IN THE UNITED STATES BANKRUPTCY COURT FOR …strettodocs.s3.amazonaws.com/files/47512377-646e-4e52-bc...bankruptcy case by filing a voluntary petition under chapter 11 of the Bankruptcy

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re:

ELK PETROLEUM, INC.,1

Debtor.

Chapter 11

Case No. 19-11157 (LSS)

DISCLOSURE STATEMENT IN RESPECT OF PLAN OF LIQUIDATION OF ELK PETROLEUM, INC., PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE

IMPORTANT DATES

Date by which Ballots Must be Received: June 30, 2020, at 8:00 p.m. (Eastern)

Date by which Objections to Confirmation of the EPI Plan Must be Filed and Served: July 2, 2020, at 4:00 p.m. (Eastern)

Hearing on Confirmation of the EPI Plan: July 8, 2020, at 10:00 a.m. (Eastern)

Dated: May 28, 2020 Wilmington, Delaware

CHIPMAN BROWN CICERO & COLE, LLP William E. Chipman, Jr. (No. 3818) Mark L. Desgrosseilliers (No. 4083) Hercules Plaza 1313 North Market Street, Suite 5400 Wilmington, Delaware 19801 Telephone: (302) 295-0191 Facsimile: (302) 295-0199 Email: [email protected]

[email protected] Special Counsel for Elk Petroleum, Inc.

1 The Debtor is Elk Petroleum, Inc. (8606). The Debtor is Elk Petroleum, Inc. (8606). The address of the

Debtor is Elk Petroleum, Inc., c/o Matthew Doheny, Chief Restructuring Officer, North Country Capital LLC, 215 Washington Street, Suite 006, Watertown, NY 13601.

Case 19-11157-LSS Doc 873 Filed 05/29/20 Page 1 of 163

mailto:[email protected]


TABLE OF CONTENTS

I. PREFATORY STATEMENT AND DEFINITIONS ..........................................................1

II. INTRODUCTION AND OVERVIEW ...............................................................................1

A. Introduction ..............................................................................................................1

B. EPA Plan, Global Settlement Agreement, and Global Settlement Order ................2

C. Disclaimers ..............................................................................................................2

D. An Overview of the Chapter 11 Process ..................................................................3

E. EPI Plan Overview ...................................................................................................4

F. Voting on the EPI Plan ..........................................................................................10

(i) Who May Vote ...........................................................................................10

(ii) How to Vote ...............................................................................................10

G. Confirmation of the EPI Plan .................................................................................11

1. Generally....................................................................................................11

2. Objections to Confirmation........................................................................11

3. Hearing on Confirmation ...........................................................................11

III. HISTORY, ORGANIZATION, AND ACTIVITIES OF THE DEBTOR AND ITS CURRENT AND FORMER AFFILIATES ......................................................................12

A. General Description of the Businesses and Operations of the Debtor and its Current and Former Affiliates ................................................................................12

B. Corporate/Organizational Structure and Governance ............................................13

1. The Debtor .................................................................................................14

2. The Debtor’s Former Affiliates .................................................................14

3. The Debtor’s Current Affiliates .................................................................14

• Elk Grieve Project, LLC ................................................................14

• Grieve Pipeline, LLC .....................................................................14

• Elk Petroleum Madden Gas & Co2, LLC ......................................15


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• Elk Operating Company, LLC .......................................................15

• Singleton EOR Project, LLC .........................................................15

• North Grieve, LLC .........................................................................15

C. The Prepetition Capital Structure of the Debtor and its Current and Former Affiliates ................................................................................................................15

1. EPA’s Secured Debt and Related Agreements ..........................................15

a. First Lien Credit Agreement ..........................................................15

b. Revolving Facility Credit Agreement ............................................16

c. Preferred Stock Purchase Agreement ............................................17

d. BP ISDA ........................................................................................17

e. EPI Guaranty Obligations ..............................................................17

2. Other Unsecured Debt Obligations ............................................................17

D. The Debtor’s Assets and Liabilities .......................................................................18

E. Circumstances Leading to the Commencement of the Bankruptcy Cases By the Debtor and its Former Affiliates ............................................................................19

1. General .......................................................................................................19

2. Defaults Under Credit Agreements ............................................................19

3. The Restructuring Support Agreement, the Bankruptcy Filings, and the EPA Plan ....................................................................................................20

4. Commencement of the Chapter 11 Case, and Bankruptcy Cases for EPA, Resolute, and EOS .....................................................................................20

F. Significant Events Since the Petition Date ............................................................21

1. First Day Motions ......................................................................................21

2. DIP Financing Motion ...............................................................................21

3. Retention of Elk Debtors’ Professional Persons ........................................22

4. Trustee and Examiner Motions ..................................................................22

5. Appointment of Equity Committee and Retention of Professionals ..........23


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6. Filing of Schedules & Statements and Bar Date Order .............................23

7. The EPI Plan/Sale Settlement and Litigation Concerning EPA Plan, Releases Therein, and Value of EPA, Resolute and EOS..........................23

8. EPA Plan Confirmation Hearing, Global Settlement Agreement, and Global Settlement Order ............................................................................25

9. Rescission of the Exchange Agreement .....................................................28

10. Rejection of Certain Executory Contracts and Leases, Including the Denver Headquarters Lease .......................................................................28

11. EPI Plan Exclusivity ..................................................................................29

IV. DESCRIPTION OF THE EPI PLAN ................................................................................29

A. Treatment of Administrative Expenses and Tax Claims .......................................29

1. Introduction ................................................................................................29

2. Administrative Expenses ...........................................................................29

3. Tax Claims .................................................................................................30

B. Classification and Treatment of Classified Claims and Interests ..........................31

1. Summary ....................................................................................................31

2. Classification and Treatment of Claims and Interests ...............................31

a. Class 1 — Miscellaneous Secured Claims.....................................31

i. Classification......................................................................31

ii. Treatment ...........................................................................31

iii. Impairment/Voting .............................................................32

b. Class 2 — Priority Non-Tax Claims ..............................................32


ii. Treatment ...........................................................................32


c. Class 3 — General Unsecured Claims ...........................................32


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ii. Treatment ...........................................................................32


d. Class 4 — EPI Preferred Interests .................................................33


ii. Treatment ...........................................................................33


e. Class 5 — EPI Subordinated Claims .............................................34


ii. Treatment ...........................................................................34


f. Class 6 — Intercompany Claims ...................................................34


ii. Treatment ...........................................................................34


g. Class 7 — EPI Interests .................................................................34


ii. Treatment ...........................................................................34


C. Acceptance or Rejection of EPI Plan .....................................................................34

1. The following Classes are Unimpaired Under the EPI Plan ......................34

Class 1 — Miscellaneous Secured Claims.....................................34

Class 2 — Priority Non-Tax Claims ..............................................34

2. Identification of Impaired Classes .............................................................34

Class 3 — General Unsecured Claims ...........................................34


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Class 4 — EPI Preferred Interests .................................................34

Class 5 — EPI Subordinated Claims .............................................34

Class 6 — Intercompany Claims ...................................................35

Class 7 —EPI Interests ..................................................................35

3. Classes Permitted and Not Permitted to Vote ............................................35

4. Effect of Non-Voting .................................................................................35

5. Nonconsensual Confirmation.....................................................................35

6. Postpetition Interest ...................................................................................35

D. Means For Implementation of the EPI Plan ...........................................................35

1. Global Settlement Agreement ....................................................................35

2. Substantive Consolidation .........................................................................36

3. Continued Corporate Existence and Vesting of Assets .............................36

4. ConocoPhillips/Burlington Resources as to Madden Insurance Proceeds .....................................................................................................36

5. Corporation Action ....................................................................................37

6. Corporate Governance ...............................................................................37

7. Source Funding ..........................................................................................38

8. Causes of Action of the Debtor ..................................................................38

9. Establishment of EPI Liquidating Trust and Vesting of EPI Litigation Trust Assets ................................................................................................38

10. Purpose of EPI Liquidating Trust ..............................................................39

11. Funding of EPI Liquidating Trust ..............................................................39

12. EPI Liquidating Trustees ...........................................................................39

13. Responsibilities and Authority of EPI Liquidating Trustees .....................39

14. Powers of the EPI Liquidating Trustees ....................................................40


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15. Compensation of EPI Liquidating Trustees and Professionals of the EPI Liquidating Trust .......................................................................................40

16. Limitations on EPI Liquidating Trustees ...................................................41

17. Final Decree ...............................................................................................41

E. Treatment of Executory Contracts and Unexpired Leases ....................................42

1. Rejection of Executory Contracts and Unexpired Leases ..........................42

2. Bar Date for Rejection Damages ...............................................................42

F. Distributions and Related Matters .........................................................................42

1. Pro Forma Plan Distribution Schedule of EPI Funds ................................42

2. Dates of Distribution ..................................................................................43

3. Cash Distributions ......................................................................................43

4. Rounding of Payments ...............................................................................43

5. Disputed Claims and Interests ...................................................................43

6. Undeliverable and Unclaimed Distributions ..............................................44

7. Compliance with Tax Requirements ..........................................................44

8. Record Date in Respect of Distributions ...................................................45

9. Reserves .....................................................................................................45

G. Litigation, Objection to Claims, and Determination of Taxes ...............................45

1. Litigation; Objections to Claims; Objection Deadline ...............................45

2. Temporary or Permanent Resolution of Disputed Claims .........................46

3. Setoffs ........................................................................................................46

4. Preservation of Causes of Action ...............................................................47

H. Releases, Injunctions, and Exculpation Provisions................................................47

1. Injunctions..................................................................................................47

a. Generally .......................................................................................47


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2. Injunction Related to Causes of Action, Claims, Administrative Expenses, and Interests ...............................................................................................47

3. Exculpation and “Exculpated Party” in the EPI Plan ................................48

a. Exculpation Provision in the EPI Plan ...........................................48

b. Definition of “Exculpated Parties” in the EPI Plan .......................49

4. Releases by Debtor and Holders of Claims and Interests ..........................49

a. Debtor Release ...............................................................................49

b. Releases by Holders .......................................................................50

c. Definition of “Released Parties” in the EPI Plan ...........................51

I. No Regulated Rate Change Without Government Approval .................................52

J. Exemption from Certain Transfer Taxes ...............................................................52

K. Retention of Jurisdiction ........................................................................................52

L. Services By and Fees for Professionals; Bar Date for Administrative Expenses ................................................................................................................52

M. No Waiver ..............................................................................................................53

N. U.S. Trustee Fees ...................................................................................................54

O. Preservation of Insurance .......................................................................................54

P. Waiver of Stay .......................................................................................................54

Q. Conditions of EPI Effective Date and Effects of Confirmation ............................54

R. Modification or Withdrawal of EPI Plan and Disclosure Statement .....................55

V. REQUIREMENTS FOR CONFIRMATION ....................................................................56

A. Acceptances Necessary to Confirm EPI Plan ........................................................56

B. Best Interest of Creditors Test ...............................................................................56

1. Chapter 7 ....................................................................................................56

2. Liquidation Alternative ..............................................................................57

3. Feasibility of EPI Plan ...............................................................................58


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4. Classification..............................................................................................58

5. Confirmation of EPI Plan Without Necessary Acceptances; Cramdown ..................................................................................................58

6. No Unfair Discrimination ..........................................................................59

7. Fair and Equitable Test ..............................................................................59

a. Secured Claims ..............................................................................59

b. Unsecured Claims ..........................................................................59

c. Equity Interests ..............................................................................60

VI. EFFECT OF CONFIRMATION PLAN ............................................................................60

A. Binding Effect of Confirmation .............................................................................60

B. Good Faith .............................................................................................................60

C. No Limitations on Effect of Confirmation.............................................................60

VII. RISK FACTORS ...............................................................................................................60

VIII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE EPI PLAN ...........61

A. Consequences to Creditors .....................................................................................62

1. Holders of Claims and EPI Preferred Interests in General ........................62

2. U.S. Federal Income Tax Consequences in Relation to the EPI Liquidating Trust and the EPI Liquidating Trust Beneficiaries ....................................63

B. Importance of Obtaining Professional Tax Assistance ..........................................66

IX. SECURITIES LAW MATTERS .......................................................................................66

A. In General...............................................................................................................66

B. Initial Issuance .......................................................................................................67

C. Resales ...................................................................................................................68

D. Exchange Act Compliance .....................................................................................68

E. Investment Company Act ......................................................................................68

F. Compliance if Required .........................................................................................69


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X. ALTERNATIVES TO EPI PLAN AND MISCELLANEOUS MATTERS .....................69

A. Alternatives to EPI Plan .........................................................................................69

(i) Liquidation Under Chapter 7.....................................................................69

(ii) Dismissal ....................................................................................................69

B. No Res Judicata Effect ..........................................................................................70

XI. CONCLUSION ..................................................................................................................70


I. PREFATORY STATEMENT AND DEFINITIONS

Pursuant to chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101, et seq. (the “Bankruptcy Code”), Elk Petroleum, Inc. (“EPI” or the “Debtor”), hereby submits this disclosure statement (the “Disclosure Statement”) in support of EPI’s Plan of Liquidation Pursuant to Chapter 11 of the Bankruptcy Code (as may be amended or modified, the “EPI Plan”). The definitions contained in the Bankruptcy Code are incorporated herein by this reference. The definitions set forth in Article I of the EPI Plan apply to capitalized terms used herein that are not otherwise defined herein or in the Bankruptcy Code. In the event of a conflict between the definitions contained herein and those definitions contained in the EPI Plan, the definitions contained in the EPI Plan shall control.

II. INTRODUCTION AND OVERVIEW

A. INTRODUCTION.

On May 22, 2019 (the “Petition Date”), EPI commenced the above-referenced bankruptcy case by filing a voluntary petition under chapter 11 of the Bankruptcy Code. Also, on the Petition Date, the Debtor’s then Affiliates, EOS, Resolute, and EPA each commenced a chapter 11 bankruptcy case of its own before the Bankruptcy Court.

This Disclosure Statement, submitted in accordance with section 1125 of the Bankruptcy Code, contains information regarding the EPI Plan proposed by the Debtor. A copy of the EPI Plan is attached to the Disclosure Statement as Exhibit 1. The Disclosure Statement is being distributed to you for the purpose of enabling you to make an informed judgment about the EPI Plan.

The Disclosure Statement contains information concerning, among other matters: (1) the Debtor’s background; (2) the assets available for distribution under the EPI Plan; and (3) a summary of the EPI Plan. The Debtor strongly urges you to review carefully the contents of this Disclosure Statement and the EPI Plan (including the exhibits to each) before making a decision to accept or reject the EPI Plan. Particular attention should be paid to the provisions affecting or impairing your rights as a Creditor or Holder of an EPI Preferred Interest.

Following a hearing on May 28, 2020, the Bankruptcy Court approved this Disclosure Statement as containing adequate information to enable a hypothetical reasonable investor to make an informed judgment about the EPI Plan. A copy of the order approving the Disclosure Statement is attached hereto as Exhibit 2 (the “Disclosure Statement Order”). Under section 1125 of the Bankruptcy Code, approval of the Disclosure Statement enables the Debtor to distribute this Disclosure Statement to the Holders of Claims in Class 3 and EPI Preferred Interests in Class 4 for purpose of soliciting votes to accept or reject the EPI Plan.

Your vote on the EPI Plan is important. Absent acceptance of the EPI Plan, there may be protracted delays in distributing the Liquidating Trust Assets to the beneficiaries of the EPI Liquidating Trust, or the conversion of EPI’s chapter 11 case to a case under chapter 7 of the Bankruptcy Code. Either of these alternatives may result in the Holders of Allowed Claims and EPI Preferred Interests receiving substantially less value than would be the case under the EPI Plan. Accordingly, the Debtor urges you to accept the EPI Plan by completing and returning the enclosed ballot(s) no later than June 23, 2020, at 8:00 p.m. (Eastern).


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B. EPA PLAN, GLOBAL SETTLEMENT AGREEMENT, AND GLOBAL SETTLEMENT ORDER.

As set forth more fully herein, the Debtor has already disposed of significant assets in the Chapter 11 Case, including its membership interests in EOS through the sale of those interests to an affiliate of AB, and it direct and indirect interests in EPA and Resolute through the confirmation and consummation of the EPA Plan. Through such transactions, EPI was also able to address significant potential liabilities of EPI and certain of its Affiliates, primarily through the assumption of executory contracts, leases, and liabilities in accordance with the EPA Plan and the EOS Sale Order and related agreements. All such assumptions were consistent with the terms of the EPA Plan and the Global Settlement Agreement.

Moreover, as discussed herein, the EPI Plan incorporates and implements the provisions of the Global Settlement Agreement and the Global Settlement Order. The Global Settlement Agreement and the Global Settlement Order also provide a path for EPI to (i) address the Claims against it and the EPI outstanding Preferred Interests, (ii) liquidate its assets, including its interests in the Grieve Entities and Madden, and (iii) Distribute the net proceeds through the EPI Liquidating Trust in accordance with the Global Settlement Agreement and the Global Settlement Order. The Global Settlement Agreement, as approved by the Global Settlement Order, binds the signatories thereto, including BSP, the AB Parties, the Holders of Allowed EPI Preferred Interests, and certain Professionals retained by the Debtor to the treatment of their claims and interests as set forth therein.

C. DISCLAIMERS.

THIS DISCLOSURE STATEMENT CONTAINS INFORMATION THAT MAY BEAR UPON YOUR DECISION TO ACCEPT OR REJECT THE EPI PLAN. PLEASE READ THIS DOCUMENT WITH CARE. THE PURPOSE OF THE DISCLOSURE STATEMENT IS TO PROVIDE “ADEQUATE INFORMATION” OF A KIND, AND IN SUFFICIENT DETAIL, AS FAR AS IS REASONABLY PRACTICABLE IN LIGHT OF THE NATURE AND HISTORY OF THE DEBTOR AND THE DEBTOR’S BOOKS AND RECORDS, THAT WOULD ENABLE A HYPOTHETICAL REASONABLE INVESTOR TYPICAL OF HOLDERS OF CLAIMS OR INTERESTS OF THE RELEVANT CLASS TO MAKE AN INFORMED JUDGMENT CONCERNING THE EPI PLAN.

FOR THE CONVENIENCE OF CREDITORS AND HOLDERS OF EPI PREFERRED INTERESTS, THIS DISCLOSURE STATEMENT SUMMARIZES THE TERMS OF THE EPI PLAN, BUT THE EPI PLAN ITSELF QUALIFIES ANY SUMMARY. IF ANY INCONSISTENCY EXISTS BETWEEN THE EPI PLAN AND THE DISCLOSURE STATEMENT, THE TERMS OF THE EPI PLAN ARE CONTROLLING.

NO REPRESENTATIONS CONCERNING THE DEBTOR’S FINANCIAL CONDITION, THE FINANCIAL CONDITION OF ANY CURRENT OR FORMER NON-AFFILIATE OF THE DEBTOR, OR ANY ASPECT OF THE EPI PLAN ARE AUTHORIZED BY THE DEBTOR OTHER THAN AS SET FORTH IN THIS DISCLOSURE STATEMENT. YOU SHOULD NOT RELY UPON ANY REPRESENTATIONS OR INDUCEMENTS MADE TO SECURE YOUR ACCEPTANCE OR REJECTION THAT ARE OTHER THAN AS CONTAINED IN OR INCLUDED WITH THIS DISCLOSURE STATEMENT IN ARRIVING AT YOUR DECISION.


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THE FINANCIAL INFORMATION CONTAINED HEREIN, UNLESS OTHERWISE INDICATED, IS UNAUDITED. MOREOVER, BECAUSE OF THE DEBTOR’S FINANCIAL DIFFICULTIES, AS WELL AS THE COMPLEXITY OF THE DEBTOR’S FINANCIAL MATTERS, THE BOOKS AND RECORDS OF THE DEBTOR, UPON WHICH THIS DISCLOSURE STATEMENT IN PART IS BASED, MAY BE INCOMPLETE OR INACCURATE. HOWEVER, REASONABLE EFFORT HAS BEEN MADE TO ENSURE THAT ALL SUCH INFORMATION IS FAIRLY PRESENTED.

NORTON ROSE FULBRIGHT US LLP (“NRF”) AND WOMBLE BOND DICKINSON (US), LLP (“WBD”,) ARE GENERAL BANKRUPTCY COUNSEL TO EPI AND ITS FORMER DIRECT AND INDIRECT WHOLLY-OWNED SUBSIDIARIES, EPA, RESOLUTE, AND EOS (THE “ELK DEBTORS”). CHIPMAN, BROWN, CICERO & COLE, LLP (“CBCC”), SERVES AS SPECIAL COUNSEL FOR EPI. CBCC HAS RELIED UPON INFORMATION PROVIDED BY THE DEBTOR AND CERTAIN OF ITS NON-DEBTOR AFFILIATES IN CONNECTION WITH PREPARATION OF THIS DISCLOSURE STATEMENT. ALTHOUGH CBCC HAS PERFORMED CERTAIN LIMITED DUE DILIGENCE IN CONNECTION WITH THE PREPARATION OF THIS DISCLOSURE STATEMENT, CBCC HAS NOT INDEPENDENTLY VERIFIED ALL OF THE INFORMATION CONTAINED HEREIN.

THE CONTENTS OF THIS DISCLOSURE STATEMENT SHOULD NOT BE CONSTRUED AS LEGAL, BUSINESS, OR TAX ADVICE. EACH CREDITOR OR INTEREST HOLDER SHOULD CONSULT HIS OR HER OWN LEGAL COUNSEL AND ACCOUNTANT AS TO LEGAL, TAX, AND OTHER MATTERS CONCERNING HIS OR HER CLAIM OR INTEREST, INCLUDING EPI PREFERRED INTERESTS.

D. AN OVERVIEW OF THE CHAPTER 11 PROCESS.

Chapter 11 of the Bankruptcy Code contains numerous provisions, the general effect of which is to provide the debtor with “breathing space” within which to propose a restructuring of its obligations to third parties. The filing of a chapter 11 bankruptcy petition creates a bankruptcy “estate” comprising all of the property interests of the debtor. Unless a trustee is appointed by the Bankruptcy Court for cause (no trustee has been appointed in this Chapter 11 Case), a debtor remains in possession and control of all its assets as a “debtor in possession.” The debtor may continue to operate its business in the ordinary course on a day-to-day basis without Bankruptcy Court approval. Bankruptcy Court approval is only required for various statutorily enumerated kinds of transactions (such as certain financing transactions) and transactions out of the ordinary course of a debtor’s business. The filing of the bankruptcy petition gives rise to what is known as the “automatic stay” which, generally, enjoins creditors from taking any action to collect or recover obligations owed by a debtor prior to the commencement of a chapter 11 case. The Bankruptcy Court can grant relief from the automatic stay under certain specified conditions or for cause.

The Bankruptcy Code authorizes the creation of one or more official committees to protect the interests of some or all creditors or interest Holders. The fees and expenses of counsel and other professionals employed by such official committees and approved by the Bankruptcy Court are generally borne by a bankruptcy estate. On June 19, 2019, the Acting United States Trustee for Region 3 (the “U.S. Trustee”) appointed a committee of preferred equity security


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Holders of EPI (the “Equity Committee”) (Docket No. 164). Each of the former members of the Equity Committee hold Series A Preferred Stock of EPI. Pursuant to the terms of the Global Settlement Order (as defined herein) and the EPA Plan and related confirmation order, the Equity Committee has disbanded. Prior to being disbanded, the Equity Committee represented the collective interests of Holders of EPI Preferred Interests in EPI. No other committees have been appointed in the Debtor’s bankruptcy case.

A chapter 11 debtor emerges from bankruptcy by successfully confirming a plan of reorganization. Alternatively, the assets of a debtor may be sold and the proceeds distributed to creditors through a plan of liquidation. A plan may be either consensual or non-consensual and provide, among other things, for the treatment of the claims of creditors and interests of shareholders and holders of options or warrants. The provisions of the EPI Plan are summarized below.

E. EPI PLAN OVERVIEW.

The following is a brief overview of the material provisions of the EPI Plan and is qualified in its entirety by reference to the full text of the EPI Plan.

The EPI Plan effectuates a liquidation of the Debtor. Under the EPI Plan, all of the Debtor’s assets will be transferred to a newly-created EPI Liquidating Trust. The EPI Plan incorporates the Global Settlement Agreement among the Debtor and each of its non-debtor subsidiaries, the AB Parties, Riverstone, BSP, and the Holders of Allowed EPI Preferred Interests, which was approved by the Bankruptcy Court pursuant to the Global Settlement Order.

Creditors with Allowed Claims against the Debtor and Holders of Allowed EPI Preferred Interests in the Debtor will receive Distributions on account of such Claims or EPI Preferred Interests out of the available assets of the Debtor’s estate, subject to the priorities of the Bankruptcy Code and, where applicable, subject to and in accordance with the terms of the Global Settlement Order, the Global Settlement Agreement, and the EPI Plan.

All assets of the Debtor (aside from the EPA Warrants (which shall be distributed on the Effective Date of the EPI Plan as set forth in the Global Settlement Order, the Global Settlement Agreement, and the EPI Plan)), which include all of the Debtor’s litigation claims and remaining assets of its non-debtor subsidiaries upon their liquidation and dissolution, will be liquidated or retained for the benefit of creditors holding Allowed Claims and Holders of Allowed EPI Preferred Interests, under the supervision of the EPI Liquidating Trustees, as set forth in the EPI Plan and the EPI Liquidating Trust Agreement. North Country Capital LLC and Asgaard Capital, LLC, are in negotiations to serve as the initial co-Liquidating Trustees. Messrs. Doheny and Reardon are principals in North Country Capital LLC and Asgaard Capital, LLC, respectively, are also the current co-Chief Restructuring Officers of the Debtor and the co-Liquidating Agents for each of the Grieve Entities and Madden. The Debtor will file a substantially final version of the EPI Liquidating Trust Agreement which among other things, identifies the Liquidating Trustees and the terms of their engagement, as soon as practicable and no later than the deadline for filing the EPI Plan Supplement. Upon the occurrence of the EPI Effective Date, the Board shall be deemed to have resigned and the Liquidating Trustees appointed. From and after the Effective Date the Liquidating Trustees shall be responsible for the management of the Debtor and its non-debtor Affiliates, liquidating the Liquidating Trust


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Assets, and making distributions to the holders of Allowed Claims and Allowed Preferred EPI Interests, subject to the terms of the Liquidating Trust Agreement.

EPI’s Causes of Action will vest in the EPI Liquidating Trust and be prosecuted or otherwise liquidated under the supervision of the EPI Liquidating Trustees in accordance with the terms of the EPI Plan and the EPI Liquidating Trust. Similarly, EPI’s non-debtor Affiliates with ongoing operations, the Grieve Entities and Madden, will be liquidated or otherwise disposed of and the net proceeds of such liquidation or disposition, if any, will be available to the EPI Liquidating Trust or EPI for Distributions in accordance with the EPI Plan, the Global Settlement Agreement, and the Global Settlement Order. EPI expects to realize no net proceeds ultimately from the disposition of the Grieve Entities and continues to work to resolve the remaining issues in connection with Madden, with respect to which EPI holds one hundred percent (100%) of the membership interests, to maximize the value of such asset for all stakeholders. EPI is in discussions to resolve Madden and currently anticipates that funds will be available for the EPI estate from such resolution, but anticipates that such funds will not exceed two million dollars ($2,000,000). After resolution of all claims at Madden, the Debtor expects that any net proceeds will be distributed to EPI in accordance with applicable law. Accordingly, the Debtor believes that the primary source of recovery for Holders of Allowed Claims and Allowed EPI Preferred Interests will come from net proceeds, if any, from pursuit of the Causes of Action.

Except as otherwise set forth in the EPI Plan, all Holders of Allowed Administrative Expenses, Unpaid Chapter 11 Professional Fee Claims, Priority Non-Tax Claims, and Priority Tax Claims against the Debtor will be paid in full on the EPI Effective Date out of EPI’s available cash on hand (unless otherwise agreed by applicable claimants in the Global Settlement Agreement) consistent with the Global Settlement Agreement and the Global Settlement Order.

As provided in the EPI Plan, the Debtor elects to provide payment over time as to any Allowed Priority Tax Claims under Bankruptcy Code section 507(a)(8)). Holders of Allowed Miscellaneous Secured Claims, if any, will receive: (i) Cash in an amount equal to the lesser of (a) the amount of such Allowed Miscellaneous Secured Claim and (b) the value of the Debtor’s property securing such Allowed Miscellaneous Secured Claim currently in the possession of the Debtor minus the amount of Claims secured by such property; (ii) delivery of the property securing such Allowed Miscellaneous Claim; or (iii) other treatment such that the Allowed Miscellaneous Secured Claim shall be rendered Unimpaired.

Holders of Allowed General Unsecured Claims shall receive on the Effective Date their Pro Rata share of the EPA Warrants, as set forth in the EPI Plan and in accordance with the Global Settlement Agreement and the Global Settlement Order. Subject to the immediately preceding sentence and the terms of the Global Settlement Agreement and Global Settlement Order, after the payment of or reserve for higher priority claims, Holders of Allowed General Unsecured Claims (other than Intercompany Claims that shall receive no distribution pursuant to section 4.6 of the EPI Plan) against the Debtor and Holders of Allowed EPI Preferred Interests will receive their Pro Rata share of the GUC Liquidation Trust Distribution or their Pro Rata share of the Class 4 Distribution, respectively, consistent with the Global Settlement Agreement and the Global Settlement Order.


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Pursuant to the terms of the Global Settlement Agreement, the Global Settlement Order, and the EPI Plan, among other things:

(1) Any proceeds from the liquidation of the assets of the EPI Liquidating Trust, including proceeds from Causes of Action, after payment or reserve for all other obligations to the extent required by the Global Settlement Agreement, will be distributed as follows:

(a) seventy-five percent (75%) of such proceeds to the Holders of Allowed General Unsecured Claims against EPI; and

(b) twenty-five percent (25%) to Holders of Allowed EPI Preferred Interests or their permitted assigns; and

(2) Holders of Unpaid Chapter 11 Professional Fee Claims agreed in the Global Settlement Agreement to accept deferred payment of their Unpaid Chapter 11 Professional Fee Claims in order to allow

(x) the EPA Plan to be confirmed and to become effective and

(y) the Debtor to pursue confirmation of the EPI Plan.

Other than EPI Preferred Interests, all Interests in the Debtor, and any associated management rights held by Holders of such Interests in EPI, will be cancelled and of no force and effect as of the EPI Effective Date.

The EPI Plan provides for the classification and treatment of Claims against and Interests in the Debtor. The EPI Plan designates five (5) Classes of Claims and two (2) Classes of Interests.

The following chart briefly summarizes the treatment of Creditors and Interest Holders under the EPI Plan.2 Amounts listed below are estimates.3 Actual Claims and Distributions will vary, including in the case of Distributions to Holders of Allowed General Unsecured Claims against EPI or Distributions to Holders of Allowed EPI Preferred Interests, whose recoveries will depend upon, among other things, the amount of funds available for Distribution, after payment of other Allowed and higher priority Claims in accordance with the EPI Plan, the Global Settlement Agreement, and the Global Settlement Order, and recoveries, if any, from Causes of Action.

2 This chart is only a summary of the classification and treatment of Claims and Interests under the EPI Plan.

References should be made to the entire EPI Disclosure Statement and the EPI Plan for a complete description of the classification and treatment of Claims and Interests.

3 The claims estimates set forth in the chart above are the Debtor’s best estimate of allowed claims as of the EPI Effective Date based on its continuing review of claims filed to date. The claims could be materially higher or lower.


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(i) Unclassified Claims

DESCRIPTION ESTIMATED ALLOWED

CLAIMS

ESTIMATED RECOVERY

PERCENTAGE TREATMENT

Unpaid Chapter 11 Professional

Fee Claims Approximately $950,000.004 100%

Paid in Cash on the EPI Effective Date, or on such later date as the EPI Liquidating Trust has sufficient Cash to pay such Claims, after the payment of Allowed Other Professional Claims, in accordance with the terms of the Global Settlement Agreement and the Global Settlement Order. See Exhibit 3 (the “Pro Forma Plan Distribution Schedule”), to be filed as part of the EPI Plan Supplement.

Other Administrative

Expenses Approximately $980,000.005 100%

Paid in full in Cash on the EPI Effective Date or as soon thereafter as the Other Administrative Expense is Allowed, subject to any agreed upon reductions. See the Pro Forma Plan Distribution Schedule. Notwithstanding any of the foregoing, if an Other Administrative Expense represents an obligation incurred in the ordinary course of business, such Other Administrative Expense will be paid in the ordinary course by Post-EPI Effective Date Debtor or the EPI Liquidating Trust in accordance with the terms of the particular transaction and/or applicable agreement.

Priority Tax Claims $0.00 100%

On or as soon as practicable after the EPI Effective Date, each Holder of an Allowed Priority Tax Claim will receive Cash from the EPI Liquidating Trust equal to the Allowed Tax Claim; provided, however, the Debtor or the EPI Liquidating Trust may in its discretion elect to make regular quarterly installment payments in Cash of a total value, as of the EPI Effective Date, equal to the amount of the Allowed Priority Tax Claim over a period ending not later than five years after the EPI Petition Date. The Debtor believes that there will be no Allowed Priority Tax Claims and that, if there were, the Debtor has sufficient net operating losses available to offset any such Allowed Priority Tax Claims.

4 This amount does not include any amounts payment for which NRF and CBCC agree can be deferred until

after the EPI Effective Date (and added to the amount of Unpaid Chapter 11 Professional Fee Claims) with respect to their respective Allowed Other Professional Clams.

5 This amount assumes that NRF and CBCC agree that payment of $40,000.00 in Allowed Other Professional Claims can be deferred until after the EPI Effective Date and that such amount can be added to the Unpaid Chapter 11 Professional Fees.


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(ii) Classified Claims

CLASS NO. DESCRIPTION

ESTIMATED ALLOWED CLAIMS

ESTIMATED RECOVERY

PERCENTAGE TREATMENT

1 Priority Non-Tax Claims $0 100%

Unimpaired; Deemed to Accept. At the election of the Debtor, the Holder of each Priority Non-Tax Claim against the Debtor will receive on or as soon as practicable after the later of (i) the EPI Effective Date, or (ii) the date upon which the Bankruptcy Court enters a Final Order determining or allowing such Claim, (a) a Cash payment from the EPI Liquidating Trust equal to the Allowed amount of such Claim, or (b) such other treatment as otherwise agreed by the Holder of such Claim and the EPI Liquidating Trust.

2 Miscellaneous Secured

Claims $0 100% or Value

of Collateral

Unimpaired; Deemed to Accept. Except to the extent that a Holder of an Allowed Miscellaneous Secured Claim has been paid by the Debtor, in whole or in part, prior to the EPI Effective Date, on the EPI Effective Date, at the option of the EPI Liquidating Trust (i) each Allowed Miscellaneous Secured Claim will be reinstated and Unimpaired in accordance with section 1124 of the Bankruptcy Code or (ii) each Holder of an Allowed Miscellaneous Secured Claim will receive, in full satisfaction, settlement, release and discharge of, and in exchange for, such Miscellaneous Secured Claim, (x) payment in full in Cash of the unpaid portion of such Allowed Miscellaneous Secured Claim, (y) surrender of the collateral securing such Claim or (z) such other treatment as may be agreed to by the Holder and the EPI Liquidating Trust. The Debtor believes that will be no Allowed Miscellaneous Secured Claims

3 General Unsecured Claims Approximately $60,000,000.00

TBD6 (excluding the value of EPA

Warrants)

Impaired; Entitled to Vote. Holders of Allowed General Unsecured Claims in Class 3 shall receive the Class 3 Distribution, as follows: On or as soon as reasonably practicable after the later of the EPI Effective Date or the allowance of its General Unsecured Clam, each Holder of an Allowed Class 3 General Unsecured Claim (other than Intercompany Claims that shall receive no distribution pursuant to section 4.6 of the EPI Plan) shall receive its Pro Rata share of the EPA Warrants and the GUC Liquidation Trust Distribution, as set forth in the EPI Plan and in accordance with the Global Settlement

6 A set forth in Article VII below (“Risk Factors”), and excluding the value of EPA Warrants for Holders of

Allowed Claims in Class 3, recoveries for Holders of Allowed Claims in Class 3 and Allowed EPI Preferred Interests in Class 4 depend upon the results of the prosecution of Causes of Action by the EPI Liquidating Trust.


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Agreement and the Global Settlement Order. Thereafter, except to the extent that a Holder of an Allowed Class 3 General Unsecured Claim agrees to a less favorable treatment, each Holder of an Allowed Class 3 General Unsecured Claim shall receive its Pro Rata share of the Class 3 Distribution (taking into account prior Distributions made to such Holders, if any, in accordance with the terms of the EPI Plan), which, in part, entitles the Holders of Allowed Claims in Class 3 to 75% of the proceeds from the liquidation of the EPI Liquidating Trust Assets. ..

4 EPI Preferred Interests

Undetermined

TBD7

Impaired; Entitled to Vote. Holders of Allowed EPI Preferred Interests in Class 4 shall receive the Class 4 Distribution, as follows: On or as soon as practicable after the EPI Effective Date, each Holder of an Allowed EPI Preferred Interest shall receive its Pro Rata share of the EPI Preferred Interests Liquidation Trust Units from the EPI Liquidating Trust, consistent with the terms of the Global Settlement Agreement, the Global Settlement Order, , and the EPI Plan, which generally entitles the Holders of Allowed EPI Preferred Interests in Class 4 to receive 25% of the proceeds from the liquidation of the EPI Liquidating Trust Assets.

5 Subordinated Claims $0 0%

Impaired; Deemed to Reject. Holders of Allowed Subordinated Claims shall receive no Distributions under the EPI Plan.

6 Intercompany Claims Approximately

$11,500,000.008 0%

Impaired; Deemed to Reject. Holders of Intercompany Claims shall receive no Distributions under the EPI Plan.

7 Interests in EPI Undetermined $0

Impaired; Deemed to Reject. The Holders of Interests will receive no distributions under the EPI Plan, and on the EPI Effective Date, all Interests will be deemed cancelled.

7 A set forth in Article VII below (“Risk Factors”), and excluding the value of EPA Warrants for Holders of

Allowed Claims in Class 3, recoveries for Holders of Allowed Claims in Class 3 and Allowed EPI Preferred Interests in Class 4 depend upon the results of the prosecution of Causes of Action by the EPI Liquidating Trust.

8 The Debtor believes that the confirmed EPA Plan resolved most (and arguably all) of the Intercompany Claims. Madden has filed a claim in the amount set forth herein against EPI, but EPI believes that (i) any value of such claims would ultimately redound to EPI; (ii) any reconciliation of such Intercompany Claims between Madden and EPI would substantially reduce, if not eliminate entirely the Intercompany Claims; (iii) to the extent that the resolution of the Intercompany Claims set forth herein is not approved, that such purposed Claims are, in fact, Interests in EPI entitled to no distribution under the terms of the EPI Plan and applicable law. EPI reserves all of its rights to oppose the Intercompany Claims on any and all grounds, in the event that such Claims are not accorded the treatment set forth in the EPI Plan.


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The EPI Plan contemplates the release by each Holder of a Claim or Interest of certain third parties identified in Article IX of the EPI Plan from any and all claims, obligations, rights, suits, damages, causes of action, and liabilities, whether known or unknown, foreseen or unforeseen, liquidated or unliquidated, fixed or contingent, matured or unmatured, in law or equity or otherwise, based on or relating in any way to the Debtor, the Chapter 11 Case, the EPI Plan, or the EPI Disclosure Statement, arising prior to the EPI Effective Date, other than claims or liabilities arising out of or relating to any act or omission of the Released Parties that constitutes willful misconduct or gross negligence. This proposed release is not a waiver or release of any right that a Holder of an Allowed Claim or Allowed EPI Preferred Interest has to payment under the EPI Plan on account of such Allowed Claim or Allowed EPI Preferred Interest.

F. VOTING ON THE EPI PLAN.

(i) Who May Vote

The EPI Plan divides Allowed Claims and Interests into multiple Classes. Under the Bankruptcy Code, only Classes that are “impaired” by the EPI Plan are entitled to vote (unless the Class receives no compensation or payment, in which event the Class is conclusively deemed not to have accepted the EPI Plan).A Class is Impaired if legal, equitable or contractual rights attaching to the Claims or Interests in the Class are modified, other than by curing defaults and reinstating maturities. Under the EPI Plan, Administrative Claims and Priority Tax Claims are unclassified and are not entitled to vote. Classes 1 and 2 are Unimpaired and are, therefore, conclusively presumed to have accepted the EPI Plan pursuant to section 1126(f) of the Bankruptcy Code, and are not entitled to vote on the EPI Plan. Classes 3 and 4 are Impaired and entitled to vote to accept or reject the EPI Plan. Classes 5, 6, and 7 are Impaired, but are deemed to reject the EPI Plan, and, thus, are not entitled to vote. Only those votes cast by Holders of Allowed Claims and Allowed EPI Preferred Interests will be counted in determining whether a sufficient number of acceptances have been received to obtain Confirmation of the EPI Plan. If no Holder of a Claim or EPI Preferred Interest eligible to vote in a particular Class timely votes to accept or reject the EPI Plan, the Debtor may seek to have the EPI Plan deemed accepted by the Holders of such Claims or EPI Preferred Interests in such Class for purposes of section 1129(b) of the Bankruptcy Code.

(ii) How to Vote

All votes to accept or to reject the EPI Plan must be cast by using the appropriate form of ballot. No votes other than ones using such ballots will be counted except to the extent ordered otherwise by the Bankruptcy Court. A form of ballot is being provided to Holders of Class 3 General Unsecured Claims and Holders of Allowed EPI Preferred Interests in Class 4, each of whom may vote their acceptance or rejection of the EPI Plan. The ballot for voting on the EPI Plan gives Holders of Claims in Class 3 and of Allowed EPI Preferred Interests in Class 4 an important choice to make with respect to the EPI Plan – you can vote for or against the EPI Plan. To vote on the EPI Plan, after carefully reviewing the EPI Plan and this Disclosure Statement,


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please complete the ballot (1) by indicating on the enclosed ballot that (a) you accept the EPI Plan or (b) you reject the EPI Plan and (2) by signing your name and mailing the ballot in the envelope provided for this purpose. Bankruptcy Management Solutions d/b/a Stretto (“Stretto”), as the Balloting Agent, will count the ballots.

IN ORDER TO BE COUNTED, BALLOTS MUST BE COMPLETED, SIGNED AND RECEIVED BY THE BALLOTING AGENT NO LATER THAN 8:00 P.M. (EASTERN) ON JUNE 30, 2020 AT THE FOLLOWING ADDRESS:

Elk Ballot Processing c/o Stretto 8269 E. 23rd Ave, Ste 275

Denver, CO 80238

IF YOUR BALLOT IS NOT PROPERLY COMPLETED, SIGNED AND RECEIVED AS DESCRIBED, IT WILL NOT BE COUNTED. IF YOUR BALLOT IS DAMAGED OR LOST, YOU MAY REQUEST A REPLACEMENT BY MAKING A WRITTEN REQUEST TO THE ADDRESS SHOWN ABOVE. FACSIMILE OR ELECTRONICALLY TRANSMITTED BALLOTS WILL NOT BE COUNTED.

G. CONFIRMATION OF THE EPI PLAN.

1. Generally

“Confirmation” is the technical term for the Bankruptcy Court’s approval of a plan of reorganization or liquidation. The timing, standards and factors considered by the Bankruptcy Court in deciding whether to confirm the EPI Plan are discussed in Article V below.

2. Objections to Confirmation

Any objections to Confirmation of the EPI Plan must be in writing and must be filed with the Bankruptcy Court and served on counsel for EPI and the United States Trustee on or before the date set forth in the notice of the Confirmation Hearing sent to you with this Disclosure Statement and the EPI Plan. Bankruptcy Rule 3007 governs the form of any such objection.

3. Hearing on Confirmation

The Bankruptcy Court has set July 8, 2020 at 10:00 a.m. (Eastern) for a hearing (the “Confirmation Hearing”) to determine whether the EPI Plan has been accepted by the requisite number of Creditors and Holders of Allowed EPI Preferred Interests and whether the other requirements for confirmation of the EPI Plan have been satisfied. The Confirmation Hearing will be held before the Honorable Laurie Selber Silverstein, United States Bankruptcy Judge, at the United States Bankruptcy Court for the District of Delaware, 824 Market Street, 6th Floor, Courtroom 2, Wilmington, Delaware 19801. The Confirmation Hearing may be continued from time to time and day to day without further notice. If the Bankruptcy Court confirms the EPI Plan, it will enter the Confirmation Order.


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III. HISTORY, ORGANIZATION, AND ACTIVITIES OF THE DEBTOR AND ITS CURRENT AND FORMER AFFILIATES

The background and operations of EPI and its Affiliates was set forth in the disclosure statement accompanying the EPA Plan and is largely duplicated herein for the benefit of those Holders of Class 3 General Unsecured Claims and Allowed EPI Preferred Interests entitled to vote on the EPI Plan.

A. GENERAL DESCRIPTION OF THE BUSINESSES AND OPERATIONS OF THE DEBTOR AND ITS CURRENT AND FORMER AFFILIATES.

Prior to the Petition Date, the Debtor and its current and former debtor and non-debtor Affiliates (collectively, the “Company”), headquartered in Denver, Colorado, operated an oil and natural gas business that specialized in applying established enhanced oil recovery (“EOR”) technologies to mature oil fields, focused primarily in the Rocky Mountain region. Specifically, the business of the Company focused on the secondary and tertiary recovery phases of oil and gas production, which involved rejuvenating and redeveloping mature oil fields by using well-established EOR technologies to extend the commercial life of an otherwise depleted oil reservoir.

The various EOR technologies consist of: water injection, gas injection, chemical injection, thermal processes, and other less conventional methods. In addition to waterflood techniques, the Company used gas injection EOR technology to inject carbon dioxide (“CO2”) into an oil reservoir at such pressure and temperature conditions where the CO2 and remaining oil become miscible with each other and act as one phase. This enables previously immobile oil reserves to flow again, possibly producing oil at levels obtained from the reserve in the primary phase of a field’s development. This method of oil production produced approximately half of the national EOR production (approximately 5% of total oil produced) as of the Petition Date. The Company’s three core oil and natural gas assets are the Greater Aneth Oil Field, the Madden/Lost Cabin Gas EPI Plant, and the Grieve Oil Field Project.

The Company’s fields were the result of various, consolidated units of mineral or leasehold interests to unify the development, production, and operation for that area. Accordingly, each field was an amalgamation of numerous oil and gas leases. In order to ensure the efficient production, operation, and management of each field, the relevant entities were parties to unit operating agreements with the relevant working interest owners for each field.

As set forth herein, following the Petition Date, certain Affiliates of the Debtor, that themselves were formerly debtors in the Bankruptcy Court, specifically EPA and Resolute, reorganized through the EPA Plan, and by the EPA Plan, EPA and Resolute are no longer Affiliates of the Debtor. The Debtor sold its membership interests in EOS, the Debtor’s other debtor Affiliate, during the course of the Chapter 11 Case, as set forth more fully herein. The bankruptcy case filed by EOS was dismissed on October 25, 2019, and the bankruptcy cases filed by EPA and Resolute were closed on November 1, 2019. The Chapter 11 Case, therefore, is the only remaining pending case in the Bankruptcy Court. The Debtor continues to hold its membership interests in the Grieve Entities and Madden, and operations continue with respect to the oil and natural gas assets held by the Grieve Entities and Madden.


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B. CORPORATE/ORGANIZATIONAL STRUCTURE AND GOVERNANCE.

The following chart illustrates the corporate ownership structure of the Debtor and its Affiliates as of the Petition Date:


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1. The Debtor. EPI is a Delaware energy holding company. EPI continues to operate through its wholly-owned subsidiaries, Madden, Grieve Pipeline, and Grieve CO2. Prior to confirmation of the EPA Plan, EPI owned Resolute and EPA. EPI is wholly-owned by Elk Petroleum, Limited (“EPL”), a non-debtor that is an Australian entity that was formerly publicly traded on the Australian Securities Exchange. On May 15, 2019, EPL commenced a voluntary administration, Australia’s version of a chapter 11 process, by appointing two administrators to assess EPL, its operations, and the appropriate strategy going forward. The voluntary administration continues as of the date of this Disclosure Statement. At all times in the Chapter 11 Case, EPI has been governed by its Board. The Board initially consisted of three directors, with two additional directors added during the Chapter 11 Case. After the addition of the two new independent directors, who were also members of the Conflicts Committee, the Board consisted of four independent directors, Patrick Bartels, Eugene Davis, Matthew Doheny, and Charles Reardon, and one inside director, David Evans. Messrs. Bartels, Doheny, Evans, and Reardon remain as members of the Board. Mr. Davis served as an independent director until shortly after the effective date of the EPA Plan (the “EPA Effective Date”). In addition, from the Petition Date through the effective date of the EPA Plan, Mr. Pinsonnault served as EPI’s Chief Restructuring Officer (as well as Chief Restructuring Officer for EPA, Resolute, and EOS). Thereafter, Messrs. Doheny and Reardon were appointed co-Chief Restructuring Officers for EPI and co-Liquidating Agents for each of Grieve Pipeline, Grieve CO2, and Madden.

2. The Debtor’s Former Affiliates. On the Petition Date, EPA was a wholly-owned subsidiary of EPI. Resolute, in turn, was a wholly-owned subsidiary of EPA. EOS was similarly a wholly-owned subsidiary of EPI. During the course of the Chapter 11 Case, EPI sold all of its membership interests in EOS to an affiliate of AB. In addition, as set forth below, EPA and Resolute reorganized through the EPA Plan and are now affiliates of the AB Parties.

3. The Debtor’s Current Affiliates. Following the effective date of the EPA Plan, EPI continued to wholly-own the following non-debtor subsidiaries:

• Elk Grieve Project, LLC (the “Project Company”), a non-debtor, is a Delaware limited liability company with an approximate 49% non-operating working interest in the CO2 EOR project at the Grieve Unit in Natrona County, Wyoming (the “Grieve Oil Field Project”). The Grieve Oil Field Project included, as of the Petition Date, 24 active wells, 10 oil production wells, 10 CO2 or water injection wells, three dual purpose wells, two injector wells, one production well, and one water source well. The Grieve Oil Field Project redevelopment cost was part of a fixed price turnkey project agreement between the Project Company and its joint venture partner and operator Denbury Onshore, LLC (“Denbury”). The Grieve Oil Field Project was commissioned and began production on April 17, 2018.

• Grieve Pipeline, LLC (the “Pipeline Company,” and with the Project Company, the “Grieve Entities”), a non-debtor, is a Wyoming limited liability company that is a 100% owner and operator of a 32-mile, eight-inch diameter steel oil pipeline (the “Grieve Pipeline”) that extends from the Grieve Oil Field Project to a receiving station at the Platte Pipeline Company, LLC oil storage facility near


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Casper, Wyoming. Denbury and the Pipeline Company entered into an oil transportation agreement to use the pipeline to transport its share of the Grieve Oil Field Project oil to Casper at a rate of $3 per barrel on 100% production.

