Document Page 1 of 25 IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF GEORGIA ROME DIVISION IN RE: BEAULIEU GROUP, LLC, et al., Debtors. CHAPTER 11 Jointly Administered Under CASE NO. 17-41677-bem MOTION TO APPROVE COMPROMISE AND SETTLEMENT WITH CT LENDER, LLC COMES NOW PMCM 2, LLC (the Liquidating Trustee, in its capacity as the liquidating trustee of the Beaulieu Liquidating Trust (the Trust, pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules, and makes and files this Motion to Approve Compromise and Settlement with CT Lender, LLC (the Motion. In support of this Motion, the Liquidating Trustee respectfully represents as follows: Jurisdiction and Venue 1. This Court has jurisdiction of this Motion pursuant to 28 U.S.C. 157 and 1334. This is a core proceeding pursuant to 28 U.S.C. 157. Venue of these jointly administered Chapter 11 cases (the Case and this Motion in this District is proper pursuant to 28 U.S.C. 1408 and 1409. The statutory predicates for the relief sought herein are Bankruptcy Rules 2002 and 9019. Background 2. On July 16, 2017 (the Petition Date, Beaulieu Group, LLC, Beaulieu Trucking, LLC and Beaulieu of America, Inc. (the Debtors filed voluntary petitions with the United States Bankruptcy Court for the Northern District of Georgia, Rome Division (the Court under Chapter 11 of the Bankruptcy Code. During the pendency of the Case, the Debtors were authorized
Document Page 2 of 25 to operate their business as debtors in possession pursuant to Sections 1107(a and 1108 of the Bankruptcy Code. 3. An Official Committee of Unsecured Creditors (the Committee was appointed on July 21, 2017. 4. On November 20, 2017, CT Lender, LLC ( CT Lender, filed a proof of claim, Claim No. 1549 (the CT Lender Claim against the Debtors, asserting a secured claim in an amount, as of July 16, 2017, of not less than $6,530,193.49. 5. On December 1, 2017, the Committee filed its Objection of the Official Committee of Unsecured Creditors to Proof of Claim No. 1549 Filed by CT Lender, LLC, Pursuant to 11 US.C. 502, Fed R. Bankr. P. 3007 and BLR 3007-1 [Dkt. No. 431] (the Committee s Objection wherein the Committee objected to the CT Lender s Claim. 6. On December 11, 2017, the Bankruptcy Court entered its Interim Order Authorizing Debtors to (A Pay Undisputed Amounts of Obligations Owed to Certain Secured Creditor, (B Escrow Disputed Amounts as Adequate Protection, and (C use Cash Collateral to Pay Ordinary Course Expenses [Dkt. No. 461] (the Interim Cash Collateral Order. In the Interim Cash Collateral Order, and after agreement by and among the Debtors, the Committee and CT Lender, the Bankruptcy Court ordered Debtors to pay to CT Lender the principal and prepetition interest portions of the CT Lender Claim in the amount of $6,327,645.83, which was paid to CT Lender on or about December 12, 2017. - 2 -
Document Page 3 of 25 7. In the Interim Cash Collateral Order, the parties agreed to place in escrow the amount of $1,000,000.00 with an entity reasonably acceptable to the Debtors, the Committee and CT Lender to be used to satisfy any additional amount of the CT Lender Claim. On January 30, 2018, the Bankruptcy Court entered its final cash collateral order [Dkt. No. 536] ( Final Cash Collateral Order which directed that the Debtors maintain the escrow established pursuant to the Interim Cash Collateral Order of $1,000,000.00 (the Escrowed Funds to be used to satisfy any additional amount of the CT Lender Claim. 8. On January 2, 2018, CT Lender filed its Response to Objection of the Official Committee of Unsecured Creditors to Proof of Claim No. 1549 Filed by CT Lender, LLC [Dkt. No. 497] in support of the CT Lender Claim. 9. On or about May 2, 2018, the Court entered an order [Dkt. No. 682] confirming the First Amended Joint Plan of Liquidation (the Plan filed jointly by Beaulieu Group, LLC, Beaulieu Trucking, LLC and the Committee. On June 4, 2018, the Debtors filed a Notice of Effective Date providing notice that the Effective Date of the Plan had occurred that day. [Dkt. No. 704]. The Plan provides, inter alia, that on and after the Effective Date (a the bankruptcy estates of Beaulieu Group, LLC and Beaulieu Trucking, LLC ( Beaulieu were substantively consolidated for all purposes related to claims and distributions, (b all of the assets of Beaulieu and its bankruptcy estate, including all causes of action, were transferred to the Trust, (c the Liquidating Trustee has all necessary power and authority to pursue any causes of action against any party, and to object to any claims filed by any creditor, and (d subject to any necessary approvals, the Liquidating - 3 -
