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1/77Date filed: 8/24/11Docket No.: 3567

IN THE UNITED STATESBANKRUPTCY COURTFOR THE DISTRICT OF DELAWARE

FINDINGS OF FACT AND CONCLUSIONS OF LAWREGARDING CONFIRMATION OF THE TIDRD AMENDED JOINTPLAN OF CAPMARK FINANCIAL GROUP INC. AND CERTAIN AFFILIATEDPROPONENT DEBTORS UNDER CHAPTER 11 OF THE BANKRUPTCYCODE

---------------------------------------------------------------.J(In reCAPMARKFINANCIALGROUP INC., et aL,

Debtors.

---------------------------------------------------------------.J(

Chapter 11CaseNo. 09-13684 (CSS)Jointly AdministeredRe: Docket No. 3558

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TABLE OF CONTENTS

I. FINDINGS OF FACT 1A. Introduction 1B. The Chapter 11 Cases 6C. Approval of the Disclosure Statement and Solicitation ofVotes for thePlan 7

(i) The Disclosure Statement Hearing 7(ii) The Solicitation and Tabulation ofVotes 7(iii) The Plan Amendments 8(iv) Disclosure Statement Error Regarding Securities Legends 9

D. Compliance with Requirementsof Section 1129 of the Bankruptcy Code 10(i) Section 1129(a)(l): Compliance with the Applicable Provisionsof the Bankruptcy Code '" 10

(a) Compliance with Section 1121 of the BankruptcyCode 10(b) Compliance with Section I I22(a) of the BankruptcyCode 10(c) Compliance with Section 1122(b) ofthe BankruptcyCode 14(d) Compliance with Section 1123(a) of the BankruptcyCode 14(e) Section 1123(b): The Plan Contains Certain

Discretionary Provisions 17(f) Section I123(c) is Inapplicable to the ProponentDebtors' Chapter II Cases 27(g) Section 1123(d): Cure ofDefaults 27.

(ii) Section 1129(a)(2): Compliance with Applicable Provisions ofthe Bankruptcy Code 27(a) Section 1125: Solicitation, Voting, and Tabulation 27(b) Section 1126: Requirements for Acceptance ofaChapter 11 Plan 29

(iii) Section 1129(a)(3): Proposal of the Plan in Good Faith and Notby Any Means Forbidden by Law 29(iv) Section 1129(a)(4): Payments Made by the ProponentDebtorsfor Services or in Respect ofCosts and Expenses are Subject toCourt Approval. 30

(v) Section 1129(a)(5): Disclosure ofNecessary InformationRegarding Directors, Officers, and Insiders 30

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(vi) Section 1129(a)(6): The Plan Does Not Contain Any RateChanges Subject to the Jurisdiction ofAny GovernmentalRegulatory Commissions 31(vii) Section 1129(a)(7): Best Interests ofHolders ofClaims and

Interests 31(viii) Section Il29(a)(8): Acceptance of the Plan by Impaired Classes 32(ix) Section 1129(a)(9): Treatment ofClaims entitled to PriorityPursuant to Section 507(a) of the Bankruptcy Code 32(x) Section 1129(a)(10): Acceptance by at Least One Class ofImpaired, Non-Insider Claims 33(xi) Section 1129(a)(I 1): Feasibility of the Plan 34(xii) Section 1129(a)(12): Paymentof Statutory Fees 35(xiii) Sections 1129(a)(l 3), 1129(a)(14), 1129(a)(l5), and 1129(a)(16)Do Not Apply to the Proponent Debtors' Chapter 11 Cases .35(xiv) Section 1129(b)(2): Cram Down Requirements 36

(a) No Unfair Discrimination 36(b) Compliance with the Absolute Priority Rule 37

E. Special Findings Affecting Protech C 38F. Special Findings Affecting CAP 38

II. CONCLUSIONS OF LAW 39A. Burden of Proof 39B. The Plan Complies with the Requirements of Section 1129 of theBankruptcy Code 39

(i) Section 1129(a)(1): The Plan's Compliance with ApplicableProvisions of the Bankruptcy Code 39(a) Section 1121 40(b) Section 1122(a) 40(c) Section 1122(b) 41(d) Section 1123(a) 42(e) Section 1123(b) 44(f ) Section 1123(c) Does NotApply to the ProponentDebtors' Chapter II Cases 53(g) Section 1123(d) 53

