chapter 11 plan.pdf

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UNITED STATES BANKRUPTCY COURTEASTERN DISTRICT OF LOUISIANA

IN RE: * CASE NO. 09-11899*

VIRGIN OIL CO., INC., * CHAPTER 11*

DEBTOR * SECTION A*

*******************************************

ORDER CONFIRMING SECOND AMENDED CHAPTER 11 PLAN OFREORGANIZATION FIL ED BY THE OFFICIAL COMMITTEE OF UNSECURED

CREDITORS AND CIT CAPITAL USA, INC. AS OF AUGUST 26, 2011, AS AMENDED

This matter came before the Bankruptcy Court on December 7, 2011, upon due and proper

notice, as a hearing (the Confirmation Hearing) to consider confirmation of the Second Amended

Chapter 11 Plan of Reorganization Filed by the Official Committee of Unsecured Creditors and CIT

Capital USA, Inc. as of August 26, 2011 (Docket No. 761), as modified and supplemented by the

Supplement to Second Amended Plan as of August 26, 2011 (Docket No. 812) (the Plan

Supplement), the First Immaterial Modifications (Docket No. 813), the (A) Notice of Continuance

and Resetting of Hearing on Confirmation of the Second Amended Chapter 11 Plan of

Reorganization Filed by the Official Committee of Unsecured Creditors and CIT Capital USA, Inc.

as of August 26, 2011, (B) Supplemental Disclosure in Support of Such Plan, and (C) Modifications

of Such Plan (Supplemental Disclosure) (Docket No. 868), and the Second Immaterial

Modifications (Docket No. 940) (collectively, the Plan), and as specifically modified by this

Confirmation Order, as well as the objections filed on behalf of El Paso E&P Company, L.P.,

Century Exploration New Orleans, Inc., Virgin Offshore U.S.A., Inc., and Sooner Pipe, LLC and

Specialty Rental tools & Supply, LLC (Docket Nos. 837, 838, 840, and892).

Case 09-11899 Doc 948 Filed 12/13/11 Entered 12/13/11 12:52:11 Main DocumentPage 1 of 25


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Appearances:

Stewart F. Peck and Benjamin W. Kadden

Counsel for the Official Committee of Unsecured Creditors

Robert Jones and David WaguespackCounsel for CIT Capital USA, Inc.;

Leo CongeniCounselfor Debtor;

David ForsythCounsel for Helis Oil & Gas;

Kent AguillardCounsel for Precision Drilling Co., LP;

Arthur VingielloCounsel for Century Exploration New Orleans, Inc.;

Albert Derbes, IV and Frederick BunolCounsel for Specialty Rental ToolsandSooner Pipe;

PJ GoodwineSpecial Counsel for the Official Committee of Unsecured Creditors

Rick KuebelCounsel for B.A. Adams Oil & GasandLagniappe Productions of Louisiana

Louis Phillips and Armistead LongCounsel for the Chapter 11 Trustee of Virgin Offshore U.S.A., Inc.

Gerald SchiffChapter 11 Trustee of Virgin Offshore U.S.A., Inc.

Considering the testimony and evidence adduced, the statements of counsel and the objections filed,

and after reviewing the Plan and other pleadings on file, this Bankruptcy Court makes the following

findings of fact and conclusions of law:1

1All capitalized terms which are not defined herein shall have the meaning(s) ascribed to them in the Plan.



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1. J urisdiction. This Bankruptcy Court has core jurisdiction over this case pursuant to 28U.S.C. 157(b)(2)(L). This matter arises under Title 11 of the United States Code, 11 U.S.C.

101, et seq. (Bankruptcy Code), and jurisdiction is vested in this Bankruptcy Court to

enter a final order by virtue of 28 U.S.C. 1334(a) and (b), and 28 U.S.C. 151, 157(a) and

(b)(1). This Bankruptcy Court has exclusive jurisdiction to determine whether the Plan

complies with the applicable provisions of the Bankruptcy Code and should be confirmed.

These findings of fact and conclusions of law are being entered under Rules 7052 and 9014

of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules). This Bankruptcy

Court has constitutional authority to enter this Confirmation Order as a Final Order.

2. Service of Solicitation Materials and Notice. In accordance with this Bankruptcy CourtsOrder Approving the Second Amended Disclosure Statement in Support of the Plan (Docket

No. 777) (the Disclosure Statement Order) and Bankruptcy Rule 3017(d), all appropriate

pleadings and the Ballot were transmitted, mailed, or published, all as evidenced by the

Affidavit filed in connection with the Plan (Docket No. 787).

3. Adequate Notice of Confirmation Hearing. In accordance with Bankruptcy Rules 2002,3018, 3019, 6004, 6006, 9007, and 9014, the Local Rules of this Bankruptcy Court, and the

Disclosure Statement Order, adequate notice of the time for filing objections to confirmation

of the Plan and the transactions contemplated thereby and adequate notice of the

Confirmation Hearing was provided to all Holders of Claims and Interests and other parties-

in-interest entitled to receive such notice under the Bankruptcy Code and Bankruptcy Rules.

No other or further notice of the Confirmation Hearing or confirmation of the Plan is

necessary or required.