• Elk Petroleum Madden Gas & CO2, LLC (“Madden”), a non-debtor, is a Delaware limited liability company with a non-operating working interest in the Madden Deep Unit, better known as the Madden/Lost Cabin Gas EPI Plant. Madden produces natural gas, sulfur, and CO2 which is primarily transported by rail to supply the fertilizer market in Tampa, Florida with the remainder transported to a local fertilizer EPI Plant located in southwestern Wyoming. Burlington Resources Oil & Gas, a limited partnership of ConocoPhillips, is the operator of record for Madden.

• Elk Operating Company, LLC (“EOC”), a non-debtor, is a Nebraska limited liability company with no assets.

• Singleton EOR Project, LLC (“Singleton”), a non-debtor, is a Delaware limited liability company with no assets.

• North Grieve, LLC (“North Grieve,” together with EPL, the Grieve Entities, Madden, EOC, and Singleton, the “Non-Debtors”), a non-debtor, is a Wyoming limited liability company that is the owner of the non-operating North Grieve pipeline.

The Non-Debtors have no subsidiaries.

C. THE PREPETITION CAPITAL STRUCTURE OF THE DEBTOR AND ITS CURRENT AND FORMER AFFILIATES.

1. EPA’s Secured Debt and Related Agreements.

To fund the purchase price to acquire the Greater Aneth Oil Field, EPI and Elk Petroleum Aneth, LLC (“Aneth”) entered into a series of debt and equity transactions, as described more fully below.

a. First Lien Credit Agreement.

On November 6, 2017, EPA entered into a Term Loan Credit Agreement (as amended, supplemented, restated and otherwise modified from time to time, the “First Lien Credit Agreement”), with HPS Investment Partners, LLC, as administrative agent (“HPS”), to obtain a fully secured loan in an aggregate principal amount of $98,000,000 secured by all property of Aneth, whether real, personal or mixed, or tangible or intangible, owned at the time of execution or acquired thereafter.

As a condition precedent to the execution of the First Lien Credit Agreement, EPI executed a Limited Recourse Guaranty Agreement (“EPI Term Loan Guaranty”) to satisfy the liabilities and obligations incurred under the First Lien Credit Agreement. Recourse pursuant to


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the EPI Term Loan Guaranty was limited to foreclosure of EPI’s equity interest in Aneth, except that EPI was liable without limit for any loss, damage, cost, or expense resulting from EPI’s fraud or willful misconduct and for enforcement costs resulting therefrom. Finally, through the execution of the Guaranty and Collateral Agreement and certain mortgages, deeds of trust, or other collateral documents (together with the First Lien Credit Agreement and the EPI Term Loan Guaranty, collectively, the “First Lien Credit Facility”), Resolute provided a guarantee as well as a security interest in all of its present and after-acquired assets.9

On June 13, 2018, HPS funded an additional $24,000,000 of loans under the First Lien Credit Agreement pursuant to the First Amendment thereto. The additional $24,000,000 funded was to be used in strict accordance with Schedule 7.22 to the First Amendment. As of the Petition Date, AB Elk Holdings LLC was the current administrative agent under the First Lien Credit Agreement. As of the Petition Date, approximately $114,000,000 in principal was outstanding under the First Lien Credit Facility.

b. Revolving Facility Credit Agreement.

In addition to the First Lien Credit Facility and PSA (as defined below), EPA entered into the Senior Revolver Loan Agreement dated November 6, 2017 (as amended, supplemented, restated and otherwise modified from time to time, the “Revolving Facility Credit Agreement,” and together with the First Lien Credit Agreement, the “Credit Agreements”), with CrossFirst Bank (“CrossFirst”) establishing a senior secured first out revolving line of credit in the maximum principal amount of $20,000,000 secured by a first priority mortgage lien, pledge of and security interest in the value of the producing oil, gas, and other leasehold and mineral interests of EPA with respect to the Greater Aneth Oil Field.

Similar to the First Lien Credit Facility, as a condition precedent to the execution of the Revolving Facility Credit Agreement, EPI also provided a guarantee to satisfy the liabilities and obligations incurred under the Revolving Facility Credit Agreement, dated November 6, 2017 (the “EPI Revolver Loan Guaranty”). Recourse pursuant to the EPI Revolver Loan Guaranty was limited to foreclosure of EPI’s equity interest in Aneth, except that EPI was liable without limit for any loss, damage, cost, or expense resulting from EPI’s fraud or willful misconduct and for enforcement costs resulting therefrom. Finally, through the execution of the Guaranty and Collateral Agreement dated November 6, 2017 and certain mortgages, deeds of trust, or other collateral documents (together with the Revolving Facility Credit Agreement and EPI Revolver Loan Guaranty, collectively, the “Revolving Credit Facility”), EPA and Resolute provided a guarantee as well as a security interest in all their present and after-acquired assets.10

As of the Petition Date, AB Elk Holdings LLC was the lender of record under the Revolving Credit Facility, having acquired the debt from CrossFirst. Approximately $14,500,000 in principal was outstanding under the Revolving Credit Facility as of the Petition Date.

9 Aneth’s obligations under the First Lien Credit Agreement were also guaranteed on an unlimited basis by

EPL. 10 Aneth’s obligations under the Revolving Facility Credit Agreement were also guaranteed on an unlimited

basis by EPL.


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c. Preferred Stock Purchase Agreement.

EPI entered into the Preferred Stock Purchase Agreement dated November 6, 2017 (the “PSA”) with AB Elk Holdings LLC (“AB Elk Holdings”), pursuant to which EPI issued and sold preferred stock (the “Preferred Stock”) to fund the remaining portion of the purchase price for acquiring the Greater Aneth Oil Field. AB Elk Holdings purchased shares of Series A Preferred Stock for an aggregate purchase price of $15,000,000 and shares of Series B Preferred Stock for an aggregate purchase price of $40,000,000. LIM also purchased shares of Series A Preferred Stock for an aggregate purchase price of $10,000,000. Thereafter, on December 20, 2017, pursuant to the Preferred Stock Issuance and Repurchase Agreement, AB Elk Holdings sold $5,000,000 of the Series B Preferred Stock it had purchased to EPI, which, in turn, issued and sold $5,000,000 of the Series A Preferred Stock to ACR and Fulcrum. A total of $65,000,000 in preferred equity was raised by EPI in connection with EPA’s acquisition of the Greater Aneth Oil Field.

d. BP ISDA

As permitted under the First Lien Credit Facility and the Revolving Credit Facility, EPA and BP Energy Company (“BP”) executed ISDA Master Agreement dated November 6, 2017 (as amended and supplemented from time to time, the “BP ISDA”). The BP ISDA provided EPA with the ability to hedge future sale prices and basis differentials on production.

e. EPI Guaranty Obligations.

In order to finance the construction, development, and commission of the Grieve Oil Field Project, BSP, as administrative agent, provided secured term loans to Elk Grieve Project, LLC and Grieve Pipeline (the “Grieve Credit Facility”) in an aggregate principal amount not to exceed $58,000,000. EPI agreed to guarantee the Grieve Credit Facility through the execution of the Guaranty Agreement dated August 5, 2016. As of the Petition Date, approximately $54,375,000 in an initial principal amount was outstanding under the Grieve Credit Facility.

As noted above, EPI has also guaranteed the First Lien Credit Facility and the Revolving Credit Facility.

2. Other Unsecured Debt Obligations.

On February 11, 2019, pursuant to the Exchange Agreement, dated February 8, 2019 (the “Exchange Agreement”), by and among EPI, EPA, AB Elk Holdings and AB Co-Invest Elk Holdings LLC (together with AB, the “AB Parties”), the AB Parties exchanged their Series A and Series B Preferred Stock for warrants to purchase common stock of EPI (the “Warrants”) and a new unsecured term loan at Aneth (the “Unsecured Term Loan”) (the “Exchange


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Transaction”). As of the Petition Date, approximately $54,987,794.24 in principal amount was outstanding under the Unsecured Loan.11

On May 20, 2019, LIM, ACR, and Fulcrum filed a suit in the Delaware Chancery Court (the “Chancery Action”) against EPI, Bradley William Lingo (former director of EPI), David Evans (current director of EPI), James Piccone (former director of EPI), and the AB Parties with respect to the Exchange Transaction. The Chancery Action sought, among other relief, to rescind the Exchange Transaction, to void the Exchange Agreement with the AB Parties, or damages in an amount to be proven at trial. The Chancery Action was stayed as of the Petition Date and subsequently (dismissed with prejudice as to certain defendants, and without prejudice to certain other defendants)) voluntarily dismissed with prejudice against, among others, EPI and the AB Parties, as part of the Global Settlement Agreement. On October 15, 2019, the Court entered an Order approving the Stipulation between EPI and the AB Parties rescinding the Exchange Transaction (the “Rescission Order”). The AB Parties (on behalf of themselves and any successors or assigns) agreed in the Global Settlement Agreement to waive any recovery on account of any preferred stock interests of EPI and any voting or other non-economic rights associated with the ownership of any preferred stock interests in EPI.

D. THE DEBTOR’S ASSETS AND LIABILITIES.

As reflected in its Schedules, EPI’s primary assets are its equity interests in various direct and indirect subsidiaries. EPI’s other assets include, without limitation Cash, Causes of Action, and substantial net operating losses (“NOLs”). Anticipated recoveries from EPI’s assets are set forth herein. See Article II.D above.

In the Schedules, EPI scheduled prepetition secured claims of approximately $138 million, $0 in priority claims, and $0 in general unsecured claims (which includes intercompany claims).12

As set forth herein, subject to all the assumptions and notes set forth herein, EPI estimates that, as of the EPI Effective Date, there will be approximately $2 million of administrative and priority claims, consisting entirely of Unpaid Chapter 11 Professional Fees and other unpaid fees and expenses of professionals incurred after the EPA Effective Date. Additionally, EPI estimates that there are $60 million of general unsecured claims against EPI’s estate. EPI is not aware of any valid secured claims. While EPI is reviewing the proofs of claim

11 Following the closing of the transactions contemplated by the Exchange Agreement, LIM, ACR, and

Fulcrum were the Holders of all outstanding shares of Series A Preferred Stock (and no shares of Series B Preferred Stock were outstanding). EPI prepared and provided to LIM, ACR, and Fulcrum, preliminary draft transaction documents regarding a potential exchange of the remaining shares of Series A Preferred Stock on substantially the same terms as contained in the Exchange Agreement and the parties engaged in good faith negotiations. Ultimately, EPI did not finalize and enter into a definitive agreement on terms of the proposed exchange, or consummate an exchange transaction with LIM, ACR and Fulcrum. As a result, none of the other Holders of Series A Preferred Stock were able to exchange their shares of Series A Preferred Stock for unsecured debt and warrants.

12 EPI listed BSP as a priority unsecured claim with an undetermined amount in the Schedules. The Claim of BSP against EPI, arising under the Guaranty Agreement or otherwise, has been Allowed by the terms of the Global Settlement Agreement, as discussed herein, as a Class 3 General Unsecured Clam in the amount of $57,869,224.79, plus fees and interest.


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filed against it, EPI believes that the aggregate amounts asserted in proofs of claim filed against EPI substantially overstate the amounts of liabilities that will be ultimately Allowed against EPI.

As discussed below, EPI, certain of its current and former Affiliates, the AB Parties, BSP, the Holders of Allowed EPI Preferred in their individual capacities, the Equity Committee, and Riverstone, entered into the Global Settlement Agreement that, among other things, addressed the Allowed Class 3 General Unsecured Claim of BSP, the treatment of the Allowed EPI Preferred Interests in EPI, and the treatment of the Unpaid Chapter 11 Professional Fees. The Bankruptcy Court entered the Global Settlement Order approving the Global Settlement was approved by the Bankruptcy Court. See Article III.E.8. below. BSP, as part of the Global Settlement, holds an Allowed Class 3 General Unsecured Claim in the amount of $57,869,224.79, plus fees and interest.

E. CIRCUMSTANCES LEADING TO THE COMMENCEMENT OF THE BANKRUPTCY CASES BY THE DEBTOR AND ITS FORMER AFFILIATES.

1. General

The Company’s prepetition business strategy focused on the acquisition of multiple oil and gas assets. This strategy outpaced the Company’s balance sheet, however, and performance of the operated and non-operated assets failed to meet initial expectations. Among other things, the acquisition of the Greater Aneth Oil Field over-levered the Company’s assets, resulting in the need to refinance those obligations almost immediately. Moreover, the Company’s Credit Agreements limited cash flow to fund general and administrative expenses at EPL, EPI, and other Non-Debtors. Despite repeated assurances that EPL would obtain and provide the Company the necessary capital contribution to adequately supplement these expenses, such funding was never received.

In an effort to achieve more predictable cash flows and reduce exposure to downward price fluctuations, the Company entered into hedge obligations under the BP ISDA to hedge future sales prices and basis differentials on production. However, the Elk Debtors were unable to capture the financial benefits of the improving commodity price environment due to their hedge obligations under the BP ISDA.

2. Defaults Under Credit Agreements

On December 10, 2018, HPS notified EPA of the occurrence of certain “Events of Default” under the First Lien Credit Agreement, including an “Event of Default” resulting from Aneth’s entry into transactions with affiliates in violation of the First Lien Credit Agreement. Given this allegation by HPS, Aneth retained Opportune LLP (“Opportune”) to perform a cash flow forensic analysis review to reconcile historical cash transfers between the Elk Debtors. EPI, EOS, and Resolute between November 6, 2017, the timing of the initial funding of the First Lien Credit Agreement, and December 2018. Opportune’s analysis indicated that through November 30, 2018, approximately $19,600,000 of Aneth payments to affiliates, including EPI, were made in violation of the First Lien Credit Agreement, including a $3,600,000 cure payment to BSP for debt violations under the Grieve Credit Facility.


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On January 17, 2019, CrossFirst notified EPA of the occurrence of certain “Events of Default” under the Revolving Facility Credit Agreement, including an “Event of Default” resulting from Aneth’s entry into transactions with affiliates in violation of the Revolving Facility Credit Agreement.

On January 18, 2019, AB Elk Holdings acquired one hundred percent of HPS’s rights, title, interests, and obligations under the First Lien Credit Facility. On the same day, EPL, EPI, EPA, Resolute, and AB Elk Holdings, as administrative agent for the lenders, entered into that certain Forbearance to Term Loan Credit Agreement, pursuant to which EPL, EPI, EPA, and Resolute acknowledged the occurrence and continuation of the certain “Events of Default” under the First Lien Credit Agreement and AB Elk Holdings temporarily forbearing from accelerating the maturity of the First Lien Credit Agreement, foreclosing on any collateral, or any other exercise of default remedies through January 31, 2019. Those “Events of Default” included, among others: (i) EPA’s entry into transactions with affiliates; (ii) EPA’s designation of EOS as operator of the Greater Aneth Oil Field instead of Resolute; and (iii) EPA’s use of the $24,000,000 funded by HPS for purposes other than those listed on Schedule 7.22 to the First Amendment. This period of forbearance was later extended through March 31, 2019, and expired according to its terms on that date.

3. The Restructuring Support Agreement, the Bankruptcy Filings, and the EPA Plan

As the liquidity position of the Company progressively tightened, the Company engaged in extensive arms’ length discussions to recapitalize its debt out of court or through a formal in-court restructuring process. EPL initially led the efforts to effect an out-of-court restructuring. Those efforts were ultimately unsuccessful. On May 10, 2019, the EPI, EPA, Resolute, and EOS entered into a restructuring support agreement (the “RSA”) with the AB Parties that formed the basis for the EPA Plan. The entry into the RSA was approved by two recently appointed independent directors of EPI, Messrs. Bartels and Davis. As noted above, Mr. Davis remained a director of EPI until shortly after the EPA Effective Date. Mr. Bartels remains a director of EPI as of the date of the filing of this EPI Disclosure Statement.

4. Commencement of the Chapter 11 Case, and Bankruptcy Cases for EPA, Resolute, and EOS

On May 22, 2019, the Elk Debtors filed bankruptcy cases under Chapter 11 of the Bankruptcy Code in order to (i) effectuate the RSA through what would become the EPA Plan and (ii) maximize the value of their respective assets and restructure their affairs in an orderly fashion, including, among other things, developing a strategy for restructuring or liquidating EPI and its non-debtor subsidiaries, the Grieve Entities and Madden. As set forth herein, the EPI Plan applies solely to EPI. The EPA Plan has already been confirmed with respect to EPA and Resolute and all of EPI’s membership interests in EOS have been sold. The bankruptcy cases of EPA, Resolute, and EOS have subsequently all been closed or dismissed, although claims filed against EPA and Resolute, and potential claims by EPA and Resolute, are still being addressed through the liquidating trust established under the EPA Plan (the “EPA Trust”), for the benefit ultimately of EPI and both Holders of Class 3 General Unsecured Claims and Allowed Class 4 EPI Preferred Interests. It is the Debtor’s intention to effect the merger of the EPA Trust and the EPI Liquidating Trust through confirmation of the EPI Plan, as well as provide for distributions


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in accordance with the Bankruptcy Code and the terms of the Global Settlement Agreement and the Global Settlement Order through the EPI Plan and the EPI Liquidating Trust Agreement.

F. SIGNIFICANT EVENTS SINCE THE PETITION DATE.

1. First-Day Motions

The Elk Debtors sought approval from the Bankruptcy Court of certain motions and applications (collectively, the “First Day Motions”), which the Elk Debtors filed simultaneously with, or shortly after, their respective voluntary petitions. The Elk Debtors sought such relief to minimize disruption of the Company’s business as a result of the filing of the bankruptcy cases of the Elk Debtors (collectively, the “Elk Chapter 11 Cases”), to establish procedures regarding the administration of the Elk Chapter 11 Case, to facilitate the Elk Debtors’ reorganization efforts, and to obtain prompt confirmation of the EPA Plan. Specifically, the First Day Motions addressed the following issues, among others:

• Payment of employee wages and related benefits;

• Payment of utility adequate assurance of future performance;

• Appointment of Bankruptcy Management Solutions, d/b/a Stretto (“Stretto”) as claims and noticing agent, subsequently appointed as administrative agent as well (to facilitate solicitation and confirmation of any EPI Plans in the Elk Chapter 11 Cases;

• Joint administration of the Elk Chapter 11 Cases;

• Payment of insurance obligations;

• Continuation of the existing cash management system;

• Payment of sales and use taxes;

• Payment of lease operating expenses; and

• Approval of proposed debtor-in-possession financing.

All of the requested first day relief was ultimately approved by the Bankruptcy Court with payment of various requested prepetition claims limited by the terms of the Elk Debtors’ proposed debtor-in-possession financing (the “DIP Financing”) and the budget (the “Budget”) filed in connection therewith.

2. DIP Financing Motion

On the Petition Date, the Elk Debtors filed their motion to approve the DIP Financing (the “DIP Motion”). That motion was approved on an interim basis by the Bankruptcy Court on May 24, 2019, and again on June 18, 2019, July 16, 2019, and July 23, 2019. The Holders of Allowed EPI Preferred Interests, all of whom became the members of the Equity Committee, objected to the relief requested in the DIP Motion (as well as certain other first day relief).


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Similarly, BSP objected to the proposed DIP Financing and served certain discovery in connection therewith. Those objections were resolved pursuant to the Bankruptcy Court’s Order (the “DIP Settlement Order”) approving EPI Plan/Sale Settlement Agreement (the “EPI Plan/Sale Settlement”) and the Bankruptcy Court entered a final order granting the relief requested in the DIP Motion on July 25, 2019 (the “Final Dip Order”).

3. Retention of Elk Debtors’ Professional Persons

After the Petition Date, the Elk Debtors requested authority from the Bankruptcy Court to retain WBD and NRF, as general bankruptcy counsel, and Ankura Consulting Group, LLC (“Ankura”) to provide the Elk Debtors a Chief Restructuring Officer and other personnel and designate Scott M. Pinsonnault as Chief Restructuring Officer for the Elk Debtors, nunc pro tunc to the Petition Date. The Bankruptcy Court approved the retention of WBD by order dated June 17, 2019, and the retention of NRF by order dated June 21, 2019. On July 12, 2019, the Bankruptcy Court approved the Elk Debtors’ retention of certain ordinary course professionals.

Following the entry of the DIP Settlement Order and the implementation of the terms of the EPI Plan/Sale Settlement, including the appointment of Messrs. Doheny and Reardon as independent directors and the creation of the Conflicts Committee (consisting of Messrs Bartels, Doheny, and Reardon), on July 25, 2019, the Bankruptcy Court entered an order approving the retention of CBCC. On that same date, the Bankruptcy Court entered its order approving the retention of Ankura. In connection with the EPI Plan/Sale Settlement, the Court thereafter approved the retention of Seaport Global Securities LLC (“Seaport”) as investment bankers to the Elk Debtors to assist with the alternative sale and market test of the assets of EOS, EPA, and Resolute, by order entered on August 7, 2019.

To facilitate the payment of fees and expenses of professionals retained by the Estate of the Elk Debtors, on July 12, 2019, the Bankruptcy Court entered an order authorizing fee application filing and interim and final compensation procedures for retained Professionals.

4. Trustee and Examiner Motions

On June 11, 2019, BSP filed a motion for the appointment of a trustee (the “Trustee Motion”) asserting as evidence of gross mismanagement by the Elk Debtors and hopeless and irreconcilable conflict in the management of the Elk Debtors generally, among other things, (i) the pursuit of the EPA Plan with no recovery for EPI, (ii) the lack of any EPI Plan for EOS or EPI after confirmation of the EPA Plan, (iii) the violations of the Credit Agreements, including misappropriation of funds that occurred prior to the Petition Date, and (iv) the absence of a sale process to provide a market test of the value implied to EPA, EOS, and Resolute, under the terms of the EPA Plan. On June 14, 2019, the Holders of Allowed EPI Preferred Interests (LIM, ACR, and Fulcrum) joined the Trustee Motion. Litigation and extensive discovery with respect to the Trustee Motion then ensued. The Trustee Motion and related litigation was addressed and resolved through the EPI Plan/Sale Settlement.

On June 17, 2019, the United States Trustee moved for the appointment of an examiner to investigate the allegations of BSP and the Holders of Allowed EPI Preferred Interests and the value of any claims to be released under the EPA Plan. The Examiner Motion was ultimately


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addressed through the Global Settlement Order and the Global Settlement Agreement (as well as the EPI Plan/Sale Settlement) and withdrawn by the United States Trustee on October 8, 2019.

5. Appointment of Equity Committee and Retention of Professionals

On June 19, 2019, the United States Trustee appointed the Official Committee of Preferred Equity Security Holders (the “Equity Committee”) in the Chapter 11 Case. No creditors’ committee or other statutory committee was appointed in any of Elk Chapter 11 Cases. The Equity Committee was composed of the following members: LIM, ACR, and Fulcrum. The members of the Equity Committee held, at the time of their appointment, all of the EPI Preferred Interests (other than those claimed to be owned by the AB Parties). The Equity Committee retained Morris, Nichols, Arsht & Tunnel, LLP (“MNAT”), as bankruptcy counsel and Teneo Capital LLC (“Teneo”) as financial advisor and investment banker. Under the terms of Global Settlement Agreement, as approved by the Global Settlement Order, upon the occurrence of the Effective Date of the EPA Plan the Equity Committee dissolved and its members and professionals were released from their duties relating to the roles for the Equity Committee. The Equity Committee remains in existence only for the purposes of enforcing its rights and obligations under the Global Settlement Agreement, and for its professionals filing and prosecuting final fee applications.

6. Filing of Schedules & Statements and Bar Date Order

On May 24, 2019, the Bankruptcy Court granted the request of the Elk Debtors to extend the deadline for filing their respective Schedules of Assets and Liabilities and Statements of Financial Affairs (collectively, as amended, the “Schedules and Statements”) through and including June 19, 2019. On June 19, 2019, EPI filed its Schedules and Statements in the Chapter 11 Case, and amended such Schedules and Statement on July 17, 2019.

Thereafter, on July 17, 2019, the Bankruptcy Court entered its order establishing August 19, 2019, as the deadline for filing claims against the Elk Debtors that arose prior to the Petition Date (the “General Bar Date”), including claims arising under section 503(b)(9) of the Bankruptcy Code, and November 22, 2019, as the bar date for Governmental Units. A schedule of filed proofs of claim filed against any of the Elk Debtors is maintained by Stretto, the Debtor’s claims agent. Pursuant to the EPA Confirmation Order, the deadline for filing administrative expense claims against either of EPA or Resolute was November 25, 2019.

7. The EPI Plan/Sale Settlement and Litigation Concerning EPA Plan, Releases Therein, and Value of EPA, Resolute, and EOS

In resolution of the Trustee Motion and to facilitate a process for (i) confirming the EPA Plan and (ii) conducting a sale process to provide a market test for the value accorded the assets of EPA and Resolute implied in such EPA Plan and the membership interests in EOS, certain parties, including the Equity Committee, BSP, the AB Parties, Riverstone, and the Elk Debtors entered into the EPI Plan/Sale Settlement, as approved by the Bankruptcy Court on July 25, 2019. The EPI Plan/Sale Settlement provided, among other things that:

• The Trustee Motion was withdrawn, as was the joinder to such motion filed by the Equity Committee;


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• Objections by BSP and the Equity Committee to the retention of Ankura were withdrawn;

• Objections by BSP and the Equity Committee to the entry of a final order approving the Elk Debtors’ DIP Motions were withdrawn;

• Certain pending discovery was withdrawn;

• The 3-member Conflicts Committee was established and Messrs. Doheny and Reardon were added to the Board and the Conflicts Committee, along with Mr. Bartels;

• The Conflicts Committee was charged with investigating, among other things:

o EPI’s claims against the EPA or Resolute;

o EPI’s claims against third parties where NRF has a conflict (or parties in interest raise the issue of a conflict with respect to NRF and the Bankruptcy Court so finds that NRF has a conflict);

o any negotiations with third parties with regard to the sale or other transfer of EPI’s interest in EOS;

o issues with respect to the assumption and/or assignment, as applicable, of contracts and leases by EOS or EPI under the EPA Plan or otherwise;

o any investigation of the Exchange Agreement or causes of action arising out of any such investigation;

o any matter for which (i) any potential conflict between or among EPI or EOS, on the one hand, and EPA or Resolute, on the other hand, becomes an actual conflict or (ii) NRF determines that it can no longer provide advice to EPI or EOS, on the one hand, and EPA or Resolute, on the other hand, on a particular matter and has filed a Notice of the Actual Conflict Matter with the Bankruptcy Court;

o whether EPI will exercise its “fiduciary out” as provided in section 2.02(c) of the RSA;

o such other matters that the Conflicts Committee determines, following advice from CBCC, involve either an actual conflict of interest or significant potential conflict of interest (between or among EPI or EOS, on the one hand, and EPA and Resolute, on the other hand) and should be delegated to the Conflicts Committee and not the Board; or

o such other matters as the Bankruptcy Court may determine are appropriate for the Conflicts Committee to handle on behalf of EPI.

• CBCC was required to report to and take direction from the Conflicts Committee;


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• Seaport was retained by the Elk Debtors to implement and oversee the sale process set forth in the EPI Plan/Sale Settlement; and

• A timeline was set for the confirmation of the EPA Plan or any alternative transaction or sale involving the assets subject to the EPA Plan, including the interests of EPI in EOS.

On August 1, 2019, the Bankruptcy Court entered an order modifying the schedule for confirmation of the EPA Plan and approving a timeline and notice procedures for a parallel sale path for the assets of EPA, Resolute, and EOS. Notwithstanding the EPI Plan/Sale Settlement and the parallel market test approved by the Bankruptcy Court, and as permitted by the EPI Plan/Sale Settlement, discovery and litigation with respect to the EPA Plan and the releases proposed through such EPA Plan continued.

After extensive document discovery and several depositions, the Equity Committee filed its motion for standing to pursue certain causes of action on behalf of the Elk Debtors as set forth in the draft complaint attached to such motion on August 31, 2019. Thereafter, on September 5, 2019, the Equity Committee filed an amended proposed complaint, which late filing was permitted, although certain causes of action were stricken by the Bankruptcy Court after a contested hearing, on September 12, 2019, through the Bankruptcy Court’s letter ruling dated September 18, 2019. Following the September 12, 2019, letter ruling counsel and other professional advisors for the Elk Debtors, met with counsel and other advisors for the Equity Committee, BSP, the AB Parties, and Riverstone in person in New York in an attempt to resolve their disputes. Although those efforts were not immediately successful, discussions remained ongoing. Thereafter, the Elk Debtors initially proceeded to seek confirmation of the EPA Plan on a contested basis.

8. EPA Plan Confirmation Hearing, Global Settlement Agreement, and Global Settlement Order

As required by the terms of the order of the Final Dip Order. The Bankruptcy Court, opened the record of the hearing with respect to confirmation of the EPA Plan on September 20, 2019. After the presentation of certain evidence in connection with such confirmation, the Bankruptcy Court adjourned the hearing on confirmation to October 4, 2019. During the course of the September 20 hearing, the Elk Debtors, BSP, the AB Parties, Riverstone, the Equity Committee, the holders of the EPI Preferred Interests (in their individual capacities), EPI, and certain estate professionals were able to reach a consensual resolution of their various disputes, subject to documentation. That resolution was embodied in the Global Settlement Agreement, which the Bankruptcy Court approved by the Global Settlement Order.

At the October 4 adjourned hearing on confirmation of the EPA Plan, the Bankruptcy Court considered and ultimately approved: (i) confirmation of the EPA Plan; (ii) the sale of EPI’s one hundred percent (100%) membership interest in EOS; and (iii) the terms of the Global Settlement Agreement. Under the terms of the Global Settlement Agreement, the Elk Debtors, EPI, BSP, the Holders of Allowed EPI Preferred Interests in their individual capacities, the Equity Committee and certain estate Professionals agreed as follows:


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• All objections to confirmation of the EPA Plan were resolved, and no motions in connection therewith would be pursued;

• The Holders of Allowed Preferred Interests would dismiss the Chancery Action with prejudice as to the AB Parties and EPI;

• In exchange for dismissal of the Chancery Action and the release of the AB Parties and their affiliates from any direct claims held by the Holders of Allowed EPI Preferred Interests, AB quitclaimed to the Holders of Allowed EPI Preferred Interests and/or their respective designees the “Madden ORRI” (as defined in the Global Settlement Agreement). Pursuant to the Global Settlement Order, the transfer of the Madden ORRI was without prejudice to any rights, liens, priorities, claims or causes of action Madden and its creditors, including Burlington Resources Oil & Gas Company, LP, in, to, or against the Subject Interests and/or Additional Subject Interests (each as defined in the Madden ORRI) and the proceeds thereof, and the rights of parties in interest with respect to any subsequent sale of the equity interest and/or the assets of Madden were preserved;

• As part of the consideration for the sale of the interests in EOS, AB released a Net Profit Interest (the “NPI”) with respect to production by Madden, without prejudice to the rights of parties in interest with respect to the NPI in the event that the assets of Madden were ultimately transferred;

• The parties to the Global Settlement Agreement agreed to support the sale of the EOS membership interests to the AB Parties in exchange for, among other consideration, (i) $100,000 to be paid to EPI by the AB Parties; and (ii) assumption of liabilities of EOS by the AB Parties as set forth in the order approving the sale;

• The transfer of certain claims and causes of action (as set forth in the order approving the sale of the interests in EOS) to EPI;

• The Distribution to EPI of the EPA Warrants on or as soon as reasonably practicable after the effective date of the EPA Plan;

• (i) The allocation of Professional fees and expenses in an amount of $750,000, plus the fees and expenses of Conflicts Committee counsel Chipman Brown Cicero & Cole, LLP (excluding $200,000, which was allocated to EPA), as set forth in the Global Settlement Agreement (to assist in facilitating the effectiveness of the EPI Plan); (ii) certain Professionals agreed to defer payment of certain amounts of their fees and expenses and, with respect to fees and expenses allocated to EPI, that EPI was not required to pay such fees and expenses on the Effective Date of the EPI Plan if in the judgment of EPI making such payments in the aggregate would cause EPI to have insufficient funds available to satisfy section 1129 of the Bankruptcy Code; and (iii) in such event these Professionals agreed to be paid on a pro rata basis for such fees and


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expenses from any assets of EPI other than the EPA Warrants as such funds become available;

• Transfer of $300,000 (derived from such deferred fees) from EPA to EPI to be allocated for the payment of fees due to the independent directors of EPI;

• Allowance of BSP’s General Unsecured Claim against EPI in the amount of $57,869,224.79, plus fees and interest;

• The EPI Plan, to the fullest extent permitted by applicable law, would provide for (i) Distribution of EPA Warrants to Allowed Class 3 General Unsecured Claims, including the Allowed Claim of BSP; (ii) Distribution of net proceeds from the sale of the equity interests in or assets owned by Madden up to and including $2,000,000.00 to the estate of EPI, with net proceeds in excess of $2,000,000 to be distributed seventy-five percent (75%) to Holders of Allowed Class 3 General Unsecured Claims and twenty-five percent (25%) to Holders of Allowed EPI Preferred Interests;

• Sharing of the proceeds from the disposition of the EPI Liquidating Trust Assets (a) 75% to the holders of unsecured claims of EPI who were holders of such claims on the Petition Date; and (b) 25% to the holders of EPI Preferred Interests who were holders on the Petition Date or their permitted assigns;

• The AB Parties agreed to forgo any Distribution from EPI on account of any claim they might have and to waive any recovery on account of any preferred stock interests they, or their successor or assigns, may hold at any time and any voting or non-economic rights associated therewith (including after the rescission of the Exchange Transaction pursuant to the Rescission Order described above);

• The AB Parties and Riverstone agreed not to enforce against EPI, its estate or its property, certain provisions of Limited Recourse Guaranties issued by EPI in connection with the First Lien Credit Facility and the Revolving Credit Facility; and

• The exchange of Mutual releases by and among the parties, with a carve-out for any release by EPI or its estate of the current directors of EPI (who would receive such a release through the terms of the EPI Plan, if approved by the Bankruptcy in connection with confirmation of such EPI Plan).

The EPA Plan became effective on October 24, 2019. As noted above, the Bankruptcy Court approved the sale of EPI’s interests in EOS (a condition to the effective date of the EPA Plan), such sale closed, and the AB Parties assumed all obligations of EOS, except in connection with those contracts assumed and assigned to EPI, Madden, or the Grieve entities. Final fee applications for certain retained Professionals (through and including October 24, 2019) were filed and subsequently approved by the Bankruptcy Court on January 21, 2020. EPI and EPA, as reorganized following the effective date of the EPA Plan (“Reorganized EPA”) were parties to a transition services agreement (the “TSA”) following such effective date. The TSA terminated by its terms on March 31, 2020.


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Under the terms of the EPA Plan, the EPA Liquidating Trust was to be established to address claims filed against EPA and Resolute and to investigate and pursue causes of action held by or otherwise transferred to the EPA Liquidating Trust. Negotiations between and among EPI the potential liquidating trustees of the EPA Liquidating Trust (Messrs. Doheny and Reardon), the Holders of Allowed EPI Interests, and BSP with regard to the terms of the EPA Liquidating Trust did not begin until mid-March, 2020. The EPA Liquidating Trust was recently executed and the EPA Liquidating Trust begun its review of pending claims against EPA and Resolute. EPI currently anticipates that it will be the only beneficiary of the EPA Liquidating Trust to receive any recoveries from the EPA Liquidating Trust.

Following confirmation of the EPA Plan, the Bankruptcy Court entered final decrees and closed the bankruptcy cases of EPA and Resolute on November 1, 2019.

9. Rescission of the Exchange Agreement

Following the approval of the Global Settlement Agreement, EPI sought the entry of an order approving the rescission of the Exchange Agreement. Prior to the Petition Date, the Holders of Allowed EPI Preferred Interests had sued, among others, the AB Parties seeking rescission of The Exchange Agreement In the Global Settlement Agreement the AB Parties and the Holders of Allowed EPI Preferred Interests agreed to the rescission of the Exchange Agreement in order to resolve the Chancery Action. Moreover, although EPI had and continues to have significant NOLs as a result of losses incurred prior to and after the Petition Date, EPI and its Conflicts Committee had significant concerns about the potential adverse tax consequences for EPI as a result of such transaction. On October 15, 2019, the Bankruptcy Court entered an order (the “Rescission Order”) approving the rescission of the Exchange Agreement. In the Global Settlement Agreement, the AB Parties agreed to waive, on behalf of themselves and any of their successors or assigns: (i) any recovery on account any preferred stock interest they may hold at any time (including following the rescission of the Exchange Transaction), including under the EPI Plan; and (ii) any voting or non-economic rights associated with the ownership of such preferred stock interests in EPI. Accordingly, the AB Parties are not included on Exhibit 1 of the EPI Plan and, will receive no Distributions under the EPI Plan.

10. Rejection of Certain Executory Contracts and Leases, Including the Denver Headquarters Lease

On January 8, 2020, the Bankruptcy Court entered an order authorizing the rejection of certain executory contracts. In addition, the Debtor rejected a lease of real property in Wyoming, as approved by the Bankruptcy Court also on January 8, 2020. Thereafter, following several extensions of the deadline for assuming or rejecting such lease, while the landlord and Reorganized EPA negotiated the terms of a new lease, as required by the terms of the TSA, the Debtor rejected the lease of its former headquarters effective February 15, 2020. The deadline for the landlord with respect to such lease to file any rejection damages claim, secured in part by a security deposit, has been extended, while the Debtor and such landlord attempt to reconcile and resolve such claim.


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11. EPI Plan Exclusivity

On March 30, 2019, the Bankruptcy Court entered an order extending the Debtor’s exclusive right to file a plan through and including May 16, 2020. The Debtor has filed the EPI Plan within the time limits established by such order and, therefore, retains the exclusive right to file and seek confirmation of a plan under the Bankruptcy Code.

IV. DESCRIPTION OF THE EPI PLAN

A DISCUSSION OF THE PRINCIPAL PROVISIONS OF THE EPI PLAN AS THEY RELATE TO THE TREATMENT OF CLASSES OF ALLOWED CLAIMS AND INTERESTS IS SET FORTH IN THE FOLLOWING SECTIONS. THE DISCUSSION OF THE EPI PLAN THAT FOLLOWS CONSTITUTES A SUMMARY ONLY, AND SHOULD NOT BE RELIED UPON FOR VOTING PURPOSES. YOU ARE URGED TO READ THE EPI PLAN IN FULL IN EVALUATING WHETHER TO ACCEPT OR REJECT THE EPI PLAN. IF ANY INCONSISTENCY EXISTS BETWEEN THIS SUMMARY AND THE EPI PLAN, THE TERMS OF THE EPI PLAN CONTROL. ALL CAPITALIZED TERMS NOT OTHERWISE DEFINED HAVE THE MEANINGS ASCRIBED TO THEM IN THE EPI PLAN.

As a demonstration of the treatment below, see attached Exhibit 3 (the “Pro Forma Plan Distribution Schedule”), to be filed as part of the EPI Plan Supplement.

A. TREATMENT OF ADMINISTRATIVE EXPENSES AND TAX CLAIMS.

1. Introduction

As required by the Bankruptcy Code, Administrative Expenses and Tax Claims (as defined below in Article IV, Section A.3) are not placed into voting Classes. Instead, they are left unclassified, are not considered Impaired, do not vote on the EPI Plan, and receive treatment specified by statute or agreement of the parties. All postpetition payments by or on behalf of the Debtor in respect of an Administrative Expense or Tax Claim will either reduce the Allowed amount thereof or reduce the amount to be paid under the EPI Plan in respect of any Allowed amount thereof; provided that the method of application that is most beneficial to the Debtor’s Estate will be employed.

2. Administrative Expenses

Under the EPI Plan, on or as soon as practicable after the EPI Effective Date (to the extent payable on the EPI Effective Date), each Holder of an Allowed Administrative Expense against the Debtor will receive, in full satisfaction, settlement, release, and extinguishment of such Allowed Administrative Expense, Cash from the EPI Liquidating Trust equal to the full amount of such Allowed Administrative Expense, unless such Holder and the EPI Liquidating Trust have mutually agreed in writing to other terms, or an order of the Bankruptcy Court provides for other terms; provided, however, that, unless otherwise agreed by the EPI Liquidating Trust, (a) requests for payment of all Administrative Expenses must be Filed and served as described in Article 2.7 of the EPI Plan, and (b) certain different and additional requirements will apply to the Administrative Expenses of Professional Persons as set forth in


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Article 2.2(a) of the EPI Plan; provided further, however, that no interest or penalties of any nature will be paid in respect of an Allowed Administrative Expense.

In conjunction with the Global Settlement Agreement, certain Holders of Professional Fee Claims against the Debtor have agreed to accept reduced and/or delayed recoveries out of available assets of the EPI Liquidating Trust.

Notwithstanding any of the foregoing, if an Administrative Expense represents an obligation incurred in the ordinary course of business, such Administrative Expense will be paid in the ordinary course by the Debtor or the EPI Liquidating Trust in accordance with the terms of the particular transaction and/or applicable agreement.

The Debtor estimates that unpaid Allowed Administrative Expenses will total approximately $1 million as of the EPI Effective Date. The Debtor further estimates that Allowed Unpaid Chapter 11 Professional Fees will total approximately $1 million as of the EPI Effective Date.

3. Tax Claims

Pursuant to section 1123(a)(1) of the Bankruptcy Code, Administrative Tax Claims and Priority Tax Claims (collectively, “Tax Claims”) are not to be classified and thus Holders of Tax Claims are not entitled to vote to accept or reject the EPI Plan.

As required by section 1129(a)(9) of the Bankruptcy Code, on or as soon as practicable after the occurrence of the EPI Effective Date, each Holder of an Allowed Tax Claim against the Debtor will receive, in full satisfaction, settlement, release, and extinguishment of such Allowed Tax Claim, Cash from the EPI Liquidating Trust equal to the portion of the Allowed Tax Claim due and payable on or prior to the EPI Effective Date according to applicable non-bankruptcy law; provided, however, that EPIhas elected to make, pursuant to section 1129(a)(9)(C), of the Bankruptcy Code, regular quarterly installment payments in Cash of a total value, as of the EPI Effective Date, equal to the amount of the Allowed Priority Tax Claim over a period ending not later than five years after the Petition Date together with interest for the period after the EPI Effective Date at the rate determined under non-bankruptcy law as of the calendar month in which the EPI Plan is confirmed: provided further, however, the EPI Liquidating Trust will retain the discretion to prepay the entire amount of the Allowed Priority Tax Claim subject to the provisions of the EPI Liquidating Trust Agreement. Any Allowed Tax Claim (or portion thereof) against the Debtor not yet due and payable as of the EPI Effective Date will be paid by the EPI Liquidating Trust no later than when due and payable under applicable non-bankruptcy law without regard to the commencement of the Chapter 11 Case; provided that upon request of the EPI Liquidating Trust, the Bankruptcy Court will determine the amount of any Disputed Claim for, or issues pertaining to, a Tax Claim. Any Holder of an Allowed Tax Claim may agree to accept different treatment as to which the EPI Liquidating Trust and such Holder have agreed upon in writing.

The Debtor estimates that there will be no Allowed Tax Claims, as of the EPI Effective Date.


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B. CLASSIFICATION AND TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS.

1. Summary

The categories of Claims and Interests listed below classify Claims and Interests for all purposes, including voting, confirmation and distribution pursuant to the EPI Plan and pursuant to sections 1122 and 1123(a)(1) of the Bankruptcy Code. A Claim or Interest is classified in a particular Class only to the extent that the Claim or Interest qualifies within the description of that Class and is classified in other Classes only to the extent that any remainder of the Claim or Interest qualifies within the description of such other Classes. A Claim or Interest is also classified in a particular Class only to the extent that such Claim or Interest is an Allowed Claim or Allowed Interest in that Class and has not been paid, released, or otherwise satisfied prior to the EPI Effective Date.

In accordance with section 1122 of the Bankruptcy Code, the EPI Plan provides for the classification of Claims and/or Interests as set forth below. Administrative Expenses and Tax Claims have not been classified and are excluded from the following Classes in accordance with section 1123(a)(1) of the Bankruptcy Code.

2. Classification and Treatment of Claims and Interests

The treatment of each Class of Claims and/or Interests is set forth below. Unless the Bankruptcy Court has specified otherwise prior to Confirmation and unless otherwise stated in the Global Settlement Agreement, the Debtor will determine whether a postpetition payment by or on behalf of the Estate in respect of a Claim either (x) will reduce the Allowed amount thereof or (y) will reduce the amount to be paid under the EPI Plan in respect of any Allowed amount thereof by considering which method is most advantageous to the Debtor’s Estate.

a. Class 1 — Miscellaneous Secured Claims

i. Classification: Class 1 consists of all Miscellaneous Secured Claims (if any such Claims exist) against the Debtor. The Debtor is not aware of any outstanding Miscellaneous Secured Claims.

ii. Treatment: Except to the extent that a Holder of an Allowed Miscellaneous Secured Claim has been paid by the Debtor, in whole or in part, prior to the EPI Effective Date, on the EPI Effective Date, at the option of the EPI Liquidating Trust, (i) each Allowed Miscellaneous Secured Claim shall be reinstated and Unimpaired in accordance with section 1124 of the Bankruptcy Code or (ii) each Holder of an Allowed Miscellaneous Secured Claim shall receive, in full satisfaction, settlement, release, and discharge of, and in exchange for, such Miscellaneous Secured Claim, (x) payment in full in Cash of the unpaid portion of such Allowed Miscellaneous Secured Claim, (y) surrender of the collateral securing such Claim, or (z) such other treatment as may be agreed to by the Holder of such Claim and the Debtor or EPI Liquidating Trust.


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iii. Impairment/Voting: Class 2 is Unimpaired. Class 2, therefore, is conclusively presumed to have accepted the EPI Plan and Holders of Claims in Class 2 are not entitled to vote to accept or reject the EPI Plan.

b. Class 2 — Priority Non-Tax Claims

i. Classification: Class 2 consists of all Priority Non-Tax Claims against the Debtor. The Debtor estimates that Allowed Priority Non-Tax Claims will total approximately $0, as of the EPI Effective Date.

ii. Treatment: Except to the extent that a Holder of an Allowed Priority Non-Tax Claim agrees to a less favorable treatment, the Holder of each Allowed Priority Non-Tax Claim shall be paid in full in Cash on or as soon as practicable after the EPI Effective Date. To the extent any Disputed Non-Priority Tax Claims exist as of the EPI Effective Date and later become Allowed Priority Non-Tax Claims, such Allowed Priority Non-Tax Claims shall be paid as soon as reasonably practicable after the reconciliation of all Disputed Priority Non-Tax Claims.

iii. Impairment/Voting: Class 2 is Unimpaired. Class 2, therefore, is conclusively presumed to have accepted the EPI Plan and Holders of Claims in Class 2 are not entitled to vote to accept or reject the EPI Plan.

c. Class 3 — General Unsecured Claims

i. Classification: Class 3 consists of all General Unsecured Claims. The Debtor estimates that Allowed General Unsecured Claims will total approximately $60 million, as of the EPI Effective Date.

ii. Treatment: The Holders of Allowed Claims in Class 3 shall receive the Class 3 Distribution as follows: Except to the extent that a Holder of an Allowed Class 3 General Unsecured Claim agrees to a less favorable treatment, on the EPI Effective Date (or as soon as reasonably practicable thereafter if a General Unsecured Claim is not Allowed on the EPI Effective Date) each Holder of an Allowed Class 3 General Unsecured Claim shall receive its Pro Rata share of (i) the EPA Warrants and (ii) the GUC Liquidation Trust Distribution, in accordance with the terms of the Global Settlement Agreement and Global Settlement Order. Thereafter, except to the extent that a Holder of an Allowed Class 3 General Unsecured Claim agrees to a less favorable treatment, each Holder of an Allowed Class 3 General Unsecured Claim shall receive its Pro Rata share of the Class 3 Distribution (taking into account


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prior Distributions made to such Holders, if any, in accordance with the terms of this EPI Plan).

For greater certainty: (i) any distributions from the proceeds of the sale of the equity interest in and/or assets owned by Elk Petroleum Madden Gas & CO2 LLC received by EPI shall be distributed as follows: (a) the first $2,000,000 of any such proceeds shall be reserved for the EPI estate, and (b) any amount of proceeds in excess of $2,000,000 shall be distributed 75% to the holders of Allowed unsecured claims of EPI who were holders on the Petition Date; and (ii) 75% of any proceeds from the EPI Liquidating Trust shall be distributed as follows to Holders of Allowed General Unsecured Claims.

iii. Impairment/Voting: Class 3 is Impaired. Holders of Claims in Class 3 are, entitled to vote to accept or reject the EPI Plan.

d. Class 4 — EPI Preferred Interests

i. Classification: Class 4 consists of all EPI Preferred Interests.

ii. Treatment: The Holders of Allowed EPI Preferred Interests in Class 4 shall receive the Class 4 Distribution, as follows: Except to the extent that a Holder of an Allowed EPI Preferred Interest in Class 4 agrees to a less favorable treatment, on the EPI Effective Date, the Holders of each Allowed EPI Preferred Interest shall receive its Pro Rata share of the Class 4 Distribution in accordance with the terms of the Global Settlement Agreement, the Global Settlement Order and the EPI Plan, which shall entitle the Holders of Allowed EPI Preferred Interests to receive 25% of the proceeds of the liquidation of the EPI Liquidating Trust Assets.

For greater certainty, any distributions from the proceeds of the sale of the equity interest in and/or assets owned by Elk Petroleum Madden Gas & CO2 LLC received by EPI shall be distributed as follows: (a) the first $2,000,000 of any such proceeds shall be reserved for the EPI estate, and (b) 25% to the Allowed Preferred Equity Interest Holders who were holders on the Petition Date or their permitted assigns of such preferred stock interests.

iii. Impairment/Voting: Class 4 is Impaired. Holders of Allowed Preferred Interests in Class 4 are, entitled to vote to accept or reject the EPI Plan.


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e. Class 5 — EPI Subordinated Claims

i. Classification: Class 5 consists of all EPI Subordinated Claims.

ii. Treatment: Holders of Allowed Class 5 EPI Subordinated Claims shall receive no distribution under the EPI Plan.

iii. Impairment/Voting: Class 5 is Impaired. Holders of EPI Subordinated Claims in Class 5 are deemed to reject the EPI Plan.

f. Class 6 — Intercompany Claims

i. Classification: Class 6 consists of all Intercompany Claims.

ii. Treatment: Holders of Allowed Class 6 Intercompany Claims shall receive no distribution under the EPI Plan.

iii. Impairment/Voting: Class 6 is Impaired. Holders of Intercompany Claims in Class 6 are deemed to reject the EPI Plan.

g. Class 7 — EPI Interests

i. Classification: Class 7 consists of all EPI Interests, other than EPI Preferred Interests.

ii. Treatment: The Holders of the Class 7 EPI Interests shall have their EPI Interests extinguished as of the EPI Effective Date and shall receive no distributions under this EPI Plan.

iii. Impairment/Voting: Class 7 is Impaired. Holders of EPI Interests in Class 7 are deemed to reject the EPI Plan.

