain Canadian Security Agreement, dated as of February 12, 2015, with the Prepetition Agent, for the benefit of the Prepetition Lenders to secure the obligations of the Prepetition Term Loan Borrower under the Prepetition Credit
Agreement. Pursuant to the Canadian Security Agreement, Rentech Canada granted the Prepetition Lenders security interests in and liens on certain assets of Rentech Canada, as more fully described in the Prepetition Term Loan Documents.
29
“Prepetition Term Loan Liens”), including, without limitation, all (a) Accounts, (b) Chattel Paper,
(c) Commercial Tort Claims described on Schedule VI of the Prepetition Term Loan Security Agreement, (d) Commodity Accounts, (e) Contracts, (f) Deposit Accounts, (g) Documents, (h) Equipment, (i) General
Intangibles, (j) Incidental Rights, (k) Instruments, (l) Intellectual Property and Intellectual Property Licenses, (m) Inventory, (n) Investment Property, (o) Letter-of-Credit Rights, (p) Payment Intangibles,
(q) Securities Accounts (and all Investment Property held therein or credited thereto), (r) Vehicles, (s) Goods and other property not aforementioned, (t) books and records pertaining to any and/or all of the Prepetition Term
Loan Collateral, and (u) Proceeds and products of any and all of the foregoing, all Supporting Obligations in respect of any of the foregoing, and all collateral security and guarantees given by any Person with respect to any of the foregoing
(collectively, subject to certain exclusions set forth in the Prepetition Term Loan Documents, the “Prepetition Term Loan Collateral”).11
(1) The CVR
Investment and Transfer of CVR Common Units
On April 1, 2016, Rentech Nitrogen Partners, L.P. (“RNP”), a majority of which was indirectly owned by
Rentech, Inc., and Rentech Nitrogen GP, LLC merged with affiliates of CVR Partners, L.P. (“CVR”). RNP ceased to be a publicly traded company and became a wholly-owned subsidiary of CVR, a publicly traded master limited partnership that
owns and operates two nitrogen fertilizer product manufacturing facilities. Each outstanding unit of RNP was exchanged for 1.04 common units of CVR (the “CVR Common Units”) and $2.57 of cash. Rentech received merger consideration of $59.8
million in cash and approximately 24.2 million CVR Common Units. After consummating the transaction, Rentech transferred approximately 17 million CVR Common Units and $10 million in cash to certain funds managed by or affiliated
II All capitalized terms used in this Paragraph and not otherwise defined herein shall have the meanings ascribed to such term in the Prepetition Term Loan
Security Agreement.
30
with GSO Capital Partners LP (“GSO”)12 to (i) repurchase and retire $100 million of Rentech, Inc.’s Series E
Convertible Preferred Stock held by such funds and (ii) repay approximately $41.7 million under the Prepetition Credit Agreement. The CVR transaction allowed Rentech to monetize a portion of its investment in RNP, to provide a method to
de-lever the business and to provide additional liquidity for Rentech’s wood fibre operations, including additional costs being incurred in Canada.
On
November 30, 2017, the Prepetition Term Loan Borrower, entered into that certain Share Exchange Agreement (together with the other documents related to, referenced in, or executed in connection with the Share Exchange Agreement prior to the
Petition Date, the “Exchange Agreement”), with the Prepetition Lenders and the Prepetition Agent. Pursuant to the Exchange Agreement, the Prepetition Term Loan Borrower transferred its remaining 7,187,630 CVR Common Units to certain funds
managed by or affiliated with GSO to satisfy $22,396,682.35 of the outstanding Prepetition Term Loan Obligations and the accrued and unpaid interest and fees thereon (the “CVR Unit Transfer”).
(2) Prepetition Term Loan Obligations
As of the Petition Date, the aggregate outstanding
principal amount under the Prepetition Term Loan Documents was approximately $19.5 million and the accrued and unpaid interest was $366,420.19 (such amounts, together with any amounts incurred or accrued but unpaid prior to the Petition Date in
accordance with the Prepetition Term Loan Documents, including but not limited to, accrued and unpaid interest, any fees, expenses and disbursements, treasury, cash management, derivative obligations, indemnification obligations, and other charges,
amounts and costs of whatever nature owing, whether or not contingent, whenever
12 GSO manages or is affiliated with the Prepetition Lenders.
31
arising, accrued, accruing, due, owing, or chargeable in respect of any of the Debtors’ obligations pursuant to the Prepetition
Term Loan Documents, collectively, the “Prepetition Term Loan Obligations”).
b. Prepetition L/C Credit Agreement
Rentech, Inc. is also party to that certain Credit Agreement, dated as of November 25, 2013 (as amended, restated, supplemented, or otherwise modified from time to time, the
“Prepetition L/C Credit Agreement”, and, together with all other loan documents, security instruments, and other documents related to, referenced in, or executed in connection with the Prepetition L/C Credit Agreement prior to the Petition
Date, the “Prepetition L/C Documents” and, together with the Prepetition Term Loan Documents, the “Prepetition Documents”), with BMO, pursuant to which BMO agreed to extend $10 million of revolving credit to Rentech, Inc., which
Rentech, Inc. was able to utilize in the form of standby letters of credit issued by BMO (the “Letters of Credit”) for the account of Rentech, Inc. and its Subsidiaries (as defined in the Prepetition L/C Credit Agreement).13
To secure the Obligations (as defined in the Prepetition L/C Credit Agreement), Rentech, Inc. entered into that certain Security Agreement (the “Prepetition L/C Security
Agreement”), dated as of March 2, 2015, with BMO. Pursuant to the Prepetition L/C Security Agreement, Rentech, Inc. granted to BMO security interests in and liens on certain of assets of Rentech, Inc. as described in the Prepetition L/C
Security Agreement (the “Prepetition L/C Liens” and, together with the Prepetition Term Loan Liens, the “Prepetition Liens”), including, without limitation, all (a) Accounts, (b) Chattel Paper, (c) Commercial Tort
Claims described on
13 Under the Prepetition L/C Credit Agreement, Rentech, Inc. was also required to pay (i) a letter of credit fee of 3.75% per annum
on the daily average face amount of the letters of credit outstanding during the preceding calendar quarter and (ii) a commitment fee on the average daily undrawn portion of the credit facility at a rate equal to 0.75% per annum.
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Schedule VI of the Prepetition L/C Security Agreement, (d) Commodity Accounts, (e) Contracts, (f) Deposit Accounts,
(g) Documents, (h) Equipment, (i) General Intangibles, (j) Incidental Rights, (k) Instruments, (I) Intellectual Property and Intellectual Property Licenses, (m) Inventory, (n) Investment Property,
(o) Letter-of-Credit Rights, (p) Payment Intangibles, (q) Securities Accounts (and all Investment Property held therein or credited thereto), (r) Vehicles, (s) Goods and other property not aforementioned, (t) books and
records pertaining to any and/or all of the Prepetition L/C Collateral, and (u) Proceeds and products of any and all of the foregoing, all Supporting Obligations in respect of any of the foregoing, and all collateral security and guarantees
given by any Person with respect to any of the foregoing (collectively, subject to certain exclusions set forth in the Prepetition L/C Documents, the “Prepetition L/C Collateral”14 and, together with the Prepetition Term Loan Collateral,
the “Prepetition Collateral”).15
On October 17, 2017, BMO provided Rentech, Inc. with notice that the Prepetition L/C Credit Agreement would not be
extended beyond November 25, 2017. The aggregate outstanding principal amount under the Prepetition L/C Credit Agreement is approximately $455,000 (the “Prepetition L/C Obligations” and, together with the Prepetition Term Loan
Obligations, the “Prepetition Obligations”). No Letters of Credit remain outstanding and all Prepetition Obligations (other than certain fees incurred by the Prepetition Lenders (the “Outstanding Fees”)) were repaid in March
2018, and the Debtors expect to pay all undisputed Outstanding Fees prior to the Effective Date.
14 The Prepetition Agent and BMO are parties to that certain Pari
Passu Intercreditor Agreement (the “Intercreditor Agreement”, dated as of March 2, 2015 (as amended, restated, supplemented, or otherwise modified from time to time), wherein the Prepetition Agent and BMO set forth their respective
rights and remedies in respect of the Prepetition Collateral.
I5 All capitalized terms used in this Paragraph and not otherwise defined herein shall have the
meanings
ascribed to such term in the Prepetition L/C Security Agreement.
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B. Events Precipitating the Chapter 11 Filing
In
early 2013, Rentech, Inc.’s senior management and board of directors made the strategic decision to shift its businesses from focusing on development and commercialization of certain alternative energy technologies to the development of a
business in wood fibre processing for the production of high-quality wood chips and pellets. Through its wholly owned subsidiaries Fulghum US and Fulghum SA, which Rentech acquired in 2013 for a purchase price of approximately $64.2 million in cash,
including approximately $3.3 million used to retire existing debt, it provided wood chipping services and manufactured wood chips for, and sold wood chips to, specialty paper producers. Through the development and operation of the Wawa Facility, in
2015 and 2016 Rentech sold wood pellets to Drax for its production of power in the United Kingdom. Beginning in 2015, the Atikokan Facility sold wood pellets to Drax and OPG in northern Ontario, Canada for power generation. In May 2014, Rentech
acquired NEWP, which sells wood chips to residential customers in the Northeastern United States, for a purchase price of $40.4 million in cash, including earn-out consideration of up to $5.0 million.
Rentech raised a substantial amount of capital through debt and equity offerings that it used to complete the acquisitions of Fulghum and NEWP, and to develop and construct the
Canadian operations in Wawa and Atikokan. One of the larger financings was provided by the Prepetition Lenders pursuant to the Prepetition Credit Agreement.
The
cost to develop and construct the Canadian facilities exceeded Rentech’s original estimates by almost two times, and the amount of time spent constructing the Canadian facilities was substantially longer than Rentech’s original estimates.
The Atikokan Facility was designed to produce approximately 100,000 metric tonnes of wood pellets per year, and although ultimately able to successfully operate at rates of approximately 90% of production capacity, the
Atikokan Facility began production much later than originally planned. The Wawa Facility was
34
designed to produce between 400,000 to 450,000 metric tonnes of wood pellets per year, but it never successfully operated at rates of
more than 40% of design capacity for limited periods of time. RTK WP Canada and RTK WP2 Canada entered into take or pay contracts for the wood pellets they produced. Those contracts, if not fulfilled, would result in substantial penalties for RTK WP
Canada and RTK WP2 Canada. Under the Drax contract (the “Drax Contract”), the Wawa Facility was supposed to begin delivering wood pellets in the fourth quarter of 2014. The price of the pellets was determined based on a formula that
depended upon movement of fuel prices, fibre prices, and estimated operating costs. The penalties were to be equal to the costs (if any) that a buyer incurred in fulfilling missed production from alternative sources. RTK WP Canada also entered into
a contract with QSL to reimburse QSL for costs relating to (i) building storage for pellets that were transported to the port of Quebec and (ii) the loading and unloading equipment that loaded vessels with pellets to be shipped to the
United Kingdom for power production. In addition, RTK WP Canada entered into multiple contracts for the supply of fibre to the Wawa Facility.
Rentech, Inc.
guaranteed the obligations arising under some of the larger contracts needed for the Canadian operations, including the contracts with QSL, Canadian National Railway, Drax, OPG, and Tembec. The total contingent obligations for Rentech, Inc. related
to these guarantees is in the tens of millions of dollars.
Production at the Wawa Facility never reached anything near what was required under the Drax Contract.
Further, the costs for Rentech to rectify certain engineering, design and construction problems (which ultimately led to litigation against the firms that designed and constructed the Wawa Facility which is currently stayed and will be resolved
within the pending
receivership proceeding), and to get the Wawa Facility to its design capacity, were estimated to
35
be in excess of $20 million. Although Rentech invested significant time and effort with consultants and expended approximately $15
million in an effort to fix the wood handling and conveyor systems at the Wawa Facility that were impeding the facility’s ability to reach full production capacity, Rentech does not have the capital to continue investing in the Wawa Facility,
nor is it confident that the current estimates concerning costs and the time needed to get the facility fully operational will not continue to rise. Without the benefit of economies of scale, the price formula used in the Drax Contract led to major
losses on sales of wood pellets. The Wawa Facility will not become profitable selling wood pellets unless it is able to deliver substantially more wood pellets under the Drax Contract, and, as described above, it cannot do so because of design and
construction issues. Without a method to increase production within the limited budget that Rentech had to make improvements to the Wawa Facility, there was no way for Rentech to deliver pellets to Drax and generate a profit. Further, the failure to
deliver the contracted quantity of pellets also generated penalties in the millions of dollars for RTK WP Canada Rentech. In 2016, Rentech approached Drax to discuss revisions to the pricing under the Drax Contract or for Drax to invest in the Wawa
Facility, but these discussions were unsuccessful.
Ultimately, in early 2017, Rentech elected to shutter the Wawa Facility. For more than a year, Rentech attempted
to fmd buyers for the Wawa Facility, but it was unable to do so. Although Wawa has been idled, substantial carrying costs have continued to accrue, including those costs relating to certain minimum requirements for buying power and mandatory
reimbursements to QSL. In late 2017, the Drax Contract and related Rentech guarantee was terminated, but the costs combined with the failure to find a buyer made it necessary for Rentech
to put the Wawa Facility into receivership.
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Rentech, Inc., as a publicly traded company with multiple business units, incurs substantial selling, general, and administrative costs
for maintaining accounting, finance, and legal personnel necessary to consolidate the results of multiple businesses (domestic and foreign) for public company reporting. In addition, although Rentech, Inc. initiated massive cost cutting protocols
over the past approximately 18 to 24 months, as a public company, it has certain costs associated with its financial reporting. Finally, the principal balance under the Prepetition Credit Agreement continues to accrue regular interest.
Although the NEWP and Fulghum businesses are self-sustaining, they are not profitable enough to generate enough cash to pay for Rentech’s corporate costs and the carrying
costs associated with the Wawa Facility’s failure to operate at full capacity. As a result of its dwindling cash position, Rentech was forced to seek relief under chapter 11 of the Bankruptcy Code.
C. The Chapter 11 Cases
1. First Day Motions
On the Petition Date, in addition to the voluntary petitions for relief filed by the Debtors, the Debtors filed a number of motions and applications seeking certain “first
day” relief. A summary of the relief sought pursuant to the First Day Motions is set forth below:
•Joint Administration Motion. Pursuant to the
Debtors’ Motion for Order Under Fed. R. Bankr. P. 1015 and Del. Bankr. L.R. 1015-1 Authorizing Joint Administration of Chapter 11 Cases [Docket No. 2], the Bankruptcy Court entered an Order approving the joint administration of the Chapter 11
Cases for procedural purposes only [Docket No. 33].
•Application to Retain Prime Clerk LLC. Pursuant to the Debtor’s Application for Appointment of
Prime Clerk LLC as Claims and Noticing Agent [Docket No. 3], the Bankruptcy Court entered an Order appointing Prime Clerk LLC as claims and noticing agent for the Chapter 11 Cases [Docket No. 36].
• Utilities Motion. Pursuant to the Motion of Debtors for Interim and Final Orders
(A)
Prohibiting Utility Providers from Altering, Refusing or Discontinuing
37
Service; (B) Approving the Debtors’ Proposed Adequate Assurance of Payment for Postpetition Services; and
(C) Establishing Procedures for Resolving Requests for Additional Adequate Assurance Payment [Docket No. 3], the Bankruptcy Court entered Orders, among other things, prohibiting Utility Providers16 from altering, refusing or discontinuing
service, approving the Debtors’ Proposed Adequate Assurance of payment for postpetition services, and established procedures for resolving requests for additional adequate assurance of payment [Docket Nos. 39 and 125].
• Insurance Motion. Pursuant to the Debtors’ Motion for Interim and Final Orders Under 11 U.S.C. §§ 105 and 363 and Fed. R. Bankr. P. 6003 Authorizing Debtors
to (A) Pay Prepetition Insurance Obligations and Maintain Postpetition Insurance Coverage, (B) Continue to Honor Insurance Premium Finance Agreements, (C) Continue to Grant Security Interests to an Insurance Premium Finance Company,
(D) to Continue to Honor Surety Bond Obligations, and (E) Authorize Banks to Honor and Process Checks and Electronic Transfer Requests Related Thereto [Docket No. 6], the Bankruptcy Court entered Orders authorizing, among other things, the
payment of prepetition obligations incurred in the ordinary course of business in connection with the Debtors’ various insurance policies [Docket Nos. 38 and 137].
• Tax Motion. Pursuant to the Debtors’ Motion for Order Under 11 U.S.C. §§
105(a), 363(b), 506(a), 507(a)(8), 541, 1107(a), and 1108 and Fed. R. Bankr. P.
6003 and 6004 (I) Authorizing Payment of Prepetition Taxes and Fees, and (II) Authorizing the Banks to Honor and Process Check and Electronic Transfer
Requests Related Thereto [Docket No.5], the Bankruptcy Court entered an Order authorizing the Debtors to pay certain prepetition Taxes and Fees owing to the Taxing Authorities [Docket No. 139].
• Cash Management Motion. Pursuant to the Motion of Debtors for Interim and
Final Orders
Pursuant to 11 U.S.C. §§ 105(a), 345, and 363, Fed. R. Bankr. P. 6003 and 6004, and Del. Bankr. L.R. 2015-2 (I) Authorizing Continued Use of Existing Cash Management System, Including Maintenance of Existing Bank Accounts, Checks, and
Business Forms, (II) Authorizing Continuation of Existing Deposit Practices, and (III) Approving the Continuation of Certain Ordinary Course Intercompany Transactions with the Non-Debtor Subsidiaries [Docket No. 10], the Bankruptcy Court
entered Orders, among other things, (i) authorizing the Debtors to continue to maintain and use their existing cash management system, (ii) granting the Debtors a waiver of certain bank account and related requirements of the U.S. Trustee
to the extent that such requirements are inconsistent with the Debtors’ practices under their existing cash management system, and (iii) authorizing the Debtors to continue to maintain and use their existing deposit practices
notwithstanding the provisions of Bankruptcy Code Section 345(b) [Docket Nos. 35 and 135].
16 Capitalized terms used in Section III.C.l. but not otherwise
defined herein shall have the meanings set forth
in the Motions and Orders in which the capitalized terms are defined, unless otherwise indicated herein.
38
Wage Motion. Pursuant to the Motion of Debtors for Entry of Interim and Final Orders (A) Authorizing Payment of Certain Prepetition
Workforce Claims, Including Wages, Salaries, and Other Compensation, (B) Authorizing Payment of Certain Employee Benefits and Confirming Right to Continue Employee Benefits on Postpetition Basis, (C) Authorizing Payment of Reimbursement to
Employees for Expenses Incurred Prepetition, (D) Authorizing Payment of Withholding and Payroll-Related Taxes, (E) Authorizing Payment of Workers’ Compensation Obligations, and (F) Authorizing Payment of Prepetition Claims Owing
to Administrators and Third-Party Providers [Docket No. 7], the Bankruptcy Court entered Orders authorizing: (i) payment of certain prepetition workforce claims; (ii) payment of certain employee benefits and confirming the
Debtors’ right to continue employee benefits on a postpetition basis; (iii) payment of reimbursement to employees for expenses incurred prepetition; (iv) payment of withholding and payroll-related taxes; (v) payment of workers’
compensation obligations; and (vi) payment of prepetition claims owing to administrators and third-party providers [Docket Nos. 37 and 136].
Cash Collateral
Motion. Pursuant to the Motion of Debtors for Interim and Final Orders Pursuant to 11 U.S.C. §§ 105, 361, 362 and 363 (I) Authorizing Use of Cash Collateral, (II) Granting Adequate Protection, (Ill) Scheduling a Final Hearing Pursuant
to Bankruptcy Rule 4001(b) and Local Rule 4001-2 and (IV) Granting Related Relief [Docket No. 12], the Bankruptcy Court entered Orders, among other things, (i) authorizing the Debtors to use Cash Collateral pursuant to an agreed budget for a
specified period of time; and (ii) granting adequate protection to the Prepetition Lenders and BMO [Docket Nos. 4I and 206].
Equity Trading Motion. Pursuant
to the Debtors’ Motion for Order Pursuant to 11 U.S.C. §§ 105(a), 362(a)(3) and 541 Establishing Notice and Hearing Procedures for Trading of Rentech Equity Securities [Docket No. 8], the Bankruptcy Court entered Orders establishing
notice and hearing procedures that must be satisfied before certain transfers of equity securities in Rentech, Inc. are deemed effective [Docket Nos. 34 and 178].
2. Appointment of the Committee and Retention of Committee Professionals
On
January 3, 20I8, the U.S. Trustee appointed a Committee of Unsecured Creditors (the “Committee”) pursuant to Bankruptcy Code Section 1102(a)(1) in connection with these Chapter 11 Cases [Docket No. 72]. The Committee selected
Lowenstein Sandler LLP
and Whiteford Taylor Preston LLC as its counsel, and Teneo Capital as its financial advisor.
39
3. Employment of Professionals and Advisors
The
Debtors have received authorization to retain Young Conaway Stargatt & Taylor, LLP and Latham & Watkins LLP, as bankruptcy co-counsel to the Debtors. The Debtors have also received authorization to retain RPA as financial advisor
to the Debtors and Prime Clerk as administrative advisor to the Debtors. In addition, the Debtors intend to retain several ordinary course professionals, including CT Corporation, Frederic W. Cook & Co., Inc., Greenberg Traurig,
Holland & Hart LLP, Lapointe Rosenstein Marchand Melancon, S.E.N.C.R.L, Marsh USA Inc., Norton Rose Fulbright, Parker, Hudson, Rainer & Dobbs LLP, Porter Hedges LLP, Sensiba San Filippo, LLP, Stikeman Elliot, LLP, and Kevin R.
McSpadden in the Chapter 11 Cases pursuant to the procedures set forth in the Ordinary Course Professionals Order.
4. Claims Process and Bar Date
a. Schedules and Statements
Each of the Debtors Filed its Schedules with the Bankruptcy Court
on December 29, 2017 [Docket Nos. 63 through 66].17 The Debtors Filed amended Schedules with the Bankruptcy Court on February 23, 2018 [Docket No. 259] and March 26, 2018 [Docket No. 313].
b. Bar Dates
Notice of the deadlines approved by the Bankruptcy Court in the Bar Date Order
was served on all potential creditors of the Debtors’ Estates within three (3) business days after the entry of the Bar Date Order. On February 28, 2018, notice of the Supplemental Bar Date was
17 A copy of the Schedules are available free of charge on the website maintained by Prime Clerk, at http://cases.primeclerk.com/rentech.
40
served on parties holding unsecured Claims that were added to the Debtors’ Schedules subsequent to the Filing of the Debtors’
amended Schedules.
D. Certain Federal Income Tax Consequences
1. In General
The following discussion summarizes certain material U.S. federal income tax consequences to Holders entitled to vote on this Combined Plan and Disclosure
Statement. This discussion is based on current provisions of the U.S. Internal Revenue Code of 1986, as amended (the “IRC”), applicable Treasury Regulations, judicial authority, and current administrative rulings and pronouncements of the
U.S. Internal Revenue Service (the “Service”). There can be no assurance that the Service will not take a contrary view, no ruling from the Service has been or will be sought nor will any counsel provide a legal opinion as to any of the
expected U.S. federal income tax consequences set forth below.
Legislative, judicial, or administrative changes or interpretations may be forthcoming that could
alter or modify the statements and conclusions set forth herein. Any such changes or interpretations may or may not be retroactive and could affect the tax consequences to the Holders of Claims, the Rentech Liquidation Trust, or the Debtors. It
cannot be predicted at this time whether any tax legislation will be enacted or, if enacted, whether any tax law changes contained therein would affect the U.S. federal income tax consequences described herein.
