Case Doc 227 Filed 02/26/18 Page 1 of 18. UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF MARYLAND Greenbelt Division

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1 Case Doc 227 Filed 02/26/18 Page 1 of 18 UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF MARYLAND Greenbelt Division In re: THE CONDOMINIUM ASSOCIATION OF THE LYNNHILL CONDOMINIUM, Debtor. 1 Case No Chapter 11 SECOND AMENDED JOINT CHAPTER 11 PLAN OF (I) THE CONDOMINIUM ASSOCIATION OF THE LYNNHILL CONDOMINIUM, AND (II) AHH16 DEVELOPMENT, LLC, DATED AS OF FEBRUARY 26, 2018 The Condominium Association of the Lynnhill Condominium, as debtor and debtor-inpossession, and AHH16 Development, LLC hereby file this Chapter 11 Plan ( Plan ) pursuant to section 1121(a) of the Bankruptcy Code. Article 1 Defined Terms For purposes of this Plan, the following terms have the meanings set forth below: 1.1 Administrative Bar Date means sixty (60) calendar days after the Confirmation Date and is the day when all requests for allowance of Administrative Claims incurred through the Confirmation Date must be filed with the Court or be waived and forever barred. Notice of confirmation of this Plan shall be deemed sufficient and adequate notice of the Administrative Bar Date. 1.2 Administrative Claim means an Allowed Claim for costs and expenses of administering and preserving the Estate pursuant to section 503(b) of the Bankruptcy Code, including, without limitation, fees of Professionals approved by the Court and any and all fees payable to the U.S. Trustee by the Debtor under 28 U.S.C. 1930(a)(6). 1.3 Allowed Claim means a Claim against the Debtor: a. for which a Proof of Claim was filed with the Court on or before February 16, 2018, or for Governmental Units on or before July 9, 2018, the applicable period of limitations fixed by the Court (see Doc. 71); 1 The Debtor s federal identification number is v4

2 Case Doc 227 Filed 02/26/18 Page 2 of 18 b. listed in Schedules D, E or F filed by the Debtor with the Court, including any amendments thereto, and that is not listed as disputed, contingent, or unliquidated; or c. for which an application has been filed pursuant to sections 329 and 330 of the Bankruptcy Code; and, as to any such claim, either no objection to the allowance thereof has been filed or, if an objection to the allowance thereof has been filed, the Court has overruled such objection or fixed the amount of such claim. 1.4 Bankruptcy Case means the above-captioned bankruptcy case filed by the Debtor. 1.5 Bankruptcy Code means the Bankruptcy Reform Act of 1978, as codified in title 11 of the United States Code, 11 U.S.C , together with all amendments and modifications thereto that were subsequently made applicable to bankruptcy cases, and such other sections of the United States Code as are applicable to bankruptcy cases. Case. 1.6 Bankruptcy Judge means the bankruptcy judge presiding over the Bankruptcy 1.7 Bankruptcy Rules means (a) the Federal Rules of Bankruptcy Procedure; and (b) the Local Rules of the U.S. Bankruptcy Court for the District of Maryland, both as now in effect or as hereafter amended. 1.8 Broker means Transwestern Carey Winston, L.L.C. d/b/a Transwestern, the real estate broker retained by the Debtor with the Court s approval in connection with the sale of the Property pursuant to the Exclusive Sales Listing Agreement (see Doc. 44). 1.9 Claim means a claim against the Debtor as defined in section 101(5) of the Bankruptcy Code, including, without limitation, any claims arising from the Debtor s rejection of unexpired leases and executory contracts Class means a category of Holders of Claims pursuant to section 1122(a) of the Bankruptcy Code, as described in Article 4 of this Plan Closing means the closing of the Sale pursuant to the terms of this Plan, which shall occur within fifteen (15) calendar days after entry of the Confirmation Order Closing Date means the date on which the Closing occurs. Order Confirmation Date means the date on which the Court enters the Confirmation 1.14 Confirmation Hearing means the hearing held by the Court to consider confirmation of this Plan pursuant to sections 1128 and 1129 of the Bankruptcy Code, as may be adjourned or continued from time to time v4

3 Case Doc 227 Filed 02/26/18 Page 3 of Confirmation Order means the order entered by the Court confirming this Plan that will, among other things, (a) provide that (i) the Property no longer maintains the status of a condominium; (ii) the Property no longer operates as a condominium; (iii) the Property is released from any condominium regime; and (iv) any and all condominium plans relating to the Property are deemed permanently abandoned; (b) unify title to all of the Residential Units and the Property, and vest the unified title in the Debtor for purposes of selling the Property to Dragone at Closing in accordance with this Plan free and clear of all liens and encumbrances; (c) approve the Sale; (d) provide that any and all existing liens on the Property or the Residential Units will attach to the Debtor s Sale Proceeds or the Fractional Sale Proceeds, as applicable, with the same priority, validity, force and effect as they now have against the Property or the Residential Units, respectively; and (e) provide that the Property be sold to Dragone in accordance with section 1146 of the Bankruptcy Code Court means the U.S. Bankruptcy Court for the District of Maryland Debtor means the Condominium Association of the Lynnhill Condominium Debtor s Counsel means Pillsbury Winthrop Shaw Pittman LLP Debtor s Sale Proceeds means that portion of the Net Sale Proceeds allocable to the Debtor for each Residential Unit s unpaid condominium fees and assessments DIP Claims means the Allowed Claim of the DIP Lender under the DIP Loan DIP Loan means that certain senior secured superpriority postpetition loan made by the DIP Lender to the Debtor in the principal amount of $1,250, pursuant to the Amended Commitment Letter of AHH16 Development, LLC or its Designee to Be Purchaser of the Property and Post-Petition Secured Lender in Connection with Lynnhill Condominium Bankruptcy Case and the DIP Orders DIP Lender means AHH16 Development, LLC, in its capacity as lender under the DIP Loan, or any assignee thereof DIP Orders means the interim and final orders entered by the Court approving the DIP Loan and granting the DIP Lender priming liens, superpriority claims and related relief for the senior secured superpriority postpetition loan made by the DIP Lender to the Debtor in the principal amount of $1,250, plus interest and fees (see Docs. 67, 140) Disputed Claim means either (a) a Claim as to which an objection has been filed in accordance with Rule 3007 of the Bankruptcy Rules and which has not been resolved by the Court; or (b) a Claim listed on the Schedules as disputed, contingent or unliquidated and as to which no Proof of Claim has been filed Distribution Date means such date(s) as the Debtor shall establish for making Distributions to the Holders of Allowed Claims in accordance with this Plan Distributions means the property required by this Plan to be distributed to the Holders of Allowed Claims v4