Document Page 4 of 25 Trustee has authority to settle all claims against Beaulieu and its bankruptcy estate. The Plan also reduced the amount of the Escrowed Funds from $1,000,000.00 to $500,000.00. 10. The Escrowed Funds are being held in escrow by counsel for Debtor, Scroggins & Williamson, P.C., 4401 Northside Parkway, Suite 450, Atlanta, GA 30327, in accordance with the Interim Cash Collateral Order, the Final Cash Collateral Order and the Plan. 11. CT Lender and the Liquidating Trustee have engaged in negotiations resulting in an agreement resolving to settle and compromise the CT Lender Claim and the Committee Objection on the terms and conditions set forth in more detail in a written Settlement Agreement (the Agreement, a copy of which is attached hereto as Exhibit A. Relief Requested 12. By filing this Motion, the Liquidating Trustee seeks authorization to enter into and consummate the Agreement, the terms of which, inter alia, resolves the Committee Objection and reduces, fixes and allows the CT Lender Claim. Basis for Relief 13. As noted above, the parties engaged in extensive settlement negotiations regarding claims, causes of action and defenses relating to the Committee Objection and the CT Lender Claim. The parties ultimately reached a final resolution of these issues as set forth in the Agreement. The Agreement is the product of the arms-length negotiations between CT Lender and the Liquidating Trustee. Below is a summary of settlement terms between the Liquidating Trustee and CT Lender, - 4 -
Document Page 5 of 25 as more fully set forth in the Agreement. In the event of any conflict between the language of the Agreement and this Motion, the Agreement shall govern. A. Within three (3 business days of the Effective Date, the Liquidating Trustee shall cause the payment to be made to CT Lender from the Escrowed Funds in the amount of $443,629.47 (the Settlement Payment. B. Upon receipt of the Settlement Payment by CT Lender, then (a the CT Lender Claim shall be deemed satisfied and paid in full, (b the liens securing the CT Lender Claim shall be deemed released and satisfied on all remaining assets of the Trust, including without limitation, the balance of the Escrowed Funds, and (c the Liquidating Trustee shall be authorized to file any UCC termination statement necessary to evidence the release and satisfaction of any such liens of CT Lender. C. Upon receipt of the Settlement Payment by CT Lender, the parties would mutually release the other parties. D. Such other terms and agreements as are more fully set forth in the Agreement, which all parties-in-interest are encouraged to read in full. 14. The Liquidating Trustee avers that the proposed resolution of the CT Lender Claim and the Committee Objection is in the best interest of the Trust, Beaulieu, Beaulieu s estate and creditors. This Court has the right and the power to approve the Agreement. See 11 U.S.C. 105; Fed. R. Bankr. P. 9019. Bankruptcy Rule 9019(a provides, in pertinent part, [o]n motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement. Fed. R. Bankr. P. 9019(a. 15. Settlements and compromises are a normal part of the process of reorganization. Case v. Los Angeles Lumber Prods. Co., 308 U.S. 106, 130 (1939. The Supreme Court of the United States has further said: [i]n administering [Bankruptcy] Proceedings in an economical and practical manner, it will often be wise to arrange the settlement of claims as to which there are substantially and reasonable doubts. Protective Comm. of Stockholders of TMT Trailer Ferry, - 5 -
Document Page 6 of 25 Inc. v. Anderson (In re TMT Trailer Ferry, Inc., 390 U.S. 414, 424 (1968, on remand, TMT Trailer Ferry, Inc. v. Kirkland, 471 F.2d 10 (5th Cir. 1972. Settlements are desirable and wise methods of bringing [closure] to... proceedings otherwise lengthy, complicated and costly. Matter of Jackson Brewing Co., 624 F.2d 599, 602 (5th Cir. 1980. 16. Under Bankruptcy Rule 9019(a, this Court may approve a compromise or settlement on motion by the trustee and after a hearing on notice to creditors, the debtor and indenture trustee.... Protective Comm. For Indep. Stockholders of TMT Ferry, Inc. v. Anderson, 390 U.S. 414, 424 (1968. In conducting a hearing under Rule 9019(a, the bankruptcy court is to determine whether the proposed compromise is fair and equitable, and in the best interests of the bankruptcy estate. Id. In making this determination, a bankruptcy court is required to apprise itself of all facts necessary for an intelligent and objective opinion of the probabilities of ultimate success should the claim be litigated. Id. To determine whether a settlement should be approved under 9019, the Court should: Id. at 424-25. form an educated estimate of the complexity, expense, and likely duration of such litigation, the possible difficulties of collecting on any judgment which might be obtained, and all other factors relevant to a full and fair assessment of the wisdom of the proposed compromise. Basic to this process in every instance, of course, is the need to compare the terms of the compromise with the likely rewards of the litigation. 17. The decision whether to approve a particular settlement is within the discretion of the bankruptcy court. It must be remembered that the evaluation of any lawsuit is quite problematic and calls for a significant degree of speculation. Texas Extrusion Corp. v Lockheed Corp. (In re Texas Extrusion Corp., 844 F.2d 1142, 1159 (5th Cir. 1988. A reviewing court will uphold the - 6 -