4. Good Faith Solicitation. Based on the record, the Official Committee of Unsecured



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Creditors (the Committee) and CIT Capital USA, Inc. (CIT, or, collectively with the

Committee, the Plan Proponents), and their respective directors, officers, employees,

managers, members, attorneys, affiliates, agents, and professionals (including, but not

limited to, their attorneys, financial advisors, investment bankers, accountants, solicitation

agents, and other professionals that have been retained by the Plan Proponents) have acted in

good faith within the meaning of Section 1125(e) of the Bankruptcy Code and in

compliance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules,

the Disclosure Statement Order, and applicable non-bankruptcy law in connection with their

respective activities related to (a) the solicitation of acceptances or rejections of the Plan; (b)

the offer, sale, issuance and distribution of the Plan Trust Assets; and (c) their participation

in the other activities in Section 1125 of the Bankruptcy Code. Votes for acceptance and

rejection of the Plan were solicited in good faith and in compliance with Bankruptcy Code

Sections 1125 and 1126, Bankruptcy Rules 3017 and 3018, the Second Amended Disclosure

Statement in Support of the Second Amended Plan (Docket No. 776) (the Disclosure

Statement), the Disclosure Statement Order, and all other provisions of the Bankruptcy

Code, and all other applicable rules, laws, and regulations. Additionally, all procedures used

to distribute the solicitation materials to the Holders of Claims and Interests were fair, and

conducted in accordance with the Bankruptcy Code, the Bankruptcy Rules, the Local Rules

of this Bankruptcy Court, and all other applicable rules and regulations. Therefore, the Plan

Proponents are entitled to the full protections afforded by Section 1125(e) of the Bankruptcy

Code.

5. Immaterial Modifications. In accordance with Section 1127 of the Bankruptcy Code, theFirst Immaterial Modifications (Docket No. 813), the Supplemental Disclosure with respect



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to Section 3.1 of the Plan (Docket No. 868), and the Second Immaterial Modifications

(Docket No. 940) (collectively with the First Immaterial Modifications, the Immaterial

Modifications) to the Plan are primarily technical in nature and do not adversely change the

treatment of any creditor or equity security interest, and all such Immaterial Modifications

are approved, and no additional disclosure to holders of claims or equity security interests is

required by the Bankruptcy Code or Rules.

6. Disclosure of Payments. All payments made or promised by the Plan Proponents, or anyperson acquiring property under the Plan, for costs, services or expenses in connection with

these cases or in connection with the Plan have been disclosed to the Bankruptcy Court and

are appropriate.

7. Fair and Equitable Best Interest. The agreement with creditors and interest holdersreflected in the Plan is fair and equitable, and in the best interests of the estates and their

respective creditors.

8. The Plan Complies with the Applicable Provisions of the Bankruptcy Code (Section1129(a)(1)).

a. The Debtor is a Louisiana corporation, and is eligible to be Debtor under Section 109of the Bankruptcy Code.

b. The Plan Proponents are proper proponents of a plan pursuant to Section 1121(c) ofthe Bankruptcy Code and have satisfied their burden of proof with respect to

confirmation of the Plan.

c. On September 4, 2011, the Plan Proponents caused, inter alia, the DisclosureStatement, the Plan and the Disclosure Statement Order to be mailed to all parties

required by this Bankruptcy Court's Disclosure Statement Order, advising them of,



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among other things, the time and place of the Confirmation Hearing and the

procedures for objection to, and voting for, the Plan. SeeDocket No. 787.

d. All appropriate governmental units (as defined in Section 101 of the BankruptcyCode) were given adequate notice of the Confirmation Hearing.

e. Any party-in-interest entitled to receive notice of the Confirmation Hearing was givenadequate notice of such Confirmation Hearing.

f. All parties-in-interest and all governmental units (as defined in Section 101 of theBankruptcy Code) had the opportunity to appear and be heard at the Confirmation

Hearing.

g. The Plan complies with Rule 3016.9. Proper Classification (Sections 1122 and 1123(a)(1)). Each Claim and Debtor Equity

Interest placed in a particular Class pursuant to the Plan is substantially similar to the other

Claims or Debtor Equity Interests, as the case may be, in such class. Valid business, legal,

and factual reasons exist for the separate classification of Claims and Debtor Equity Interests

and there is no unfair discrimination or gerrymandering between or among the Holders of

Claims and Debtor Equity Interests. Accordingly, the classification of Claims and Debtor

Equity Interests under the Plan complies with Sections 1122 and 1123(a)(1) of the

Bankruptcy Code.

10.Unimpaired Classes (Section 1123(a)(2)). The Plan at least one Class of Claims that is notImpaired under the Plan.

11.Treatment of Impaired Classes (Section 1123(a)(3)). The Plan specifies the treatment ofall Impaired Classes.

12.No Discrimination (Section 1123(A)(4)). The Plan provides for the same treatment of each



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Claim or Debtor Equity Interest in a particular Class, unless a holder of a Claim or Debtor

Equity Interests therein has agreed to a less favorable treatment.

13.Implementation of the Plan (Section 1123(a)(5)). The Plan provides adequate means forthe Plan's implementation, as set forth in Article V of the Plan.

14.Debtor s Charter Provisions (Section 1123(a)(6)). The Plan satisfies all requirements of11 U.S.C. 1123(a)(6).

15.Selection of Officers (Section 1123(a)(7)). The Plan contains only provisions that areconsistent with the interests of creditors and equity security holders and with public policy

with respect to the appointment of the initial Trustee for the Plan Trust.