4 Case Doc 227 Filed 02/26/18 Page 4 of Dragone means Dragone Realty, LLC, in its capacity as purchaser of the Property, or its designee Effective Date means the Closing Date Estate means the bankruptcy estate created on the Petition Date pursuant to section 541 of the Bankruptcy Code and includes the Property Executory Contract means any contract to which the Debtor is a party that is subject to assumption or rejection under section 365 of the Bankruptcy Code Former Resident means, with respect to a Residential Unit, the person(s) who owned the Residential Unit immediately prior to title to that Residential Unit vesting in the Debtor Former Resident s Claim means an Allowed Claim of a Former Resident on account of his/her property interest in a Residential Unit Fractional Sale Proceeds means that portion of the Net Sale Proceeds allocable to each Residential Unit based on the fractional interests identified on Exhibit C to the Master Deed of the Lynnhill Condominium, which is attached as Exhibit 1, after deducting the Debtor s claim against the Former Residents for unpaid condominium fees and assessments and paying post-confirmation expenses associated with the Bankruptcy Case and administering this Plan, including, without limitation, Post-Confirmation Professional Claims General Unsecured Claim means an Allowed Claim that is not an Administrative Claim, Priority Claim or Secured Claim Governmental Unit has the meaning set forth in section 101(27) of the Bankruptcy Code Holder means the legal or beneficial holder of a Claim (and, when used in conjunction with a Class or type of Claim, means a Holder of a Claim in such Class or of such type) Lien means an attached interest in or charge against the Property or a Residential Unit(s) securing payment of a debt or satisfaction of an obligation Nagle & Zaller means Nagle & Zaller, P.C Nagle & Zaller s Claim means Claim No. 4 filed by Nagle & Zaller in the amount of $145, Nagle & Zaller Escrow means the escrow that the Debtor will establish and fund at Closing in the amount of $145, or such other sum as may be determined by the Court on account of Nagle & Zaller s Claim pursuant to section 5.9 of this Plan v4

5 Case Doc 227 Filed 02/26/18 Page 5 of Net Sale Proceeds means the Sale Proceeds remaining after (a) subtracting all of the costs associated with the Sale and all of the administrative expenses of this Bankruptcy Case; and (b) funding the Professional Fee Reserve and the UST Reserve PEPCO means Potomac Electric Power Company PEPCO s Claim means Claim No. 2, as amended, filed by PEPCO in the amount of $651, PEPCO Escrow means the escrow that the Debtor will establish and fund at Closing in the amount of $651, or such other sum as may be determined by the Court on account of PEPCO s Claim pursuant to section 5.8 of this Plan Petition Date means January 10, 2018, the date on which the Debtor filed its petition for relief under chapter 11 of the Bankruptcy Code in this Bankruptcy Case Post-Confirmation Professional Claims means a claim for compensation or reimbursement of expenses pursuant to sections 327, 328, 330, 331 or 503(b) of the Bankruptcy Code relating to services of Professionals performed after the Confirmation Date, which are to be paid from the Net Sale Proceeds Priority Claims means all Priority Tax Claims and Priority Non-Tax Claims Priority Non-Tax Claim means an Allowed Claim accorded priority in right of payment under section 507(a) of the Bankruptcy Code, other than a Priority Tax Claim Priority Tax Claim means an Allowed Claim of a Governmental Unit of the kind specified in section 507(a)(8) of the Bankruptcy Code Professional means an attorney, accountant, engineer, architect or other professional retained or to be compensated pursuant to an order of the Court under sections 327, 328, 330, 503(b) or 1103 of the Bankruptcy Code Professional Fee Reserve means the reserve established at Closing for the benefit of Professionals retained as of the Confirmation Date. The Professional Fee Reserve shall be funded in an amount sufficient to pay in full the accrued, but unpaid, fees and expenses of Professionals and will be held in escrow by the Title Company Proof of Claim means a proof of claim filed with the Court pursuant to section 501 of the Bankruptcy Code, Part III of the Bankruptcy Rules or otherwise Property means the real property and improvements thereon located at 3103 and 3107 Good Hope Avenue, Temple Hills, Maryland 20748, which consists of two 7-story buildings with 219 residential units, a parking lot and common areas Purchase Agreement means the agreement pursuant to which the Debtor will sell the Property to Dragone at Closing for $17.05 million, minus a $1 million credit for certain v4

