A disclosure statement is a clause within a contract that requires one party to provide certain information or documents to the other party, ensuring transparency and informed decision-making. This clause is crucial for preventing misunderstandings and potential disputes by clearly outlining the nature and extent of information to be disclosed.
Adequacy of Disclosures in the Combined Disclosure Statement and Plan. The Combined Disclosure Statement and Plan contains adequate and extensive material information regarding the Debtors and the Combined Disclosure Statement and Plan (and the transactions contemplated thereby) so that the parties entitled to vote on the Combined Disclosure Statement and Plan could make informed decisions regarding the Combined Disclosure Statement and Plan. The Combined Disclosure Statement and Plan contains “adequate information” as that term is defined in section 1125(a) of the Bankruptcy Code and complies with any applicable additional requirements of the Bankruptcy Code and Bankruptcy Rules.
Implementation of the Combined Disclosure Statement and Plan (11 U.S.C. § 1123(a)(5)). The Combined Disclosure Statement and Plan, including the provisions governing the Litigation Trust, provides adequate and proper means for the Combined Disclosure Statement and Plan’s implementation. Thus, section 1123(a)(5) of the Bankruptcy Code is satisfied.
Information contained in the Combined Disclosure Statement and Plan is proposed and subject to change, whether as a result of amendments or supplements, third-party actions, or otherwise, and should not be relied upon by any party. A copy of the Combined Disclosure Statement and Plan is furnished as Exhibit 99.1 and is incorporated herein by reference. The above description of the Combined Disclosure Statement and Plan is a summary only and is qualified in its entirety by reference to the full text of the Combined Disclosure Statement and Plan.
THIS COMBINED DISCLOSURE STATEMENT AND PLAN CONTAINS CERTAIN STATUTORY PROVISIONS AND DESCRIBES CERTAIN EVENTS IN THESE CHAPTER 11 CASES AND CERTAIN DOCUMENTS RELATED TO THE COMBINED DISCLOSURE STATEMENT AND PLAN THAT MAY BE ATTACHED AND ARE INCORPORATED BY REFERENCE. ALTHOUGH THE DEBTORS BELIEVE THAT THIS INFORMATION IS FAIR AND ACCURATE, THIS INFORMATION IS QUALIFIED IN ITS ENTIRETY TO THE EXTENT THAT IT DOES NOT SET FORTH THE ENTIRE TEXT OF SUCH DOCUMENTS OR STATUTORY PROVISIONS OR EVERY DETAIL OF SUCH EVENTS.
THE INFORMATION CONTAINED HEREIN OR ATTACHED HERETO IS MADE ONLY AS OF THE DATE OF THIS COMBINED DISCLOSURE STATEMENT AND PLAN, UNLESS ANOTHER TIME IS SPECIFIED. THIS COMBINED DISCLOSURE STATEMENT AND PLAN WAS COMPILED FROM INFORMATION OBTAINED FROM NUMEROUS SOURCES BELIEVED TO BE ACCURATE TO THE BEST OF THE DEBTORS’ KNOWLEDGE, INFORMATION AND BELIEF. THERE CAN BE NO ASSURANCES THAT THE STATEMENTS CONTAINED HEREIN WILL BE CORRECT AT ANY TIME AFTER THIS DATE. NO REPRESENTATIONS OR WARRANTIES ARE MADE AS TO THE ACCURACY OF THE FINANCIAL INFORMATION CONTAINED HEREIN OR ASSUMPTIONS REGARDING THE DEBTORS’ BUSINESS. EXCEPT WHERE SPECIFICALLY NOTED, THE FINANCIAL INFORMATION CONTAINED IN THIS COMBINED DISCLOSURE STATEMENT AND PLAN AND IN THE RELATED EXHIBITS HAS NOT BEEN AUDITED BY A CERTIFIED PUBLIC ACCOUNTANT AND HAS NOT BEEN PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN THE UNITED STATES OR ANY OTHER JURISDICTION. THIS DISCLOSURE STATEMENT AND PLAN HAS BEEN PREPARED IN ACCORDANCE WITH SECTIONS 1123 AND 1125 OF THE BANKRUPTCY CODE AND BANKRUPTCY RULE 3016 AND NOT NECESSARILY IN ACCORDANCE WITH FEDERAL OR STATE SECURITIES LAWS OR OTHER NON-BANKRUPTCY LAWS. THIS COMBINED DISCLOSURE STATEMENT AND PLAN HAS NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE “SEC”), ANY STATE SECURITIES COMMISSION OR ANY SECURITIES EXCHANGE OR ASSOCIATION, NOR HAS THE SEC, ANY STATE SECURITIES COMMISSION OR ANY SECURITIES EXCHANGE OR ASSOCIATION PASSED UPON THE ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED HEREIN. NO OTHER GOVERNMENTAL OR OTHER REGULATORY AUTHORITY HAS PASSED ON, CONFIRMED OR DETERMINED THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED HEREIN.