Document Page 7 of 25 approval of a settlement if it is the result of an adequate and intelligent consideration of the merits of the claims, the difficulties of pursuing them, the potential harm to the debtor s estate caused by delay, and the fairness of the terms of the settlement. TMT Trailer Ferry, Inc., 390 U.S. at 434. 18. The Eleventh Circuit has adopted the following factors to consider in evaluating the propriety of a proposed settlement or compromise: a. The probability of success in the litigation; b. The difficulties, if any, to be considered in the matter of collection; c. The complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it; and d. The paramount interest of creditors and a proper deference to their reasonable views in the premises. In re Chira, 567 F.3d 1307, 1312 (11th Cir. 2009. See also In re Justice Oaks II, Ltd., 898 F.2d 1544, 1549 (11th Cir. 1990. 19. Probability of Success on the Merits. It is difficult to assess whether the Liquidating Trustee would prevail on the Committee Objection to the CT Lender Claim, were such objection to be litigated. However, the Liquidating Trustee believes the proposed result is certainly within the realm of potential litigation results, but without having to spend the funds necessary to litigate. 20. Difficulty in Collection and Complexity, Expense, and Likely Duration of the Litigation. The difficulty of collection factor is not applicable to this settlement. However, if the matters subject to the Agreement are litigated, that litigation would surely be expensive and time consuming. Such a cost and delay in the administration of the Case would be burdensome to the Trust. Given that CT Lender is agreeing to reduce the CT Lender Claim and to release other claims against the Trust as set forth in the Agreement, the significant advantages of the Agreement are to - 7 -
Document Page 8 of 25 free up funds for distribution to other creditors and to save further expense and distraction of litigating the Committee Objection to the CT Lender Claim. 21. Paramount Interest of Creditors. By virtue of the proposed settlement, the Liquidating Trustee will be reducing the amount of potential secured claims against the Trust and limiting further delay and expense which would necessarily be occasioned by litigation of issues which would be raised by the Liquidating Trustee to the CT Lender Claim. Under the circumstances, the interest of creditors will be best served by approval of the proposed settlement. Notice 22. Notice of this Motion is being provided to the Office of the United States Trustee, counsel for CT Lender and any other parties entitled to Designated Notice under the terms of the confirmed Plan. In light of the nature of the relief requested, the Liquidating Trustee respectfully requests that the Court find that no further notice is necessary. WHEREFORE, the Liquidating Trustee respectfully requests that the Court (i grant this Motion and enter an order, substantially in the form attached hereto as Exhibit B, approving the proposed settlement with CT Lender, and (ii grant such other and further relief as may be just and proper. - 8 -
Document Page 9 of 25 Respectfully submitted, this 21st day of November, 2018. SCROGGINS & WILLIAMSON, P.C. 4401 Northside Parkway Suite 450 Atlanta, GA 30327 T: (404 893-3880 F: (404 893-3886 E: rwilliamson@swlawfirm.com mlevin@swlawfirm.com By: /s/ J. Robert Williamson J. ROBERT WILLIAMSON Georgia Bar No. 765214 MATTHEW W. LEVIN Georgia Bar No. 448270 Counsel for the Liquidating Trustee - 9 -
Document Page 10 of 25 EXHIBIT A Settlement Agreement
Document Page 11 of 25 SETTLEMENT AGREEMENT This Settlement Agreement (the Agreement is dated as of October 24, 2018, and entered into pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure ( Bankruptcy Rules. This Agreement is made by and between CT Lender, LLC, a Delaware limited liability company ( CT Lender and PMCM 2, LLC, Liquidating Trustee for the Estates of Beaulieu Group, LLC, et al. ( Trustee in the formerly jointly administered Chapter 11 bankruptcy case pending in the United States Bankruptcy Court for the Northern District of Georgia, Rome Division ( Bankruptcy Court, Case No. 17-41677 ( Bankruptcy Case ; (each of CT Lender and Trustee, individually, a Party and collectively, Parties. RECITALS WHEREAS, on July 16, 2017, Beaulieu Group, LLC ( Debtor filed voluntary petition under Chapter 11 of Title 11 of the United States Code ( Bankruptcy Code in the Bankruptcy Court; WHEREAS, on or about November 20, 2017, CT Lender filed a proof of claim, Claim No. 1549 ( CT Lender s Claim against Debtor, asserting a secured claim in an amount, as of July 16, 2017, of not less than $6,530,193.49; WHEREAS, on December 1, 2017, the Official Committee of Unsecured Creditors filed the Objection of the Official Committee of Unsecured. Creditors to Proof of.claim No, 1549 Filed by CT Lender, LLC, Pursuant to.11 US.C. 502, Fed R. Bankr. P. 3007 and BLR 3007-1 [Dkt. No. 431] ( Committee s Objection wherein the Committee objected to CT Lender s Claim; WHEREAS, on December 11, 2017, the Bankruptcy Court entered its Interim Order Authorizing Debtors to (A Pay Undisputed Amounts of Obligations Owed to Certain Secured