6 Case Doc 227 Filed 02/26/18 Page 6 of 18 life, health, and safety requirements of Prince George s County in connection with rehabbing the Property. The form of the Purchase Agreement is attached as Exhibit Residential Unit means one of the 219 residential units of the Property Sale means the sale of the Property to Dragone pursuant to the terms of this Plan and the Purchase Agreement Sale Costs includes the fee payable to the Broker pursuant to the Exclusive Sales Listing Agreement, the fee payable to the Title Company, and all other customary transaction costs incurred by the Debtor in connection with the Sale of the Property Sale Proceeds means the proceeds from the Sale payable to the Debtor at Closing Schedules means the schedules of assets and liabilities and the statement of financial affairs filed by the Debtor with the Court in accordance with section 521(a)(1)(B) of the Bankruptcy Code and Rule 1007 of the Bankruptcy Rules, and any amendments thereto Secured Claim means an Allowed Claim that is (a) secured by a valid, perfected, enforceable and non-avoidable Lien on the Property or any unit or portion thereof (including, but not limited to, any Residential Unit); or (b) subject to setoff under section 553 of the Bankruptcy Code Title Company means Madison Title Agency or such other title insurance company that will provide services at Closing and will serve as escrow agent to hold the Net Sale Proceeds, the Professional Fee Reserve and the UST Reserve including, without limitation, Stewart Title Company Unexpired Lease means a lease to which the Debtor is a party that is subject to assumption or rejection under section 365 of the Bankruptcy Code Unit Lienholder means the Holder of a Secured Claim that is secured by a valid, perfected, enforceable and non-avoidable Lien on a Residential Unit UST Reserve means the reserve established at Closing to pay any fees due to the Office of the U.S. Trustee within one year after the Effective Date. The UST Reserve shall be funded in an amount sufficient to pay in full any and all estimated fees that may be due to the U.S. Trustee within one year after the Effective Date and will be held in escrow by the Title Company U.S. Trustee means the Office of the United States Trustee for Region 4. Article 2 Classification of Claims In accordance with section 1122(a) of the Bankruptcy Code, a Claim is placed in a particular Class only to the extent that the Claim falls within the description of that Class, and is v4

7 Case Doc 227 Filed 02/26/18 Page 7 of 18 classified in other Classes to the extent that any portion of the Claim falls within the description of such other Classes. A Claim is also placed in a particular Class for the purpose of receiving Distributions pursuant to this Plan only to the extent that such Claim is an Allowed Claim in that Class and such Claim has not been paid, released, or otherwise settled prior to the Effective Date. In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims, Priority Tax Claims and certain other claims have not been classified, and the treatment of such unclassified Claims is set forth below in Article 3 of this Plan. For purposes of this Plan, Claims are unclassified or classified as follows in accordance with sections 1122(a) and 1123(a)(1) of the Bankruptcy Code: 2.1 Unclassified Claims a. Administrative Claims b. Priority Tax Claims c. DIP Claims 2.2 Classified Claims a. Class 1. Class 1 consists of all Priority Non-Tax Claims, if any. b. Class 2. Class 2 consists of all Secured Claims. A Secured Claim is capped at the value of the collateral securing that Claim. c. Class 3. Class 3 consists of all General Unsecured Claims, excluding the Former Residents Claims. d. Class 4. Class 4 consists of all of the Former Residents Claims. e. Class 5. Class 5 consists of PEPCO s Claim. f. Class 6. Class 6 consists of Nagle & Zaller s Claim. Article 3 Treatment of Unclassified Claims 3.1 Administrative Claims. Each Administrative Claim will be paid in full on the Effective Date from the Sale Proceeds. Any Administrative Claim of a Professional approved by the Court after the Effective Date shall be paid upon entry of an order approving that Administrative Claim from the Professional Fee Reserve or from the Net Sale Proceeds if there are insufficient funds in the Professional Fee Reserve. 3.2 Priority Tax Claims. Each Priority Tax Claim will be paid in full on the Distribution Date from the Fractional Sale Proceeds allocable to the Residential Unit on which the tax was levied. The only known Priority Tax Claims are property taxes of the kind specified in section 507(a)(8)(B) of the Bankruptcy Code v4