C. ACCEPTANCE OR REJECTION OF EPI PLAN.

1. The following Classes are Unimpaired under the EPI Plan.

Class 1 — Miscellaneous Secured Claims

Class 2 — Priority Non-Tax Claims

2. Identification of Impaired Classes.

The following Classes of Claims and Interests are Impaired under the EPI Plan.

Class 3 — General Unsecured Claims

Class 4 — EPI Preferred Interests

Class 5 — EPI Subordinated Claims


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Class 6 — Intercompany Claims

Class 7 —EPI Interests

3. Classes Permitted and Not Permitted to Vote

Classes 1 and 2 are Unimpaired. Holders of Claims in such Classes are conclusively presumed pursuant to section 1126(f) of the Bankruptcy Code to have accepted the EPI Plan and therefore shall not be entitled to vote to accept or reject the EPI Plan. Classes 3 through 7 are Impaired. Holders of Claims in Class 3 and EPI Preferred Interests in Class 4 are permitted to vote to accept or reject the EPI Plan. Holders of EPI Subordinated Claims in Class 5, Intercompany Claims in Class 6, and EPI Interests in Class 7 are deemed to reject the EPI Plan. The Debtor reserves all rights with respect to the allowance of any Claims or Interests, including EPI Preferred Interests, except as otherwise expressly provided by the Global Settlement Agreement or this EPI Plan.

Class 3 (General Unsecured Claims) shall have accepted the EPI Plan if (a) the Holders of at least two-thirds in amount of the Allowed Claims in Class 3 actually voting in such Class have voted to accept the EPI Plan and (b) the Holders of more than one-half in number of the Allowed Claims in Class 3 actually voting in such Class have voted to accept the EPI Plan. Class 4 (EPI Preferred Interests) shall have accepted the EPI Plan if the Holders of at least two-thirds in amount of the Allowed EPI Preferred Interests actually voting in such Class have voted to accept the EPI Plan.

4. Effect of Non-Voting.

If no Holder of a Claim eligible to vote in a particular Class timely votes to accept or reject the EPI Plan, the Debtor may seek to have the EPI Plan deemed accepted by the Holders of such Claims in such Class for purposes of section 1129(b) of the Bankruptcy Code.

5. Nonconsensual Confirmation.

Since the holders of Claims and Interests in these Classes are receiving no recovery under the EPI Plan, the Debtor intends to seek confirmation of the EPI Plan with respect to EPI Subordinated Claims in Class 5, Intercompany Claims in Class 6, and EPI Interests in Class 7, under the “cram down” provisions of section 1129(b) of the Bankruptcy Code..

6. Postpetition Interest.

Nothing in the EPI Plan or this Disclosure Statement shall be deemed to entitle the Holder of a Claim to receive postpetition interest on account of such Claim.

D. MEANS FOR IMPLEMENTATION OF THE EPI PLAN.

1. Global Settlement Agreement

The provisions of the EPI Plan incorporate and implement the provisions of the Global Settlement Agreement and the Global Settlement Order pursuant to section 1123(b)(3)(A) of the


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Bankruptcy Code. From and after the EPI Effective Date, each and every provision of the Global Settlement Agreement shall be binding on the Post-EPI Effective Date Debtor and the EPI Liquidating Trust, as applicable.

2. Substantive Consolidation

Nothing in the EPI Plan is intended to substantively consolidate, nor shall have the effect of substantively consolidating, the Debtor or its Estate with any of EPI’s current or former Affiliates, and the Post-EPI Effective Date Debtor shall maintain its separate corporate existence from and after the EPI Effective Date.

3. Continued Corporate Existence and Vesting of Assets

On and after the EPI Effective Date, subject to the requirements of the EPI Plan, the Post-EPI Effective Date Debtor will continue to exist as a Delaware company and shall retain all of the powers of such companies under applicable non-bankruptcy law, as modified by the EPI Plan, and without prejudice to any right to amend its operative corporate documents, dissolve, merge or convert into another form of business entity, or to alter or terminate its existence to the extent consistent with the EPI Plan. The Debtor’s membership interests in Madden, the Grieve Entities, EOC, Singleton and North Grieve (collectively, the “Membership Interests”) shall be deemed transferred to and held by the EPI Liquidating Trust, the EPI Liquidating Trust shall be deemed to have been admitted as the sole member of the Grieve Entities, Madden, EOC, Singleton, and North Grieve under applicable non-bankruptcy law and shall be authorized to exercise all of the rights and powers of a sole member as provided by the EPI Plan, subject to the terms of the EPI Plan and the EPI Liquidating Trust Agreement.

Except as otherwise provided in the EPI Plan all assets and property of the Debtor and its Estate, including the Membership Interests, will vest in the EPI Liquidating Trust, free and clear of all Claims, Liens, charges, other encumbrances, and Interests, except as provided by the Global Settlement Agreement. None of the occurrence of the EPI Effective Date, the effectiveness of this EPI Plan, nor any provision of applicable non-bankruptcy law shall cause a dissolution of the Debtor following the EPI Effective Date.

4. ConocoPhillips/Burlington Resources Rights as to Madden Insurance Proceeds.

Pursuant to the terms of a certain Asset Transfer Agreement by and between Madden and ConocoPhillips Company (“COP”), Madden transferred all of its working interests and certain other assets to COP subject to the terms and provisions of such agreement. The transaction closed on or about May 14, 2020 (the “Madden Liquidation”). Notwithstanding anything to the contrary contained in this Disclosure Statement, the Plan, the EPI Plan Supplement, or the EPI Confirmation Order, any Insurance Policies held by, or in which Madden is or was an insured on such policy, the proceeds which provide or may provide insurance coverage regarding or relating to the fire and damages relating thereto in December 2018 at the so-called Lost Cabin Gas Plant in the state of Wyoming and any “lost revenue” or similar types of insurance coverage and proceeds relating thereto regarding or relating to the fire in December 2018 (collectively the “Madden Insurance Proceeds”), and which have been assigned to COP under the Madden Liquidation, are not property of the EPI bankruptcy estate, but are property of COP as the assignee of certain of Madden’s assets or the loss payee under the subject Insurance Policies


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representing the Madden Insurance Proceeds. In the event that any of EPI, the EPI Liquidating Trust, or the Post-EPI Effective Date Debtor receives any of the Madden Insurance Proceeds after the assignment of the Madden Insurance Proceeds to COP, such Madden Insurance Proceeds shall be immediately turned over in full to COP without offset, recoupment or other reduction.

5. Corporate Action

On the EPI Effective Date, the matters under the EPI Plan involving or requiring action of the Debtor, including but not limited to actions requiring a vote or other approval of the board of directors, shareholders, or managers of the Debtor or the execution of any documentation incident to or in furtherance of the EPI Plan, shall be deemed to have been authorized by the EPI Confirmation Order and to have occurred and be in effect from and after the EPI Effective Date without any further action by the Bankruptcy Court or the officers, directors, or managers of the Debtor. The Post-EPI Effective Date Debtor’s articles of incorporation and by-laws shall be deemed to include a provision prohibiting the issuance of nonvoting equity securities and such other provisions as may be required pursuant to section 1123(a)(6) of the Bankruptcy Code. The Post-EPI Effective Date Debtor may execute and/or file any such documents, as necessary, with the Delaware Secretary of State and other state governmental authorities having jurisdiction over the Debtor as may be necessary or appropriate under applicable non-bankruptcy law to effectuate fully the terms of such documents.

If necessary, on the EPI Effective Date, the Debtor’s articles of incorporation and by-laws shall be deemed replaced and amended by the Post-EPI Effective Date Debtor articles of incorporation and by-laws, which shall be in full force and effect from and after the EPI Effective Date. EPI, through the actions of the EPI Liquidating Trust, may amend and/or restate, or cause the amendment and/or restatement, of operative documents and the operating agreements of any of their non-Debtor subsidiaries, direct or indirect, as may be necessary or appropriate under applicable non-bankruptcy law to ensure consistency with or to implement or effectuate fully the provisions of the EPI Plan, provided that any such modifications are consistent with the terms of the EPI Plan.

6. Corporate Governance

From and after the EPI Effective Date, subject to the terms of the EPI Plan, the business, affairs, and operation of the Post-EPI Effective Date Debtor shall be managed by, and all decisions on behalf of the Post-EPI Effective Date Debtor may be made by, the EPI Liquidating Trust, acting through the EPI Liquidating Trustees, in accordance with the terms of the EPI Plan and the EPI Liquidating Trust Agreement.

On the EPI Effective Date, each member of the Board shall be deemed to have resigned, the Conflicts Committee shall be deemed dissolved, and the Post-EPI Effective Date Debtor shall be governed by the EPI Liquidating Trust, in accordance with the terms of the EPI Plan and the EP Liquidating Trust Agreement.

The specific individuals proposed to serve as the initial EPI Liquidating Trustees with respect to the EPI Liquidating Trust shall be disclosed in the EPI Plan Supplement.


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7. Source of Funding

The source of all distributions and payments under this EPI Plan shall be the Liquidating Trust Assets and the proceeds thereof, including, without limitation, the Debtor’s Cash on hand proceeds from the sale or other disposition of the remaining property of the Debtor and its non-Debtor subsidiaries and the prosecution of Causes of Action.

8. Causes of Action of the Debtor

Unless a Cause of Action of the Debtor (including the right to object to any Claim asserted against the Estate) is, in writing, expressly waived, relinquished, released, assigned, compromised, or settled in the EPI Plan, or in a Final Order, all rights of the Estate and the EPI Liquidating Trust from and after the EPI Effective Date with respect to the Causes of Action are expressly preserved, assigned to, and fully vested in, the EPI Liquidating Trust for the Beneficiaries of the EPI Liquidating Trust.

The EPI Liquidating Trust shall have standing as the representative of the Debtor’s Estate pursuant to section 1123(b)(3)(B) of the Bankruptcy Code to pursue, or decline to pursue, the Causes of Action and objections to Claims, as appropriate, in the business judgment of the EPI Liquidating Trust, acting through the EPI Liquidating Trustees, subject to the terms of the Liquidating Trust Agreement. Subject to the terms of the EPI Liquidating Trust Agreement, the EPI Liquidating Trustees, may settle, release, sell, assign, otherwise transfer, or compromise, Causes of Action, and/or objections to Claims and Interests, including EPI Preferred Interests without need for notice or order of the Bankruptcy Court, as set forth in the EPI Plan and the EPI Trust Agreement.

9. Establishment of EPI Liquidating Trust and Vesting of EPI Liquidating Trust Assets

On the EPI Effective Date, the Debtor or the Post-EPI Effective Date Debtor shall take any and all actions as may be necessary or appropriate to establish the EPI Liquidating Trust, to cause the transfer and assignment of the Debtor’s Assets, including, without limitation, the Causes of Action, to the EPI Liquidating Trust as set forth in the EPI Plan and the EPI Liquidating Trust Agreement which together shall constitute the initial EPI Liquidating Trust Assets. Upon the EPI Effective Date, the EPI Liquidating Trust shall be vested with all right, title, and interest in the EPI Liquidating Trust Assets, and such property shall become the property of the EPI Liquidating Trust free and clear of all Claims, Liens, charges, other encumbrances, and interests, all of which is subject to the terms of the Global Settlement Agreement, the Global Settlement Order, and the EPI Plan. It is intended that the EPI Liquidating Trust qualify as a liquidating trust for federal income tax purposes. The sole beneficiaries of the EPI Liquidating Trust shall be the EPI Liquidating Trust Beneficiaries, as set forth in the EPI Plan and the EPI Liquidating Trust Agreement and in accordance with the terms of the Global Settlement Agreement and the Global Settlement Order.

For federal income tax purposes, the beneficiaries of the EPI Liquidating Trust shall be treated as the grantors of the EPI Liquidating Trust and deemed to be the owners of the assets of the EPI Liquidating Trust, and the transfer of the EPI Liquidating Trust Assets to the EPI


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Liquidating Trust shall be deemed a transfer to such beneficiaries by EPI followed by a deemed transfer by such beneficiaries to the EPI Liquidating Trust.

10. Purpose of EPI Liquidating Trust

The EPI Liquidating Trust shall be established for the primary purpose of prosecuting the Causes of Action and otherwise liquidating and distributing the EPI Liquidating Trust Assets in accordance with Treasury Regulation section 301.7701-4(d). In particular, this includes: (i) reviewing and reconciling, including where appropriate objecting to, any Disputed Claims or Disputed EPI Preferred Interests, unless otherwise agreed by the EPI Liquidating Trust, (ii) reviewing, litigating, settling, dismissing, or releasing the Causes of Action; and (iii) distributing the proceeds of any of the Causes of Action and any other EPI Liquidating Trust Assets in accordance with the EPI Plan, the Global Settlement Agreement and the EPI Liquidating Trust Agreement.

The EPI Liquidating Trust shall have no objective to continue or engage in the conduct of a trade or business and shall not be deemed a successor-in-interest of EPI or its respective Estate for any purpose other than as specifically set forth herein.

11. Funding of EPI Liquidating Trust

On the EPI Effective Date, EPI shall fund the EPI Liquidating Trust as set forth in the EPI Plan and in accordance with the terms of the Global Settlement Agreement.

12. EPI Liquidating Trustees

The initial EPI Liquidating Trustees shall be selected prior to the Confirmation Hearing. Any successor EPI Liquidating Trustee shall be appointed pursuant to the EPI Liquidating Trust Agreement. On the EPI Effective Date, and subject to the provisions of the EPI Liquidating Trust Agreement, the EPI Liquidating Trustees shall be the sole authorized representatives and signatories of the EPI Liquidating Trust, with authority to render any and all services necessary to effectuate the terms of the EPI Plan as they relate to the EPI Liquidating Trust. From and after the EPI Effective Date, the EPI Liquidating Trustees shall be deemed to have been appointed as the representative of EPI’s Estate by the Bankruptcy Court pursuant to section 1123(b)(3)(B) of the Bankruptcy Code for purposes of the EPI Liquidating Trust Assets, specifically including the Causes of Action. The powers, authority, responsibilities, and duties of the EPI Liquidating Trustees shall be as set forth in, and governed by the EPI Plan, the EPI Confirmation Order, and the EPI Liquidating Trust Agreement. The EPI Liquidating Trustees may execute, deliver, file, or record such documents, instruments, releases, and other agreements, and take such actions as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the EPI Plan as they relate to the EPI Liquidating Trust.

13. Responsibilities and Authority of EPI Liquidating Trustees

The responsibilities and authority of the EPI Liquidating Trustees shall be set forth in, and subject to the terms of the EPI Liquidating Trust Agreement, and shall include (a) calculating and implementing distributions from the EPI Liquidating Trust in accordance with the EPI Plan; (b) filing all required tax returns and paying taxes and all other obligations on


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behalf of the EPI Liquidating Trust from funds held by the EPI Liquidating Trust; (c) reporting to the EPI Liquidating Trust Beneficiaries as set forth in the EPI Liquidating Trust Agreement; (d) distributing the assets of the EPI Liquidating Trust in accordance with the provisions of the EPI Plan; (e)retaining and paying at normal and customary rates (or on a contingency fee basis) professionals to represent the EPI Liquidating Trust in connection with its purposes; (f) reconciling and, if appropriate, objecting to Claims against and Interests in EPI, with authority to settle any objections; (h) analyzing the Causes of Action and deciding whether to abandon, pursue, litigate, or settle such Causes of Action; and (i) such other responsibilities as may be vested in the EPI Liquidating Trustees pursuant to the EPI Plan, the EPI Liquidating Trust Agreement, or the EPI Confirmation Order, or as may otherwise be necessary and proper to carry out the provisions of the EPI Plan. Neither the EPI Liquidating Trust nor the EPI Liquidating Trustees shall be required to post a bond in favor of the United States.

14. Powers of the EPI Liquidating Trustees

Subject to the terms of the EPI Liquidating Trust Agreement, the EPI Plan, and the Global Settlement Agreement, the powers of the EPI Liquidating Trustees to administer the EPI Liquidating Trust shall, without any need for approval of the Bankruptcy Court in each of the following instances, include: (a) the power to invest EPI Liquidating Trust funds as permitted in the EPI Liquidating Trust Agreement, withdraw funds, make distributions, and pay taxes and other obligations owed by the EPI Liquidating Trust from funds held by the EPI Liquidating Trustee in accordance, (b) the power to engage and compensate employees and professionals to assist the EPI Liquidating Trustees with respect to his or her responsibilities, (c) the power to prosecute, compromise, abandon, and settle the Causes of Action (d) the power to abandon or destroy any of the books and records when they are no longer necessary to administer the EPI Liquidating Trust, (e) the power to abandon any of the EPI Liquidating Trust Assets, including but not limited to any interests in any of the Debtor’s subsidiaries, and (f) such other powers as may be vested in or assumed by the EPI Liquidating Trustees pursuant to the EPI Plan, the Global Settlement Agreement, the EPI Liquidating Trust Agreement, an order of the Bankruptcy Court, or as may be necessary and proper to carry out the provisions of the EPI Plan and the intent of the EPI Liquidating Trust. Subject to the terms of the EPI Liquidating Trust Agreement, the EPI Liquidating Trustees, on behalf of the EPI Liquidating Trust, shall have absolute discretion to pursue or not to pursue any and all of the Causes of Action and objections to Claims and Interests, as they determine is in the best interests of the EPI Litigation Trust Beneficiaries and consistent with the purposes of the EPI Liquidating Trust, and shall have no liability for the outcome of their decisions, other than those decisions determined by a final order no longer subject to appeal to constitute gross negligence, fraud, or willful misconduct. Any determination by the EPI Liquidating Trustees as to what actions are in the best interests of the EPI Liquidating Trust shall be conclusive, subject to the terms of the EPI Liquidating Trust Agreement.

15. Compensation of EPI Liquidating Trustees and Professionals of the EPI Liquidating Trust

The EPI Liquidating Trustees shall serve on (i) the terms and, conditions, and have the rights and responsibilities set forth in the EPI Plan, the Global Settlement Agreement, the EPI Confirmation Order and the EPI Liquidating Trust Agreement. The compensation for the EPI Liquidating Trustees shall be set forth in the EPI Liquidating Trust Agreement or otherwise


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disclosed in a filing with the Bankruptcy Court. The EPI Liquidating Trustees shall not be required to file Fee Applications to receive compensation, but the EPI Liquidating Trustees’ fees shall be subject to the provisions of the EPI Liquidating Trust Agreement. The EPI Liquidating Trustees shall have the right to retain the services of attorneys, accountants, and other professionals and agents on behalf of the EPI Liquidating Trust in the discretion of the EPI Liquidating Trustees to assist and advise the EPI Liquidating Trustees in the performance of their duties and to compensate such professionals from the assets of the EPI Liquidating Trust, subject to the terms of the EPI Liquidating Trust Agreement. Any professionals retained by the EPI Liquidating Trustees on behalf of the EPI Liquidating Trust shall not be required to file Fee Applications to receive compensation.

16. Limitations on EPI Liquidating Trustees

The EPI Liquidating Trustees, in such capacity, shall not at any time: (a) enter into or engage in any trade or business (other than the management and disposition of the EPI Liquidating Trust Assets), and no part of the EPI Liquidating Trust Assets or the proceeds, revenue, or income therefrom shall be used or disposed of by the EPI Liquidating Trust in furtherance of any trade or business, or (b) except as provided below, reinvest any EPI Liquidating Trust Assets.

Other than as provided in the EPI Plan, and the EPI Liquidating Trust Agreement, the EPI Liquidating Trustees are not empowered to incur indebtedness.

The EPI Liquidating Trustees may only invest funds held in the EPI Liquidating Trust consistent with the requirements of the EPI Liquidating Trust Agreement, the Bankruptcy Code, or any order of the Bankruptcy Court modifying such requirements.

The EPI Liquidating Trustees shall hold, collect, conserve, protect and administer the EPI Liquidating Trust in accordance with the provisions of the EPI Plan, and the EPI Liquidating Trust Agreement, and pay and distribute amounts as set forth herein for the purposes set forth in the EPI Plan, the Global Settlement Agreement, and the EPI Liquidating Trust Agreement.

The EPI Liquidating Trustees may determine to merge the EPI Liquidating Trust with the trust formed under the EPA Plan and may attempt to do so through the EPI Confirmation Order. If such merger is proposed after the EPI Confirmation Order is entered, the EPI Liquidating Trustees shall file notice of same, and an amended, comprehensive trust agreement, with the Bankruptcy Court.

17. Final Decree.

At any time following the EPI Effective Date, the Post-EPI Effective Date Debtor or the EPI Liquidating Trust shall be authorized to file a motion for the entry of a final decree closing the Chapter 11 Case pursuant to section 350 of the Bankruptcy Code.


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E. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

1. Rejection of Executory Contracts and Unexpired Leases

Except for any executory contracts or unexpired leases: (i) that previously were assumed or rejected by an order of the Bankruptcy Court, pursuant to section 365 of the Bankruptcy Code; (ii) that are listed for assumption by the Debtor as of the EPI Effective Date in a Plan Supplement to be filed and served on affected non-Debtor counterparties; (iii) as to which a motion for approval of the assumption or rejection of such contract or lease has been Filed and served prior to the EPI Effective Date; (iv) that constitute contracts of insurance in favor of, or that benefit, the Debtor or its Estate; or (v) that were previously sold, conveyed, or otherwise assigned pursuant to Final Order, 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 shall be deemed rejected pursuant to section 365 of the Bankruptcy Code as of the EPI Effective Date. Without limiting the foregoing, the indemnification obligations in favor of the current members of the Board shall be assumed as of the EPI Effective Date and shall constitute obligations of the Post-EPI Effective Date Debtor. All other pre-EPI Effective Date indemnification obligations of the Debtor shall be deemed rejected as of the EPI Effective Date to the extent that such obligations are contained in executory contracts within the meaning of section 365 of the Bankruptcy Code, but only to the extent not inconsistent with any existing insurance obligations. The EPI Confirmation Order shall constitute an order of the Bankruptcy Court approving such assumptions or rejections, pursuant to section 365 of the Bankruptcy Code, as of the EPI Effective Date.

2. Bar Date for Rejection Damages

If the rejection of an executory contract or unexpired lease pursuant to the EPI Plan or otherwise gives rise to a Claim by the other party or parties to such contract or lease, such Claim shall be forever barred and shall not be enforceable against the Debtor or its Estate unless a proof Claim is Filed and served on the Post-EPI Effective Date Debtor or the EPI Liquidating Trust and their respective counsel within thirty (30) days after the earlier of (a) EPI Effective Date or (b) service of a notice that the executory contract or unexpired lease has been rejected. All such Claims for which proofs of Claim are required to be Filed, if Allowed, will be, and will be treated as, General Unsecured Claims, subject to the provisions of the EPI Plan.

F. DISTRIBUTIONS AND RELATED MATTERS.

1. Pro Forma Plan Distribution Schedule of EPI Funds

The EPI Plan will distribute funds according to the Pro Forma Plan Distribution Schedule. A copy of Pro Forma Plan Distribution Schedule is attached hereto as Exhibit 3. EPI will receive a distribution of funds from the liquidation of Madden in an estimated amount of $1,804,703. The distribution of funds from the liquation of Madden (the “Madden Funds”) is the primary source of funds addressed in the Pro Forma Plan Distribution Schedule. As of the Effective Date, the Madden Funds will first be used to satisfy accrued and to-be-incurred Allowed Administrative Expenses incurred by EPI through the estimated EPI Effective Date. Also, on the EPI Effective Date, the EPI Trust will be pre-funded in the amount of $586,900, which equals approximately one years’ out of pocket expenses for administration of the EPI


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Liquidating Trust. The balance of the Madden Funds will go to pay a percentage of the Holders of Unpaid Chapter 11 Professional Fee Claims. Currently, that amount of that payment is estimated to be $68,920, a 7.04% payment of the $978,600 in total claims pool. To the extent other estate assets are liquated prior to the Effective Date, the amount paid to the Holders of Unpaid Chapter 11 Professional Fee Claims will increase if there are no increases in Allowed Administrative Expenses ahead of the EPI Effective Date. To the extent Allowed Administrative Expenses increase, it will result in a lower distribution to the Holders of Unpaid Chapter 11 Professional Fee Claims. After the EPI Effective Date, and when the EPI Liquidating Trust recovers additional proceeds that are not otherwise needed to pay expenses related to the administration of the EPI Liquidating Trust, the funds will be used to pay the Holders of Unpaid Chapter 11 Professional Fee Claims until such claims are paid in full. Once the Holders of Unpaid Chapter 11 Professional Fee Claims are paid in full, any excess funds will be distributed to Allowed Class 3 Claims and Allowed Class 4 EPI Preferred Interests pursuant to the terms of the Global Settlement Agreement, the Global Settlement Order, and the EPI Plan.

2. Dates of Distribution

The sections of the EPI Plan on treatment of Administrative Expenses, Claims, and Interests specify the times for distributions. Whenever any payment or distribution to be made under the EPI Plan shall be due on a day other than a Business Day, such payment or distribution shall instead be made, without interest, by the EPI Liquidating Trust (or its agent) on the immediately following Business Day. Distributions due on the EPI Effective Date will be paid on such date or as soon as practicable thereafter, provided that if other provisions of the EPI Plan require the surrender of securities or establish other conditions precedent to receiving a distribution, the distribution may be delayed until such surrender occurs or conditions are satisfied.

3. Cash Distributions

Distributions of Cash may be made either by check drawn on a domestic bank or wire transfer from a domestic bank, at the option of the EPI Liquidating Trust, as applicable, except that Cash payments made to foreign Creditors may be made in such funds and by such means as are necessary or customary in a particular foreign jurisdiction.

4. Rounding of Payments

Whenever payment of a fraction of a cent would otherwise be called for, the actual payment shall reflect a rounding down of such fraction to the nearest whole cent. To the extent Cash remains undistributed as a result of the rounding of such fraction to the nearest whole cent, such Cash shall be treated as “Unclaimed Property” under the EPI Plan.

5. Disputed Claims and Interests

Notwithstanding all references in the EPI Plan to Claims that are Allowed, solely for the purpose of calculating the amount or number of distributions to be made on account of Allowed Claims or Allowed EPI Preferred Interests under the EPI Plan, such calculations shall be made as if each Disputed Claim or Disputed EPI Preferred Interests were an Allowed Claim or Allowed EPI Preferred Interest, or as determined by the Bankruptcy Court shall be used for calculations


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as to such Disputed Claim or Disputed EPI Preferred Interest to be Allowed or authorized or otherwise determines the amount or number which would constitute a sufficient reserve for a Disputed Claim or Disputed EPI Preferred Interest (which estimates and determinations may be requested by the Post-EPI Effective Date Debtor or the EPI Liquidating Trustee, as applicable), such amount or number as determined by the Bankruptcy Court shall be used for calculations as to such Disputed Claim or Disputed EPI Preferred Interest.

All distributions due in respect of a Disputed Claim shall be held and not made pending resolution of the Disputed Claim.

If an objection to a Disputed Claim or Disputed EPI Preferred Interest is withdrawn, resolved by agreement, or determined by Final Order, any distributions due on account of any resulting Allowed Claim or Allowed EPI Preferred Interest shall be made by the EPI Liquidating Trust. No interest shall be due to a Holder of a Disputed Claim or a Disputed EPI Preferred Interest based on the delay attendant to determining the allowance of such Claim or EPI Preferred Interest.

6. Undeliverable and Unclaimed Distributions

If any distribution under the EPI Plan is returned to the EPI Liquidating Trust as undeliverable or the check or other similar instrument or Distribution by the EPI Liquidating Trust remains uncashed or unclaimed, as applicable, for ninety (90) days, such Cash shall be deemed to be Unclaimed Property. Upon property becoming Unclaimed Property, it immediately shall revest in the EPI Liquidating Trust and distributed in accordance with the EPI Plan, the Global Settlement Order, and the Global Settlement Agreement.

In the event any Distribution to a Holder of Allowed Claim or Allowed EPI Preferred Interest becomes Unclaimed Property, no subsequent distributions for such Holder which may otherwise be due under the EPI Plan will accrue or be held for such Holder, provided that, if the EPI Liquidating Trust is notified in writing of such Holder’s then-current address and status as a Holder under the EPI Plan, thereafter, the Holder of and Allowed Claim or Allowed EPI Preferred Interest will become entitled to its share of distributions, if any, which first become due after such notification.

7. Compliance with Tax Requirements

The Post-EPI Effective Date Debtor and the EPI Liquidating Trust, as applicable, shall comply with all withholding and reporting requirements imposed by federal, state, or local taxing authorities in connection with making Distributions pursuant to the EPI Plan.

In connection with each distribution with respect to which the filing of an information return (such as an IRS Form 1099 or 1042) or withholding is required, the Post-EPI Effective Date Debtor and the EPI Liquidating Trust, as applicable, shall file such information return with the IRS and provide any required statements in connection therewith to the recipients of such distribution, or effect any such withholding and deposit all moneys so withheld to the extent required by law.


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8. Record Date in Respect of Distributions

Except as set forth below, the record date and time for the purpose of determining which Persons are entitled to receive any and all distributions on account of any Allowed Claims or EPI Preferred Interests, irrespective of the date of or number of distributions, shall be the same as the Record Date.

9. Reserves.

In making any Distributions in respect of Allowed Claims or Allowed EPI Preferred Interests under the EPI Plan, the EPI Liquidating Trust shall reserve an appropriate and adequate amount of Cash on account of any unresolved Disputed Claims or Disputed EPI Preferred Interests. The EPI Liquidating Trust shall make a corrective Distribution following the resolution of any Disputed Claim or Disputed EPI Preferred Interest to which the Holder may be entitled on the next regularly scheduled distribution date.

G. LITIGATION, OBJECTIONS TO CLAIMS, AND DETERMINATION OF TAXES.

1. Litigation; Objections to Claims; Objection Deadline

Except as may be expressly provided otherwise in the EPI Plan, from and after the EPI Effective Date, the EPI Liquidating Trust shall be responsible for pursuing Causes of Action, any objection to the allowance of any Claim or EPI Preferred Interest, and the determination of Tax issues and liabilities.

From and after the EPI Effective Date, the EPI Liquidating Trust shall have exclusive authority to file objections, settle, compromise, withdraw, or litigate to judgment objections to Claims or Interests; provided, however, parties in interest may file objections to Claims to the extent permitted by Bankruptcy Code section 502(a).Unless another date is established by the Bankruptcy Court sua sponte (which may so act without notice or hearing) or is established by other provisions of the EPI Plan, any objection to a Claim or Interest shall be filed with the Bankruptcy Court and served on the Person holding such Claim or Interest within one hundred twenty (120) days after the EPI Effective Date (as may be extended, the “Claims Objection Deadline”), the EPI Liquidating Trust may seek extension(s) thereof subject to Bankruptcy Court approval and with notice only to parties that have requested such notice pursuant to Bankruptcy Rule 2002.

In addition to any other available remedies or procedures with respect to Tax issues or liabilities or rights to Tax refunds, the EPI Liquidating Trust may use (and receive the benefits of) section 505 of the Bankruptcy Code with respect to: (1) any Tax issue or liability or right to a Tax refund relating to an act or event occurring prior to the EPI Effective Date; or (2) any Tax liability or right to a Tax refund arising prior to the EPI Effective Date. If the EPI Liquidating Trust uses section 505(b) of the Bankruptcy Code: (1) the Bankruptcy Court shall determine the amount of the subject Tax liability or right to a Tax refund in the event that the appropriate governmental entity timely determines a Tax to be due in excess of the amount indicated on the subject return; and (2) if the prerequisites are met for obtaining a discharge of Tax liability in accordance with section 505(b) of the Bankruptcy Code, the EPI Liquidating Trust shall be


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entitled to such discharge which shall apply to any and all Taxes relating to the period covered by such return.

2. Temporary or Permanent Resolution of Disputed Claims

The Post-EPI Effective Date Debtor or the EPI Liquidating Trust, as applicable, may request, at any time prior to the EPI Effective Date or the EPI Liquidating Trust may request on and after the EPI Effective Date, that the Bankruptcy Court estimate any contingent or unliquidated Disputed Claim pursuant to section 502(c) of the Bankruptcy Code, irrespective of whether any party has previously objected to such Disputed Claim. The Bankruptcy Court shall retain jurisdiction to estimate any contingent or unliquidated Disputed Claim at any time during litigation concerning any objection to the Disputed Claim. If the Bankruptcy Court estimates any contingent or unliquidated Disputed Claim, that estimated amount would constitute either the Allowed amount of such Disputed Claim or a maximum limitation on such Disputed Claim, as determined by the Bankruptcy Court. If the estimated amount constitutes a maximum limitation on such Disputed Claim, the EPI Liquidating Trust may elect from and after the EPI Effective Date to pursue any supplemental proceedings to object to any ultimate payment on account of such Disputed Claim against the Debtor.

In addition, the EPI Liquidating Trust may resolve or adjudicate any Disputed Claim or Disputed Interest from and after the EPI Effective Date in the manner in which the amount of such Claim, Interest, or Administrative Expense and the rights of the Holder of such Claim, Interest, or Administrative Expense would have been resolved or adjudicated if the Chapter 11 Cases had not been commenced. All of the aforementioned objection, estimation, and resolution procedures are cumulative and not necessarily exclusive of one another.

3. Setoffs

The EPI Liquidating Trust may, but shall not be required to, setoff against any Claim, and the payments or other distributions to be made pursuant to the EPI Plan in respect of such Claim, claims of any nature whatsoever that the Debtor may have against the Holder of such Claim; provided, however, neither the failure to do so nor the allowance of any Claim hereunder shall constitute a waiver or release by the Post-EPI Effective Date Debtor or the EPI Liquidating Trust of any such claim that the Post-EPI Effective Date Debtor or the EPI Liquidating Trust may have against such Holder, unless otherwise agreed to in writing by such Holder and the Post-EPI Effective Date Debtor or the EPI Liquidating Trust as applicable.

Unless otherwise authorized by a Final Order, any Holder of a Claim, other than BSP (which shall be deemed to have preserved its setoff rights, if any), must assert any setoff rights against a Claim by the Debtor against such Entity by timely filing an appropriate motion on or before the Confirmation Date seeking authority to setoff, or will be deemed to have waived and be forever barred from asserting any right to setoff against a Claim by the Debtor; provided, however, that the right of the Debtor, the EPI Liquidating Trustees, or the EPI Liquidating Trust, as applicable, to object to the validity of any asserted right of setoff shall be preserved.


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4. Preservation of Causes of Action

In accordance with section 1123(b) of the Bankruptcy Code, the EPI Liquidating Trust, and each of its successors or assigns will retain and may exclusively enforce any Causes of Action and the Confirmation Order shall be deemed a res judicata determination of such rights to retain and exclusively enforce such Causes of Action. Absent such express waiver or release, the EPI Liquidating Trust, and each of its successors or assigns, shall have standing as the representatives of the Debtor’s Estate pursuant to section 1123(b)(3)(B) of the Bankruptcy Code to pursue Causes of Action, as appropriate, in accordance with the best interests of the EPI Liquidating Trust. The Causes of Action may be asserted or prosecuted before or after solicitation of votes on the EPI Plan or before or after the EPI Effective Date.

Absent an express waiver or release set forth in the EPI Plan, nothing in the EPI Plan shall (or is intended to) prevent, estop or be deemed to preclude the Post-EPI Effective Date Debtor or the EPI Liquidating Trust, as applicable, from using, pursuing, prosecuting, or otherwise acting upon all or any of their Causes of Action and, therefore, no preclusion doctrine, including, without limitation, the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable or otherwise), or laches shall apply to such Causes of Action upon or after Confirmation or the EPI Effective Date.

H. RELEASES, INJUNCTIONS, AND EXCULPATION PROVISIONS

1. Injunctions

a. Generally

Unless otherwise provided in the EPI Plan or the EPI Confirmation Order, all injunctions and stays provided for in the Chapter 11 Cases pursuant to sections 105 and 362 of the Bankruptcy Code or otherwise in effect on the Confirmation Date, shall remain in full force and effect until the EPI Effective Date. From and after the EPI Effective Date, all Persons are permanently enjoined from, and restrained against, commencing or continuing in any court any suit, action or other proceeding, or otherwise asserting any claim or interest, seeking to hold the Post-EPI Effective Date Debtor, its Estate, the EPI Liquidating Trust, or the property of the Debtor, its’ Estate, or the EPI Liquidating Trust, liable for any Claim, obligation, right, interest, debt or liability that has been released pursuant to the EPI Plan.

2. Injunction Related to Causes of Action, Claims, Administrative Expenses, and Interests

The EPI Plan provides in Article IX thereof, the following injunction:

FROM AND AFTER THE EPI EFFECTIVE DATE, TO THE EXTENT OF THE EXCULPATION AND RELEASES GRANTED IN ARTICLE IX, THE DEBTOR AND HOLDERS OF CLAIMS OR INTERESTS SHALL NOT COMMENCE OR CONTINUE IN ANY MANNER AGAINST THE EXCULPATED PARTIES OR RELEASED PARTIES AND THEIR ASSETS AND PROPERTIES, AS THE CASE MAY BE, ANY SUIT, ACTION OR OTHER PROCEEDING, ON ACCOUNT OF


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OR RESPECTING ANY CLAIM, DEMAND, LIABILITY, OBLIGATION, DEBT, RIGHT, CAUSE OF ACTION, INTEREST OR REMEDY RELEASED OR TO BE RELEASED PURSUANT TO ARTICLE IX. THE RIGHTS AFFORDED IN THE EPI PLAN AND THE TREATMENT OF ALL CLAIMS AND INTERESTS HEREIN SHALL BE IN EXCHANGE FOR AND IN COMPLETE SATISFACTION OF CLAIMS AND INTERESTS OF ANY NATURE WHATSOEVER, INCLUDING ANY INTEREST ACCRUED ON CLAIMS FROM AND AFTER THE PETITION DATE, AGAINST THE DEBTOR OR ANY OF ITS ASSETS, PROPERTY, OR ESTATE.

EXCEPT AS OTHERWISE EXPRESSLY PROVIDED FOR HEREIN OR IN THE EPI CONFIRMATION ORDER, FROM AND AFTER THE EPI EFFECTIVE DATE, ALL CLAIMS SHALL BE FULLY RELEASED, AND THE INTERESTS SHALL BE CANCELLED, AND THE DEBTOR’S LIABILITY WITH RESPECT THERETO SHALL BE EXTINGUISHED COMPLETELY, INCLUDING ANY LIABILITY OF THE KIND SPECIFIED UNDER SECTION 502(G) OF THE BANKRUPTCY CODE.

EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN OR IN THE EPI CONFIRMATION ORDER, ALL ENTITIES SHALL BE PRECLUDED FROM ASSERTING AGAINST THE DEBTOR, THE DEBTOR’S ESTATE, THE EPI LIQUIDATING TRUST, THE EPI LIQUIDATING TRUSTEES, AND EACH OF THEIR RESPECTIVE SUCCESSORS AND ASSIGNS AND EACH OF THEIR ASSETS AND PROPERTIES, ANY OTHER CLAIMS OR INTERESTS BASED UPON ANY DOCUMENTS, INSTRUMENTS OR ANY ACT OR OMISSION, TRANSACTION OR OTHER ACTIVITY OF ANY KIND OR NATURE THAT OCCURRED BEFORE THE EPI EFFECTIVE DATE.

Notwithstanding anything to the contrary herein, on and after the EPI Effective Date, any and all membership or similar interests or units held by the Debtor in a subsidiary shall survive after the EPI Effective Date by virtue of such interests being left unimpaired to maintain the existing corporate structure of the Debtor.

3. Exculpation and “Exculpated Party” in the EPI Plan

a. Exculpation provision in the EPI Plan

The EPI Plan provides in Article IX thereof, the following exculpation provision:

TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW AND WITHOUT AFFECTING OR LIMITING THE DEBTOR RELEASE OR THIRD PARTY RELEASE, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THE EPI PLAN, NO EXCULPATED PARTY SHALL HAVE OR INCUR, AND EACH EXCULPATED PARTY IS HEREBY RELEASED AND EXCULPATED


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FROM ANY EXCULPATED CLAIM, OBLIGATION, CAUSE OF ACTION OR LIABILITY FOR ANY EXCULPATED CLAIM, EXCEPT FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, BUT IN ALL RESPECTS SUCH PERSONS SHALL BE ENTITLED TO REASONABLY RELY UPON THE ADVICE OF COUNSEL WITH RESPECT TO THEIR DUTIES AND RESPONSIBILITIES PURSUANT TO THE EPI PLAN. THE DEBTOR (AND EACH OF ITS RESPECTIVE AFFILIATES, AGENTS, DIRECTORS, OFFICERS, EMPLOYEES, ADVISORS AND ATTORNEYS) HAVE PARTICIPATED IN COMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE WITH REGARD TO THE SOLICITATION OF THE EPI PLAN AND THE DISTRIBUTIONS CONTEMPLATED PURSUANT TO THE EPI PLAN AND, THEREFORE, ARE NOT, AND ON ACCOUNT OF SUCH DISTRIBUTIONS SHALL NOT BE, LIABLE AT ANY TIME FOR THE VIOLATION OF ANY APPLICABLE LAW, RULE, OR REGULATION GOVERNING THE SOLICITATION OF ACCEPTANCES OR REJECTIONS OF THE EPI PLAN OR SUCH DISTRIBUTIONS MADE PURSUANT TO THE EPI PLAN.

b. Definition of “Exculpated Parties” in EPI Plan

The EPI Plan defines “Exculpated Parties” in Article 1.75 as:

(a) EPI; (b) the Board and its members; (c) the Conflicts Committee and its members; (d) the Equity Committee and the Equity Committee Members (but solely in their capacity as members of the Equity Committee); (e) BSP; (f) with respect to EPI, all of its current officers and directors, employees, agents, advisory board members, financial advisors, attorneys, investment bankers, consultants, representatives, and all Professional Persons; and (g) with respect to (b), (c), and (d), all of their respective current officers and directors, principals, shareholders, members, partners, managers, employees, agents, advisory board members, financial advisors, attorneys, investment bankers, consultants, representatives, and all Professional Persons.

4. Releases by Debtor and Holders of Claims and Interests

The EPI Plan also provides the following releases by the Debtor and its Estate and releases by Holders of Claims and Interests:

a. Debtor Release

ON THE EPI EFFECTIVE DATE, THE RELEASED PARTIES WILL BE EXPRESSLY, UNCONDITIONALLY, GENERALLY AND INDIVIDUALLY AND COLLECTIVELY RELEASED, ACQUITTED, AND DISCHARGED BY THE DEBTOR AND ITS ESTATE FROM ANY AND ALL ACTIONS, CLAIMS, OBLIGATIONS, RIGHTS, SUITS, DAMAGES, CAUSES OF ACTION, REMEDIES AND LIABILITIES WHATSOEVER, INCLUDING ANY DERIVATIVE CLAIMS ASSERTED


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OR ASSERTABLE ON BEHALF OF THE DEBTOR, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, MATURED OR UNMATURED, EXISTING OR HEREINAFTER ARISING, IN LAW, EQUITY, CONTRACT, TORT OR OTHERWISE, BY STATUTE OR OTHERWISE, THAT THE DEBTOR, THE EPI LIQUIDATING TRUST, THE DEBTOR’S ESTATE OR THE DEBTOR’S AFFILIATES (WHETHER INDIVIDUALLY OR COLLECTIVELY) OR ON BEHALF OF THE HOLDER OF ANY CLAIM OR INTEREST OR OTHER ENTITY, EVER HAD, NOW HAS OR HEREAFTER CAN, SHALL, OR MAY HAVE, BASED ON OR RELATING TO, OR IN ANY MANNER ARISING FROM, IN WHOLE OR IN PART, THE DEBTOR, THE DEBTOR’S LIQUIDATION, THE CHAPTER 11 CASE, THE PURCHASE, SALE OR RESCISSION OF THE PURCHASE OR SALE OF ANY SECURITY OF THE DEBTOR, THE SUBJECT MATTER OF, OR THE TRANSACTIONS OR EVENTS GIVING RISE TO, ANY CLAIM OR INTEREST THAT IS TREATED IN THE EPI PLAN, THE BUSINESS OR CONTRACTUAL ARRANGEMENTS BETWEEN THE DEBTOR AND ANY RELEASED PARTY, THE RESTRUCTURING OF CLAIMS AND INTERESTS BEFORE OR DURING THE CHAPTER 11 CASE THE NEGOTIATION, FORMULATION, PREPARATION, OR PERFORMANCE OF THE EPI PLAN, THE EPI DISCLOSURE STATEMENT, THE PURSUIT OF CONFIRMATION, THE PURSUIT OF CONSUMMATION, THE ADMINISTRATION OR IMPLEMENTATION OF THE EPI PLAN, OR RELATED AGREEMENTS, INSTRUMENTS ,OR OTHER DOCUMENTS OR ANY OTHER ACT OR OMISSION, TRANSACTION, AGREEMENT, EVENT, OR OTHER OCCURRENCE RELATING TO THE DEBTOR OR THE FOREGOING TAKING PLACE ON OR BEFORE THE CONFIRMATION DATE OF THE EPI PLAN, EXCEPT FOR ANY CLAIMS AND CAUSES OF ACTION FOR ACTUAL FRAUD OR GROSS MISCONDUCT, IN EACH CASE AS DETERMINED BY FINAL ORDER OF THE BANKRUPTCY COURT OR ANY OTHER COURT OF COMPETENT JURISDICTION.

b. Releases by Holders.

SUBJECT TO THE RIGHT OF EACH HOLDER OF A CLAIM AGAINST OR INTEREST IN THE DEBTOR TO AFFIRMATIVELY ‘OPT OUT” OF THE RELEASE SET FORTH BELOW BY NOTING SUCH “OPT OUT” ELECTION ON THE BALLOT TO VOTE ON THE EPI PLAN, TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, AS SUCH LAW MAY BE EXTENDED OR INTERPRETED SUBSEQUENT TO THE EPI EFFECTIVE DATE, EXCEPT AS OTHERWISE PROVIDED IN THE EPI PLAN OR THE EPI CONFIRMATION ORDER, ON THE EPI EFFECTIVE DATE, EACH HOLDER OF A CLAIM AGAINST OR INTEREST IN THE DEBTOR SHALL BE DEEMED TO HAVE EXPRESSLY, UNCONDITIONALLY, GENERALLY AND INDIVIDUALLY AND COLLECTIVELY,


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RELEASED, ACQUITTED, AND DISCHARGED THE RELEASED PARTIES FROM ANY AND ALL ACTIONS, CLAIMS, INTERESTS, OBLIGATIONS, RIGHTS, SUITS, DAMAGES, CAUSES OF ACTION, REMEDIES AND LIABILITIES WHATSOEVER, INCLUDING ANY DERIVATIVE CLAIMS ASSERTED OR ASSERTABLE ON BEHALF OF THE DEBTOR, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, MATURED OR UNMATURED, EXISTING OR HEREAFTER ARISING, IN LAW, EQUITY, CONTRACT, TORT OR OTHERWISE, THAT SUCH HOLDER (WHETHER INDIVIDUALLY OR COLLECTIVELY) EVER HAD, NOW HAS OR HEREAFTER CAN, SHALL OR MAY HAVE, BASED ON OR RELATING TO, OR IN ANY MANNER ARISING FROM, IN WHOLE OR IN PART, THE DEBTOR, THE DEBTOR’S LIQUIDATION, THE CHAPTER 11 CASE, THE PURCHASE, SALE OR RESCISSION OF THE PURCHASE OR SALE OF ANY SECURITY OF THE DEBTOR, THE SUBJECT MATTER OF, OR THE TRANSACTIONS OR EVENTS GIVING RISE TO, ANY CLAIM OR INTEREST THAT IS TREATED IN THE EPI PLAN, THE BUSINESS OR CONTRACTUAL ARRANGEMENTS BETWEEN THE DEBTOR AND ANY RELEASED PARTY, THE RESTRUCTURING OF CLAIMS AND INTERESTS BEFORE OR DURING THE CHAPTER 11 CASE, THE NEGOTIATION, FORMULATION, PREPARATION, OR PERFORMANCE OF THE EPI PLAN OR THE EPI DISCLOSURE STATEMENT, THE PURSUIT OF CONFIRMATION, THE PURSUIT OF CONSUMMATION, THE ADMINISTRATION OR IMPLEMENTATION OF THE EPI PLAN, OR RELATED AGREEMENTS, INSTRUMENTS, OR OTHER DOCUMENTS OR ANY OTHER ACT OR OMISSION, TRANSACTION, AGREEMENT, EVENT, OR OTHER OCCURRENCE RELATING TO THE DEBTOR OR THE FOREGOING TAKING PLACE ON OR BEFORE THE EPI CONFIRMATION DATE, EXCEPT FOR ANY CLAIMS AND CAUSES OF ACTION FOR WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, IN EACH CASE AS DETERMINED BY FINAL ORDER OF THE BANKRUPTCY COURT OR ANY OTHER COURT OF COMPETENT JURISDICTION OR THE RIGHTS OF ANY CLAIMHOLDER TO ENFORCE THE EPI PLAN.

c. Definition of “Released Parties” in the EPI Plan

The EPI Plan defines “Released Parties” in Article 1.118 as:

(a) the Debtor; (b) the Board; (c) the Conflicts Committee; (d) the Equity Committee; (e) the members of the Equity Committee in their respective capacity as members of such Equity Committee and in their individual capacities; (f) BSP; (g) the AB Parties; (h) and with respect to clauses (b) through (g) such entities’ successors and assigns, subsidiaries, affiliates, beneficial owners, managed accounts or funds, current officers, directors, principals, shareholders, direct and indirect equity holders, members, partners (general and limited), employees, agents, advisory board members, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, management companies, fund


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advisors and other Professionals; provided that no Person shall be a Released Party if it objects to the releases provided for in Article IX of this EPI Plan. Except as set forth in this EPI Plan, no current or former officers or directors of EPI shall constitute Released Parties or shall be released by any of this EPI Plan, the EPI Plan Supplement, or the EPI Confirmation Order; provided, further, that, for the avoidance of doubt, notwithstanding the foregoing or anything else contained in this EPI Plan, as it pertains to BSP and the BSP Parties, Released Parties does not include any of the Debtor’s subsidiaries or affiliates. Notwithstanding the foregoing or anything else contained in this EPI Plan to the contrary, Released Parties do not include (w) all Affiliates of the Debtor and any of their respective Related Parties other than the Debtor and those Persons expressly identified in the foregoing (b) through (h); (x) EPL, Brad Lingo, James Piccone, V. Brian Dolan, Neale Taylor, Russell Krause, Timothy Hargreaves, Alexander Hunter; (y) KPMG LLP and any affiliates thereof; and (z) Resolute Energy Corporation, Hicks Acquisition Company I, Inc., Resolute Natural Resources Company, LLC, Cimarex Energy Co., CR Sub 1 Inc., CR Sub 2 LLC, and any affiliates of or successors to the foregoing entities.

I. NO REGULATED RATE CHANGE WITHOUT GOVERNMENT APPROVAL.

The Debtor does not charge any rates for purposes of section 1129(a)(6) that are regulated by any governmental regulatory commission with jurisdiction under applicable non-bankruptcy law.