Creditor, (B Escrow Disputed Amounts as Adequate Protection, and (C use Cash Collateral to Pay Ordinary Course Expenses [Dkt. No. 461] ( Interim Cash Collateral Order. In the Interim Cash Collateral Order, and after agreement by and among the Debtor, Committee and CT Lender, the Bankruptcy Court ordered Debtor to. pay to CT Lender the principal and prepetition interest portions of CT Lender s Claim in the amount of $6,327,645.83, which was paid to CT Lender on or about December 12, 2017; WHEREAS, in the Interim Cash Collateral Order, the parties agreed to place in escrow the amount of $1,000,000.00 with an entity reasonably acceptable to Debtor, the Committee and CT Lender to be used to satisfy any additional amount of CT Lender s Claims. On January 30, 2018, the Bankruptcy Court entered its final cash collateral order [Dkt. No. 536] ( Final Cash Collateral Order which directed that Debtor maintain the escrow established pursuant to the Interim Cash Collateral Order of $1,000,000.00 (the Escrowed Funds to be used to satisfy any additional amount of CT Lender s Claim;
Document Page 12 of 25 WHEREAS, the Escrowed Funds are being held in escrow by counsel for Debtor, Scroggins & Williamson, P.C., 4401 Northside Parkway, Suite 450, Atlanta, GA 30327, in accordance with the Interim Cash Collateral Order and the Final Cash Collateral Order; WHEREAS, on January 2, 2018, CT Lender filed its Response to Objection of the Official Committee of Unsecured Creditors to Proof of Claim No. 1549 Filed by CT Lender, LLC [Dkt. No. 497] in support of CT Lender s Claim; WHEREAS, on March 14, 2018, Debtor and the Committee filed their First Amended Joint Plan of Liquidation [Dkt. No. 631] ( First Amended Plan ; WHEREAS, among other things, the First Amended Plan reduced the amount of the Escrowed Funds from $1,000,000.00 to $500,000.00; WHEREAS, on May 2, 2018, the Bankruptcy Court entered an Order Confirming First Amended Joint Plan of Liquidation Proposed by Debtor and Official Committee of Unsecured Creditors ( Confirmation Order [Dkt. No. 682]; WHEREAS, the Parties have concluded that it is in their respective best interests to resolve all disputed issues and related matters on the terms set forth in this Agreement; and WHEREAS, Debtor and Trustee believe that the compromise and settlement provided herein is fair and reasonable, and in the best interests of Debtor s bankruptcy estate created upon the filing of bankruptcy on the Petition Date ( Bankruptcy Estate ; NOW, THEREFORE, the Parties, in consideration of the premises, covenants, and agreements provided for herein and for other good and valuable consideration acknowledged by each of them to be satisfactory and adequate, and intending to be legally bound, do hereby mutually agree as follows, subject to Bankruptcy Court approval: ARTICLE I SETTLEMENT TERMS Section 1.1 Settlement Payment. Within three (3 business days after the Effective Date (as defined below, the Trustee shall cause the payment to be made to CT Lender from the Escrowed Funds the amount of $443,629.47 ( Settlement Payment via wire transfer to the account set forth in the wiring instructions to be provided by counsel for CT Lender. Section 1.2 Satisfaction of CT Lender s Claim. Upon receipt of the Settlement Payment by CT Lender as set forth in Section 1.1 hereof, then (a CT Lender s Claim shall be deemed satisfied and paid in full, (b the liens securing CT Lender s Claim shall be deemed released and satisfied on all remaining assets of Trustee, including without limitation, the balance of the Escrowed Funds, and (c the Trustee shall be authorized to file any UCC termination statement necessary to evidence the release and satisfaction of any such liens of CT Lender. 2
Document Page 13 of 25 ARTICLE II RELEASES Section 2.1 Release of CT Lender s Claim. Upon receipt of the Settlement Payment by CT Lender as set forth in Section 1.1 hereof, CT Lender irrevocably and unconditionally, fully, finally, and forever waives, releases, acquits, and discharges the Trustee, the Bankruptcy Estate, the Debtor, the Committee and their respective successors and assigns, attorneys, and other professionals (collectively, CT Lender Releasees from any and all claims, demands, rights, liabilities, or causes of action of any and every kind, character, or nature whatsoever, in law or in equity, known or unknown, whether asserted or unasserted, which CT Lender has or may have or claim to have, against any of CT Lender Releasees, upon, or by reason of any manner, cause or thing whatsoever from the beginning of the world to the Effective Date, including but not limited to CT Lender s Claim. Any release provided in this Section 2.1 shall not flow from, nor be deemed to waive, release, quitclaim, novate or otherwise affect, any claims, causes of action, counterclaims or defenses held by any affiliate, member or manager of CT Lender. Section 2.2 Release of CT Lender. Upon receipt of the Settlement Payment by CT Lender as set forth in Section 1.1 hereof, Trustee, on behalf of the Bankruptcy Estate, the Debtor, the Committee, and any and all other representatives of the