The Proposed Disclosure Statement was submitted to the Bankruptcy Court for interim approval, and on November 2, 2023, the Bankruptcy Court entered the Order (I) Granting Interim Approval of the Disclosures in the Combined Plan and Disclosure Statement; (II) Scheduling a Combined Confirmation Hearing and Setting Deadlines Related thereto; (III) Approving Solicitation Packages and Procedures; (IV) Approving the Forms of Ballots; and (V) Granting Related Relief [Docket No. 701] (the “Solicitation Procedures Order”). Accordingly, the Debtors have commenced solicitation of votes to accept or reject the Proposed Plan in accordance with the terms of the Solicitation Procedures Order. A confirmation hearing to consider final approval of the Proposed Disclosure Statement and the Proposed Plan is expected to be held in the Bankruptcy Court on January 8, 2024.
The Reverse Stock Split will be effectuated by filing Articles of Amendment with the State Department of Assessments and Taxation of Maryland, which the Company expects to file no earlier than the twentieth day following the mailing of the Disclosure Statement (as defined below) to stockholders. Maryland law does not require us to obtain any vote or consent of our stockholders to consummate the Reverse Stock Split. Accordingly, we are not seeking stockholder approval for the Reverse Stock Split, the subsequent deregistration of the Common Stock, or the suspension of our duty to file periodic reports and other information with the SEC. The Board reserves the right to abandon, postpone or modify the foregoing for any reason, at any time, before they are consummated. Under Maryland law and our charter, stockholders are not entitled to dissenter’s rights or any right of appraisal in connection with the Reverse Stock Split. The Reverse Stock Split will be conducted upon the terms and subject to the conditions set forth in the Company’s disclosure statement, which is attached as Exhibit A to this Schedule (the “Disclosure Statement”). The information contained in the Disclosure Statement, including all exhibits thereto, is hereby expressly incorporated herein by reference. Capitalized terms used but not defined herein shall have the meanings given to them in the Disclosure Statement.
Objections to the Plan of Reorganization or Disclosure Statement: Any objection (each, a “Plan/Disclosure Statement Objection”) to the Combined Disclosure Statement and Plan must: (a) be in writing; (b) comply with the Federal Rules of Bankruptcy Procedure and the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware; (c) state the name and address of the objecting party and the amount and nature of the Claim or Interest beneficially owned by such entity; and (d) state with particularity the legal and factual basis for such objections, and, if practicable, a proposed modification to the Plan of Reorganization that would resolve such objection.
Plan/Disclosure Statement Objections must be filed with the Court and served upon the following parties (collectively, the “Notice Parties”) no later than April 12, 2024, at 4:00 p.m. (Eastern Time): (a) counsel to the Debtor: Faegre Drinker Biddle & Reath LLP (Attn: Patrick A. Jackson, Ian J. Bambrick, and Sarah E. Silveira); (b) counsel to the Prepetition Lenders: White & Case LLP (Attn: Harrison Denman) and Richards, Layton & Finger, P.A. (Attn: Paul N. Heath and Amanda R. Steele); (c) the Office of the United States Trustee (Attn: Rosa Sierra-Fox); and (d) counsel to any statutory committees appointed in the Chapter 11 Case.
THIS COMBINED DISCLOSURE STATEMENT AND PLAN WAS COMPILED FROM INFORMATION OBTAINED FROM NUMEROUS SOURCES BELIEVED TO BE ACCURATE TO THE BEST OF THE DEBTOR’S KNOWLEDGE, INFORMATION AND BELIEF. NO GOVERNMENTAL AUTHORITY HAS PASSED ON, CONFIRMED OR DETERMINED THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED HEREIN.