J. EXEMPTION FROM CERTAIN TRANSFER TAXES.

Pursuant to section 1146(c) of the Bankruptcy Code, any transfers by the Debtor pursuant to the EPI Plan shall not be subject to any stamp tax or other similar tax.

K. RETENTION OF JURISDICTION.

Notwithstanding the entry of the EPI Confirmation Order or the occurrence of the EPI Effective Date, the Bankruptcy Court will retain jurisdiction over the Chapter 11 Cases and any of the proceedings related to the Chapter 11 Cases pursuant to section 1142 of the Bankruptcy Code and 28 U.S.C. § 1334 to the fullest extent permitted by the Bankruptcy Code and other applicable law, including, without limitation, such jurisdiction as is necessary to ensure that the purpose and intent of the EPI Plan are carried out. Without limiting the generality of the foregoing, the Bankruptcy Court will retain jurisdiction for the purposes specifically identified in Article XI of the EPI Plan.

L. SERVICES BY AND FEES FOR PROFESSIONALS; BAR DATE FOR ADMINISTRATIVE EXPENSES

Notwithstanding any other provision herein or in the EPI Plan, Professional Fee Claims will be paid in accordance with the terms of the order(s) authorizing such payments as promptly as possible on the EPI Effective Date for any outstanding amounts due as of the EPI Effective Date, and as soon as practicable thereafter as such obligation to pay becomes due unless otherwise agreed upon by the applicable Professional.


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In conjunction with the Global Settlement Agreement, certain Holders of Professional Fee Claims against EPI have agreed to accept reduced and/or otherwise deferred recoveries in accordance with the terms of such settlement.

From and after the EPI Effective Date, the EPI Liquidating Trust shall in the ordinary course of business and without the necessity for any approval by the Bankruptcy Court, pay the reasonable fees and expenses of professionals thereafter incurred by the EPI Liquidating Trust, as applicable, provided that such payments shall be limited by the terms of the Global Settlement Agreement.

Requests for payment of all Administrative Expenses, other than for those for which a Bar Date was previously set or for which a request and/or proof Claim has previously been filed, must be Filed and served on the EPI Liquidating Trust and the United States Trustee by no later than thirty (30) days after the EPI Effective Date. The EPI Liquidating Trust will have until ninety (90) days after the EPI Effective Date to bring an objection to a request for payment of an Administrative Expense filed by the deadline established by Article 2.7 of the EPI Plan. Nothing in the EPI Plan will prohibit the EPI Liquidating Trust from paying Administrative Expenses in the ordinary course in accordance with applicable law during or after the Chapter 11 Case, but after the EPI Effective Date, the obligation to pay an Administrative Expense will depend upon the claimant’s compliance with this section and such Administrative Expense being Allowed under the provisions of the EPI Plan.

Notwithstanding the foregoing but except as may be expressly provided in other sections of the EPI Plan, Professional Persons requesting compensation or reimbursement of expenses incurred after the Petition Date and prior to the EPI Effective Date must file and serve, on all parties entitled to notice thereof, a Fee Application for final allowance of compensation and reimbursement of expenses in accordance with the various orders of the Bankruptcy Court establishing procedures for submission and review of such applications and in any event no later than twenty (20) days after the EPI Effective Date.

M. NO WAIVER.

Neither the failure of the Debtor to list a Claim in the Debtor’s Schedules, the failure of the Debtor to object to any Claim or Interest for purposes of voting, the failure of the Debtor to object to a Claim, Administrative Expense, or Interest prior to Confirmation of the EPI Plan or the EPI Effective Date, the failure of the Debtor to assert a Cause of Action prior to Confirmation of the EPI Plan or the EPI Effective Date, the absence of a proof Claim having been filed with respect to a Claim, nor any action or inaction of the Debtor or any other party with respect to a Claim, Administrative Expense, Interest, or Cause of Action other than a legally effective express waiver or release will be deemed a waiver or release of the right of the Debtor or the EPI Liquidating Trust, before or after solicitation of votes on the EPI Plan or before or after Confirmation of the EPI Plan or the EPI Effective Date to: (a) object to or examine such Claim, Administrative Expense, or Interest, in whole or in part or (b) retain and either assign or exclusively assert, pursue, prosecute, utilize, otherwise act, or otherwise enforce any Cause of Action.


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N. U.S. TRUSTEE FEES.

All fees payable on or before the EPI Effective Date pursuant to section 1930 of title 28 of the United States Code will be paid by the Debtor on or before the EPI Effective Date. From and after the EPI Effective Date, the EPI Liquidating Trust will pay the fees assessed against the Debtor’s Estate until such time as the Chapter 11 Case is closed, dismissed, or converted. In addition, the Liquidating Trust on behalf of the Post-EPI Effective Date Debtor will file post-confirmation quarterly reports in conformity with the U.S. Trustee guidelines until entry of an order closing or converting the Chapter 11 Cases.

O. PRESERVATION OF INSURANCE.

The Debtor’s release from and payment of Claims and EPI Preferred Interests as provided in the EPI Plan will not diminish or impair the enforceability of any insurance policy that may cover any Claims, including, without limitation, any Claims on account of the Debtor’s officers or directors.

With respect to all insurance policies that have been issued at any time by Illinois Union Insurance Company, Federal Insurance Company and Vigilant Insurance Company and/or each of their affiliates and successors (collectively, the “Chubb Companies”), or provide coverage, to the Debtor or its predecessors (collectively, with all agreements, documents, or instruments relating thereto, the “Chubb Insurance Contracts”), the Chubb Companies have requested that this Disclosure Statement and the EPI Plan be revised to clarify that (i) nothing (including EPI Plan Sections 1.102 (including as used throughout the Disclosure Statement and Plan), 6.5, 6.7(a), and 6.14) alters the terms and conditions of (or coverage) provided by the Chubb Insurance Contracts and (ii) the EPI Liquidating Trust must remain liable for all of the obligations, regardless of when they arise, under the Chubb Insurance Contracts. The Chubb Companies have requested other revisions including that this Disclosure Statement and the EPI Plan contain certain language regarding the treatment and handling of workers’ compensation and similar claims. The Debtor is considering these revisions. The Chubb Companies reserve all rights to object to confirmation of the EPI Plan and the Debtor reserves all rights to respond to any such objections.

P. WAIVER OF STAY.

The Debtor requests as part of the Confirmation Order a waiver from the Bankruptcy Court of the fourteen (14) day stay of Bankruptcy Rule 3020(e) and, to the extent applicable, a waiver of the fourteen (14) day stay of Bankruptcy Rule 6004(h).

Q. CONDITIONS TO EPI EFFECTIVE DATE AND EFFECTS OF CONFIRMATION.

The EPI Plan will not be consummated and the EPI Effective Date will not occur unless and until (i) the Bankruptcy Court shall have approved this Disclosure Statement with respect to the EPI Plan by an order in form and substance reasonably acceptable to the Debtor and BSP, in consultation with the Preferred Interest Representative; (ii) the EPI Confirmation Order shall be in form and substance reasonably acceptable to the Debtor and BSP, in consultation with the Preferred Interest Representative; (iii) the EPI Liquidating Trust Agreement and any exhibits thereto shall be in form and substance reasonably acceptable to the Debtor and BSP, in


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consultation with the Preferred Interest Representative; (iv) the EPI Confirmation Order shall be in form and substance reasonably acceptable to the Debtor and BSP, in consultation with the Preferred Interest Representative, and shall have been entered by the Bankruptcy Court and such EPI Confirmation Order shall have become a Final Order (unless the Final Order requirement is waived by the Debtor and BSP, in consultation with the Preferred Interest Representative); (v) no stay shall be in effect with respect to the EPI Confirmation Order; and (vi) the EPI Liquidating Trust Agreement has been executed by the EPI Liquidating Trustees (no later than thirty (30) days after entry of the EPI Confirmation Order).

Confirmation of the EPI Plan will bind the Debtor, all Holders of Claims and Interests and all other parties in interest to the provisions of the EPI Plan whether or not the Claim or Interest is Impaired under the EPI Plan and whether or not the Holder of such Claim or Interest has accepted the EPI Plan.

Confirmation of the EPI Plan will constitute a finding that: (i) the EPI Plan has been proposed in good faith and in compliance with applicable provisions of the Bankruptcy Code; and (ii) all EPI’s solicitation of acceptances or rejections of the EPI Plan has been in good faith and in compliance with applicable provisions of the Bankruptcy Code. Nothing contained in the EPI Plan will limit the effect of Confirmation as described in section 1141 of the Bankruptcy Code.

R. MODIFICATION OR WITHDRAWAL OF EPI PLAN AND DISCLOSURE STATEMENT.

The Debtor may seek to amend or modify the EPI Plan at any time prior to its Confirmation in the manner provided by section 1127 of the Bankruptcy Code or as otherwise permitted by law without additional disclosure pursuant to section 1125 of the Bankruptcy Code, except as the Bankruptcy Court may otherwise order, and except as otherwise set forth in the EPI Plan. Subject to the provisions of the EPI Plan, the Debtor further reserves the right to amend the terms of the EPI Plan or waive any conditions to its Confirmation, effectiveness, or consummation if the Debtor determines that such amendments or waivers are necessary or desirable to confirm, effectuate, or consummate the EPI Plan, in accordance with the terms of the EPI Plan.

After Confirmation of the EPI Plan, but prior to the EPI Effective Date, the Debtor may, pursuant to section 1127 of the Bankruptcy Code, and as permitted by the terms of the EPI Plan, seek to modify the EPI Plan. After the EPI Effective Date, the EPI Liquidating Trust may apply to the Bankruptcy Court to remedy defects or omissions in the EPI Plan or to reconcile inconsistencies in the EPI Plan.

The Debtor reserves the right to revoke and withdraw the EPI Plan at any time prior to the EPI Effective Date, in which case the EPI Plan will be deemed to be null and void. If the Debtor revokes or withdraws the EPI Plan, or if Confirmation or the EPI Effective Date does not occur, then: (i) the EPI Plan will be null and void in all respects; (ii) any settlement or compromise embodied in the EPI Plan (if any), assumption or rejection of executory contracts or unexpired leases affected by the EPI Plan, and any document or agreement executed pursuant to the EPI Plan, will be deemed null and void; and (iii) nothing contained in the EPI Plan will: (a) constitute a waiver or release of any Claims or Interests or claims or Causes of Action by the Debtor against any other Entity; (b) prejudice in any manner the rights of the Debtor or any other


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Entity; or (c) constitute an admission, acknowledgement, offer, or undertaking of any sort by the Debtor or any other Entity.

V. REQUIREMENTS FOR CONFIRMATION

A. ACCEPTANCES NECESSARY TO CONFIRM EPI PLAN.

Voting rights are set as follows:

CLASS STATUS VOTING RIGHTS

Class 1 – Miscellaneous Secured Claims Unimpaired Not Entitled to Vote

Class 2 – Priority Non-Tax Claims Unimpaired Not Entitled to Vote

Class 3 – General Unsecured Claims Impaired Entitled to Vote

Class 4 – EPI Preferred Interests Impaired Entitled to Vote

Class 5 – Subordinated Claims Impaired Not Entitled to Vote

Class 6 – Intercompany Claims Impaired Not Entitled to Vote

Class 7 – Interests in the Debtor Impaired Not Entitled to Vote

If no Holder of a Claim or EPI Preferred Interest eligible to vote in a particular Class timely votes to accept or reject the EPI Plan, the Debtor will seek to have the EPI Plan deemed accepted by the Holders of such Claims or Preferred Interests in such Class for purposes of section 1129(b) of the Bankruptcy Code.

B. BEST INTEREST OF CREDITORS TEST.

Confirmation requires, among other things, that each Holder of a Claim in an Impaired Class and each Holder of an Interest either: (a) accepts the EPI Plan; or (b) receives or retains under the EPI Plan property of a value, as of the EPI Effective Date, that is not less than the value such Holder would receive or retain if the Debtor was liquidated under chapter 7 of the Bankruptcy Code. This requirement is commonly referred to as the “best interests test.”

1. Chapter 7

To determine the value that the Holders of Impaired Claims and Interests would receive if the Debtor was liquidated, the Bankruptcy Court must determine the dollar amount that would be generated from the liquidation of the Debtor’s assets and properties in the context of a chapter 7 liquidation case. Section 704 of the Bankruptcy Code requires a chapter 7 trustee to collect and reduce to money the property of the estate as expeditiously as is compatible with the best interests of parties in interest.

Here, the Cash available in a chapter 7 case for satisfaction of Allowed Claims and EPI Preferred Interests would consist of the Cash proceeds resulting from the liquidation of the


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Debtor’s remaining assets, augmented by the Cash, if any, held by the Debtor at the time of the commencement of the chapter 7 case. Any such Cash amount would then be reduced by the amount of any Claims secured by such assets such as the Miscellaneous Secured Claims (if any), the costs and expenses of the liquidation of any remaining assets, including the costs of prosecution of any pending litigation and Causes of Action, and such additional Administrative Claims and other Priority Claims that may be incurred during the chapter 7 cases.

The costs of liquidation under chapter 7 would include fees payable to the chapter 7 trustee and his or her attorneys and other professionals and agents, plus any unpaid expenses incurred by the Debtor during the Chapter 11 Case that would be entitled to priority in the chapter 7 cases (such as compensation for Professional Persons and costs and expenses of the Debtor). Such Administrative Expenses arising during the chapter 7 and 11 cases would have to be paid in Cash in full from the liquidation proceeds before the balance of those proceeds could be made available to pay prepetition claims.

2. Liquidation Alternative

Pursuant to Bankruptcy Code section 1129(a)(7), if an Impaired Class does not accept the EPI Plan, the Debtor must demonstrate, and the Bankruptcy Court must determine that with respect to such Class, each Holder of a Claim in the applicable Class will receive property of a value, as of the EPI Effective Date of the EPI Plan, that is not less than the amount that such Holder would receive if the Debtor was liquidated under chapter 7 of the Bankruptcy Code on the EPI Effective Date .

The EPI Plan is expected to provide a greater recovery to the Holders of Allowed Claims and Allowed EPI Preferred Interests than such Holders would receive under a liquidation under chapter 7 primarily (i) because pursuant to the EPI Plan, the proposed Liquidating Trustees are familiar with the operations, businesses, and assets of the subsidiaries of EPI and will play a role in the disposition of such subsidiaries, with excess proceeds to be distributed to the EPI Liquidating Trust, and (ii) due to the benefits of the Global Settlement Agreement, which has been incorporated into the EPI Plan.

A newly appointed chapter 7 trustee would require substantial time, effort and money to become familiar with sources of EPI Plan funding and attendant circumstances, and during such period, potential transactions that may result in residual value for the Estate may be jeopardized. The EPI Liquidating Trust, under the EPI Plan, will be able to maximize the value of the Debtor’s assets efficiently, redounding to the benefit of the EPI Liquidating Trust Beneficiaries.

Moreover, in a chapter 7 case, the chapter 7 trustee would be entitled to seek a sliding scale commission based upon the funds distributed by such trustee. Some residual value resulting from the Debtor’s efforts prior to the chapter 7 trustee’s appointment may be subsequently transferred to the Estate, and the chapter 7 trustee may be able to assert a commission for such funds even though they are the result of prior efforts. It is also anticipated that a chapter 7 liquidation would result in delay in Distributions to Creditors and Holders of Allowed EPI Preferred Interests. Among other things, a chapter 7 case would trigger a new bar date for filing claims that would be more than ninety (90) days following conversion of the Chapter 11 Case to chapter 7. See Fed. R. Bankr. P. 3002(c). Hence, a chapter 7 liquidation would not only delay distributions, but raise the prospect of additional claims that were not


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asserted in the Chapter 11 Case. Based on the foregoing, the EPI Plan provides an opportunity to bring the greatest return to Creditors and Holders of Allowed EPI Preferred Interests.

3. Feasibility of EPI Plan

Section 1129(a)(11) of the Bankruptcy Code requires, as a condition to confirmation, that the Bankruptcy Court find that confirmation of the EPI Plan is not likely to be followed by the liquidation or the need for further financial reorganization of the Debtor or any successor to the Debtor under the EPI Plan, unless such liquidation or reorganization is proposed under the EPI Plan. This requirement is called “feasibility.”

The EPI Plan is feasible because the Debtor anticipates it will have sufficient funds available as of the EPI Effective Date, subject to the terms of the Global Settlement Agreement, to satisfy all of the Debtor’s projected obligations under the EPI Plan. The Debtor has previously described how Allowed Claims will be satisfied through the distribution of EPI Liquidation Trust Assets to the Holders of Allowed Claims and Allowed EPI Preferred Interests. Therefore, the Debtor believes that Confirmation of the EPI Plan is not likely to be followed by the need for a further bankruptcy relief by the Post-EPI Effective Date Debtor. However, pursuant to the terms of the Global Settlement Agreement, certain Unpaid Chapter 11 Professional Fees may not be paid in full, or payment may be delayed, as agreed by the Holders of such Claims.

4. Classification

In accordance with section 1122 of the Bankruptcy Code, the EPI Plan provides for the classification of Claims and Interests. Section 1122(a) of the Bankruptcy Code permits a plan to place a claim or equity interest in a particular class only if the claim or equity interest is substantially similar to the other claims or interests in that class. The Debtor believes that the classification of Claims and Interests under the EPI Plan is appropriate and consistent with applicable law.

5. Confirmation of EPI Plan Without Necessary Acceptances; Cramdown

A COURT MAY CONFIRM THE EPI PLAN, EVEN IF IT IS NOT ACCEPTED BY ALL IMPAIRED CLASSES, IF THE EPI PLAN HAS BEEN ACCEPTED BY AT LEAST ONE IMPAIRED CLASS OF CLAIMS OR PREFERRED INTERESTS, AND THE EPI PLAN MEETS THE “CRAMDOWN” REQUIREMENTS SET FORTH IN SECTION 1129(b) OF THE BANKRUPTCY CODE. SECTION 1129(b) OF THE BANKRUPTCY CODE REQUIRES THAT THE BANKRUPTCY COURT FIND THAT THE EPI PLAN IS “FAIR AND EQUITABLE,” AND DOES NOT “DISCRIMINATE UNFAIRLY” WITH RESPECT TO EACH NON-ACCEPTING IMPAIRED CLASS OF CLAIMS OR INTERESTS. IF AT LEAST ONE IMPAIRED CLASS HAS VOTED TO ACCEPT THE EPI PLAN, IN ACCORDANCE WITH SECTION 1129(a)(8) OF THE BANKRUPTCY CODE, THE DEBTOR INTENDS TO REQUEST THAT THE BANKRUPTCY COURT CONFIRM THE EPI PLAN IN ACCORDANCE WITH THE “CRAMDOWN” PROVISION OF SECTION 1129(b) OF THE BANKRUPTCY CODE, OR MODIFY THE EPI PLAN IN ACCORDANCE WITH THE TERMS THEREOF.


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The EPI Plan provides for the possibility of invoking the “cramdown” provisions as defined in section 1129(a) of the Bankruptcy Code. Under this provision, the Bankruptcy Court has the authority to confirm the EPI Plan even though a Class of Claims or Interests that is Impaired does not vote to accept the EPI Plan, if another Class of Claims or Interests, which is also Impaired, votes to accept the EPI Plan. This provision takes into account the possibility that one large claimant or several claimants may arbitrarily vote not to accept the EPI Plan and that those arbitrary votes could be detrimental to other Creditors or Holders of Interest, including EPI Preferred Interests. In this instance, the Bankruptcy Court, notwithstanding the negative vote of an Impaired Class, in the interest of being “fair and equitable,” may confirm the EPI Plan if another Impaired Class has accepted the EPI Plan. Such determination, if necessary, would be addressed at the EPI Confirmation Hearing.

6. No Unfair Discrimination

The Debtor believes that under the EPI Plan: (i) all Impaired Classes of Claims and Interests are treated in a manner that is consistent with the treatment of other Classes of Claims and Interests with which their legal rights are intertwined, if any; and (ii) no Class of Claims or Interests will receive payments or property with an aggregate value greater than the aggregate value of the Allowed Claims or Allowed Interests in such Class. The Debtor believes that the EPI Plan does not discriminate unfairly as to any Impaired Class.

7. Fair and Equitable Test

With respect to a dissenting class of Claims and Interests, the “fair and equitable” standard requires that the EPI Plan provide that either the Holders of Claims or Interests in each Class received everything to which such Holders are legally entitled or that Classes junior in priority to the Class receive nothing. The strict requirement of the allocation of full value to dissenting classes before any junior class can receive distribution is known as the “absolute priority rule.”

The Bankruptcy Code establishes different “fair and equitable” tests for Holders of secured claims, unsecured claims, and interests as follows:

a. Secured Claims

Either: (i) each Holder of a secured claim (x) retains the lien securing its secured claim and receives on account of its allowed secured claim deferred cash payments having a present value equal to the amount of its allowed secured claim, or (y) realizes the “indubitable equivalent” of its allowed secured claim; or (ii) the property securing the claim is sold free and clear of liens, with such liens attaching to the proceeds, and the liens against such proceeds are treated in accordance with clause (i).

b. Unsecured Claims

Either: (i) each Holder of an unsecured claim receives or retains under the EPI Plan property of a value equal to the amount of its allowed claim; or (ii) the Holders of claims and interests that are junior to the claims or the non-accepting class do not receive any property under the EPI Plan on account of such claims and interests.


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c. Equity Interests

Either: (i) such Holder of an interest receives or retains property of a value equal to the greater of any fixed liquidation preference or fixed redemption price to which such Holder is entitled, or the value of the interest; or (ii) the Holder of any interests junior to the interests in the impaired class will not receive or retain any property under the EPI Plan.

The cramdown provisions of the Bankruptcy Code are complex and this summary is not intended to be a complete statement of the law in this area.

VI. EFFECT OF CONFIRMATION

A. BINDING EFFECT OF CONFIRMATION.

Confirmation will bind the Debtor, all Holders of Claims, Administrative Expenses, or Interests and other parties in interest to the provisions of the EPI Plan whether or not the Claim, Administrative Expense, or Interest of such Holder is Impaired under the EPI Plan and whether or not the Holder of such Claim, Administrative Expense, or Interest has accepted the EPI Plan.

B. GOOD FAITH.

Confirmation of the EPI Plan shall constitute a finding that: (i) the EPI Plan has been proposed in good faith and in compliance with applicable provisions of the Bankruptcy Code; and (ii) all Persons’ solicitations of acceptances or rejections of the EPI Plan and the offer, issuance, sale, or purchase of a security offered or sold under the EPI Plan have been in good faith and in compliance with applicable provisions of the Bankruptcy Code.

C. NO LIMITATIONS ON EFFECT OF CONFIRMATION.

Nothing contained in the EPI Plan will limit the effect of Confirmation as described in section 1141 of the Bankruptcy Code.

VII. RISK FACTORS

There is a risk under the EPI Plan that Allowed Administrative Expenses, Tax Claims and Priority Non-Tax Claims will materially exceed the Debtor’s estimates. The process of reconciling all such Claims has not been completed and outstanding disputes remain that may need to be litigated or otherwise resolved. Among other things, EPI has not yet filed its corporate tax return for 2019 and, therefore, there can be no assurances that EPI will not have adverse tax consequences as a result of the Exchange Agreement, the subsequent rescission of such agreement, and the confirmation of the EPA Plan, among other things. Nor is there any assurance, with respect to such potential adverse tax consequences that EPI possess sufficient NOLs to offset any potential tax liability.

Further, the EPI Plan provides for certain conditions that must be satisfied (or waived) prior to the EPI Effective Date. As of the date of this Disclosure Statement, there can be no assurance that any or all such conditions will be satisfied (or waived). Accordingly, even if the


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EPI Plan is confirmed by the Bankruptcy Court, there can be no assurance that the EPI Plan will be consummated.

Further, there is a risk that the Debtor will not be able to realize the recoveries projected herein from the assets presently available to the Estate (including any value that may be distributed to EPI by its subsidiaries and net proceeds, if any, from the prosecution of the Causes of Action), which may have an adverse impact on distributions to Creditors and Holders of Allowed EPI Preferred Interests.

Additionally, there is a risk that the EPI Plan may not be confirmed by the Bankruptcy Court, either because the requisite votes in favor of the EPI Plan are not received or the Bankruptcy Court decides not to confirm the EPI Plan on some other basis.

Notwithstanding the risks, however, the Debtor believes that the same risks described herein are present in and greater to Creditors and Holders of Interests in a chapter 7 case. Although the Debtor believes that the EPI Plan will satisfy all requirements necessary for confirmation by the Bankruptcy Court, there can be no assurance that the Bankruptcy Court will reach the same conclusion. Finally, there can be no assurance that modifications to the EPI Plan will not be required for confirmation or that such modifications would not necessitate the re-solicitation of votes.

VIII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE EPI PLAN

The following discussion is a summary of certain U.S. federal income tax consequences of the EPI Plan to Holders of Claims against and Interests in the Debtor. This discussion is based on the Internal Revenue Code (the “Tax Code”), Treasury Regulations promulgated and proposed thereunder, judicial decisions and published administrative rules and pronouncements of the Internal Revenue Service (“IRS”), all as in effect on the date hereof. Due to the complexity of certain aspects of the EPI Plan, the lack of applicable legal precedent, the possibility of changes in the law, the differences in the nature of the Claims (including Claims within the same Class), and Interests (including Interests in the same Class), the Holder’s status and method of accounting (including Holders within the same Class) and the potential for disputes as to legal and factual matters with the IRS, the tax consequences described herein are subject to significant uncertainties. No legal opinions have been requested from counsel with respect to any of the tax aspects of the EPI Plan and no rulings have been or will be requested from the IRS with respect to the any of the issues discussed below. Further, legislative, judicial or administrative changes may occur, perhaps with retroactive effect, which could affect the accuracy of the statements and conclusions set forth below as well as the tax consequences to the Debtor and the Holders of Claims.

This discussion does not purport to address all aspects of U.S. federal income taxation that may be relevant to the Debtor or the Holders of Claims and Interests in light of their personal circumstances, nor does the discussion deal with tax issues with respect to taxpayers subject to special treatment under the U.S. federal income tax laws (including, for example, banks, governmental authorities or agencies, pass-through entities, brokers and dealers in securities, traders that mark-to-market their securities, mutual funds, insurance companies, other financial institutions, real estate investment trusts, tax-exempt organizations, small business


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investment companies, regulated investment companies, foreign taxpayers, persons whose functional currency is not the U.S. dollar, persons subject to the alternative minimum tax, and persons holding Claims or Interests as part of a “straddle,” “hedge,” “constructive sale” or “conversion transaction” with other investments). This discussion does not address the tax consequences to Holders of Claims who did not acquire such Claims at the issue price on original issue. No aspect of foreign, state, local or estate and gift taxation is addressed.

The U.S. federal income tax consequences of the distributions contemplated by the EPI Plan to the Holders of Claims that are U.S. Persons will depend upon a number of factors. For purposes of the following discussion, a “U.S. Person” is any person or entity (1) who is a citizen or resident of the United States, (2) that is a corporation or partnership created or organized in or under the laws of the United States or any state thereof, (3) that is an estate, the income of which is subject to U.S. federal income taxation regardless of its source or (4) that is a trust (a) the administration over which a United States person can exercise primary supervision and all of the substantial decisions of which one or more U.S. persons have the authority to control; or (b) that has in effect a valid election to continue to be treated as a U.S. Person for U.S. federal income tax purposes. In the case of a partnership, the tax treatment of its partners will depend on the status of the partner and the activities of the partnership. U.S. Persons who are partners in a partnership should consult their tax advisors. A “Non-U.S. Person” is any person or entity that is not a U.S. Person. For purposes of the following discussion and unless otherwise noted below, the term “Holder” will mean a Holder of a Claim that is a U.S. Person.

Except where otherwise indicated, this discussion assumes that the Claims are held as capital assets within the meaning of section 1221 of the Tax Code.

THE FOLLOWING SUMMARY IS NOT INTENDED TO CONSTITUTE ADVICE TO ANY PARTY, AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING AND ADVICE BASED UPON THE PERSONAL CIRCUMSTANCES OF EACH HOLDER OF A CLAIM. EACH HOLDER OF A CLAIM, AS WELL AS EACH HOLDER OF AN INTEREST, IS URGED TO CONSULT WITH SUCH HOLDER’S TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES APPLICABLE UNDER THE EPI PLAN.

IRS Circular 230 Notice. To ensure compliance with IRS Circular 230, Holders of Claims and Interests are hereby notified that: (a) any discussion of federal tax issues contained or referred to in this Disclosure Statement is not intended or written to be used, and cannot be used, by Holders of Claims and Interests for the purpose of avoiding penalties that may be imposed on them under the Tax Code; (b) such discussion is written in connection with the promotion or marketing by the Debtor of the transactions or matters addressed herein; and (c) Holders of Claims and Interests should seek advice based on their particular circumstances from an independent tax advisor.

A. CONSEQUENCES TO CREDITORS.

1. Holders of Claims and EPI Preferred Interests in General

Generally, a Holder of a Claim should in most, but not all circumstances, recognize gain or loss equal to the difference between the “amount realized” by such Holder in exchange for its


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Claim and such Holder’s adjusted tax basis in the Claim. The “amount realized” is equal to the sum of the cash and the fair market value of any other consideration received under a plan in respect of a Holder’s Claim. The tax basis of a Holder in a Claim will generally be equal to the Holder’s cost therefore. To the extent applicable, the character of any recognized gain or loss (e.g., ordinary income, or short-term or long-term capital gain or loss) will depend upon the status of the Holder, the nature of the Claim in the Holder’s hands, the purpose and circumstances of its acquisition, the Holder’s holding period of the Claim, and the extent to which the Holder previously claimed a deduction for the worthlessness of all or a portion of the Claim. Generally, if the Claim is a capital asset in the Holder’s hands, any gain or loss realized will generally be characterized as capital gain or loss, and will constitute long-term capital gain or loss if the Holder has held such Claim for more than one year.

A Holder who received Cash in satisfaction of its Claims may recognize ordinary income or loss to the extent that any portion of such consideration is characterized as accrued interest. A Holder who did not previously include in income accrued but unpaid interest attributable to its Claim, and who receives a distribution on account of its Claim pursuant to the EPI Plan, will be treated as having received interest income to the extent that any consideration received is characterized for United States federal income tax purposes as interest, regardless of whether such Holder realizes an overall gain or loss as a result of surrendering its Claim. A Holder who previously included in its income accrued but unpaid interest attributable to its Claim should recognize an ordinary loss to the extent that such accrued but unpaid interest is not satisfied, regardless of whether such Holder realizes an overall gain or loss as a result of the distribution it may receive under the EPI Plan on account of its Claim.

Under the EPI Plan, the Holders of Class 3 Claims and EPI Preferred Interest in Class 4 may receive only a partial distribution of their Allowed Claims or Preferred Interests. As discussed herein, members of Class 3 and Class 4 also will receive the Liquidation Trust Units, which is discussed further herein. Moreover, Holders of Allowed Class 3 General Unsecured Claims will receive their Pro Rata share of the EPA Warrants. Whether the Holder of such Claims or EPI Preferred Interests will recognize a loss or any other tax treatment will depend upon facts and circumstances that are specific to the nature of the Holder and its Claims or Preferred Interests. Creditors should consult their own tax advisors.

A Holder of a Claim that is a Non-U.S. Person generally will not be subject to United States federal income tax with respect to property (including money) received in exchange for such Claim pursuant to the EPI Plan, unless (i) such Holder is engaged in a trade or business in the United States to which income, gain or loss from the exchange is “effectively connected” for United States federal income tax purposes, or (ii) if such Holder is an individual, such Holder is present in the United States for one hundred and eighty-three (183) days or more during the taxable year of the exchange and certain other requirements are met.

2. U.S. Federal Income Tax Consequences in Relation to the EPI Liquidating Trust and the EPI Liquidating Trust Beneficiaries

As of the EPI Effective Date, the EPI Liquidating Trust will be established for the benefit of the EPI Liquidating Trust Beneficiaries. The tax consequences of the EPI Plan in relation to the EPI Liquidating Trust and the EPI Liquidating Trust Beneficiaries are subject to uncertainties


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due to the complexity of the EPI Plan and the lack of interpretative authority regarding certain changes in the tax law.

Allocations of taxable income of the EPI Liquidating Trust (other than taxable income allocable to the EPI Liquidating Trust’s claims reserves) among Holders of Claims and EPI Preferred Interests will be determined by reference to the manner in which an amount of cash equal to such taxable income would be distributed (were such cash permitted to be distributed at such time) if, immediately prior to such deemed distribution, the EPI Liquidating Trust had distributed all of its assets (valued at their tax book value) to the Holders of the beneficial interests in the EPI Liquidating Trust, adjusted for prior taxable income and loss and taking into account all prior and concurrent distributions from the EPI Liquidating Trust. Similarly, taxable loss of the EPI Liquidating Trust will be allocated by reference to the manner in which an economic loss would be borne immediately after a liquidating distribution of the remaining trust assets.

The tax book value of the trust assets for this purpose will equal their fair market value on the EPI Effective Date, adjusted in accordance with tax accounting principles prescribed by the Tax Code, applicable Treasury Regulations, and other applicable administrative and judicial authorities and pronouncements. Uncertainties with regard to federal income tax consequences of the EPI Plan may arise due to the inherent nature of estimates of value that will impact tax liability determinations.

Subject to definitive guidance from the IRS or a court of competent jurisdiction to the contrary (including the receipt of an IRS private letter ruling if the EPI Liquidating Trustee so requests one, or the receipt of an adverse determination by the IRS upon audit if not contested by the EPI Liquidating Trustee), the EPI Liquidating Trustees may (a) elect to treat any trust assets allocable to, or retained on account of, Disputed Claims (the “Trust Claims Reserve”) as a “disputed ownership fund” governed by Treasury Regulation Section 1.468B-9, and (b) to the extent permitted by applicable law, report consistently with the foregoing for state and local income tax purposes. Accordingly, any Trust Claims Reserve will be subject to tax annually on a separate entity basis on any net income earned with respect to the trust assets in such reserves, and all distributions from such reserves will be treated as received by Holders in respect of their Claims or EPI Preferred Interests as if distributed by the Debtor. All parties (including, without limitation, the EPI Liquidating Trustees and the Holders of beneficial interests in the EPI Liquidating Trust) will be required to report for tax purposes consistently with the foregoing.

The EPI Liquidating Trust is intended to qualify as a liquidating trust for federal income tax purposes. In general, a liquidating trust is not a separate taxable entity but rather is treated for federal income tax purposes as a “grantor” trust (i.e., a pass-through entity).

The IRS, in Revenue Procedure 94-45, 1994.28 I.R.B. 124, set forth the general criteria for obtaining an IRS ruling as to the grantor trust status of a liquidating trust under a chapter 11 EPI Plan. The EPI Liquidating Trust has been structured with the intention of complying with such general criteria. Pursuant to the EPI Plan, and in conformity with Revenue Procedure 94-45, supra, all parties (including the EPI Liquidating Trustee and the Holders of beneficial interests in the EPI Liquidating Trust) are required to treat for federal income tax purposes, the EPI Liquidating Trust as a grantor trust of which the Holders of the applicable Allowed Claims and EPI Preferred Interests are the owners and grantors. While the following discussion assumes


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that the EPI Liquidating Trust would be so treated for federal income tax purposes, no ruling has been requested from the IRS concerning the tax status of the EPI Liquidating Trust as a grantor trust. Accordingly, there can be no assurance that the IRS would not take a contrary position to the classification of the EPI Liquidating Trust as a grantor trust. lf the IRS were to challenge successfully such classification, the federal income tax consequences to the EPI Liquidating Trust and the EPI Litigation Trust Beneficiaries thereof could materially vary from those discussed herein.

In general, each EPI Liquidating Trust Beneficiary will recognize gain or loss in an amount equal to the difference between (i) the “amount realized” by such beneficiary in satisfaction of its applicable Allowed Claim or Allowed EPI Preferred Interest, and (ii) such beneficiary’s adjusted tax basis in such Claim or EPI Preferred Interest. The “amount realized” by a beneficiary will equal the sum of cash and the aggregate fair market value of the property received by such party pursuant to the EPI Plan (such as a beneficiary’s undivided beneficial interest in the assets transferred to the EPI Liquidating Trust). Where gain or loss is recognized by a beneficiary in respect of its Allowed Claim or Allowed EPI Preferred Interest, the character of such gain or loss (i.e., long-term or short-term capital, or ordinary income) will be determined by a number of factors including the tax status of the party, whether the Claim or EPI Preferred Interest constituted a capital asset in the hands of the party and how long it had been held, whether the Claim or EPI Preferred Interest was originally issued at a discount or acquired at a market discount and whether and to what extent the party had previously claimed a bad debt deduction in respect of the Claim or EPI Preferred Interest.

After the EPI Effective Date, any amount that a beneficiary receives as a distribution from the EPI Liquidating Trust in respect of its beneficial interest in the EPI Liquidating Trust should not be included, for federal income tax purposes, in the party’s amount realized in respect of its Allowed Claim or Allowed EPI Preferred Interest, but should be separately treated as a distribution received in respect of such party’s beneficial interest in the EPI Liquidating Trust.

In general, a beneficiary’s aggregate tax basis in its undivided beneficial interest in the assets transferred to the EPI Liquidating Trust will equal the fair market value of such undivided beneficial interest as of the EPI Effective Date and the beneficiary’s holding period in such assets will begin the day following the EPI Effective Date. Distributions to any beneficiary will be allocated first to the original principal portion of the beneficiary’s Allowed Claim as determined for federal tax purposes, and then, to the extent the consideration exceeds such amount, to the remainder of such Claim. However, there is no assurance that the IRS will respect such allocation for federal income tax purposes.

For all federal income tax purposes, all parties (including the EPI Liquidating Trustees and the EPI Liquidating Trust Beneficiaries) will treat the transfer of assets to the EPI Liquidating Trust, in accordance with the terms of the EPI Plan, as a transfer of those assets directly to the Holders of the applicable Allowed Claims or Allowed EPI Preferred Interests, followed by the transfer of such assets by such Holders to the EPI Liquidating Trust. Consistent therewith, all parties will treat the EPI Liquidating Trust as a grantor trust of which such Holders are to be owners and grantors. Thus, such Holders (and any subsequent Holders of interests in the EPI Liquidating Trust) will be treated as the direct owners of an undivided beneficial interest in the assets of the EPI Liquidating Trust for all federal income tax purposes. Accordingly, each Holder of a beneficial interest in the EPI Liquidating Trust will be required to report on its


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federal income tax return(s) the Holder’s allocable share of all income, gain, loss, deduction, or credit recognized or incurred by the EPI Liquidating Trust.

The EPI Liquidating Trust’s taxable income will be allocated to the EPI Liquidating Trust Beneficiaries in accordance with each such beneficiary’s pro rata share. The character of items of income, deduction, and credit to any EPI Liquidating Trust Beneficiary and the ability of such EPI Liquidating Trust Beneficiary to benefit from any deductions or losses may depend on the particular situation of such beneficiary.

The federal income tax reporting obligation of an EPI Liquidating Trust Beneficiary is not dependent upon the EPI Liquidating Trust distributing any cash or other proceeds. Therefore, an EPI Liquidating Trust Beneficiary may incur a federal income tax liability regardless of the fact that the EPI Liquidating Trust has not made, or will not make, any concurrent or subsequent distributions to the EPI Liquidating Trust Beneficiary. If an EPI Liquidating Trust Beneficiary incurs a federal tax liability but does not receive distributions commensurate with the taxable income allocated to it in respect of its beneficial interests in the EPI Liquidating Trust it holds, the EPI Liquidating Trust Beneficiary may be allowed a subsequent or offsetting loss.

The EPI Liquidating Trustees will file with the IRS returns for the EPI Liquidating Trust as a grantor trust pursuant to Treasury Regulations section 1.671-4(a). The EPI Liquidating Trust will also send to each EPI Liquidating Trust Beneficiary a separate statement setting forth such beneficiary’s share of items of income, gain, loss, deduction, or credit and will instruct such beneficiary to report such items on its federal income tax return.

Events subsequent to the date of this Disclosure Statement, such as the enactment of additional tax legislation, could also change the federal income tax consequences of the EPI Plan and the transactions contemplated thereunder.

B. IMPORTANCE OF OBTAINING PROFESSIONAL TAX ASSISTANCE.

THE FOREGOING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF CERTAIN INCOME TAX CONSEQUENCES OF THE EPI PLAN AND IS NOT A SUBSTITUTE FOR CAREFUL TAX EPI PLANNING WITH A TAX PROFESSIONAL. THE ABOVE DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. THE TAX CONSEQUENCES ARE IN MANY CASES UNCERTAIN AND MAY VARY DEPENDING ON A CLAIM HOLDER’S OR INTEREST HOLDER’S PARTICULAR CIRCUMSTANCES. ACCORDINGLY, CLAIM AND INTEREST HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS ABOUT THE UNITED STATES FEDERAL, STATE AND LOCAL, AND APPLICABLE FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF THE EPI PLAN.

IX. SECURITIES LAW MATTERS

A. IN GENERAL

The EPI Plan provides for the establishment of the EPI Liquidating Trust and for the issuance of beneficial interests therein. Beneficial interests in trusts may be deemed to be


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“securities” under applicable federal and state securities laws. However, as discussed herein, the Debtor does not believe that the EPI Liquidating Trust Interests constitute “securities” for purposes of applicable non-bankruptcy law. Alternatively, even if the EPI Liquidating Trust Interests constitute “securities,” the Debtor believes that these would be exempt from registration pursuant to Bankruptcy Code section 1145(a)(1). Finally, the Debtor does not believe that the Investment Company Act of 1940, as amended (the “Investment Company Act”), is applicable in that the EPI Liquidating Trust will not be, and is not controlled by, an “investment company” for purposes of that Act.

B. INITIAL ISSUANCE

Unless an exemption is available, the offer and sale of a security generally is subject to registration with the United States Securities and Exchange Commission (the “SEC”) under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”). In the opinion of the Debtor, the Liquidating Trust Interests do not constitute “securities” within the definition of Section 2(11) of the Securities Act and corresponding definitions under state securities laws and regulations (“Blue Sky Laws”) because generally they are non-transferable. Accordingly, the EPI Liquidating Trust Units should be issuable in accordance with the EPI Plan without registration under the Securities Act or any Blue Sky Law.

Alternatively, in the event that the EPI Liquidating Trust Units are deemed to constitute securities, section 1145(a)(1) of the Bankruptcy Code exempts the offer and sale of securities under a plan from registration under the Securities Act and Blue Sky Laws if three principal requirements are satisfied:

(a) the securities are offered and sold under a plan and are securities of the debtor, of an affiliate of the debtor participating in a joint EPI Plan with the debtor, or of a successor to the debtor under the EPI Plan;

(b) the recipients of the securities hold a pre-petition or administrative claim against the debtor or an interest in the debtor; and

(c) the securities are issued entirely in exchange for recipient’s claim against or interest in the debtor, or principally in such exchange and partly for cash or property.

If and to the extent that the EPI Liquidating Trust Units may constitute securities, the Debtor believes that these beneficial interests issued in respect of Allowed Claims will qualify as securities “of the debtor … or of a successor to the debtor” pursuant to section 1145(a)(1). In addition, the Trust Interests will be issued entirely in exchange for Claims or EPI Preferred Interests. Thus, the Debtor believes that the issuance of the EPI Liquidating Trust Units pursuant to the EPI Plan will satisfy the applicable requirements of section 1145(a)(1) of the Bankruptcy Code, and that such issuance should be exempt from registration under the Securities Act and any applicable Blue Sky Law.

The Debtor believes that its reliance upon the foregoing exemptions in respect of the issuance of the EPI Liquidating Trust Units is consistent with positions taken by the SEC with respect to similar transactions and arrangements by other chapter 11 debtors in possession.


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However, the Debtor has not sought any “no-action” letter by the SEC with respect to any such matters, and therefore no assurance can be given regarding the availability of any exemptions from registration with respect to any securities, if any, issued pursuant to the EPI Plan.

C. RESALES.

The EPI Liquidating Trust Units will be subject to transfer restrictions under the terms of the EPI Liquidating Trust Agreement. As provided in said agreement, generally, the EPI Liquidating Trust Units cannot be assigned or transferred other than by operation of law, and will not be represented by certificates.

D. EXCHANGE ACT COMPLIANCE.

Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), applies only to a company that has both (i) total assets in excess of $10.0 million and (ii) a class of equity securities held of record by more than 2,000 persons or 500 persons who are not accredited investors (within 120 days after the last day of the company’s fiscal year). The Debtor believes it highly unlikely conditions (i) and (ii) will be deemed satisfied in respect to the EPI Liquidating Trust, and in any event, the EPI Liquidating Trust should not be required to register under Section 12(g) of the Exchange Act. The Debtor has been advised that the staff of the SEC has issued no-action letters with respect to the non-necessity of Exchange Act registration of a bankruptcy plan trust when the following are true:

(a) the beneficial interests in the trust are not represented by certificates or, if they are, the certificates bear a legend stating that the certificates are transferable only upon death or by operation of law;

(b) the trust exists only to effect a liquidation and will terminate within a reasonable period of time; and

(c) the trust will issue annual unaudited financial information to all beneficiaries.

Based on the foregoing, the Debtor believes that the EPI Liquidating Trust will not be subject to registration under the Exchange Act. However, the views of the SEC on the matter have not been sought by the Debtor and, therefore, no assurance can be given regarding this matter.

E. INVESTMENT COMPANY ACT.

As the assets of the EPI Liquidating Trust do not consist of securities issued by the Debtor or any other person, and this trust is organized as a liquidating entity in the process of liquidation, the Debtor does not believe that the EPI Liquidating Trust falls within the definition of “investment company” in any manner requiring such entity to register under the Investment Company Act.


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F. COMPLIANCE IF REQUIRED.

Notwithstanding the preceding discussion, if the EPI Liquidating Trustees determine, with the advice of counsel, that the EPI Liquidating Trust is required to comply with the registration and reporting requirements of the Exchange Act or the Investment Company Act, then prior to the registration of the EPI Liquidating Trust under the Exchange Act or the Investment Company Act, the EPI Liquidating Trustees (subject to the terms of the EPI Liquidating Trust Agreement) will seek to amend the EPI Liquidating Trust Agreement to make such changes as are deemed necessary or appropriate to ensure that the EPI Liquidating Trust is not subject to registration or reporting requirements of the Exchange Act, or the Investment Company Act, and the EPI Liquidating Trust Agreement, as so amended, will be effective after notice and opportunity for a hearing, and the entry of a Final Order of the Bankruptcy Court. If the EPI Liquidating Trust Agreement, as amended, is not approved by Final Order of the Bankruptcy Court or the Bankruptcy Court otherwise determines in a Final Order that registration under one or both of the Exchange Act or Investment Company Act is required, then the EPI Liquidating Trustees will take such actions as may be required to satisfy the registration and reporting requirements of the Exchange Act and/or the Investment Company Act, as applicable.

X. ALTERNATIVES TO EPI PLAN AND MISCELLANEOUS MATTERS

A. ALTERNATIVES TO EPI PLAN.

The Debtor believes that if the EPI Plan is not confirmed, or is not confirmable, the alternatives to the EPI Plan include: (a) conversion of the Chapter 11 Case to a case under chapter 7; (b) dismissal of the Chapter 11 Case; or (c) an alternative plan of reorganization or liquidation which, in the Debtor’s view, would offer less favorable treatment to creditors than that proposed under the EPI Plan.

(i) Liquidation Under Chapter 7

If no EPI Plan can be confirmed, the Chapter 11 Case may be converted to cases under chapter 7 of the Bankruptcy Code, pursuant to which a trustee would be appointed to liquidate the Debtor’s assets for distribution to Creditors in accordance with the priorities established by the Bankruptcy Code. For the reasons previously discussed above, the Debtor believes that Confirmation of the EPI Plan will provide Creditors and Holders of Allowed EPI Preferred Interests with a recovery that is expected to be more than could be achieved in a liquidation under chapter 7 of the Bankruptcy Code.

(ii) Dismissal

Dismissal of the Chapter 11 Case would result in each individual creditor or Holder of an EPI Preferred Interest having to protect its own rights through legal action, likely resulting in, among other things, numerous suits and other proceedings being commenced and actions being taken by secured creditors to protect or foreclose upon their collateral, requiring the Debtor to expend substantial time and resources to respond to and address such matters. The Debtor believes that dismissal of the Chapter 11 Case would result in disparate, delayed, and potentially smaller recoveries by Creditors and Holders of EPI Preferred Interests.


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B. NO RES JUDICATA EFFECT.

Notwithstanding any provision to the contrary in the EPI Plan, this Disclosure Statement, or the EPI Liquidating Trust Agreement that permit the Debtor to enter into settlements and compromises of Causes of Action and any other potential litigation, such provisions will not have and are not intended to have any res judicata effect with respect to any claims and Causes of Action that are not otherwise treated under the EPI Plan, and will not be deemed a bar to asserting such claims and Causes of Action.

XI. CONCLUSION

The Debtor believes that the EPI Plan is in the best interest of Creditors and Holders of EPI Preferred Interests and urges Creditors and Holders of EPI Preferred Interests to vote to accept the EPI Plan.

Dated: May 28, 2020 ELK PETROLEUM, INC.

By: /s/ Matthew Doheny Matthew Doheny, Co-Chief Restructuring Officer of Elk

PETROLEUM, INC.

By: /s/ Charles Reardon

Charles Reardon, Co-Chief Restructuring Officer of Elk

Petroleum, Inc.


EXHIBIT 1


THIS IS NOT A SOLICITATION OF ACCEPTANCE OR REJECTION OF THE EPI PLAN. ACCEPTANCE OR REJECTIONS MAY NOT BE SOLICITED UNTIL THE

EPI DISCLOSURE STATEMENT HAS BEEN APPROVED BY THE BANKRUPTCY COURT. THE EPI PLAN IS BEING SUBMITTED FOR APPROVAL BUT HAS NOT

BEEN APPROVED BY THE BANKRUPTCY COURT.


In re:


Debtor.

Chapter 11

Case No. 19-11157 (LSS)

PLAN OF LIQUIDATION OF ELK PETROLEUM, INC., PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE

CHIPMAN BROWN CICERO & COLE, LLP William E. Chipman, Jr. (No. 3818) Mark L. Desgrosseilliers (No. 4083) Hercules Plaza 1313 North Market Street, Suite 5400 Wilmington, Delaware 19801 Telephone: (302) 295-0191 Facsimile: (302) 295-0199 Email: [email protected] [email protected]

Special Counsel for Elk Petroleum, Inc.

1 The Debtor is Elk Petroleum, Inc. (8606). The Debtor is Elk Petroleum, Inc. (8606). The address of the

Debtor is Elk Petroleum, Inc., c/o Matthew Doheny, Chief Restructuring Officer, North Country Capital LLC, 215 Washington Street, Suite 006, Watertown, NY 13601.