The following summary is for general information only. The tax treatment of a Holder may vary depending upon such Holder’s particular situation. This summary does not address
all of the tax consequences that may be relevant to a Holder, including any alternative minimum tax consequences, and does not address the tax consequences to a Holder that has made an agreement to resolve its Claim in a manner not explicitly
provided for in this Combined Plan and Disclosure Statement. This summary also does not address the U.S. federal income tax
41
consequences to persons not entitled to vote on this Combined Plan and Disclosure Statement or Holders subject to special treatment
under the U.S. federal income tax laws, such as brokers or dealers in securities or currencies, certain securities traders, tax-exempt entities, financial institutions, insurance companies, foreign persons, partnerships and other pass-through
entities, Holders that hold Claims as a position in a “straddle” or as part of a “synthetic security,” “hedging,” “conversion,” or other integrated transaction, Holders that have a “functional
currency” other than the United States dollar, and Holders that have acquired Claims in connection with the performance of services. The following summary assumes the Claims are held by Holders as “capital assets” within the meaning
of Section 1221 of the IRC and all Claims denominated as indebtedness are properly treated as debt for U.S. federal income tax purposes.
The tax treatment of
Holders and the character, amount, and timing of income, gain, or loss recognized as a consequence of this Combined Plan and Disclosure Statement, and the Distributions provided for by this Combined Plan and Disclosure Statement may vary, depending
upon, among other things: (i) whether the Claim (or portion thereof) constitutes a Claim for principal or interest; (ii) the type of consideration received by the Holder in exchange for the Claim and whether the Holder receives
Distributions under this Combined Plan and Disclosure Statement in more than one taxable year; (iii) whether the Holder is a citizen or resident of the United States for tax purposes, is otherwise subject to U.S. federal income tax on a net
basis, or falls into any special class of taxpayers, such as those excluded from this discussion as noted above; (iv) the manner in which the Holder acquired the Claim; (v) the length of time the Claim has been held; (vi) whether the
Claim was acquired at a discount; (vii) whether the Holder has taken a bad debt deduction with respect to the Claim (or any portion thereof) in the current or prior years; (viii) whether the Holder has previously included in income
42
accrued but unpaid interest with respect to the Claim; (ix) the method of tax accounting of the Holder; (x) whether the Claim
is an installment obligation for U.S. federal income tax purposes; and (xi) whether the “market discount” rules are applicable to the Holder. Therefore, each Holder should consult its tax advisor for information that may be relevant
to its particular situation and circumstances, and the particular tax consequences to such Holder of the transactions contemplated by this Combined Plan and Disclosure Statement.
THE FOLLOWING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF CERTAIN U.S. FEDERAL TAX CONSEQUENCES OF THIS COMBINED PLAN AND DISCLOSURE STATEMENT AND IS NOT A SUBSTITUTE FOR CAREFUL
TAX PLANNING WITH A TAX PROFESSIONAL. THE FOLLOWING DISCUSSION IS FOR INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. THE TAX CONSEQUENCES ARE IN MANY CASES UNCERTAIN AND MAY VARY DEPENDING ON A HOLDER’S PARTICULAR CIRCUMSTANCES. ACCORDINGLY,
EACH HOLDER IS STRONGLY URGED TO CONSULT ITS TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE, LOCAL, AND APPLICABLE NON-U.S. INCOME AND OTHER TAX CONSEQUENCES OF THIS COMBINED PLAN AND DISCLOSURE STATEMENT.
2. U.S. Federal Income Tax Consequences to the Debtors
If there is a discharge of a debt
obligation by a debtor (or, in the case of indebtedness with multiple obligors, indebtedness that is allocable to such debtor) for an amount less than the adjusted issue price (in most cases, the amount the debtor received on incurring the
obligation, with certain adjustments), such discharge generally would give rise to cancellation of debt (“COD”) income, which must be included in the debtor’s income (or, in the case of a debtor that is treated as a disregarded entity
for U.S. federal income tax purposes, in the income of its
43
owner). However, the Debtors should be able to utilize a special tax provision which excludes from taxable income COD income realized on
debts discharged in a chapter 11 case (the “Bankruptcy Exception”).
Under Section 108(b) of the IRC and Treasury Regulations that apply to members
of a consolidated group, each Debtor that is not treated as a disregarded entity for U.S. federal income tax purposes and that does not recognize COD income pursuant to the Bankruptcy Exception will be required to reduce certain tax attributes,
including consolidated attributes, such as consolidated net operating losses and net operating loss carryforwards (“NOLs”) and certain other losses, credits and carryforwards, if any, attributable to such Debtor, attributes that arose in
separate return limitation years of such Debtor (if any), and the Debtor’s tax basis in its assets (but not below the amount of its liabilities remaining immediately after the discharge of indebtedness), in an amount generally equal to the
amount of such Debtor’s COD income excluded from taxable income under the Bankruptcy Exception. A “look-through rule” applies when asset basis reduction reduces the basis of stock of another member of the consolidated group and
requires corresponding adjustments to be made to the attributes attributable to the lower-tier member.
As a result of the required attribute reduction resulting
from the discharge of indebtedness, the Debtors believe that a portion of the NOLs (and alternative minimum tax NOLs) of the Debtors will be eliminated after consummation of this Combined Plan and Disclosure Statement. Any remaining NOLs allocable
to the Debtors may be subject to one or more usage limitations imposed by the IRC or the Treasury Regulations promulgated thereunder.
The Non-Debtor Subsidiary
Sales, the transfer of the Debtors’ assets to the Rentech Liquidation Trust, and the liquidation of the Debtors may trigger income or gain
44
recognition by the Debtors (apart from any COD income, which would be subject to the Bankruptcy Exception as described above). However,
the Debtors’ existing NOLs and capital losses (prior to being reduced as a result of any attribute reduction) should generally first be available to offset any such income or gain recognized in the taxable year that includes the Effective Date
(with any capital losses available to only offset capital gains). If such NOLs and capital losses do not offset all such income or gain, the Debtors would owe regular U.S. federal income tax with respect to taxable years ending after the Petition
Date which could reduce the amounts otherwise available for distribution to Holders under this Combined Plan and Disclosure Statement. The Debtors have yet to determine whether or not they will incur any regular U.S. federal income tax with respect
to such tax years. In addition, if the Service were to prevail in assessing additional U.S. federal income tax for any of these years or for tax years ending prior to the Petition Date, such tax liabilities could also result in a reduction in the
amounts otherwise available for distribution under this Combined Plan and Disclosure Statement.
A corporation or a consolidated group of corporations may incur
alternative minimum tax (“AMT”) liability even where a NOL is generated for regular corporate income tax purposes or where NOL carryovers and certain other tax attributes are sufficient to eliminate taxable income as computed under the
regular corporate income tax. In general, the AMT is imposed on a corporation’s alternative minimum taxable income at a twenty percent (20%) rate to the extent such tax exceeds the corporation’s regular U.S. federal income tax. For
purposes of computing taxable income for AMT purposes, certain tax deductions and other beneficial allowances allowed in computing a corporation’s regular U.S. federal income tax are modified or eliminated. In particular, even though a
corporation otherwise might be able to offset its taxable income for regular tax purposes by available NOL carryforwards, a portion of a corporation’s
45
taxable income for AMT purposes may not be offset by available NOL carryforwards (as computed for AMT purposes). The Debtors have yet to
determine whether or not they expect to incur any AMT with respect to taxable years ending after the Petition Date.
3. U.S. Federal Income Tax Treatment of the
Rentech Liquidation Trust
Except with respect to the Disputed Claims Reserve, it is intended that the Rentech Liquidation Trust will be treated as one or more
“grantor trusts” for U.S. federal income tax purposes. In general, a grantor trust is not a separate taxable entity. The Service, in Revenue Procedure 94-45, 1994-2 C.B. 684, set forth the general criteria for obtaining an advanced ruling
as to the grantor trust status of a liquidating trust under a chapter 11 plan. The Debtors are not requesting a private letter ruling regarding the status of the Rentech Liquidation Trust as a grantor trust. However, consistent with the requirements
of Revenue Procedure 94-45, the Liquidation Trust Agreement requires all relevant parties to treat, for U.S. federal income tax purposes, the transfer of the Debtors’ assets to the Rentech Liquidation Trust as (i) a transfer of such assets
to the beneficiaries of the Rentech Liquidation Trust (to the extent of the value of their respective interests in the applicable Liquidation Trust Assets) followed by (ii) a transfer of such assets by such beneficiaries to the Rentech
Liquidation Trust (to the extent of the value of their respective interests in the applicable Liquidation Trust Assets), with the beneficiaries of the Rentech Liquidation Trust being treated as the grantors and owners of the Rentech Liquidation
Trust. Each beneficiary of the Rentech Liquidation Trust will generally recognize gain (or loss) in its taxable year that includes the Effective Date in an amount equal to the difference between the amount realized in respect of its Claim and its
adjusted tax basis in such Claim. The amount realized for this purpose should generally equal the amount of Cash and the fair market value of any other assets received or deemed received for U.S. federal income tax purposes under this Combined Plan
and Disclosure Statement in respect of such Holder’s Claim. A Holder that is
46
deemed to receive for U.S. federal income tax purposes a non-Cash asset under this Combined Plan and Disclosure Statement in respect of
its Claim should generally have a tax basis in such asset in an amount equal to the fair market value of such asset on the date of its deemed receipt.
This
Combined Plan and Disclosure Statement and the Liquidation Trust Agreement generally provide that the beneficiaries of the Rentech Liquidation Trust must value the assets of the Rentech Liquidation Trust consistently with the values determined by
the Liquidation Trustee for all U.S. federal, state, local, and foreign income tax purposes. As soon as possible after the Effective Date, the Liquidation Trustee, in consultation with any financial advisors it deems appropriate, shall make a good
faith valuation of the assets transferred to the Rentech Liquidation Trust.
Consistent with the treatment of the Rentech Liquidation Trust (except with respect to
the Disputed Claims Reserve) as one or more grantor trusts, the Liquidation Trust Agreement and this Combined Plan and Disclosure Statement will require each Holder to report on its U.S. federal income tax return its allocable share of the Rentech
Liquidation Trust’s income, gain, loss, deduction and credit. Therefore, a Holder may incur a U.S. federal income tax liability with respect to its allocable share of the income of the Rentech Liquidation Trust whether or not the Rentech
Liquidation Trust has made any distributions to such Holder. The character of items of income, gain, loss, deduction, and credit to any Holder and the ability of such Holder to benefit from any deduction or losses will depend on the particular
situation of such Holder.
In general, a distribution of underlying assets from the Rentech Liquidation Trust to a beneficiary thereof (other than in respect of
distributions attributable to a reduction in the Disputed Claims Reserve) may not be taxable to such Holder because such Holders are already
47
regarded for U.S. federal income tax purposes as owning such assets. Holders are urged to consult their tax advisors regarding the
appropriate U.S. federal income tax treatment of distributions from the Rentech Liquidation Trust.
Except with respect to the Disputed Claims Reserve, the
Liquidation Trustee will file with the Service tax returns for the Rentech Liquidation Trust as one or more grantor trusts pursuant to Treasury Regulation Section 1.671-4(a) and will also send to each Holder a separate statement setting forth
such Holder’s share of items of Rentech Liquidation Trust income, gain, loss, deduction, or credit. Each such Holder will be required to report such items on its U.S. federal income tax return.
The discussion above assumes that, except with respect to the Disputed Claims Reserve, the Rentech Liquidation Trust will be respected as one or more grantor trusts for U.S.
federal income tax purposes. If the Service were to successfully challenge such classification, the U.S. federal income tax consequences to the Rentech Liquidation Trust and the beneficiaries of the Rentech Liquidation Trust could differ materially
from those discussed herein (including the potential for an entity level tax to be imposed on all income of the Rentech Liquidation Trust).
4. Disputed Claims
Reserve
Until such time as all of the beneficial interests in the Rentech Liquidation Trust can be distributed to the Holders in accordance with the terms of this
Combined Plan and Disclosure Statement, the Disputed Claims Reserve will be treated as owning a portion of the assets in the Rentech Liquidation Trust. Distributions from the Disputed Claims Reserve will be made to Holders of Disputed Claims when
such Claims are subsequently Allowed and to Holders of Allowed Claims when Disputed Claims are subsequently disallowed. The Rentech Liquidation Trust shall file all income tax returns with respect to any income attributable to the
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Disputed Claims Reserve and shall pay the federal, state, and local income taxes attributable to the Disputed Claims Reserve, based on
the items of income, gain, deduction, credit, or loss allocable thereto.
Holders should note that the tax treatment of the Disputed Claims Reserve is unclear and
should consult their tax advisors as to the tax consequences to them of the establishment of, the income on, and distributions from, the Disputed Claims Reserve.
5. U.S. Federal Income Tax Consequences to Holders of Claims
a. Holders of
Allowed Claims in Class 3
Holders of Allowed Claims in Class 3 as of the Effective Date should be treated as receiving from the Debtors their respective shares of
the applicable assets of the Rentech Liquidation Trust (other than any assets allocated to the Disputed Claims Reserve) in satisfaction of their Allowed Claims, and simultaneously transferring such assets to the Rentech Liquidation Trust.
Accordingly, a Holder of such Claim should generally recognize gain or loss in an amount equal to the amount deemed realized on the Effective Date (as described above) less its adjusted tax basis of its Claim. Additionally, such Holders should
generally recognize their allocable share of income, gain, loss, deductions and credits recognized by the Rentech Liquidation Trust on an annual basis.
Because a
Holder’s ultimate share of the assets of the Rentech Liquidation Trust based on its Allowed Claim will not be determinable on the Effective Date due to, among other things, the existence of Disputed Claims and the value of the assets at the
time of actual receipt not being ascertainable on the Effective Date, such Holder should recognize additional or offsetting gain or loss if, and to the extent that, the aggregate amount of Cash and fair market value of the assets of the Rentech
Liquidation Trust ultimately received by such Holder is greater than or less than the amount used in initially determining gain or loss in accordance with the
49
procedures described in the preceding paragraph. It is unclear when a Holder of an Allowed Claim should recognize, as an additional
amount received for purposes of computing gain or loss, an amount attributable to the disallowance of a Disputed Claim.
The character of any gain or loss as
capital gain or loss or ordinary income or loss and, in the case of capital gain or loss, as short-term or long-term, will depend on a number of factors, including: (i) the nature and origin of the Claim; (ii) the tax status of the Holder
of the Claim; (iii) whether the Claim has been held for more than one year; (iv) the extent to which the Holder previously claimed a loss or bad debt deduction with respect to the Claim; and (v) whether the Claim was acquired at a
market discount. A Holder that purchased its Claim from a prior Holder at a market discount may be subject to the market discount rules of the IRC. Under those rules (subject to a de minimis exception), assuming that such Holder has made no election
to accrue the market discount and include it in income on a current basis, any gain recognized on the exchange of such Claim generally would be characterized as ordinary income to the extent of the accrued market discount on such Claim as of the
date of the exchange.
It is possible the Service may assert that any loss should not be recognizable until the Liquidation Trustee makes its final distribution of
the assets of the Rentech Liquidation Trust. Holders should consult their tax advisors regarding the possibility that the recognition of gain or loss may be deferred until the final distribution of the assets of the Rentech Liquidation Trust.
b. Holders of Disputed Claims
Although not free from doubt, Holders of
Disputed Claims should not recognize any gain or loss on the date that the assets of the Debtors are transferred to the Rentech Liquidation Trust, but should recognize gain or loss in an amount equal to: (i) the amount of Cash and the fair
market value of any other property distributed to such Holder less (ii) the
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adjusted tax basis of its Claim when the Cash and other property is actually distributed to such Holder. However, it is possible that
such Holders may be required to recognize the fair market value of such Holder’s allocable share of the Rentech Liquidation Trust’s assets, as an amount received for purposes of computing gain or loss, either on the Effective Date or the
date such Holder’s Claim becomes an Allowed Claim.
c. Interest Income with Respect to Allowed Claims
Holders of Allowed Claims will be treated as receiving a payment of interest (includible in income in accordance with the Holder’s method of accounting for tax purposes) to
the extent that any Cash or other property received (or deemed received) pursuant to this Combined Plan and Disclosure Statement is attributable to accrued but unpaid interest, if any, on such Allowed Claims. The extent to which the receipt of Cash
or other property should be attributable to accrued but unpaid interest is unclear. The Debtors and the Rentech Liquidation Trust intend to take the position, and this Combined Plan and Disclosure Statement provides, that such Cash or property
distributed pursuant to this Combined Plan and Disclosure Statement will first be allocable to the principal amount of an Allowed Claim and then, to the extent necessary, to any accrued but unpaid interest thereon. Each Holder should consult its tax
advisor regarding the determination of the amount of consideration received under this Combined Plan and Disclosure Statement that is attributable to interest (if any). A Holder generally will be entitled to recognize a loss to the extent any
accrued interest was previously included in its gross income and is not paid in full.
6. Backup Withholding and Information Reporting
A Holder of an Allowed Claim may be subject to backup withholding (currently at the rate of 24%) with respect to any “reportable” payments received pursuant to this
Combined Plan and Disclosure Statement unless (i) such Holder is a corporation or comes within
51
certain other exempt categories and, when required, demonstrates this fact or (ii) provides a correct taxpayer identification
number, certifies as to no loss of exemption from backup withholding and complies with applicable requirements of the backup withholding rules. A Holder who does not provide a correct taxpayer identification number may be subject to penalties
imposed by the Service. Amounts withheld under the backup withholding rules may be credited against a Holder’s tax liability, and a Holder may obtain a refund of any excess amounts withheld under the backup holding rules by timely filing the
appropriate claim for refund with the Service.
The Liquidation Trustee will report annually to each Holder of an Allowed Claim and to the Service the Holder’s
share of any income, gains and losses of the Rentech Liquidation Trust during the calendar year to the extent required by law.
Treasury Regulations generally
require disclosure by a taxpayer on its U.S. federal income tax return of certain types of transactions in which the taxpayer participated, including certain transactions that result in the taxpayer recognizing a loss in excess of specified
thresholds. Each Holder should consult its tax advisor regarding these regulations and whether the transactions contemplated by this Combined Plan and Disclosure Statement would be subject to these regulations.
THE FOREGOING DISCUSSION OF CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. ACCORDINGLY, EACH HOLDER SHOULD CONSULT
ITS TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF THIS COMBINED PLAN AND DISCLOSURE STATEMENT DESCRIBED HEREIN AND THE APPLICATION OF FEDERAL, STATE, LOCAL, AND FOREIGN TAX LAWS.
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NEITHER THE DEBTORS NOR THEIR PROFESSIONALS SHALL HAVE ANY LIABILITY TO ANY PERSON OR HOLDER ARISING FROM OR RELATED TO THE U.S.
FEDERAL, STATE, LOCAL OR FOREIGN TAX CONSEQUENCES OF THIS COMBINED PLAN AND DISCLOSURE STATEMENT OR THE FOREGOING DISCUSSION.
E. Alternate Plan
If this Combined Plan and Disclosure Statement is not confirmed, the Debtors, or any other party in interest could attempt to formulate a different plan. The additional costs,
including, among other amounts, additional professional fees or asserted substantial contribution claims, all of which would constitute Administrative Expense Claims (subject to allowance), however, may be so significant that one or more parties in
interest could request that the Chapter 11 Cases be converted to chapter 7. Accordingly, the Debtors believe that this Combined Plan and Disclosure Statement enables Creditors to realize the best return under the circumstances.
F. The Non-Debtor Subsidiary Sales
During 2015 and 2016, Rentech began to experience revenue,
cash flow, and liquidity challenges due in large part to construction and operating issues with the Canadian wood pellet facilities, reduced sales for the wood pellet businesses located in the Northeastern United States operated through NEWP, and
reduced demand for the wood chipping services provided by Fulghum Fibres, Inc. in the Southeastern United States. The increasing strain on Rentech’s liquidity threatened its ability to continue to service its debts under the Prepetition Credit
Agreement and the Prepetition L/C Credit Agreement. On April 19, 2016, Rentech, Inc. engaged Wells Fargo to assist in the process of reviewing strategic alternatives to address Rentech’s liquidity needs. Specifically, Wells Fargo was retained
to assist in evaluating potential transactions involving the sale, transfer, or other
53
disposition of all or a portion of Rentech’s businesses or assets, or the equity interests in Rentech, Inc. (including a potential
tender offer, merger, consolidation, other business or strategic combination, or any recapitalization).
While working with Wells Fargo for the remainder of 2016
and the early part of 2017, there was an effort to market the Rentech businesses to a number of targeted strategic buyers deemed likely to have an interest in at least certain of the assets. Several of those potential buyers completed months of due
diligence, participated in site visits and attended management presentations with each of Rentech’s business unit heads. For various reasons, each of these parties decided to pass on the opportunity to purchase Rentech, Inc. or any of its
individual assets.
On January 30, 2017, Rentech, Inc. also retained RPA (together with Wells Fargo, the “Advisors”) to, among other things, validate
its business plans and financial forecasts, develop restructuring proposals, and conduct discussions with creditors and stakeholders. Since being engaged, the Advisors have (i) helped Rentech evaluate, identify, and implement initiatives
designed to enhance liquidity, (ii) assisted Rentech in evaluating potential transaction alternatives and strategies and in identifying financial and/or strategic institutional investors or other investors who might have been interested in
participating in a transaction, and (iii) advised Rentech as to potential mergers or acquisitions and the potential sale or other disposition of its business assets.
In early 2017, Rentech widened the field of potential buyers/investors that it approached in pursuit of strategic alternatives. On February 21, 2017, Rentech publically
announced that it was considering strategic alternatives for the Wawa Facility and Rentech as a
whole, “that may include, but are not limited to, a sale of
the Company, a merger or other
54
business combination, a sale of all or a material portion of the Company’s assets or a recapitalization”. This announcement
was made to ensure that any potentially interested parties throughout the wood processing industry or otherwise would be made aware of Rentech’s efforts to sell the business(es). Thereafter, Wells Fargo initiated a broad marketing and sale
process where multiple parties signed non-disclosure agreements with Rentech and were provided confidential information memoranda for their initial review. For the next several months, Rentech provided numerous documents to potential buyers,
conducted multiple site visits for its operations at Fulghum, at NEWP and in Canada and conducted several management meetings.
After full consideration of
Rentech’s potential strategic and financial alternatives and discussions with certain potential investors, it became clear that there were no viable out-of-court refinancing or restructuring options for
the Debtors to pursue. Faced with a lack of viable financing options and dwindling liquidity, and after extensive discussions with its Advisors, Rentech determined that (i) the sale of substantially all of the assets of (a) Fulghum US,
(b) NEWP, and (c) RTK WP2 Canada,18 and (ii) the liquidation of the Wawa Facility pursuant to a receivership, combined with the Debtors’ bankruptcy filing in the United States and the filing of a liquidating plan, was in the best
interests of the Debtors and their creditors.
Prior to the Petition Date, the Advisors conducted an extensive marketing process in an effort to locate a potential
buyer for Rentech or certain of the Non-Debtor Subsidiaries. Wells Fargo ceased providing services to Rentech in or about September 2017. The entire process ultimately took place over the course of 15 months. Approximately 42 potential buyers were
contacted during the marketing process, approximately 36 of which executed non-disclosure agreements and received a confidential information memorandum, and approximately
18 RTK WP2 Canada owns the Atikokan Facility.
55
14 of which delivered an indication of interest either for Rentech or certain Non-Debtor Subsidiaries.
Initial indications of interest for all of the Fulghum assets were provided by each of The Price Companies Inc. (“Price”) and FFI Acquisition, Inc. (“FFI”) in
or about May 2017. In or about August 2017, FFI resubmitted a bid for just the Fulghum US assets after conducting substantial due diligence which took into account changes to the business, its asset base and customer contracts which had occurred
since its original offer. At this time, another third party that had previously expressed an interest in the entire company but had decided to focus on just the Fulghum assets, also submitted a bid after conducting substantial due diligence. Of
these two offers, the offer from FFI was superior in value.
In advance of providing its May 2017 indication of interest, Price was provided with a redacted
confidential information memorandum. As one of Fulghum’s main competitors in the market, Fulghum determined early in the marketing process that it would not be feasible to provide copies of key customer contracts, specific pricing information
in its customer contracts, or detailed financial information during the diligence process to Price without (i) risking the loss of significant market share to Price or (ii) harming Fulghum’s ability to sell these valuable assets to
other potential purchasers.