16.Executory Contracts and Unexpired Leases (Section 1123(b)(2)). The Plan provides thatthe Debtor has properly provided for the assumption or rejection of all executory contracts

and unexpired leases pursuant to Section 365 of the Bankruptcy Code.

17.The Debtor Has Complied with the Bankruptcy Code (Section 1129(a)(2)). The PlanProponents have complied with the applicable provisions of the Bankruptcy Code. The

solicitation of acceptances and rejections from holders of Impaired Claims and Debtor

Equity Interests has been in compliance with applicable provisions of the Bankruptcy Code

and Bankruptcy Rules including, without limitation, Sections 1125 and 1126. The

modifications to the Plan set forth in the Immaterial Modifications satisfy, and the Plan

Proponents have satisfied, 11 U.S.C. 1127.

18.Plan Proposed in Good Faith (Section 1129(a)(3)). The Plan has been proposed in goodfaith and not by any means forbidden by law. The Plan has been proposed for valid business

purposes, to satisfy substantial obligations of the Debtor, and to provide relief under Chapter

11 to the Debtor, its creditors, and equity security holders.



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19.Payments of Costs and Expenses (Section 1129(A)(4)). Any payment made or to be madepursuant to the Plan for services or costs and expenses incurred in or in connection with the

Debtors Chapter 11 case has been approved by, or will be subject to, the approval of the

Bankruptcy Court as reasonable.

20.Directors and Officers (Section 1129(a)(5)). The Plan Proponents have disclosed theidentity and compensation of the proposed initial Trustee of the Plan Trust, Whistler Energy,

L.L.C. (the Trustee), as well as the identity of the principals of the Trustee, as required by

11 U.S.C. 1129(a)(5). The appointment and compensation of the proposed Trustee, if any,

pursuant to the terms disclosed by the Plan Proponents, is consistent with the interests of

creditors and equity security holders and with public policy.

21.No Rate Change (Section 1129(a)(6)). No rate changes are provided for in the Plan thatwould require governmental regulatory commission approval.

22.Best Interests of Creditors (Section 1129(a)(7)). With respect to each Impaired Class ofClaims or Debtor Equity Interests, each Holder of a Claim or Debtor Equity Interest will

receive or retain under the Plan on account of such Claim or Debtor Equity Interest property

of a value, as of the Effective Date of the Plan, that is not less than the amount that such

Holder would so receive or retain if the Debtor was liquidated under Chapter 7 of the

Bankruptcy Code on the Effective Date of the Plan.

23.Plan Acceptance (Section 1129(a)(8)). Allowed Class 1 Claims are Unimpaired within themeaning of 11 U.S.C. 1124, and the Holders thereof are conclusively presumed to have

accepted the Plan under 11 U.S.C. 1126(f). Holders of Class 5 Claims are Impaired, but are

deemed not to accept the Plan, as such Claims are not entitled to receive or retain any

property under the Plan. Class 2, 3, and 4 under the Plan are Impaired and entitled to vote



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and have each accepted the Plan. Holders of Claims in Classes 2, 3 and 4 each unanimously

voted to accept the Plan.

24.Plan Treatment of Administrative Expenses Claims and Priority Claims (Section1129(a)(9)). Except to the extent that the Holder of a particular Claim has agreed to a

different treatment of such claim, Sections 3.1 and 4.1 of the Plan provides that each Holder

of a Claim of a kind specified in 11 U.S.C. 507(a)(1) shall receive on account of such Claim

cash equal to the allowed amount of such Claim on the later of (a) the Effective Date of the

Plan, and (b) the date on which such Claim becomes Allowed. However, Section 3.2 of the

Plan provides that Professionals employed in this matter and seeking payment of an

Administrative Claim shall file final applications for allowances of compensation for

services rendered and reimbursement of expenses, and all such Professionals shall file such

application for compensation no later than thirty (30) days after the occurrence of the

Effective Date for payment of such Claims. However, on or prior to the Effective Date, all

Professionals shall provide to counsel for the Committee an estimate through the Effective

Date of the compensation and expenses regarding which each Professional will submit such

an application. Additionally, the Plan complies with 11 U.S.C. 1129(a)(9)(C) for a Holder

of a Section 507(a)(8) claim.

25.At Least One Impaired Class Accepted the Plan (Section 1129(a)(10)). Classes 2, 3, and4, each an Impaired Class under the Plan, have accepted the Plan.

26.Feasibility (Section 1129(a)(11)). This Plan provides for the ultimate liquidation of theDebtor's estate. The evidence adduced in support of the Plan: (i) is persuasive and credible,

(ii) has not been controverted by other evidence, and (iii) establishes that the Plan Trust,

through the Plan Trustee, will be able to perform its obligations under the Plan and that the



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Plan offers a reasonable prospect of success. Accordingly, the Plan is feasible and complies

with Section 1129(a)(11).

27.United States Trustee Fees (Section 1129(a)(12)). All fees due and payable under 28U.S.C. 1930 will be paid by the Debtor in accordance with Section 14.2 of the Plan.

28.Retiree Benefits (Section 1129(a)(13)). The Debtor does not have any obligations withrespect to retiree benefits.

29.Section 1129(b). To the extent that Section 1129(b) applies, all applicable requirementshave been met with respect to the Plan. The Plan does not discriminate unfairly, and the

Plan is fair and equitable with respect to each Class of Claims or Debtor Equity Interests that

is Impaired under and has not accepted the Plan.