TABLE OF CONTENTS

INTRODUCTION ....................................................................................................................................... 1

ARTICLE I .................................................................................................................................................. 2

A. SCOPE OF DEFINITIONS ............................................................................................................. 2

B. DEFINITIONS ................................................................................................................................. 2

1.1 503(b)(9) Claims ....................................................................................................................... 2 1.2 AB ............................................................................................................................................ 2 1.3 AB Co-Invest ............................................................................................................................. 2 1.4 AB Parties ................................................................................................................................. 2 1.5 ACR ........................................................................................................................................... 2 1.6 Administrative Claim ................................................................................................................ 2 1.7 Administrative Tax Claim ......................................................................................................... 2 1.8 Affiliated Cases ......................................................................................................................... 2 1.9 Affiliated Debtors ...................................................................................................................... 2 1.10 Allowed ..................................................................................................................................... 2 1.11 Allowed EPI Preferred Interests ................................................................................................ 3 1.12 Assets ........................................................................................................................................ 3 1.13 Avoidance Actions .................................................................................................................... 3 1.14 Ballot ......................................................................................................................................... 3 1.15 Bankruptcy Code ....................................................................................................................... 3 1.16 Bankruptcy Court ...................................................................................................................... 3 1.17 Bankruptcy Rules ...................................................................................................................... 3 1.18 Bar Date ..................................................................................................................................... 4 1.19 Beneficiaries .............................................................................................................................. 4 1.20 Board ......................................................................................................................................... 4 1.21 BSP ............................................................................................................................................ 4 1.22 Business Day ............................................................................................................................. 4 1.23 Cash ........................................................................................................................................... 4 1.24 Causes of Action ....................................................................................................................... 4 1.25 Chapter 11 Case......................................................................................................................... 4 1.26 Chapter 11 Professional Fee Claims.......................................................................................... 4 1.27 Claim ......................................................................................................................................... 4 1.28 Claims Agent ............................................................................................................................. 4 1.29 Claims Objection Deadline ....................................................................................................... 4 1.30 Class .......................................................................................................................................... 4 1.31 Class 3 Distribution ................................................................................................................... 5 1.32 Class 4 Distribution ................................................................................................................... 5 1.33 Conflicts Committee .................................................................................................................. 5 1.34 Debtor ........................................................................................................................................ 5 1.35 COP ................................................................................................................................5 1.36 Deficiency Claim ....................................................................................................................... 5 1.37 Disallowed Claim ...................................................................................................................... 5


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1.38 Disallowed EPI Preferred Interests ........................................................................................... 5 1.39 Disputed Claims ........................................................................................................................ 5 1.40 Distribution ................................................................................................................................ 5 1.41 Distribution Dates...................................................................................................................... 5 1.42 Distribution Reserve .................................................................................................................. 5 1.43 EOS ........................................................................................................................................... 6 1.44 EOS Sale Order ......................................................................................................................... 6 1.45 EPA ........................................................................................................................................... 6 1.46 EPA Confirmation Date ............................................................................................................ 6 1.47 EPA Confirmation Order ........................................................................................................... 6 1.48 EPA Liquidating Trust .............................................................................................................. 6 1.49 EPA Liquidating Trust Agreement ............................................................................................ 6 1.50 EPA Liquidating Trust Assets ................................................................................................... 6 1.51 EPA Plan ................................................................................................................................... 6 1.52 EPA Warrants ............................................................................................................................ 6 1.53 EPI ..................................................................................................................................6 1.54 EPI Confirmation Date .............................................................................................................. 6 1.55 EPI Confirmation Hearing ......................................................................................................... 7 1.56 EPI Confirmation Order ............................................................................................................ 7 1.57 EPI Disclosure Statement .......................................................................................................... 7 1.58 EPI Disclosure Statement Approval Order ................................................................................ 7 1.59 EPI Effective Date ..................................................................................................................... 7 1.60 EPI Interest ................................................................................................................................ 7 1.61 EPI Liquidating Trust ................................................................................................................ 7 1.62 EPI Liquidating Trust Agreement ............................................................................................. 7 1.63 EPI Liquidating Trust Assets .................................................................................................... 7 1.64 EPI Liquidating Trustees ........................................................................................................... 7 1.65 EPI Liquidating Trust Operating Expenses ............................................................................... 7 1.66 EPI Plan ..................................................................................................................................... 8 1.67 EPI Plan Confirmation Hearing ................................................................................................ 8 1.68 EPI Plan Supplement ................................................................................................................. 8 1.69 EPI Preferred Interest ................................................................................................................ 8 1.70 EPI Preferred Interests Liquidation Trust Units ........................................................................ 8 1.71 EPI Subordinated Claim ............................................................................................................ 8 1.72 EPL ............................................................................................................................................ 8 1.73 Equity Committee...................................................................................................................... 8 1.74 Equity Committee Members ..................................................................................................... 8 1.75 Estate ......................................................................................................................................... 8 1.76 Exculpated Parties ..................................................................................................................... 9 1.77 Exhibit ....................................................................................................................................... 9 1.78 Face Amount ............................................................................................................................. 9 1.79 Final Distribution Date .............................................................................................................. 9 1.80 Final Distribution Report ........................................................................................................... 9 1.81 Final Order ................................................................................................................................ 9 1.82 First Distribution Date ............................................................................................................... 9 1.83 Fulcrum ..................................................................................................................................... 9


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1.84 General Unsecured Claim ......................................................................................................... 9 1.85 Global Settlement Agreement ................................................................................................. 10 1.86 Global Settlement Order .......................................................................................................... 10 1.87 Grieve CO2 .............................................................................................................................. 10 1.88 Grieve Entities ......................................................................................................................... 10 1.89 Grieve Pipeline ........................................................................................................................ 10 1.90 Guaranty Agreement ............................................................................................................... 10 1.91 GUC Liquidation Trust Distribution ....................................................................................... 10 1.92 Holder ...................................................................................................................................... 10 1.93 Impaired .................................................................................................................................. 10 1.94 Insurance Policies .................................................................................................................... 10 1.95 Insurer ...................................................................................................................................... 10 1.96 Intercompany Claims .............................................................................................................. 10 1.97 Internal Revenue Code ............................................................................................................ 10 1.98 Liens ........................................................................................................................................ 11 1.99 LIM .......................................................................................................................................... 11 1.100 Liquidation Trust Units ........................................................................................................... 11 1.101 Madden .................................................................................................................................... 11 1.102 Madden Insurance Proceeds ........................................................................................11 1.103 Madden Liquidation .....................................................................................................11 1.104 Miscellaneous Secured Claim ................................................................................................. 11 1.105 Net Recoveries ........................................................................................................................ 11 1.106 Other Professional Claim ........................................................................................................ 11 1.107 Person ...................................................................................................................................... 11 1.108 Petition Date ............................................................................................................................ 11 1.109 Post-EPI Effective Date Claims .............................................................................................. 12 1.110 Post-EPI Effective Date Debtor .............................................................................................. 11 1.111 Preferred Interest Liquidation Trust Distribution .................................................................... 11 1.112 Preferred Interest Representative ............................................................................................ 11 1.113 Priority Non-Tax Claim ........................................................................................................... 12 1.114 Priority Tax Claim ................................................................................................................... 12 1.115 Pro Rata ................................................................................................................................... 12 1.116 Professional Claim Bar Date ................................................................................................... 12 1.117 Professional Fee Order ............................................................................................................ 12 1.118 Professional Person ................................................................................................................. 12 1.119 Record Date or Distribution Record Date ............................................................................... 12 1.120 Related Parties ......................................................................................................................... 12 1.121 Released Parties ....................................................................................................................... 13 1.122 Resolute Aneth ........................................................................................................................ 13 1.123 Scheduled ................................................................................................................................ 13 1.124 Schedules ................................................................................................................................. 13 1.125 Section 503 Deadline ............................................................................................................... 13 1.126 Secured Claim ......................................................................................................................... 13 1.127 Secured Creditor ...................................................................................................................... 13 1.128 Sole Shareholder...................................................................................................................... 13 1.129 Statutory Fees .......................................................................................................................... 14


iv

1.130 Subsequent Distribution Date .................................................................................................. 13 1.131 Substantial Contribution Claim ............................................................................................... 13 1.132 Tax Refunds ............................................................................................................................ 13 1.133 Third Party Claim .................................................................................................................... 14 1.134 Unimpaired .............................................................................................................................. 14 1.135 Unpaid Chapter 11 Professional Fee Claims ........................................................................... 14

C. RULES OF INTERPRETATION: APPLICATION OF DEFINITIONS, RULES OF CONSTRUCTION, AND COMPUTATION OF TIME ............................................................... 14

D. EXHIBITS ..................................................................................................................................... 15

ARTICLE II. UNCLASSIED CLAIMS .................................................................................................. 15

2.1 Unpaid Chapter 11 Professional Fee Claims ........................................................................... 15

2.2 Administrative Claims – Other Professional Claims ............................................................... 15

(a) Final Fee Applications; Payment of Other Professional Claims ....................................... 15

(b) Payment of Interim Amounts ............................................................................................ 15

(c) Payment of Professional Fee Claims ................................................................................ 15

(d) Post EPI Effective Date Services ...................................................................................... 15

2.3 Administrative Claims - Substantial Contribution Compensation and Expenses Bar Date .... 16

2.4 Administrative Claims – Allowed 503(b)(9) Claims .............................................................. 16

2.5 Administrative Claims – Allowed Administrative Tax Claims ............................................... 16

2.6 Administrative Claims - Ordinary Course Expenses ............................................................... 16

2.7 Other Administrative Claims Bar Date ................................................................................... 16

2.8 Priority Tax Claims ................................................................................................................. 16

2.9 Statutory Fees .......................................................................................................................... 17

ARTICLE III. CLASSIFICATION OF CLAIMS AND INTERESTS ................................................ 17

3.1 Classification in General ......................................................................................................... 17

3.2 Summary of Classification of Claims and Interests ................................................................ 17

3.3 Elimination of Vacant Classes ................................................................................................ 18

3.4 Voting; Presumptions; Solicitation.......................................................................................... 18

(a) Acceptance by Certain Impaired Classes .......................................................................... 18


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(b) Deemed Acceptance by Unimpaired Classes.................................................................... 19

(c) Deemed Rejection by Impaired Classes ........................................................................... 19

3.5 Cramdown ............................................................................................................................... 19

3.6 No Waiver ............................................................................................................................... 19

ARTICLE IV. PROVISIONS FOR TREATMENT OF CLAIMS AND INTERESTS ..................... 19

4.1 Class 1 (Miscellaneous Secured Claims) ................................................................................ 19

4.2 Class 2 (Priority Non-Tax Claims) .......................................................................................... 20

4.3 Class 3 (General Unsecured Claims) ....................................................................................... 20

4.4 Class 4 (EPI Preferred Interests) ............................................................................................. 20

4.5 Class 5 (EPI Subordinated Claims) ......................................................................................... 20

4.6 Class 6 (Intercompany Claims) ............................................................................................... 20

4.7 Class 7 (EPI Interests) ............................................................................................................. 20

ARTICLE V. ACCEPTANCE OR REJECTION OF THE EPI PLAN; EFFECT OF REJECTION BY ONE OR MORE IMPAIRED CLASSES OF CLAIMS OR INTERESTS ................................... 20

5.1 Impaired Classes of Claims and Interests Entitled to Vote..........................................20

5.2 Acceptance by an Impaired Class ................................................................................21

5.3 Presumed Acceptances by Unimpaired Classes ..........................................................21

5.4 Classes Deemed to Reject the EPI Plan .......................................................................21

5.5 Non-Consensual Confirmation ....................................................................................21

5.6 Confirmability and Severability of the EPI Plan .........................................................21

ARTICLE VI. MEANS FOR IMPLEMENTATION OF THE EPI PLAN – FORMATION OF THE EPI LIQUIDATING TRUST ......................................................................................21

6.1 Appointment of the EPI Liquidating Trustees .............................................................21

6.2 Creation of EPI Liquidating Trust ...............................................................................22

6.3 Beneficiaries of EPI Liquidating Trust ........................................................................22

6.4 Vesting and Transfer of Assets to the EPI Liquidating Trust ......................................22

6.5 Funding of the EPI Liquidating Trust ..........................................................................22


vi

6.6 Distributions from the Liquidating Trust .....................................................................23

6.7 Certain Powers and Duties of the EPI Liquidating Trust and the EPI Liquidating Trustees ........................................................................................................................23

(a) General Powers of the EPI Liquidating Trustees ...................................................23

(b) Books and Records ................................................................................................24

(c) Investments of Cash ...............................................................................................25

(d) Deposit of Cash ......................................................................................................25

(e) Costs and Expenses of Administration of the EPI Liquidating Trust ....................25

(f) Reporting................................................................................................................25

6.8 United States Federal Income Tax Treatment of the EPI Liquidating Trust for the EPI Liquidating Trust Assets ..............................................................................................25

6.9 Governance of the Debtor ............................................................................................26

6.10 Term of EPI Liquidating Trust ....................................................................................26

6.11 Limitation of Liability of the EPI Liquidating Trustees ..............................................27

6.12 Standard of Care and Exculpation ...............................................................................27

6.13 Transfer Taxes .............................................................................................................27

6.14 ConocoPhillips/Burlington Resources .........................................................................27

ARTICLE VII. UNEXPIRED LEASES AND EXECUTORY CONTRACTS ......................27

7.1 Contracts and Leases....................................................................................................27

7.2 Rejection Damages Bar Date .......................................................................................28

7.3 Objections to Rejection Damage Claims .....................................................................28

ARTICLE VIII. PROVISIONS GOVERNING DISTRIBUTIONS .......................................28

8.1 Time of Distribution ....................................................................................................28

8.2 Interest on Claims ........................................................................................................28

8.3 Claims Administration Responsibility .........................................................................29

8.4 Procedures for Treating and Resolving Disputed Claims. No Distributions Pending


vii

Allowance ....................................................................................................................29

(a) Distribution Reserve ..............................................................................................29

(b) Distributions After Allowance ...............................................................................29

(c) Partial Distribution .................................................................................................29

8.5 Delivery of Distributions .............................................................................................30

8.6 Setoff ............................................................................................................................30

(a) By the Debtor, the EPI Liquidating Trustees, or the EPI Liquidating Trust .........30

(b) By Non-Debtors .....................................................................................................30

8.7 Unclaimed or Undeliverable Distributions ..................................................................30

8.8 De Minimis Distributions ............................................................................................31

8.9 Manner of Payment Under this EPI Plan .....................................................................31

8.10 Final Distribution Report .............................................................................................31

8.11 Post-Final Distribution Report Assets .........................................................................31

8.12 Exemption from Securities Law ..................................................................................31

ARTICLE IX. SETTLEMENT, RELEASE, INJUNCTION AND RELATED PROVISIONS ...............................................................................................................................31

9.1 Release of Liens ...........................................................................................................31

9.2 Liabilities to, and Rights of, Governmental Units .......................................................32

9.3 Releases by the Debtor and Its Estate ..........................................................................32

9.4 Releases by Holders .....................................................................................................33

9.5 Exculpation ..................................................................................................................33

9.6 Injunction .....................................................................................................................34

9.7 Term of Injunctions or Stays........................................................................................35

9.8 No Liability for Solicitation or Participation ...............................................................35

9.9 Compromises and Settlements .....................................................................................35

9.10 Objections to Claims and Interests ..............................................................................35


viii

ARTICLE X. CONDITIONS PRECEDENT ............................................................................35

10.1 Conditions to Confirmation .........................................................................................35

10.2 Conditions to EPI Effective Date .................................................................................36

10.3 Waiver of Conditions to Confirmation and EPI Effective Date ..................................36

ARTICLE XI. RETENTION OF JURISDICTION .................................................................36

ARTICLE XII. MISCELLANEOUS PROVISIONS ...............................................................38

12.1 Binding Effect ..............................................................................................................38

12.2 Modification and Amendments....................................................................................38

12.3 Withholding and Reporting Requirements ..................................................................38

12.4 Third-Party Claims/Causes of Action ..........................................................................39

12.5 Revocation, Withdrawal or Non-Consummation Right to Revoke or Withdraw ........39

12.6 Severability of EPI Plan Provisions .............................................................................39

12.7 Trustee’s Fees ..............................................................................................................39

12.8 Notices .........................................................................................................................39

12.9 Governing Law ............................................................................................................39

12.10 Waiver and Estoppel ....................................................................................................40

12.11 BSP Representative Party ............................................................................................40

12.12 EPI Preferred Interest Holder Representative Party ....................................................40


INTRODUCTION

Elk Petroleum, Inc. (the “Debtor” or “EPI”), as debtor and debtor in possession in the above captioned case, hereby proposes the following plan of liquidation pursuant to the provisions of chapter 11 of the Bankruptcy Code.

For a discussion of the Debtor’s history, businesses, properties, key contracts, and a summary and analysis of the EPI Plan, stakeholders of the Debtor should review the EPI Disclosure Statement filed with the Bankruptcy Court to which the EPI Plan is attached. ALL HOLDERS OF CLAIMS AND EPI PREFERRED INTERESTS ENTITLED TO VOTE ARE ENCOURAGED TO READ THE EPI PLAN AND THE EPI DISCLOSURE STATEMENT IN THEIR ENTIRETY BEFORE VOTING TO ACCEPT OR REJECT THE EPI PLAN.

The EPI Plan provides for the liquidation and conversion of all of the Debtor’s remaining assets (other than the EPA Warrants) to Cash and the distribution of the net proceeds realized therefrom and all remaining Cash on hand to the holders of Allowed Claims and Allowed EPI Preferred Interests as of the Record Date in accordance with the relative priorities established in the Bankruptcy Code as set forth in the EPI Plan and in accordance with the Global Settlement Agreement, as approved by the Global Settlement Order. The EPA Warrants shall be distributed on the EPI Effective Date to creditors holding Allowed General Unsecured Claims, as more fully set forth in this EPI Plan, the Global Settlement, and the Global Settlement Order. The EPI Plan does not provide for a distribution to EPI’s Sole Shareholder, EPL, and its vote to accept or reject the EPI Plan, therefore, is not being solicited. The EPI Plan contemplates the creation of the EPI Liquidating Trust to, among other things, resolve Disputed Claims, if any, and Disputed EPI Preferred Interests, if any, pursue unreleased Causes of Action, implement the terms of the EPI Plan, and make Distributions to the holders of Allowed Claims and Allowed EPI Preferred Interests.

Under section 1125(b) of the Bankruptcy Code, a vote to accept or reject the EPI Plan cannot be solicited from a Holder of a Claim or EPI Preferred Interest until such time as the EPI Disclosure Statement has been approved by the Bankruptcy Court and distributed to Holders of Claims and EPI Preferred Interests.

The Debtor expressly reserves its right to alter, amend, or modify the EPI Plan, one or more times, before its substantial consummation, subject to the restrictions on modification set forth in section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019 and otherwise set forth in this EPI Plan.

NO SOLICITATION MATERIALS, OTHER THAN THE EPI DISCLOSURE STATEMENT AND RELATED MATERIALS TRANSMITTED THEREWITH AND APPROVED BY THE BANKRUPTCY COURT, HAVE BEEN AUTHORIZED BY THE BANKRUPTCY COURT FOR USE IN SOLICITING ACCEPTANCE OR REJECTION OF THE EPI PLAN.


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ARTICLE I

A. SCOPE OF DEFINITIONS

All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in Article I of the EPI Plan. Any term used in the EPI Plan that is not defined herein, but is defined in the Bankruptcy Code or the Bankruptcy Rules, shall have the meaning ascribed to that term in the Bankruptcy Code or the Bankruptcy Rules.

B. DEFINITIONS

1.1 “503(b)(9) Claims” means a claim for payment of an administrative expense of a kind specified in section 503(b)(9) of the Bankruptcy Code.

1.2 “AB” means AB Elk Holdings, LLC.

1.3 “AB Co-Invest” means AB Co-Invest Elk Holdings, LLC.

1.4 “AB Parties” means AB and AB Co-Invest, collectively.

1.5 “ACR” means ACR Alpine Capital Research, LLC, as advisor to the ACR MultiStrategy Quality Return Fund, a Series of Investment Management Series Trust II, a Delaware statutory trust, and the Holder of an Allowed EPI Preferred Interest.

1.6 “Administrative Claim” means a claim for payment of an administrative expense of a kind specified in sections 327, 328, 330, 331, 363, 365, 503(b), 507, or 1114 of the Bankruptcy Code, for the period from the Petition Date through and including the EPI Effective Date, including, but not limited to, (a) the actual, necessary costs and expenses, incurred from and after the Petition Date through the EPI Effective Date, of preserving EPI’s Estate and operating the business of the Debtor, including wages, salaries, or commissions for services rendered after the commencement of the Chapter 11 Case, (b) Other Professional Claims, and (c) all fees and charges assessed against the Debtors’ Estate under chapter 123 of title 28 of the United States Code, and all Allowed Claims that are entitled to be treated as Administrative Claims pursuant to a Final Order of the Bankruptcy Court.

1.7 “Administrative Tax Claim” means a claim for any tax of a kind specified in section 503(b)(1)(B) and (C) of the Bankruptcy Code and entitled to priority pursuant to section 507(a)(1) of the Bankruptcy Code.

1.8 “Affiliated Cases” means, collectively, the cases filed by each of Elk Petroleum Aneth, LLC (Case No. 19-11158), Resolute Aneth, LLC (Case No. 19-11159), and Elk Operating Services, LLC (Case No. 19-11160).

1.9 “Affiliated Debtors” means EPA, Resolute, and EOS, collectively.

1.10 “Allowed” means with respect to any Claim or EPI Preferred Interest or any portion thereof (a) that has been allowed by a Final Order, or (b) as to which, on or by the EPI Effective Date, (i) no proof of claim or interest has been timely filed with the Bankruptcy Court and (ii) the


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liquidated and noncontingent amount of which is Scheduled, other than a Claim or Interest that is Scheduled in an unknown amount or as disputed, and not otherwise paid pursuant to a separate order of the Bankruptcy Court, or (c) for which a proof of claim in a liquidated amount has been timely filed with the Bankruptcy Court pursuant to the Bankruptcy Code, any Final Order of the Bankruptcy Court or other applicable bankruptcy law, and as to which either (i) no objection to its allowance has been filed within the periods of limitation fixed by the EPI Plan, the EPI Confirmation Order, the Bankruptcy Code or by any order of the Bankruptcy Court or (ii) any objection to its allowance has been settled or withdrawn, or has been denied by a Final Order, or (d) that is expressly allowed in a liquidated amount in the EPI Plan. The amount of an Allowed Claim or Allowed EPI Preferred Interest shall be the lesser of the amount stated in a proof of claim or interest filed for such Claim or EPI Preferred Interest (if less than the amount Scheduled for such Claim or Interest), the amount agreed to in a written settlement, or the amount allowed by a Final Order. All distributions on account of an Allowed Claim or Allowed EPI Preferred Interest will be made to the Holders of Allowed Claims or Allowed EPI Preferred Interests of record on the Record Date.

1.11 “Allowed EPI Preferred Interests” means those EPI Preferred Interests set forth on Exhibit 1 hereto, which EPI Preferred Interests shall be deemed Allowed as of the EPI Effective Date without further order of the Bankruptcy Court.

1.12 “Assets” means all of the right, title and interest of the Debtor in and to property of whatever type or nature (including, without limitation, real, personal, mixed, tangible or intangible), including property of the Debtor’s Estate, including, but not limited to, EPI’s Interests in its non-Debtor subsidiaries, Madden and the Grieve Entities.

1.13 “Avoidance Actions” means, unless otherwise released under a prior Order of the Bankruptcy Court or under the EPI Plan, Causes of Action against Persons arising under sections 502, 510, 541, 542, 544, 545, 547, 548, 549, 550, 551, and 553 of the Bankruptcy Code, or under applicable state or federal statutes and common law, including fraudulent transfer laws, whether or not litigation is commenced to prosecute such Avoidance Actions.

1.14 “Ballot” means each of the ballot forms that are distributed with the EPI Disclosure Statement to Holders of Claims and EPI Preferred Interests in Classes that are impaired under the EPI Plan and entitled to vote under Article IV hereof in connection with the solicitation of acceptances of the EPI Plan.

1.15 “Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as amended and codified in title 11 of the United States Code, 11 U.S.C. §§ 101, et seq.

1.16 “Bankruptcy Court” means the United States Bankruptcy Court for the District of Delaware or such other court as may have jurisdiction over the Chapter 11 Case.

1.17 “Bankruptcy Rules” means (a) the Federal Rules of Bankruptcy Procedure and the Official Bankruptcy Forms, as amended, (b) the Federal Rules of Civil Procedure, as amended, as applicable to the Chapter 11 Case or proceedings therein, and (c) the local rules of the Bankruptcy Court, as applicable to the Chapter 11 Case or proceedings therein, as the case may be.


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1.18 “Bar Date” means the date or dates established by the Bankruptcy Court pursuant to the Order Granting Motion of the Debtors for Entry of an Order (I) Establishing Bar Dates for Filing Claims and (II) Approving Notice Procedures Related Thereto (Docket No. 285) by which Proofs of Claim must be filed.

1.19 “Beneficiaries” means the beneficiaries of the EPI Liquidating Trust.

1.20 “Board” means the Board of EPI as of the EPA Confirmation Date.

1.21 “BSP” means BSP Agency, LLC, or its successors and assigns, in its capacity as administrative agent for the lenders party to the Guaranty Agreement.

1.22 “Business Day” means any day, excluding Saturdays, Sundays and legal holidays, on which commercial banks are open for business in Wilmington, Delaware.

1.23 “Cash” means currency, a certified check, cashier’s check or wire transfer of good funds from any source.

1.24 “Causes of Action” means, unless otherwise released under a prior Order of the Bankruptcy Court or under the EPI Plan, any and all actions, causes of action, suits, accounts, controversies, agreements, promises, rights to legal remedies, rights to equitable remedies, rights to payment and claims, whether known, unknown, reduced to judgment, not reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured and whether asserted or assertable directly or derivatively, in law, equity or otherwise, including, without limitation, the Avoidance Actions and those Causes of Action transferred to EPI prior to the EPI Effective Date, including through the EOS Sale Order.

1.25 “Chapter 11 Case” means the Debtor’s bankruptcy case pending in the Bankruptcy Court and being administered under case number 19-11157 (LSS).

1.26 “Chapter 11 Professional Fee Claims” means those fees and expenses incurred in the Chapter 11 Case or the Affiliated Cases, in either instance incurred through October 24, 2019, which fees and expense shall have been approved by a Final Order.

1.27 “Claim” means a claim against the Debtor, whether or not asserted, as defined in section 101(5) of the Bankruptcy Code.

1.28 “Claims Agent” means Bankruptcy Management Solutions d/b/a Stretto, the claims and noticing agent of the Debtor.

1.29 “Claims Objection Deadline” means the date by which objections to Claims shall be filed, which date shall be the date that is one hundred and twenty (120) days after the EPI Effective Date, as such date may be extended on motion of the EPI Liquidating Trust, as ordered by the Bankruptcy Court.

1.30 “Class” means a category of Claims or Interests described in Article III of this EPI Plan.


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1.31 “Class 3 Distribution” means the distribution to be made to Holders of Allowed General Unsecured Claims in Class 3, including but not limited to the EPA Warrants, GUC Liquidation Trust Units, and the Cash or other assets available to Holders of Allowed General Unsecured Claims from the liquidation of the EPI Liquidating Trust Assets, including through the pursuit of Causes of Action, in accordance with and subject to the terms of the Global Settlement Agreement and the Global Settlement Order.

1.32 “Class 4 Distribution” means the distribution to be made to Holders of Allowed EPI Preferred Interests in Class 4 of EPI Preferred Interests Liquidation Trust Units and the Cash or other assets available to Holders of Allowed EPI Preferred Interests from the liquidation of the EPI Liquidating Trust Assets, including through the pursuit of Causes of Action, in accordance with and subject to the terms of the Global Settlement Agreement and the Global Settlement Order.

1.33 “Conflicts Committee” means the Conflicts Committee of the Board, consisting of Patrick Bartels, Matthew Doheny, and Charles Reardon.

1.34 “COP” means ConocoPhillips Company.

1.35 “Debtor” means Elk Petroleum, Inc.

1.36 “Deficiency Claim” means, as to a Secured Creditor, that portion of such Secured Creditor's Allowed Secured Claim not paid or satisfied from the proceeds of any sale or other disposition of the Debtor’s Assets or return of such Secured Creditor's collateral; and, as to any other creditor asserting a claim that is subject to a lien or security interest in property of the Debtor’s Estate, such Claim to the extent it is (a) rendered an unsecured claim by virtue of section 506(a) of the Bankruptcy Code and (b) otherwise determined to be an Allowed Claim.

1.37 “Disallowed Claim” means a Claim, or any portion thereof, that (a) has been disallowed by a Final Order or (b) is Scheduled at zero or as contingent, disputed or unliquidated and as to which a proof of claim bar date has been established, but no proof of claim has been filed or deemed timely filed with the Bankruptcy Court pursuant to either the Bankruptcy Code or any Final Order of the Bankruptcy Court or otherwise deemed timely filed under applicable law.

1.38 “Disallowed EPI Preferred Interests” shall mean all EPI Preferred Interests that are not Allowed EPI Preferred Interests.

1.39 “Disputed Claim” means a Claim, or any portion thereof, that is neither an Allowed Claim nor a Disallowed Claim, and includes, without limitation, a Claim that (a) has not been Scheduled or is Scheduled by the Debtor as unknown or as contingent, unliquidated, or disputed for which a proof of claim has been filed or (b) is the subject of an objection filed with the Bankruptcy Court and which objection has not been withdrawn or overruled by a Final Order of the Bankruptcy Court.

1.40 “Distribution” means a distribution of Cash or other Property pursuant to this EPI Plan or the EPI Liquidating Trust.

1.41 “Distribution Dates” means collectively, the First Distribution Date, any Subsequent Distribution Date, and the Final Distribution Date.


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1.42 “Distribution Reserve” means Cash reserved from the EPI Liquidating Trust in an amount equal to the distribution or distributions on account of Disputed Claims or Disputed Interests when Allowed, which Cash will be held by the EPI Liquidating Trust pending allowance of such Disputed Claims or Disputed Interests, and then distributed on account of Allowed Claims or Allowed Interests in accordance with Section 7.4 of this EPI Plan. The Distribution Reserve for any Disputed Class 3 General Unsecured Claims or Disputed Class 4 EPI Preferred Interests shall be funded solely from the EPI Liquidating Trust Assets or the proceeds thereof.

1.43 “EOS” means Elk Operating Services, LLC.

1.44 “EOS Sale Order” means the Revised Order (I) Approving the Sale of the Membership Interests in Elk Operating Services, LLC Free and Clear of All Claims and Encumbrances, (II) Authorizing and Approving the Assumption and Assignment of Certain Unexpired Leases and Executory Contracts, and (III) Granting Related Relief (Docket No. 644).

1.45 “EPA” means Elk Petroleum Aneth, LLC.

1.46 “EPA Confirmation Date” means the date of entry of the EPA Confirmation Order.

1.47 “EPA Confirmation Order” means the order entered by the Bankruptcy Court on October 8, 2019 (Docket No. 619) confirming in all respects all of the provisions, terms, and conditions of the EPA Plan.

1.48 “EPA Liquidating Trust” means the liquidating trust established pursuant to the EPA Plan and the EPA Liquidating Trust Agreement.

1.49 “EPA Liquidating Trust Agreement” means the agreement, established as of the effective date of the EPA Plan (the “EPA Effective Date”), setting forth the terms and conditions applicable to the EPA Liquidating Trust.

1.50 “EPA Liquidating Trust Assets” means any and all assets of EPA transferred to the EPA Liquidating Trust pursuant to the terms and conditions of the EPA Plan and EPA Confirmation Order.

1.51 “EPA Plan” means the Third Amended Joint Plan of Reorganization of EPA and Resolute Aneth (Docket No. 594), as confirmed by the Bankruptcy Court.

1.52 “EPA Warrants” means those certain cashless exercise warrants for the purchase of 10% of the new equity in reorganized EPA at a strike or exercise price fixed upon a total enterprise value of reorganized EPA of $175 million, with an expiration date on the fourth anniversary of the issuance of the warrants, all as set forth in the Global Settlement Agreement approved by the Global Settlement Order. A copy of the Warrant Agreement between EPA and the warrant agent will be included in the EPI Plan Supplement.

1.53 “EPI” means Elk Petroleum, Inc.

1.54 “EPI Confirmation Date” means the date of entry of the EPI Confirmation Order.


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1.55 “EPI Confirmation Hearing” means the hearing before the Bankruptcy Court on confirmation of the EPI Plan and related matters under section 1128 of the Bankruptcy Code.

1.56 “EPI Confirmation Order” means the order entered by the Bankruptcy Court confirming in all respects all of the provisions, terms and conditions of this EPI Plan.

1.57 “EPI Disclosure Statement” means the written disclosure statement that relates to the EPI Plan, as approved by the EPI Disclosure Statement Approval Order pursuant to section 1125 of the Bankruptcy Code and Bankruptcy Rule 3017, as such disclosure statement may be amended, modified or supplemented from time to time.

1.58 “EPI Disclosure Statement Approval Order” means the Final Order approving, among other things, the EPI Disclosure Statement, entered by the Bankruptcy Court on May __, 2020 (Docket No. __).

1.59 “EPI Effective Date” means the first Business Day on which the conditions precedent set forth in Article 10.2 of the EPI Plan have been satisfied or waived as provided in Section 10.3 hereof.

1.60 “EPI Interest” means the rights of any current or former holder or owner of any shares of common stock of the Debtor authorized and issued prior to the Confirmation Date or other instruments evidencing an ownership interest in the Debtor, whether or not certificated, transferable, voting or denominated “common stock” or a similar security, and any Claim or Cause of Action related to or arising from the foregoing, or any option, warrant or right, contractual or otherwise, to acquire any such interest, exclusive of any such interests held in treasury by the Debtor ,excluding, for the avoidance of doubt, any EPI Preferred Interest.

1.61 “EPI Liquidating Trust” means the liquidating grantor trust established pursuant to this EPI Plan and the EPI Liquidating Trust Agreement.

1.62 “EPI Liquidating Trust Agreement” means the agreement, established as of the EPI Effective Date, setting forth the terms and conditions applicable to the EPI Liquidating Trust, the final form of which shall be filed with the EPI Plan Supplement.

1.63 “EPI Liquidating Trust Assets” means any and all remaining Assets of the Debtor, including Cash, Causes of Action, Claims of EPI, and any additional assets that may subsequently be transferred to the EPI Liquidating Trust.

1.64 “EPI Liquidating Trustees” means the Persons designated in the EPI Liquidating Trust Agreement to serve as trustees of the EPI Liquidating Trust from time to time. The initial EPI Liquidating Trustees shall be set forth in the EPI Plan Supplement, and the terms relating to any compensation to be paid to the EPI Liquidating Trustees shall be set forth in the EPI Liquidating Trust Agreement.

1.65 “EPI Liquidating Trust Operating Expenses” means the fees and expenses incurred by the EPI Liquidating Trust or the EPI Liquidating Trustees, including but not limited to the fees and expenses of professionals employed by the EPI Liquidating Trust.


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1.66 “EPI Plan” means this Plan of Liquidation of Elk Petroleum, Inc., Pursuant to Chapter 11 of the Bankruptcy Code, as amended and confirmed by the Bankruptcy Court, pursuant to the EPI Confirmation Order.

1.67 “EPI Plan Confirmation Hearing” means the hearing to be held by the Bankruptcy Court, on a date and at a time to be determined, with respect to confirmation of the EPI Plan.

1.68 “EPI Plan Supplement” means the compilation of documents and forms of documents, schedules and Exhibits to the EPI Plan, all of which shall be in form and substance reasonably acceptable to BSP, to be filed no later than seven (7) days before the earlier of the voting deadline for the EPI Plan or the objection deadline with respect to confirmation of the EPI Plan, on notice to parties in interest, and additional documents filed before the EPI Effective Date as supplements or amendments to the EPI Plan Supplement. The Debtor shall have the right to amend the documents contained in, and Exhibits to, the EPI Plan Supplement through the EPI Effective Date, subject to the consent of BSP and, subject to consulting with the Preferred Interest Representative if documents in the Plan Supplement would adversely affect any of the EPI Preferred Interest Holders.

1.69 “EPI Preferred Interest” means any preferred equity security of EPI authorized and issued prior to the EPA Confirmation Date, including any option, warrant, or other right, contractual or otherwise, to acquire any preferred equity security in EPI, or any right to payment or compensation based upon any such interest, whether or not such interest is owned by the Holder of such right to payment or compensation, whether or not transferable and whether fully vested or vesting in the future.

1.70 “EPI Preferred Interests Liquidation Trust Units” means the Liquidation Trust Units issued to the holders of Allowed EPI Preferred Interests in Class 4 in accordance with the terms of the Global Settlement Agreement and the Global Settlement Order.

1.71 “EPI Subordinated Claim” means any Claim that is subject to (a) subordination under section 510 of the Bankruptcy Code or any other statute, (b) contractual subordination, or (c) equitable subordination as determined by the Bankruptcy Court in a Final Order, including, without limitation, any Claim (i) for or arising from the rescission of a purchase, sale, issuance, or offer of a Security of the Debtor; (ii) for damages arising from the purchase or sale of such a Security; or (iii) for reimbursement, indemnification, or contribution allowed under section 502 of the Bankruptcy Code on account of such Claim.

1.72 “EPL” means Elk Petroleum, Ltd.

1.73 “Equity Committee” means the Official Committee of Preferred Equity Security Holders of EPI.

1.74 “Equity Committee Members” means the members of the Equity Committee in the capacity as members of such committee.

1.75 “Estate” means the bankruptcy estate of the Debtor arising pursuant to section 541 of the Bankruptcy Code.


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1.76 “Exculpated Parties” means, collectively, and in each case in their capacities as such solely during the Chapter 11 Case: (a) EPI; (b) the Board and its members; (c) the Conflicts Committee and its members; (d) the Equity Committee and the Equity Committee Members (but solely in their capacity as members of the Equity Committee); (e) BSP; (f) with respect to EPI, all of its current officers and directors, employees, agents, advisory board members, financial advisors, attorneys, investment bankers, consultants, representatives, and all Professional Persons; and (g) with respect to (b), (c), and (d), all of their respective current officers and directors, principals, shareholders, members, partners, managers, employees, agents, advisory board members, financial advisors, attorneys, investment bankers, consultants, representatives, and all Professional Persons.

1.77 “Exhibit” means an exhibit annexed to the EPI Plan.

1.78 “Face Amount” means (a) when used in reference to a Disputed or Disallowed Claim or Disputed or Disallowed Interest, the full stated amount claimed by the Holder of such Claim or Interest in any proof of claim or proof of interest timely filed with the Bankruptcy Court or otherwise deemed timely filed by any Final Order of the Bankruptcy Court or other applicable bankruptcy law, and (b) when used in reference to an Allowed Claim or Allowed Interest, the allowed amount of such Claim or Interest.

1.79 “Final Distribution Date” means the date(s) on which a final Distribution of EPI Liquidating Trust is made to (i) Holders of Allowed Claims and (ii) Holders of Allowed EPI Preferred Interests, entitled to Distributions therefrom. The Final Distribution Date(s) shall be one or more dates, as determined by the EPI Liquidating Trustees, which is after the liquidation into Cash of all EPI Liquidating Trust Assets (other than those assets abandoned by the Debtor or the EPI Liquidating Trust, as applicable) and the collection of other sums due or otherwise remitted or returned to the Estate.

1.80 “Final Distribution Report” shall have the meaning set forth in Section 8.10 of the EPI Plan.

1.81 “Final Order” means an order or judgment, the operation or effect of which has not been stayed, reversed or amended and as to which order or judgment (or any revision, modification or amendment thereof) the time to appeal or seek review or rehearing has expired and as to which no appeal or petition for review or rehearing was filed or, if filed, remains pending.

1.82 “First Distribution Date” means, except as set forth in this EPI Plan, the first Business Day [___] days after the EPI Effective Date, or such other time as may be reasonably determined by the EPI Liquidating Trustees, to make initial Distributions under this EPI Plan

1.83 “Fulcrum” means Fulcrum Energy Capital Fund II, LLC, and the Holder of an Allowed EPI Preferred Interest.

1.84 “General Unsecured Claim” means a Claim that is not an Administrative Claim, Priority Non-Tax Claim, Priority Tax Claim, Secured Claim, Miscellaneous Secured Claim, Intercompany Claim, Professional Claim, or any Statutory Fees, and specifically includes, without limitation, and any unsecured Deficiency Claim of any holder of a Miscellaneous Secured Claim.


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1.85 “Global Settlement Agreement” means the Stipulation Authorizing Global Settlement Pursuant to Federal Rule of Bankruptcy Procedure 9019 approved by the Global Settlement Order (Docket No. 620).

1.86 “Global Settlement Order” means the order (Docket No. 620), entered by the Bankruptcy Court approving the Global Settlement Agreement.

1.87 “Grieve CO2” means Elk Grieve Project, LLC, a non-Debtor Affiliate of EPI.

1.88 “Grieve Entities” means, collectively, Grieve CO2 and Grieve Pipeline.

1.89 “Grieve Pipeline” means Grieve Pipeline, LLC, a non-debtor Affiliate of EPI.

1.90 “Guaranty Agreement” means that certain Guaranty Agreement, dated as of August 5, 2016, among EPL, EPI, Grieve CO2 and each other Restricted Subsidiary (as defined therein) of EPI, each lender from time to time party thereto and BSP Agency, LLC.

1.91 “GUC Liquidation Trust Distribution” means the Liquidation Trust Units issued to holders of Allowed General Unsecured Claims in Class 3 in accordance with the Global Settlement Agreement and the Global Settlement Order.

1.92 “Holder” means a Person holding a Claim or Interest as of the applicable date of determination. For the avoidance of doubt, each lender (and each of their respective successors and assigns) under the Guaranty Agreement is a Holder of an Allowed Class 3 Claim, as such claim is Allowed pursuant to the Global Settlement Agreement and the Global Settlement Order, and entitled to receive a Distribution under the EPI Plan on account of its respective Pro Rata Share of such Allowed Claim.

1.93 “Impaired” refers to any Claim, EPI Interest, and EPI Preferred Interest that is impaired within the meaning of section 1124 of the Bankruptcy Code.

1.94 “Insurance Policies” means all insurance policies that have been issued at any time or provide coverage, benefits or proceeds to the Debtor (or its predecessors) and all agreements, documents, or instruments relating thereto.

1.95 “Insurer” means any company or other entity that issued an Insurance Policy, any third-party administrator of or for any Insurance Policy, and any respective predecessors, successors, and affiliates of any of the foregoing.

1.96 “Intercompany Claims” means (i) any account reflecting intercompany book entries by the Debtor with respect to an Affiliate of the Debtor or (ii) any Claim, Cause of Action, or remedy held or asserted by or against the Debtor by or against an Affiliate of the Debtor, in each case accruing before or after the Petition Date through the EPI Effective Date, including, but not limited to, any Claim for reimbursement, payment as guarantor or surety, or any Claim for contribution or expenses that was allocable between the Debtor and its Affiliates, including those Claims reflected by a proof of claim.

1.97 “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.


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1.98 “Liens” means any mortgage, pledge, deed of trust, assessment, security interest, lease, lien, adverse claim, levy, charge, right of first refusal or surrender right, or other encumbrance of any kind, including any “lien” as defined in Section 101(37) of the Bankruptcy Code.

1.99 “LIM” means LIM Asia Special Situations Master Fund Limited, and the Holder of an Allowed EPI Preferred Interest.

1.100 “Liquidation Trust Units” means the units in the EPI Liquidation Trust to be deemed distributed to the EPI Litigation Trust Beneficiaries and the right to receive distributions on account of such beneficial interests.

1.101 “Madden” means Elk Petroleum Madden Gas & CO2, LLC, a wholly-owned, non-debtor affiliate of EPI.

1.102 “Madden Insurance Proceeds” means any proceeds from any Insurance Policies (including any insurance policies pertaining to Madden, owned by Madden, or in which Madden is a loss payee) that provide or may provide insurance coverage regarding or relating to the fire and damages relating thereto in December 2018 at the so-called Lost Cabin Gas Plant in the state of Wyoming and any “lost revenue” or similar types of insurance coverage and proceeds relating thereto regarding or relating to the fire in December 2018, as assigned to COP as part of the Madden Liquidation.

1.103 “Madden Liquidation” means that certain sale of certain of Madden’s assets to COP, which closed on or about May 14, 2020.

1.104 “Miscellaneous Secured Claim” means any Secured Claim, whether by operation of law, contract or otherwise, but solely to the extent of the value, as of the EPI Effective Date, or such other date as is established by the Bankruptcy Court, of such security interest or lien after giving effect to all security interests or liens senior in priority.

1.105 “Net Recoveries” shall mean the net proceeds of the liquidation of the Assets of the Debtor and the EPI Liquidating Trust after payment of all necessary and actual fees and expenses associated with the liquidation of such Assets.

1.106 “Other Professional Claim” means a Claim of a Professional Person, for compensation or reimbursement of costs and expenses relating to services rendered after the Petition Date and prior to and including the EPI Effective Date that is not an Unpaid Chapter 11 Professional Fee Claim.

1.107 “Person” means an individual, corporation, partnership, joint venture, association, joint stock company, limited liability company, limited liability partnership, trust, estate, unincorporated organization or other entity.

1.108 “Petition Date” means May 22, 2019, which is the date on which the Debtor filed its petition commencing the Chapter 11 Case.


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1.109 “Post-EPI Effective Date Claims” means all Claims against and obligations incurred by the EPI Liquidating Trust on and after the EPI Effective Date (specifically excluding Administrative Claims and all other Allowed Claims and Interests treated in Classes 1 through 7 of the EPI Plan).

1.110 “Post-EPI Effective Date Debtor” means the Debtor on and after the EPI Effective Date.

1.111 “Preferred Interest Liquidation Trust Distribution” means the Liquidation Trust Units issued to holders of Allowed EPI Preferred Interests in accordance with the Global Settlement Agreement and the Global Settlement Order.

1.112 “Preferred Interest Representative” has the meaning set forth in section 13.2 of this EPI Plan.

1.113 “Priority Non-Tax Claim” means any Claim of a kind specified in section 507(a)(3), (4), (5), (6), or (7) of the Bankruptcy Code other than an Administrative Claim.

1.114 “Priority Tax Claim” means any Claim of a governmental unit (as defined in section 101(27) of the Bankruptcy Code) of the kind specified in sections 502(i) or 507(a)(8) of the Bankruptcy Code.

1.115 “Pro Rata” means, at any time, the proportion that the Face Amount of a Claim in a particular Class bears to the aggregate Face Amount of all Claims (including Disputed Claims, but excluding Disallowed Claims) in such Class, unless this EPI Plan provides otherwise.

1.116 “Professional Claim Bar Date” shall have the meaning set forth in Section 2.2(a) of the EPI Plan.

1.117 “Professional Fee Order” means the order establishing procedures for the interim compensation for Professionals that has been entered by the Bankruptcy Court.

1.118 “Professional Person” means a professional retained in the Chapter 11 Case pursuant to sections 327, 328, and 1103 of the Bankruptcy Code, or otherwise.

1.119 “Record Date” or “Distribution Record Date” means the date that is two (2) Business Days after the entry of an order by the Bankruptcy Court approving the EPI Disclosure Statement.

1.120 “Related Parties” means, with respect to a Person that is a Released Party, collectively, its predecessors, successors, assigns, subsidiaries, direct and indirect Affiliates, managed accounts and funds, current officers and directors, principals, shareholders, members, partners, managers, employees, subcontractors, agents, advisory board members, advisors, financial advisors, attorneys, accountants, investment bankers, consultants, agents, representatives, management companies, fund advisors, and other professionals, and such Person’s respective heirs, executors, estates, servants, and nominees, in each case in their capacity as such.


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1.121 “Released Parties” means each of: (a) the Debtor; (b) the Board; (c) the Conflicts Committee; (d) the Equity Committee; (e) the members of the Equity Committee in their respective capacity as members of such Equity Committee and in their individual capacities; (f) BSP; (g) the AB Parties; (h) and with respect to clauses (b) through (g) such entities’ successors and assigns, subsidiaries, affiliates, beneficial owners, managed accounts or funds, current officers, directors, principals, shareholders, direct and indirect equity holders, members, partners (general and limited), employees, agents, advisory board members, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, management companies, fund advisors and other Professionals; provided that no Person shall be a Released Party if it objects to the releases provided for in Article IX of this EPI Plan. Except as set forth in this EPI Plan, no current or former officers or directors of EPI shall constitute Released Parties or shall be released by any of this EPI Plan, the EPI Plan Supplement, or the EPI Confirmation Order; provided, further, that, for the avoidance of doubt, notwithstanding the foregoing or anything else contained in this EPI Plan, as it pertains to BSP and the BSP Parties, Released Parties does not include any of the Debtor’s subsidiaries or affiliates. Notwithstanding the foregoing or anything else contained in this EPI Plan to the contrary, Released Parties do not include (w) all Affiliates of the Debtor and any of their respective Related Parties other than the Debtor and those Persons expressly identified in the foregoing (b) through (h); (x) EPL, Brad Lingo, James Piccone, V. Brian Dolan, Neale Taylor, Russell Krause, Timothy Hargreaves, Alexander Hunter; (y) KPMG LLP and any affiliates thereof; and (z) Resolute Energy Corporation, Hicks Acquisition Company I, Inc., Resolute Natural Resources Company, LLC, Cimarex Energy Co., CR Sub 1 Inc., CR Sub 2 LLC, and any affiliates of or successors to the foregoing entities.

1.122 “Resolute Aneth” means Resolute Aneth, LLC.

1.123 “Scheduled” means, with respect to any Claim, EPI Preferred Interest, or EPI Interest, the status and amount, if any, of such Claim, EPI Preferred Interest, or EPI Interest as set forth in the Schedules.

1.124 “Schedules” means the schedules of assets and liabilities filed in the Bankruptcy Court by the Debtor, as such schedules have been or may be amended or supplemented from time to time in accordance with Bankruptcy Rule 1009 or orders of the Bankruptcy Court.

1.125 “Section 503 Deadline” shall have the meaning ascribed thereto in Section 2.3 of the EPI Plan.

1.126 “Secured Claim” means a Claim secured by a properly perfected and unavoidable security interest in or Lien upon property of the Estate to the extent of the value of such security interest or Lien as determined by a Final Order of the Bankruptcy Court pursuant to section 506 of the Bankruptcy Code or as otherwise agreed upon in writing by the Debtor and the Claimholder (or as otherwise agreed upon in writing by the Debtor and the Claimholder upon reasonable advance notice to BSP and the Preferred Interest Representative).

1.127 “Secured Creditor” means any Creditor that holds a Secured Claim.

1.128 “Sole Shareholder” means EPL.


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1.129 “Statutory Fees” means the fees due and owing to the U.S. Trustee as of the EPI Confirmation Date pursuant to 28 U.S.C. § 1930(a)(6).