Buyers for the NEWP and Fulghum assets were selected by Rentech following substantial due diligence efforts and extensive discussions
and negotiations. On December 15,2017, Fulghum US entered into an Asset Purchase Agreement with FFI, as the buyer, and Scott Davis Chip Company, Inc., as the affiliate guarantor of the buyer (the “Fulghum/FFI APA”). 19 As set forth in
the Fulghum/FFI APA, FFI agreed to purchase substantially all of Fulghum US’s
19 The Non-Debtor Subsidiaries party to the Fulghum/FFI APA are Fulghum Fibres
Florida, Inc., Fulghum Fibres, Inc., and Fulghum Fibres Collins, Inc. Not all of the Fulghum US entities are party to the Fulghum/FFI APA.
56
assets (aside from certain specified excluded assets) and assume substantially all of its liabilities (aside from certain deferred tax
liabilities and other specified excluded liabilities). The base purchase price under the Fulghum/FFI APA was $28,000,000.20
On December 19, 2017, NEWP entered
into an Asset Purchase Agreement with Lignetics of New England, Inc., as the buyer, and Lignetics, Inc., as the buyer guarantor (the “NEWP APA”). As set forth in the NEWP APA, Lignetics of New England, Inc. will purchase substantially all
of NEWP’s assets (aside from certain specified excluded assets) and assume substantially all of its liabilities (aside from certain specified excluded liabilities). The base purchase price under the NEWP APA is $33,000,000.21
Collectively, the assets that were to be sold pursuant to the NEWP APA and the Fulghum/FFI APA likely constitute substantially all of the Debtors’ assets even though none of
the assets that are being sold are held or owned directly by either Debtor. As such, such sales would typically require the consent of two-thirds of Rentech, Inc.‘s public shareholders pursuant to Rentech, Inc’s Amended and Restated
Articles of Incorporation.
Rentech Inc. currently has approximately 23.2 million shares of common stock outstanding and, given the circumstances, it would be
practically impossible to achieve a response from such a large number of shareholders (especially where they are unlikely to obtain any benefit from the sales) thus making it impossible for Fulghum US and NEWP to proceed with their sale processes
(and for the Debtors to receive sale proceeds resulting from such sales for distribution to their creditors) without the involvement of the Bankruptcy Court.
20
The final purchase price under the Fulghum/FFI APA included a working capital adjustment and adjustments to account for, among other things, certain excluded assets and liabilities and amounts paid into an escrow account.
21 The final purchase price under the NEWP APA will include a working capital adjustment and adjustments to account for, among other things, certain excluded assets and liabilities
and amounts paid into an escrow account.
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Additionally, the process of soliciting such votes would be extremely time consuming and expensive with, as mentioned above, an
uncertain result as to the outcome.
As a result, on December 27, 2017, the Debtors filed the Sale Motion seeking authorization to take all corporate actions
required to approve the NEWP APA and the Fulghum/FFI APA so that NEWP and Fulghum may proceed with the sale of substantially all of their assets. On January 12, 2018, Price submitted an offer to purchase the Fulghum US assets for a base
purchase price of $30,000,000, subject to a working capital adjustment and adjustments to account for, among other things, certain excluded assets and liabilities and amounts paid into an escrow account [Docket No. 105]. Price and the Committee
each objected to the Sale Motion arguing that Price’s offer to pay an additional $2,000,000 for the Fulghum US assets was superior to the Fulghum/FFI APA and should be accepted by the Debtors.
Despite Price’s new expression of interest in the Fulghum US assets, the Debtors continued to believe that the sale of the Fulghum assets to FFI was in the best interests of
the Debtors and their stakeholders because: (1) the Fulghum/FFI APA had been heavily negotiated; (2) the Debtors were confident that, upon Bankruptcy Court approval, the Fulghum US sale to FFI would close; and (3) the Fulghum US sale
to FFI was expected to close on or before February 5, 2018. Given the Debtors’ precarious financial position, the timing and certainty of closing was of utmost importance to the Debtors. In addition, the value in Fulghum US’s business
derives principally from its customers and Fulghum US’s customers had expressed a desire for certainty and an efficient sale process and were in favor of a sale of the assets to FFI.
On January 17, 2018, a hearing on the Sale Motion was held at which time Price agreed to waive substantially all remaining conditions precedent under the existing Fulghum/FFI
APA and agreed not to request certain customer and mill specific information in connection with
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the sale and to close no later than February 15, 2018. As a result, Price and FFI participated in a live auction for the Fulghum US
assets. At the conclusion of the auction, Price was deemed to be the winning bidder with a base purchase price of $33,750,000 .22 On January 19, 2018, the Bankruptcy Court entered the Order Authorizing the Debtors to Approve the Sale of Assets
of Non-Debtor NEWP Subsidiaries and the Taking of Corporate Action in Connection Therewith [Docket No. 145]. On February 1, 2018, Fulghum Fibres Florida, Inc., Fulghum Fibres, Inc., and Fulghum Fibres Collins, Inc. entered into an Asset
Purchase Agreement with Price, as the buyer (the “Fulghum APA”), and, on February 2, 2018, the Bankruptcy Court entered the Order Authorizing the Debtors to Approve the Sale of Assets of Non-Debtor Subsidiaries Fulghum Fibres, Inc.,
Fulghum Fibres Florida, Inc., and Fulghum Fibres Collins, Inc. and the Taking of Corporate Action in Connection Therewith [Docket No. 210].
The NEWP sale and
the Fulghum US sale closed on February 14, 2018 and February 15, 2018, respectively.23 Proceeds from the Non-Debtor Subsidiary Sales that are distributed by the Non-Debtor Subsidiary Sellers to the Debtors, the Post-Effective Date Debtors,
or the Rentech Liquidation Trust as a dividend will be utilized by the Post-Effective Date Debtors or the Liquidation Trustee, as applicable, to make Distributions to the Holders of Allowed Claims and Allowed Equity Interests pursuant to this
Combined Plan and Disclosure Statement.
Finally, the Atikokan Sale closed on January 22, 2018 and the liquidation of the Wawa Facility will proceed
concurrently with, and on a similar timeline as, these Chapter 11 Cases.
22 The final purchase price under the Fulghum APA will include a working capital
adjustment and adjustments to account for, among other things, certain excluded assets and liabilities and amounts paid into an escrow account.
23 Additional
information regarding the Non-Debtor Subsidiary Sales can be found in the Sale Motion.
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G. Best Interests Test
Bankruptcy Code Section
1129(a)(7) requires that each Holder of an Impaired claim or interest either (a) accept the plan or (b) receive or retain under the plan property of a value, as of the Effective Date, that is not less than the value such Holder would
receive if the debtors were liquidated under chapter 7 of the Bankruptcy Code. Because the majority of the Debtors’ assets will be liquidated to Cash, the Debtors believe that the value of any Distributions to Holders of Claims if the
Debtors’ Chapter 11 Cases were converted to cases under chapter 7 of the Bankruptcy Code would be less than the value of Distributions under this Combined Plan and Disclosure Statement. The Debtors believe that this is because conversion of the
Chapter 11 Cases to chapter 7 cases would require the appointment of a chapter 7 trustee, and in turn, such chapter 7 trustee’s likely retention of new professionals. In addition, the Debtors expect that a chapter 7 trustee would be forced to
liquidate the assets of NEWP and Fulghum at a significant discount to what is provided for in the NEWP APA and the Fulghum APA. Like a chapter 7 trustee, the Liquidation Trustee will have the power to retain professionals, but unlike a chapter 7
trustee’s professionals, the court does not need to approve the retention of such professionals, or their fees. The “learning curve” that the trustee and new professionals would be faced with comes with potential additional costs to
the Estates and with a delay compared to the timing of Distributions under this Combined Plan and Disclosure Statement. Furthermore, a chapter 7 trustee would be entitled to statutory fees relating to the Distributions. Accordingly, a portion of the
Cash that will be available for Distribution to Holders of Allowed Claims following the Non- Debtor Subsidiary Sales would instead be paid to the chapter 7 trustee. Notwithstanding, like the chapter 7 trustee, the Liquidation Trustee also will be
paid fees for his services.
As a result, the Debtors believe that the Estates would have fewer funds available for distribution in a hypothetical chapter 7
liquidation than they would if this Combined Plan and
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Disclosure Statement is confirmed, and therefore Holders of Allowed Claims will recover less in the hypothetical chapter 7 cases.
Accordingly, the Debtors believe that the “best interest” test of Bankruptcy Code Section 1129 is satisfied.
Attached hereto as Exhibit C is the
Debtors’ liquidation analysis and recovery summary (the “Liquidation Analysis”), which the Debtors have prepared with the assistance of RPA for the purpose of evaluating whether this Combined Plan and Disclosure Statement meets the
“best interest” test of Bankruptcy Code Section 1129(a)(7).24 The Debtors believe that this Combined Plan and Disclosure Statement meets this test and that the members of each impaired class that have not voted to accept this Combined
Plan and Disclosure Statement or that are not deemed to accept this Combined Plan and Disclosure Statement will receive under this Combined Plan and Disclosure Statement at least as much as they would receive if the Debtors were liquidated under
chapter 7 of the Bankruptcy Code. For the reasons set forth herein and in the Liquidation Analysis, the Debtors believe that this Combined Plan and Disclosure Statement provides a superior recovery for Holders of Allowed Claims, and that this
Combined Plan and Disclosure Statement meets the requirements of the “best interest” test.
24 The determination of the hypothetical proceeds from the
liquidation of assets is, by its nature, a highly uncertain process involving the extensive use of estimates and assumptions which, although considered reasonable by the Debtors’ management and their advisors, are inherently subject to
significant business, economic, and competitive uncertainties and contingencies beyond the control of the Debtors and their management. Accordingly, there can be no assurance that the values reflected in the Liquidation Analysis would be realized if
the Debtors were, in fact, to undergo a liquidation under chapter 7 of the Bankruptcy Code, and actual results could vary materially and adversely from those shown here.
Neither the Debtors nor RPA make any representation or warranties regarding the accuracy of the estimates and assumptions or the ability to achieve forecasted results. Further,
nothing contained in the Liquidation Analysis attached hereto as Exhibit C is intended to be or constitutes a concession or admission of the Debtors. The Liquidation Analysis was developed solely for purposes of this Combined Plan and Disclosure
Statement to enable the Holders of Claims entitled to vote on this Combined Plan and Disclosure Statement to make an informed judgement about this Combined Plan and Disclosure Statement, and it should not be used or relied on for any other purpose,
including the purchase or sale of securities, or Claims or Equity Interests in, the Debtors or any of their Affiliates.
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In addition, the allowance, classification, and treatment of Allowed Claims and Allowed Equity Interests provided for herein takes into
account the relative priority and rights of such Claims and Equity Interests in connection with any contractual, legal and equitable subordination rights relating thereto, whether arising under general principles of equitable subordination,
Bankruptcy Code Section 510 or otherwise.
The Debtors believe this Combined Plan and Disclosure Statement is beneficial to all of the Debtors’ Creditors.
The Debtors estimate Allowed General Unsecured Claims in Class 3 of approximately $24.3 million. All Intercompany Claims and non-Debtor Affiliate Claims are being subordinated to other General Unsecured Claims.
The Debtors worked in good faith to establish the terms of this Combined Plan and Disclosure Statement, which, as described further below, will provide Holders of certain Allowed
Claims with Distributions of Cash following the closing of the Non-Debtor Subsidiary Sales and the distribution of dividends from the Non-Debtor Subsidiary Sellers and other Non-Debtor Subsidiaries to the
Debtors, the Post-Effective Date Debtors, or the Rentech Liquidation Trust. For all of these reasons, the Debtors believe this Combined Plan and Disclosure Statement is in the best interests of their Estates.
H. Releases
The release provisions set forth in Sections XII.B. and XII.C. of this Combined
Plan and Disclosure Statement are an integral part of this Combined Plan and Disclosure Statement.
I. Certain Risk Factors to be Considered
Holders of Claims and Equity Interests should read and consider carefully the risk factors below, as well as the other information set forth in this Combined Plan and Disclosure
Statement, the documents attached to this Combined Plan and Disclosure Statement, and the
62
documents referred to or incorporated by reference in this Combined Plan and Disclosure Statement. These factors should not be regarded
as constituting the only risks present in connection with this Combined Plan and Disclosure Statement and its implementation.
1. Risk Factors that May Affect the
Debtors’ Ability to Consummate this Combined Plan and Disclosure Statement
a. Debtors May Not Be Able to Secure Confirmation of this Combined
Plan and Disclosure Statement
As is described in greater detail in Section VI.A.3 below,
Bankruptcy Code Section 1129 sets forth the requirements for confirmation of a chapter 11 plan. While, as set forth below, the Debtors believe that this Combined Plan and Disclosure Statement complies with or will comply with all such
requirements, there can be no guarantee that the Bankruptcy Court will agree.
b. Risk of Non-Occurrence of the Effective Date
Although the Debtors believe that the Effective Date will occur and may occur quickly after the Confirmation Date, there can be no assurance as to such timing, or as to whether the
Effective Date will, in fact, occur.
c. Parties May Object to the Classification of Claims and Equity Interests Bankruptcy Code Section 1122 provides that a
plan may place a claim or an equity interest in a particular class only if such claim or equity interest is substantially similar to the other claims or equity interests in such class. As is described in greater detail in Section VI.A.4 below, the
Debtors believe that the classification of Claims and Equity Interests under this Combined Plan and Disclosure Statement complies with the requirements set forth in the Bankruptcy Code. Nevertheless, there can be no assurance the Bankruptcy Court
will reach the
same conclusion.
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2. Risk Factors that may Affect Distributions under this Combined Plan and Disclosure Statement
The estimates of Allowed Claims and recoveries for Holders of Allowed Claims set forth in this Combined Plan and Disclosure Statement are based on various assumptions, including
the closing of the Non-Debtor Subsidiary Sales. Should one or more of the underlying assumptions ultimately prove to be incorrect, the actual Allowed amounts of Claims may vary significantly from the estimated Claims contained in this Combined Plan
and Disclosure Statement. Moreover, the Debtors cannot determine with any certainty at this time the number or amount of Claims that will ultimately be Allowed. Such differences may materially and adversely affect, among other things, the recoveries
to Holders of Allowed Claims under this Combined Plan and Disclosure Statement.
IV. TREATMENT OF UNCLASSIFIED CLAIMS
A. Administrative Expense Claims
Requests for Administrative Expense Claims must be filed by
no later than the Administrative Expense Bar Date, except that requests for the payment and allowance of claims arising under Bankruptcy Code Section 503(b)(9) must be filed by no later than the General Bar Date as set forth in the Bar Date
Order. On or as soon as reasonably practicable after the Effective Date or the date on which such Administrative Expense Claim becomes Allowed, each Holder of an Allowed Administrative Expense Claim shall receive payment in full in Cash of the
Allowed amount of such Claim (as determined by settlement or Final Order of the Bankruptcy Court) or such other treatment as may be agreed upon by such Holder of an Allowed Administrative Expense Claim on the Effective Date. All Administrative
Expense Claims based on the fees and expenses of Professionals shall be paid in accordance with Section XVI.W. below. Notwithstanding the foregoing, (i) taxing authorities are not required to file
64
Administrative Expense Claims for postpetition taxes and (ii) current employees of the Debtors for whom the Debtors are paying
health care costs are not required to file Administrative Expense Claims for such health care costs, provided, however, that such current employees must submit any other requests for Administrative Expense Claims no later than the Administrative
Expense Bar Date.
B. Priority Tax Claims
Each Holder of an Allowed Priority
Tax Claim shall receive either (i) Cash equal to the due and unpaid portion of such Allowed Priority Tax Claim (as determined by settlement or Final Order of the Bankruptcy Court), (ii) treatment in a manner consistent with Bankruptcy Code
Section 1129(a)(9)(C), or (iii) such different treatment as to which such Holder agrees to in writing. One or more Distributions on account of Allowed Priority Tax Claims shall be made by the Debtors, the Post-Effective Date Debtors, or
the Liquidation Trustee to each Holder of an Allowed Priority Tax Claims Claim on each Distribution Date until such Allowed Priority Tax Claims are paid in full, provided, however, that the timing of the payments shall not be less favorable, unless
otherwise agreed, than what is required under Bankruptcy Code Section 1129(a)(9)(C). Allowed Priority Tax Claims are projected to total approximately $50,000.00.
C. Payment of Statutory Fees
All fees due and payable pursuant to
Section 1930 of Title 28 of the U.S. Code prior to the Effective Date shall be paid by the Debtors on the Effective Date. After the Effective Date, the Post-Effective Date Debtors and the Liquidation Trustee shall be jointly and severally
liable to pay any and all such fees when due and payable. The Debtors shall file quarterly reports due prior to the Effective Date when they become due. After the Effective Date, the Liquidation Trustee shall file with the Bankruptcy Court quarterly
reports when they become due in a form reasonably acceptable to the U.S. Trustee. Notwithstanding the limited substantive
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consolidation of the Debtors called for in this Combined Plan and Disclosure Statement, each and every one of the Debtors, the
Post-Effective Date Debtors and the Liquidation Trustee shall remain obligated to pay quarterly fees to the U.S. Trustee until the earliest of that particular Debtor’s case being closed, dismissed or converted to a case under chapter 7 of the
Bankruptcy Code.
V. SUMMARY OF DEBTORS’ ASSETS; SUMMARY OF TREATMENT OF CLAIMS AND EQUITY INTERESTS AND ESTIMATED RECOVERIES
A. Summary of Assets
Asset25
Estimated Value as of the Petition Date
Rentech WP U.S. Inc.
Rentech, Inc
Cash and Cash Equivalents
$0
approximately $2,970,000
Accounts Receivable and Deposits
$0
approximately $568,000
Equity Interest in Subsidiaries
$0
approximately
$23,000,000 to
$43,500,000
B. Summary of Treatment of Claims and Equity Interests and Estimated Recoveries
The following
chart provides a summary of the treatment of each Class of Claims and Equity Interests (other than Administrative Expense Claims, and Priority Tax Claims) and an estimate of the recoveries of each Class.26 The treatment provided in this chart is for
informational purposes only and is qualified in its entirety by Article VII of this Combined Plan
25 As discussed in Sections III.A.1(a)(3)(i). and III.F. of this
Combined Plan and Disclosure Statement, the Debtors have negotiated the terms of the Atikokan Sale and the Non-Debtor Subsidiary Sales. The base purchase prices under the Fulghum APA and the NEWP APA are $33,750,000 and $33,000,000 respectively.
However, each base purchase price is subject to a working capital adjustment and adjustments to account for, among other things, certain excluded assets and liabilities and amounts paid into an escrow account.
26 The amounts represent estimated Allowed Claims, and do not represent amounts actually asserted by the Creditors in proofs of claim or otherwise. As no proofs of claim have yet
been filed against the Debtors, there can be no assurances of the exact amount of the Allowed Claims at this time. Rather, the actual amount of the Allowed Claims may be more or less than estimated.
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and Disclosure Statement.
Class
Estimated
Allowed Claims
Treatment / Voting
Status
Estimated Recovery to Holders of Allowed Claims and Equity Interests27
Class 1 - Secured
Claims
$19,955,00028
Unimpaired / Deemed to Accept
100%
Class 2 – Priority Non-
Unimpaired /
Tax Claims
$113,400
Deemed to Accept
100%
Class 3 - General
Impaired / Entitled to
Unsecured Claims
$24,300,000
Vote
43% - 84%
Class 4 - Affiliate
Impaired /
Deemed
Claims
$867,730
to Reject
0%
Class 5 - Intercompany
Impaired / Deemed
Claims
$0
to Reject
0%
Class 6 – Rentech
Equity Interests
N/A
Impaired / Deemed to Reject
None
Class 7 – Rentech WP Equity Interests
N/A
Impaired
/ Deemed to Reject
None
Class 8 – Other Equity
Interests
N/A
Impaired / Deemed to Reject
None
27 The estimated percentage recovery is based upon, among other things, an estimate of
the Allowed Claims in the Chapter 11 Cases. As set forth above in footnote 24, the actual amount of the Allowed Claims may be more or less than estimated. Thus the actual recoveries may be higher or lower than projected depending upon, among other
things, the amounts and priorities of Claims that are actually Allowed by the Bankruptcy Court. The Debtors do not expect that Holders of Allowed Claims and Equity Interests in any of Classes 4, 5, 6, 7 or 8 will receive a recovery under this
Combined Plan and Disclosure Statement, but the actual recovery of any of these Classes will depend upon the total amount of General Unsecured Claims in Class 3 that are ultimately deemed Allowed and the total amount of sale proceeds received by the
Debtors from the Atikokan Sale, the Non-Debtor Subsidiary Sales, and proceeds from the monetization of the Debtors’ interests in the other Non-Debtor Subsidiaries.
28 This figure includes only the aggregate outstanding principal amount under the Prepetition Documents as of the Petition Date. Following the Petition Date, all Prepetition
Obligations (other than the Outstanding Fees) were repaid in March 2018, and the Debtors expect to pay all undisputed Outstanding Fees prior to the Effective Date.
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VI. CONFIRMATION PROCEDURES
A. Confirmation
Procedure
1. Confirmation Hearing
A hearing has been scheduled for April 4,
2018 at 10:00 a.m. (EST), at the Bankruptcy Court, 824 North Market Street, 5th Floor, Courtroom No.6, Wilmington, Delaware 19081 to consider (A) approval of this Combined Plan and Disclosure Statement as providing adequate information pursuant
to Bankruptcy Code Section 1125 on a final basis and (B) confirmation of this Combined Plan and Disclosure Statement pursuant to Bankruptcy Code Section 1129. The Confirmation Hearing may be adjourned from time to time by the
Bankruptcy Court without further notice, except for an announcement of the adjourned date made at the Confirmation Hearing or by Filing a notice with the Bankruptcy Court.
2. Procedure for Objections
Any objection to confirmation of this Combined Plan and Disclosure
Statement must: (i) be made in writing; (ii) state the name and address of the objecting party and the nature of the Claim or Equity Interest of such party; (iii) state with particularity the legal and factual basis and nature of the
objection; and (iv) be filed with the Bankruptcy Court, together with proof of service, and served so that they are received on or before the Confirmation Objection Deadline by the following parties: (a)(1) counsel to the Debtors, Young Conaway
Stargatt & Taylor, Rodney Square, 1000 North King Street, Wilmington, Delaware 19801 (Attn.: Michael R. Nestor, Esq. (email: mnestor@ycst.com)) and (2) Latham & Watkins LLP, 335 South Grand Avenue, Suite 100, Los Angeles, CA
90071-1560 (Attn.: Peter M. Gilhuly, Esq. (email: Peter.Gilhuly@lw.com)); (b) counsel to the Prepetition Lenders, Akin Gump Strauss Hauer & Geld LLP, One Bryant Park, New York, NY 10036 (Attn: Ira S. Dizengoff, Esq. and Daniell.
Fisher, Esq. (emails: idizengoff@AkinGump.com and dfisher@akingump.com)); (c) counsel to
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the Prepetition Agent, Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New York, NY 10036 (Attn: David C. Reamer
(email: david.reamer@skadden.com)); (d) counsel to BMO, Chapman and Cutler LLP, 111 West Monroe Street, Chicago, IL 60603 (Attn: Stephen R. Tetro II, Esq. (email: stetro@chapman.com)); (e) counsel to the Office of the United States
Trustee,
844 King Street, Suite 2207, Wilmington, DE 19801 (Attn: Juliet Sarkessian, Esq. (email: Juliet.M.Sarkessian@usdoj.gov)); and (f) counsel to the
Committee, Lowenstein Sandler LLP, 1251 Avenue of the Americas, New York, New York 10020 (Attn: Wojciech F. Jung, Esq. (email: wjung@lowenstein.com)) and Whiteford Taylor Preston LLC, 405 North King Street, Suite 500, Wilmington, DE 19801 (Attn:
Christopher M. Samis, Esq. (email: csamis@wtplaw.com)). Unless an objection is timely filed and served by the Confirmation Objection Deadline, such objection may not be considered by the Bankruptcy Court at the Confirmation Hearing.