8 Case Doc 227 Filed 02/26/18 Page 8 of DIP Claims. The DIP Claims will be paid in full on the Closing Date from the Sale Proceeds. Article 4 Treatment of Classified Claims 4.1 Class 1 Priority Non-Tax Claims. On the Distribution Date, each Priority Non-Tax Claim will be paid in full from the Debtor s Sale Proceeds. The Debtor is not aware of any Priority Non-Tax Claims. Pursuant to sections 1124 and 1126(f) of the Bankruptcy Code, Class 1 is an unimpaired Class and conclusively presumed to have accepted this Plan. 4.2 Class 2 Secured Claims. On the Distribution Date, each Secured Claim will be paid in full (up to the value of its collateral) from the Fractional Sale Proceeds allocable to the portion of the Property that secures the Secured Claim. Where more than one Secured Claim is secured by the same collateral, the relevant Secured Claims will be paid in accordance with their relative priorities. Class 2 is an impaired Class and entitled to vote on this Plan. 4.3 Class 3 General Unsecured Claims. On the Distribution Date, each General Unsecured Claim will be paid pro rata from the Debtor s Sale Proceeds. Class 3 is an impaired Class and entitled to vote on this Plan. 4.4 Class 4 Former Residents Claims. On the Distribution Date, each Former Resident will be paid the net remaining Fractional Sale Proceeds allocable to the Residential Unit that the Former Resident owned. The amount paid to a Former Resident will have been reduced by the sum owed to the Debtor by that Former Resident or allocable to the relevant Residential Unit. Class 4 is an impaired Class and entitled to vote on this Plan. 4.5 Class 5 PEPCO s Claim. Provided that no appeal or stay is then pending, within three (3) business days of an order becoming a final, non-appealable order that determines that PEPCO s Claim is an Allowed Claim (a) secured by the Property or the funds in the PEPCO Escrow or (b) with priority over Class 3 Claims, PEPCO s Claim will be paid from the PEPCO Escrow in the amount allowed by the Court. If, or to the extent, the Court determines that PEPCO s Claim is not secured or is not entitled to a priority that is higher than the General Unsecured Claims in Class 3, then PEPCO s Claim shall, to the extent otherwise allowed and unpaid, be paid on the Distribution Date as a Class 3 Claim. Notwithstanding anything to the contrary contained in this Plan, the Debtor and all parties in interest reserve the right to challenge the amount, extent and priority of PEPCO s Claim and nothing in this Plan shall be deemed an admission regarding the validity, amount or extent of PEPCO s Claim. 4.6 Class 6 Nagle & Zaller s Claim. Provided that no appeal or stay is then pending, within three (3) business days of an order becoming a final, non-appealable order that determines that Nagle & Zaller s Claim is an Allowed Claim (a) secured by the Property or the funds in the Nagle & Zaller Escrow or (b) with priority over Class 3 Claims, Nagle & Zaller s Claim will be paid from the Nagle & Zaller Escrow in the amount allowed by the Court. If, or to the extent, the Court determines that Nagle & Zaller s Claim is not secured or is not entitled to a priority that is higher than the General Unsecured Claims in Class 3, then Nagle & Zaller s Claim shall, to the extent otherwise allowed and unpaid, be paid on the Distribution Date as a v4

9 Case Doc 227 Filed 02/26/18 Page 9 of 18 Class 3 Claim. Notwithstanding anything to the contrary contained in this Plan, the Debtor and all parties in interest reserve the right to challenge the amount, extent and priority of Nagle & Zaller s Claim and nothing in this Plan shall be deemed an admission regarding the validity, amount or extent of Nagle & Zaller s Claim. Article 5 Means for Execution of the Plan 5.1 Generally. This Plan will be executed and implemented pursuant to a sale of the Property to Dragone free and clear of all liens, claims (including, without limitation, the Claims addressed in this Plan), encumbrances, rights and other interests pursuant to section 363(f) of the Bankruptcy Code and on an as is, where is basis, without representations or warranties of any kind, nature or description. All members of Class 4 will have consented (or will be deemed to have consented) to unifying title to all of the Residential Units and the Property. Upon confirmation of this Plan and Closing of the Sale (which shall occur within fifteen (15) calendar days after entry of the Confirmation Order): (a) the Property will no longer maintain its status as a condominium (the condominium regime will be extinguished to the extent not already so); (b) the Property will no longer be operated as a condominium; (c) the Property shall be released from any condominium regime; (d) any and all condominium plans relating to the Property shall be deemed permanently abandoned; (e) title to the Property (including but not limited to all of the Residential Units) shall, to the extent not already accomplished, vest in the Debtor in a unified fashion (i.e., one title and one deed) for purposes of selling and conveying fee simple absolute ownership of the Property to Dragone at Closing in accordance with this Plan and the Purchase Agreement; and (f) any and all existing liens on the Property or the Residential Units will attach to the Debtor s Sale Proceeds or the Fractional Sale Proceeds, as applicable, with the same priority, validity, force and effect as they now have against the Property or the Residential Units; provided, however, that the Debtor and other parties in interest will retain the right to challenge any such liens. 5.2 Execution of Purchase Agreement and Other Sale Documents. Upon confirmation of this Plan, to the extent (if any) that it has not already occurred, title to the Property and the Residential Units will unify and vest in the Debtor for purposes of selling the Property to Dragone at Closing. The Debtor will be vested with the authority to perform under the Purchase Agreement and to execute and perform under any other customary, necessary or appropriate Sale documents at Closing. Any such documents the Debtor executes shall be valid and enforceable, grant Dragone unified fee simple absolute title to the Property, and be recognized and honored by all parties that deal with sales and transfers of real property in Maryland. 5.3 Recordation and Other Taxes Covered by Section 1146(a). Pursuant to section 1146(a) of the Bankruptcy Code, the making or delivery of an instrument of transfer under this Plan (including, without limitation, the transfer and sale of the Property in connection with the Sale) will not be subject to any stamp, real estate transfer, mortgage recording or other similar tax. 5.4 Broker s Fees and Customary Transaction Costs. At Closing, the Sale Costs, including, but not limited to, the fee payable to the Broker pursuant to the Exclusive Sales v4