1.130 “Subsequent Distribution Date” means any date, other than the Final Distribution Date, after the First Distribution Date on which the Post-EPI Effective Date Debtor or the EPI Liquidating Trustees, as the case may be, determine that an interim distribution should be made to holders of Allowed Claims in light of, inter alia, resolutions of Disputed Claims and the administrative costs of such a Distribution.

1.131 “Substantial Contribution Claim” means a claim for payment of an administrative expense of a kind specified in sections 503(b)(3), (4), and (5) of the Bankruptcy Code.

1.132 “Tax Refunds” means the Claim of the Debtor for a refund of state or federal income taxes other than any refund of state income taxes received by a Debtor prior to the Petition Date.

1.133 “Third Party Claim” means a claim or other cause of action of the Debtor, or of EOS, assigned to the Debtor pursuant to the EOS Sale Order, as of the EPI Effective Date against any Person not otherwise released under a prior Order of the Bankruptcy Court or under the EPI Plan.

1.134 “Unimpaired” refers to any Claim or EPI Preferred Interest that is not Impaired under the EPI Plan.

1.135 “Unpaid Chapter 11 Professional Fee Claims” means the Professional Claims that are unpaid as of the date of this EPI Plan and for which the respective Professional Person holding such Unpaid Chapter 11 Professional Fee Claim agreed to defer payment under the terms of the Global Settlement Order and the Global Settlement Agreement.

C. RULES OF INTERPRETATION: APPLICATION OF DEFINITIONS, RULES OF CONSTRUCTION, AND COMPUTATION OF TIME

Wherever from the context it appears appropriate, each term stated in either the singular or the plural shall include both the singular and the plural, and pronouns stated in the masculine, feminine, or neuter gender shall include the masculine, feminine, and neuter. For purposes of the EPI Plan: (a) any reference in the EPI Plan to a contract, instrument, release, indenture, or other agreement or document being in a particular form or on particular terms and conditions means that the document shall be substantially in that form or substantially on those terms and conditions; (b) any reference in the EPI Plan to an existing document or exhibit filed or to be filed means the document or exhibit as it may have been or may be amended, modified, or supplemented; (c) unless otherwise specified, all references in the EPI Plan to Sections, Schedules, and Exhibits are references to sections, schedules, and exhibits of or to the EPI Plan. Unless otherwise specified, the words “herein,” “hereof,” “hereto,” “hereunder,” and other words of similar meaning refer to the EPI Plan as a whole and not to any particular section, subsection, or clause contained in the EPI Plan. The rules of construction contained in section 102 of the Bankruptcy Code shall apply to the construction of the EPI Plan. The headings in the EPI Plan are for convenience of reference only and shall not expand, limit, or otherwise affect the provisions of the EPI Plan. Unless


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otherwise indicated herein, all references to dollars are to United States dollars. Unless otherwise expressly provided herein, in computing any period of time prescribed or allowed by the EPI Plan, the provisions of Bankruptcy Rule 9006(a) shall apply.

D. EXHIBITS

All Exhibits and the documents comprising the EPI Plan Supplement are incorporated into and are a part of the EPI Plan as if set forth in full herein and as may be filed with the EPI Plan Supplement.

ARTICLE II UNCLASSIFED CLAIMS

2.1 Unpaid Chapter 11 Professional Fee Claims. To the extent not earlier paid, any amounts due and owing for Unpaid Chapter 11 Professional Fee Claims shall be paid in accordance with the terms of the Global Settlement Agreement and the Global Settlement Order. See Exhibit 3 (the “Pro Forma Plan Distribution Schedule”) to the Disclosure Statement, to be filed as part of the EPI Plan Supplement.

2.2 Administrative Claims and Other Professional Claims.

(a) Final Fee Applications; Payment of Other Professional Claims. All final requests for payment of Other Professional Claims that have accrued from and after the EPA Effective Date must be filed no later than twenty (20) days after the EPI Effective Date (the “Professional Claim Bar Date”). After notice and a hearing in accordance with the procedures established by the Bankruptcy Code, the Bankruptcy Rules, and prior orders of the Bankruptcy Court, the allowed amounts of such Other Professional Claims shall be determined by the Bankruptcy Court, and the balance due thereon shall thereafter be immediately paid in full in Cash as such Cash becomes available for such payment. See Exhibit 3 (the “Pro Forma Plan Distribution Schedule”) to the Disclosure Statement, to be filed as part of the EPI Plan Supplement.

(b) Payment of Interim Amounts. The provisions of the Professional Fee Order shall remain in effect as to amounts owing to professionals prior to the EPI Effective Date.

(c) Payment of Professional Fee Claims. All Other Professional Claims shall be paid by the Debtor or the EPI Liquidating Trustees to the extent approved by order of the Bankruptcy Court within five (5) Business Days after entry of such order, or at such later date as may be agreed by the Holder of the Allowed Other Professional Claim.

(d) Post-EPI Effective Date Services. After the EPI Effective Date, any requirement that Professionals comply with the Professional Fee Order or sections 327 through 331 of the Bankruptcy Code in seeking retention or compensation for services rendered after such date shall terminate. The EPI Liquidating Trustees shall pay any professionals retained by the EPI Liquidating Trust for Post-EPI Effective Date services from the funds available to the EPI Liquidating Trust in accordance with the terms of this EPI Plan, the EPI Confirmation Order, and the EPI Liquidating Trust Agreement.


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2.3 Administrative Claims - Substantial Contribution Compensation and Expenses Bar Date. Any Person who requests compensation or expense reimbursement for making a Substantial Contribution Claim in the Chapter 11 Case pursuant to sections 503(b)(3), (4), or (5) of the Bankruptcy Code must file an application with the clerk of the Bankruptcy Court on or before a date that is thirty (30) days subsequent to the EPI Effective Date (the “Section 503 Deadline”) and serve such application on counsel for the EPI Liquidating Trust on or before the Section 503 Deadline, or be forever barred from seeking such compensation or expense reimbursement. All Allowed Substantial Contribution Claims shall be paid by the EPI Liquidating Trustees as soon as practicable after the EPI Effective Date.

2.4 Administrative Claims – Allowed 503(b)(9) Claims. Allowed 503(b)(9) Claims, unless previously paid by the Debtor, or otherwise, shall be paid by the EPI Liquidating Trustees as soon as practicable after the EPI Effective Date or as the Holder of such Allowed 503(b)(9) Claim and the EPI Liquidating Trust otherwise agree.

2.5 Administrative Claims – Allowed Administrative Tax Claims. Allowed Administrative Tax Claims under section 503(b)(1)(B) and (C) of the Bankruptcy Code, unless previously paid by or on behalf of the Debtor or otherwise paid, shall be paid by the EPI Liquidating Trustees as soon as practicable after the EPI Effective Date.

2.6 Administrative Claims - Ordinary Course Expenses. Allowed Administrative Claims with respect to liabilities incurred by the Debtor in the ordinary course of business during the Chapter 11 Case, unless previously paid by or on behalf of the Debtor (or otherwise paid), shall be paid by the EPI Liquidating Trustees as soon as practicable after the EPI Effective Date or as the EPI Liquidating Trust and the Holder of such Ordinary Course Expense otherwise agree.

2.7 Other Administrative Claims Bar Date. All requests for payment of an Administrative Claim other than Professional Claims and 503(b)(9) Claims, incurred on or after the Petition Date, must be filed with the Bankruptcy Court and served on counsel to the EPI Liquidating Trust no later than thirty (30) days after the EPI Effective Date. Unless the EPI Liquidating Trust objects to an Administrative Claim within ninety (90) days after the EPI Effective Date, or such later date as may be fixed by the Bankruptcy Court upon request of the EPI Liquidating Trust, such Administrative Claim shall be deemed allowed in the amount requested. In the event that the EPI Liquidating Trust objects to an Administrative Claim, the Bankruptcy Court shall determine the allowed amount of such Administrative Claim. All such Allowed Administrative Claims, unless previously paid by the Debtor, or otherwise, shall be paid by the EPI Liquidating Trustees within thirty (30) days of allowance by the Bankruptcy Court or as the EPI Liquidating Trust and the Holder of such Administrative Claim otherwise agree.

2.8 Priority Tax Claims. On the EPI Effective Date, or as soon as practicable after a Priority Tax Claim becomes an Allowed Claim if the date of allowance is later than the EPI Effective Date, each Holder of an Allowed Priority Tax Claim against the Debtor, unless previously paid by or on behalf of the Debtor or otherwise paid, shall be paid by the EPI Liquidating Trustees in full in Cash; provided, however, that the Debtor or the Liquidating Trust may elect to pay the Holder of an Allowed Priority Tax Claim under Bankruptcy Code section 507(a)(8) in accordance with Bankruptcy Code section 1129(a)(9)(C).


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2.9 Statutory Fees. Notwithstanding anything herein to the contrary, on the EPI Effective Date, the Debtor shall pay, in full, in Cash, any fees due and owing to the U.S. Trustee as of the EPI Confirmation Date pursuant to 28 U.S.C. § 1930(a)(6). On and after the EPI Effective Date, to the extent that the Chapter 11 Case remains open, and for so long as the Debtor or the EPI Liquidating Trust remains obligated to pay quarterly fees, the Debtor or the EPI Liquidating Trust shall file with the Bankruptcy Court quarterly reports in a form reasonably acceptable to the U.S. Trustee. The Debtor or the EPI Liquidating Trust, as applicable, shall remain obligated to pay quarterly fees to the U.S. Trustee until the earliest of the Chapter 11 Case being closed, dismissed, or converted to a case under chapter 7 of the Bankruptcy Code.

ARTICLE III CLASSIFICATION OF CLAIMS AND INTERESTS

3.1 Classification in General. Pursuant to section 1122 of the Bankruptcy Code, set forth below is a designation of classes of Claims against and Interests in the Debtor. A Claim or Interest is placed in a particular Class for the purposes of voting on the EPI Plan and receiving distributions pursuant to the EPI Plan only to the extent that such Claim or Interest is an Allowed Claim or Allowed Interest in that Class and such Claim or Interest has not been paid, released, or otherwise settled prior to the EPI Effective Date. In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax Claims have not been classified and their treatment is set forth in Article II above.

3.2 Summary of Classification of Claims and Interests. The following table designates the Classes of Claims against and Interests in the Debtor and specifies which Classes are: (a) Impaired and Unimpaired under this EPI Plan; (b) entitled to vote to accept or reject this EPI Plan in accordance with section 1126 of the Bankruptcy Code; and (c) deemed to accept or reject this EPI Plan:

CLASS DESCRIPTION IMPAIRED/UNIMPAIRED VOTING STATUS

1 Miscellaneous

Secured Claims Unimpaired

Holders of Class 1 Miscellaneous Secured Clams are Unimpaired, deemed to accept the EPI Plan, and not entitled to vote on the EPI Plan.

2 Priority Non-Tax

Claims Unimpaired

Holders of Class 2 Priority Non-Tax Claims are Unimpaired, deemed to accept the EPI Plan, and not entitled to vote on the EPI Plan.


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CLASS DESCRIPTION IMPAIRED/UNIMPAIRED VOTING STATUS

3 General Unsecured

Claims Impaired

Holders of Class 3 General Unsecured Claims are Impaired and are entitled to vote on the EPI Plan

4 EPI Preferred

Interests Impaired

Holders of Class 4 EPI Preferred Interests are Impaired and are entitled to vote on the EPI Plan

5 EPI Subordinated

Claims Impaired

Holders of Class 5 EPI Subordinated Claims are Impaired, shall receive no distributions, and are deemed to reject the EPI Plan

6 Intercompany

Claims Impaired

Holders of Class 6 Intercompany Claims are Impaired, shall receive no distributions, and are deemed to reject the EPI Plan

7 EPI Interests Impaired

Holders of Class 7 EPI Interests are Impaired, shall receive no distributions, and are deemed to reject the EPI Plan

3.3 Elimination of Vacant Classes. Any Class that, as of the commencement of the EPI Confirmation Hearing, does not have at least one Holder of a Claim or Interest that is Allowed in an amount greater than zero for voting purposes shall be considered vacant, deemed eliminated from this EPI Plan for purposes of voting to accept or reject this EPI Plan, and disregarded for purposes of determining whether this EPI Plan satisfies section 1129(a)(8) of the Bankruptcy Code with respect to such Class.

3.4 Voting; Presumptions; Solicitation.

(a) Acceptance by Certain Impaired Classes. Only Holders of Allowed Claims and EPI Preferred Interests in Classes 3 and 4 are entitled to vote to accept or reject this EPI Plan. The


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Impaired Class of Claims in Claim 3 shall have accepted this EPI Plan if the Holders of at least two-thirds (2/3) in amount and one-half (1/2) in number of the Allowed Claims actually voting in such Class have voted to accept this EPI Plan. The Impaired Class of EPI Preferred Interests in Class 4 shall have accepted this EPI Plan if the Holders of at least two-thirds (2/3) in amount of Allowed EPI Preferred Interests actually voting in such Class have voted to accept this EPI Plan. Holders of Claims and EPI Preferred Interests in Classes 3 and 4 will receive ballots containing detailed voting instructions for accepting or rejecting this EPI Plan.

(b) Deemed Acceptance by Unimpaired Classes. Holders of Claims in Classes 1 and 2 are Unimpaired and are conclusively deemed to have accepted this EPI Plan pursuant to section 1126(f) of the Bankruptcy Code. Accordingly, such Holders are not entitled to vote to accept or reject this EPI Plan.

(c) Deemed Rejection by Impaired Classes. Holders of EPI Subordinated Claims in Class 5, Intercompany Claims in Class 6, and EPI Interests in Class 7 shall neither receive any distribution pursuant to this EPI Plan nor retain any property on account of such Claims or EPI Interests. Holders of Claims in Class 5, Intercompany Claims in Class 6, and EPI Interests in Class 7 are, therefore, Impaired and are conclusively deemed to have rejected this EPI Plan pursuant to section 1126(g) of the Bankruptcy Code. Accordingly, such Holders are not entitled to vote to accept or reject this EPI Plan.

3.5 Cramdown. If any Class of Claims or Interests is deemed to reject this EPI Plan or is entitled to vote on this EPI Plan and does not vote to accept this EPI Plan, the Debtor may (a) seek confirmation of this EPI Plan under section 1129(b) of the Bankruptcy Code or (b) amend or modify this EPI Plan in accordance with the terms hereof and the Bankruptcy Code. If a controversy arises as to whether any Claims or Interests, or any class of Claims or Interests, are Impaired, the Bankruptcy Court shall, after notice and a hearing, determine such controversy on or before the EPI Confirmation Date.

3.6 No Waiver. Subject to the terms of the Global Settlement Order and the Global Settlement Agreement, nothing contained in this EPI Plan shall be construed to waive the right of the Debtor or any other Person to object on any basis to any Claim or Interest.

ARTICLE IV PROVISIONS FOR TREATMENT OF CLAIMS AND INTERESTS

4.1 Class 1 (Miscellaneous Secured Claims). Except to the extent that a Holder of an Allowed Class 1 Claim agrees to less favorable treatment, the Holder of each Allowed Class 1 Claim shall receive at the discretion of the EPI Liquidating Trustees from the EPI Liquidating Trust Assets: (i) Cash in an amount equal to the lesser of (a) the amount of such Allowed Miscellaneous Secured Claim and (b) the value of the Debtor’s property securing such Allowed Miscellaneous Secured Claim currently in the possession of the Debtor minus the amount of Claims secured by such property; (ii) delivery of the property securing such Allowed Miscellaneous Secured Claim; or (iii) other treatment such that the Allowed Miscellaneous Secured Claim shall be rendered Unimpaired. Any Allowed Deficiency Claim of a Holder of an Allowed Class 1 Claim shall be treated as a Class 3 General Unsecured Claim.


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4.2 Class 2 (Priority Non-Tax Claims). Except to the extent that a Holder of an Allowed Priority Non-Tax Claim agrees to a less favorable treatment, the Holder of each Allowed Priority Non-Tax Claim shall be paid in full in Cash on or as soon as practicable after the EPI Effective Date. To the extent any Disputed Non-Priority Tax Claims exist as of the EPI Effective Date and later become Allowed Priority Non-Tax Claims, such Allowed Priority Non-Tax Claims shall be paid as soon as reasonably practicable after the reconciliation of all Disputed Priority Non-Tax Claims.

4.3 Class 3 (General Unsecured Claims). Except to the extent that a Holder of an Allowed Class 3 General Unsecured Claim agrees to a less favorable treatment, on the EPI Effective Date (or as soon as reasonably practicable thereafter if a General Unsecured Claim is not Allowed on the EPI Effective Date) each Holder of an Allowed Class 3 General Unsecured Claim shall receive its Pro Rata share of (i) the EPA Warrants and (ii) the GUC Liquidation Trust Distribution, in accordance with the terms of the Global Settlement Agreement and Global Settlement Order. Thereafter, except to the extent that a Holder of an Allowed Class 3 General Unsecured Claim agrees to a less favorable treatment, each Holder of an Allowed Class 3 General Unsecured Claim shall receive its Pro Rata share of the Class 3 Distribution (taking into account prior Distributions made to such Holders, if any, in accordance with the terms of this EPI Plan).

4.4 Class 4 (EPI Preferred Interests). Except to the extent that a Holder of an Allowed Class 4 EPI Preferred Interest agrees to a less favorable treatment, in full and final satisfaction of any Claim or EPI Preferred Interest, the Holders of each Allowed Class 4 EPI Preferred Interest shall receive its Pro Rata share of the Class 4 Distribution in accordance with the terms of the Global Settlement Agreement and the Global Settlement Order. On the EPI Effective Date, or as soon as reasonably practicable thereafter if an EPI Preferred Interest has not been Allowed on the EPI Effective Date, each holder of an Allowed Class 4 EPI Preferred Interest shall receive its Pro Rata share of the Preferred Interest Liquidation Trust Distribution.

4.5 Class 5 (EPI Subordinated Claims). Holders of Allowed Class 5 EPI Subordinated Claims shall receive no distribution under the EPI Plan.

4.6 Class 6 (Intercompany Claims). Holders of Class 6 Intercompany Claims shall receive no distribution under the EPI Plan.

4.7 Class 7 (EPI Interests). The Holders of the Class 7 EPI Interests shall have their EPI Interests extinguished as of the EPI Effective Date and shall receive no distributions under this EPI Plan.

ARTICLE V ACCEPTANCE OR REJECTION OF THE EPI PLAN; EFFECT OF REJECTION BY

ONE OR MORE IMPAIRED CLASSES OF CLAIMS OR INTERESTS

5.1 Impaired Classes of Claims and Interests Entitled to Vote. Holders of Allowed General Unsecured Claims in Class 3 and Holders of Allowed EPI Preferred Interests in Class 4 are each entitled to vote as a class, respectively, to accept or reject the EPI Plan. The Debtor will tabulate votes on the EPI Plan.


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5.2 Acceptance by an Impaired Class. In accordance with sections 1126(c) and 1126(d) of the Bankruptcy Code and except as provided in section 1126(e) of the Bankruptcy Code, (a) an Impaired Class of Claims shall have accepted the EPI Plan if the EPI Plan is accepted by the Holders of at least two-thirds in dollar amount and more than one-half (½) in number of the Allowed Claims of such Class that have timely and properly voted to accept or reject the EPI Plan; and (b) the Impaired Class of EPI Preferred Interests shall have accepted the EPI Plan if the EPI Plan is accepted by the Holders of at least two-thirds in amount of the Allowed EPI Preferred Interests of such Class that have timely and properly voted to accept or reject the EPI Plan.

5.3 Presumed Acceptances by Unimpaired Classes. Class 1 Miscellaneous Secured Claims and Class 2 Priority Non-Tax Claims are Unimpaired by the EPI Plan. Under section 1126(f) of the Bankruptcy Code, such Holders are conclusively presumed to accept the EPI Plan, and the votes of such Holders will not be solicited.

5.4 Classes Deemed to Reject the EPI Plan. Class 5 Subordinated Claims, Class 6 Intercompany Claims, and Class 7 EPI Interests will not receive any distribution under the EPI Plan and are, therefore, Impaired. Both Classes are presumed to have rejected the EPI Plan pursuant to section 1126(g) of the Bankruptcy Code. The votes of Holders of Class 5 Subordinated Claims, Class 6 Intercompany Claims, and Class 7 EPI Interests will not be solicited.

5.5 Non-Consensual Confirmation. In the event that less than all Impaired Classes vote to accept the EPI Plan, the Debtor will seek Confirmation of the EPI Plan under section 1129(b) of the Bankruptcy Code.

5.6 Confirmability and Severability of the EPI Plan. The confirmation requirements of section 1129 of the Bankruptcy Code must be satisfied. A determination by the Bankruptcy Court that the EPI Plan is not confirmable pursuant to section 1129 of the Bankruptcy Code shall not limit or affect the Debtor’s ability to modify the EPI Plan to satisfy the confirmation requirements of section 1129 of the Bankruptcy Code.

ARTICLE VI MEANS FOR IMPLEMENTATION OF THE EPI PLAN – FORMATION OF THE EPI

LIQUIDATING TRUST

After the EPI Effective Date, the EPI Plan shall be implemented as follows:

6.1 Appointment of the EPI Liquidating Trustees. The EPI Liquidating Trustees shall be identified in the EPI Plan Supplement. At the EPI Plan Confirmation Hearing, the Bankruptcy Court shall consider and, if appropriate, ratify the selection of the EPI Liquidating Trustees. All compensation for the EPI Liquidating Trustees shall be paid from the EPI Liquidating Trust Assets in accordance with the terms of the EPI Plan and the EPI Liquidating Trust Agreement. The term of each EPI Liquidating Trustee shall commence upon execution of the EPI Liquidating Trust Agreement on the EPI Effective Date. The EPI Liquidating Trustees shall not be required to give any bond or surety or other security for the performance of their duties unless otherwise ordered by the Bankruptcy Court. The EPI Liquidating Trust Agreement shall be provided in the EPI Plan Supplement. On the EPI Effective Date, all Beneficiaries of the EPI Liquidating Trust shall be deemed to have ratified and become bound by the terms and conditions


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of the EPI Liquidating Trust Agreement. In the event that any EPI Liquidating Trustee resigns or is removed, terminated, or otherwise unable to serve as an EPI Liquidating Trustee, its successor shall be appointed as set forth in the EPI Liquidating Trust Agreement. Any successor EPI Liquidating Trustee appointed shall be bound by and comply with the terms of the EPI Plan, the EPI Confirmation Order, and the EPI Liquidating Trust Agreement.

6.2 Creation of EPI Liquidating Trust. On the EPI Effective Date, the EPI Liquidating Trustees shall sign the EPI Liquidating Trust Agreement and, in their capacities as EPI Liquidating Trustees, accept all EPI Liquidating Trust Assets on behalf of the Beneficiaries thereof, and be authorized (i) to obtain, collect, seek the turnover of, liquidate, and collect all of the EPI Liquidating Trust Assets not in the possession or control of the Debtor or the EPI Liquidating Trustees and (ii) to prosecute or compromise (subject to the terms of the Liquidating Trust Agreement) the Causes of Action. The EPI Liquidating Trust will then be created and effective without any further action by the Bankruptcy Court or any Person as of the EPI Effective Date. The EPI Liquidating Trust shall be established for the primary purpose of prosecuting the Causes of Action, liquidating the EPI Liquidating Trust Assets, and making Distributions in accordance with the Global Settlement Agreement, the Global Settlement Order, this EPI Plan, and the EPI Liquidating Trust Agreement, with no objective to continue or engage in the conduct of a trade or business, except only in the event and to the extent necessary to, and consistent with, the liquidating purpose of the EPI Liquidating Trust.

6.3 Beneficiaries of EPI Liquidating Trust. The Holders of Allowed General Unsecured Claims against the Debtor and the Holders of Allowed EPI Preferred Interests shall be the Beneficiaries of the EPI Liquidating Trust. Such Beneficiaries shall be bound by the EPI Liquidating Trust Agreement. The interests of the Beneficiaries in the EPI Liquidating Trust shall be uncertificated and non-transferable in accordance with the terms set forth in this EPI Plan and the EPI Liquidating Trust Agreement.

6.4 Vesting and Transfer of Assets to the EPI Liquidating Trust. Under Section 1141(b) of the Bankruptcy Code, the EPI Liquidating Trust Assets shall be assigned, transferred, and vest in the EPI Liquidating Trust upon the EPI Effective Date free and clear of all Liens, Claims, and Interests for the benefit of the EPI Liquidating Trust Beneficiaries; provided, however, that the EPI Liquidating Trustees may abandon or otherwise not accept any Assets that the EPI Liquidating Trustees believe, in good faith, to have no value to, or will be unduly burdensome to, the EPI Liquidating Trust in accordance with the terms of the EPI Liquidating Trust Agreement. Any Assets that the EPI Liquidating Trustees so abandon or otherwise do not accept shall not be property of the EPI Liquidating Trust. As of the EPI Effective Date, all Assets, including the EPI Liquidating Trust Assets shall vest in the EPI Liquidating Trust and all Assets dealt with in this EPI Plan shall be free and clear of all Liens, Claims, and Interests except as otherwise specifically provided in this EPI Plan, the EPI Confirmation Order, the Global Settlement Order, or the Global Settlement Agreement.

6.5 Funding of the EPI Liquidating Trust. The EPI Liquidating Trust shall be funded with (i) Cash of EPI; (ii) proceeds from the liquidation of Madden and Grieve CO2, if any; (iii) net recoveries resulting from the prosecution of any and all Causes of Action; (iii) the EPA Warrants; (iv) the benefits, rights, interests, and proceeds of any Insurance Policies with respect to EPI, Madden, and Grieve CO2 to the extent payable to such entities in accordance with the terms


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of the Insurance Policies (subject to the other provisions of this Plan, including Section 6.14, as to the assignment of the Madden Insurance Proceeds to COP); and (v) any and all other Assets belonging to the Estate (all of which shall be distributed in accordance with the terms of this EPI Plan, the EPI Confirmation Order, the EPI Litigation Trust Agreement, the Global Settlement Agreement, and the Global Settlement Order). Notwithstanding anything in this EPI Plan to the contrary, EPI reserves all of its rights to transfer the assets of Grieve CO2 or abandon such assets and/or any interests in any of the Grieve Entities in accordance with the provisions of the Bankruptcy Code.

6.6 Distributions from the Liquidating Trust. Other than the Distribution of EPA Warrants, with respect to which Distributions shall be made to Holders of Allowed General Unsecured Claims on the EPI Effective Date (or as soon as reasonably practicable thereafter if a General Unsecured Claim is not Allowed on the EPI Effective Date), Distributions from the EPI Liquidating Trust shall be made in accordance with (and in accordance with the terms of) this EPI Plan, the EPI Liquidating Trust Agreement, the Global Settlement Agreement, and the Global Settlement Order. For the avoidance of doubt, other than the Distributions of EPA Warrants as provided herein, the EPI Liquidating Trust Operating Expenses shall be paid prior to making any Distributions to Beneficiaries of the EPI Liquidating Trust. In addition, and for the avoidance of doubt, Unpaid Chapter 11 Professional Fee Claims shall be paid prior to making any distributions to Beneficiaries of the EPI Liquidating Trust, unless the Holder of an Unpaid Chapter 11 Professional Fee Claim and the Liquidating Trust otherwise agree.

6.7 Certain Powers and Duties of the EPI Liquidating Trust and the EPI Liquidating Trustees.

(a) General Powers of the EPI Liquidating Trustees. Subject to the terms of the EPI Liquidating Trust Agreement, the EPI Liquidating Trustees shall have, and enjoy the powers of, the Debtor’s authorized representative for all purposes and shall have the power and authority to perform the acts described in the EPI Liquidating Trust Agreement (subject to approval by the Bankruptcy Court where applicable), in addition to any powers granted by law or conferred to them by any other provision of this EPI Plan, provided, however, that enumeration of the following powers shall not be considered in any way to limit or control the power and authority of the EPI Liquidating Trustees to act as specifically authorized by any other provision of this EPI Plan, the EPI Liquidating Trust Agreement, and/or any applicable law, and to act in such manner as the EPI Liquidating Trustees may deem necessary or appropriate, including, without limitation, to discharge all obligations assumed by the EPI Liquidating Trustees or provided herein, to conserve and protect the EPI Liquidating Trust and the EPI Liquidating Trust Assets, or to confer on the Beneficiaries the benefits intended to be conferred upon them by this EPI Plan. The powers, rights, and responsibilities of the EPI Liquidating Trustees shall be specified in the EPI Liquidating Trust Agreement, shall be subject to the terms of the Global Settlement Order and the Global Settlement Agreement, and, subject to the foregoing, shall include the authority, power, and responsibility to: (a) receive, manage, invest, supervise, and protect EPI Liquidating Trust Assets; (b) pay taxes or other obligations incurred by the EPI Liquidating Trust and issue to employees or other Persons, and/or file with the appropriate Governmental Units, applicable tax and wage returns and forms; (c) retain and compensate, without further order of the Bankruptcy Court, the services of employees, professionals, and consultants to advise and assist in the administration, prosecution, and Distribution of EPI Liquidating Trust Assets; (d) calculate and implement Distributions of EPI


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Liquidating Trust Assets; (e) investigate, prosecute, compromise, and settle, in accordance with the specific terms of the EPI Liquidating Trust Agreement, the Causes of Action vested in the EPI Liquidating Trust, as set forth in the EPI Liquidating Trust Agreement; (f) object to and resolve Claims and Interests in accordance with this EPI Plan, subject to the terms of the EPI Liquidating Trust Agreement, including the power to object to Claims against and Interests in the Debtor, and to subordinate and recharacterize Claims by objection, motion, or adversary proceeding against the Debtor and, subject to the occurrence of the Effective Date, without any further notice or action, order or approval by the Bankruptcy Court, for Claims and Interests with a value less than or equal to $250,000.00; (g) undertake all administrative functions of the Chapter 11 Case, including the payment of Statutory Fees incurred post-EPI Effective Date with respect to distributions from the EPI Liquidating Trust and the ultimate closing of the Chapter 11 Case and dissolution of the Debtor and any of its Affiliates; and (h) take such other action as may be vested in or assumed by the EPI Liquidating Trustees consistent with this EPI Plan, the EPI Liquidating Trust Agreement, and any applicable Orders of the Bankruptcy Court, or as may be necessary and proper to carry out the provisions of this EPI Plan.

Except as expressly set forth in this EPI Plan and in the EPI Liquidating Trust Agreement, the EPI Liquidating Trustees, on behalf of the EPI Liquidating Trust, shall have absolute discretion, but subject to the consent of BSP and the provisions of sections 5.4 and 7.3 of the Liquidating Trust Agreement, to pursue or not to pursue, or settle and compromise, any Causes of Action the EPI Liquidating Trustees determine is in the best interests of the EPI Liquidating Trust’s Beneficiaries and consistent with the purposes of the EPI Liquidating Trust, and shall be indemnified to the fullest extent permitted under applicable law by the EPI Liquidating Trust for the outcome of his, her, or its decisions, other than those decisions constituting fraud, gross negligence, willful misconduct, bad faith, or self-dealing.

The EPI Liquidating Trustees may incur any reasonable and necessary expenses in liquidating and converting the EPI Liquidating Trust Assets to Cash. The EPI Liquidating Trust is the successor to the Debtor, its Estate, its books and records, and its privileges and protections (it being understood that to the extent the EPI Liquidating Trustees are a successor with respect to documents subject to a common interest privilege with any third party, nothing herein shall relieve the EPI Liquidating Trustees of any formal or informal obligations with respect to such common interest agreements). The EPI Liquidating Trustees shall have standing, authority, power, and right to assert, prosecute, and/or settle the Causes of Action, in accordance with the provisions of the Liquidating Trust Agreement, including, with respect to the EPI Liquidating Trust, making a claim under Insurance Policies based upon its powers as a bankruptcy-appointed representative of the Debtor’s Estate with the same or similar abilities possessed by insolvency trustees, receivers, examiners, conservators, liquidators, rehabilitators, or similar officials. The Causes of Action will vest in the EPI Liquidating Trust as set forth in the EPI Liquidating Trust Agreement; provided, however, there can be no assurance as to the outcome of such Causes of Action or the dollar amount of any recovery that will be obtained by the EPI Liquidating Trust.

(b) Books and Records. On the EPI Effective Date, the EPI Liquidating Trust shall: (x) take possession of all books, records, and files of the Debtor and the Estate that were not transferred in connection with the EPA Plan; and (y) provide for the retention and storage of such books, records, and files until such time as the EPI Liquidating Trustees determine, in accordance


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with the EPI Liquidating Trust Agreement, that retention of same is no longer necessary or beneficial.

(c) Investments of Cash. Cash held pending Distribution shall, to the extent permitted by applicable law and in the discretion of the EPI Liquidating Trustees, be invested by the EPI Liquidating Trustees in (a) direct obligations of, or obligations guaranteed by, or obligations secured by, the United States of America (including without limitation United States Treasury Bills); (b) obligations of any agency or corporation that is or may hereafter be created by or pursuant to an Act of the Congress of the United States as an agency or instrumentality thereof, or (c) demand deposits or short-term certificates of deposit at any bank or trust company that has, at the time of the acquisition by the EPI Liquidating Trustees of such investments, capital stock and surplus aggregating at least $100 million and whose short-term debt obligations are rated by at least two nationally recognized statistical rating organizations in one of the two highest categories therefor; provided, however that such investments are investments permitted to be made by a liquidating trust within the meaning of Treasury Regulation section 301.7701-4(d), as reflected therein, or under applicable Internal Revenue Service (“IRS”) guidelines, rulings, or other controlling authorities. Such investments shall mature in such amounts and at such times as, in the judgment of the EPI Liquidating Trustee at the times such investments are made, are necessary, or are desirable with a view to providing funds when needed to make Distributions from the EPI Liquidating Trust Assets. Any investment purchased with the EPI Liquidating Trust Assets shall be deemed included among the EPI Liquidating Trust Assets.

(d) Deposit of Cash. In addition to the above, the EPI Liquidating Trustees shall be permitted, at the discretion of the EPI Liquidating Trustees, to deposit Cash in (a) any banks that are party to a Uniform Depository Agreement with the Office of the United States Trustee or (b) any banks that company with the requirements of section 345 of the Bankruptcy Code.

(e) Costs and Expenses of Administration of the EPI Liquidating Trust. All EPI Liquidating Trust Operating Expenses shall be the responsibility of and paid by the EPI Liquidating Trust in accordance with the EPI Liquidating Trust Agreement.

(f) Reporting. In no event later than thirty (30) Business Days after the end of the first full quarter following the EPI Effective Date and on a quarterly basis thereafter until all Cash in the EPI Liquidating Trust has been released or distributed in accordance with this EPI Plan and the EPI Liquidating Trust Agreement, the EPI Liquidating Trustees shall File reports setting forth the amounts, recipients, and dates of all Distributions through each applicable reporting period.

6.8 United States Federal Income Tax Treatment of the EPI Liquidating Trust for the EPI Liquidating Trust Assets. For federal income tax purposes, it is intended that the EPI Liquidating Trust be classified as a liquidating trust under Section 301.7701-4 of the Treasury regulations and that the trust be owned by its Beneficiaries. Accordingly, for federal income tax purposes, it is intended that the Beneficiaries be treated as if they had received a distribution from the Estate of an undivided interest in the EPI Liquidating Trust Assets (to the extent of the value of their respective share in the applicable Assets) and then contributed such interests to the EPI Liquidating Trust, and the Beneficiaries will be treated as the grantors and owners thereof.


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The EPI Liquidating Trustees shall be responsible for filing all federal, state, and local tax returns for the EPI Liquidating Trust and for the Debtor (and Post-EPI Effective Date Debtor, as the case may be). The EPI Liquidating Trust shall comply with all withholding and reporting requirements imposed by any federal, state, or local taxing authority, and all Distributions made by the EPI Liquidating Trust shall be subject to any such withholding and reporting requirements. The EPI Liquidating Trustees shall be authorized to take any and all actions that may be necessary or appropriate to comply with such withholding and reporting requirements including, without limitation, requiring that, as a condition to the receipt of a Distribution, the Holder of an Allowed Claim or the Holder of an EPI Preferred Interest complete the appropriate IRS Form W-8 or IRS Form W-9, as applicable to each Holder. Notwithstanding any other provision of this EPI Plan, (a) each Holder of an Allowed Claim or an EPI Preferred Interest that is to receive a Distribution from the EPI Liquidating Trust shall have the sole and exclusive responsibility for the satisfaction and payment of any tax obligations imposed on such Holder by any Governmental Unit, including income and other tax obligations, on account of such Distribution, and (b) no Distribution shall be made to or on behalf of such Holder under this EPI Plan unless and until such Holder has made arrangements satisfactory to the EPI Liquidating Trustees to allow the EPI Liquidating Trust to comply with its tax withholding and reporting requirements.

Any property to be distributed by the EPI Liquidating Trust shall, pending the implementation of such arrangements, be treated as an undeliverable Distribution to be held by the EPI Liquidating Trustees, as the case may be, until such time as the Liquidating Trustees are satisfied with the Holder’s arrangements for any withholding tax obligations.

6.9 Governance of the Debtor. Following the EPI Effective Date, the EPI Liquidating Trustees shall also be, and shall enjoy the powers of, the Debtor’s authorized representatives for all purposes, including, without limitation, section 1123 of the Bankruptcy Code. No further proof of such power shall be necessary or required. Upon the EPI Effective Date, the Board shall be deemed to have resigned and the Debtor shall be managed by the EPI Liquidating Trust, through the EPI Liquidating Trustees.

6.10 Term of EPI Liquidating Trust. The EPI Liquidating Trustees shall be discharged and the EPI Liquidating Trust shall be terminated at such time as (i) all Disputed Claims against the Debtor have been settled, Allowed, Disallowed, or otherwise resolved, (ii) all of the Causes of Action have been prosecuted to completion or settled and the EPI Liquidating Trust Assets have been collected and liquidated, (iii) all duties and obligations of the EPI Liquidating Trustees under the EPI Liquidating Trust Agreement have been fulfilled, (iv) all Distributions required to be made by the EPI Liquidating Trust under this EPI Plan and the EPI Liquidating Trust Agreement have been made, and (v) the Chapter 11 Case has been closed; provided, however, that in no event shall the EPI Liquidating Trust be dissolved later than five (5) years from the EPI Effective Date unless the Bankruptcy Court, upon motion within the six-month period prior to the fifth anniversary (or the end of any extension period approved by the Bankruptcy Court), determines that a fixed period extension (not to exceed one (1) year, together with any prior extensions, unless the EPI Liquidating Trust has procured a favorable letter ruling from the Internal Revenue Service that any further extension would not adversely affect the status of the EPI Liquidating Trust as a liquidating trust for federal income tax purposes) is necessary to facilitate or complete the recovery and liquidation of the EPI Liquidating Trust Assets.


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6.11 Limitation of Liability of the EPI Liquidating Trustees. The EPI Liquidating Trust shall indemnify the EPI Liquidating Trustees and the Liquidating Trust’s professionals against any losses, liabilities, expenses (including attorneys’ fees and disbursements), damages, taxes, suits, or claims that the EPI Liquidating Trustees or the EPI Liquidating Trust’s professionals may incur or sustain by reason of being or having been an EPI Liquidating Trustee or professionals of the EPI Liquidating Trust for performing any functions incidental to such service; provided, however, the foregoing shall not relieve the EPI Liquidating Trustees or the EPI Liquidating Trust’s professionals from liability for bad faith, willful misconduct, reckless disregard of duty, criminal conduct, gross negligence, fraud, or self-dealing, or, in the case of an attorney professional and, as required under Rule 1.8(h)(1) of the Delaware Layers’ Rules of Professional Conduct, malpractice.

6.12 Standard of Care and Exculpation. The EPI Liquidating Trust, its professionals and its employees and the EPI Liquidating Trustees are exonerated, held harmless, and indemnified by the Debtor and its Estate for any act or omission in respect of the EPI Liquidating Trustees’ duties under the EPI Plan, except for fraud, gross negligence, and willful misconduct (and may, but are not required to, maintain insurance for the purpose of such indemnification), as set forth in the EPI Liquidating Trust Agreement.

6.13 Transfer Taxes. Any transfer of the EPI Liquidating Plan Assets or any portion(s) of the EPI Liquidating Plan Assets pursuant to this EPI Plan shall constitute a “transfer under a plan” within the purview of section 1146(c) of the Bankruptcy Code and shall not be subject to transfer, stamp, or similar taxes.

6.14 ConocoPhillips/Burlington Resources. Notwithstanding anything to the contrary contained in this Plan, the EPI Plan Supplement, or the EPI Confirmation Order, any Insurance Policies held by, or in which Madden is or was an insured on such policy, the proceeds of which are Madden Insurance Proceeds, are not property of the Debtor’s bankruptcy estate, but are property of COP as the assignee of certain of Madden’s assets or the loss payee under the subject Insurance Policies representing the Madden Insurance Proceeds. In the event that any of EPI, the EPI Liquidating Trust, or Post-EPI Effective Date Debtor receives any of the Madden Insurance Proceeds after the assignment of the Madden Insurance Proceeds to COP, such Madden Insurance Proceeds shall be immediately turned over in full to COP without offset, recoupment or other reduction.

ARTICLE VII UNEXPIRED LEASES AND EXECUTORY CONTRACTS

7.1 Contracts and Leases. On the EPI Effective Date, all Pre-EPI Petition Date executory contracts, employment agreements and unexpired leases, with the exception of contracts that constitute contracts of insurance in favor of, or that benefit, the Debtor or its Estate and those leases and contracts that were previously assumed or rejected shall be deemed automatically rejected as of the EPI Effective Date or such earlier date as the Debtor may have unequivocally terminated such lease or contract. The EPI Confirmation Order shall constitute an order of the Bankruptcy Court approving such rejections, pursuant to section 365 of the Bankruptcy Code.


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7.2 Rejection Damages Bar Date. If the rejection by the Debtor, pursuant to the EPI Plan, of an executory contract or unexpired lease results in a Claim, then such Claim shall be forever barred and shall not be enforceable against the Debtor, the EPI Liquidating Trust, or the properties of any of them unless a proof of claim is filed with the clerk of the Bankruptcy Court and served upon counsel to the Debtor and counsel to the EPI Liquidating Trust within thirty (30) days after the EPI Effective Date.

7.3 Objections to Rejection Damage Claims. Objections to proofs of Claim for damages resulting from rejected executory contracts or unexpired leases shall be filed by the EPI Liquidating Trust any time prior to the Claims Objection Deadline, as such date may be extended by the Bankruptcy Court upon request of the EPI Liquidating Trustees. Said objections shall be served upon the Holder of the Claim to which such objection is made (or Holder’s counsel, when applicable) and any Rejection Claim that is Allowed shall be treated as an Allowed Class 3 General Unsecured Claim in accordance with this EPI Plan.

ARTICLE VIII PROVISIONS GOVERNING DISTRIBUTIONS

8.1 Time of Distributions. Except as otherwise provided for herein, ordered by the Bankruptcy Court, or otherwise, distributions under the EPI Plan shall be made as soon as is practicable on the later to occur of (a) the EPI Effective Date, (b) the date a General Unsecured Claim or EPI Preferred Interest becomes Allowed, or (c) the date that Cash becomes available for distribution to a particular Class pursuant to the treatment of such Class under this EPI Plan, in accordance with the Global Settlement Agreement and the Global Settlement Order. The EPI Liquidating Trustees shall establish a reserve or reserves of Cash, estimated to be sufficient to satisfy any incurred and anticipated Post-EPI Effective Date Claims incurred by the EPI Liquidating Trust. The EPI Liquidating Trustees may make additional distributions of Cash and property received after the initial distributions. Such additional distributions may be made at such times and in such amounts as determined by the EPI Liquidating Trustees.

8.2 Interest on Claims. Unless otherwise specifically provided for in this EPI Plan or the EPI Confirmation Order, or as required by section 506 of the Bankruptcy Code, post-EPI Petition Date interest shall not accrue or be paid on Claims, and no Claimholder shall be entitled to interest accruing on or after the Petition Date on any Claim. Interest shall not accrue or be paid upon any Disputed Claim in respect of the period from the Petition Date to the date a final distribution is made thereon if and after such Disputed Claim becomes an Allowed Claim.


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8.3 Claims Administration Responsibility. The EPI Liquidation Trustees shall retain sole responsibility for administering, disputing, objecting to, compromising, or otherwise resolving issues related to distributions to Holders of Claims or Holders of EPI Preferred Interests, subject to the terms of this EPI Plan.

8.4 Procedures for Treating and Resolving Disputed Claims. No Distributions Pending Allowance. Except as set forth in this EPI Plan, no payments or distributions will be made with respect to all or any portion of a Disputed Claim unless and until all objections to such Disputed Claim have been settled or withdrawn or have been determined by a Final Order, and the Disputed Claim has become an Allowed Claim. All objections to Claims must be filed by the Claims Objection Deadline, as such time period may be extended by the Bankruptcy Court.

(a) Distribution Reserve. The EPI Liquidating Trustees shall fund the Distribution Reserve prior to making Distributions to Holders of Allowed Claims and Holders of Allowed EPI Preferred Interests. The EPI Liquidating Trustees may request estimation for any Disputed Claim that is contingent or unliquidated, and the EPI Liquidating Trustees will fund the Distribution Reserve based upon the estimated amount of each such Disputed Claim or Disputed EPI Preferred Interest as determined by the Bankruptcy Court. In the event a contingent or unliquidated Disputed Claim or Disputed EPI Preferred Interest is not estimated pursuant to an Order of the Bankruptcy Court, the EPI Liquidating Trustees will fund the Distribution Reserve based upon the appropriate Pro Rata percentage distribution of the Face Amount of such Disputed Claim or Disputed EPI Preferred Interest.

(b) Distributions After Allowance. Payments and distributions from the Distribution Reserve on account of a Disputed Claim, to the extent that such Disputed Claim ultimately becomes an Allowed Claim, will be made in accordance with provisions of this EPI Plan that govern the Class in which such Claim is classified. Promptly after the date when the order or judgment of the Bankruptcy Court allowing all or part of such Claim becomes a Final Order, the EPI Liquidating Trustees shall distribute to the Holder of such Claim any Cash allocated to such Claim in the Distribution Reserve that would have been distributed on the dates distributions were previously made on account of Allowed Claims had such Claim been an Allowed Claim on such dates. All Distributions made under this section of this EPI Plan on account of an Allowed Claim shall be made as if such Claim had been an Allowed Claim on the dates distributions were previously made to Allowed Claims.

(c) Partial Distributions. Notwithstanding any other provision of this EPI Plan or the documents referred to by this EPI Plan, the EPI Liquidating Trustees may make one or more distributions to the Holders of Disputed Claims, based on the distributions which such Holders would otherwise be entitled to receive based on the undisputed portions of such Disputed Claims if the Liquidating Trustees had not objected to such Disputed Claims, if any. The EPI Liquidating Trustees may only make Distributions on the undisputed portions of all Disputed Claims, or none at all. Notwithstanding the foregoing, the EPI Liquidating Trustees may not authorize or pay any distribution to entities who may be liable to the EPI Liquidating Trust with respect to a Cause of Action or otherwise, which Disputed Claim may be paid, if at all, only after the Holder of such Disputed Claim has discharged its liability to the EPI Liquidating Trust on account of the Cause of Action or otherwise.


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8.5 Delivery of Distributions. Distributions to Holders of Allowed Claims or Holders of Allowed EPI Preferred Interests, shall be delivered by the EPI Liquidation Trustees (a) to the addresses set forth on the proofs of claim filed by such Holders (or at the last known addresses of such Holders or such other address as is provided to the Liquidating Trustees by the Holders or their counsel, whether or not a proof of claim or interest has been filed), (b) to the addresses set forth in any written notices of address changes delivered to the EPI Liquidation Trustees after the date of any related proof of claim, (c) to the addresses reflected in the Schedules if no proof of claim or interest has been filed and the EPI Liquidation Trustees have not received a written notice of a change of address, or (d) in the case of a Claimholder whose Allowed Claim is governed by an agreement and is administered by an agent or servicer, to the agent or servicer which shall then be responsible for making delivery of the distribution to such Claimholder.

8.6 Setoff.

(a) By the Debtor, the EPI Liquidating Trustees, or the EPI Liquidating Trust.

The Debtor or the EPI Liquidating Trust may, pursuant to Bankruptcy Code sections 553 or 558 or any other applicable law, but shall not be required to, set off against any Claim, and the Distributions to be made pursuant to this EPI Plan in respect of such Claim, Claims of any nature whatsoever that the Debtor may have against the Holder of such Claim; provided, however, that neither the failure to do so nor the allowance of any Claim hereunder shall constitute a waiver or release by any of the Debtor, the EPI Liquidating Trustees, or the EPI Liquidating Trust, as the case may be, of any such Claim that the Debtor may have against such Holder.

(b) By Non-Debtors.

Unless otherwise authorized by a Final Order, any Holder of a Claim, other than BSP (which shall be deemed to have preserved its setoff rights, if any), must assert any setoff rights against a Claim by the Debtor against such Entity by timely filing an appropriate motion on or before the Confirmation Date seeking authority to setoff, or will be deemed to have waived and be forever barred from asserting any right to setoff against a Claim by the Debtor; provided, however, that the right of the Debtor, the EPI Liquidating Trustees, or the EPI Liquidating Trust, as applicable, to object to the validity of any asserted right of setoff shall be preserved.

8.7 Unclaimed or Undeliverable Distributions. If the Distribution to any Claimholder or Holder of an EPI Preferred Interest is returned as undeliverable, no further distributions to such Claimholder or Holder of an EPI Preferred Interest shall be made unless and until the EPI Liquidation Trustees are notified of the then current address of such Claimholder or Holder of an EPI Preferred Interest, at which time all missed distributions shall be made to such Claimholder or Holder of an EPI Preferred Interest, without interest. Amounts in respect of undeliverable distributions shall be returned to the EPI Liquidation Trustees until such distributions are claimed. If any distribution under the EPI Plan is returned to the EPI Liquidating Trust as undeliverable or the check or other similar instrument or Distribution by the EPI Liquidating Trust remains uncashed or unclaimed, as applicable, for ninety (90) days, such Cash shall be deemed to be Unclaimed Property


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Upon property becoming Unclaimed Property, it immediately shall revest in the EPI Liquidating Trust and distributed in accordance with the EPI Plan, the Global Settlement Order and Global Settlement Agreement. All claims for undeliverable distributions shall be made on or before the thirtieth (30th) day after the final distribution under this EPI Plan. After such date, all property unclaimed by any Claimholder or Holder of an EPI Preferred Interest shall revert to the EPI Liquidation Trustees to be redistributed to Holders of Allowed Claims and EPI Preferred Interests in accordance with this EPI Plan, the Global Settlement Agreement, and the Global Settlement Order.

8.8 De Minimis Distributions. Notwithstanding any other provision of the EPI Plan, the EPI Liquidating Trustees or any other Person acting on behalf of the EPI Liquidating Trust shall not be required to make distributions of Cash less than $25.00 in value. In addition, the EPI Liquidating Trustees shall not be required to make a distribution on account of any Allowed Claim or EPI Preferred Interest if the aggregate amount of all distributions authorized to be made on such date is less than $20,000, in which case such distributions shall be deferred to the next Distribution Date, unless such distribution would be the final distribution to either or both of Holders of Allowed Claims or Allowed EPI Preferred Interests.