3. Requirements for Confirmation
The Bankruptcy Court will confirm this Combined Plan and
Disclosure Statement only if it meets all the applicable requirements of Bankruptcy Code Section 1129. Among the requirements for confirmation in these Chapter 11 Cases is that this Combined Plan and Disclosure Statement be: (i) accepted
by all Impaired Classes of Claims and Equity Interests or, if rejected by an Impaired Class, that this Combined Plan and Disclosure Statement “does not discriminate unfairly” against and is “fair and equitable” with respect to
such Class; and (ii) feasible. The Bankruptcy Court must also find that:
a. This Combined Plan and Disclosure Statement has classified Claims and Equity
Interests in a permissible manner;
b. This Combined Plan and Disclosure Statement complies with the technical requirements of Chapter 11 of the Bankruptcy Code;
and
[GRAPHIC APPEARS HERE]
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c. This Combined Plan and Disclosure Statement has been proposed in good faith.
The Debtors believe that this Combined Plan and Disclosure Statement complies, or will comply, with all such requirements.
4. Classification of Claims and Equity Interests
Bankruptcy Code Section 1122 requires
this Combined Plan and Disclosure Statement to place a Claim or Equity Interest in a particular Class only if such Claim or Equity Interest is substantially similar to the other Claims or Equity Interests in such Class. This Combined Plan and
Disclosure Statement creates separate Classes to deal respectively with Secured Claims, Priority Non-Tax Claims, General Unsecured Claims, Affiliate Claims, Intercompany Claims, Rentech Equity Interests, Rentech WP Equity Interests, and Other Equity
Interests. The Debtors believe that this Combined Plan and Disclosure Statement’s classifications place substantially similar Claims or Equity Interests in the same Class and thus meet the requirements of Bankruptcy Code Section 1122.
5. Impaired Claims or Equity Interests
Pursuant to Bankruptcy Code
Section 1124, a Class of Claims or Equity Interests may be Impaired if this Combined Plan and Disclosure Statement alters the legal, equitable, or contractual rights of the Holders of such Claims or Equity Interests treated in such Class. The
Holders of Claims not Impaired by this Combined Plan and Disclosure Statement are deemed to accept this Combined Plan and Disclosure Statement and do not have the right to vote to accept or reject this Combined Plan and Disclosure Statement. The
Holders of Claims in Class 3 are Impaired and are entitled to vote to accept or reject this Combined Plan and Disclosure Statement. The procedure for soliciting such votes, as approved by the Bankruptcy Court, will be set out in the Conditional
Approval and Procedures Order. The Holders of Claims in Classes
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4 and 5 that are Impaired by this Combined Plan and Disclosure Statement and the Holders of Equity Interests in Classes 6, 7 and 8 are
deemed to reject this Combined Plan and Disclosure Statement and do not have the right to vote. Finally, the Holders of Claims that are not classified under this Combined Plan and Disclosure Statement are not entitled to vote on this Combined Plan
and Disclosure Statement.
6. Confirmation Hearing Notice
All known Creditors
and parties in interest will receive notice of the Confirmation Hearing on this Combined Plan and Disclosure Statement (the “Confirmation Hearing Notice”), which shall contain instructions for obtaining a copy of this Combined Plan and
Disclosure Statement free of charge.
7. Elimination of Vacant Classes
Any
Class of Claims or Equity Interests that does not contain, as of the date of commencement of the Confirmation Hearing, a Holder of an Allowed Claim or Equity Interest, shall be deemed deleted from this Combined Plan and Disclosure Statement for all
purposes.
B. Bar Dates for Fee Claims
All requests for compensation or
reimbursement of Professionals retained in these Chapter 11 Cases for services performed and expenses incurred prior to the Effective Date shall be filed and served on: (i) counsel for the Debtors, (a) Latham & Watkins LLP, 355
South Grand Avenue, Suite 100, Los Angeles, CA 90071-1560 (Attn: Peter M. Gilhuly, Esq. (email: Peter.Gilhuly@lw.com)) and (b) Young Conaway Stargatt & Taylor, LLP, Rodney Square, 1000 North King Street, Wilmington, DE 19801 (Michael
R. Nestor, Esq. (email: mnestor@ycst.com)); (ii) the U.S. Trustee, J. Caleb Boggs Federal Building, 844 King Street, Suite 2207, Lockbox 35, Wilmington, DE 19801 (Attn: Juliet Sarkessian, Esq. (email: Juliet.M.Sarkessian@usdoj.gov)),
(iii) counsel to the Committee, (a) Lowenstein Sandler LLP,
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1251 Avenue of the Americas, New York, NY 10020 (Attn: Wojciech F. Jung, Esq. (email: wjung@lowenstein.com)) and (b) Whiteford
Taylor Preston LLC, 405 North King Street, Suite 500, Wilmington, DE 19801 (Attn: Christopher M. Samis, Esq. (email: csamis@wtplaw.com)), and (iv) such other entities who are designated by the Bankruptcy Rules, the Confirmation Order, or other
Order of the Bankruptcy Court, by no later than thirty (30) days after service of notice of the Effective Date, unless otherwise agreed by the Debtors. Upon the Effective Date, any requirement that Professionals comply with Bankruptcy Code
Sections 327 through 331 and 1103 in seeking retention or compensation for services rendered after such date shall terminate, and Professionals may be employed and paid in the ordinary course of business without any further notice to, or action,
Order, or approval of, the Bankruptcy Court.
VII. CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS; ESTIMATED RECOVERIES
Equity Interests and Claims, other than Administrative Expense Claims, and
Priority Tax
Claims, are classified for all purposes, including confirmation and Distribution pursuant to this Combined Plan and Disclosure Statement, as follows:
Class
Type
Status Under Plan
Voting Status
1
Secured Claims
Unimpaired
Deemed to Accept
2
Priority Non-Tax Claims
Unimpaired
Deemed to Accept
3
General Unsecured
Impaired
Entitled to Vote
4
Affiliate Claims
Impaired
Deemed to Reject
5
Intercompany Claims
Impaired
Deemed to Reject
6
Rentech Equity Interests
Impaired
Deemed to Reject
7
Rentech WP Equity Interests
Impaired
Deemed to Reject
8
Other Equity Interests
Impaired
Deemed to Reject
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VIII. TREATMENT OF CLAIMS AND EQUITY INTERESTS
A.
Treatment of Claims
1. Class 1 – Secured Claims
a. Classification
Class 1 consists of all Secured Claims.
b. Impairment and Voting
Class 1 is Unimpaired by this Combined Plan and Disclosure Statement. Holders of Class 1 Claims are deemed to have accepted this Combined Plan and Disclosure Statement and
therefore, are not entitled to vote to accept or reject this Combined Plan and Disclosure Statement.
c. Treatment
After satisfaction in full of all Administrative Expense Claims, Allowed Fee Claims, and Allowed Priority Tax Claims, each Holder of an Allowed Secured Claim shall receive either
(a) such treatment as such Holder agrees, or (b) at the Debtors’ option (i) payment in full in Cash of the Allowed amount of such Secured Claim (as determined by settlement or Final Order of the Bankruptcy Court), or
(ii) treatment consistent with the provisions of Bankruptcy Code Section 1129(b)(2)(A). For Allowed Secured Claims that will be paid in Cash, one or more Distributions on account of such Allowed Secured Claims shall be made by the Debtors,
the Post-Effective Date Debtors, or the Liquidation Trustee to each Holder of such Allowed Secured Claim on each Distribution Date (or the date on which such Claim becomes an Allowed Secured Claim), until such Allowed Secured Claims are paid in
full, provided, however, that the Debtors, the Post-Effective Date Debtors, and the Liquidation Trustee shall have no obligation to make a Distribution to Holders of Allowed Secured Claims where the Debtors, the Post-Effective Date Debtors, or the
Liquidation Trustee determine that to make such a
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Distribution would prevent them from having sufficient funds to pay Allowed Administrative Claims, and the actual and necessary costs
and expenses of the Estates and the Rentech Liquidation Trust, including Wind-Down Expenses.
2. Class 2 – Priority Non-Tax Claims
a. Classification
Class 2 consists of Priority Non-Tax Claims.
b. Impairment and Voting
Class 2 is Unimpaired by this Combined Plan and Disclosure Statement.
Holders of Allowed Priority Non-Tax Claims are deemed to have accepted this Combined Plan and Disclosure Statement and therefore, are not entitled to vote to accept or reject this Combined Plan and Disclosure Statement.
c. Treatment
After satisfaction in full of all Administrative Expense Claims, Allowed Fee
Claims, Allowed Priority Tax Claims, and Allowed Secured Claims, each Holder of an Allowed Priority Non-Tax Claim shall receive either (a) such treatment as such Holder agrees, or (b) at the Debtors’ option (i) payment in full in
Cash of the Allowed amount of such Priority Non-Tax Claim (as determined by settlement or Final Order of the Bankruptcy Court), or (ii) treatment consistent with the provisions of Bankruptcy Code Section 1129(a)(9)(B). One or more Distributions
on account of such Allowed Priority Non-Tax Claims shall be made by the Debtors, the Post-Effective Date Debtors, or the Liquidation Trustee to each Holder of such Allowed Priority Non-Tax Claim in accordance with Bankruptcy Code
Section 1129(a)(9)(B) on each Distribution Date (or the date on which such Claim becomes an Allowed Priority Non-Tax Claim), until such Allowed Priority Non-Tax Claims are paid in full.
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3. Class 3 – General Unsecured Claims
a.
Classification
Class 3 consists of General Unsecured Claims.
b. Impairment
and Voting
Class 3 is Impaired. Holders of Allowed General Unsecured Claims in Class 3 are entitled to vote to accept or reject this Combined Plan and Disclosure
Statement.
c. Treatment
After satisfaction in full of all Administrative
Expense Claims, Allowed Fee Claims, Allowed Priority Tax Claims, Allowed Secured Claims, and Allowed Priority Non-Tax Claims, each Holder of an Allowed General Unsecured Claim shall receive its Pro Rata share of any funds remaining in the Rentech
Liquidation Trust or such other treatment as may be agreed upon by such Holder and the Liquidation Trustee. One or more Distributions on account of such Allowed General Unsecured Claims shall be made by the Liquidation Trustee to each Holder of such
Allowed General Unsecured Claim on each Distribution Date (or the date on which such Claim becomes an Allowed General Unsecured Claim) on a Pro Rata basis, provided, however, that the Liquidation Trustee shall have no obligation to make a
Distribution to Holders of Allowed General Unsecured Claims where the Liquidation Trustee determines that to make such a Distribution would prevent it from having sufficient funds to pay Allowed Administrative Claims, and the actual and necessary
costs and expenses of the Estates and the Rentech Liquidation Trust, including Wind-Down Expenses.
4. Class 4 – Affiliate Claims
a. Classification
Class 4 consists of all Affiliate Claims.
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b. Impairment and Voting
Class 4 is Impaired.
Holders of Allowed Affiliate Claims in Class 4 are deemed to have rejected this Combined Plan and Disclosure Statement and therefore, are not entitled to vote to accept or reject this Combined Plan and Disclosure Statement.
c. Treatment.
After satisfaction in full of all Administrative Expense Claims, Allowed Fee
Claims, Allowed Priority Tax Claims, Allowed Secured Claims, Allowed Priority Non-Tax Claims, and Allowed General Unsecured Claims, each Holder of an Allowed Affiliate Claim shall receive its Pro Rata share of any funds remaining in the Rentech
Liquidation Trust or such other treatment as may be agreed upon by such Holder and the Liquidation Trustee. One or more Distributions on account of such Allowed Affiliate Claims shall be made by the Liquidation Trustee to each Holder of such Allowed
Affiliate Claim on each Distribution Date (or the date on which such Claim becomes an Allowed Affiliate Claim), on a Pro Rata basis, provided, however, that the Liquidation Trustee shall have no obligation to make a Distribution to Holders of
Allowed Affiliate Claims where the Liquidation Trustee determines that to make such a Distribution would prevent it from having sufficient funds to pay Allowed Administrative Claims, and the actual and necessary costs and expenses of the Estates and
the Rentech Liquidation Trust, including Wind-Down Expenses.
5. Class 5 – Intercompany Claims
a. Classification
Class 5 consists of all Intercompany Claims.
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b. Impairment and Voting
Class 5 is Impaired.
Holders of Allowed Intercompany Claims in Class 5 are deemed to have rejected this Combined Plan and Disclosure Statement and therefore, are not entitled to vote to accept or reject this Combined Plan and Disclosure Statement.
c. Treatment
After satisfaction in full of all Administrative Expense Claims, Allowed Fee
Claims, Allowed Priority Tax Claims, Allowed Secured Claims, Allowed Priority Non-Tax Claims, Allowed General Unsecured Claims, and Allowed Affiliate Claims, each Holder of an Allowed Intercompany Claim shall receive its Pro Rata share of any funds
remaining in the Rentech Liquidation Trust or such other treatment as may be agreed upon by such Holder and the Liquidation Trustee. One or more Distributions on account of such Allowed Intercompany Claims shall be made by the Liquidation Trustee to
each Holder of such Allowed Intercompany Claim on each Distribution Date (or the date on which such Claim becomes an Allowed Intercompany Claim) on a Pro Rata basis, provided, however, that the Liquidation Trustee shall have no obligation to make a
Distribution to Holders of Allowed Intercompany Claims where the Liquidation Trustee determines that to make such a Distribution would prevent it from having sufficient funds to pay Allowed Administrative Claims, and the actual and necessary costs
and expenses of the Estates and the Rentech Liquidation Trust, including Wind-Down Expenses.
6. Class 6 - Rentech Equity Interests
a. Classification
Class 6 consists of Rentech Equity Interests.
b. Impairment and Voting
Class 6 is Impaired. Holders of Rentech Equity Interests in Class 6
are not entitled to vote and are deemed to reject this Combined Plan and Disclosure Statement.
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c. Allowed Rentech Equity Interests
Rentech Equity
Interests held by Holders thereof as of the Effective Date shall be Allowed Equity Interests under this Combined Plan and Disclosure Statement upon receipt by the Debtors or the Liquidation Trustee of any Tax Information requested by the Debtors or
the Liquidation Trustee.
d. Treatment
On the Effective Date, all Rentech
Equity Interests shall be cancelled and Holders of Rentech Equity Interests shall not receive any Distribution on account of such interests until all Administrative Expense Claims, Allowed Fee Claims, Allowed Priority Tax Claims, Allowed Secured
Claims, Allowed Priority Non-Tax Claims, Allowed General Unsecured Claims, Allowed Affiliate Claims and Allowed Intercompany Claims are paid in full. If funds remain in the Rentech Liquidation Trust following the satisfaction of all such Claims and
all Wind-Down Expenses, the Debtors, the Liquidation Trustee shall make a Distribution to each Holder of an Allowed Rentech Equity Interest on a Pro Rata basis.
7.
Class 7- Rentech WP Equity Interests
a. Classification
Class 7 consists of
Rentech WP Equity Interests.
b. Impairment and Voting
Class 7 is Impaired.
Holders of Rentech WP Equity Interests in Class 7 are not entitled to vote and are deemed to reject this Combined Plan and Disclosure Statement.
c. Treatment
On the Effective Date, all Rentech WP Equity Interests shall be cancelled and Holders of Rentech WP Equity Interests shall not receive any Distribution on account
of such interests.
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8. Class 8 – Other Equity Interests
a.
Classification
Class 8 consists of Other Equity Interests.
b. Impairment and
Voting
Class 8 is Impaired. Holders of Other Equity Interests in Class 8 are not entitled to vote and are deemed to reject this Combined Plan and Disclosure
Statement.
c. Treatment
On the Effective Date, all Other Equity Interests
shall be cancelled and Holders of Other Equity Interests shall not receive any Distribution on account of such Interests.
B. Modification of Treatment of Claims
and Equity Interests
The Debtors, the Post-Effective Date Debtors, and the Liquidation Trustee reserve the right to modify the treatment of any Allowed Claim or
Equity Interest in any manner adverse only to the Holder of such Claim or Equity Interest at any time after the Effective Date upon the consent of the Holder of the Claim or Equity Interest whose Allowed Claim or Equity Interest, as the case may be,
is being adversely affected.
C. Cramdown and No Unfair Discrimination.
With
respect to the Impaired Classes of Claims and Equity Interests that are deemed to have rejected this Combined Plan and Disclosure Statement, the Debtors hereby request, without any delay in the occurrence of the Confirmation Hearing or Effective
Date, that the Bankruptcy Court confirm this Combined Plan and Disclosure Statement in accordance with Bankruptcy Code Section 1129(b) with respect to such non-accepting Classes, in which case this Combined Plan and Disclosure Statement shall
constitute a motion for such relief.
Confirming this Combined Plan and Disclosure Statement under such a circumstance is what is known as a “cramdown.”
Among other things, a “cramdown” is
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appropriate where the Bankruptcy Court finds that such plan does not unfairly discriminate against the objecting class and is fair and
equitable with respect to such objecting class. A plan unfairly discriminates against a class if another class of equal rank in priority will receive greater value under the plan than the non-accepting class without reasonable justification. A plan
is fair and equitable if no claim or interest junior to the objecting class shall receive or retain any claim or interest under the plan.
IX. PROVISIONS REGARDING
THE RENTECH LIQUIDATION TRUST
A. Appointment of the Liquidation Trustee
On
the Effective Date, all assets of the Debtors will be transferred and assigned to the Rentech Liquidation Trust (and constitute the Liquidation Trust Assets) and the Liquidation Trustee shall be appointed and thereafter serve in accordance with this
Combined Plan and Disclosure Statement and the Liquidation Trust Agreement. The Liquidation Trustee shall not be required to give any bond or surety or other security for the performance of his duties unless otherwise ordered by the Bankruptcy
Court. The material terms of the Liquidation Trustee’s compensation are included in the Liquidation Trust Agreement.29 Effective as of the Effective Date, the board of directors of each Post-Effective Date Debtor shall be comprised solely of
the Liquidation Trustee. Effective as of the Effective Date, members of the board of directors of each Debtor prior to the Effective Date, in their capacities as such, shall have no continuing obligations to either of the Post-Effective Date Debtors
on or after the Effective Date. Effective as of the Effective Date, the sole officer of each Post-Effective Date Debtor shall be the Liquidation Trustee.
29 A copy
of the Liquidation Trust Agreement is attached hereto as Exhibit A.
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B. Rights and Powers of the Liquidation Trustee
The Liquidation Trustee shall, in addition to any powers and authority specifically set forth in other provisions of this Combined Plan and Disclosure Statement or
the Liquidation Trust Agreement, be empowered to act on behalf of the Estates and the Post-Effective Date Debtors to (i) effect all actions and execute all agreements, instruments, and other documents necessary to perform its duties under this
Combined Plan and Disclosure Statement or the Liquidation Trust Agreement, (ii) establish, as necessary, disbursement accounts for the deposit and distribution of all amounts distributed under this Combined Plan and Disclosure Statement,
(iii) make Distributions in accordance with this Combined Plan and Disclosure Statement, (iv) object to Claims, as appropriate, (v) employ and compensate professionals to represent it with respect to its responsibilities,
(vi) assert any of the Debtors’ claims, Causes of Action, rights of setoff, or other legal or equitable defenses, and (vii) exercise such other powers as may be vested in the Post-Effective Date Debtors and/or the Liquidation Trustee
by Order of the Bankruptcy Court, pursuant to this Combined Plan and Disclosure Statement, or as deemed by the Liquidation Trustee to be necessary and proper to implement the provisions hereof. The Liquidation Trustee may take any and all actions
which he deems reasonably necessary or appropriate to defend against any Claim, including, without limitation, the right to: (a) exercise any and all judgment and discretion with respect to the manner in which to defend against or settle any
Claim, including, without limitation, the retention of professionals, experts and consultants; and (b) enter into a settlement agreement or agreements without approval of the Bankruptcy Court. Following the Effective Date, as they come due,
Wind-Down Expenses shall be paid by the Liquidation Trustee from the Liquidation Trust Assets.
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C. Post Confirmation Date Expenses of the Liquidation Trustee
The Liquidation Trustee shall receive reasonable compensation for services rendered to the Estates and the Post-Effective Date Debtors pursuant to this Combined Plan and Disclosure
Statement or the Liquidation Trust Agreement without further Order. In addition, the amount of reasonable fees and expenses incurred by the Liquidation Trustee on or after the Effective Date (including, without limitation, reasonable attorney and
professional fees and expenses) may be paid without further Order.
X. PROVISIONS GOVERNING DISTRIBUTIONS UNDER THIS COMBINED PLAN AND DISCLOSURE STATEMENT
A. Method of Payment
Unless otherwise expressly agreed, in writing, all Cash
payments to be made pursuant to this Combined Plan and Disclosure Statement shall be made by check drawn on a domestic bank or an electronic wire.
B. Objections to
and Resolution of Claims
The Liquidation Trustee shall have the right to file objections and/or motions to estimate any and all Claims after the Effective Date.
The Liquidation Trustee shall have the authority to compromise, settle, otherwise resolve or withdraw any objections, without approval of the Bankruptcy Court. The Liquidation Trustee shall further have the authority to resolve and settle any and
all Claims without approval of the Bankruptcy Court.
C. Claims Objection Deadline
The Liquidation Trustee, and any other party in interest to the extent permitted pursuant to Bankruptcy Code Section 502(a), shall file and serve any objection to any Claims,
including Administrative Expense Claims, no later than the Claims Objection Deadline;
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provided, however, the Claims Objection Deadline may be extended by the Bankruptcy Court from time to time upon motion and notice by the
Liquidation Trustee.
D. No Distribution Pending Allowance
Notwithstanding any
other provision of this Combined Plan and Disclosure Statement, no payment or Distribution of Cash or other property shall be made with respect to any portion of a Disputed Claim unless and until all objections to such Claim are resolved by Final
Order or as otherwise permitted by this Combined Plan and Disclosure Statement.
E. Claims Reserve
On any date that Distributions are to be made under the terms of this Combined Plan and Disclosure Statement, the Liquidation Trustee shall reserve Cash or property equal to
one-hundred percent (100%) of the Cash or property that would be Distributed on such date on account of Disputed Claims as if each such Disputed Claim were an Allowed Claim but for the pendency of a dispute with respect thereto, unless
otherwise Ordered by the Bankruptcy Court following notice to the affected Claim Holder. Such Cash or property, as the case may be, shall be held in trust for the benefit of the Holders of all such Disputed Claims pending determination of their
entitlement thereto.
F. Distribution After Allowance
Except as otherwise
provided herein, within the later of (i) seven (7) Business Days after a Disputed Claim becomes an Allowed Claim and (ii) thirty (30) days after the expiration of the Claims Objection Deadline, the Liquidation Trustee shall
distribute all Cash or other property to which a Holder of an Allowed Claim is then entitled. For the avoidance of doubt, no Distributions on account of Allowed Equity Interests shall be made unless and until all Allowed Claims and the then incurred
Wind-Down Expenses, have been paid in full.
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G. Adjustments to Claims Without Objection
After
the Effective Date, any Claim that has been paid or satisfied in full, or any Claim that has been amended or superseded by the Holder of the Claim, may be marked as satisfied, adjusted or expunged on the register of Claims in the Chapter 11 Cases by
the Balloting Agent at the direction of the Liquidation Trustee without a Claims objection having to be Filed and without any further notice to or action, Order or approval of the Bankruptcy Court.
H. Voting Record Date
Except as otherwise provided in a Final Order of the Bankruptcy Court,
the transferees of Claims that are transferred pursuant to Bankruptcy Rule 3001 on or prior to the Voting Record Date will be treated as the Holders of those Claims for all purposes. The Liquidation Trustee shall have no obligation to recognize any
transfer of any Claim occurring after the Voting Record Date. In making any Distribution with respect to any Claim, the Liquidation Trustee shall be entitled instead to recognize and deal with, for all purposes hereunder, only the Entity that is
listed on the proof of claim Filed with respect thereto or on the Schedules as the Holder thereof as of the close of business on the Voting Record Date and upon such other evidence or record of transfer or assignment that is actually known to the
Debtors or the Liquidation Trustee as of the Voting Record Date.
I. Delivery of Distributions
Except as provided herein, Distributions to Holders of Allowed Claims and Allowed Equity Interests shall be made: (1) at the addresses set forth on the respective proofs of
claim or interest Filed by such Holders; (2) at the addresses set forth in any written notices of address changes delivered to the Liquidation Trustee after the date of any related proof of claim or interest; (3) at the address reflected
in the Schedules if no proof of claim or interest is filed and the Liquidation Trustee has not received a written notice of a change of address; or (4) at the
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address otherwise set forth in the Debtors’ or the Rentech Liquidation Trust’s books and records or the books and records of
the brokers for the Holders of Equity Interests.