10 Case Doc 227 Filed 02/26/18 Page 10 of 18 Listing Agreement, the fee payable to the Title Company and all other customary transaction costs incurred by the Debtor in connection with the Sale, will be paid from the Sale Proceeds. 5.5 Escrow Agent. The Title Company will serve as escrow agent and maintain escrow accounts to ensure the safe handling of the Sale Proceeds, Net Sale Proceeds, the Professional Fee Reserve, the UST Reserve, the Nagle & Zaller Escrow, the PEPCO Escrow, and any other reserve or escrow required by this Plan or the Confirmation Order, in strict accordance with this Plan and the Confirmation Order; provided, however, that the Debtor retains the right to change the Title Company upon filing a notice with the Court. 5.6 Professional Fee Reserve. At Closing, the Debtor shall establish a reserve in an amount sufficient to pay in full all of the accrued, but unpaid, fees and expenses of all Professionals retained as of Closing, including, without limitation, Debtor s Counsel and Mr. William Johnson. The Professional Fee Reserve will be held in escrow by the Title Company. Upon entry of an order of the Court approving a Professional s fees and expenses, the Title Company shall disburse funds to that Professional in accordance with the Court s order. The Professional Fee Reserve will be exclusively for the benefit of Professionals retained as of the Confirmation Date or for which a retention application has been filed by the Effective Date. 5.7 U.S. Trustee Matters. At Closing, the Debtor shall establish the UST Reserve in an amount sufficient to pay in full any and all estimated fees that may be due to the Office of the U.S. Trustee within one year after the Effective Date. All fees payable pursuant to section 1930 of title 28 of the United States Code shall be paid on the Effective Date. All fees payable pursuant to section 1930 of title 28 of the United States Code after the Effective Date shall be paid on a quarterly basis until this Bankruptcy Case is closed, converted, or dismissed. The Debtor shall be liable for the payment of all quarterly fees due pursuant to section 1930 of title 28 after the Effective Date. After the Effective Date, the Debtor shall provide the U.S. Trustee with post-confirmation quarterly reports that shall include all of its respective disbursements for that quarter. All fees payable under this section 5.7 shall first be payable from the UST Reserve, and after the UST Reserve has been exhausted, from any Net Sale Proceeds then remaining. 5.8 PEPCO Escrow. At Closing, the Debtor shall establish an escrow with $651, or such other sum as may be determined by the Court on account of PEPCO s Claim. PEPCO s rights and liens against the Property, if any, shall transfer and attach to the funds in the PEPCO Escrow upon the sale of the Property. The Debtor and all parties in interest reserve the right to challenge the amount, extent and priority of PEPCO s Claim. Provided that no appeal or stay is then pending, within three (3) business days of an order of the Court determining that PEPCO s Claim is an Allowed Claim secured by the Property or the PEPCO Escrow (as applicable) becoming a final, non-appealable order, PEPCO s Claim will be paid from the PEPCO Escrow in the amount allowed by the Court. If the Court determines that, notwithstanding the absence of any security for PEPCO s Claim, PEPCO s Claim is entitled to a higher priority than the General Unsecured Claims in Class 3 under applicable state or federal law, then, provided that no appeal or stay is then pending, within three (3) business days of an order of the Court determining that PEPCO s Claim is an Allowed Claim with priority over Class 3 Claims becoming final and non-appealable, PEPCO s Claim shall be paid from the PEPCO Escrow in the amount allowed by the Court. If, or to the extent, the Court determines that PEPCO s Claim is not secured or is not entitled to a priority that is higher than the General v4

11 Case Doc 227 Filed 02/26/18 Page 11 of 18 Unsecured Claims in Class 3, then all of the funds in the PEPCO Escrow that the Court determines do not serve as security for PEPCO s Claim or are not required to pay any allowed priority claim held by PEPCO shall be transferred to the account with funds for the payment of Class 3 Claims, and PEPCO s Claim shall, to the extent otherwise allowed and unpaid, be paid as a Class 3 Claim. The PEPCO Escrow shall be established by the Debtor with, and maintained by, the Title Company subject to the Debtor s right to change the Title Company upon filing a notice with the Court. 5.9 Nagle & Zaller Escrow. At Closing, the Debtor shall establish an escrow with $145, or such other sum as may be determined by the Court on account of Nagle & Zaller s Claim. Nagle & Zaller s rights and liens against the Property, if any, shall transfer and attach to the funds in Nagle & Zaller s Escrow upon the sale of the Property. The Debtor and all parties in interest reserve the right to challenge the amount, extent and priority of Nagle & Zaller s Claim. Provided that no appeal or stay is then pending, within three (3) business days of an order of the Court determining that Nagle & Zaller s Claim is an Allowed Claim secured by the Property or the Nagle & Zaller Escrow (as applicable) becoming a final, non-appealable order, Nagle & Zaller s Claim will be paid from the Nagle & Zaller Escrow in the amount allowed by the Court. If the Court determines that, notwithstanding the absence of any security for Nagle & Zaller s Claim, Nagle & Zaller s Claim is entitled to a higher priority than the General Unsecured Claims in Class 3 under applicable state or federal law, then, provided that no appeal or stay is then pending, within three (3) business days of an order of the Court determining that Nagle & Zaller s Claim is an Allowed Claim with priority over Class 3 Claims becoming final and non-appealable, Nagle & Zaller s Claim shall be paid from the Nagle & Zaller Escrow in the amount allowed by the Court. If, or to the extent, the Court determines that Nagle & Zaller s Claim is not secured or is not entitled to a priority that is higher than the General Unsecured Claims in Class 3, then all of the funds in the Nagle & Zaller Escrow that the Court determines do not serve as security for Nagle & Zaller s Claim or are not required to pay any allowed priority claim held by Nagle & Zaller shall be transferred to the account with funds for the payment of Class 3 Claims, and Nagle & Zaller s Claim shall, to the extent otherwise allowed and unpaid, be paid as a Class 3 Claim. The Nagle & Zaller Escrow shall be established by the Debtor with, and maintained by, the Title Company subject to the Debtor s right to change the Title Company upon filing a notice with the Court Post-Confirmation Retention and Compensation of Professionals. Upon confirmation of this Plan, the Debtor will have the right to (a) retain Professionals (subject to the Court s approval) to implement the terms of this Plan, including, without limitation, to assist with the reconciliation of Claims and the making of Distributions; and (b) pay the Post- Confirmation Professional Claims of such retained Professionals from the Net Sale Proceeds. At Closing, the Debtor will provide Debtor s Counsel with a $300, retainer as security for post-confirmation services to be provided in connection with the implementation of this Plan. Upon confirmation of this Plan, the Debtor will retain accountants or similar professionals to, among other things, (a) perform an accounting of amounts due to the Debtor for unpaid condominium fees and assessments; (b) allocate the Fractional Sale Proceeds among the Residential Units based on the fractional interests identified on Exhibit 1; (c) for each Residential Unit, perform an accounting of (i) amounts due to the Debtor for unpaid condominium fees and assessments, (ii) amounts due to the Unit Lienholders of the relevant Residential Unit, and (iii) the residual amount, if any, due to the Former Resident; (d) allocate the Debtor s Sale v4