8.9 Manner of Payment Under this EPI Plan. The Cash Distributions made pursuant to this EPI Plan shall be made in U.S. dollars by checks drawn on domestic banks selected by the EPI Liquidating Trustees, as applicable, or by wire transfer from a domestic bank selected at the option of the EPI Liquidating Trustees.

8.10 Final Distribution Report. The EPI Liquidating Trustees shall prepare and file with the Bankruptcy Court a final report (the “Final Distribution Report”) twenty (20) days prior to making the Final Distribution under this EPI Plan. The report shall disclose the total amount distributed or to be distributed under this EPI Plan.

8.11 Post-Final Distribution Report Assets. Any assets received by the EPI Liquidating Trustees after the filing of the Final Distribution Report shall be tendered to the Holders of Allowed Claims and Holders of EPI Preferred Interests in accordance with the Distribution requirements otherwise set forth in this EPI Plan, the Global Settlement Agreement, and the Global Settlement Order.

8.12 Exemption from Securities Laws. The issuance and distribution of the EPA Warrants shall be exempt from registration under the Securities Act of 1933 and any other applicable securities laws pursuant to section 1145 of the Bankruptcy Code, to the maximum extent permitted thereunder. The Warrants may be resold by the holders thereof without restriction, except to the extent that any such holder is deemed to be an “underwriter” as defined in section 1145(b)(1) of the Bankruptcy Code.

ARTICLE IX SETTLEMENT, RELEASE, INJUNCTION AND RELATED PROVISIONS

9.1 Release of Liens. Except as otherwise provided in this EPI Plan or in any contract, instrument, release, or other agreement or document created pursuant to this EPI Plan, on the EPI Effective Date and concurrently with the applicable distributions made pursuant to this EPI Plan,


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all mortgages, deeds of trust, liens, pledges or other security interests against any property of the Estate shall be fully released and discharged, and all of the right, title and interest of any holder of such mortgages, deeds of trust, liens, pledges or other security interests shall revert to the Estate and its successors and assigns.

9.2 Liabilities to, and Rights of, Governmental Units. Nothing in this EPI Plan or the EPI Confirmation Order shall discharge, release, or preclude: (1) any liability to a Governmental Unit that is not a Claim; (2) any Claim of a Governmental Unit arising on or after the EPI Confirmation Date; (3) any liability to a Governmental Unit on the part of any Person other than the Debtor or the EPI Liquidation Trustees; or (4) any criminal liability. Nothing in this EPI Plan or the EPI Confirmation Order shall enjoin or otherwise bar any Governmental Unit from asserting or enforcing, outside the Bankruptcy Court, any liability described in the preceding sentence. The release and injunction provisions contained in this EPI Plan and the EPI Confirmation Order are not intended and shall not be construed to bar any Governmental Unit from, after the EPI Confirmation Date, pursuing any police or regulatory action.

9.3 Releases by the Debtor and Its Estate. ON THE EPI EFFECTIVE DATE, THE RELEASED PARTIES WILL BE EXPRESSLY, UNCONDITIONALLY, GENERALLY AND INDIVIDUALLY AND COLLECTIVELY RELEASED, ACQUITTED, AND DISCHARGED BY THE DEBTOR AND ITS ESTATE FROM ANY AND ALL ACTIONS, CLAIMS, OBLIGATIONS, RIGHTS, SUITS, DAMAGES, CAUSES OF ACTION, REMEDIES AND LIABILITIES WHATSOEVER, INCLUDING ANY DERIVATIVE CLAIMS ASSERTED OR ASSERTABLE ON BEHALF OF THE DEBTOR, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, MATURED OR UNMATURED, EXISTING OR HEREINAFTER ARISING, IN LAW, EQUITY, CONTRACT, TORT OR OTHERWISE, BY STATUTE OR OTHERWISE, THAT THE DEBTOR, THE EPI LIQUIDATING TRUST, THE DEBTOR’S ESTATE OR THE DEBTOR’S AFFILIATES (WHETHER INDIVIDUALLY OR COLLECTIVELY) OR ON BEHALF OF THE HOLDER OF ANY CLAIM OR INTEREST OR OTHER ENTITY, EVER HAD, NOW HAS OR HEREAFTER CAN, SHALL, OR MAY HAVE, BASED ON OR RELATING TO, OR IN ANY MANNER ARISING FROM, IN WHOLE OR IN PART, THE DEBTOR, THE DEBTOR’S LIQUIDATION, THE CHAPTER 11 CASE, THE PURCHASE, SALE OR RESCISSION OF THE PURCHASE OR SALE OF ANY SECURITY OF THE DEBTOR, THE SUBJECT MATTER OF, OR THE TRANSACTIONS OR EVENTS GIVING RISE TO, ANY CLAIM OR INTEREST THAT IS TREATED IN THE EPI PLAN, THE BUSINESS OR CONTRACTUAL ARRANGEMENTS BETWEEN THE DEBTOR AND ANY RELEASED PARTY, THE RESTRUCTURING OF CLAIMS AND INTERESTS BEFORE OR DURING THE CHAPTER 11 CASE THE NEGOTIATION, FORMULATION, PREPARATION, OR PERFORMANCE OF THE EPI PLAN, THE EPI DISCLOSURE STATEMENT, THE PURSUIT OF CONFIRMATION, THE PURSUIT OF CONSUMMATION, THE ADMINISTRATION OR IMPLEMENTATION OF THE EPI PLAN, OR RELATED AGREEMENTS, INSTRUMENTS ,OR OTHER DOCUMENTS OR ANY OTHER ACT OR OMISSION, TRANSACTION, AGREEMENT, EVENT, OR OTHER OCCURRENCE RELATING TO THE DEBTOR OR THE FOREGOING TAKING PLACE ON OR BEFORE THE CONFIRMATION DATE OF THE EPI PLAN, EXCEPT FOR ANY CLAIMS AND CAUSES OF ACTION FOR ACTUAL FRAUD OR GROSS


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MISCONDUCT, IN EACH CASE AS DETERMINED BY FINAL ORDER OF THE BANKRUPTCY COURT OR ANY OTHER COURT OF COMPETENT JURISDICTION.

9.4 Releases by Holders. SUBJECT TO THE RIGHT OF EACH HOLDER OF A CLAIM AGAINST OR INTEREST IN THE DEBTOR TO AFFIRMATIVELY ‘OPT OUT” OF THE RELEASE SET FORTH BELOW BY NOTING SUCH “OPT OUT” ELECTION ON THE BALLOT TO VOTE ON THE EPI PLAN, TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, AS SUCH LAW MAY BE EXTENDED OR INTERPRETED SUBSEQUENT TO THE EPI EFFECTIVE DATE, EXCEPT AS OTHERWISE PROVIDED IN THE EPI PLAN OR THE EPI CONFIRMATION ORDER, ON THE EPI EFFECTIVE DATE, EACH HOLDER OF A CLAIM AGAINST OR INTEREST IN THE DEBTOR SHALL BE DEEMED TO HAVE EXPRESSLY, UNCONDITIONALLY, GENERALLY AND INDIVIDUALLY AND COLLECTIVELY, RELEASED, ACQUITTED, AND DISCHARGED THE RELEASED PARTIES FROM ANY AND ALL ACTIONS, CLAIMS, INTERESTS, OBLIGATIONS, RIGHTS, SUITS, DAMAGES, CAUSES OF ACTION, REMEDIES AND LIABILITIES WHATSOEVER, INCLUDING ANY DERIVATIVE CLAIMS ASSERTED OR ASSERTABLE ON BEHALF OF THE DEBTOR, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, MATURED OR UNMATURED, EXISTING OR HEREAFTER ARISING, IN LAW, EQUITY, CONTRACT, TORT OR OTHERWISE, THAT SUCH HOLDER (WHETHER INDIVIDUALLY OR COLLECTIVELY) EVER HAD, NOW HAS OR HEREAFTER CAN, SHALL OR MAY HAVE, BASED ON OR RELATING TO, OR IN ANY MANNER ARISING FROM, IN WHOLE OR IN PART, THE DEBTOR, THE DEBTOR’S LIQUIDATION, THE CHAPTER 11 CASE, THE PURCHASE, SALE OR RESCISSION OF THE PURCHASE OR SALE OF ANY SECURITY OF THE DEBTOR, THE SUBJECT MATTER OF, OR THE TRANSACTIONS OR EVENTS GIVING RISE TO, ANY CLAIM OR INTEREST THAT IS TREATED IN THE EPI PLAN, THE BUSINESS OR CONTRACTUAL ARRANGEMENTS BETWEEN THE DEBTOR AND ANY RELEASED PARTY, THE RESTRUCTURING OF CLAIMS AND INTERESTS BEFORE OR DURING THE CHAPTER 11 CASE, THE NEGOTIATION, FORMULATION, PREPARATION, OR PERFORMANCE OF THE EPI PLAN OR THE EPI DISCLOSURE STATEMENT, THE PURSUIT OF CONFIRMATION, THE PURSUIT OF CONSUMMATION, THE ADMINISTRATION OR IMPLEMENTATION OF THE EPI PLAN, OR RELATED AGREEMENTS, INSTRUMENTS, OR OTHER DOCUMENTS OR ANY OTHER ACT OR OMISSION, TRANSACTION, AGREEMENT, EVENT, OR OTHER OCCURRENCE RELATING TO THE DEBTOR OR THE FOREGOING TAKING PLACE ON OR BEFORE THE EPI CONFIRMATION DATE, EXCEPT FOR ANY CLAIMS AND CAUSES OF ACTION FOR WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, IN EACH CASE AS DETERMINED BY FINAL ORDER OF THE BANKRUPTCY COURT OR ANY OTHER COURT OF COMPETENT JURISDICTION OR THE RIGHTS OF ANY CLAIMHOLDER TO ENFORCE THE EPI PLAN.

9.5 Exculpation. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW AND WITHOUT AFFECTING OR LIMITING THE DEBTOR RELEASE OR THIRD PARTY RELEASE, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THE EPI PLAN, NO EXCULPATED PARTY SHALL HAVE OR INCUR,


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AND EACH EXCULPATED PARTY IS HEREBY RELEASED AND EXCULPATED FROM ANY EXCULPATED CLAIM, OBLIGATION, CAUSE OF ACTION OR LIABILITY FOR ANY EXCULPATED CLAIM, EXCEPT FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, BUT IN ALL RESPECTS SUCH PERSONS SHALL BE ENTITLED TO REASONABLY RELY UPON THE ADVICE OF COUNSEL WITH RESPECT TO THEIR DUTIES AND RESPONSIBILITIES PURSUANT TO THE EPI PLAN. THE DEBTOR (AND EACH OF ITS RESPECTIVE AFFILIATES, AGENTS, DIRECTORS, OFFICERS, EMPLOYEES, ADVISORS AND ATTORNEYS) HAVE PARTICIPATED IN COMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE WITH REGARD TO THE SOLICITATION OF THE EPI PLAN AND THE DISTRIBUTIONS CONTEMPLATED PURSUANT TO THE EPI PLAN AND, THEREFORE, ARE NOT, AND ON ACCOUNT OF SUCH DISTRIBUTIONS SHALL NOT BE, LIABLE AT ANY TIME FOR THE VIOLATION OF ANY APPLICABLE LAW, RULE, OR REGULATION GOVERNING THE SOLICITATION OF ACCEPTANCES OR REJECTIONS OF THE EPI PLAN OR SUCH DISTRIBUTIONS MADE PURSUANT TO THE EPI PLAN.

9.6 Injunction. FROM AND AFTER THE EPI EFFECTIVE DATE, TO THE EXTENT OF THE EXCULPATION AND RELEASES GRANTED IN ARTICLE IX, THE DEBTOR AND HOLDERS OF CLAIMS OR INTERESTS SHALL NOT COMMENCE OR CONTINUE IN ANY MANNER AGAINST THE EXCULPATED PARTIES OR RELEASED PARTIES AND THEIR ASSETS AND PROPERTIES, AS THE CASE MAY BE, ANY SUIT, ACTION OR OTHER PROCEEDING, ON ACCOUNT OF OR RESPECTING ANY CLAIM, DEMAND, LIABILITY, OBLIGATION, DEBT, RIGHT, CAUSE OF ACTION, INTEREST OR REMEDY RELEASED OR TO BE RELEASED PURSUANT TO ARTICLE IX. THE RIGHTS AFFORDED IN THE EPI PLAN AND THE TREATMENT OF ALL CLAIMS AND INTERESTS HEREIN SHALL BE IN EXCHANGE FOR AND IN COMPLETE SATISFACTION OF CLAIMS AND INTERESTS OF ANY NATURE WHATSOEVER, INCLUDING ANY INTEREST ACCRUED ON CLAIMS FROM AND AFTER THE PETITION DATE, AGAINST THE DEBTOR OR ANY OF ITS ASSETS, PROPERTY, OR ESTATE.

EXCEPT AS OTHERWISE EXPRESSLY PROVIDED FOR HEREIN OR IN THE EPI CONFIRMATION ORDER, FROM AND AFTER THE EPI EFFECTIVE DATE, ALL CLAIMS SHALL BE FULLY RELEASED, AND THE INTERESTS SHALL BE CANCELLED, AND THE DEBTOR’S LIABILITY WITH RESPECT THERETO SHALL BE EXTINGUISHED COMPLETELY, INCLUDING ANY LIABILITY OF THE KIND SPECIFIED UNDER SECTION 502(G) OF THE BANKRUPTCY CODE.

EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN OR IN THE EPI CONFIRMATION ORDER, ALL ENTITIES SHALL BE PRECLUDED FROM ASSERTING AGAINST THE DEBTOR, THE DEBTOR’S ESTATE, THE EPI LIQUIDATING TRUST, THE EPI LIQUIDATING TRUSTEES, AND EACH OF THEIR RESPECTIVE SUCCESSORS AND ASSIGNS AND EACH OF THEIR ASSETS AND PROPERTIES, ANY OTHER CLAIMS OR INTERESTS BASED UPON ANY DOCUMENTS, INSTRUMENTS OR ANY ACT OR OMISSION, TRANSACTION OR


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OTHER ACTIVITY OF ANY KIND OR NATURE THAT OCCURRED BEFORE THE EPI EFFECTIVE DATE.

Notwithstanding anything to the contrary herein, on and after the EPI Effective Date, any and all membership or similar interests or units held by the Debtor in a subsidiary shall survive after the EPI Effective Date by virtue of such interests being left unimpaired to maintain the existing corporate structure of the Debtor.

9.7 Term of Injunctions or Stays. Unless otherwise provided in this EPI Plan or in the EPI Confirmation Order, all injunctions or stays in effect in the Chapter 11 Case pursuant to sections 105 or 362 of the Bankruptcy Code or any order of the Bankruptcy Court, and extant on the EPI Confirmation Date (excluding any injunctions or stays contained in this EPI Plan or the EPI Confirmation Order), shall remain in full force and effect until the EPI Effective Date. All injunctions or stays contained in this EPI Plan or the EPI Confirmation Order shall remain in full force and effect in accordance with their terms.

9.8 No Liability for Solicitation or Participation. As specified in section 1125(e) of the Bankruptcy Code, Persons that solicit acceptances or rejections of this EPI Plan, in good faith and in compliance with the applicable provisions of the Bankruptcy Code are not liable, on account of such solicitation or participation, for violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of this EPI Plan or the offer, issuance, sale or purchase of securities.

9.9 Compromises and Settlements. The Debtor expressly reserves the right (with Bankruptcy Court approval, following appropriate notice and opportunity for a hearing) to compromise and settle, up to and including the EPI Effective Date, Claims against the Debtor and claims that the Debtor may have against other Persons. After the EPI Effective Date, such right shall pass exclusively to the EPI Liquidating Trust, pursuant to this EPI Plan.

9.10 Objections to Claims and Interests. The failure by the Debtor to object to, or seek to estimate, any Claim or Interest for purposes of voting shall not be deemed a waiver of the right of the Debtor and the EPI Liquidating Trust to object to any Claim or Interest that is not expressly Allowed in this EPI Plan or that has not already been allowed by separate order of the Bankruptcy Court, or reexamine the Claim or Interest in whole or in part for any other purpose, including, but not limited to, any Distribution.

ARTICLE X CONDITIONS PRECEDENT

10.1 Conditions to Confirmation. The following are conditions precedent to confirmation of this EPI Plan that may be satisfied or waived in accordance with Section 9.3 of this EPI Plan:

(a) The Bankruptcy Court shall have approved the EPI Disclosure Statement with respect to the EPI Plan by an order in form and substance reasonably acceptable to the Debtor and BSP, in consultation with the Preferred Interest Representative;


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(b) The EPI Confirmation Order shall be in form and substance reasonably acceptable to the Debtor and BSP, in consultation with the Preferred Interest Representative; and

(c) The EPI Liquidating Trust Agreement and any exhibits thereto shall be in form and substance reasonably acceptable to the Debtor and BSP, in consultation with the Preferred Interest Representative.

10.2 Conditions to EPI Effective Date. The following are conditions precedent to the occurrence of the EPI Effective Date, each of which may be satisfied or waived in accordance with Section 10.3 of the EPI Plan:

(a) The Bankruptcy Court shall have approved the EPI Disclosure Statement with respect to the Plan in an order in form and substance reasonably acceptable to the Debtor and BSP, in consultation with the Preferred Interest Representative;

(b) The EPI Confirmation Order shall be in form and substance reasonably acceptable to the Debtor and BSP, in consultation with the Preferred Interest Representative, and shall have been entered by the Bankruptcy Court and such EPI Confirmation Order shall have become a Final Order (unless the Final Order requirement is waived by the Debtor and BSP, in consultation with the Preferred Interest Representative);

(c) No stay shall be in effect with respect to the EPI Confirmation Order; and

(d) The EPI Liquidating Trust Agreement has been executed by the EPI Liquidating Trustees (no later than thirty (30) days after entry of the EPI Confirmation Order).

10.3 Waiver of Conditions to Confirmation and EPI Effective Date. The conditions set forth in Sections 10.1 and 10.2 of the EPI Plan may be waived by the Debtor, with the consent of BSP and in consultation with the Preferred Interest Representative, without any notice to other parties in interest or the Bankruptcy Court and without a hearing.

ARTICLE XI RETENTION OF JURISDICTION

11.1 Pursuant to sections 105(a) and 1142 of the Bankruptcy Code, the Bankruptcy Court shall have exclusive jurisdiction of all matters arising out of, and related to, the Chapter 11 Case and the EPI Plan, including, among other things, the following matters:

(a) to hear and determine pending motions for the assumption and assignment of or rejection of executory contracts or unexpired leases to which the Debtor is a party or with respect to which the Debtor may be liable, and to hear and determine the allowance of Claims resulting therefrom, including the amount of Cure, if any, required to be paid in connection with such assumption and assignment;

(b) to adjudicate any and all adversary proceedings, applications and contested matters that may be commenced or maintained pursuant to the Chapter 11 Case or this EPI Plan, including, without limitation, any actions to recover any transfers, Assets, properties or damages to which


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the Debtor may be entitled under applicable contract provisions, the provisions of this EPI Plan, or applicable provisions of the Bankruptcy Code or any other federal, state, or local laws;

(c) to ensure that Distributions to Holders of Allowed Claims and Allowed EPI Preferred Interests are accomplished as provided herein;

(d) to hear and determine any and all objections to the allowance or estimation of Disputed Claims, Disputed EPI Preferred Interests, and EPI Interests filed both before and after the EPI Confirmation Date, including any objections to the classification of any Claim or Interest, and to allow or disallow any Claim or Interest in whole or in part;

(e) to determine requests for the payment of Claims entitled to priority under section 507(a)(1) of the Bankruptcy Code, including compensation of and reimbursement of expenses of parties entitled thereto;

(f) to enter and implement such orders as may be appropriate if the EPI Confirmation Order is for any reason stayed, revoked, modified, or vacated;

(g) to hear and determine disputes arising in connection with the interpretation, implementation, or enforcement of this EPI Plan, including disputes arising under agreements, documents, or instruments executed in connection with this EPI Plan or regarding the rights of the EPI Liquidating Trustees;

(h) to determine any other matters that may arise in connection with or relate to the EPI Plan, the EPI Disclosure Statement, the EPI Confirmation Order or any contract, instrument, release or other agreement created in connection with the EPI Plan or the EPI Disclosure Statement;

(i) to hear and determine all disputes with respect to the EPI Liquidating Trust Agreement;

(j) to issue orders in aid of execution, implementation, or consummation of the EPI Plan;

(k) to consider any modifications of the EPI Plan, to cure any defect or omission, or to reconcile any inconsistency in any order of the Bankruptcy Court, including, without limitation, the EPI Confirmation Order;

(l) to hear and determine all applications for compensation and reimbursement of Professional Claims under this EPI Plan or under sections 330, 331, 503(b), 1103, and 1129(a)(4) of the Bankruptcy Code;

(m) to hear and determine matters concerning state, local, and federal taxes in accordance with sections 346, 505, and 1146 of the Bankruptcy Code;

(n) to hear any other matter not inconsistent with the Bankruptcy Code;


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(o) to hear and determine all disputes involving the existence, nature, or scope of the exculpation or releases provided for in this EPI Plan;

(p) to hear and determine any Claims of or against the Debtor;

(q) to hear and determine settlements and disputes with respect to any Liquidating Trust Asset;

(r) to enforce all orders previously entered by the Bankruptcy Court; and

(s) to enter a final decree closing the Chapter 11 Case.

Notwithstanding anything contained herein to the contrary and only to the extent the Bankruptcy Court has previously ordered otherwise, the Bankruptcy Court retains exclusive jurisdiction to hear and determine disputes concerning Claims, Interests, Third Party Claims, and any motions to compromise or settle such disputes. Despite the foregoing, if the Bankruptcy Court is determined not to have jurisdiction with respect to the foregoing, or if the EPI Liquidating Trustees choose to pursue any Third-Party Claim in another court of competent jurisdiction, the EPI Liquidating Trust and the EPI Liquidating Trustees will have authority to bring such action in any other court of competent jurisdiction.

ARTICLE XII MISCELLANEOUS PROVISIONS

12.1 Binding Effect. The EPI Plan shall be binding upon and inure to the benefit of the Debtor, the EPI Liquidating Trust, all present and former Holders, all present and former Holders of EPI Preferred Interests, all present and former Holders of EPI Interests, other parties in interest, and their respective successors and assigns.

12.2 Modification and Amendments. The Debtor may alter, amend, or modify the EPI Plan or any Exhibits thereto under section 1127(a) of the Bankruptcy Code at any time prior to the EPI Confirmation Hearing, with such alterations, amendments or modifications being in form and substance acceptable to BSP. After the EPI Confirmation Date and prior to substantial consummation of the EPI Plan as defined in section 1101(2) of the Bankruptcy Code, the EPI Liquidating Trust may, under section 1127(b) of the Bankruptcy Code, institute proceedings in the Bankruptcy Court to remedy any defect or omission or reconcile any inconsistencies in the EPI Plan, the EPI Liquidating Trust Agreement, the EPI Disclosure Statement, or the EPI Confirmation Order, and such matters as may be necessary to carry out the purposes and effects of the EPI Plan, so long as such proceedings do not materially adversely affect the treatment of Claims or Interests under the EPI Plan; provided, however, that prior notice of such proceedings shall be served in accordance with the Bankruptcy Rules or order of the Bankruptcy Court.

12.3 Withholding and Reporting Requirements. In connection with the EPI Plan and all instruments issued in connection therewith and distributions thereon, the Debtor shall comply with all withholding and reporting requirements imposed by any federal, state, local, or foreign taxing authority, and all distributions hereunder shall be subject to any such withholding and reporting requirements.


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12.4 Third-Party Claims/Causes of Action. Unless otherwise released under a prior Order of the Bankruptcy Court or under the EPI Plan, all Third-Party Claims and Causes of Action are expressly preserved for prosecution and enforcement by the EPI Liquidating Trust.

12.5 Revocation, Withdrawal or Non-Consummation Right to Revoke or Withdraw. The Debtor reserves the right to revoke or withdraw the EPI Plan at any time prior to the EPI Effective Date.

12.6 Severability of EPI Plan Provisions. If prior to entry of the EPI Confirmation Order any term or provision of this EPI Plan which does not govern the treatment of Claims or Interests or the conditions to the EPI Effective Date is held by the Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy Court shall have the power to alter and interpret such term or provision to make it valid and enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void, or unenforceable, and such term or provision shall then be applicable as altered or interpreted. Notwithstanding any such holding, alteration or interpretation, the remainder of the terms and provisions of this EPI Plan shall remain in full force and effect and will in no way be affected, impaired, or invalidated by such holding, alteration, or interpretation. The EPI Confirmation Order shall constitute a judicial determination and shall provide that each term and provision of this EPI Plan, as it may have been altered or interpreted in accordance with the foregoing, is valid and enforceable pursuant to its terms.

12.7 Trustee’s Fees. All fees due and owing under 28 U.S.C. §1930 shall be paid on the EPI Effective Date and thereafter, as due, until the Chapter 11 Case is closed, converted, or dismissed and final decreed, from the EPI Liquidating Trust Assets.

12.8 Notices. Pursuant to Bankruptcy Rule 2002 and any applicable local Bankruptcy Rules, notice of all post-Confirmation matters for which notice is required to be given shall be deemed sufficient if served upon the U.S. Trustee's Office, counsel to the Debtor, counsel to the EPI Liquidating Trust, and all persons on the Debtor’s Bankruptcy Rule 2002 service list. With the exception of the Debtor, the EPI Liquidating Trust, and the United States Trustee, any Person desiring to remain on the Debtor’s Bankruptcy Rule 2002 service list shall be required to file a request for continued service and to serve such request upon counsel to the EPI Liquidating Trust and the Debtor within thirty (30) days subsequent to the EPI Effective Date. Persons shall be notified of such continued notice requirements in the notice of entry of the EPI Confirmation Order. Persons who do not file a request for continued service shall be removed from the Debtor’s Bankruptcy Rule 2002 service list. Any notice required or permitted to be provided to the Debtor or the EPI Liquidating Trust under the EPI Plan shall be in writing and served by (a) certified mail, return receipt requested, (b) hand delivery, or (c) overnight delivery service, to be addressed as follows:

If to EPI: {TO COME}

If to the EPI Liquidating Trust: {TO COME}

12.9 Governing Law. Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy Code and Bankruptcy Rules) or unless otherwise specifically stated, the


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laws of the State of Delaware shall govern the construction and implementation of the EPI Plan, any agreements, documents, and instruments executed in connection with the EPI Plan, and corporate governance matters.

12.10 Waiver and Estoppel. Except as provided in the Global Settlement Agreement and the Global Settlement Order, each Holder of a Claim or Interest, shall be deemed to have waived any right to assert that, by virtue of an agreement made with the Debtor and/or their counsel or any other party, its Claim or Interest should be allowed in a certain amount, in a certain priority, secured or not subordinated if such agreement was not disclosed in the EPI Plan, the EPI Disclosure Statement, or in papers filed with the Bankruptcy Court.

12.11 BSP Representative Party. To the extent that any consent of BSP is required pursuant to the terms of this EPI Plan, BSP shall designate one person (the “BSP Representative Person”) whom the EPI Liquidating Trustees shall contact. The name and contact information of the BSP Representative Person shall be as set forth in section 10.1 (Notice) of the EPI Liquidating Trust Agreement.

12.12 EPI Preferred Interest Holder Representative Party. In the circumstances set forth in this EPI Plan and the EPI Liquidating Trust Agreement that require consultation with the Holders of Allowed EPI Preferred Interests, the Holders of Allowed EPI Preferred Interests shall designate one Holder (the “Preferred Interest Representative”) with which the EPI Liquidating Trustees shall consult. The name and contact information of such entity person shall be as set forth in section 10.1 (Notice) of the EPI Liquidating Trust Agreement.

Dated: May 26, 2020 ELK PETROLEUM, INC.

By: /s/ Matthew Doheny Matthew Doheny, Co-Chief

Restructuring Officer of Elk Petroleum, Inc.

By: /s/ Charles Reardon

Charles Reardon, Co-Chief Restructuring Officer of Elk

Petroleum, Inc.


EXHIBIT 1

ALLOWED EPI PREFERRED INTERESTS



EXHIBIT 2



In re:


Debtor.

Chapter 11

Case No. 19-11157 (LSS)

Related Docket No(s). 826, 855, 856

ORDER (I) APPROVING ELK PETROLEUM, INC.’S DISCLOSURE STATEMENT, (II) DETERMINING DATES, PROCEDURES, AND FORMS APPLICABLE TO THE

SOLICITATION PROCESS, (III) ESTABLISHING VOTE TABULATION PROCEDURES, AND (IV) ESTABLISHING OBJECTION DEADLINE AND

SCHEDULING HEARING TO CONSIDER PLAN CONFIRMATION

Upon consideration of the Motion for Entry of an Order (I) Approving Elk Petroleum,

Inc.’s Disclosure Statement, (II) (II) Determining Dates, Procedures, and Forms Applicable to

the Solicitation Process, (III) Establishing Vote Tabulation Procedures, and (IV) Establishing

Objection Deadline and Scheduling Hearing to Consider Plan Confirmation (Docket No. 826)

(the “Motion”)2 pursuant to sections 105(a), 1125, and 1126 of the Bankruptcy Code and

Bankruptcy Rules 2002, 3017, 3018, and 3020; and it appearing that adequate and sufficient

notice of the Motion and the hearing on the EPI Disclosure Statement, revised as filed at docket

number 856, having been provided and no other or further notice need be provided, and all

objections to the Motion and the EPI Disclosure Statement having been resolved, overruled by

the Court, withdrawn or rendered moot; and following due deliberation, and just cause existing

for the relief requested in the Motion:

1 The Debtor is Elk Petroleum, Inc. (8606). The address of the Debtor is Elk Petroleum, Inc., c/o Matthew

Doheny, Chief Restructuring Officer, North Country Capital LLC, 215 Washington Street, Suite 006, Watertown, NY 13601.

2 Capitalized terms used but not otherwise defined herein shall have the meaning given to them in the Motion or the EPI Plan, revised as filed at docket number 855.

Case 19-11157-LSS Doc 870 Filed 05/28/20 Page 1 of 10Case 19-11157-LSS Doc 873 Filed 05/29/20 Page 134 of 163

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THE COURT HEREBY FINDS:

A. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and

1334;

B. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2);

C. The EPI Disclosure Statement contains adequate information within the meaning

of section 1125 of the Bankruptcy Code;

D. Notice of the hearing on the EPI Disclosure Statement and the Motion was

sufficient; and

E. The relief requested in the Motion is in the best interest of EPI, its estate, and

other parties-in-interest.

THE COURT HEREBY ORDERS AND ADJUDGES THAT:

1. The Motion is GRANTED, as set forth herein.

2. The EPI Disclosure Statement is hereby APPROVED in all respects.

3. The following dates and deadlines are hereby APPROVED:

EVENT PROPOSED DATE/DEADLINE

Voting Record Date June 2, 2020, at 5:00 p.m. (Eastern)

Solicitation Commencement Date June 2, 2020

Rule 3018(a) Motion Deadline June 29, 2020, at 4:00 p.m. (Eastern)

Voting Deadline June 30, 2020, at 8:00 p.m. (Eastern)

EPI Plan Objection Deadline July 2, 2020, at 4:00 p.m. (Eastern)

Deadline to File Confirmation Brief July 6, 2020, at 4:00 p.m. (Eastern)

Deadline to File Voting Report July 2, 2020, at 4:00 p.m. (Eastern)

Plan Supplement Filing Deadline June 16, 2020, at 4:00 p.m. (Eastern)

EPI Confirmation Hearing July 8, 2020, at 10:00 a.m. (Eastern)


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4. The record date for determining the holders of claims and interests entitled to

receive solicitation packages and/or notices, as more particularly provided in this Order is June

2, 2020, at 5:00 p.m. (Eastern) (the “Voting Record Date”). Only holders of claims and

interests as of the Voting Record Date are entitled to the voting and notice rights provided for

herein.

5. The date by which the ballots cast to accept or reject the Plan must be received is

June 30, 2020, at 8:00 p.m. (Eastern) (the “Voting Deadline”). EPI may extend the Voting

Deadline in favor of any voter, any class of voters, or all of the voters without further order of

the Court. Ballots not received by the Voting Deadline, or by any extended voting deadline as

provided for in this Order, shall not be counted.

6. The forms of ballots attached to the Motion as Exhibit B-1 and Exhibit B-2 are

approved, as revised and attached hereto as Exhibit 1 and Exhibit 2, subject in all cases to the

right of EPI to make additional correcting, conforming, and formatting changes to such forms of

ballots, so long as such changes are non-material.

7. As soon as practicable, but in no event later than June 2, 2020 (the “Solicitation

Commencement Date”), EPI shall commence the solicitation and noticing process by placing

the solicitation materials and notices approved in this Order in the mail, first-class postage

prepaid (and by sending by electronic mail, where electronic mail addresses are available).

8. The solicitation materials to be transmitted on or before the Solicitation

Commencement Date to those holders as of the Voting Record Date of claims in classes entitled

to vote on the EPI Plan, as described in paragraph 11 below, shall include the following:

(i) notice of the EPI Confirmation Hearing and objection deadline; (ii) the EPI Disclosure

Statement; (iii) the EPI Plan (appended to the EPI Disclosure Statement); (iv) an appropriate


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ballot; (v) the EPI Disclosure Statement Order; and (vi) a pre-addressed return envelope

(collectively, the “Solicitation Package”).

9. The following holders of Claims and EPI Preferred Interests are entitled to vote

on the EPI Plan and, thus, to receive the Solicitation Package, as follows:

(a) Any Holder, as of the Voting Record Date, of a Claim in Class 3 -

(i) who has filed a proof of Claim on or before the Voting Record Date, in the amount asserted in such proof of Claim, provided that such proof of Claim (i) has not been disallowed by an order of the Court entered on or before the Voting Record Date, (ii) is not the subject of an objection to the entirety of the Claim pending as of the Voting Record Date (with voting permitted only with respect to any amount thereof that is not subject to objection), (iii) has not been reduced by order of the Court or is not subject to an objection pending before the Court for reduction (with voting permitted only in the reduced or proposed reduced amount and/or classification), and (iv) does not allege a Claim that is wholly unliquidated (with voting permitted only with respect to the amount thereof that is fixed); or

(ii) who has not filed a proof of Claim but which Claim is scheduled in EPI’s Schedules, or any amendments thereto, but is not designated therein as contingent, unliquidated, or disputed or listed therein as zero or unknown in amount, in the amount set forth in the schedules, or any amendments thereto; provided, however, that any Holder who has not filed a proof of Claim, but which Claim is scheduled in EPI’s Schedules, or any amendments thereto, as contingent, unliquidated, or disputed or listed therein as zero or unknown in amount, may vote, but their vote shall only be in the amount of $1, unless the Holder files a Rule 3018 Motion in accordance with paragraph 15 below (in which case such vote shall be in the amount determined by the Court in accordance with such paragraph).

(b) Any Holder, as of the Voting Record Date, of Allowed EPI Preferred Interests (as defined in the Plan).

10. Voting creditors who have filed duplicate claims for the same underlying liability

that are classified in the same Class, shall be entitled to receive only one Solicitation Package

and one Ballot for voting their claims with respect to that Class.


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11. Voting creditors who filed amended Claims after the Voting Record Date shall be

entitled to vote only the Claim evidenced by their initial proof of Claim, unless the initial proof

of Claim has been disallowed.

12. Nothing in this Order affects EPI’s right (or any other party’s right, if applicable)

to object to any proof of claim after the Voting Record Date or the Voting Deadline; provided,

however, any objection to a proof of claim for voting purposes shall be filed on or before June 9,

2020.

13. Holders of Claims that are (i) asserted as wholly unliquidated or (ii) asserted in a

proof of claim as to which an objection to the entirety of the Claim is pending as of the Voting

Record Date (collectively, the “Disputed Claimants”) are not permitted to vote unless either (i)

an agreement is reached with EPI regarding the classification and amount of such Claim for

voting purposes or (ii) the Court enters an order granting a Rule 3018 Motion. June 29, 2020, at

4:00 p.m. (Eastern) is hereby established as the deadline for Rule 3018 Motions to be filed with

the Court and served upon EPI’s counsel (the “Rule 3018 Motion Deadline”). If any Disputed

Claimant files and serves a Rule 3018 Motion by June 29, 2020, at 4:00 p.m. (Eastern), the

Disputed Claimant shall be permitted to vote provisionally and the Court will hold a hearing on

the Rule 3018 Motion on July 8, 2020, at 10:00 a.m. (Eastern) and enter an order (the “Rule

3018 Order”) to determine (i) whether such Disputed Claimant’s vote on the EPI Plan should be

allowed and (ii) if such Disputed Claimant is permitted to vote, the amount of the Disputed

Claimant’s Claim for voting purposes.

14. EPI shall send by electronic mail, if electronic mail addresses are available, and

by mail, first class postage prepaid, on or before the Solicitation Commencement Date, to the

Disputed Claimants, the Disputed Claimant Package as described in the Motion.


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15. Specifically, EPI shall send by electronic mail, if electronic mail addresses are

available, and by mail, first class postage prepaid, on or before the Solicitation Commencement

Date, to the Disputed Claimants a notice in substantially the form attached to the Motion as

Exhibit C (the “Notice of Disputed Claim Status”), the EPI Disclosure Statement, and the EPI

Plan (appended to the EPI Disclosure Statement), in lieu of a Solicitation Package. The Notice

of Disputed Claims Status satisfies the requirements of Bankruptcy Rule 3017(d).

16. No Solicitation Packages or other notices approved in this Order shall be

transmitted to (i) Holders of Claims listed on the schedules, or any amendments thereto, that

have already been paid in full during the Debtor’s chapter 11 case, (ii) any person to whom EPI

mailed a notice of the commencement of the case and first meeting of creditors or a notice of the

bar date for filing proofs of claim if either of such notices was returned marked “undeliverable”

or “moved - no forwarding address” or for a similar reason, unless EPI has been informed in

writing by such person of that person’s new address, or (iii) any holder of a Claim that was

disallowed in full by order of this Court.

17. Notwithstanding anything set forth herein, EPI shall provide notice of the EPI

Confirmation Hearing as well as the deadline for filing objections thereto to all parties in interest

as required by Bankruptcy Rule 2002.

18. On or as soon as practicable after the Solicitation Commencement Date, EPI shall

send by electronic mail and by mail, first class postage prepaid, to the United States Trustee for

informational purposes, a Solicitation Package and a copy of all forms of ballots and notices

approved by this Court.

19. On or as soon as practicable after the Solicitation Commencement Date, EPI shall

send by electronic mail, if electronic mail addresses are available, and by mail, first class postage


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prepaid, the Confirmation Hearing Notice to Holders of Claims listed on the schedules, or any

amendments thereto, as contingent, unliquidated, or disputed or as zero or unknown in amount

who did not file proofs of claim.

20. Unless otherwise directed by the Court, the Voting and Claims Agent shall follow

the guidelines set forth below in tabulating the votes to accept or reject the EPI Plan:

(a) Subject to paragraph (b) below, any ballot that is timely received, that contains sufficient information to permit the identification of the claimant and that is cast as an acceptance or rejection of the EPI Plan shall be counted and shall be deemed to be cast as an acceptance or rejection, as the case may be, of the EPI Plan.

(b) The following ballots shall not be counted or considered for any purpose in determining whether the EPI Plan has been accepted or rejected: (i) any ballot received after the Voting Deadline unless EPI has granted an extension of the Voting Deadline with respect to such ballot; (ii) any ballot that is illegible or contains insufficient information to permit the identification of the claimant; (iii) any ballot cast by a person or entity that does not hold a claim in a class that is entitled to vote to accept or reject the EPI Plan; (iv) any ballot timely received that is cast in a manner that indicates neither an acceptance nor rejection of the EPI Plan or that indicates both an acceptance and rejection of the EPI Plan; (v) any unsigned ballot; (vi) any Ballot submitted by facsimile, telecopy, or electronic mail unless as otherwise ordered by the Court or agreed to by EPI; or (vii) any Ballot not cast in accordance with the procedures approved in this Order.

(c) Any Ballot cast for a Claim designated as unliquidated, disputed, or as zero or unknown in amount and for which (i) no agreement with EPI has been reached regarding the classification and amount of such Claim for voting purposes, or (ii) no Bankruptcy Rule 3018(a) Order has been entered shall be counted as a vote for a claim in the amount of $1.00.

(d) Notwithstanding Bankruptcy Rule 3018(a), whenever two or more ballots are cast voting the same claim prior to the Voting Deadline, the last dated valid ballot received prior to the Voting Deadline shall be deemed to reflect the voter’s intent and thus to supersede any prior ballots, without prejudice to EPI’s right (or the right of any other party, if applicable) to object to the validity of the last dated valid ballot on any basis permitted by law, including under Bankruptcy Rule 3018(a), and, if the objection is sustained, to count the first dated ballot for all purposes.

(e) Claim splitting shall not be permitted. Creditors who vote must vote all of their Claims within a particular class to either accept or reject the EPI Plan.


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(f) Any party who has delivered a valid ballot for the acceptance or rejection of the EPI Plan may withdraw such acceptance or rejection by delivering a written notice of withdrawal to the Voting and Claims Agent at any time prior to the Voting Deadline. A notice of withdrawal, to be valid, must (i) contain the description of the Claim to which it relates and the aggregate principal amount represented by such claim, (ii) be signed by the withdrawing party in the same manner as the ballot being withdrawn, (iii) contain a certification that the withdrawing party owns the Claim(s) and possesses the right to withdraw the vote sought to be withdrawn and (iv) be received by the Voting and Claims Agent prior to the Voting Deadline.

(g) Ballots sent via facsimile or electronic mail transmission shall not be counted for voting purposes unless as otherwise ordered by the Court or agreed to by EPI.

21. To the extent a Class has no members, such Class shall not be counted for voting

purposes. The Debtor has requested in the EPI Plan that if a Class has members but no votes to

accept or reject the EPI Plan are received by any members of a particular Class, such Class shall

be deemed to have accepted the EPI Plan. The Court will consider such request at the

Confirmation Hearing, if necessary.

22. EPI is authorized to provide notification of defects in filed ballots and an

opportunity to cure same to voters, but shall not be under any duty to do so, nor shall EPI or any

other person or entity incur any liability for failure to provide such notification.

23. The hearing to consider confirmation of the Plan shall be held on July 8, 2020, at

10:00 a.m. (Eastern), before the Honorable Laurie S. Silverstein, United States Bankruptcy

Court of the District of Delaware, 824 Market Street, 6th Floor, Courtroom No. 2, Wilmington,

Delaware 19801, provided, however, that the hearing may be adjourned from time to time

without further notice to creditors or other parties in interest, other than by (a) the filing of a

notice with respect to such postponement, which notice can be the agenda of the hearing with

respect to confirmation of the EPI Plan, and (b) service of such notice, in accordance with the

orders of this Court, on all parties requesting notice under Bankruptcy Rule 2002.


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24. Objections (including any accompanying briefs), if any, to confirmation of the

EPI Plan or proposed modifications to the EPI Plan must (i) be in writing, (ii) state the name and

address of the objecting party and the nature of the claim or interest of such party, (iii) state with

particularity the basis and nature of any objection to confirmation of the EPI Plan or proposed

modification to the EPI Plan; and (iv) be filed, together with proof of service, so as to be

received no later than 4:00 p.m. (Eastern) on July 2, 2020, by the Office of the Clerk, United

States Bankruptcy Court for the District of Delaware, 824 Market Street, 3rd Floor, Wilmington,

Delaware 19801, and served on each of the following parties: (i) COUNSEL TO THE DEBTOR,

Chipman Brown Cicero & Cole, LLP, Hercules Plaza, 1313 North Market Street, Suite 5400,

Wilmington, Delaware 19801 (Attn: William E. Chipman, Jr., Esquire, and Mark L.

Desgrosseilliers, Esquire) and (ii) OFFICE OF THE UNITED STATES TRUSTEE, J. Caleb Boggs

Federal Building, 844 North King Street, Suite 2207, Lockbox #35, Wilmington, Delaware

19801.

25. Any objections to confirmation of the EPI Plan not timely filed and served in the

manner set forth above may not be considered and may be overruled.

26. Replies, if any, to any objection to confirmation of, or proposed modifications to,

the EPI Plan shall be filed and served so that they are actually received no later than 4:00 p.m.

(Eastern) on July 6, 2020, by the Court and the objecting party.

27. The deadline for submission of the certification of votes (the “Voting Report”)

shall be July 2, 2020, at 4:00 p.m. (Eastern).

28. The Notice of Non-Voting Status, in substantially the form attached as Exhibit D

to the Motion, is approved, as the dates set forth therein have been amended hereby. EPI shall

send the Notice of Non-Voting Status to Non-Voting Holders by electronic mail, if electronic


LAURIE SELBER SILVERSTEIN UNITED STATES BANKRUPTCY JUDGE - 10 -

mail addresses are available, and by mail, first-class postage prepaid, in lieu of transmitting a

Solicitation Package to each such Holder.

29. The form of notice of the confirmation hearing date and objection deadline, in

substantially the form attached as Exhibit E to the Motion, (the “Confirmation Hearing

Notice”) is approved, as the dates set forth therein have been amended hereby. The

Confirmation Hearing Notice shall be included in the Solicitation Packages and EPI shall send

the Confirmation Hearing Notice to all parties in interest by electronic mail, if electronic mail

addresses are available, and by mail, first-class postage prepaid.

30. EPI is authorized to make non-substantive changes to the EPI Disclosure

Statement, the EPI Plan, and related documents without further Order of the Court, including

without limitation, changes to correct typographical and grammatical errors and to make

conforming changes among the EPI Disclosure Statement, the EPI Plan, this Order, and any

other related materials prior to its transmission to parties in interest.

31. EPI and the Voting and Claims Agent respectfully are authorized to send any

documents or notices required under the Motion or this Order in an electronic format, including

by sending the recipients of such documents or notices a compact disc or flash drive containing

the required papers in an electronic format. Upon request by any party in interest, EPI’s counsel

will provide hard copies of any such document or notice at its expense.

32. The Court shall retain jurisdiction to implement, interpret, and effectuate the

provisions of this Order.

Dated: May 28th, 2020 Wilmington, Delaware


EXHIBIT 1

Case 19-11157-LSS Doc 870-1 Filed 05/28/20 Page 1 of 9Case 19-11157-LSS Doc 873 Filed 05/29/20 Page 144 of 163


In re:


Debtor.

Chapter 11

Case No. 19-11157 (LSS)

CLASS 3 BALLOT FOR (I) ACCEPTING OR REJECTING ELK PETROLEUM, INC.’S PLAN OF LIQUIDATION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE AND

(II) OPTING OUT OF THIRD-PARTY RELEASES CONTAINED THEREIN CLASS 3: GENERAL UNSECURED CLAIMS

PLEASE READ AND FOLLOW THE ENCLOSED VOTING INSTRUCTIONS CAREFULLY BEFORE COMPLETING THE BALLOT.

THIS BALLOT MUST BE RETURNED TO THE BELOW ADDRESS BEFORE JUNE 30, 2020 AT 8:00 P.M. (EASTERN) (THE “VOTING DEADLINE”), OR YOUR VOTE WILL NOT BE COUNTED.

On May 28, 2020, the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) entered an order (the “Disclosure Statement Order”) approving the Disclosure Statement in Respect of Plan of Liquidation of Elk Petroleum, Inc., Pursuant to Chapter 11 of the Bankruptcy Code (as may be amended, supplemented, or modified from time to time, the “EPI Disclosure Statement”),2 which provides additional information about Elk Petroleum, Inc. (the “Debtor” or “EPI”), this Chapter 11 Case, and the Plan of Liquidation of Elk Petroleum, Inc., Pursuant to Chapter 11 of the Bankruptcy Code (as may be amended, supplemented, or modified from time to time, the “EPI Plan”) to assist you in deciding how to vote your ballot. A copy of the EPI Plan is attached as Exhibit 1 to the EPI Disclosure Statement. If you do not have an EPI Disclosure Statement, you may obtain a copy for free from Stretto (“Voting and Claims Agent”) by (i) downloading the Disclosure Statement from the Voting and Claims Agent’s website at https://case.stretto.com/elkpetroleum or (ii) by contacting the Voting and Claims Agent at 855-423-1620 or at [email protected]. Court approval of the EPI Disclosure Statement does not indicate approval of the EPI Plan by the Court.

You should review the EPI Disclosure Statement and the EPI Plan before you vote. You may wish to seek legal advice concerning the EPI Plan and your classification and treatment under the EPI Plan. Your claim has been placed in Class 3 under the EPI Plan. If you hold Claims or equity interests in more than one class, you will receive a ballot for each class in which you are entitled to vote.

1 The Debtor is Elk Petroleum, Inc. (8606). The Debtor is Elk Petroleum, Inc. (8606). The address of the Debtor

is Elk Petroleum, Inc., c/o Matthew Doheny, Chief Restructuring Officer, North Country Capital LLC, 215 Washington Street, Suite 006, Watertown, NY 13601.

2 Capitalized terms not otherwise defined herein shall have the meanings scribed to such terms in the EPI Plan or the EPI Disclosure Statement.


https://case.stretto.com/elkpetroleum


B-2

IMPORTANT DEADLINE

IF YOUR BALLOT IS NOT RECEIVED AT THE ADDRESS PROVIDED BELOW BY:

JUNE 30, 2020 AT 8:00 P.M. (Eastern)

AND SUCH DEADLINE IS NOT EXTENDED, YOUR VOTE WILL NOT COUNT AS EITHER AN ACCEPTANCE OR REJECTION OF THE PLAN. IF THE EPI PLAN IS CONFIRMED BY THE

BANKRUPTCY COURT IT WILL BE BINDING ON YOU WHETHER OR NOT YOU VOTE.

This ballot is not a letter of transmission and may not be used for any purpose other than to vote to accept or reject the EPI Plan.

MAILING INFORMATION

YOUR BALLOT MUST BE SENT VIA FIRST CLASS MAIL (IN THE ENCLOSED ENVELOPE) OR VIA OVERNIGHT COURIER OR PERSONAL DELIVERY TO:


Denver, CO 80238

Ballots submitted by facsimile, email or other means of electronic transmission will not be counted.

VOTING INFORMATION AND INSTRUCTIONS FOR COMPLETING THE BALLOT

HOW TO VOTE

1. COMPLETE ITEM 1.

2. REVIEW THE CERTIFICATIONS AND ACKNOWLEDGEMENTS IN ITEM 2.

3. SIGN THE BALLOT.

4. RETURN THE BALLOT TO Elk Ballot Processing c/o Stretto, 8269 E. 23rd Ave, Ste 275, Denver, CO 80238 (an envelope addressed to this address is enclosed for your convenience) SO THAT IT IS RECEIVED BY JUNE 30, 2020, AT 8:00 P.M. (Eastern).