If the Distribution to the Holder of any Claim or Equity Interest is returned to the Liquidation Trustee as
undeliverable, no further Distribution shall be made to such Holder unless and until the Liquidation Trustee is notified in writing of such Holder’s then current address. Undeliverable Distributions shall remain in the possession of the
Liquidation Trustee until the earlier of (i) such time as a Distribution becomes deliverable or (ii) such undeliverable Distribution becomes an Unclaimed Distribution.
Until such time as an undeliverable Distribution becomes an Unclaimed Distribution, within 30 days after the end of each calendar quarter following the Effective Date, or upon such
other interval as the Bankruptcy Court may Order, but in no event less frequently than annually, the Liquidation Trustee shall make Distributions of all Cash and property that has become deliverable during the preceding quarter.
The Liquidation Trustee shall make reasonable efforts to update or correct contact information for recipients of undeliverable Distributions; provided, however, nothing contained
in this Combined Plan and Disclosure Statement shall require the Liquidation Trustee to locate any Holder of an Allowed Claim or Allowed Equity Interest.
J.
Unclaimed Distributions
Any Cash or other property to be distributed under this Combined Plan and Disclosure Statement shall revert to the Rentech Liquidation
Trust or the Debtors, as applicable, if it is not claimed by the Entity on or before the Unclaimed Distribution Deadline. If such Cash or other property is not claimed on or before the Unclaimed Distribution Deadline, the Distribution made to such
Entity shall be deemed to be reduced to zero. Any Distribution that remains unclaimed one hundred and twenty (120) days after the final Distribution is made shall
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be paid to a 501(c)(3) charity, such as the American Bankruptcy Institute or other institution determined by the Liquidation Trustee,
which is not related to and/or associated with the Debtors, the Liquidation Trustee, BMO, the Prepetition Agent, or the Prepetition Lenders.
K. De Minimis
Distributions
The Liquidation Trustee shall not distribute Cash to the Holder of an Allowed Claim or Allowed Equity Interest if the amount of Cash to be
distributed on account of such Claim or Interest is less than $25.00 in the aggregate. Any holder of an Allowed Claim or Allowed Equity Interest on account of which the amount of Cash to be distributed is less than $25.00 in the aggregate will be
forever barred from receiving any Distribution under this Combined Plan and Disclosure Statement for such Allowed Claim or Allowed Equity Interest. Any Cash not distributed pursuant to this Article X of this Combined Plan and Disclosure Statement
will be the property of the Estates or the Rentech Liquidation Trust.
L. Setoff
The Debtors or the Liquidation Trustee, as the case may be, retain the right to reduce any Claim by way of setoff in accordance with their Books and Records,
provided that the Debtors or the Liquidation Trustee shall provide the Holders of such Claims no less than ten (10) days’ written notice of the proposed setoff, and if the Holder of such Claim timely objects to the proposed setoff, such
setoff or recoupment may not be effectuated without prior approval of the Bankruptcy Court.
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XI. IMPLEMENTATION AND EFFECT OF CONFIRMATION OF COMBINED PLAN AND DISCLOSURE STATEMENT
A. Means for Implementation of this Combined Plan and Disclosure Statement
In addition to the
provisions set forth elsewhere in this Combined Plan and Disclosure Statement, the following shall constitute the means for implementation of this Combined Plan and Disclosure Statement:
1. Limited Substantive Consolidation.
This Combined Plan and Disclosure Statement provides for
the limited substantive consolidation of the Debtors’ Estates, but solely for the purposes of this Combined Plan and Disclosure Statement, including making any Distributions to Holders of Claims. The Debtors propose limited substantive
consolidation to avoid the inefficiency of proposing Entity-specific Claims for which there would be no impact on Distributions. On the Effective Date, (i) all assets and liabilities of the Debtors will, solely for Distribution purposes, be
treated as if they were merged, (ii) each Claim against the Debtors will be deemed a single Claim against and a single obligation of the Debtors, (iii) any Claims filed or to be filed in the Chapter 11 Cases will be deemed single Claims
against both of the Debtors, (iv) all guarantees of either Debtor of the payment, performance, or collection of obligations of the other Debtor shall be eliminated and canceled, (v) all transfers, disbursements, and Distributions on
account of Claims made by or on behalf of any of the Debtors’ Estates hereunder will be deemed to be made by or on behalf of both of the Debtors’ Estates, and (vi) any obligation of the Debtors as to Claims or Equity Interests will be
deemed to be one obligation of both of the Debtors. Holders of Allowed Claims or Allowed Equity Interests entitled to Distributions under this Combined Plan and Disclosure Statement shall be entitled to their share of assets available for
Distribution without regard to which Debtor was originally liable for such Claim. Except as set forth herein, such limited
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substantive consolidation shall not (other than for purposes related to this Combined Plan and Disclosure Statement) affect the legal
and corporate structures of the Debtors.
The Debtors propose limited substantive consolidation to avoid the inefficiency of proposing Entity-specific Claims for
which there would be no impact on Distributions. Such limited substantive consolidation has been approved by the Bankruptcy Court under similar circumstances. See, e.g., In re BIND Therapeutics, Inc., No. 16-11084 (BLS), Docket No. 457
(September 26, 2016); In re Accuride Corp., No. 09-13449 (BLS), 2010 WL 5093173, at *10 (Bankr. D. Del. Feb. 18, 2010); In re Kaiser Aluminum Corp., No. 02-10429 (JKF), 2006 WL 616243, at *22 (Bankr. D. Del. Feb. 6, 2006).
2. Funding of Liabilities and Distributions.
Distributions on account of Allowed Claims and
Allowed Equity Interests and any Wind-Down Expenses shall be paid from: (a) Cash held by the Debtors as of the Effective Date, (b) any Cash obtained after the Effective Date resulting from the Non-Debtor Subsidiary Sales, and
(c) additional Cash proceeds obtained after the Effective Date, if any, from all other sources, including the liquidation and collection of the Debtors’ remaining assets, litigation of Causes of Action and monetization of the Debtors’
interests in the other Non-Debtor Subsidiaries.
3. Corporate Action; Effectuating Documents: Further Transactions.
On the Effective Date, all matters and actions provided for under this Combined Plan and Disclosure Statement that would otherwise require approval of the directors and officers of
the Debtors shall be deemed to have been authorized and effective in all respects as provided herein and shall be taken without any requirement for further action by the directors and officers of the Debtors. The Debtors, the Post-Effective Date
Debtors, or the Liquidation
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Trustee, as applicable, are authorized to execute, deliver, file or record such contracts, instruments, releases and other agreements or
documents and to take such actions as may be necessary or appropriate to effectuate and further evidence the terms and conditions of this Combined Plan and Disclosure Statement.
B. Additional Means for Implementation
1. Preservation of Right to Conduct Investigations
The preservation of the Rentech Liquidation Trust’s right to conduct investigations under Bankruptcy Rule 2004 is necessary and relevant to the Rentech
Liquidation Trust and the administration of the Liquidation Trust Assets. Accordingly, any and all rights to conduct investigations under Bankruptcy Rule 2004 held by the Debtors prior to the Effective Date shall vest with the Rentech Liquidation
Trust and shall continue until dissolution of the Rentech Liquidation Trust.
2. Prosecution and Resolution of Causes of Action
From and after the Effective Date, prosecution and settlement of all Causes of Action shall be the sole responsibility of the Liquidation Trustee under this Combined Plan and
Disclosure Statement and the Confirmation Order. From and after the Effective Date, the Liquidation Trustee shall have exclusive rights, powers, and interests of the Estates to pursue, settle, or abandon such Causes of Action as the sole
representatives of the Estates under Bankruptcy Code Section 1123(b)(3). All Causes of Action that are not expressly released or waived under this Combined Plan and Disclosure Statement are reserved and preserved and vest in the Rentech
Liquidation Trust in accordance with this Combined Plan and Disclosure Statement, including but not limited to, the following Claims and Causes of Action: (i) all Avoidance Actions; (ii) all Claims related to the Wawa Facility and the
Debtors’ assumption of
obligations related to the Wawa Facility; (iii) the April 2016 repurchase and retirement of
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Rentech, Inc.‘s Series E Convertible Preferred Stock; and (iv) the 2017 transfer of CVR Common Units to funds managed by or
affiliated with GSO, except to the extent any portion of such Causes of Action are subject to any releases provided in this Combined Plan and Disclosure Statement, the Confirmation Order or any other Final Order of the Bankruptcy Court. No Person
may rely on the absence of a specific reference in this Combined Plan and Disclosure Statement or the Plan Supplement to any Cause of Action against it as any indication that the Debtors or the Liquidation Trustee will not pursue any and all
available Causes of Action against such Person. The Liquidation Trustee expressly reserves all Causes of Action, except for Causes of Actions that are expressly released or waived under this Combined Plan and Disclosure Statement, and, therefore, no
preclusion doctrine, including the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable, or otherwise), or laches, shall apply to such Causes of Action upon, after, or as a consequence of
confirmation or consummation of this Combined Plan and Disclosure Statement.
3. Privileges as to Certain Causes of Action
Effective as of the Effective Date, all Privileges of the Debtors, including those relating to the Liquidation Trust Assets, shall be deemed transferred, assigned, and delivered to
the Rentech Liquidation Trust, without waiver or release, and shall vest with the Rentech Liquidation Trust. The Liquidation Trustee shall hold and be the beneficiary of all such Privileges and is entitled to assert such Privileges. No such
Privilege shall be waived by disclosures to the Liquidation Trustee of the Debtors’ documents, information, or communications subject to any Privilege. The Debtors’ Privileges, including those relating to the Liquidation Trust Assets, will
remain subject to the rights of third parties under applicable law, including any rights arising from the common interest doctrine, the joint defense doctrine,
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joint attorney-client representation, or any agreement. Nothing contained herein or in the Confirmation Order, nor any
Professional’s compliance herewith and therewith, shall constitute a breach of any Privileges of the Debtors.
XII. EXCULPATION, RELEASES AND INJUNCTIONS
A. Exculpation.
The Exculpated Parties shall not have or incur any liability
for any act or omission taken or not taken in connection with or arising out of the Chapter 11 Cases, the negotiation and Filing of this Combined Plan and Disclosure Statement, the Filing of the Chapter 11 Cases, the settlement of Claims or
renegotiation of Executory Contracts and leases, the pursuit of confirmation of this Combined Plan and Disclosure Statement, the consummation of this Combined Plan and Disclosure Statement, or the administration of this Combined Plan and Disclosure
Statement or the property to be Distributed under this Combined Plan and Disclosure Statement, except for their willful misconduct or gross negligence or any obligations that they have under or in connection with this Combined Plan and Disclosure
Statement or the transactions contemplated in this Combined Plan and Disclosure Statement. Nothing herein shall prevent any exculpated party from asserting as a defense to any claim of willful misconduct or gross negligence that they reasonably
relied upon the advice of counsel with respect to their duties and responsibilities under this Combined Plan and Disclosure Statement or otherwise. For the avoidance of doubt, this provision only applies to post-Petition Date acts or omissions.
B. Releases by the Debtors.
Effective as of the Effective Date, for good and
valuable consideration, the adequacy of which is hereby confirmed, the Debtors and each of the Debtors’ successors and assigns, shall be deemed to, completely, conclusively, absolutely, unconditionally,
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irrevocably and forever release, waive, void, and extinguish (A) each of the Debtors’ Related Persons from any Claim, Cause of
Action, obligation, suit, judgment, damages, debt, right, remedy or liability, for any act or omission that took place prior to the Effective Date solely and exclusively in connection with or arising out of the Chapter 11 Cases, the negotiation and
Filing of this Combined Plan and Disclosure Statement, the Filing of the Chapter 11 Cases, the settlement of Claims or renegotiation of Executory Contracts and leases, the pursuit of confirmation of this Combined Plan and Disclosure Statement, the
consummation of this Combined Plan and Disclosure Statement, or the administration of this Combined Plan and Disclosure Statement, including the solicitation of votes, or the property to be distributed under this Combined Plan and Disclosure
Statement, and, (B) subject to providing the Liquidation Trustee with their reasonable assistance as set forth in a letter from the officers to the Liquidation Trustee, each of the directors and officers30 of the Debtors as of the Petition Date
from any Claim, Cause of Action, obligation, suit, judgment, damages, debt, right, remedy or liability, for any act or omission that took place prior to the Petition Date in connection with either of the Debtors, except for Claims related to any act
or omission that is determined in a Final Order by a court of competent jurisdiction to have constituted gross negligence, actual fraud or willful misconduct, but in all respects such Entities shall be entitled to reasonably rely upon the advice of
counsel with respect to their duties and responsibilities pursuant to this Combined Plan and Disclosure Statement.
C. Releases by Holders of Claims and Other
Parties.
30 For purposes of clarity, these officers and directors are Nicole Sykes Powe, Paul Summers, Joe Herold, Bill Regan, Edward M. Stern, Halbert S.
Washburn, Kevin Rendino, Ronald M. Sega, and Wesley K. Clark.
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Effective as of the Effective Date, except for the rights that remain in effect from and after the Effective Date to enforce this
Combined Plan and Disclosure Statement, for good and valuable consideration, the adequacy of which is hereby confirmed, and except as otherwise provided in this Combined Plan and Disclosure Statement or in the Confirmation Order, the Released
Parties are deemed forever released by (i) subject to the last sentence of this Section XII.C, holders of all Claims who vote to either accept or reject this Combined Plan and Disclosure Statement but do not opt out of granting the releases set
forth herein (a “Release Opt-Out”), (ii) the Prepetition Agent, (iii) the Prepetition Lenders, (iv) BMO, and (v) the Committee (and its current and former members in their individual capacities as members of the
Committee), from any Claim, Cause of Action, obligation, suit, judgment, damages, debt, right, remedy or liability, for any act or omission (i) that took place prior to the Petition Date relating to and/or in connection with either of the
Debtors, and (ii) in connection with, relating to, or arising out of the Chapter 11 Cases, the negotiation and Filing of this Combined Plan and Disclosure Statement, the Filing of the Chapter 11 Cases, the settlement of Claims or renegotiation
of Executory Contracts and leases, the pursuit of confirmation of this Combined Plan and Disclosure Statement, the consummation of this Combined Plan and Disclosure Statement, or the administration of this Combined Plan and Disclosure Statement,
including the solicitation of votes, or the property to be distributed under this Combined Plan and Disclosure Statement, except for Claims related to any act or omission that is determined in a Final Order by a court of competent jurisdiction to
have constituted actual fraud or willful misconduct, but in all respects such Entities shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities pursuant to this Combined Plan and Disclosure
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Statement. For the avoidance of doubt, notwithstanding the foregoing, a Release Opt-Out solely means that such Holder (i) is
electing to not release the Released Parties, and (ii) shall not impair, limit or effect in any way the exculpation of the Exculpated Parties as set forth in Section XII.A. of this Combined Plan and Disclosure Statement.
D. Injunctions Relating to Releases.
Effective as of the Effective Date, all Persons that
hold, have held, or may hold a claim, Claim, Cause of Action, obligation, suit, judgment, damages, debt, right, remedy, or liability of any nature whatsoever, that is released or exculpated pursuant to this Combined Plan and Disclosure Statement
(the “Released Claims”), shall be permanently, forever and completely stayed, restrained, prohibited, barred, and enjoined from taking any of the following actions, whether directly or indirectly, derivatively or otherwise, on account of
or based on the subject matter of such Released Claims (i) commencing, conducting, or continuing in any manner, directly or indirectly, any suit, action, or other proceeding (including, without limitation, any judicial, arbitral,
administrative, or other proceeding) on account of the Released Claims in any forum, (ii) enforcing, attaching (including, without limitation, any prejudgment attachment), collecting, or in any way seeking to recover any judgment, award,
decree, or other order on account of the Released Claims, (iii) creating, perfecting, or in any way enforcing in any matter, directly or indirectly, any lien on account of the Released Claims, and (iv) setting off (except to the extent
such setoff was exercised prior to the Petition Date), seeking reimbursement or contributions from, or subrogation against, directly or indirectly, any amount against any liability or obligation owed to any Person on account of the Released Claims.
E. Injunctions to Protect Plan Assets.
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Except as expressly otherwise provided in this Combined Plan and Disclosure Statement, including Section XVI.D. hereof, or to the extent
necessary to enforce the terms and conditions of this Combined Plan and Disclosure Statement, the Confirmation Order or a separate Order of the Bankruptcy Court, all Entities who have held, hold, or may hold Claims against or Equity Interests in the
Debtors shall be permanently enjoined from taking any of the following actions against any of the assets to be distributed under this Combined Plan and Disclosure Statement on account of any such Claims or Equity Interests: (i) commencing or
continuing, in any manner or in any place, any action, Cause of Action, or other proceeding; (ii) enforcing, attaching, collecting, or recovering in any manner any judgment, award, decree, or Order; (iii) creating, perfecting, or enforcing
any Lien; (iv) asserting a setoff (except to the extent such setoff was exercised prior to the Petition Date), or the right of subrogation of any kind against any debt, liability, or obligation due to the Debtors; and (v) commencing or
continuing, in any manner or in any place, any action, Cause of Action, or other proceeding against any of the assets to be distributed under this Combined Plan and Disclosure Statement that does not comply with or is inconsistent with the
provisions of this Combined Plan and Disclosure Statement.
XIII. EXECUTORY CONTRACTS AND UNEXPIRED LEASES
A. Rejection of Executory Contracts and Unexpired Leases
On the Effective Date, all Executory
Contracts not assumed before the Effective Date, or subject to a pending motion to assume as of the Effective Date, will be deemed rejected. The Confirmation Order shall constitute an Order approving such rejection as of the Effective Date.
B. Deadline for Filing Proofs of Claim Relating to Executory Contracts and Unexpired
Leases Rejected Pursuant to this Combined Plan and Disclosure Statement
If the rejection by the Debtors of an Executory Contract pursuant to this Combined Plan and Disclosure Statement gives rise to a Claim, a proof of claim must be submitted to the
Balloting Agent at Rentech WP U.S. Inc. Claims Processing Center, c/o Prime Clerk LLC, 830 3rd Avenue, 3rd Floor, New York, N.Y. 10022, by no later than thirty (30) days after service of the notice of the Effective Date. Absent an Order of the
Bankruptcy Court to the contrary, any proofs of claim not filed and served within such time period will be forever barred from receiving any Distribution under this Combined Plan and Disclosure Statement for such Claim. Unless otherwise Ordered by
the Bankruptcy Court, all Claims arising from the rejection of Executory Contracts shall be treated as Class 3 Claims under this Combined Plan and Disclosure Statement. For the avoidance of doubt, any Claims arising from the rejection of an
Executory Contract pursuant to a separate motion are subject to the Rejection Bar Date.
C. Debtors’ Obligations Pursuant to their Corporate Charters, Bylaws
or other
Organizational Documents
On the Effective Date, the Amended and
Restated Articles of Incorporation, as Amended, of Rentech, Inc. shall be further amended as set forth in the Articles Amendment attached to the Plan Supplement to permit the Debtors to further authorize the sale of substantially all of the assets
of the Non-Debtor Subsidiary Sellers pursuant to the Non-Debtor Subsidiary Sales and the sale of their interests in or the assets of other Non-Debtor Subsidiaries. By this Combined Plan and Disclosure Statement, the Debtors hereby assume all
obligations pursuant to their corporate charters, bylaws, or other organization documents (as amended pursuant to the Articles Amendment and this Combined Plan and Disclosure Statement) to indemnify current officers, directors, agents, and/or
employees with respect to all present and future actions, suits and proceedings against the Debtors or such directors, officers, agents,
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and/or employees, based upon any act or omission for or on behalf of the Debtors. All such obligations shall not be discharged or
impaired by confirmation of this Combined Plan and Disclosure Statement. Notwithstanding the foregoing, any and all such related pre-Petition Date obligations (including prepetition indemnification obligations and prepetition cure obligations) shall
constitute Class 3 Claims, without further recourse to the assets of or Distributions from the Debtors’ Estates. Notwithstanding the foregoing, any and all post-Petition Date indemnity obligations arising from post-Petition Date activities
shall constitute Administrative Expense Claims, subject to Bankruptcy Code Section 503(b)(1)(A).
D. Debtors’ Insurance Policies
Nothing in this Combined Plan and Disclosure Statement and/or the Confirmation Order alters the rights and obligations of the Debtors (and their Estates) and the Debtors’
insurers (and third-party claims administrators) under the Insurance Policies or modifies the coverage or benefits provided thereunder or the terms or conditions thereof or diminishes or impairs the enforceability of the Insurance Policies. All of
the Debtors’ rights and their Estates’ rights under any Insurance Policy to which the Debtors and/or the Debtors’ Estates are beneficiaries shall vest with the Rentech Liquidation Trust for the benefit of the beneficiaries of the
Rentech Liquidation Trust and all of the beneficiaries of such Insurance Policies.
XIV. CONDITIONS PRECEDENT TO AND OCCURRENCE OF CONFIRMATION AND THE EFFECTIVE
DATE
A. Conditions Precedent to Confirmation
The following are conditions
precedent to Confirmation that must be satisfied or waived:
(i) The Confirmation Order shall be reasonably acceptable in form and substance to the Debtors; and
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(ii) The Plan Supplement and any other exhibits or schedules incorporated as part of this Combined Plan and Disclosure Statement shall
be reasonably acceptable in form and substance to the Debtors.
B. Conditions Precedent to the Effective Date
This Combined Plan and Disclosure Statement shall not become effective unless and until the following conditions shall have been satisfied or waived:
(i) Entry of the Confirmation Order; and
(ii) The Confirmation Order becomes a Final Order.
C. Establishing the Effective Date
The calendar date to serve as the
Effective Date shall be a Business Day, on or promptly following the satisfaction or waiver of all conditions to the Effective Date, which date will be selected by the Debtors. On or within two (2) Business Days after the Effective Date, the
Debtors shall file and serve a notice of occurrence of the Effective Date. Such notice shall contain, among other things, the Administrative Expense Bar Date, the deadline by which Professionals must file and serve any Fee Claims and the deadline to
file a proof of claim relating to damages from the rejection of any Executory Contract pursuant to the terms of this Combined Plan and Disclosure Statement.
D.
Effect of Failure of Conditions
If each condition to the Effective Date has not been satisfied or duly waived within forty-five (45) days after the
Confirmation Date, then upon motion by any party in interest, made before the time that each of the conditions has been satisfied or duly waived and upon notice to such parties in interest as required by the Bankruptcy Code, the Bankruptcy Rules, or
the Local Rules, or as the Bankruptcy Court may direct, the Confirmation Order may be vacated by the Bankruptcy Court; provided, however, that notwithstanding the filing of such
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motion, the Confirmation Order shall not be vacated if each of the conditions to the Effective Date is either satisfied or duly waived
by the Debtors before any Order granting such relief becomes a Final Order. If the Confirmation Order is vacated pursuant to this section, this Combined Plan and Disclosure Statement shall be deemed null and void in all respects and nothing
contained herein shall (A) constitute a waiver or release of any Claims by or against the Debtors, or (B) prejudice in any manner the rights of the Debtors.
In addition, if each condition to the Effective Date has not been satisfied or duly waived within forty-five (45) days after the Confirmation Date, the Debtors shall, on a
quarterly basis until the earlier of the occurrence of the Effective Date or the date the Confirmation Order is vacated, File a notice with the Bankruptcy Court that indicates which conditions precedent to the Effective Date have not occurred and
have not been duly waived.
E. Waiver of Conditions to Effective Date
The
condition to the Effective Date of the Confirmation Order becoming a Final Order may be waived, in whole or in part, by the Debtors, without notice or an Order of the Bankruptcy Court.