Bankruptcy Estate (collectively, Estate Releasors, irrevocably and unconditionally, fully, finally, and forever waive, release, acquit, and discharge CT Lender and its successors and assigns, attorneys and other professionals (collectively, Estate Releasees from any and all claims, demands, rights, liabilities, or causes of action of any and every kind, character, or nature whatsoever, in law or in equity, known or unknown, whether asserted or unasserted, which the Estate Releasors, or any of them, have or may have or claim to have, against any of the Estate Releasees, upon, or by reason of any manner, cause or thing whatsoever from the beginning of the world to the Effective Date, including but not limited to any claims that have been or could be asserted by the Estate Releasors against the Estate Releasees in the Bankruptcy Case. Any release provided in this Section 2.2 shall not flow from, nor be deemed to waive, release, quitclaim, novate or otherwise affect, any claims, causes of action, counterclaims or defenses held by the Estate Releasors against any affiliate, member or manager of CT Lender. Section 2.3 Obligations Not Released. Notwithstanding Sections 2.1 and 2.2 above, no Party is released from its obligations as provided in this Agreement. ARTICLE III REPRESENTATIONS AND WARRANTIES Section 3.1 and warrants that: Representations and Warranties of Trustee. Trustee hereby represents (a subject to any necessary approval by the Bankruptcy Court, Trustee has the full requisite power and authority to execute and deliver this Agreement and to perform the obligations under this Agreement, and the execution, delivery and performance hereof, and the instruments 3
Document Page 14 of 25 and documents required to be executed in connection herewith, (i have been duly and validly authorized by Trustee and (ii are not in contravention of any material document or agreement specifically applicable to Trustee or to which Trustee is a party; (b (c no proceeding, litigation or adversary proceeding before any court, arbitrator or administrative or governmental body is pending against Trustee which would adversely affect Trustee s ability to enter into this Agreement or to perform the obligations hereunder; and Trustee directly or indirectly, and subject to approval by the Bankruptcy Court, has the power and authority to bind the Bankruptcy Estate to the terms of this Agreement or otherwise has been duly authorized to execute and deliver this Agreement on behalf of the Bankruptcy Estate. Section 3.2 Representations and Warranties of CT Lender. CT Lender hereby represents and warrants that: that: (a (b Section 3.3 (a (b CT Lender has full requisite power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement, and the execution, delivery and performance hereof, and the instruments and documents required to be executed by it in connection herewith, (i have been duly and validly authorized and (ii are not in contravention of any material document or agreement specifically applicable to it or to which it is a party; no proceeding, litigation or adversary proceeding before any court, arbitrator or administrative or governmental body is pending against it which would adversely affect its ability to enter into this Agreement or to perform its obligations hereunder; and Additional Representations. Each of the Parties represents and warrants in executing this Agreement, such Party does not rely, and has not relied, upon any representation or statement made by any other Party or any of such other Party s representative, agents, or attorneys, with regard to the subject matter, basis, or effect of this Agreement or otherwise, other than as may be stated specifically in this Agreement; in executing this Agreement, such Party has relied entirely upon such Party s own judgment, beliefs, and interest and upon the advice of its counsel and that such Party has had a reasonable period of time to consider the terms of this Agreement before entering into it; 4
Document Page 15 of 25 (c (d such Party has reviewed this Agreement and fully understands and voluntarily accepts all of the previsions contained herein; and this Agreement is the product of negotiations among the Parties hereto and that any rule of construction as to ambiguities being resolved against the drafting party shall not apply in the interpretation of this Agreement. Section 4.2 Effective Date. This Agreement shall become effective immediately upon ten (10 days after a Designated Notice has been sent pursuant toarticle VIII of the Plan unless an objection thereto has been timely filed ( Effective Date. ARTICLE V MISCELLANEOUS PROVISIONS Section 5.1 Good Faith. The Parties agree that this Agreement was negotiated in good faith and reflects a compromise and settlement that was reached voluntarily in consultation with their respective legal counsel. Section 5.2 Amendments. This Agreement may be amended or modified only by a written instrument signed by all Parties or by their respective successors-in-interest. Section 5.3 No Admission. This Agreement is entered into in settlement and compromise of disputed claims. It