12 Case Doc 227 Filed 02/26/18 Page 12 of 18 Proceeds among the Holders of Allowed Claims in Class 3; (e) perform any necessary claims reconciliation analysis; and (f) perform tax services, including, but not limited to, the preparation of federal and state tax returns, tax notices, 1099 Forms, and other similar documents Distributions to Creditors. The Debtor, with the assistance of Debtor s Counsel and its accountant, shall be responsible for Distributions to Holders of Allowed Claims in accordance with the terms of this Plan or any other order of the Court. Distributions will be sent: (a) to the address set forth on the Proof of Claim filed by each Holder; (b) to the address set forth in any subsequent notice of change of address filed with the Court; (c) to the address reflected in the Schedules if no Proof of Claim or notice of change of address is filed; or (d) pursuant to the written instructions of the Holder of the Allowed Claim sent to and received by the Debtor no later than five (5) business days before the next Distribution Date. Distributions to Holders of Allowed Claims will not be made until all Disputed Claims have been finally resolved and all Post-Confirmation Professional Claims have been paid in full. The Debtor reserves the right to seek further court approval to make Distributions that are not inconsistent with applicable priority law Undeliverable Distributions. If a Distribution to any Holder is returned as undeliverable, then the Debtor shall use reasonable efforts to determine that Holder s then current address. If the Debtor cannot determine, or is not notified of, a Holder s then current address within three (3) months after the Distribution Date, then the Distribution reserved for such Holder shall be deemed an unclaimed Distribution, and Section 5.13 of this Plan shall be applicable thereto Unclaimed Distributions. If the current address for the Holder of an Allowed Claim entitled to a Distribution under this Plan has not been determined by the Distribution Date or such Holder has otherwise not been located, then such Holder (a) shall no longer be a Holder; and (b) shall be deemed to have released such Allowed Claim Remaining Debtor Sale Proceeds. After payment of the Allowed Claims in Class 3, any remaining proceeds will be distributed to the Former Residents based on the fractional interests identified on Exhibit Duties and Retained Rights and Powers. The Debtor will continue to exist until this Plan has been substantially consummated and the Bankruptcy Case is closed. Upon confirmation of this Plan, the Debtor will retain all of its rights and powers under the Bankruptcy Code, including, but not limited to, the right to prosecute and resolve all avoidance and other causes of actions and all other rights and powers under sections 505, 506, 541, 542, 543, 544, 547, 548, 549, 550, and 553 of the Bankruptcy Code. Additionally, any and all claims and causes of action of the Debtor as of the Confirmation Date, including, without limitation, against PEPCO, Washington Gas Light Company, and Prince George s County, Maryland, 2 are expressly preserved and retained by the Debtor. Upon confirmation of this Plan, the Debtor, with 2 For the avoidance of doubt, such claims include the claims related to or arising from or in connection with the facts and circumstances described in the Notice and Order of the Office of the Fire Marshal dated as of August 18, 2017, which the Debtor appealed on August 24, 2017, and the actions taken by Prince George s County in connection therewith v4