30.Section 1129(d). The principal purpose of the Plan is not the avoidance of taxes or theavoidance of the application of Section 5 of the Securities Act of 1933 (15 U.S.C. 77e).

31.Issuance of Security. No securities shall be issued under the Plan.32.Offshore Settlement. Virgin Offshore USA, Inc. (Offshore), a wholly-owned subsidiary

of the Debtor, previously asserted certain claims and causes of action against the Debtor and

its estate, and the Debtor has previously asserted certain claims and causes of action against

Offshore (collectively, the Offshore Claims). As discussed in the Supplemental

Disclosure, and as more fully set forth in Section 5.17 and Section 5.18 (Offshore

Settlement) as embodied in the Second Immaterial Modifications, the Offshore Settlement

constitutes a settlement and compromise of the Offshore Claims. Based upon a review of the

record, the Bankruptcy Court finds that the notice provided regarding the Offshore

Settlement was the best and most practicable notice under the circumstances, contained

sufficient disclosure of the terms and circumstances of the matters raised by the Motion,



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including, but not limited to, the Offshore Settlement and the hearing regarding same, and

provided reasonable, due, and adequate process under the law. Furthermore, the Debtor

demonstrated at the Confirmation Hearing that the Offshore Settlement is the product of

lengthy arms length negotiation and not collusion or fraud and is of benefit to the Debtors

estate and represents a fair and reasonable compromise of the issues in dispute and the

interests of the Debtors estate and its creditors are best served by the Offshore Settlement

and not by continued litigation. Therefore, after giving due consideration to (i) the

probability of success, (ii) the complexity and likely duration of and expenses incurred in

connection with the litigation of the claims and causes of action, (iii) other factors bearing on

the reasonableness of the Offshore Settlement, and (iv) all testimony and evidence adduced,

representations of counsel and review of the record and pleadings of this matter, the

Bankruptcy Court finds that the Offshore Settlement (a) is fair, equitable, reasonable and

falls above the lowest point in the range of reasonableness, (b) is in the best interest of the

Debtor, its estate, and all other parties-in-interest in this matter, including all creditors and

interest holders, (c) reflects a sound and reasonable exercise of business judgment by the

parties thereto, and (d) satisfies the applicable standards of Section 105(a) of the Bankruptcy

Code and Bankruptcy Rule 9019 and should be approved.

Finding that the Plan is confirmable for all of the foregoing reasons, and based upon the

foregoing findings of fact and conclusions of law, which are fully incorporated by reference below:

IT IS HEREBY ORDERED, ADJ UDGED AND DECREED THAT:

A. Confirmation. The Plan is hereby CONFIRMED IN ALL RESPECTS and the record ofthe Confirmation Hearing is closed.

B. Binding Plan and Order. The provisions of the Plan and this Confirmation Order are



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hereby made binding upon the Debtor, the Trustee of the Plan Trust, and all other Holders of

Claims and Interests, including Claims for environmental damage or equity security

interests, whether or not such Claims or Interests are impaired under the Plan and whether or

not such Holder of a Claim or Interest has filed, or is deemed to have filed, a proof of Claim

or proof of Interest or has accepted the Plan. Except as otherwise may be set forth in the

Plan, all persons and entities that are the Holders of Claims and Interests, including Claims

for environmental damage, or Debtor Equity Interests, and their respective servants, agents,

employees, officers, directors, partners, successors and assigns are hereby enjoined and

restrained from commencing or continuing in any suit, action or proceeding or otherwise

attempting to obtain possession of, or interfering with the Trustee of the Plan Trust's

possession or distribution of, all property of the estate of the Debtor or the Plan Trust, and all

proceeds thereof, so as to enable the Trustee of the Plan Trust to implement, effectuate and

carry out all of the provisions of the Plan.

C. Releases. As of the Effective Date, for good and valuable consideration, the adequacy ofwhich is hereby confirmed, the Debtor, the Plan Trust, the Plan Trustee, and any Person

seeking to exercise the rights of the Debtor or the Debtors Estate, including, without

limitation, any successor to the Debtor or the Debtors Estate or any Estate Representative,

shall be deemed to forever release, waive, and discharge all Claims, obligations, suits,

judgments, damages, demands, debts, rights, Causes of Action, and liabilities whatsoever,

including for negligence, but excluding for fraud, willful misconduct, intentional tortious

acts, or gross negligence in connection with or related to the formulation, negotiation, or

implementation of the Plan, the solicitation of acceptances of the Plan, the pursuit of

Confirmation of the Plan, the Confirmation of the Plan, the consummation of the Plan, or the



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administration of the Plan or the property to be distributed under the Plan, whether liquidated

or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or

unforeseen, then existing or thereafter arising, in law, equity, or otherwise, that are based in

whole or part on any act, omission, transaction, event, or other occurrence taking place on or

prior to the Effective Date in any way relating to the Debtor, the Plan Trust, the Chapter 11

Case, or the Plan, and that may be asserted by or on behalf of the Debtor, the Estate, the Plan

Trust, the Plan Trustee or any Person seeking to exercise the rights of the Debtor or the

Debtors Estate, including, without limitation, an Estate Representative, against (i) any

member of the Committee; (ii) any Professionals of the Committee; (iii) CIT and Whitney