is not intended to be and should not be construed to be an admission by any Party that it is liable to the other for any reason whatsoever and, in fact; any such claim of liability is expressly denied. Section 5.4 Recitals Not Binding. The recitals set forth in the Agreement shall not constitute binding admissions, statements against interest, or be admissible as evidence in any proceedings between or involving one or more of the Parties to establish any fact, waiver; estoppel, contention, assertion, or allegation of any kind or nature whatsoever, except that the recitals can be used in connection with a proceeding seeking to approve and/or enforce this Agreement. Section 5.5 Attorney s Fees and Costs. The Parties shall bear their own costs and attorney s fees incurred in connection with this Agreement and consummation of the settlement which is the subject of this Agreement. In the event that an action is commenced by any Party to enforce the provisions of this Agreement, then the prevailing Party shall be entitled to an award, in addition to any other claims or damages, of its costs and expenses including reasonable attorney s fees in connection with said action from the other Party. Section 5.6 Counterparts. This Agreement may be executed by facsimile, PDF or other electronic format and in one or more counterparts. All executed counterparts and each of them shall be deemed to be one and the same instrument. Each Party shall cause his counsel to exchange among themselves original signed counterparts. A complete set of executed. 5
Document Page 16 of 25 counterparts shall be filed as Exhibit A to the Notice of Compromise and Settlement of Disputed Claims filed with the Bankruptcy Court. Section 5.7 Successors. This Agreement shall be binding upon, and inure to the benefit of, the successors of the Parties. Section 5.8 Jurisdiction. The Bankruptcy Court shall retain exclusive jurisdiction with respect to implementation and enforcement of the terms of this Agreement, and each Party submits to the jurisdiction of the Bankruptcy Court for - purposes of implementing and enforcing the settlement embodied in this Agreement. Section 5.9 Further Assurances. Each of the Parties hereto agrees to execute and deliver, or to cause to be executed and delivered, all such instruments, and to take all such action as the other Party may reasonably request in order to effectuate the intent and purposes of, and to carry out the terms of this Agreement. Section 5.10 Governing Law. This Agreement and any exhibits hereto shall be considered to have been negotiated, executed and delivered, and to be wholly performed, in the State of Georgia, and the rights and obligations of the Parties to this Agreement shall be construed and enforced in accordance with and governed by the internal, substantive laws of the State of Georgia without giving effect to that state s choice of law principles. Section 5.11 Entire Agreement. This Agreement constitutes the entire agreement between. the Parties and no representations, warranties, or inducements have been made to any Party concerning this Agreement other than the representation, warranties, and covenants contained and memorialized in this Agreement. It is understood by the Parties that, except for the matters expressly represented herein, the facts or law with respect to which this Agreement is entered into may turn out to be other than or different from the facts now known to each Party or believed by such Party to be true; each Party therefore expressly assumes the risk of the facts or law turning out to be so different, and agrees that this Agreement shall be in all respects effective and not subject to termination by reason of any such different facts or law. 6
Document Page 17 of 25
Document Page 18 of 25 EXHIBIT B Form of Order
Document Page 19 of 25 IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF GEORGIA ROME DIVISION IN RE: BEAULIEU GROUP, LLC, et al., Debtors. CHAPTER 11 Jointly Administered Under CASE NO. 17-41677-bem ORDER GRANTING MOTION TO APPROVE COMPROMISE AND SETTLEMENT WITH CT LENDER, LLC THIS matter having come before the Court upon the Motion to Approve Compromise and Settlement with CT Lender, LLC [Dkt. No. ] (the Motion filed by PMCM 2, LLC (the Liquidating Trustee, in the above-styled jointly administered case (the Case, to approve a compromise of controversies as embodied in that certain Settlement Agreement (the Agreement annexed to the Motion as Exhibit A, by, between and among the Liquidating Trustee and CT Lender, LLC ( CT Lender, all as more fully defined and set forth in the Agreement; 1 and a hearing having been noticed on the Motion for December, 2018; and no objections having been filed to the Motion prior to the hearing, and no party having appeared at the hearing opposing the Motion; and the Court having reviewed the Motion and after due deliberation, the Court having concluded that good and sufficient cause exists to grant the relief requested by the Motion; now, therefore, the Court hereby finds and concludes as follows: 1 All capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Motion.