13 Case Doc 227 Filed 02/26/18 Page 13 of 18 the assistance of Debtor s Counsel and its accountant, will be responsible for the implementation of this Plan and all post-confirmation responsibilities, including, without limitation, Claims reconciliation, coordinating and making Distributions, filing quarterly and other reports with the Court and the U.S. Trustee, paying the U.S. Trustee s fees, wind-up of the Debtor s affairs, the dissolution of the Debtor and closing this Bankruptcy Case. Article 6 Executory Contracts and Unexpired Leases 6.1 Plan Constitutes Motion to Reject. Except for any insurance policies under which the insurer has a continuing obligation to pay the Debtor or a third party on behalf of the Debtor, the Debtor has claims or causes of action against the insurer, or as may be otherwise set forth in this Plan, all Executory Contracts and Unexpired Leases not assumed by the Debtor previously shall be deemed rejected on the Closing Date. Entry of the Confirmation Order shall constitute approval of such rejections under sections 365 and 1123 of the Bankruptcy Code. 6.2 Claims Arising From Rejection. Any Claim arising from the rejection of an Unexpired Lease or Executory Contract shall be filed with the Court no later than thirty (30) calendar days after entry of the Confirmation Order. If not timely filed, then such Claim will be waived and forever barred. Any Allowed Claim arising from the rejection of an Executory Contract or an Unexpired Lease will be a Class 3 Claim. Article 7 Administrative Bar Date 7.1 Administrative Bar Date. All requests for payment of unpaid Administrative Claims, including, but not limited to, applications of Professionals for compensation and expense reimbursement for services rendered or expenses incurred through the Confirmation Date, shall be filed with the Court no later than sixty (60) calendar days after the Confirmation Date. If not timely filed, then such Administrative Claims will be waived and forever barred. Any payment made or to be made by the Debtor for services or for costs and expenses incurred during this Bankruptcy Case through the Confirmation Date, or in connection with this Plan and incident to this Bankruptcy Case, is subject to the Court s approval as reasonable. 7.2 Disallowance of Improperly Filed Administrative Claims. Requests for payments of Administrative Claims included within a proof of claim are of no force and effect, and are disallowed in their entirety as of the Effective Date, and shall be satisfied only to the extent such Administrative Claim is subsequently filed in a timely fashion as provided in section 7.1 and subsequently becomes an Allowed Claim. Article 8 Disputed Claims 8.1 No Distribution on Claim Unless an Allowed Claim. Notwithstanding any other provision of this Plan, no cash or property will be distributed under this Plan on account of the disputed portion of any Claim or any Disputed Claim, unless and until the disputed portion of any such claim becomes an Allowed Claim v4

14 Case Doc 227 Filed 02/26/18 Page 14 of Objections to Claims. The Debtor retains the right to file objections to Claims. Any objections or challenges to Claims in Class 5 or Class 6 shall be filed no later than 90 days after the Confirmation Date subject to the Debtor s right to extend such 90-day deadline for cause shown and subject to the rights of Holders of Class 5 or Class 6 Claims to object to any such extension. The Debtor retains the discretion to litigate any such objections to a final determination by the Court or to compromise, settle, or otherwise resolve any such objection subject to the Court s approval; provided, however, that the Debtor may settle any Claims without prior court approval if the allowed amount of the Claim does not exceed $25, and if the U.S. Trustee and the 20 largest unsecured creditors fail to object after ten (10) business days notice of such settlement. 8.3 Allowance of Disputed Claims. If any portion of a Disputed Claim is allowed, then distributions to the Holder of such Claim will be made, within a reasonable time, in the amount that such Holder would have been entitled to receive under this Plan if such Claim had been an Allowed Claim on the Distribution Date without interest or present value adjustment. Article 9 Effect of Confirmation 9.1 Binding Effect. On and after the Confirmation Date, the provisions of this Plan shall bind any Holder of a Claim, including, without limitation, the Former Residents, the Debtor, the Unit Lienholders and Dragone. 9.2 Limitation of Liability. Only to the extent permitted by section 1125(e) of the Bankruptcy Code, neither the Debtor, nor any Professionals employed by the Debtor shall have or incur any liability to any person for any act taken or omission made in good faith in connection with or related to formulating, soliciting, implementing, confirming or consummating this Plan, its accompanying disclosure statement or any contract, instrument, release or other agreement or document created in connection with this Plan. 9.3 No Discharge. In accordance with section 1141(d)(3) of the Bankruptcy Code, the Debtor is not receiving a discharge in the Bankruptcy Case because the Debtor is selling all or substantially all of the property of the Estate and the Debtor will not engage in business after consummation of this Plan. 9.4 Injunction. The confirmation of this Plan will satisfy all Claims or causes of action arising out of any Claim addressed by the terms of this Plan and will operate as an injunction against all persons of the commencement or continuation of an action, the employment of process, or an act, to collect or recover from, or offset against, the Debtor, the Estate and the Property, except as provided in this Plan. 9.5 General Releases by Holders of Claims. Without limiting any other applicable provisions of, or releases contained in, this Plan or the Bankruptcy Code, as of the Effective Date, in consideration for, among other things, the Debtor s obligations under this Plan, cash and other contracts, instruments, releases, agreements or documents to be entered into or delivered in connection with this Plan, each Holder of a Claim (a) voting to accept this Plan or (b) abstaining from voting on this Plan and electing not to opt out of the release contained in this paragraph, v4

