MECHANICS/IMPLEMENTATION OF PLAN
Upon confirmation of the Plan, the Debtor shall receive a cash infusion of $100,000 from Jerry Grisaffi. These funds will be used to cover overhead and to operate the company and make any Plan payments, if needed. This cash infusion will be repaid without interest in 36 equal monthly payments commencing 180 days after the Effective Date (“New Note”). The New Note can be converted at anytime to shares of stock. In the event of conversion into stock, the New Note holder will receive 50% of the outstanding balance on the New Note at time of conversion in stock. To be converted at 50% of the bid price over a ten day average.
The Debtor shall issue stock under 11 U.S.C. section 1145 to the Class 3 creditors.
Additionally, the Debtor shall purchase Chill Texas, Inc. In exchange for 5,000,000 shares of stock in the Debtor.
The Debtor currently has 702,433,700 shares outstanding. Of these 500,000,000 are subject to the pending Adversary proceeding against Welch. After the purchase of Chill Texas, Inc and the issuance of shares for insider debt the Debtor (assuming a return of the Welsh shares) will have 207,811,541 shares outstanding before the Plan shares are issued.
All payments to be paid by the Debtor shall be made by the Disbursing Agent. The Disbursing Agent shall also be responsible for supervising the issuance of stock as proposed under the Plan. The Debtor shall select the Disbursing Agent prior to confirmation of the Plan.
The Disbursing Agent shall receive a reasonable fee for his/her services. The Court shall retain jurisdiction to determine the amount of the Disbursing Agent’s fee if necessary.
It is an integral and essential element of this Plan that all securities to be the issued to the holders of Allowed Claims Debtor, shall be exempt from registration under the Securities Act of 1933, as amended, pursuant to section 1145 of the Code.
It is the expressed intent of the Debtor to file with a Securities Broker Dealer to sponsor these securities to the over the counter pink sheets or bulletin board, if qualified. In the event a market develops for the securities of the Debtor, any party receiving securities under this Plan (or a transferee of any securities issued under this Plan), unless otherwise restricted, shall be limited in pledging, shorting, hypothecating or selling, more than 25% of the holders’ securities in any three month period during the first 12 months from the date the Debtor’s securities become tradeable.
The confirmation of this Plan shall serve as a settlement pursuant to Bankruptcy Rule 9019 of the current litigation in the cases of Republic of Texas Brands, Inc v. Empire Capital, LLC, Scott Forsyth, and Matthew Nicoletti, Adversary number 14-03021-BJH (“Adversary No. 1") and Republic of Texas Brands, inc., v. Michael Welch, Adversary number 14-00315-BJH (“Adversary No. 2"). The Empire Group and the Debtor shall take all steps necessary to dismiss Adversary No. 1 and Adversary No. 2 upon the Final Confirmation Date. The dismissal of Adversary No. 1 and Adversary No. 2 is an intricate part of the treatment of the Class 4 creditors under this Plan.
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