Document Page 20 of 25 FINDINGS OF FACT AND CONCLUSIONS OF LAW 2 Jurisdiction, Final Order and Statutory Predicates A. The Court has jurisdiction over the Motion to approve the Agreement between the Debtors and the Claimant, and the relief requested therein, pursuant to 28 U.S.C. 157 and 1334, and this matter is a core proceeding pursuant to 28 U.S.C. 157(b(2. Venue of this case and the Motion in this district is proper under 28 U.S.C. 1408 and 1409. B. This Order constitutes a final and immediately appealable order within the meaning of 28 U.S.C. 158(a. C. The predicates for the relief sought in the Motion are Fed. R. Bankr. P. 9019(a and 11 U.S.C. 105(a. Notice of the Motion D. The Liquidating Trustee has provided due and adequate notice of the Motion, the Hearing, the Agreement, and a reasonable opportunity to object or be heard with respect to the Motion and the relief requested therein to counsel for CT Lender and those parties entitled to Designated Notice under the Plan confirmed by the Confirmation Order in this Case. Such notice was good and sufficient under the particular circumstances, and no further notice is necessary. Sound Business Judgment and Reasonableness E. The relief requested in the Motion is fair, reasonable and in the best interests of the Trust, Beaulieu, Beaulieu s estate and their creditors. The Liquidating Trustee has demonstrated good, sufficient and sound business purposes and justifications for the relief requested in the 2 The findings and conclusions set forth herein constitute the Court s findings of fact and conclusions of law pursuant to Rule 7052 of the Federal Rule of Bankruptcy Procedure, as made applicable to this proceeding pursuant to Rule 9014 of the Federal Rule of Bankruptcy Procedure. To the extent any of the following findings of fact constitute conclusions of law, they are adopted as such. To the extent any of the following conclusions of law constitute findings of fact, they are adopted as such. - 2 -
Document Page 21 of 25 Motion and the approval of the transactions contemplated thereby. The settlement and compromise with CT Lender embodied in the Agreement is consistent with the reasonable range of litigation outcomes if the Liquidating Trustee was to litigate the matters resolved pursuant to this Order. Settling on the terms set forth in the Agreement will generate more funds for distribution to creditors by the Liquidating Trustee, and saves the expense and avoids the burden, delay, and risk of further negotiations or litigation with CT Lender concerning the claims resolved by the Agreement. The Agreement was negotiated in good faith between the Liquidating Trustee and CT Lender. Accordingly, the Liquidating Trustee has demonstrated that entry into the Agreement is in the best interests of the Trust, Beaulieu, Beaulieu s estate and their creditors. For all of the foregoing reasons and after due deliberation, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT: 1. The Motion is GRANTED, and the Agreement is APPROVED. 2. The failure to specifically include any particular provision of the Agreement in this Order shall not diminish or impair the effectiveness of such provision, it being the intent of the Court that the Agreement be authorized and approved in its entirety. 3. Pursuant to Fed. R. Bankr. P. 9019(a, the settlement and release of claims as set forth in the Agreement is hereby approved, and the Liquidating Trustee is authorized to enter into the Agreement and undertake all acts as are necessary to consummate the transactions contemplated by the Agreement in accordance with its terms, and to execute and deliver all documents as may be required to effectuate the transactions contemplated by the Agreement, subject only to the conditions specified in the Agreement. 4. All persons or entities, including all creditors of the Trust, Beaulieu, and Beaulieu s estate, are hereby bound by the terms and provisions of the Agreement and this Order and thus are - 3 -
Document Page 22 of 25 hereby barred and precluded from asserting or pursuing any claims or causes of action against any of the parties to the Agreement that are released under the Agreement. 5. This Court shall retain jurisdiction to interpret and enforce the provisions of this Order and the Agreement in all respects, and to adjudicate, if necessary, all disputes arising under or relating to or affecting any of the transactions contemplated under the Agreement. END OF DOCUMENT Prepared and presented by: SCROGGINS & WILLIAMSON, P.C. By: J. ROBERT WILLIAMSON Georgia Bar No. 765214 MATTHEW W. LEVIN Georgia Bar No. 448270 4401 Northside Parkway Suite 450 Atlanta, GA 30327 T: (404 893-3880 F: (404 893-3886 E: rwilliamson@swlawfirm.com mlevin@swlawfirm.com Counsel for the Liquidating Trustee - 4 -