National Bank (Whitney); (iv) any advisors or professionals retained by CIT or Whitney,

and (iv) with respect to each of the above-named Persons, such Persons principals,

employees, agents, affiliates, current and former officers and directors; provided,however,

that nothing in Section 8.2 of the Plan shall be deemed to prohibit the Debtor, Plan Trust or

the Trustee from asserting and enforcing any Claims, obligations, suits, judgments, demands,

debts, rights, Causes of Action or liabilities they may have against any employee, officer, or

director that is based upon any alleged breach of fiduciary obligations owed to the Debtor or

the Plan Trust. For the avoidance of doubt, the releases granted by the Debtor in Section 8.2

of the Plan shall not relate to any Claims or Causes of Action specifically reserved by the

Debtor pursuant to Article IX of the Plan and described in greater detail in Section III(G)(2)

of the Disclosure Statement, including, but not limited to, that certain action brought by the

Committee, acting in its capacity as a derivative plaintiff on behalf of the Debtor, and others

styledThe Official Committee of Unsecured Creditors of Virgin Oil Company, Inc., et al v.

Robert Fulton Smith, J r., et al, Civil Action No. 2011-8906, pending before the Civil District



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Court for the Parish of Orleans, State of Louisiana, and any claim the Debtor may have

against the Debtors Professionals for malpractice arising during the pendency of the

Debtors Chapter 11 Proceeding.

D. Injunction. Except as otherwise expressly provided in the Plan, this Confirmation Orderor a separate order of the Bankruptcy Court, all Persons who have held, hold, or may hold a

Claim or other debt or liability of Debtor or Interest or other right of any Holder of any

Debtor Equity Interests, or any other Cause of Action arising from or related to the Debtors

Chapter 11 Case, shall be permanently enjoined, on and after the Effective Date, from taking

any actions on account of such Claims, debts, liabilities, or Interests or rights, including but

not limited to: (a) commencing or continuing in any manner any action or other proceeding

of any kind with respect to any such Claim or Interest against any of the Debtor or the Plan

Trust; (b) enforcing, attaching, collecting, or recovering by any manner or means of any

judgment, award, decree or order against the Debtor on account of any such Claim or Interest

against the Debtor or the Plan Trust; (c) creating, perfecting or enforcing any Lien or

encumbrance of any kind against the Debtor or against the property or interests in property

of the Debtor on account of any such Claim or Interest or the Plan Trust; (d) asserting any

right of setoff, subrogation, or recoupment of any kind against any obligation due to or from

the Debtor or the Plan Trust; and (e) commencing or continuing any action, in any manner,

in any place that does not comply with or is inconsistent with the provisions of the Plan,

unless in any matter involving the Debtor or the Plan Trust, the matter is brought only in the

Bankruptcy Court. Any person or Person injured by any willful violation of such injunction,

including but not limited to filing an action in any other court or forum, shall recover actual

damages, including costs and professionals fees, and, in appropriate circumstances, may



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recover punitive damages, from the willful violator. The Bankruptcy Court also may impose

any additional sanctions as may be appropriate under the circumstances, including contempt

sanctions. For the avoidance of doubt, nothing contained herein shall in any way limit or

enjoin the ability or rights of any party to perfect or enforce any Lien or encumbrance of any

kind against any non-debtor or any property of such non-debtor(s).

E. Exculpation and Limitation of L iability.(1) None of the (i) members of the Committee; (ii) Professionals for the Committee; ;

(iii) CIT and Whitney; (iv) any advisors or professionals retained by CIT or Whitney,

or (v) with respect to each of the above-named Persons, such Persons principals,

employees, agents, affiliates, current and former officers and directors, shall have or

incur any liability to any holder of a Claim or an Debtor Equity Interest, or any other

party-in-interest, or any of their respective agents, employees, representatives, advisors,

attorneys, or affiliates, or any of their successors or assigns, for any act or omission in

connection with, relating to, or arising out of, the formulation, negotiation, or

implementation of the Plan, the solicitation of acceptances of the Plan, the pursuit of

Confirmation of the Plan, the Confirmation of the Plan, the consummation of the Plan,

or the administration of the Plan or the property to be distributed under the Plan,

including acts or omissions which are the result of negligence, but excluding acts or

omissions which are the result of fraud, gross negligence, willful misconduct or willful

violation of federal or state securities laws or the Internal Revenue Code, and in all

respects shall be entitled to reasonably rely upon the advice of counsel with respect to

their duties and responsibilities under the Plan.

(b) Notwithstanding any other provision of the Plan, no holder of a Claim or a Debtor



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Equity Interests, no other party-in-interest, none of their respective agents, employees,

representatives, advisors, attorneys, or affiliates, and none of their respective

successors or assigns shall have any right of action against (i) any member of the

Committee; (ii) any Professionals for the Committee; (iii) CIT and Whitney; (iv) any

advisors or professionals retained by CIT or Whitney; and (v) with respect to each of

the above-named Persons, such Persons principals, employees, agents, affiliates,

current and former officers and directors, for any act or omission in connection with,

relating to, or arising out of, the formulation, negotiation, or implementation of the

Plan, solicitation of acceptances of the Plan, the pursuit of Confirmation of the Plan,

the Confirmation of the Plan, the consummation of the Plan, or the administration of

the Plan or the property to be distributed under the Plan, including acts or omissions

which are the result of negligence but excluding acts or omissions which are the result

of fraud, gross negligence, willful misconduct or willful violation of federal or state

securities laws or the Internal Revenue Code, and in all respects shall be entitled to

reasonably rely upon the advice of counsel with respect to their duties and

responsibilities under the Plan.