XV. RETENTION OF JURISDICTION
Notwithstanding the entry of the Confirmation Order and the
occurrence of the Effective Date, following the Effective Date, the Bankruptcy Court shall retain such jurisdiction over the Chapter 11 Cases as is legally permissible, including, without limitation, such jurisdiction as is necessary to ensure that
the interests and purposes of this Combined Plan and Disclosure Statement are carried out. The Bankruptcy Court shall have jurisdiction of all matters arising out of, and related to, the Chapter 11 Cases and this Combined Plan and Disclosure
Statement pursuant to, and for the purposes of, Bankruptcy Code Sections 105(a) and 1142 and for, among other things, the following purposes:
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(i) To hear and determine any objections to Claims and to address any issues relating to Disputed Claims;
(ii) To enter and implement such Orders as may be appropriate in the event the Confirmation Order is for any reason stayed, revoked, modified or vacated;
(iii) To issue such Orders in aid of execution and consummation of this Combined Plan and Disclosure Statement, to the extent authorized by Bankruptcy Code Section 1142;
(iv) To consider any amendments to or modifications of this Combined Plan and Disclosure Statement, to cure any defect or omission, or reconcile any inconsistency
in any Order of the Bankruptcy Court, including, without limitation, the Confirmation Order;
(v) To hear and determine all requests for compensation and
reimbursement of expenses to the extent Allowed by the Bankruptcy Court under Bankruptcy Code Sections 330 or 503;
(vi) To hear and determine disputes arising in
connection with the interpretation, implementation or enforcement of this Combined Plan and Disclosure Statement;
(vii) To hear and determine matters concerning
state, local and federal taxes in accordance with Bankruptcy Code Sections 346, 505 and 1146 (including, without limitation, any request by the Debtors or the Liquidation Trustee for an expedited determination of tax under Bankruptcy Code
Section 505(b));
(viii) To hear any other matters as to which the Bankruptcy Court has jurisdiction;
(ix) To enter a final decree closing the Chapter 11 Cases;
(x) To ensure that
Distributions to Holders of Allowed Claims and Allowed Equity Interests are accomplished pursuant to the provisions of this Combined Plan and Disclosure Statement;
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(xi) To decide or resolve any motions, adversary proceedings, contested or litigated matters and any other matters and grant or deny any
applications involving the Debtors that may be pending on the Effective Date;
(xii) To issue injunctions, enter and implement other Orders or take such other
actions as may be necessary or appropriate to restrain interference by any Person or Entity with the occurrence of the Effective Date or enforcement of this Combined Plan and Disclosure Statement, except as otherwise provided herein;
(xiii) To determine any other matters that may arise in connection with or related to this Combined Plan and Disclosure Statement, the Confirmation Order, the Liquidation Trust
Agreement or any contract, instrument, release, indenture or other agreement or document created or implemented in connection with this Combined Plan and Disclosure Statement;
(xiv) To enforce, interpret, and determine any disputes arising in connection with any stipulations, orders, judgments, injunctions, exculpations, and rulings entered in connection
with the Chapter 11 Cases (whether or not the Chapter 11 Cases have been closed, however if the Chapter 11 Cases are closed the Bankruptcy Court will not have jurisdiction until the Chapter 11 Cases are reopened);
(xv) To resolve disputes concerning any reserves with respect to Disputed Claims or the administration thereof;
(xvi) To resolve any disputes concerning whether a Person or Entity had sufficient notice of the Chapter 11 Cases, the General Bar Date, the Governmental Unit Bar Date, the
Supplemental Bar Date, the Rejection Bar Date, the Administrative Expense Bar Date, and/or the hearing on the approval of this Combined Plan and Disclosure Statement for the purpose of
determining whether a Claim, or Equity Interest is discharged and/or enjoined hereunder or for any other purpose; and
(xvii) To resolve any other matter or for any purpose specified in this Combined Plan and Disclosure Statement, the Confirmation Order, the Liquidation Trust Agreement or any other
document entered into in connection with any of the foregoing.
XVI. MISCELLANEOUS PROVISIONS
A. Books and Records
On the Effective Date, the Debtors’ remaining books and records (the
“Books and Records”) shall be transferred to the Post-Effective Date Debtors. The Liquidation Trustee shall be free to abandon, destroy or otherwise dispose of the Books and Records in compliance with applicable non-bankruptcy law at any
time on and after the Effective Date, without the need for any other or further Order, provided that the Liquidation Trustee shall obtain consent from the Oversight Committee prior to abandoning any Books and Records.
B. Transfer of the Debtors’ Assets
Except as otherwise provided herein, any assets that
are property of the Debtors’ Estates on the Effective Date including, without limitation, any Causes of Action, shall transfer to the Rentech Liquidation Trust on the Effective Date. Thereafter, the Rentech Liquidation Trust (at the direction
of the Liquidation Trustee) may use, acquire and dispose of such property free of any restrictions of the Bankruptcy Code, the Bankruptcy Rules or Bankruptcy Court approval. Except as specifically provided in this Combined Plan and Disclosure
Statement or the Confirmation Order, as of the Effective Date, all property of the Debtors that has been transferred to the Rentech Liquidation Trust shall be free and clear of any Liens, Claims, encumbrances and interests of any kind.
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C. Termination of Injunctions or Stays
Unless
otherwise provided herein or in the Confirmation Order, all injunctions or stays provided for in the Chapter 11 Cases under Bankruptcy Code Sections 105 or 362 or otherwise, and extant on the Confirmation Date shall terminate on the Effective Date,
at which time the injunctions and stays set forth in this Combined Plan and Disclosure Statement shall take effect.
D. Amendment or Modification of this Combined
Plan and Disclosure Statement
Alterations, amendments or modifications of this Combined Plan and Disclosure Statement may be proposed in writing by the Debtors
with the consent of the Committee, at any time before the Confirmation Date, provided that (i) such alterations, amendments, or modifications shall be in compliance with Bankruptcy Code Section 1127(a) and Bankruptcy Rule 3019(a),
(ii) this Combined Plan and Disclosure Statement, as altered, amended, or modified, satisfies the conditions of Bankruptcy Code Sections 1122 and 1123, and (iii) the Debtors shall have complied with Bankruptcy Code Section 1125.
E. Severability
In the event the Bankruptcy Court determines, before the
Confirmation Date, that any provision in this Combined Plan and Disclosure Statement is invalid, void or unenforceable, such provision shall be invalid, void or unenforceable with respect to the Holder or Holders of such Claims or Equity Interests
as to which the provision is determined to be invalid, void or unenforceable. The invalidity, voidability or unenforceability of any such provision shall in no way limit or affect the enforceability and operative effect of any other provision of
this Combined Plan and Disclosure Statement.
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F. Revocation or Withdrawal of this Combined Plan and Disclosure Statement
The Debtors reserve the right to revoke or withdraw this Combined Plan and Disclosure Statement before the Confirmation Date. If the Debtors revoke or withdraw this Combined Plan
and Disclosure Statement before the Confirmation Date, then this Combined Plan and Disclosure Statement shall be deemed null and void. In such event, nothing contained herein shall constitute or be deemed a waiver or release of any Claims by or
against the Debtors.
G. Binding Effect
This Combined Plan and Disclosure
Statement shall be binding upon and inure to the benefit of the Debtors, the Holders of Claims and the Holders of Equity Interests, and their respective successors and assigns.
H. Notices
All notices, requests and demands to or upon the Liquidation Trustee, the Post-
Effective Date Debtors or the Debtors, as applicable, to be effective shall be in writing and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when actually delivered or, in the case of notice by facsimile
transmission, when received and telephonically confirmed, addressed as shall be set forth in the Confirmation Order.
I. Governing Law
Except to the extent the Bankruptcy Code, Bankruptcy Rules or other federal law is applicable, or to the extent an exhibit to this Combined Plan and Disclosure Statement provides
otherwise, the rights and obligations arising under this Combined Plan and Disclosure Statement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to the principles of
conflicts of law of such jurisdiction.
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J. Withholding and Reporting Requirements
In
connection with the consummation of this Combined Plan and Disclosure Statement, the Debtors, the Post-Effective Date Debtors and Liquidation Trustee shall comply with all withholding and reporting requirements imposed by any federal, state, local
or foreign taxing authority and all distributions hereunder shall be subject to any such withholding and reporting requirements. Notwithstanding the above, each Holder of an Allowed Claim or Allowed Equity Interest that is to receive a Distribution
under this Combined Plan and Disclosure Statement shall have the sole and exclusive responsibility for providing any requested Tax Information or documentation to the Liquidation Trustee, and for the satisfaction and payment of any tax obligations
imposed on such Holder by any Governmental Unit, including income, withholding and other tax obligations, on account of such Distribution. The Debtors and the Liquidation Trustee have the right, but not the obligation, to not make a Distribution
until such Holder has (i) made arrangements satisfactory to any disbursing party for payment of any such tax obligations and (ii) provided any requested Tax Information or documentation to the Liquidation Trustee. The Debtors or
Liquidation Trustee may require, as a condition to receipt of a Distribution, that the Holder of an Allowed Claim or Allowed Equity Interest complete and return a Form W-8 or W-9, or other applicable form, as applicable to each such Holder, and
additional Tax Information. If the Debtors or Liquidation Trustee make such a request and the Holder fails to comply before the date that is 180 days after the request is made, the amount of such Distribution shall irrevocably revert to the Debtors
or the Rentech Liquidation Trust and any Claim or Equity Interest in respect of such Distribution shall be disallowed and forever barred from receiving a Distribution under this Combined Plan and Disclosure Statement.
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K. Headings
Headings are used in this Combined
Plan and Disclosure Statement for convenience and reference only, and shall not constitute a part of this Combined Plan and Disclosure Statement for any other purpose.
L. Exhibits/Schedules
All exhibits and schedules to this Combined Plan and Disclosure
Statement are incorporated into and are a part of this Combined Plan and Disclosure Statement as if set forth in full herein.
M. Filing of Additional Documents
On or before substantial consummation of this Combined Plan and Disclosure Statement, the Debtors shall file with the Bankruptcy Court such agreements and other
documents as may be necessary or appropriate to effectuate and further evidence the terms and conditions of this Combined Plan and Disclosure Statement.
N. No
Admissions
Notwithstanding anything herein to the contrary, nothing contained in this Combined Plan and Disclosure Statement shall be deemed as an admission by any
Entity with respect to any matter set forth herein.
O. Successors and Assigns
The rights, benefits and obligations of any Person or Entity named or referred to in this Combined Plan and Disclosure Statement shall be binding on, and shall
inure to the benefit of any heir, executor, administrator, successor or assign of such Person or Entity.
P. Reservation of Rights
Except as expressly set forth herein, this Combined Plan and Disclosure Statement shall have no force or effect unless the Bankruptcy Court shall enter the Confirmation
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Order. None of the filing of this Combined Plan and Disclosure Statement, any statement or provision contained herein, or the taking of
any action by the Debtors with respect to this Combined Plan and Disclosure Statement shall be or shall be deemed to be an admission or waiver of any rights of the Debtors or Holders of Claims or Equity Interests before the Effective Date.
Q. Implementation
The Debtors shall take all steps, and execute all
documents, including appropriate releases, necessary to effectuate the provisions contained in this Combined Plan and Disclosure Statement.
R. Inconsistency
In the event of any inconsistency among this Combined Plan and Disclosure Statement and any other instrument or document created or executed pursuant to this
Combined Plan and Disclosure Statement, the provisions of this Combined Plan and Disclosure Statement shall govern.
S. Dissolution of the Debtors
In connection with and following the closing of the Chapter 11 Cases, the Post- Effective Date Debtors are authorized to take any and all actions necessary to effect the
Debtors’ dissolution for all purposes under applicable state law.
T. Termination of the Liquidation Trustee
After the Chapter 11 Cases are closed and the Liquidation Trustee has completed all of the tasks necessary in order to fully and completely wind down, dissolve and/or terminate the
Debtors and to otherwise comply with its obligations under the terms of this Combined Plan and Disclosure Statement, the Liquidation Trustee shall have fully completed its duties under this
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Combined Plan and Disclosure Statement and thereby shall be fully released and discharged of its duties and obligations to carry out the
terms of this Combined Plan and Disclosure Statement.
U. Compromise of Controversies
Pursuant to Bankruptcy Rule 9019, and in consideration for the classification, distribution and other benefits provided under this Combined Plan and Disclosure Statement, the
provisions of this Combined Plan and Disclosure Statement shall constitute a good faith compromise and settlement of all Claims or controversies resolved pursuant to this Combined Plan and Disclosure Statement and in these Chapter 11 Cases. The
entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval of each of the foregoing compromises or settlements, and all other compromises and settlements provided for in this Combined Plan and Disclosure Statement and the
Chapter 11 Cases, and the Bankruptcy Court’s findings shall constitute its determination that such compromises and settlements are in the best interests of the Debtors, the Estates and all Holders of Claims and Equity Interests against the
Debtors.
V. Request for Expedited Determination of Taxes
The Debtors and the
Liquidation Trustee shall have the right to request an expedited determination under Bankruptcy Code Section 505(b) with respect to tax returns filed, or to be filed, for any and all taxable periods ending after the Petition Date through the
Effective Date.
W. Fee Claims
On the later of (i) the Effective Date and
(ii) the date the Bankruptcy Court enters an order approving the final fee applications of the applicable Professional, the Debtors shall pay all unpaid amounts approved by the Bankruptcy Court owing to such Professional relating to prior
periods and for the period ending on the Effective Date. Each Professional shall estimate its Professional Fee Claims due for periods that have not been billed as of the Effective Date. On
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or prior to thirty (30) days after service of notice of the Effective Date, each Professional shall File with the Bankruptcy Court
its final fee application seeking final approval of all fees and expenses from the Petition Date through the Effective Date; provided that the Post-Effective Date Debtors or the Liquidation Trustee may pay retained Professionals or other Entities in
the ordinary course of business after the Effective Date, without further Bankruptcy Court order. Objections to any Fee Claim must be Filed and served on the Liquidation Trustee and the requesting party no later than thirty (30) days after such
Fee Claim is Filed with the Bankruptcy Court. For the avoidance of doubt, to the extent there is any conflict between the terms of this Combined Plan and Disclosure Statement and/or the Confirmation Order and the Order Establishing Procedures for
Interim Compensation and Reimbursement of Expenses of Professionals [Docket No. 174], the Confirmation Order shall govern. Within ten (10) days after entry of a Final Order with respect to its final fee application, each Professional shall
remit any overpayment to the Liquidation Trustee, and the Liquidation Trustee shall pay any unpaid amounts to each Professional.
X. Postpetition Interest
Interest shall not accrue on any Claims or Interests, and no Holder of a Claim or Interest shall be entitled to interest accruing on or after the Petition Date. No
prepetition Claim shall be Allowed to the extent it is for postpetition interest or other similar charges, except to the extent permitted for Holders of Allowed Secured Claims under Bankruptcy Code Section 506(b).
Y. Dissolution of the Committee
Upon the occurrence of the Effective Date, the Committee shall
dissolve automatically, whereupon its members, professionals, and agents shall be released from any duties and responsibilities in the Chapter 11 Cases and under the Bankruptcy Code, except with respect to (i) obligations arising under
confidentiality agreements, which shall remain in full force and
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effect, (ii) prosecuting applications for payment of fees and reimbursement of expenses of Professionals or attending to any other
issues related to applications for payment of fees and reimbursement of expenses of Professionals, (iii) any motions or motions for other actions seeking enforcement of implementation of the provisions of this Combined Plan and Disclosure
Statement, and (iv) prosecuting or participating in any appeal of the Confirmation Order or any request for reconsideration thereof.
Z. Exemption from Certain
Taxes and Fees
Pursuant to Bankruptcy Code Section 1146(a), the making or delivery of any instrument or transfer from a Debtor to the Rentech Liquidation
Trust, or to any other Person under this Combined Plan and Disclosure Statement, shall not be subject to any law imposing a stamp tax or similar tax.
Dated:
April 4, 2018
Wilmington, Delaware
Rentech, Inc.
By: /s/ Paul Summers
Name: Paul Summers
Title: Chief Financial Officer
Dated: April 4, 2018
Wilmington, Delaware
Rentech WP U.S. Inc.
By: /s/ Paul Summers
Name:
Paul Summers
Title: Chief Financial Officer
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Exhibit A
Liquidation Trust Agreement
LIQUIDATION TRUST AGREEMENT
PREAMBLE
This Liquidation Trust Agreement, dated as of [ ], 2018 (the “Agreement”), which pertains to the administration of this Rentech Liquidation Trust (the “Liquidation
Trust”), is made effective as of the Effective Date1 of the Plan, by and among Rentech, Inc. and Rentech WP U.S., Inc., as debtors-in-possession (collectively, the “Debtors”), and Peter Kravitz, not individually, but solely in his
capacity as trustee (the “Liquidation Trustee” and together with the Debtors, the “Parties”) in accordance with the Debtors’ Second Amended Combined Disclosure Statement and Chapter 11 Plan of Liquidation dated April [_],
2018 (including all exhibits thereto, as the same may be further amended, modified, or supplemented from time to time, the “Plan”) filed by the Debtors and such Plan having been confirmed pursuant to the entry of the Confirmation Order.
RECITALS:
(A) On December 19, 2017 (the “Petition Date”), each
of the Debtors filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) commencing their Chapter 11 cases (the
“Chapter 11 Cases”);
(B) On December 19, 2017, the Debtors filed the initial Debtors’ Combined Disclosure Statement and Chapter 11 Plan of
Liquidation and a motion seeking an order confirming the Plan (the “Confirmation Order”) with the Bankruptcy Court, on February 15, 2018, the Debtors filed the Debtors’ Amended Combined Disclosure Statement and Chapter 11 Plan of
Liquidation with the Bankruptcy Court, and on April [_], 2018, the Debtors filed the Plan with the Bankruptcy Court;
(C) The Plan provides for the creation of a
post-confirmation Liquidation Trust to hold and administer the Debtors’ assets (the “Liquidation Trust Assets”), including certain Causes of Action, and distribute the proceeds therefrom to the Holders of Allowed Claims and Equity
Interests, in accordance with the terms of this Agreement and the Plan. This Agreement is executed to establish the Liquidation Trust and to facilitate the Plan;
(D) The Liquidation Trust is created on behalf of, and for the benefit of, the Liquidation Trust Beneficiaries;
(E) The respective powers, authority, responsibilities and duties of the Liquidation Trustee shall be governed by this Agreement, the Plan, the Confirmation Order, other applicable
orders issued by the Bankruptcy Court and, with respect to the Liquidation Trustee only, any obligations under Delaware law;
1 Capitalized terms used herein and
not otherwise defined herein or when first used shall have the meanings set forth in the Plan.
(F) This Agreement is intended to supplement, complement and implement the Plan. If any of the terms and/or provisions of this Agreement
are inconsistent with the terms and/or provisions of the Plan, then the Plan shall govern except for inconsistencies or clarifications in furtherance of the Liquidation Trust as a liquidating trust for federal income tax purposes, in which case the
terms and/or provisions of the Liquidation Trust shall govern; and
(G) The Liquidation Trust is intended to qualify as a “liquidating trust” under the
United States Internal Revenue Code of 1986, as amended, (the “IRC”) and the Treasury Regulations promulgated thereunder, specifically Treasury Regulation section 301.7701-4(d), and as such is a “grantor trust” for federal income
tax purposes with the Liquidation Trust Beneficiaries treated as the grantors and owners of the Liquidation Trust. In particular, as specified in Revenue Procedure 94-45, 1994-2 C.B. 684 (July 11, 1994):
(i) The Liquidation Trust is organized for the primary purpose of liquidating the Liquidation Trust Assets, with no objective to conduct a trade or business except to the extent
reasonably necessary to, and consistent with, the liquidating purpose of the Liquidation Trust. The Liquidation Trust shall not be deemed a successor of the Debtors or their Estates;
(ii) This Agreement provides that the Liquidation Trust Beneficiaries will be treated as the grantors of the Liquidation Trust and deemed owners of the Liquidation Trust Assets,
and further, requires the Liquidation Trustee to file returns for the Liquidation Trust as a grantor trust pursuant to Treasury Regulation section 1.671-4(a);
(iii) This Agreement provides for consistent valuations of the transferred property by the Liquidation Trustee and the Liquidation Trust Beneficiaries, and those
valuations shall be used for all federal income tax purposes;
(iv) All of the Liquidation Trust’s income is to be and will be treated as subject to tax on a
current basis to the Liquidation Trust Beneficiaries who will be responsible for payment of any tax due;
(v) This Liquidation Trust contains a fixed or
determinable termination date in that it will terminate as soon as practicable, but in no event later than the fifth (5th) anniversary of the Effective Date; provided, however, that, the Bankruptcy Court, upon motion by a party-in-interest
within the six (6) month period prior to the fifth (5th) anniversary (or at least six (6) months prior to the end of an extension period), may extend the term of the Liquidation Trust for a finite period (not to exceed an additional
three (3) years, together with any prior extensions, without a favorable ruling from the IRS that any further extension would not adversely affect the status of the Liquidation Trust as a liquidating trust for federal income tax purposes) if
such an extension is warranted by the facts and based upon a finding that such an extension is necessary to the liquidating purpose of the Liquidation Trust, further provided adequate funding exists for such extension period as determined by the
Bankruptcy Court;
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(vi) The investment powers of the Liquidation Trustee, other than those reasonably necessary to maintain the value of the Liquidation
Trust Assets and to further the liquidating purpose of the Liquidation Trust, are limited to powers to invest in Permissible Investments (as defined herein); and
(vii) The Liquidation Trustee is required to distribute to the Liquidation Trust Beneficiaries, at least once per twelve-month period, the Liquidation Trust’s
net income plus all net proceeds from the sale, realization, settlement or liquidation of the Liquidation Trust Assets, except that the Liquidation Trustee may retain an amount of net proceeds or net income reasonably necessary to maintain the value
of the Liquidation Trust Assets, to satisfy current and projected expenses of the Liquidation Trust, or to meet Claims and contingent liabilities (including Disputed Claims).
NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements contained herein and in the Plan, the Parties agree as follows:
DEFINITIONS
“Affiliates” means parents, subsidiaries, members, managers, limited
partners and general partners.
“Agreement” has the meaning specified in the Preamble to this Agreement. “Bankruptcy Court” has the meaning
specified in the Preamble to this Agreement. “Causes of Action” means all Causes of Action (as defined in the Plan) that are
Liquidation Trust Assets.
“Confidential Party” has the meaning specified in Section 18.4. “Debtors” has the meaning specified in the Preamble to this Agreement.
“Engagement Letter” means the engagement letter dated [__], 2018 that is attached hereto as Exhibit A.
“IRS” means the Internal Revenue Service of the United States of America. “Liquidation Trust” has the meaning specified in the Preamble to this Agreement.
“Liquidation Trust Asset Proceeds” means any and all proceeds from the Liquidation Trust Assets, including, without limitation, any cash or other
property received from or in connection with the Liquidation Trust Assets or the prosecution, settlement or adjudication of any related Cause of Action.
“Liquidation Trust Beneficiaries” means the Holders of Allowed Claims. “Liquidation Trust Funds” has the meaning specified in Section 5.1.
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“Liquidation Trustee” has the meaning specified in the Preamble to this Agreement or any successor thereto.
“Liquidation Trustee Non-Professionals” has the meaning specified in Section 15.l(b). “Liquidation Trustee Professionals” has the meaning specified in
Section 15.1(a).
“Oversight Committee” means the members of the Committee that have agreed to serve on the Oversight Committee of the Liquidation
Trust after the Effective Date or such other Persons as may be approved by the Bankruptcy Court thereafter.
“Parties” has the meaning specified in the
Preamble to this Agreement. “Permissible Investments” has the meaning specified in Section 2.8.
“Person” means any individual,
corporation, partnership, joint venture, association, trust, unincorporated organization, or other legal entity, or any governmental authority, entity, or political subdivision thereof.
“Petition Date” has the meaning specified in the Preamble to this Agreement. “Plan” has the meaning specified in the Preamble to this Agreement.
ARTICLE I.
NAME OF TRUST AND LIQUIDATION TRUSTEE
1.1. Appointment of Liquidation Trustee
The name of the Liquidation Trust is the Rentech
Liquidation Trust.
Peter Kravitz is hereby appointed to serve as the initial Liquidation Trustee under the Plan, and hereby accepts this appointment and agrees to
serve in such capacity effective upon the Effective Date of the Plan and pursuant to the terms of the Plan, the Engagement Letter and this Agreement. A successor Liquidation Trustee shall be appointed as set forth in Section 12.1 in the event
the Liquidation Trustee is removed or resigns pursuant to this Agreement or if the Liquidation Trustee otherwise vacates the position.