Document Page 23 of 25 IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF GEORGIA ROME DIVISION IN RE: BEAULIEU GROUP, LLC, et al., Debtors. CHAPTER 11 Jointly Administered Under CASE NO. 17-41677-bem NOTICE OF HEARING ON MOTION TO APPROVE COMPROMISE AND SETTLEMENT WITH CT LENDER, LLC (Hearing to be Held in Atlanta PLEASE TAKE NOTICE that PMCM 2, LLC (the Liquidating Trustee, the Liquidating Trustee appointed under the confirmed First Amended Joint Plan of Liquidation has filed a Motion to Approve Compromise and Settlement with CT Lender, LLC (the Motion in which the Liquidating Trustee has requested that the Court approve a settlement of potential objections to a Proof of Claim filed by CT Lender, LLC ( CT Lender asserting secured claims against the above-captioned Debtors. As part of the proposed settlement, the Liquidating Trustee has agreed to pay CT Lender $443,629.47 in full and complete satisfaction of any claims held by CT Lender. A copy of the Motion is available upon request to undersigned counsel, or by downloading at www.americanlegal.com/beaulieu. PLEASE TAKE FURTHER NOTICE that the Court will hold a hearing on the Motion in Courtroom 1402, United States Courthouse, 75 Ted Turner Drive, SW, Atlanta, Georgia at 11:00 a.m. on December 20, 2018. PLEASE TAKE FURTHER NOTICE that your rights may be affected by the Court s ruling on this Motion. You should read this Motion carefully and discuss it with your attorney if you have one in this bankruptcy case. (If you do not have an attorney, you may wish to consult one. If you do not want the Court to grant the relief sought in the Motion, or if you want the Court to consider your views, then you and/or your attorney should attend the hearing. You may also file a written response to the Motion with the Clerk at the address stated below, but you are not required to do so. If you file a written response, you must attach a certificate stating when, how and on whom (including addresses you served the response. The address of the Clerk s Office is: Clerk, U.S. Bankruptcy Court, 600 E. First Street, Room 339, Rome, Georgia 30161-3187. You should also mail a copy of your response to the undersigned at the address stated below.
Document Page 24 of 25 Respectfully submitted, this 21st day of November, 2018. SCROGGINS & WILLIAMSON, P.C. 4401 Northside Parkway, Suite 450 Atlanta, Georgia 30327 T: (404 893-3880 F: (404 893-3886 E: rwilliamson@swlawfirm.com mlevin@swlawfirm.com By: /s/ J. Robert Williamson J. ROBERT WILLIAMSON Georgia Bar No. 765214 MATTHEW W. LEVIN Georgia Bar No. 448270 Counsel for the Liquidating Trustee - 2 -
Document Page 25 of 25 CERTIFICATE OF SERVICE This is to certify that on this date I served a true and correct copy of the within and foregoing Motion to Approve Compromise and Settlement with CT Lender, LLC and Notice of Hearing by causing same to be deposited in the United States Mail with adequate postage affixed thereon and addressed to the following persons: Martin P. Ochs Office of the United States Trustee 362 Richard B. Russell Building 75 Ted Turner Drive, SW Atlanta, GA 30303 John F. Isbell Garrett A. Nail Thompson Hine LLP Two Alliance Center 3560 Lenox Road, Suite 1600 Atlanta, GA 30326 Elizabeth B. Rose Caiola & Rose, LLC 150 E. Ponce de Leon Ave. Suite 410 Decatur, GA 30030 Paul Labov Michael G. Menkowitz Fox Rothschild, LLP 2000 Market Street, 20th Floor Philadelphia, PA 19103-3222 Gregory M. Taube Nelson Mullins Riley & Scarborough LLP 201 17th Street, NW, Suite 1700 Atlanta, Georgia 30363 Harry R. Cash Grant, Konvalinka & Harrison, PC 633 Chestnut Street Suite 900 Chattanooga, TN 37450-0900 James F.F. Carroll 100 Peachtree Street Suite 1950 Atlanta, GA 30303 This 21st day of November, 2018. SCROGGINS & WILLIAMSON, P.C. 4401 Northside Parkway Suite 450 Atlanta, Georgia 30327 T: (404 893-3880 F: (404 893-3886 E: rwilliamson@swlawfirm.com mlevin@swlawfirm.com By: /s/ J. Robert Williamson J. ROBERT WILLIAMSON Georgia Bar No. 765214 MATTHEW W. LEVIN Georgia Bar No. 448270 Counsel for the Liquidating Trustee