F. Objections. All objections to the Disclosure Statement and Plan, to the extent not withdrawn,resolved, waived, or settled prior to the Confirmation Hearing or incorporated into the

Immaterial Modifications or this Confirmation Order, are overruled on the merits.

G. Vestment and Transfer of Assets. Upon the Effective Date, but subsequent to the executionof the Plan Trust Agreement, and subject to the Liens and security interests granted herein, the

Plan Trust Assets shall be transferred and vested in the Plan Trust, free and clear of any and all

Claims, Interests, debts, Liens, security Interests, and encumbrances of any kind or type, except



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those Claims, debts, Liens, security Interests, and encumbrances specifically provided for

under the Plan or in this Confirmation Order, including, but not limited to, the Plan Trust

Assets. Except as provided in the Plan and the Immaterial Modifications, nothing in the Plan

or this Confirmation shall result in the cancellation, invalidation or forfeiture of any Claims,

Interests, debts, Liens, security Interests, and encumbrances of any kind or type against

Offshore.

H. Dismissal of Adversary Proceeding No. 10-1019. Within fourteen (14) days of theEffective Date, the Committee shall file a motion to dismiss Adversary Proceeding Number

10-1019 without prejudice.

I. Dismissal of Adversary Proceeding No. 11-01088. Adversary Proceeding Number 11-01088 shall be dismissed with prejudice within fourteen (14) days after the Effective Date.

J . Executory Leases and Unexpired Leases. On the Effective Date, except for an ExecutoryContract or Unexpired Lease that was previously assumed, assumed and assigned, or rejected

by an order of the Bankruptcy Court, or an Executory Contract or Unexpired Lease set forth on

Exhibit A to the Plan (Docket No. 813-1), each Executory Contract and Unexpired Lease

entered into by the Debtor prior to the Petition Date that has not previously expired or

terminated pursuant to its own terms will be rejected, pursuant to Section 365 of the

Bankruptcy Code. This Confirmation Order will constitute an order of the Bankruptcy Court

approving such rejections, pursuant to Section 365 of the Bankruptcy Code, as of the

Effective Date. The executory contracts and unexpired leases of the Debtor set forth in

Exhibit A to the Plan are assumed as of the Effective Date and such assumptions are

approved by this Bankruptcy Court.

K. Offshore Settlement. The Offshore Settlement, pursuant to Bankruptcy Rule 9019, is



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approved in its entirety.

L. Cancellation of Existing Debtor Equity Interests. On the Effective Date, except asotherwise provided for in the Plan, (i) the existing Debtor Equity Interests shall be deemed

extinguished, cancelled and of no further force or effect, and (ii) the obligations of the

Debtor (and the Plan Trust) under any agreements governing the Debtor Equity Interests and

any indebtedness or obligation of the Debtor with respect to the Debtor Equity Interests shall

be discharged without further act or action under any applicable agreement, law, regulation,

order, or rule and without any action on the part of the Bankruptcy Court or any Person.

M.Plan Trust Agreement and Appointment of Whistler Energy, L.L.C. as Trustee for thePlan Trust. The appointment of Whistler Energy, L.L.C. as Trustee for the Plan Trust is

hereby approved, and the Debtor is hereby authorized and directed to execute the Plan Trust

Agreement, a form of which was attached as Exhibit B to the Plan Supplement, subject to

such further modifications as may be agreed by the Debtor and the Trustee. The Debtor and

the Trustee are authorized and directed to take all actions necessary or appropriate to enter

into, effectuate and consummate any and all contracts, instruments, releases, leases,

indentures and other agreements or documents created in connection with the Plan, including

the execution of the Plan Trust Agreement. In the event that there is any inconsistency or

conflict between the provisions of the Plan Trust Agreement and the terms of the Plan or this

Confirmation Order, the terms of the Plan and this Confirmation Order shall control over the

Plan Trust Agreement and the terms of this Confirmation Order shall control over the Plan.

Finally, notwithstanding anything contained to the contrary in the Plan, the Plan Trust

Agreement, or this Confirmation Order, the following shall be applicable to the Plan Trust

Agreement and the Trustee of the Plan Trust: (1) on the Effective Date, the Debtor (a) shall



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transfer to the Plan Trust in accordance with the Trustees directions all Plan Trust Assets,

including, but not limited to, (i) eighty-five (85%) percent of the Cash on deposit in the

Empire Escrow as of the Effective Date, (ii) all of Cash or Cash equivalents of the Debtor as

of the Effective Date, including any revenue and accounts generated from the production of

the Debtors oil and gas properties prior to the Effective Date, (iii) the entirety of the

Debtors interests in its oil and gas properties, together with any corresponding liabilities and

obligations, (iv) all Causes of Action of the Debtor reserved under this Second Amended

Plan, and as described in Section III(G)(2) of the Disclosure Statement, including without

limitation, (A) all Claims and Causes of Action under Sections 544, 545, 547, 548, 549, 550,

551 and 553 of the Bankruptcy Code, (B) the D&O Claims, including but not limited to that

certain action brought by the Committee, acting in its capacity as a derivative plaintiff on

behalf of the Debtor, and others styledThe Official Committee of Unsecured Creditors of

Virgin Oil Company, Inc., et al v. Robert Fulton Smith, J r., et al, Civil Action No. 2011-

8906, pending before the Civil District Court for the Parish of Orleans, State of Louisiana,

and any and all claims, demands and causes of action that have been or could be asserted

there arising out of or related to the same operative facts, parties, transactions or

occurrences, including, without limitation, the claims asserted by the Committee in its

capacity as a derivative plaintiff on behalf of the Debtor with respect to claims of its wholly-

owned subsidiary, Offshore, (C) claims against the Debtors Professionals for legal

malpractice, and (D) the El Paso Claims, including, but not limited to, that certain action

brought by the Committee on behalf of the Debtor styled Virgin Oil Company, Inc. v.