15 Case Doc 227 Filed 02/26/18 Page 15 of 18 will be deemed to unconditionally agree to the release provisions contained in this Plan; other than as expressly provided herein, each such Holder shall be deemed to forever release, waive and discharge all Claims, liabilities, debts, charges, actions, debts and demands, whether sounding in law or equity, in any way relating to the Debtor, the Bankruptcy Case, this Plan, its accompanying disclosure statement, or that certain Order from the Circuit Court for Prince George s County, entered on October 4, 2017, as amended, authorizing, among other things, the sale of the Property, that such person has, had or may have against the Debtor and its present or former directors, officers, employees, attorneys, and real estate brokers acting in such capacity; provided, however, that the releases described in this paragraph shall not include any act, omission or occurrence that was the result of gross negligence, willful misconduct or criminal activity; and, provided further, notwithstanding anything to the contrary in this release, all defenses of Prince George s County to any claim asserted against it by the Debtor are preserved, Prince George s County s ability to liquidate (but not collect on, except in accordance with the Plan) any claim asserted by it against the Debtor is preserved, and any Allowed Claim of Prince George s County shall be satisfied only in accordance with the terms of the Plan. Article 10 Modification of Plan 10.1 Pre-Confirmation Modification. The Debtor reserves the right, in accordance with the Bankruptcy Code, to amend or modify this Plan or the treatment of any Claim prior to the Confirmation Date; provided, however, that the Debtor and Dragone must mutually agree to modifications relating to the Property Post-Confirmation Modification. After the Confirmation Date, the Debtor may amend or modify this Plan in accordance with section 1127(b) of the Bankruptcy Code, or remedy any defect or omission, or reconcile any inconsistency in this Plan, in such a manner as may be necessary to carry out the purpose and intent of this Plan; provided, however, that the Debtor and Dragone must mutually agree to modifications relating to the Property. Article 11 Retention of Jurisdiction 11.1 Pre-Confirmation. Prior to confirmation of this Plan, the Court shall retain its existing jurisdiction, including, but not limited to, jurisdiction over the Debtor and the Debtor s assets Post-Confirmation. After confirmation of this Plan, the Court shall retain jurisdiction necessary to ensure that the terms of this Plan are carried out. The Court s jurisdiction shall be over any and all disputes and litigation pending on the Confirmation Date, any controversies that may arise thereafter, and any controversies that may affect the consummation of this Plan, including but not limited to: a. The classification of Claims, the re-examination of Claims which have been allowed for purposes of voting, and any Claim objections that may be filed v4

16 Case Doc 227 Filed 02/26/18 Page 16 of 18 b. The determination of all causes of action, controversies, disputes and conflicts involving or relating to the Debtor or its assets, arising prior to or after the Confirmation Date, whether or not subject to an action pending as of the Confirmation Date, between the Debtor and any other party. c. The modification of this Plan after confirmation to correct any defect, to cure any omission, or to reconcile any inconsistency in this Plan or in the Confirmation Order, as may be necessary or otherwise appropriate to carry out or clarify the intended purposes of this Plan or the Confirmation Order. d. Applications for compensation of services rendered to the Debtor and the Estate by Professionals pursuant to section 330(a) of the Bankruptcy Code. e. The enforcement and interpretation of the terms and conditions of this Plan, including, but not limited to, any agreement regarding the payment or satisfaction of an Allowed Claim. f. The existence, extent or priority of any Liens, encumbrances, or interests in property of the Debtor or the Estate. g. All matters concerning local, state and federal taxes in accordance with sections 346, 505 and 1146 of the Bankruptcy Code. h. Requests for the Court to enter orders or take any action as may be necessary to enjoin interference with the implementation or the consummation of this Plan. i. Requests for entry of an order concluding and terminating the Bankruptcy Case. Article 12 General Provisions 12.1 General Rules of Interpretation. For purposes of this Plan, the following rules of interpretation apply: a. Construction of Terms. Except as otherwise provided herein, this Plan shall be construed in conformance with section 102 of the Bankruptcy Code. Whenever it is appropriate because of the form or the context, each term whether stated in the masculine, feminine or neutral gender, shall include the masculine, feminine and the neutral gender, and each term stated in either the singular or the plural includes the singular and the plural. Any capitalized term used in this Plan that is not defined in this Plan but that is used in the Bankruptcy Code or the Bankruptcy Rules shall have the meaning assigned to such term in the Bankruptcy Code or the Bankruptcy Rules, as the context requires v4

17 Case Doc 227 Filed 02/26/18 Page 17 of 18 b. Referenced Documents. Any reference in this Plan to a contract, instrument, release, or other agreement or document being in a particular form or on particular terms and conditions means that such document shall be substantially in such form or substantially on such terms and conditions. Any reference in this Plan to an existing document or exhibit filed or to be filed means such document or exhibit, as it may have been or may be amended, modified or supplemented. c. Captions and Headings. Captions and headings in articles and sections are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation of this Plan. Unless otherwise specified, all references in this Plan to sections, articles or exhibits are references to sections, articles and exhibits of or to this Plan Governing Law. Except to the extent the Bankruptcy Code, the Bankruptcy Rules or other federal law applies, the rights and obligations arising under this Plan shall be governed by, and construed and enforced in accordance with, the laws of Maryland, without giving effect to the principles of conflicts of law of such jurisdiction Reservation of Rights Regarding Claims. Except as otherwise explicitly provided in this Plan, nothing herein shall affect the Debtor s rights and defenses, both legal and equitable, with respect to any Claims, including, but not limited to, all rights with respect to legal and equitable defenses to alleged rights of setoff or recoupment [Intentionally omitted] Successors and Assigns. The rights, benefits and obligations of any entity named or referred to in this Plan shall be binding on, and shall inure to the benefit of, any heir, executor, administrator, successor or assign of such entity Closing Bankruptcy Case. When all Disputed Claims filed against the Debtor have become Allowed Claims or have been disallowed, and all Distributions required under this Plan have been completed, the Debtor will file a notice advising the Court and all parties in interest of the substantial consummation of this Plan Waiver of Applicable Stays. Any and all automatic stays, including, but not limited to, those in Rules 3020(e) and 6004(h) of the Bankruptcy Rules, are waived and the Confirmation Order will provide as such. In the absence of an affirmative order entered by the Court granting a motion to stay the Confirmation Order, the Debtor will be entitled to immediately implement this Plan. (Remainder of page intentionally left blank) v4