5. BALLOTS RECEIVED AFTER THE VOTING DEADLINE WILL NOT BE COUNTED.

6. YOU MUST VOTE THE FULL AMOUNT OF YOUR CLAIM REPRESENTED BY THIS BALLOT TO ACCEPT OR REJECT THE EPI PLAN AND MAY NOT SPLIT YOUR VOTE.

7. ANY EXECUTED BALLOT RECEIVED THAT (A) DOES NOT INDICATE EITHER AN ACCEPTANCE OR REJECTION OF THE EPI PLAN, OR (B) THAT INDICATES BOTH AN ACCEPTANCE AND A REJECTION OF THE EPI PLAN WILL NOT BE COUNTED.

8. ALL BALLOTS MUST BE FULLY EXECUTED TO BE COUNTED. IF A BALLOT IS TO BE EXECUTED BY AN AUTHORIZED PARTY OTHER THAN AN OFFICER OR EMPLOYEE OF THE CREDITOR, SUFFICIENT EVIDENCE OF THE AUTHORIZED PARTY'S AUTHORITY TO EXECUTE THE BALLOT MUST BE INCLUDED WITH THE BALLOT.


B-3

ARTICLE IX OF THE EPI PLAN CONTAINS INJUNCTIONS AND RELEASES OF CERTAIN PLAN PARTICIPANTS. PLEASE REVIEW THESE PROVISIONS OF THE EPI PLAN CAREFULLY BEFORE SUBMITTING YOUR BALLOT AS THESE PROVISIONS MAY AFFECT YOUR RIGHTS.

THE DEBTOR RECOMMENDS THAT YOU VOTE TO ACCEPT THE EPI PLAN

Item 1. Vote. The undersigned, a Holder of a Class 3 General Unsecured Claim against the Debtor in the amount set forth below as of June 2, 2020 (i.e., the “Voting Record Date”) (the “Voting Amount”), votes to (check one box; if you fail to check one of the boxes below, but the Ballot is otherwise properly completed and returned your Ballot will not be counted as either an acceptance or rejection of the EPI Plan):

Accept the EPI Plan Reject the EPI Plan

Voting Amount: $

IMPORTANT INFORMATION REGARDING THE RELEASE OF CLAIMS BY THIRD

PARTIES

ARTICLE IX OF THE EPI PLAN CONTAINS RELEASE, EXCULPATION, AND INJUNCTION PROVISIONS, WHICH ARE SET FORTH AT THE END OF THIS BALLOT. YOU SHOULD REVIEW

THESE PROVISIONS CAREFULLY. CHECK THE BOX BELOW IF YOU ELECT NOT TO GRANT THE THIRD-PARTY RELEASE CONTAINED IN ARTICLE IX OF THE EPI PLAN. IF YOU SUBMIT YOUR BALLOT WITH THIS BOX CHECKED, THEN YOU WILL BE DEEMED NOT TO CONSENT TO THE THIRD-PARTY RELEASE SET FORTH IN ARTICLE IX OF THE EPI PLAN. PLEASE BE ADVISED THAT BY NOT CHECKING THE BOX BELOW YOU ELECT TO GRANT THE THIRD-PARTY RELEASE IN EACH AND EVERY CAPACITY IN WHICH YOU HOLD A CLAIM AGAINST, OR EQUITY INTEREST IN, THE DEBTOR. YOU MUST AFFIRMATIVELY CHECK THE BOX BELOW IN ORDER TO OPT-OUT OF THE THIRD-PARTY RELEASE. PLEASE ALSO BE ADVISED THAT THE DEBTOR RELEASE CONTAINED IN ARTICLE IX OF THE EPI PLAN WILL BE INCLUDED IN THE CONFIRMATION ORDER AND THAT IT IS SEPARATE FROM AND INDEPENDENT OF THE THIRD-PARTY RELEASE. IF YOU OBJECT TO THE DEBTOR RELEASE, YOU MUST FILE A SEPARATE OBJECTION WITH THE BANKRUPTCY COURT IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE DISCLOSURE STATEMENT ORDER. THE THIRD-PARTY RELEASE AND DEBTOR RELEASE, EXCULPATION, AND INJUNCTION PROVISIONS OF THE EPI PLAN (ALONG WITH RELEVANT DEFINITIONS) ARE REPRODUCED AT PAGES B-5 THROUGH AND INCLUDING B-8 OF THIS BALLOT. Item 2. Release of Claims.

OPT-OUT ELECTION: The undersigned, a Holder of a Class 3 General Unsecured Claim against the Debtor, elects to opt-out of the Third-Party Releases contained in Article IX of the EPI Plan.


B-4

Item 3. Certifications and Acknowledgments. By signing this Ballot, the undersigned acknowledges and certifies that (a) the undersigned is the claimant or has the power and authority to vote to accept or reject the EPI Plan on behalf of such claimant and (b) the Social Security or Federal Tax I.D. No. provided below, if any, is true and correct. The undersigned understands that the solicitation of votes for the EPI Plan is subject to all the terms and conditions set forth in the EPI Disclosure Statement and the Disclosure Statement Order. The undersigned understands that, if this Ballot is validly executed but does not indicate either acceptance or rejection of the EPI Plan, this Ballot will not be counted as either an acceptance or rejection of the EPI Plan.

Name of Creditor (Please Print)

Social Security or Federal Tax I.D. No. (Optional)

Authorized Signature

Name of Signatory

If by Authorized Agent, Name and Title

Street Address

City, State, Zip Code

Telephone Number

Date Completed

IF YOU HAVE RECEIVED A DAMAGED BALLOT OR HAVE LOST YOUR BALLOT, OR IF YOU HAVE ANY QUESTIONS CONCERNING THIS BALLOT OR THE VOTING

PROCEDURES, PLEASE CONTACT THE VOTING AND CLAIMS AGENT AT 855-423-1620.


B-5

RELEASE, EXCULPATION, AND INJUNCTION PROVISIONS CONTAINED IN THE EPI PLAN

Releases by the Debtor and Its Estate. ON THE EPI EFFECTIVE DATE, THE RELEASED PARTIES WILL BE EXPRESSLY, UNCONDITIONALLY, GENERALLY AND INDIVIDUALLY AND COLLECTIVELY RELEASED, ACQUITTED, AND DISCHARGED BY THE DEBTOR AND ITS ESTATE FROM ANY AND ALL ACTIONS, CLAIMS, OBLIGATIONS, RIGHTS, SUITS, DAMAGES, CAUSES OF ACTION, REMEDIES AND LIABILITIES WHATSOEVER, INCLUDING ANY DERIVATIVE CLAIMS ASSERTED OR ASSERTABLE ON BEHALF OF THE DEBTOR, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, MATURED OR UNMATURED, EXISTING OR HEREINAFTER ARISING, IN LAW, EQUITY, CONTRACT, TORT OR OTHERWISE, BY STATUTE OR OTHERWISE, THAT THE DEBTOR, THE EPI LIQUIDATING TRUST, THE DEBTOR’S ESTATE OR THE DEBTOR’S AFFILIATES (WHETHER INDIVIDUALLY OR COLLECTIVELY) OR ON BEHALF OF THE HOLDER OF ANY CLAIM OR INTEREST OR OTHER ENTITY, EVER HAD, NOW HAS OR HEREAFTER CAN, SHALL, OR MAY HAVE, BASED ON OR RELATING TO, OR IN ANY MANNER ARISING FROM, IN WHOLE OR IN PART, THE DEBTOR, THE DEBTOR’S LIQUIDATION, THE CHAPTER 11 CASE, THE PURCHASE, SALE OR RESCISSION OF THE PURCHASE OR SALE OF ANY SECURITY OF THE DEBTOR, THE SUBJECT MATTER OF, OR THE TRANSACTIONS OR EVENTS GIVING RISE TO, ANY CLAIM OR INTEREST THAT IS TREATED IN THE EPI PLAN, THE BUSINESS OR CONTRACTUAL ARRANGEMENTS BETWEEN THE DEBTOR AND ANY RELEASED PARTY, THE RESTRUCTURING OF CLAIMS AND INTERESTS BEFORE OR DURING THE CHAPTER 11 CASE THE NEGOTIATION, FORMULATION, PREPARATION, OR PERFORMANCE OF THE EPI PLAN, THE EPI DISCLOSURE STATEMENT, THE PURSUIT OF CONFIRMATION, THE PURSUIT OF CONSUMMATION, THE ADMINISTRATION OR IMPLEMENTATION OF THE EPI PLAN, OR RELATED AGREEMENTS, INSTRUMENTS ,OR OTHER DOCUMENTS OR ANY OTHER ACT OR OMISSION, TRANSACTION, AGREEMENT, EVENT, OR OTHER OCCURRENCE RELATING TO THE DEBTOR OR THE FOREGOING TAKING PLACE ON OR BEFORE THE CONFIRMATION DATE OF THE EPI PLAN, EXCEPT FOR ANY CLAIMS AND CAUSES OF ACTION FOR ACTUAL FRAUD OR GROSS MISCONDUCT, IN EACH CASE AS DETERMINED BY FINAL ORDER OF THE BANKRUPTCY COURT OR ANY OTHER COURT OF COMPETENT JURISDICTION.

Releases by Holders. SUBJECT TO THE RIGHT OF EACH HOLDER OF A CLAIM AGAINST OR INTEREST IN THE DEBTOR TO AFFIRMATIVELY ‘OPT OUT” OF THE RELEASE SET FORTH BELOW BY NOTING SUCH “OPT OUT” ELECTION ON THE BALLOT TO VOTE ON THE EPI PLAN, TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, AS SUCH LAW MAY BE EXTENDED OR INTERPRETED SUBSEQUENT TO THE EPI EFFECTIVE DATE, EXCEPT AS OTHERWISE PROVIDED IN THE EPI PLAN OR THE EPI CONFIRMATION ORDER, ON THE EPI EFFECTIVE DATE, EACH HOLDER OF A CLAIM AGAINST OR INTEREST IN THE DEBTOR SHALL BE DEEMED TO HAVE EXPRESSLY, UNCONDITIONALLY, GENERALLY AND INDIVIDUALLY AND COLLECTIVELY, RELEASED, ACQUITTED, AND DISCHARGED THE RELEASED PARTIES FROM ANY AND ALL ACTIONS, CLAIMS, INTERESTS, OBLIGATIONS, RIGHTS, SUITS, DAMAGES, CAUSES OF ACTION, REMEDIES AND LIABILITIES WHATSOEVER, INCLUDING ANY DERIVATIVE CLAIMS ASSERTED OR ASSERTABLE ON BEHALF OF THE DEBTOR, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, MATURED OR UNMATURED, EXISTING OR HEREAFTER ARISING, IN LAW, EQUITY, CONTRACT, TORT OR OTHERWISE, THAT SUCH HOLDER (WHETHER INDIVIDUALLY OR COLLECTIVELY) EVER HAD, NOW HAS OR HEREAFTER CAN, SHALL OR MAY HAVE, BASED ON OR RELATING TO, OR IN ANY MANNER ARISING FROM, IN WHOLE OR IN PART, THE DEBTOR, THE DEBTOR’S LIQUIDATION, THE CHAPTER 11 CASE, THE PURCHASE, SALE OR RESCISSION OF THE PURCHASE OR SALE OF ANY SECURITY OF THE DEBTOR, THE SUBJECT MATTER OF, OR THE TRANSACTIONS OR EVENTS GIVING RISE TO, ANY CLAIM OR INTEREST THAT IS TREATED IN THE EPI PLAN, THE BUSINESS OR CONTRACTUAL ARRANGEMENTS BETWEEN THE DEBTOR AND ANY RELEASED PARTY, THE RESTRUCTURING OF CLAIMS AND INTERESTS BEFORE OR DURING THE CHAPTER 11 CASE, THE NEGOTIATION, FORMULATION, PREPARATION, OR PERFORMANCE OF THE EPI PLAN OR THE EPI DISCLOSURE STATEMENT, THE PURSUIT OF CONFIRMATION, THE PURSUIT OF CONSUMMATION, THE ADMINISTRATION OR IMPLEMENTATION OF THE EPI PLAN, OR RELATED AGREEMENTS, INSTRUMENTS, OR OTHER DOCUMENTS OR ANY OTHER ACT OR OMISSION, TRANSACTION,


B-6

AGREEMENT, EVENT, OR OTHER OCCURRENCE RELATING TO THE DEBTOR OR THE FOREGOING TAKING PLACE ON OR BEFORE THE EPI CONFIRMATION DATE, EXCEPT FOR ANY CLAIMS AND CAUSES OF ACTION FOR WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, IN EACH CASE AS DETERMINED BY FINAL ORDER OF THE BANKRUPTCY COURT OR ANY OTHER COURT OF COMPETENT JURISDICTION OR THE RIGHTS OF ANY CLAIMHOLDER TO ENFORCE THE EPI PLAN.

Exculpation. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW AND WITHOUT AFFECTING OR LIMITING THE DEBTOR RELEASE OR THIRD PARTY RELEASE, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THE EPI PLAN, NO EXCULPATED PARTY SHALL HAVE OR INCUR, AND EACH EXCULPATED PARTY IS HEREBY RELEASED AND EXCULPATED FROM ANY EXCULPATED CLAIM, OBLIGATION, CAUSE OF ACTION OR LIABILITY FOR ANY EXCULPATED CLAIM, EXCEPT FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, BUT IN ALL RESPECTS SUCH PERSONS SHALL BE ENTITLED TO REASONABLY RELY UPON THE ADVICE OF COUNSEL WITH RESPECT TO THEIR DUTIES AND RESPONSIBILITIES PURSUANT TO THE EPI PLAN. THE DEBTOR (AND EACH OF ITS RESPECTIVE AFFILIATES, AGENTS, DIRECTORS, OFFICERS, EMPLOYEES, ADVISORS AND ATTORNEYS) HAVE PARTICIPATED IN COMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE WITH REGARD TO THE SOLICITATION OF THE EPI PLAN AND THE DISTRIBUTIONS CONTEMPLATED PURSUANT TO THE EPI PLAN AND, THEREFORE, ARE NOT, AND ON ACCOUNT OF SUCH DISTRIBUTIONS SHALL NOT BE, LIABLE AT ANY TIME FOR THE VIOLATION OF ANY APPLICABLE LAW, RULE, OR REGULATION GOVERNING THE SOLICITATION OF ACCEPTANCES OR REJECTIONS OF THE EPI PLAN OR SUCH DISTRIBUTIONS MADE PURSUANT TO THE EPI PLAN.

Injunction. FROM AND AFTER THE EPI EFFECTIVE DATE, TO THE EXTENT OF THE EXCULPATION AND RELEASES GRANTED IN ARTICLE IX [OF THE EPI PLAN], THE DEBTOR AND HOLDERS OF CLAIMS OR INTERESTS SHALL NOT COMMENCE OR CONTINUE IN ANY MANNER AGAINST THE EXCULPATED PARTIES OR RELEASED PARTIES AND THEIR ASSETS AND PROPERTIES, AS THE CASE MAY BE, ANY SUIT, ACTION OR OTHER PROCEEDING, ON ACCOUNT OF OR RESPECTING ANY CLAIM, DEMAND, LIABILITY, OBLIGATION, DEBT, RIGHT, CAUSE OF ACTION, INTEREST OR REMEDY RELEASED OR TO BE RELEASED PURSUANT TO ARTICLE IX. THE RIGHTS AFFORDED IN THE EPI PLAN AND THE TREATMENT OF ALL CLAIMS AND INTERESTS [IN THE EPI PLAN] . . . SHALL BE IN EXCHANGE FOR AND IN COMPLETE SATISFACTION OF CLAIMS AND INTERESTS OF ANY NATURE WHATSOEVER, INCLUDING ANY INTEREST ACCRUED ON CLAIMS FROM AND AFTER THE PETITION DATE, AGAINST THE DEBTOR OR ANY OF ITS ASSETS, PROPERTY, OR ESTATE.

EXCEPT AS OTHERWISE EXPRESSLY PROVIDED FOR [IN THE EPI PLAN] . . . OR IN THE EPI CONFIRMATION ORDER, FROM AND AFTER THE EPI EFFECTIVE DATE, ALL CLAIMS SHALL BE FULLY RELEASED, AND THE INTERESTS SHALL BE CANCELLED, AND THE DEBTOR’S LIABILITY WITH RESPECT THERETO SHALL BE EXTINGUISHED COMPLETELY, INCLUDING ANY LIABILITY OF THE KIND SPECIFIED UNDER SECTION 502(G) OF THE BANKRUPTCY CODE.

EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED [IN THE EPI PLAN] . . . OR IN THE EPI CONFIRMATION ORDER, ALL ENTITIES SHALL BE PRECLUDED FROM ASSERTING AGAINST THE DEBTOR, THE DEBTOR’S ESTATE, THE EPI LIQUIDATING TRUST, THE EPI LIQUIDATING TRUSTEES, AND EACH OF THEIR RESPECTIVE SUCCESSORS AND ASSIGNS AND EACH OF THEIR ASSETS AND PROPERTIES, ANY OTHER CLAIMS OR INTERESTS BASED UPON ANY DOCUMENTS, INSTRUMENTS OR ANY ACT OR OMISSION, TRANSACTION OR OTHER ACTIVITY OF ANY KIND OR NATURE THAT OCCURRED BEFORE THE EPI EFFECTIVE DATE

Term of Injunctions or Stays. Unless otherwise provided in the EPI Plan or in the EPI Confirmation Order, all injunctions or stays in effect in the Chapter 11 Case pursuant to sections 105 or 362 of the Bankruptcy Code or any order of the Bankruptcy Court, and extant on the EPI Confirmation Date (excluding any injunctions or stays contained in this EPI Plan or the EPI Confirmation Order), shall remain in full force and effect until the EPI Effective Date. All injunctions or stays contained in this EPI Plan or the EPI Confirmation Order shall remain in full force and effect in accordance with their terms.


B-7

Defined Terms. The EPI Plan contains the following defined terms with respect to the release, exculpation, and injunction provisions set forth therein:

“AB” means AB Elk Holdings, LLC.

“AB Co-Invest” means AB Co-Invest Elk Holdings, LLC.

“AB Parties” means AB and AB Co-Invest, collectively.

“BSP” means BSP Agency, LLC, or its successors and assigns, in its capacity as administrative agent for the lenders party to the Guaranty Agreement.

“Board” means the Board of EPI as of the EPA Confirmation Date.

“Chapter 11 Case” means the Debtor’s bankruptcy case pending in the Bankruptcy Court and being administered under case number 19-11157 (LSS).

“Conflicts Committee” means the Conflicts Committee of the Board, consisting of Patrick Bartels, Matthew Doheny, and Charles Reardon.

“Equity Committee” means the Official Committee of Preferred Equity Security Holders of EPI.

“Equity Committee Members” means the members of the Equity Committee in the capacity as members of such committee.

“Exculpated Parties” means, collectively, and in each case in their capacities as such solely during the Chapter 11 Case: (a) EPI; (b) the Board and its members; (c) the Conflicts Committee and its members; (d) the Equity Committee and the Equity Committee Members (but solely in their capacity as members of the Equity Committee); (e) BSP; (f) with respect to EPI, all of its current officers and directors, employees, agents, advisory board members, financial advisors, attorneys, investment bankers, consultants, representatives, and all Professional Persons; and (g) with respect to (b), (c), and (d), all of their respective current officers and directors, principals, shareholders, members, partners, managers, employees, agents, advisory board members, financial advisors, attorneys, investment bankers, consultants, representatives, and all Professional Persons.

“Person” means an individual, corporation, partnership, joint venture, association, joint stock company, limited liability company, limited liability partnership, trust, estate, unincorporated organization or other entity.

“Professional Person” means a professional retained in the Chapter 11 Case pursuant to sections 327, 328, and 1103 of the Bankruptcy Code, or otherwise.

“Related Parties” means, with respect to a Person that is a Released Party, collectively, its predecessors, successors, assigns, subsidiaries, direct and indirect Affiliates, managed accounts and funds, current officers and directors, principals, shareholders, members, partners, managers, employees, subcontractors, agents, advisory board members, advisors, financial advisors, attorneys, accountants, investment bankers, consultants, agents, representatives, management companies, fund advisors, and other professionals, and such Person’s respective heirs, executors, estates, servants, and nominees, in each case in their capacity as such.

“Released Parties” means each of: (a) the Debtor; (b) the Board; (c) the Conflicts Committee; (d) the Equity Committee; (e) the members of the Equity Committee in their respective capacity as members of such Equity Committee and in their individual capacities; (f) BSP; (g) the AB Parties; (h) and with respect to clauses (b) through (g) such entities’ successors and assigns, subsidiaries, affiliates, beneficial owners, managed accounts or funds, current officers, directors, principals, shareholders, direct and indirect equity holders, members, partners (general and limited), employees, agents, advisory board members, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, management companies, fund advisors and other Professionals; provided that


B-8

no Person shall be a Released Party if it objects to the releases provided for in Article IX of this EPI Plan. Except as set forth in this EPI Plan, no current or former officers or directors of EPI shall constitute Released Parties or shall be released by any of this EPI Plan, the EPI Plan Supplement, or the EPI Confirmation Order; provided, further, that, for the avoidance of doubt, notwithstanding the foregoing or anything else contained in this EPI Plan, as it pertains to BSP and the BSP Parties, Released Parties does not include any of the Debtor’s subsidiaries or affiliates. Notwithstanding the foregoing or anything else contained in this EPI Plan to the contrary, Released Parties do not include (w) all Affiliates of the Debtor and any of their respective Related Parties other than the Debtor and those Persons expressly identified in the foregoing (b) through (h); (x) EPL, Brad Lingo, James Piccone, V. Brian Dolan, Neale Taylor, Russell Krause, Timothy Hargreaves, Alexander Hunter; (y) KPMG LLP and any affiliates thereof; and (z) Resolute Energy Corporation, Hicks Acquisition Company I, Inc., Resolute Natural Resources Company, LLC, Cimarex Energy Co., CR Sub 1 Inc., CR Sub 2 LLC, and any affiliates of or successors to the foregoing entities.


EXHIBIT 2



In re:


Debtor.

Chapter 11

Case No. 19-11157 (LSS)

CLASS 4 BALLOT FOR (I) ACCEPTING OR REJECTING ELK PETROLEUM, INC.’S PLAN OF LIQUIDATION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE AND

(II) OPTING OUT OF THIRD-PARTY RELEASES CONTAINED THEREIN CLASS 4: EPI PREFERRED INTERESTS

PLEASE READ AND FOLLOW THE ENCLOSED VOTING INSTRUCTIONS CAREFULLY BEFORE COMPLETING THE BALLOT.

THIS BALLOT MUST BE RETURNED TO THE BELOW ADDRESS BEFORE JUNE 30, 2020 AT 8:00 P.M. (EASTERN) (THE “VOTING DEADLINE”), OR YOUR VOTE WILL NOT BE COUNTED.

On May 28, 2020, the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) entered an order (the “Disclosure Statement Order”) approving the Disclosure Statement in Respect of Plan of Liquidation of Elk Petroleum, Inc., Pursuant to Chapter 11 of the Bankruptcy Code (as may be amended, supplemented, or modified from time to time, the “EPI Disclosure Statement”),2 which provides additional information about Elk Petroleum, Inc. (the “Debtor” or “EPI”), this Chapter 11 Case, and the Plan of Liquidation of Elk Petroleum, Inc., Pursuant to Chapter 11 of the Bankruptcy Code (as may be amended, supplemented, or modified from time to time, the “EPI Plan”) to assist you in deciding how to vote your ballot. A copy of the EPI Plan is attached as Exhibit 1 to the EPI Disclosure Statement. If you do not have an EPI Disclosure Statement, you may obtain a copy for free from Stretto (“Voting and Claims Agent”) by (i) downloading the Disclosure Statement from the Voting and Claims Agent’s website at https://case.stretto.com/elkpetroleum or (ii) by contacting the Voting and Claims Agent at 855-423-1620 or at [email protected]. Court approval of the EPI Disclosure Statement does not indicate approval of the EPI Plan by the Court.

You should review the EPI Disclosure Statement and the EPI Plan before you vote. You may wish to seek legal advice concerning the EPI Plan and your classification and treatment under the EPI Plan. Your EPI Preferred Interest has been placed in Class 4 under the EPI Plan. If you hold Claims or equity interests in more than one class, you will receive a ballot for each class in which you are entitled to vote.

1 The Debtor is Elk Petroleum, Inc. (8606). The Debtor is Elk Petroleum, Inc. (8606). The address of the Debtor

is Elk Petroleum, Inc., c/o Matthew Doheny, Chief Restructuring Officer, North Country Capital LLC, 215 Washington Street, Suite 006, Watertown, NY 13601.

2 Capitalized terms not otherwise defined herein shall have the meanings scribed to such terms in the EPI Plan or the EPI Disclosure Statement.


https://case.stretto.com/elkpetroleum


B-2

IMPORTANT DEADLINE

IF YOUR BALLOT IS NOT RECEIVED AT THE ADDRESS PROVIDED BELOW BY:

JUNE 30, 2020, AT 8:00 P.M. (Eastern)

AND SUCH DEADLINE IS NOT EXTENDED, YOUR VOTE WILL NOT COUNT AS EITHER AN ACCEPTANCE OR REJECTION OF THE EPI PLAN. IF THE EPI PLAN IS CONFIRMED BY THE

BANKRUPTCY COURT IT WILL BE BINDING ON YOU WHETHER OR NOT YOU VOTE.

This ballot is not a letter of transmission and may not be used for any purpose other than to vote to accept or reject the EPI Plan.

MAILING INFORMATION

YOUR BALLOT MUST BE SENT VIA FIRST CLASS MAIL (IN THE ENCLOSED ENVELOPE) OR VIA OVERNIGHT COURIER OR PERSONAL DELIVERY TO:


Denver, CO 80238

Ballots submitted by facsimile, email, or other means of electronic transmission will not be counted.

VOTING INFORMATION AND INSTRUCTIONS FOR COMPLETING THE BALLOT

HOW TO VOTE

1. COMPLETE ITEM 1.

2. REVIEW THE CERTIFICATIONS AND ACKNOWLEDGEMENTS IN ITEM 2.

3. SIGN THE BALLOT.

4. RETURN THE BALLOT TO Elk Ballot Processing c/o Stretto, 8269 E. 23rd Ave, Ste 275, Denver, CO 80238 (an envelope addressed to this address is enclosed for your convenience) SO THAT IT IS RECEIVED BY JUNE 30, 2020, AT 8:00 P.M. (Eastern).

5. BALLOTS RECEIVED AFTER THE VOTING DEADLINE WILL NOT BE COUNTED.

6. YOU MUST VOTE THE FULL AMOUNT OF YOUR EPI PREFERRED INTEREST REPRESENTED BY THIS BALLOT TO ACCEPT OR REJECT THE EPI PLAN AND MAY NOT SPLIT YOUR VOTE.

7. ANY EXECUTED BALLOT RECEIVED THAT (A) DOES NOT INDICATE EITHER AN ACCEPTANCE OR REJECTION OF THE EPI PLAN, OR (B) THAT INDICATES BOTH AN ACCEPTANCE AND A REJECTION OF THE EPI PLAN WILL NOT BE COUNTED.

8. ALL BALLOTS MUST BE FULLY EXECUTED TO BE COUNTED. IF A BALLOT IS TO BE EXECUTED BY AN AUTHORIZED PARTY OTHER THAN AN OFFICER OR EMPLOYEE OF THE HOLDER OF THE EPI PREFERRED INTEREST, SUFFICIENT EVIDENCE OF THE AUTHORIZED PARTY'S AUTHORITY TO EXECUTE THE BALLOT MUST BE INCLUDED WITH THE BALLOT.


B-3

ARTICLE IX OF THE EPI PLAN CONTAINS INJUNCTIONS AND RELEASES OF CERTAIN PLAN PARTICIPANTS. PLEASE REVIEW THESE PROVISIONS OF THE EPI PLAN CAREFULLY BEFORE SUBMITTING YOUR BALLOT AS THESE PROVISIONS MAY AFFECT YOUR RIGHTS.

THE DEBTOR RECOMMENDS THAT YOU VOTE TO ACCEPT THE EPI PLAN

Item 1. Vote. The undersigned, a Holder of a Class 4 EPI Preferred Interest in the Debtor in the Voting Amount set forth below, votes to (check one box; if you fail to check one of the boxes below, but the Ballot is otherwise properly completed and returned your Ballot will not be counted as either an acceptance or rejection of the EPI Plan):

Accept the EPI Plan Reject the EPI Plan

Voting Amount: $

IMPORTANT INFORMATION REGARDING THE RELEASE OF CLAIMS BY THIRD

PARTIES

ARTICLE IX OF THE EPI PLAN CONTAINS RELEASE, EXCULPATION, AND INJUNCTION PROVISIONS, WHICH ARE SET FORTH AT THE END OF THIS BALLOT. YOU SHOULD REVIEW

THESE PROVISIONS CAREFULLY. CHECK THE BOX BELOW IF YOU ELECT NOT TO GRANT THE THIRD-PARTY RELEASE CONTAINED IN ARTICLE IX OF THE EPI PLAN. IF YOU SUBMIT YOUR BALLOT WITH THIS BOX CHECKED, THEN YOU WILL BE DEEMED NOT TO CONSENT TO THE THIRD-PARTY RELEASE SET FORTH IN ARTICLE IX OF THE EPI PLAN. PLEASE BE ADVISED THAT BY NOT CHECKING THE BOX BELOW YOU ELECT TO GRANT THE THIRD-PARTY RELEASE IN EACH AND EVERY CAPACITY IN WHICH YOU HOLD AN EPI PREFERRED INTEREST IN THE DEBTOR. YOU MUST AFFIRMATIVELY CHECK THE BOX BELOW IN ORDER TO OPT-OUT OF THE THIRD-PARTY RELEASE. PLEASE ALSO BE ADVISED THAT THE DEBTOR RELEASE CONTAINED IN ARTICLE IX OF THE EPI PLAN WILL BE INCLUDED IN THE CONFIRMATION ORDER AND THAT IT IS SEPARATE FROM AND INDEPENDENT OF THE THIRD-PARTY RELEASE. IF YOU OBJECT TO THE DEBTOR RELEASE, YOU MUST FILE A SEPARATE OBJECTION WITH THE BANKRUPTCY COURT IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE DISCLOSURE STATEMENT ORDER. THE THIRD-PARTY RELEASE AND DEBTOR RELEASE, EXCULPATION, AND INJUNCTION PROVISIONS OF THE EPI PLAN (ALONG WITH RELEVANT DEFINITIONS) ARE REPRODUCED AT PAGES B-5 THROUGH AND INCLUDING B-8 OF THIS BALLOT. Item 2. Release of Claims.

OPT-OUT ELECTION: The undersigned, a Holder of a Class 4 EPI Preferred Interest in the Debtor, elects to opt-out of the Third-Party Releases contained in Article IX of the EPI Plan.


B-4

Item 3. Certifications and Acknowledgments. By signing this Ballot, the undersigned acknowledges and certifies that (a) the undersigned is the claimant or has the power and authority to vote to accept or reject the EPI Plan on behalf of such Holder of an EPI Preferred Interest and (b) the Social Security or Federal Tax I.D. No. provided below, if any, is true and correct. The undersigned understands that the solicitation of votes for the EPI Plan is subject to all the terms and conditions set forth in the EPI Disclosure Statement and the Disclosure Statement Order. The undersigned understands that, if this Ballot is validly executed but does not indicate either acceptance or rejection of the EPI Plan, this Ballot will not be counted as either an acceptance or rejection of the EPI Plan.

Name of Preferred Interest Holder (Please Print)

Social Security or Federal Tax I.D. No. (Optional)

Authorized Signature

Name of Signatory

If by Authorized Agent, Name and Title

Street Address

City, State, Zip Code

Telephone Number

Date Completed

IF YOU HAVE RECEIVED A DAMAGED BALLOT OR HAVE LOST YOUR BALLOT, OR IF YOU HAVE ANY QUESTIONS CONCERNING THIS BALLOT OR THE VOTING

PROCEDURES, PLEASE CONTACT THE VOTING AND CLAIMS AGENT AT 855-423–1620.


B-5

RELEASE, EXCULPATION, AND INJUNCTION PROVISIONS CONTAINED IN THE EPI PLAN

Releases by the Debtor and Its Estate. ON THE EPI EFFECTIVE DATE, THE RELEASED PARTIES WILL BE EXPRESSLY, UNCONDITIONALLY, GENERALLY AND INDIVIDUALLY AND COLLECTIVELY RELEASED, ACQUITTED, AND DISCHARGED BY THE DEBTOR AND ITS ESTATE FROM ANY AND ALL ACTIONS, CLAIMS, OBLIGATIONS, RIGHTS, SUITS, DAMAGES, CAUSES OF ACTION, REMEDIES AND LIABILITIES WHATSOEVER, INCLUDING ANY DERIVATIVE CLAIMS ASSERTED OR ASSERTABLE ON BEHALF OF THE DEBTOR, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, MATURED OR UNMATURED, EXISTING OR HEREINAFTER ARISING, IN LAW, EQUITY, CONTRACT, TORT OR OTHERWISE, BY STATUTE OR OTHERWISE, THAT THE DEBTOR, THE EPI LIQUIDATING TRUST, THE DEBTOR’S ESTATE OR THE DEBTOR’S AFFILIATES (WHETHER INDIVIDUALLY OR COLLECTIVELY) OR ON BEHALF OF THE HOLDER OF ANY CLAIM OR INTEREST OR OTHER ENTITY, EVER HAD, NOW HAS OR HEREAFTER CAN, SHALL, OR MAY HAVE, BASED ON OR RELATING TO, OR IN ANY MANNER ARISING FROM, IN WHOLE OR IN PART, THE DEBTOR, THE DEBTOR’S LIQUIDATION, THE CHAPTER 11 CASE, THE PURCHASE, SALE OR RESCISSION OF THE PURCHASE OR SALE OF ANY SECURITY OF THE DEBTOR, THE SUBJECT MATTER OF, OR THE TRANSACTIONS OR EVENTS GIVING RISE TO, ANY CLAIM OR INTEREST THAT IS TREATED IN THE EPI PLAN, THE BUSINESS OR CONTRACTUAL ARRANGEMENTS BETWEEN THE DEBTOR AND ANY RELEASED PARTY, THE RESTRUCTURING OF CLAIMS AND INTERESTS BEFORE OR DURING THE CHAPTER 11 CASE THE NEGOTIATION, FORMULATION, PREPARATION, OR PERFORMANCE OF THE EPI PLAN, THE EPI DISCLOSURE STATEMENT, THE PURSUIT OF CONFIRMATION, THE PURSUIT OF CONSUMMATION, THE ADMINISTRATION OR IMPLEMENTATION OF THE EPI PLAN, OR RELATED AGREEMENTS, INSTRUMENTS ,OR OTHER DOCUMENTS OR ANY OTHER ACT OR OMISSION, TRANSACTION, AGREEMENT, EVENT, OR OTHER OCCURRENCE RELATING TO THE DEBTOR OR THE FOREGOING TAKING PLACE ON OR BEFORE THE CONFIRMATION DATE OF THE EPI PLAN, EXCEPT FOR ANY CLAIMS AND CAUSES OF ACTION FOR ACTUAL FRAUD OR GROSS MISCONDUCT, IN EACH CASE AS DETERMINED BY FINAL ORDER OF THE BANKRUPTCY COURT OR ANY OTHER COURT OF COMPETENT JURISDICTION.

Releases by Holders. SUBJECT TO THE RIGHT OF EACH HOLDER OF A CLAIM AGAINST OR INTEREST IN THE DEBTOR TO AFFIRMATIVELY ‘OPT OUT” OF THE RELEASE SET FORTH BELOW BY NOTING SUCH “OPT OUT” ELECTION ON THE BALLOT TO VOTE ON THE EPI PLAN, TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, AS SUCH LAW MAY BE EXTENDED OR INTERPRETED SUBSEQUENT TO THE EPI EFFECTIVE DATE, EXCEPT AS OTHERWISE PROVIDED IN THE EPI PLAN OR THE EPI CONFIRMATION ORDER, ON THE EPI EFFECTIVE DATE, EACH HOLDER OF A CLAIM AGAINST OR INTEREST IN THE DEBTOR SHALL BE DEEMED TO HAVE EXPRESSLY, UNCONDITIONALLY, GENERALLY AND INDIVIDUALLY AND COLLECTIVELY, RELEASED, ACQUITTED, AND DISCHARGED THE RELEASED PARTIES FROM ANY AND ALL ACTIONS, CLAIMS, INTERESTS, OBLIGATIONS, RIGHTS, SUITS, DAMAGES, CAUSES OF ACTION, REMEDIES AND LIABILITIES WHATSOEVER, INCLUDING ANY DERIVATIVE CLAIMS ASSERTED OR ASSERTABLE ON BEHALF OF THE DEBTOR, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, MATURED OR UNMATURED, EXISTING OR HEREAFTER ARISING, IN LAW, EQUITY, CONTRACT, TORT OR OTHERWISE, THAT SUCH HOLDER (WHETHER INDIVIDUALLY OR COLLECTIVELY) EVER HAD, NOW HAS OR HEREAFTER CAN, SHALL OR MAY HAVE, BASED ON OR RELATING TO, OR IN ANY MANNER ARISING FROM, IN WHOLE OR IN PART, THE DEBTOR, THE DEBTOR’S LIQUIDATION, THE CHAPTER 11 CASE, THE PURCHASE, SALE OR RESCISSION OF THE PURCHASE OR SALE OF ANY SECURITY OF THE DEBTOR, THE SUBJECT MATTER OF, OR THE TRANSACTIONS OR EVENTS GIVING RISE TO, ANY CLAIM OR INTEREST THAT IS TREATED IN THE EPI PLAN, THE BUSINESS OR CONTRACTUAL ARRANGEMENTS BETWEEN THE DEBTOR AND ANY RELEASED PARTY, THE RESTRUCTURING OF CLAIMS AND INTERESTS BEFORE OR DURING THE CHAPTER 11 CASE, THE NEGOTIATION, FORMULATION, PREPARATION, OR PERFORMANCE OF THE EPI PLAN OR THE EPI DISCLOSURE STATEMENT, THE PURSUIT OF CONFIRMATION, THE PURSUIT OF CONSUMMATION, THE ADMINISTRATION OR IMPLEMENTATION OF THE EPI PLAN, OR RELATED AGREEMENTS, INSTRUMENTS, OR OTHER DOCUMENTS OR ANY OTHER ACT OR OMISSION, TRANSACTION,


B-6

AGREEMENT, EVENT, OR OTHER OCCURRENCE RELATING TO THE DEBTOR OR THE FOREGOING TAKING PLACE ON OR BEFORE THE EPI CONFIRMATION DATE, EXCEPT FOR ANY CLAIMS AND CAUSES OF ACTION FOR WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, IN EACH CASE AS DETERMINED BY FINAL ORDER OF THE BANKRUPTCY COURT OR ANY OTHER COURT OF COMPETENT JURISDICTION OR THE RIGHTS OF ANY CLAIMHOLDER TO ENFORCE THE EPI PLAN.

Exculpation. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW AND WITHOUT AFFECTING OR LIMITING THE DEBTOR RELEASE OR THIRD PARTY RELEASE, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THE EPI PLAN, NO EXCULPATED PARTY SHALL HAVE OR INCUR, AND EACH EXCULPATED PARTY IS HEREBY RELEASED AND EXCULPATED FROM ANY EXCULPATED CLAIM, OBLIGATION, CAUSE OF ACTION OR LIABILITY FOR ANY EXCULPATED CLAIM, EXCEPT FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, BUT IN ALL RESPECTS SUCH PERSONS SHALL BE ENTITLED TO REASONABLY RELY UPON THE ADVICE OF COUNSEL WITH RESPECT TO THEIR DUTIES AND RESPONSIBILITIES PURSUANT TO THE EPI PLAN. THE DEBTOR (AND EACH OF ITS RESPECTIVE AFFILIATES, AGENTS, DIRECTORS, OFFICERS, EMPLOYEES, ADVISORS AND ATTORNEYS) HAVE PARTICIPATED IN COMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE WITH REGARD TO THE SOLICITATION OF THE EPI PLAN AND THE DISTRIBUTIONS CONTEMPLATED PURSUANT TO THE EPI PLAN AND, THEREFORE, ARE NOT, AND ON ACCOUNT OF SUCH DISTRIBUTIONS SHALL NOT BE, LIABLE AT ANY TIME FOR THE VIOLATION OF ANY APPLICABLE LAW, RULE, OR REGULATION GOVERNING THE SOLICITATION OF ACCEPTANCES OR REJECTIONS OF THE EPI PLAN OR SUCH DISTRIBUTIONS MADE PURSUANT TO THE EPI PLAN.

Injunction. FROM AND AFTER THE EPI EFFECTIVE DATE, TO THE EXTENT OF THE EXCULPATION AND RELEASES GRANTED IN ARTICLE IX [OF THE EPI PLAN], THE DEBTOR AND HOLDERS OF CLAIMS OR INTERESTS SHALL NOT COMMENCE OR CONTINUE IN ANY MANNER AGAINST THE EXCULPATED PARTIES OR RELEASED PARTIES AND THEIR ASSETS AND PROPERTIES, AS THE CASE MAY BE, ANY SUIT, ACTION OR OTHER PROCEEDING, ON ACCOUNT OF OR RESPECTING ANY CLAIM, DEMAND, LIABILITY, OBLIGATION, DEBT, RIGHT, CAUSE OF ACTION, INTEREST OR REMEDY RELEASED OR TO BE RELEASED PURSUANT TO ARTICLE IX. THE RIGHTS AFFORDED IN THE EPI PLAN AND THE TREATMENT OF ALL CLAIMS AND INTERESTS [IN THE EPI PLAN] . . . SHALL BE IN EXCHANGE FOR AND IN COMPLETE SATISFACTION OF CLAIMS AND INTERESTS OF ANY NATURE WHATSOEVER, INCLUDING ANY INTEREST ACCRUED ON CLAIMS FROM AND AFTER THE PETITION DATE, AGAINST THE DEBTOR OR ANY OF ITS ASSETS, PROPERTY, OR ESTATE.

EXCEPT AS OTHERWISE EXPRESSLY PROVIDED FOR [IN THE EPI PLAN] . . . OR IN THE EPI CONFIRMATION ORDER, FROM AND AFTER THE EPI EFFECTIVE DATE, ALL CLAIMS SHALL BE FULLY RELEASED, AND THE INTERESTS SHALL BE CANCELLED, AND THE DEBTOR’S LIABILITY WITH RESPECT THERETO SHALL BE EXTINGUISHED COMPLETELY, INCLUDING ANY LIABILITY OF THE KIND SPECIFIED UNDER SECTION 502(G) OF THE BANKRUPTCY CODE.

EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED [IN THE EPI PLAN] . . . OR IN THE EPI CONFIRMATION ORDER, ALL ENTITIES SHALL BE PRECLUDED FROM ASSERTING AGAINST THE DEBTOR, THE DEBTOR’S ESTATE, THE EPI LIQUIDATING TRUST, THE EPI LIQUIDATING TRUSTEES, AND EACH OF THEIR RESPECTIVE SUCCESSORS AND ASSIGNS AND EACH OF THEIR ASSETS AND PROPERTIES, ANY OTHER CLAIMS OR INTERESTS BASED UPON ANY DOCUMENTS, INSTRUMENTS OR ANY ACT OR OMISSION, TRANSACTION OR OTHER ACTIVITY OF ANY KIND OR NATURE THAT OCCURRED BEFORE THE EPI EFFECTIVE DATE

Term of Injunctions or Stays. Unless otherwise provided in the EPI Plan or in the EPI Confirmation Order, all injunctions or stays in effect in the Chapter 11 Case pursuant to sections 105 or 362 of the Bankruptcy Code or any order of the Bankruptcy Court, and extant on the EPI Confirmation Date (excluding any injunctions or stays contained in this EPI Plan or the EPI Confirmation Order), shall remain in full force and effect until the EPI Effective Date. All injunctions or stays contained in this EPI Plan or the EPI Confirmation Order shall remain in full force and effect in accordance with their terms.


B-7

Defined Terms. The EPI Plan contains the following defined terms with respect to the release, exculpation, and injunction provisions set forth therein:

“AB” means AB Elk Holdings, LLC.

“AB Co-Invest” means AB Co-Invest Elk Holdings, LLC.

“AB Parties” means AB and AB Co-Invest, collectively.

“BSP” means BSP Agency, LLC, or its successors and assigns, in its capacity as administrative agent for the lenders party to the Guaranty Agreement.

“Board” means the Board of EPI as of the EPA Confirmation Date.

“Chapter 11 Case” means the Debtor’s bankruptcy case pending in the Bankruptcy Court and being administered under case number 19-11157 (LSS).

“Conflicts Committee” means the Conflicts Committee of the Board, consisting of Patrick Bartels, Matthew Doheny, and Charles Reardon.

“Equity Committee” means the Official Committee of Preferred Equity Security Holders of EPI.

“Equity Committee Members” means the members of the Equity Committee in the capacity as members of such committee.

“Exculpated Parties” means, collectively, and in each case in their capacities as such solely during the Chapter 11 Case: (a) EPI; (b) the Board and its members; (c) the Conflicts Committee and its members; (d) the Equity Committee and the Equity Committee Members (but solely in their capacity as members of the Equity Committee); (e) BSP; (f) with respect to EPI, all of its current officers and directors, employees, agents, advisory board members, financial advisors, attorneys, investment bankers, consultants, representatives, and all Professional Persons; and (g) with respect to (b), (c), and (d), all of their respective current officers and directors, principals, shareholders, members, partners, managers, employees, agents, advisory board members, financial advisors, attorneys, investment bankers, consultants, representatives, and all Professional Persons.

“Person” means an individual, corporation, partnership, joint venture, association, joint stock company, limited liability company, limited liability partnership, trust, estate, unincorporated organization or other entity.

“Professional Person” means a professional retained in the Chapter 11 Case pursuant to sections 327, 328, and 1103 of the Bankruptcy Code, or otherwise.

“Related Parties” means, with respect to a Person that is a Released Party, collectively, its predecessors, successors, assigns, subsidiaries, direct and indirect Affiliates, managed accounts and funds, current officers and directors, principals, shareholders, members, partners, managers, employees, subcontractors, agents, advisory board members, advisors, financial advisors, attorneys, accountants, investment bankers, consultants, agents, representatives, management companies, fund advisors, and other professionals, and such Person’s respective heirs, executors, estates, servants, and nominees, in each case in their capacity as such.

“Released Parties” means each of: (a) the Debtor; (b) the Board; (c) the Conflicts Committee; (d) the Equity Committee; (e) the members of the Equity Committee in their respective capacity as members of such Equity Committee and in their individual capacities; (f) BSP; (g) the AB Parties; (h) and with respect to clauses (b) through (g) such entities’ successors and assigns, subsidiaries, affiliates, beneficial owners, managed accounts or funds, current officers, directors, principals, shareholders, direct and indirect equity holders, members, partners (general and limited), employees, agents, advisory board members, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, management companies, fund advisors and other Professionals; provided that


B-8

no Person shall be a Released Party if it objects to the releases provided for in Article IX of this EPI Plan. Except as set forth in this EPI Plan, no current or former officers or directors of EPI shall constitute Released Parties or shall be released by any of this EPI Plan, the EPI Plan Supplement, or the EPI Confirmation Order; provided, further, that, for the avoidance of doubt, notwithstanding the foregoing or anything else contained in this EPI Plan, as it pertains to BSP and the BSP Parties, Released Parties does not include any of the Debtor’s subsidiaries or affiliates. Notwithstanding the foregoing or anything else contained in this EPI Plan to the contrary, Released Parties do not include (w) all Affiliates of the Debtor and any of their respective Related Parties other than the Debtor and those Persons expressly identified in the foregoing (b) through (h); (x) EPL, Brad Lingo, James Piccone, V. Brian Dolan, Neale Taylor, Russell Krause, Timothy Hargreaves, Alexander Hunter; (y) KPMG LLP and any affiliates thereof; and (z) Resolute Energy Corporation, Hicks Acquisition Company I, Inc., Resolute Natural Resources Company, LLC, Cimarex Energy Co., CR Sub 1 Inc., CR Sub 2 LLC, and any affiliates of or successors to the foregoing entities.


EXHIBIT 3


Post Effective Winddown

Accrued May Jun Jul (a) Aug Sept Oct Nov Dec Total

Cash

Cash on hand 5/12/20 (book) 11,961 11,961 11,961 11,961 145,550 37,500 14,000 0 0 11,961

Cash from Madden 0 0 0 1,804,703 0 0 0 0 0 1,804,703

Disbursements (below) (1,671,114) (39,130) (23,500) (14,000) 0 0 (1,747,744)

Payments to Professionals Deferred Fees (68,920) (68,920)

Ending Cash 11,961 11,961 11,961 145,550 37,500 14,000 0 0 0 0

Administrative Claims

Directors Fees

North Country Capital 20,000 20,000 40,000

Charles Reardon 20,000 20,000 40,000

Redan Advisors LLC 20,000 20,000 40,000

Director expenses 21,000 5,000 26,000

Management Fees

North Country Capital 5,000 5,000 10,000

Asgaard 5,000 5,000 10,000

Estimated expense reimbursement 5,000 5,000

Professional fees

Chipman Brown Cicero & Cole 85,000 75,000 15,000 175,000

Stretto (claims agent) 25,000 25,000 25,000 75,000

Plante & Moran (taxes) 25,000 25,000

US Trustee Fees 4,875 14,000 18,875

Norton Rose Fulbright 37,542 8,661

Womble Bond Dickinson 27,547 5,969

Other expenses

South Check (accounting) 6,000 6,000 6,000 6,000 24,000

Post TSA (Randy) 625 625 12,500 12,500 26,250

Ondrish (tax return support) 6,000 5,000 11,000

D&O Tail 280,000 280,000

EOS Claim for Insurance re-imbursement 100,000 100,000

Contingency for Chapter 11 expenses 75,000 75,000

Total Administrative Claims 85,000 100,000 202,714 596,500 39,130 23,500 14,000 0 0 981,125

Funding of Combined Trust

Initial funding of Combined Trust 100,000 100,000

Funding to Combined Trust (balance) 586,900 586,900

Total Disbursements 185,000 100,000 202,714 1,183,400 39,130 23,500 14,000 0 0 1,668,025

Unpaid Chapter 11 Prof Fee Claims

Est Billings Available %

Chipman Brown Cicero & Cole 188,600 13,283 7.04

Norton Rose Fulbright 150,000 10,564 7.04

Ankura 150,000 10,564 7.04

Morris Nichols 450,000 31,692 7.04

Norton Rose Fulbright 40,000 2,817 7.04

Womble Bond Dickinson 0 0

Total 978,600 68,920 7.04 (a) Assumes Effective Date end of July

Elk Disclosure Statement - Sources and Uses (602068883v1 USA).XLSX


Documents

IN THE UNITED STATES BANKRUPTCY COURT FOR …strettodocs.s3.amazonaws.com/files/47512377-646e-4e52-bc...bankruptcy case by filing a voluntary petition under chapter 11 of the Bankruptcy