Tennessee Gas Pipeline Company, Case No. 11-01521, pending before the United States

District Court for the Western District of Louisiana, Lake Charles Division, (v) 100% of the



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Debtors 100% equity interest in Offshore, (vi) any and all other property held by the Plan

Trust, and, (vii) the proceeds, products and offspring of any such property; (2) in

implementing the provisions of paragraph N of this Order, the Trustee may pursue (or decide

not to pursue) any and all Reserved Causes of Action, other Causes of Action, and Claims in

any courts of competent jurisdiction in the United States, including the Bankruptcy Court, as

it sees fit and determines in its sole and absolute discretion; (3) in lieu of meetings in person

of the Plan Committee, the members thereof may act through either telephone calls or e-

mails among themselves; (4) the individual members of the Plan Committee will be

appointed or designated by the members identified in the Plan on or before the Effective

Date of the Plan, and if any appointed member of the Plan Committee declines to serve, dies,

or resigns, as a member therefor, the then remaining member or members may, in his or their

sole and absolute discretion, appoint a replacement member therefor; and (5) the Trustee

and the members of the Plan Committee are entitled to rely on the advice of counsel or other

professional advisors in all matters.

N. Preservation of Causes of Action. As more fully set forth in Article IX of the Plan, andexcept as otherwise provided in the Plan, all Claims and Causes of Action in favor of the

Debtor, including, but not limited to, (i) all Claims and Causes of Action under Sections 544,

545, 547, 548, 549, 550, 551 and 553 of the Bankruptcy Code, (ii) the D&O Claims,

including but not limited to that certain action brought by the Committee, acting in its

capacity as a derivative plaintiff on behalf of the Debtor, and others styledThe Official

Committee of Unsecured Creditors of Virgin Oil Company, Inc., et al v. Robert Fulton Smith,

J r., et al, Civil Action No. 2011-8906, pending before the Civil District Court for the Parish

of Orleans, State of Louisiana, and any and all claims, demands and causes of action that



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have been or could be asserted there arising out of or related to the same operative facts,

parties, transactions or occurrences, including, without limitation, the claims asserted by the

Committee in its capacity as a derivative plaintiff on behalf of the Debtor with respect to

claims of its wholly-owned subsidiary, Offshore, (iii) claims against the Debtors

Professionals for legal malpractice, and (iv) the El Paso Claims, including, but not limited to,

that certain action brought by the Committee on behalf of the Debtor styledVirgin Oil

Company, Inc. v. Tennessee Gas Pipeline Company, Case No. 11-01521, pending before the

United States District Court for the Western District of Louisiana, Lake Charles Division, are

reserved and are to be transferred to and prosecuted after the Effective Date by the Plan

Trust without any impact on the viability of, or rights associated with, any such claims as a

result of such claims being prosecuted by the Plan Trust rather than the Debtor. Causes of

Action shall be interpreted to include, without limitation, any and all actions, causes of

action, liabilities, obligations, rights, suits, debts, sums of money, damages, judgments,

Claims and demands, actions, defenses, offsets, powers, privileges and licenses whatsoever,

whether known or unknown, suspected or unsuspected, whether arising prior to, on or after

the Petition Date, in contract or tort, in law, equity or otherwise. Subject to the provisions of

the Plan, the Trustee may prosecute, settle, dismiss, or choose not to pursue any and all

Causes of Action and claims as the Trustee of the Plan Trust sees fit and determines, in its

sole and absolute discretion, without further review or approval by this Bankruptcy Court.

O.J udgments. Except as otherwise provided in the Plan, any judgments against the Debtordated on or prior to the Effective Date are hereby voided and of no further force and effect.

P. Dismissal of Litigation. Except as otherwise provided in the Plan, on the Effective Date,all suits, litigation, administrative actions or other proceedings, judicial or administrative,



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asserting any claim against the Debtor shall be dismissed as to all such claims against the

Debtor. Such dismissal shall be with prejudice to the assertion of such claim in any manner.

Q. Retention of J urisdiction. The Bankruptcy Court retains all permissible jurisdiction overthe Debtor, Plan Trust, the Trustee, the members of the Plan Committee, all creditors, equity

security interest holders, and all matters relating or pertaining to the Plan, and matters

reserved in Article XIII of the Plan, and all Causes of Action to be maintained by the Trustee

of the Plan Trust regarding collection of accounts receivable or enforcement of rights, or

Causes of Action and/or Claims hereby maintained, reserved, and preserved. For the

avoidance of doubt, this Bankruptcy Court shall retain jurisdiction over all pending matters,

including pending adversary proceedings.