ARTICLE II.
DUTIES AND POWERS OF THE LIQUIDATION TRUSTEE
2.1. Generally
The Liquidation Trustee shall be responsible for liquidating and administering (or abandoning, as the case may be) the Liquidation Trust Assets, including the Causes of Action, and
taking actions on behalf of, and representing, the Liquidation Trust. The Liquidation Trustee shall have the authority to bind the Liquidation Trust within the limitations set forth herein, but
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shall for all purposes hereunder be acting in the capacity of Liquidation Trustee and not individually.
2.2. Scope of Authority of Liquidation Trustee
Within the limitations set forth herein, and
subject to the oversight of the Oversight Committee and the provisions set forth in this Agreement, the responsibilities and authority of the Liquidation Trustee shall include, without limitation: (i) holding and administering the Liquidation
Trust Assets, (ii) evaluating and determining strategy with respect to the Causes of Action and litigating Causes of Action, or settling, transferring, releasing or abandoning any and all Causes of Action on behalf of the Liquidation Trust,
(iii) facilitating the prosecution or settlement of objections to or estimations of Claims asserted against the Liquidation Trust or the Liquidation Trust Assets, (iv) calculating and implementing distributions to the Liquidation Trust
Beneficiaries in accordance with the Plan and this Agreement, (v) filing all required tax returns for the Liquidation Trust as a grantor trust pursuant to Treasury Regulation section 1.671-4(a), (vi) performing such acts as are necessary
for the administration, resolution and wind-down of the Debtors after the Effective Date including, without limitation, preparing and filing final tax returns for the Debtors, and finalizing the wind- down of
the Debtors’ 401(k) plan, as necessary, (vii) retaining Trustee Professionals and Trustee Non-Professionals as provided in the Plan or this Agreement, (viii) receiving reasonable compensation for performing services as Liquidation
Trustee in accordance with the Engagement Letter and paying the reasonable fees, costs and expenses of any Trustee Professionals and Trustee Non-Professionals in accordance with the applicable provisions of this Agreement, (ix) providing
periodic reports and updates to the Office of the United States Trustee regarding the status of the administration of the Liquidation Trust Assets and the assets, liabilities and transfers of the Liquidation Trust, and (x) carrying out such
other responsibilities not specifically set forth herein as may be vested in the Liquidation Trustee pursuant to the Plan, this Agreement, Bankruptcy Court order, or as may be necessary and proper to carry out the provisions of the Plan or this
Agreement.
2.3. Obligations to Liquidation Trust and Beneficiaries
The
Liquidation Trustee’s actions as Liquidation Trustee will be held to standards required under Delaware law.
2.4. Additional Powers of Liquidation Trustee
In connection with the administration of the Liquidation Trust, subject to and except as otherwise set forth in this Agreement or the Plan, the Liquidation Trustee
is hereby authorized to perform those acts necessary to accomplish the purposes of the Liquidation Trust. Without limiting, but subject to, the foregoing, the Liquidation Trustee shall, unless otherwise provided in this Agreement and subject to the
limitations contained herein and in the Plan:
(1) be expressly authorized and required to hold legal title (on behalf of the Liquidation Trust as Liquidation
Trustee, but not individually) to the Liquidation Trust Assets, including, but not limited to, the Causes of Action, and be expressly authorized to vote
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any Claim or Equity Interest held by the Liquidation Trust in any case or proceeding under the Bankruptcy Code or otherwise and to
receive any distribution therein;
(2) be expressly authorized and required to protect and enforce the rights to the Liquidation Trust Assets vested in the
Liquidation Trust by the Plan by any method deemed appropriate in his discretion, including, without limitation, by judicial proceedings or pursuant to any applicable bankruptcy, insolvency, moratorium or similar law and general principles of
equity, provided that any initiation of a judicial proceeding shall be done in consultation with the Oversight Committee;
(3) be expressly authorized and required
to invest funds (in the manner set forth in Section 2.8), make distributions and pay any other obligations owed by the Liquidation Trust from the Liquidation Trust Assets as provided herein and in the Plan;
(4) be expressly authorized and required to prosecute, defend, compromise, adjust, arbitrate, abandon, estimate, or otherwise deal with and settle, in accordance with the terms set
forth in Article VI hereof, Claims against the Liquidation Trust or the Liquidation Trust Assets, provided that any initiation of a judicial proceeding shall be done in consultation with the Oversight Committee;
(5) be expressly authorized and required to pay expenses and make disbursements necessary to preserve, liquidate, and enhance the Liquidation Trust Assets;
(6) be expressly authorized to purchase such insurance coverage as the Liquidation Trustee, in his sole discretion, deems necessary and appropriate with respect to the liabilities
and obligations of the Liquidation Trustee;
(7) be expressly authorized to purchase such insurance coverage as the Liquidation Trustee, in his sole discretion,
deems necessary and appropriate with respect to real and personal property which may be or may become Liquidation Trust Assets;
(8) be expressly authorized to
retain and pay, as applicable, the Trustee Professionals and Trustee Non-Professionals as provided in, and subject to the terms of, this Agreement;
(9) be
expressly authorized to settle, in his sole discretion, any and all Disputed Claims such that the remaining claim amount after the settlement is less than or equal to $500,000.00; provided, however, that the Liquidation Trustee may not settle any
Disputed Claim where the remaining claim amount after the settlement exceeds $500,000.00 without approval of the Oversight Committee or the Bankruptcy Court;
(10)
be expressly authorized to incur any reasonable and necessary expenses in liquidating and converting the Liquidation Trust Assets to Cash, or otherwise administering the Liquidation Trust, as set forth in the Plan or this Agreement; and
(11) be expressly authorized and required to assume such other powers as may be vested in or assumed by the Liquidation Trust pursuant to the Plan or Bankruptcy
6
Court order, or as may be necessary and proper to carry out the provisions of the Plan or this Agreement.
2.5. General Authority of the Liquidation Trustee
Unless specifically stated otherwise herein,
the Liquidation Trustee shall not be required to obtain Bankruptcy Court approval with respect to any proposed action or inaction: (a) authorized in this Agreement, or (b) specifically contemplated in the Plan.
2.6. Limitation of Liquidation Trustee’s Authority: No On-Going Business
(a) The
Liquidation Trustee shall have no power or authority except as set forth in this Agreement or in the Plan.
(b) For federal income tax purposes, the Liquidation
Trustee shall not be authorized to engage in any trade or business with respect to the Liquidation Trust Assets or any proceeds therefrom except to the extent reasonably necessary to, and consistent with, the liquidating purpose of the Liquidation
Trust. The Liquidation Trustee shall take such actions consistent with the prompt orderly liquidation of the Liquidation Trust Assets as required by applicable law and consistent with the treatment of the Liquidation Trust as a liquidating trust
under Treasury Regulation section 301.7701-4(d), to the extent such actions are permitted by this Agreement.
2.7. Other Activities
Reserved.
2.8. Investment and Safekeeping of Liquidation Trust Assets
All monies and other assets received by the Liquidation Trustee shall, until distributed or paid over as herein provided, be segregated from all other monies and assets of the
Liquidation Trustee, and further, shall be held in trust for the benefit of the Liquidation Trust Beneficiaries, but need not be segregated from other Liquidation Trust Assets, unless and to the extent required by the Plan. The Liquidation Trustee
shall promptly invest any such monies in the manner set forth in this Section 2.8, but shall otherwise be under no liability for interest or income on any monies received by the Liquidation Trust hereunder and held for distribution or payment
to the Liquidation Trust Beneficiaries, except as such interest shall actually be received. Investment of any monies held by the Liquidation Trust shall be administered in accordance with the general duties and obligations hereunder. The right and
power of the Liquidation Trustee to invest the Liquidation Trust Assets, the proceeds thereof, or any income earned by the Liquidation Trust, shall be limited to the right and power to (i) invest such Liquidation Trust Assets (pending
distributions in accordance with the Plan or this Agreement) in (a) short-term direct obligations of, or obligations guaranteed by, the United States of America or (b) short-term obligations of any agency or corporation which is or may
hereafter be created by or pursuant to an act of the Congress of the United States as an agency or instrumentality thereof; or (ii) deposit such assets in demand deposits at any bank or trust company, which has, at the time of the deposit, a
capital stock and surplus aggregating at least $1,000,000,000 (collectively, the “Permissible Investments”) provided, however, that the scope of any such Permissible
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Investments shall be limited to include only those investments that a liquidating trust, within the meaning of Treasury Regulation
section 301.7701-4(d), may be permitted to hold, pursuant to the Treasury Regulations, or any modification in the IRS guidelines, whether set forth in IRS rulings, other IRS pronouncements or otherwise.
ARTICLE III.
TERM AND COMPENSATION FOR LIQUIDATION TRUSTEE
3.1. Compensation
(a) The Liquidation Trustee shall be entitled to receive compensation for
services rendered on behalf of the Liquidation Trust and reimbursement of expenses as provided in the Engagement Letter or such other compensation as ordered by the Bankruptcy Court or approved by the Oversight Committee.
(b) All compensation and other amounts payable to the Liquidation Trustee and the Oversight Committee shall be paid out of the Liquidation Trust Funds.
3.2. Termination
The duties, responsibilities and powers of the Liquidation Trustee and the
Oversight Committee will terminate on the date the Liquidation Trust is dissolved and terminated pursuant to Section 16.1, or by an order of the Bankruptcy Court.
3.3. No Bond
The Liquidation Trustee shall serve without bond.
3.4. Removal
The Liquidation Trustee may be removed only for cause by the Oversight Committee
or a Final Order of the Bankruptcy Court after notice and a hearing; provided however, that the Liquidation Trustee may not be removed until a successor Liquidation Trustee has been named or is capable of being named immediately upon such removal.
For purposes of removing the Liquidation Trustee, “cause” shall mean gross negligence, breach of fiduciary duty, breach of trust, and reckless or willful mishandling of the Liquidation Trust Assets. Any fees and unreimbursed expenses that
have been properly incurred by the Liquidation Trustee in accordance with the terms of this Agreement and the Engagement Letter that are owing to the Liquidation Trustee as of the date of the Liquidation Trustee’s removal shall be paid to the
Liquidation Trustee within 5 days of the removal date.
3.5. Resignation
The
Liquidation Trustee may resign by giving not less than sixty (60) days’ prior written notice thereof to the Oversight Committee and/or the Bankruptcy Court.
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ARTICLE IV.
PROVISIONS REGARDING DISTRIBUTIONS
4.1. Priority and Method of Distributions
(a) Generally. The Liquidation
Trustee, on behalf of the Liquidation Trust, or such other Person as may be designated in accordance with this Agreement, will make distributions to the Liquidation Trust Beneficiaries in accordance with this Agreement and in accordance with the
priorities set forth in, and the other provisions of, the Plan. Whenever any distribution to be made under the Plan or this Agreement is due on a day other than a Business Day, such distribution shall be made, without interest, on the immediately
succeeding Business Day, but any such distribution will have been deemed to have been made on the date due.
(b) Distribution of Liquidation Trust Assets and
Proceeds Thereof. All Liquidation Trust Assets and all Liquidation Trust Asset Proceeds shall be distributed in accordance with the terms of this Agreement and of, and priorities established by, the Plan and Confirmation Order.
(c) Distribution of the Liquidation Trust Funds. Distributions will be made by the Liquidation Trustee in the following order of priority: (i) first, to satisfy the expenses
of administering the Liquidation Trust, including reasonable fees and expenses of any attorneys, advisors, other professionals and employees employed by the Liquidation Trustee, and members of the Oversight Committee for expenses incurred as members
of the Oversight Committee; and (ii) second, to make distributions to Liquidation Trust Beneficiaries in accordance with the terms of the Plan and this Agreement.
(d) Periodic Distribution Requirement. Subject to the provisions of this Article IV and to the extent required to maintain grantor trust tax status, the Liquidation Trustee is
required to distribute at least once per twelve-month period to the Liquidation Trust Beneficiaries the Liquidation Trust’s net income plus all net proceeds from the sale, realization, settlement or liquidation of the Liquidation Trust Assets,
except that the Liquidation Trustee may retain an amount of net proceeds or net income reasonably necessary to maintain the value of the Liquidation Trust Assets, to satisfy current and projected expenses of the Liquidation Trust, and to meet Claims
and contingent liabilities (including Disputed Claims). The Liquidation Trustee shall consult with the Oversight Committee prior to making any distributions to the Liquidation Trust Beneficiaries.
(e) Withholding. The Liquidation Trustee may withhold from amounts distributable to any Person any and all amounts, to be determined in the Liquidation Trustee’s reasonable
sole discretion, required by any law, regulation, rule, ruling, directive or other government equivalent of the United States or of any political subdivision thereof. To the extent that amounts are so withheld and paid over to the appropriate
governmental entity, such amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of whom such deduction and withholding was made.
(f) Tax Identification Numbers and Tax Information. The Liquidation Trustee is authorized to request and obtain from the Liquidation Trust Beneficiaries or any other
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Person Forms W-8 and/or W-9 or such other forms or information relating to the Liquidation Trustee’s tax obligations or obligations
to withhold as the Liquidation Trustee may reasonably request, and the Liquidation Trustee may condition any distribution to any Liquidation Trust Beneficiary or other distributee upon receipt of such forms or information.
4.2. Delivery of Distributions
Subject to the provisions of Federal Rule of Bankruptcy
Procedure 2002(g), and except as otherwise provided herein, distributions and deliveries to the Liquidation Trust Beneficiaries shall be made at the address of each such Liquidation Trust Beneficiary set forth on the Debtors’ books and records
unless superseded by (i) the address set forth on proofs of claim filed by any such Liquidation Trust Beneficiary or in the books and records of the transfer agent for the Debtors’ Equity Interests or (ii) the address provided in
connection with a transfer pursuant to Section 14.1.
4.3. Unclaimed Distributions
Any Cash or other property to be Distributed under the Plan shall revert to the Liquidation Trust or the Debtors, as applicable, if it is not claimed by the Entity on or before the
Unclaimed Distribution Deadline. If such Cash or other property is not claimed on or before the Unclaimed Distribution Deadline, the Distribution made to such Entity shall be deemed to be reduced to zero. Any Distribution that remains unclaimed
ninety (90) days after the final Distribution is made shall be paid to a charity exempt from taxation under Section 501(c)(3) of the IRC, such as the American Bankruptcy Institute, or such other charity as determined by the Liquidation
Trustee.
ARTICLE V. TRUST FUNDING
5.1. Trust Funding
The costs and expenses of the Liquidation Trust, including, without limitation, the compensation to and reimbursement of expenses of the Liquidation Trustee and the fees, costs and
expenses of all professionals retained by the Liquidation Trustee in connection with the performance of the Liquidation Trustee’s duties in connection with this Agreement, and the expenses of the Oversight Committee, shall be initially paid
from a fund set aside (the “Liquidation Trust Funds”) for payment of same on the Effective Date. The Liquidation Trust Funds shall not be subject to charge for claims against the Liquidation Trust, the Liquidation Trustee, or the
Debtors’ Estates. Any funds remaining in the Liquidation Trust Funds after completion of the Liquidation Trustee’s activities and full payment of all costs and expenses of the Liquidation Trust including, without limitation, the fees,
costs and expenses of the Liquidation Trustee and the professionals retained by the Liquidation Trustee, and the expenses of the Oversight Committee, shall be paid to the Liquidation Trust Beneficiaries according to the terms of the Plan and this
Agreement.
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ARTICLE VI.
PROCEDURES FOR RESOLUTION OF DISPUTED,
CONTINGENT AND UNLIQUIDATED CLAIMS OR EQUITY INTERESTS
6.1. Objections to Claims; Prosecution of Disputed Claims
(a) The Liquidation Trustee, on behalf of the Liquidation Trust, shall have the exclusive right to object to the allowance of any Claims in Classes 1, 2, 3, 4 or 5 by no later than
the Claims Objection Deadline. The Liquidation Trustee shall have the right to object to the allowance of Claims with respect to which the Liquidation Trustee disputes classification, liability or allowance in whole or in part. The Liquidation
Trustee shall have the authority to settle, in his sole discretion, any and all such objections to Claims such that the remaining claim amount after the settlement is less than or equal to $500,000.00; provided, however, that the Liquidation Trustee
may not settle any objection to a Claim where the remaining claim amount after the settlement exceeds $500,000.00 without Bankruptcy Court or Oversight Committee approval.
6.2. Estimation of Claims
The Liquidation Trustee may at any time request that the Bankruptcy
Court estimate any contingent or unliquidated Claim pursuant to Section 502(c) of the Bankruptcy Code regardless of whether the Debtors or the Liquidation Trustee previously have objected to such Claim or whether the Bankruptcy Court has ruled on
any such objection. The Bankruptcy Court will retain jurisdiction to estimate any Claim at any time during litigation concerning any objection to any Claim, including, without limitation, during the pendency of any appeal relating to any such
objection. Subject to the provisions of Section 502(j) of the Bankruptcy Code, in the event that the Bankruptcy Court estimates any contingent or unliquidated Claim, the amount so estimated shall constitute the maximum allowed amount of such
Claim. If the estimated amount constitutes a maximum limitation on the amount of such Claim, the Liquidation Trustee may pursue supplementary proceedings to object to the allowance of such Claim. All of the aforementioned objection, estimation and
resolution procedures are intended to be cumulative and not necessarily exclusive of one another. Claims may be estimated and subsequently compromised, settled, withdrawn or resolved by any mechanism approved by the Bankruptcy Court.
6.3. Payments and Distributions on Disputed Claims
(a) Notwithstanding any provision hereof to
the contrary, the Liquidation Trustee may, in his discretion, pay the undisputed portion of a Disputed Claim. Notwithstanding the foregoing, the Liquidation Trustee will set aside for each Holder of a Disputed Claim such portion of Cash as may be
necessary to provide required distributions if that Claim were an Allowed Claim, either based upon the amount of the Claim as filed with the Bankruptcy Court or the amount of the Claim as estimated by the Bankruptcy Court.
(b) At such time as a Disputed Claim becomes, in whole or in part an Allowed Claim, the Liquidation Trustee shall distribute to the Holder thereof the distributions, if any, to
which such Holder is then entitled under the Plan or this Agreement. Such distribution, if any,
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will be made as soon as practicable after the date that the order or judgment of the Bankruptcy Court allowing such Disputed Claim
becomes a Final Order. No interest will be paid on Disputed Claims that later become Allowed or with respect to any distribution in satisfaction thereof to a Holder.
ARTICLE VII.
LIABILITY AND EXCULPATION PROVISIONS
7.1. Standard of Liability
(a) In no event shall the Liquidation Trustee or his Professionals,
Non-Professionals, Affiliates, representatives, employees, directors, officers or principals or members of the Oversight Committee be held personally liable for any claim, expense, liability or other obligation asserted against the Liquidation
Trust. The Liquidation Trustee and all of his Non-Professionals, Professionals, Affiliates, representatives, employees, directors, officers or principals and members of the Oversight Committee shall not be
liable for any negligence or any error of judgment made in good faith with respect to any action taken or omitted to be taken in good faith, except to the extent that the action taken or omitted to be taken by each of the same or their respective
Professionals, Non-Professionals, Affiliates, representatives, employees, directors, officers or principals or members of the Oversight Committee is determined by a Final Order to be solely due to their own respective gross negligence, willful
misconduct, fraud or, solely in the case of the Liquidation Trustee, breach of fiduciary duty. Any act or omission taken with the approval of the Bankruptcy Court will be conclusively deemed not to constitute gross negligence or willful misconduct,
provided, however, that nothing herein shall be deemed to limit the qualified immunity to which the Oversight Committee is entitled to under applicable law, which members of the Oversight Committee shall be entitled to enjoy the same protections and
immunity as applicable to members of the Committee.
7.2. Reliance by Liquidation Trustee
Except as otherwise provided herein:
(a) the Liquidation Trustee may rely, and shall be
protected in acting upon, any resolution, certificate, statement, installment, opinion, report, notice, request, consent, order, or other paper or document reasonably believed to be genuine and to have been signed or presented by the proper party or
parties;
(b) the Liquidation Trustee shall not be liable for any action reasonably taken or not taken by him in accordance with the advice of a Professional; and
(c) persons dealing with the Liquidation Trustee shall look only to the Liquidation Trust Funds to satisfy any liability incurred by the Liquidation Trustee to
such person in carrying out the terms of this Agreement, and the Liquidation Trustee shall not have any personal obligation to satisfy any such liability, except to the extent that actions taken or not taken after the Effective Date by the
Liquidation Trustee are determined by a Final Order to be solely due to the Liquidation Trustee’s own gross negligence, willful misconduct, fraud or breach of fiduciary duty.
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7.3. Exculpation; Indemnification
(a) Exculpation.
From and after the Effective Date, the Liquidation Trustee, and his Professionals, Non-Professionals, Affiliates, representatives, employees, directors, officers or principals and the Oversight Committee, shall be and hereby are exculpated by all
Persons and Entities, including, without limitation, Holders of Claims and Equity Interests and other parties in interest, from any and all claims, causes of action and other assertions of liability arising out of the discharge of the powers and
duties conferred upon said parties pursuant to or in furtherance of this Agreement, the Plan, or any order of the Bankruptcy Court or applicable law or otherwise, except only for actions taken or not taken, from and after the Effective Date only to
the extent determined by a Final Order to be solely due to their own respective gross negligence, willful misconduct, fraud, or, solely in the case of the Liquidation Trustee, breach of fiduciary duty.
(b) No Holder of a Claim or Equity Interest or other party-in-interest will have or be permitted to pursue any claim or cause of action against the Liquidation Trustee or his
Professionals, Non-Professionals, representatives, employees, directors, officers or principals or the Oversight Committee, for making payments in accordance with the Plan or this Agreement or for implementing the provisions of the Plan or this
Agreement. Any act taken or not taken, in the case of the Liquidation Trustee, with the approval of the Bankruptcy Court, will be conclusively deemed not to constitute gross negligence, willful misconduct, or a breach of fiduciary duty.
(c) Indemnification. The Liquidation Trust shall indemnify, defend and hold harmless the Liquidation Trustee, his Professionals and Non-Professionals and members of the Oversight
Committee, solely from Liquidation Trust Funds and Liquidation Trust Assets, from and against any and all claims, causes of action, liabilities, obligations, losses, damages or expenses (including attorneys’ fees and expenses) occurring after
the Effective Date, other than to the extent determined by a Final Order to be solely due to their own respective gross negligence, willful misconduct, or, solely in the case of the Liquidation Trustee, breach of fiduciary duty, to the fullest
extent permitted by applicable law.
ARTICLE VIII.
ESTABLISHMENT OF THE
LIQUIDATION TRUST
8.1. Transfer of Assets to Liquidation Trust; Assumption of Liabilities
Pursuant to the Plan, the Debtors and the Liquidation Trustee hereby establish the Liquidation Trust on behalf of the Liquidation Trust Beneficiaries, to be treated as the grantors
and deemed owners of the Liquidation Trust Assets and the Debtors hereby transfer, assign, and deliver to the Liquidation Trust, on behalf of the Liquidation Trust Beneficiaries, all of their right, title, and interest in the Liquidation Trust
Assets, including the related claims and Causes of Action of the Debtors, other than any claims and causes of action expressly waived, exculpated or released in accordance with the provisions of the Plan, notwithstanding any prohibition of
assignability under applicable non-bankruptcy law. Such transfer includes, but is not limited to, all rights to assert, waive or otherwise exercise any attorney-client privilege, work product protection or other privilege, immunity, or
confidentiality provision vested in, or controlled by, the Debtors. The Liquidation Trustee agrees to accept and hold the Liquidation
Trust Assets in the Liquidation Trust for the benefit of the Liquidation Trust Beneficiaries, subject to the terms of the Plan and this
Agreement.
8.2. Title to Assets
(a) On the Effective Date, the Debtors shall
transfer the Liquidation Trust Assets to the Liquidation Trust for the benefit of the Liquidation Trust Beneficiaries. Notwithstanding any prohibition of assignability under applicable non-bankruptcy law, all assets and properties encompassed by the
Plan shall vest in the Liquidation Trust in accordance with Section 1141 of the Bankruptcy Code. Upon the transfer of the Liquidation Trust Assets to the Liquidation Trust, the Debtors shall have no interest in or with respect to such
Liquidation Trust Assets or the Liquidation Trust.