THE STATEMENTS CONTAINED HEREIN ARE MADE AS OF THE DATE HEREOF, UNLESS ANOTHER TIME IS SPECIFIED. THE DELIVERY OF THIS COMBINED DISCLOSURE STATEMENT AND PLAN SHALL NOT BE DEEMED OR CONSTRUED TO CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AT ANY TIME AFTER THE DATE HEREOF. HOLDERS OF CLAIMS OR INTERESTS SHOULD NOT CONSTRUE THE CONTENTS OF THIS COMBINED DISCLOSURE STATEMENT AND PLAN AS PROVIDING ANY LEGAL, BUSINESS, FINANCIAL OR TAX ADVICE. THEREFORE, EACH SUCH HOLDER SHOULD CONSULT WITH ITS OWN LEGAL, BUSINESS, FINANCIAL AND TAX ADVISORS AS TO ANY SUCH MATTERS CONCERNING THE COMBINED DISCLOSURE STATEMENT AND PLAN AND THE TRANSACTIONS CONTEMPLATED HEREBY.
NO PARTY IS AUTHORIZED TO GIVE ANY INFORMATION WITH RESPECT TO THE COMBINED DISCLOSURE STATEMENT AND PLAN OTHER THAN THAT WHICH IS CONTAINED IN THIS COMBINED DISCLOSURE STATEMENT AND PLAN. NO REPRESENTATIONS CONCERNING THE DEBTOR OR THE VALUES OF ITS PROPERTY HAVE BEEN AUTHORIZED BY THE DEBTOR, OTHER THAN AS SET FORTH IN THIS COMBINED DISCLOSURE STATEMENT AND PLAN. ANY INFORMATION, REPRESENTATIONS OR INDUCEMENTS MADE TO OBTAIN AN ACCEPTANCE OF THE COMBINED DISCLOSURE STATEMENT AND PLAN OTHER THAN, OR INCONSISTENT WITH, THE INFORMATION CONTAINED HEREIN SHOULD NOT BE RELIED UPON BY ANY HOLDER OF A CLAIM OR INTEREST. THIS COMBINED DISCLOSURE STATEMENT AND PLAN HAS BEEN PREPARED IN ACCORDANCE WITH SECTION 1125 OF THE BANKRUPTCY CODE AND BANKRUPTCY RULE 3016(b) AND NOT IN ACCORDANCE WITH FEDERAL OR STATE SECURITIES LAWS OR OTHER NON-APPLICABLE BANKRUPTCY LAWS. THIS COMBINED DISCLOSURE STATEMENT AND PLAN HAS NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE “SEC”), NOR HAS THE SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED HEREIN.
A Disclosure Statement is a document or section within a document that provides essential information, facts, or details about a particular subject relevant to a contract or transaction. It ensures that all parties involved have a clear understanding of material facts, potential risks, liabilities, and obligations. The intent is to promote transparency and prevent misunderstandings or disputes.
A Disclosure Statement should be used whenever there is a need to provide crucial information to another party in a transaction or agreement. Common scenarios include:
It’s essential to provide a Disclosure Statement when knowingly withholding information could lead to legal, financial, or reputational consequences.
When writing a Disclosure Statement, follow these guidelines:
Example: Property Disclosure Statement
## Which Contracts Typically Contain Disclosure Statements?
Disclosure Statements are often found in a variety of contracts, including but not limited to:
- **Real Estate Contracts**: To disclose property conditions and any defects.
- **Loan Agreements**: To disclose interest rates, fees, and repayment terms.
- **Business Sale Agreements**: To disclose financial performance and liabilities.
- **Securities Offering Documents**: To disclose investment risks and company financials.
These statements ensure that all parties are entering agreements with a full understanding of the pertinent details.
Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
Dispositive power refers to the authority granted to an individual or entity to manage, direct, or dispose of assets or interests, typically within the context of a trust or investment arrangement. This power can include the ability to buy, sell, transfer, or otherwise regulate the assets, and is often accompanied by fiduciary responsibilities to act in the best interests of the beneficiaries or stakeholders.
The dispute resolution clause outlines the methods by which any disagreements arising from a contract will be managed, specifying procedures such as negotiation, mediation, arbitration, or litigation. This clause aims to provide a clear framework for resolving conflicts efficiently, thus minimizing potential disruptions to the contractual relationship.
Double trigger acceleration is a contractual provision commonly found in employee stock or option agreements, which accelerates vesting based on the occurrence of two specific events, typically a change in company control followed by an employee's involuntary termination or departure for 'good reason.' This clause is designed to provide financial security to key employees in the event of company acquisition while also protecting the acquiring company from immediate mass vesting.
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