R. Dissolution of the Creditors Committee. The Creditors Committee willcontinue in existence until the Effective Date, to exercise those powers and perform those

duties specified in Section 1103 of the Bankruptcy Code, and will perform such other duties

as it may have been assigned by the Bankruptcy Court prior to the Effective Date. On the

Effective Date, the Creditors Committee will be dissolved and its members will be deemed

released by the Debtor and its Estate (i) of all their duties, responsibilities and obligations in

connection with the Chapter 11 Case, and (ii) from all claims and Causes of Action relating

to or arising directly or indirectly from services performed. On the Effective Date, the

retention or employment of the Creditors Committee's Professionals and other agents will

terminate, except as is necessary to address fee applications filed by the Debtor, Creditors

Committee, or their respective Professionals. Upon the dissolution of the Creditors

Committee, no notice to the Creditors Committee that might otherwise be required pursuant

to an order of the Bankruptcy Court (e.g., a Procedures Order) shall be required.



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S. Narrative Status Report. The Trustee of the Plan Trust shall file with the BankruptcyCourt a narrative post-confirmation report within one (1) year after the Effective Date

detailing the steps taken toward consummation of the Plan. Additional reports are to be filed

annually thereafter until a motion for final decree is filed.

T. Authority. All actions and transactions contemplated under the Plan, including, but notlimited to, any documents executed in connection therewith or related thereto, shall be

authorized upon entry of this Confirmation Order without the need of further approvals,

notices, or meetings of the Debtor.

U. Enabling Provision. All persons who are contemplated by the Plan to render services,execute documents, make payments, file pleadings, resolve controversies, or take any action

are hereby ordered and directed to take such action. After the Effective Date, the Trustee of

the Plan Trust may present such orders or assignments to this Bankruptcy Court, for entry or

approval and suitable for filing in the records of any county, parish, state, or government

agency which provide that such properties are conveyed to and vested in the Plan Trust. The

orders or assignments may designate any liens, Claims, encumbrances, or other Interest

which appears of record and/or from which the property is being transferred and assigned.

The Plan shall be conclusively deemed to be adequate notice that such lien, Claim,

encumbrance, or other Interest is being extinguished, and no notice, other than by the Plan,

shall be given before the presentation of such orders or assignments. Any person having a

lien, Claim, encumbrance, or other Interest against any Plan Trust Asset shall be

conclusively deemed to have consented to the transfer, assignment, and vesting of such Plan

Trust Asset with the Plan Trust.

V. References to Plan Provisions. The failure specifically to include or reference any



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particular provision of the Plan in this Confirmation Order shall not diminish or impair the

effectiveness of such provision, it being the intent of this Bankruptcy Court that the Plan be

confirmed in its entirety (except as otherwise modified in this Confirmation Order).

W. Modifications of the Plan Before Substantial Consummation. Before substantialconsummation of the Plan, the Plan Proponents may, under Section 1127(b) of the

Bankruptcy Code, (a) amend the Plan so long as such amendment shall not materially or

adversely affect the treatment of any Holder of a Claim; (b) institute proceedings in this

Bankruptcy Court to remedy any defect or omission or reconcile any inconsistency in the

Plan, the Disclosure Statement, or this Confirmation Order; and (c) amend the Plan as may

be necessary to carry out the purposes and effects of the Plan so long as such amendment

does not materially or adversely affect the treatment of the Holders of the Claims or Interests

under the Plan; provided, however, prior notice of any amendment shall be served in

accordance with the Bankruptcy Rules or Orders of this Bankruptcy Court.

X. Applicable Non-Bankruptcy Law. Pursuant to Sections 1123(a) and 1142(a) of theBankruptcy Code, the provisions of this Confirmation Order, the Plan, or any amendments or

modifications thereto shall be enforceable notwithstanding any other applicable non-

bankruptcy law.

Y. Conflicts Between Plan and/or the Plan Trust Agreement and this Order. If there is anyconflict or inconsistency between the Plan and this Confirmation Order, the terms of this

Confirmation Order shall control. Likewise, in the event that there is any conflict or

inconsistency among the provisions of the Plan Trust Agreement or the terms of the Plan or

this Confirmation Order, the terms of this Confirmation Order shall control.

Z. Severability of Plan Provisions. Each term and provision of the Plan, as it may be altered



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or interpreted, is valid and enforceable pursuant to its terms.

AA.Recordable Form. This Confirmation Order shall be, and hereby is, declared to be inrecordable form and shall be accepted by any filing or recording officer or authority of any

applicable government authority for filing and recording purposes without further or

additional orders, certifications, or other supporting documents. Further, this Bankruptcy

Court authorizes the Plan Proponents, the Trustee of the Plan Trust, and the Plan Trust to file

a memorandum of this Confirmation Order in any appropriate filing or recording office as

evidence of the matters herein contained.

BB.Waiver of Stay. For good cause shown, the stay imposed by Bankruptcy Rules 3020(e) and7062 is hereby waived and shall not apply to this Confirmation Order. Notwithstanding any

other applicable law, Bankruptcy Rule 6004(h), the Plan Proponents, the Debtor, and all

parties to transactions contemplated by the Plan shall be authorized to consummate the Plan

and the transactions and transfers contemplated thereby immediately after the entry of this

Confirmation Order.

CC.Appeal. The reversal or modification on appeal of this Confirmation Order does not affectthe validity of the transactions contemplated under the Plan with respect to an entity that has

purchased or acquired property in good faith, whether or not such entity knew of the

pendency of the appeal, unless such authorization and transactions under the Plan are stayed

pending appeal.


Documents

chapter 11 plan.pdf