(b) For all federal income tax purposes, all Parties and Liquidation Trust Beneficiaries shall treat the
transfer of the Liquidation Trust Assets by the Debtors to the Liquidation Trust, as set forth in this Article VIII and in the Plan, as a transfer of such assets by the Debtors to the Liquidation Trust Beneficiaries entitled to distributions under
this Agreement followed by a transfer by such Liquidation Trust Beneficiaries to the Liquidation Trust. Thus, the Beneficiaries shall be treated as the grantors and owners of a grantor trust for federal income tax purposes.
8.3. Valuation of Assets
As soon as practicable after the Effective Date, the Liquidation
Trustee (to the extent that the Liquidation Trustee deems it necessary or appropriate in his discretion), shall value the Liquidation Trust Assets based on the good faith determination of the Liquidation Trustee. The valuation shall be used
consistently by all Parties and the Liquidation Trust Beneficiaries for all federal income tax purposes. The Bankruptcy Court shall resolve any dispute regarding the valuation of the Liquidation Trust Assets.
ARTICLE IX.
LIQUIDATION TRUST BENEFICIARIES
9.1. Identification of Liquidation Trust Beneficiaries
In order to determine the actual names
and addresses of the Liquidation Trust Beneficiaries, the Liquidation Trustee shall be entitled, but not required, to conclusively rely on (i) the names and addresses set forth in the Debtors’ Schedules, books and records or filed proofs
of claim or (ii) the Debtors’ stock transfer agent. Each Liquidation Trust Beneficiary’s right to distribution from the Liquidation Trust, which is dependent upon such Liquidation Trust Beneficiary’s classification under the
Plan, shall be that accorded to such Liquidation Trust Beneficiary under the Plan.
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ARTICLE X. ADMINISTRATION
10.1. Purpose of the
Liquidation Trust
The Liquidation Trust shall be established for the primary purpose of liquidating its assets, in accordance with Treasury Regulation section
301.7701-4(d), with no objective to continue or engage in the conduct of a trade or business, except to the extent reasonably necessary to, and consistent with, the liquidating purpose of the Liquidation Trust. Accordingly, the Liquidation Trustee
shall, in an expeditious but orderly manner, liquidate and convert to Cash the Liquidation Trust Assets, make timely distributions to the Liquidation Trust Beneficiaries and not unduly prolong its duration, and shall take or refrain from taking such
other actions as may be necessary, in the Liquidation Trustee’s reasonable judgment, to preserve and maintain the status of the Liquidation Trust as a “liquidating trust” and as a “grantor trust” within the meaning of
Treasury Regulation sections 301.7701-4(d) and 1.671-4(a). The Liquidation Trust shall not be deemed a successor-in-interest of the Debtors for any purpose other than as specifically set forth in this Agreement.
10.2. Books and Records
The Liquidation Trustee shall maintain books and records relating to
the administration of the Causes of Action and the distribution by the Liquidation Trustee of the proceeds therefrom in such detail and for such period of time as may be necessary to make full and proper accounting in respect thereof and to comply
with applicable provisions of law. The Liquidation Trustee shall also maintain books and records relating to the administration of the Liquidation Trust Assets (including the Causes of Action), the income and expenses of the Liquidation Trust, and
the payment of expenses of and liabilities of, claims against or assumed by, the Liquidation Trust in such detail and for such period of time as may be necessary to make full and proper accounting in respect thereof and to comply with applicable
provisions of law. Except as otherwise provided herein or in the Plan, nothing in this Agreement requires the Liquidation Trustee to file any accounting or seek approval of any court with respect to the administration of the Liquidation Trust, or as
a condition for making any payment or distribution out of the Liquidation Trust Assets. Subject to all applicable privileges, those Liquidation Trust Beneficiaries who hold, in the aggregate, 10% or more of the aggregate dollar value of the Allowed
General Unsecured Claims or 5% or more of the total number of Allowed Equity Interests, shall have the right, in addition to any other rights they may have pursuant to this Agreement, under the Plan or otherwise, upon thirty (30) days’
prior written notice to the Liquidation Trustee, to request a reasonable inspection of the books and records held by the Liquidation Trustee, provided that, all costs associated with such inspection shall be paid in advance by such requesting
Liquidation Trust Beneficiary, and further, if so requested, such Liquidation Trust Beneficiary shall have entered into a confidentiality agreement in form and substance reasonably satisfactory to the Liquidation Trustee, and make such other
arrangements as may be reasonably requested by the Liquidation Trustee, provided, further, that the Liquidation Trustee shall provide such additional statements, reports, submissions and information to the Oversight Committee as may reasonably be
requested, including without limitation, periodic updates on the status of the Liquidation Trust, its assets (including tax
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refunds), and the projected timing of future distributions (to the extent known by the Liquidation Trustee).
10.3. Compliance with Laws
Any and all distributions of Liquidation Trust Assets shall comply
with all applicable laws and regulations, including, but not limited to, applicable federal and state tax and securities laws.
ARTICLE XI.
SUCCESSOR LIQUIDATION TRUSTEE
11.1. Successor Liquidation Trustee
In the event the Liquidation Trustee is removed by the Bankruptcy Court or the Oversight Committee, resigns pursuant to this Agreement, or otherwise vacates his position, a
successor Liquidation Trustee shall be appointed subject to the approval of the Bankruptcy Court or, on or after July 1, 2018, the Oversight Committee. If a successor Liquidation Trustee is not so appointed, then the Bankruptcy Court or, on or
after July 1, 2018, the Oversight Committee shall appoint a successor in accordance with the best interests of the Liquidation Trust Beneficiaries. Any successor Liquidation Trustee appointed hereunder shall execute an instrument accepting such
appointment. Thereupon, such successor Liquidation Trustee shall, without any further act, become vested with all the estates, properties, rights, powers, trusts and duties of his/her predecessor in the Liquidation Trust with like effect as if
originally named herein; provided, however, that a removed or resigning Liquidation Trustee shall, nevertheless, when requested in writing by the successor Liquidation Trustee, execute and deliver any reasonable instrument or instruments conveying
and transferring to such successor Liquidation Trustee all the estates, properties, rights, powers, and trusts of such removed or resigning Liquidation Trustee.
ARTICLE XII.
DISPUTED CLAIMS RESERVE
12.1. Disputed Claims Reserve
The Liquidation Trustee shall maintain a reserve for any
distributable amounts required to be set aside on account of Disputed Claims and shall distribute such amounts (net of any expenses, including any taxes relating thereto), as provided in the Plan and in this Agreement, as such Disputed Claims are
resolved by Final Order, and such amounts shall be distributable in respect of such Disputed Claims as such amounts would have been distributable had the Disputed Claims been Allowed Claims as of the Effective Date.
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ARTICLE XIII. REPORTING
13.1. Annual and Final
Reports
As soon as practicable after the end of each calendar year, and as soon as practicable upon termination of the Liquidation Trust, the Liquidation Trustee
shall submit to the Bankruptcy Court a written report including (i) financial statements of the Liquidation Trust at the end of that calendar year or period, and (ii) the receipts and disbursements of the Liquidation Trustee for such
period.
13.2. Federal Income Tax
(a) Grantor Trust Status. Subject to
definitive guidance from the IRS or a court of competent jurisdiction to the contrary (including the issuance of applicable Treasury Regulations, the receipt by the Liquidation Trustee of a private letter ruling if the Liquidation Trustee so
requests one, or the receipt of an adverse determination by the IRS upon audit if not contested by the Liquidation Trustee), the Liquidation Trustee shall file tax returns for the Liquidation Trustee as a grantor trust pursuant to Treasury
Regulation section 1.671-4(a).
(b) Allocations of Liquidation Trust Taxable Income. Subject to the provisions of Section 13.2(a) hereof, allocations of
Liquidation Trust taxable income shall be determined by reference to the manner in which an amount of cash equal to such taxable income would be distributed (without regard to any restriction on distributions described herein) if, immediately prior
to such deemed distribution, the Liquidation Trust had distributed all of its other assets (valued for this purpose at their tax book value) to the Liquidation Trust Beneficiaries (treating any Holder of a Disputed Claim, for this purpose, as a
current Liquidation Trust Beneficiary entitled to distributions), taking into account all prior and concurrent distributions from the Liquidation Trust (including any distributions held in reserve pending the resolution of Disputed Claims).
Similarly, taxable losses of the Liquidation Trust will be allocated by reference to the manner in which an economic loss would be borne immediately after a liquidating distribution of the remaining Liquidation Trust Assets. The tax book value of
the Liquidation Trust Assets for this purpose shall equal their fair market value on the Effective Date or, if later, the date such assets were acquired by the Liquidation Trust, adjusted in either case in accordance with tax accounting principles
prescribed by the IRC, the Treasury Regulations and any other applicable administrative and judicial authorities and pronouncements.
(c) Tax Reporting Duties of
Liquidation Trustee. Within sixty (60) days following the end of each calendar year, the Liquidation Trustee shall prepare and distribute a statement setting forth the information necessary for each Liquidation Trust Beneficiary to determine
its share of items of income, gain, loss, deduction or credit for United States federal income tax purposes.
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13.3. Other
The Liquidation Trustee shall file (or
cause to be filed) any other statement, returns or disclosures relating to the Liquidation Trust or the Liquidation Trust Assets, that are required by the IRS or any other Governmental Unit.
ARTICLE XIV.
TRANSFER OF LIQUIDATION TRUST BENEFICIARIES’ INTERESTS
14.1. Transfer of Liquidation Trust Beneficiaries’ Interests
The beneficial interests
that are owned by the Liquidation Trust Beneficiaries shall not be certificated. The interest of a Liquidation Trust Beneficiary shall be freely transferable by such Liquidation Trust Beneficiary; provided, however, that any transfer by a
Liquidation Trust Beneficiary to another party will not be effective until and unless (i) the Liquidation Trustee receives written notice of such transfer executed by the appropriate party, (ii) the proposed transfer complies with all
applicable securities laws, and (iii) the Liquidation Trustee receives address information and any tax information reasonably requested by the Liquidation Trustee (including, without limitation, IRS Forms W-8 or W-9) from the transferee and
from the transferor. In the case of a deceased individual Liquidation Trust Beneficiary, his or her executor or administrator shall succeed to such decedent’s interests. The Liquidation Trustee shall not be required to record any transfer in
favor of any transferee which, in the sole discretion of the Liquidation Trustee, is or might be construed to be ambiguous or to create uncertainty as to the holder of the interest in the Liquidation Trust. Until a transfer is in fact recorded on
the books and records maintained by the Liquidation Trustee for the purpose of identifying Liquidation Trust Beneficiaries, the Liquidation Trustee, whether or not in receipt of documents of transfer or other documents relating to the transfer, may
nevertheless make distributions and send communications to Liquidation Trust Beneficiaries, as though he has no notice of any such transfer, and in so doing the Liquidation Trustee shall be fully protected and incur no liability to any purported
transferee or any other Entity.
ARTICLE XV.
LIQUIDATION TRUSTEE PROFESSIONALS
AND NON-PROFESSIONALS
15.1. Retention of Liquidation Trustee Professionals and Non-Professionals
(a) The Liquidation Trustee shall have the right to retain his own professionals including, without limitation, claims, disbursing and transfer agents, legal counsel, accountants,
experts and other agents or advisors, as the Liquidation Trustee deems appropriate (the “Liquidation Trustee Professionals”) and on such terms as the Liquidation Trustee deems appropriate. The Liquidation Trustee Professionals shall be
compensated in accordance with Section 15.2 hereof. The Liquidation Trustee Professionals so retained need not be “disinterested” as that term is defined in the Bankruptcy Code and may include, without limitation, counsel and
financial advisors of the Debtors or the Committee, provided, however, that the retention of professionals other than counsel and financial advisors of the Debtors or the
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Committee shall require prior consent of the Oversight Committee or approval of the Bankruptcy Court.
(b) The Liquidation Trustee shall have the right to retain non-professionals including, without limitation, employees, independent contractors or other agents as the Liquidation
Trustee deems appropriate (the “Liquidation Trustee Non-Professionals”) and on such terms as the Liquidation Trustee deems appropriate. Such Liquidation Trustee Non-Professionals shall be compensated
in accordance with Section 15.2 hereof. The Liquidation Trustee Non-Professionals so retained need not be “disinterested” as that term is defined in the Bankruptcy Code and may include, without limitation, employees, independent
contractors or agents of the Debtors or the Committee.
15.2. Payment to Liquidation Trustee Professionals and Liquidation Trustee
Non-Professionals
(a) After the Effective Date, Liquidation Trustee Professionals shall be required to submit reasonably
detailed invoices on a monthly basis to the Liquidation Trustee, including in such invoices a description of the work performed, who performed such work, and if billing on an hourly basis, the hourly rate of each such person, plus an itemized
statement of expenses. The Liquidation Trustee shall pay those invoices ten (10) days after a copy of such invoices is provided to the Liquidation Trustee, without Bankruptcy Court approval, unless the Liquidation Trustee objects. If there is a
dispute as to a part of an invoice, the Liquidation Trustee shall pay the undisputed portion and the Bankruptcy Court shall resolve any disputed amount.
(b) After
the Effective Date, Liquidation Trustee Non-Professionals shall be required to submit to the Liquidation Trustee periodic invoices containing information with sufficient detail to assess the reasonableness of the fees and charges. The Liquidation
Trustee shall pay those invoices ten (10) days after a copy of such invoices is provided to the Liquidation Trustee, without Bankruptcy Court approval, unless the Liquidation Trustee objects. If there is a dispute as to a part of an invoice,
the Liquidation Trustee shall pay the undisputed portion and the Bankruptcy Court shall resolve any disputed amount.
(c) After the Effective Date, members of the
Oversight Comittee shall be required to submit to the Liquidation Trustee periodic expense statements, if any, containing information with sufficient detail to assess the reasonableness of the charges. The Liquidation Trustee shall pay those
invoices ten (10) days after a copy of such invoices is provided to the Liquidation Trustee, without Bankruptcy Court approval, unless the Liquidation Trustee objects. If there is a dispute as to a part of an invoice, the Liquidation Trustee
shall pay the undisputed portion and the Bankruptcy Court shall resolve any disputed amount.
(d) All payments to Liquidation Trustee Professionals, Liquidation
Trustee Non-Professionals or the Oversight Committee shall be paid out of the Liquidation Trust Funds.
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ARTICLE XVI.
TERMINATION OF LIQUIDATION TRUST
16.1. Duration and Extension
Notwithstanding any provision of the Plan to the
contrary, the Liquidation Trust will terminate as soon as practicable, but in no event later than the fifth (5th) anniversary of the Effective Date; provided, however, that, the Bankruptcy Court, upon motion by a
party-in- interest within the six (6) month period prior to the fifth (5th) anniversary (or at least six (6) months prior to the end of an extension period), may extend the term of the
Liquidation Trust for a finite period (not to exceed an additional three (3) years, together with any prior extensions, without a favorable ruling from the IRS that any further extension would not adversely affect the status of the Liquidation
Trust as a liquidating trust for federal income tax purposes) if such an extension is warranted by the facts and based upon a finding that such an extension is necessary to the liquidating purpose of the Liquidation Trust, further provided adequate
funding exists for such extension period as determined by the Bankruptcy Court.
16.2. Diligent Administration
The Liquidation Trustee shall, as applicable, (i) not unduly prolong the duration of the Liquidation Trust; (ii) at all times endeavor to resolve, settle or otherwise
dispose of all claims that constitute Liquidation Trust Assets; (iii) effect the liquidation and distribution of the Liquidation Trust Assets to the Liquidation Trust Beneficiaries in accordance with the terms hereof, and; (iv) endeavor to
terminate the Liquidation Trust as soon as reasonably practicable.
ARTICLE XVII. AMENDMENT AND WAIVER
17.1. Amendment and Waiver.
Any substantive provision of this Agreement may be materially
amended or waived only with the written consent of the Liquidation Trustee and the Oversight Committee or by order of the Bankruptcy Court if necessary to implement the Plan; provided, however, that no change may be made to this Agreement that would
adversely affect the federal income tax status of the Liquidation Trust as a “grantor trust.” Technical or non-material amendments to or waivers of portions of this Agreement may be made as necessary, to clarify this Agreement or to enable
the Liquidation Trust to effectuate the terms of this Agreement, with the consent of the Liquidation Trustee.
ARTICLE XVIII. MISCELLANEOUS PROVISIONS
18.1. Intention of Parties to Establish Grantor Trust
This Agreement is intended to create a
grantor trust for United States federal income tax purposes and, to the extent provided by law, shall be governed and construed in all respects as a grantor trust.
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18.2. Preservation of Privilege
In connection with
the vesting and transfer of the Liquidation Trust Assets, including rights and Causes of Action, any attorney-client privilege, work-product protection, or other privilege or immunity attaching or relating to any documents or communications (of any
kind, whether written or oral, electronic or otherwise) held by the Debtors shall be transferred to the Liquidation Trust and shall vest in the Liquidation Trust. Accordingly, in connection with the prosecution and/or investigation of the Causes of
Action by the Liquidation Trustee, any and all directors, officers, employees, counsel, agents, or attorneys-in-fact, of the Debtors, cannot assert any attorney-client privilege, work product protection, or other privilege or immunity attaching or
relating to any documents or communications (of any kind, whether written or oral, electronic or otherwise) held by the Debtors or otherwise prevent, hinder, delay, or impede production or discussion of documents or communications requested by the
Liquidation Trustee in discovery (whether formal or informal, and including without limitation, depositions, written discovery, and interviews). The Debtors and the Liquidation Trustee shall take all necessary actions to protect the transfer of such
privileges, protections and immunities.
18.3. Prevailing Party
Subject to
Section 7.3(c) hereof, if the Liquidation Trustee or the Liquidation Trust, as the case may be, is the prevailing party in a dispute regarding the provisions of this Agreement or the enforcement thereof, then such prevailing party shall be
entitled to collect any and all costs, expenses and fees, including attorneys’ fees, from the nonprevailing party incurred in connection with such dispute or enforcement action.
18.4. Confidentiality
The Liquidation Trustee, and each of his employees, members, agents,
professionals and advisors, including the Liquidation Trustee Professionals and Liquidation Trustee Non-Professionals, and members of the Oversight Committee (each a “Confidential Party” and collectively the “Confidential
Parties”) shall hold strictly confidential and not use for personal gain any material, non-public information of which they have become aware in their capacity as a Confidential Party, of or pertaining to any Entity to which any of the
Liquidation Trust Assets relates; provided, however, that such information may be disclosed if (a) it is now or in the future becomes generally available to the public other than as a result of a disclosure by the Confidential Parties, or
(b) such disclosure is required of the Confidential Parties pursuant to legal process including but not limited to subpoena or other court order or other applicable laws or regulations. In the event that any Confidential Party is requested to
divulge confidential information pursuant to this subparagraph (b), such Confidential Party shall promptly, in advance of making such disclosure, provide reasonable notice of such required disclosure to the Liquidation Trustee to allow him
sufficient time to object to or prevent such disclosure through judicial or other means and shall cooperate reasonably with the Liquidation Trustee in making any such objection, including but not limited to appearing in any judicial or
administrative proceeding in support of any objection to such disclosure.
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18.5. Laws as to Construction
This Agreement shall
be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to rules governing the conflict of law.
18.6. Severability
Except with respect to provisions herein that are contained in the Plan, if any provision of this Agreement or the application thereof to any person or
circumstance shall be finally determined by a court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this Agreement, or the application of such provision to Persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby, and shall be valid and enforceable to the fullest extent permitted by law.
18.7.
Oversight Committee
In furtherance of the Plan, on the Effective Date, the Oversight Committee shall be established to oversee the implementation of the Plan. The
Oversight Committee shall have access to the Liquidation Trustee and the right to consult with and, to the extent provided in this Agreement, direct the Liquidation Trustee in connection with the administration and implementation of the Plan on and
after the Effective Date as set forth in this Agreement. The Oversight Committee shall initially consist of members of the Committee who, prior to the Effective Date, express desire to serve on the Oversight Committee.
18.8. Notices
Any notice or other communication hereunder shall be in writing and shall be
deemed to have been sufficiently given, for all purposes, if delivered by facsimile (at the numbers set forth below) and deposited, postage prepaid, in a post office or letter box addressed to the person (or their successors or replacements) for
whom such notice is intended at such address as set forth below, or such other addresses as may be filed with the Bankruptcy Court:
Liquidation Trustee:
Province, Inc.
Attn: Peter Kravitz
2360 Corporate Circle, Suite 330
Henderson, NV 89074
Facsimile: 702-685-5556
E-mail: pkravitz@provincefirm.com
With a copy to:.
Attn:
Facsimile: ——
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E-mail: ———-
18.9. Notices if to a
Liquidation Trust Beneficiary
Any notice or other communication hereunder shall be in writing and shall be deemed to have been sufficiently given, for all
purposes, if deposited, postage prepaid, in a post office or letter box addressed to the person for whom such notice is intended to the name and address set forth on such Liquidation Trust Beneficiary’s proof of claim or such other notice filed
with the Bankruptcy Court and the Liquidation Trust, or if none of the above has been filed, to the address set forth in the Debtors’ Schedules or books and records or provided by the transfer agent for the Debtors’ Equity Interests or
provided to the Liquidation Trustee pursuant to Section 14.1.
18.10. Survivability
Notwithstanding any provision of the Plan to the contrary, the terms and provisions of this Agreement shall remain fully binding and enforceable notwithstanding any vacancy in the
position of the Liquidation Trustee.
18.11. Headings
The section headings
contained in this Agreement are solely for the convenience of reference and shall not affect the meaning or interpretation of this Agreement or of any term or provision hereof.
18.12. Conflicts with Plan Provisions
Except as otherwise expressly stated herein, if any of
the terms and/or provisions of this Agreement conflict with the terms and/or provisions of the Plan, then the Plan shall govern.
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IN WITNESS WHEREOF, the Parties hereto have either executed and acknowledged this Agreement, or caused it to be executed and
acknowledged on their behalf by their duly authorized officers all as of the date first above written.
Peter Kravitz not individually but solely as
Liquidation Trustee
By:
——————————————-
Name: Peter Kravitz
RENTECH, INC.
By:
——————————————-
Name:
Title:
RENTECH WP U.S., INC.
By: ——————————————-
Name:
Title:
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Exhibit A
Engagement Letter
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| This ‘8-K’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 7/1/18 | ||||
| 6/18/18 | ||||
| Filed on: | 4/9/18 | |||
| For Period End: | 4/4/18 | |||
| 4/2/18 | ||||
| 3/28/18 | ||||
| 3/26/18 | ||||
| 3/21/18 | ||||
| 3/14/18 | ||||
| 2/28/18 | ||||
| 2/23/18 | ||||
| 2/20/18 | ||||
| 2/15/18 | ||||
| 2/14/18 | 8-K | |||
| 2/5/18 | ||||
| 2/2/18 | ||||
| 2/1/18 | ||||
| 1/22/18 | ||||
| 1/19/18 | ||||
| 1/17/18 | ||||
| 1/12/18 | ||||
| 12/29/17 | ||||
| 12/27/17 | 8-K | |||
| 12/19/17 | ||||
| 12/13/17 | SC 13D/A | |||
| 11/30/17 | 4, 8-K | |||
| 11/25/17 | ||||
| 10/17/17 | 4, SC 13D/A | |||
| 10/16/17 | 25 | |||
| 10/13/17 | 4 | |||
| 2/21/17 | ||||
| 1/30/17 | SC 13G/A | |||
| 9/26/16 | 8-K | |||
| 4/19/16 | ||||
| 4/1/16 | 4, 8-K | |||
| 3/2/15 | ||||
| 2/12/15 | 4, 8-K, SC 13G | |||
| 11/25/13 | ||||
| 8/13/13 | ||||
| 8/12/13 | 25, 8-A12B | |||
| 1/24/13 | ||||
| 2/18/10 | 4 | |||
| 2/6/06 | ||||
| 4/5/00 | ||||
| 4/4/00 | 8-A12B, 8-K | |||
| 8/17/99 | ||||
| 6/17/99 | ||||
| 7/11/94 | ||||
| List all Filings | ||||