In re 11 Underground Creative, LLC

WHITMAN L. HOLT BANKRUPTCY JUDGE

Chapter 11

SOUTHWELL & O'ROURKE, P.S. BY DAN O'ROURKE, WSBA #4911 Attorney for Debtors

FINDINGS OF FACT AND CONCLUSIONS OF LAW REGARDING CONFIRMATION OF DEBTOR'S' FIRST AMENDED CHAPTER 11 SUBCHAPTER V PLAN OF REORGANIZATION

WHITMAN L. HOLT BANKRUPTCY JUDGE

THIS MATTER came on for hearing on August 19, 2024 on the request of Debtor for confirmation of Debtor's First Amended Chapter 11 Subchapter V Plan of Reorganization filed on August 5, 2024 [ECF No. 102] (the "Plan"). Southwell & O'Rourke, P.S. appeareding for Debtor. The court having reviewed the Plan and the Declaration of Jerrod Lindblom [ECF No. 107], and having heard the statements of counsel, makes the following FINDINGS OF FACT AND CONCLUSIONS OF LAW,

1. Debtor filed this Chapter 11 Subchapter V proceeding on May 28, 2024 [ECF No. 1].

2. Debtor filed the Plan on August 5, 2024 [ECF No. 102]. The Plan contains a brief history of the business operations of the Debtor, a liquidation analysis, and projections with respect to the ability of the Debtor to make Plan payments. The Plan provides for the submission of future income as is necessary for the execution of the Plan. As such, the Plan complies with 11 U.S.C. § 1190.

3. Debtor gave proper notice of the original plan filing and the hearing on confirmation of the Plan to creditors and parties in interest as required by FRBP 2002, LBR 2002-1, and LBR 3018-1, as well as other applicable provisions of the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure by properly serving the original Plan, List of Classifying Claims and Interest, Ballot, and notice. Proof of service of such was filed with the court on July 1, 2024 [ECF No. 73]).

4. The hearing on confirmation after notice to creditors was held by telephone conference on August 19, 2024.

5. Certain classes of claims are impaired under the pPlan.

6. Debtor filed a Ballot Summary on August 5, 2024 [ECF No. 103] (the "Ballot Summary"). The Ballot Summary indicates that all Classes who cast a ballot, voted in favor of the Plan. There were no Classes that voted against the Plan.

7. No ballots other than those identified in the Ballot Summary have been received by Debtor except Class 6 voted after the voting deadline.

8. Any payment made or to be made by the Debtor for services or for costs and expenses in or in connection with the case, or in connection with the Plan and incident to the case, has been approved by, or is subject to the approval of, the court as reasonable. Any and all payments for professional services, including authorization required by 11 U.S.C. §§ 327 and 330, shall remain subject to bankruptcy court approval notwithstanding confirmation of the Plan.

9. Debtor shall continue the operation of Debtor's Business, defined in Art. 9.1 of Plan, after confirmation of the Plan. The net income from Debtor's business operations shall be used by Debtor to pay creditors as provided by the Plan.

10. The Debtor's Plan contains a Liquidation Analysis, which in a liquidation scenario, projects that all creditors shall would not be paid in full. As such, the creditors who are impaired by the plan, and who did not vote for the plan, will receive not less than the amount they would receive in a liquidation, as required by 11 U.S.C. § 1129(a)(7).

11. No government regulatory commission or agency is required to approve the Plan or terms of the Plan.

12. Debtor's Plan satisfies the requirements of 11 U.S.C. § 1129(a)(7) in that each holder of a claim or interest has accepted the Plan or will receive or retain under the Plan property of a value, as of the effective date of the Plan, that is not less than the amount that such holder would receive or retain if Debtor was liquidated under Chapter 7 of the Bankruptcy Code on such date.

13. No 11 U.S.C. § 1111(b) elections have been made by any secured creditor.

14. With respect to the class of claims that did not vote for the Plan, the Plan does not discriminate unfairly, and is fair and equitable, with respect to such class of claims as required by 11 U.S.C. §§ 1129(b)(1) and 1191(a). As stated above, the Plan calls for the Debtor's payment of its disposable income to creditors over a period of 3 years. Furthermore, the Debtor has provided a Plan Budget, Monthly Operating Reports and the Declaration of Debtor's representative Jerrod Lindblom, which demonstrate the Debtor's ability to make the Plan payments.

15. Class 1 claims are unimpaired under the Plan and are not entitled to vote. Classes numbered 3, 7, and 10 represent insider claims and are not voting classes under the Plan.

16. Administrative priority claims described by 11 U.S.C. § 503(b) and 11 U.S.C. § 507(Aa)(2) are provided for as required by 11 U.S.C. § 1129(a)(9).

17. The Plan has been accepted in writing by at least one non-insider class of impaired creditors as required by 11 U.S.C. § 1129(a)(10). The provisions of Chapter 11, Title 11 of the United States Code have been complied with, and the Plan complies with all provisions of Title 11 of the United States Code as well as other applicable law.

18. Confirmation of the Plan is not likely to be followed by liquidation, or the need for further financial reorganization, of Debtor.

19. This was a voluntary Chapter 11 filing by the Debtor. As such, no fees are due to any involuntary creditors.

20. The Debtor does not owe child support or domestic support obligations.

21. The Debtor has no allowable unpaid wage claims nor claims for commissions that were directly incurred by Debtor which have not been waived.

22. The Debtor does not owe claims for non-payment to any employee benefit plan.

23. The Debtor does not operate a grain storage facility.

24. The Debtor does not owe a debt to fishermen.

25. There are no claims made by any creditors for pre-petition deposits for purchase or lease of products for any creditor's personal family or household use.

26. The Debtor does not currently owe the bankruptcy court for any fees.

27. Debtor is not paying retiree benefits; therefore, no retiree benefits will be affected by the Plan.

28. Debtor's Plan should be confirmed. The provisions of Chapter 11 have been complied with, and the Plan has been proposed in good faith and not by any means forbidden by law.

29. The requirements for confirmation of the Plan imposed by the Bankruptcy Code, Federal Rules of Bankruptcy Procedure and other applicable law, including the requirements of 11 U.S.C. § 1129, have been met.

30. The effective date of the Plan will be the first business day following the date on which the confirmation order becomes a final non-appealable order. Debtor is authorized and directed to begin consummation of the Plan on the effective date.

31. The Plan is confirmed.