(ii) Section 1129(a)(2): Compliance with Applicable Provisions ofthe Bankruptcy Code 54(a) Section 1125 54(b) Section 1126 55

(iii) Section 1I29(a)(3): Proposal of the Plan in Good Faith 56

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(iv) Section 1129(a)(4): Court Approval ofCertain Payments asReasonable 57(v) Section 1129(a)(5): Disclosure ofIdent ity ofProposedManagement, Compensation of Insiders and Consistencyof

Management Proposals with the Interests ofCreditors and PublicPolicy 58(vi) Section I129(a)(6): Approval ofRate Changes 58(vii) Section 1129(a)(7): Best Interests ofHolders ofClaims andInterests 59(viii) Section 1129(a)(8): Acceptance of the Plan by Each ImpairedClass 60(ix) Section 1129(a)(9): Treatment of Claims Entitled to PriorityPursuant to Section 507(a) of the Bankruptcy Code 61(x) Section 1129(a)(10): Acceptance By at Least One Impaired,Non-Insider Class 61(xi) Section 1129(a)(11): Feasibi lity of the Plan 61(xii) Section 1129(a)(12): Payment ofBankruptcy Fees 64(xiii) Sections 1129(a)(13), I 129(a)(14), 1I29(a)(1 5), and 1129(a)(16)Do Not Apply to the Proponent Debtors' Chapter 11 Cases 64(xiv) Section 1129(b): The Plan Satisfies the CramDownRequirements with Respect to CFGJ Class 3B, CFGI Class 3C,and CFGI Class 6 65

(a) The Plan Does Not Unfairly Discriminate Against AnyClass ofClaims or Interests 66(b) The Plan Is Fair and Equitable with Respect to EachImpaired Class ofClaims or Interests that Has Not

Accepted the Plan 67(xv) Section 1129(d): The Purpose of the Plan is Not Avoidance ofTaxes or the Requirements of Section 5 of the Securities Act of

]933 68C. The Plan Amendments 69D. Disclosure Statement Error Regarding Securities Legends 70E. Special Terms Regarding the Effectiveness of the Protech C Plan andCAP Plan 70

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The United States Bankruptcy Court for the District of Delaware (the"Bankruptcy Court" or "Court") hereby issues the following Findings of Fact and Conclusions ofLaw (the "Findings and Conclusions") with respect to confirmation of the Third Amended JointPlan ofCapmark Financial Group Inc. and Certain AffiliatedProponent Debtors under Chapter11 ofthe Bankruptcy Code, filed on August 16, 2011 [Docket No. 3476] and amended on August18, 2011 and August 23, 2011 (the "Plan"); proposed by Capmark Financial Group Inc.("CFGI") and certain of its subsidiaries and affiliates, as plan proponent debtors and debtors inpossession (collectively, the "Proponent Debtors,',2 and after the Effective Date, the"Reorganized Debtors").I. FINDINGS OF FAC'rJ

A. Introduction1. On July 8, 2011, the Bankruptcy Court issued the Order (I) Approving

Notice of Disclosure Statement Hearing, (II) Approving Disclosure Statement, (III) FixingVoting Record Date, (IV) Scheduling Plan Confirmation Hearing and Approving Form andManner of Related Notice and Objection Procedures, (V) Appointing Balloting Agent,1 Capitalized terms used but not otherwise defmed herein have the meanings ascribed to such terms in the Plan. Therules of construction set forth in Section 1.3 of the Plan apply to these Findings and Conclusions and to the OrderCorifirming Third AmendedJoint Plan ofCapmark Financial Group Inc. and Certain Affiliated Proponent Debtorsunder Chapter 11 of the Bankruptcy Code (the "Confirmation Order"). In addition, in accordance with Section 1.1of the Plan, unless the context otherwise requires, any capitalized term used and not defined in the Plan or theseFindings and Conclusions, but defined in the Bankruptcy Code, shall have the meaning ascribed to that term in theBankruptcy Code. A copy of the Plan is attached to the Confirmation Order as Exhibit A and is incorporated hereinby reference.2 The following 14 Proponent Debtors (with the last four digits of each such Debtor's federal tax identificationnumber) are proponents of the Plan (defmed herein): Summit Crest Ventures, LLC ("SCY") (5690); CFGl (2188);Capmark Capital Inc. ("CCf') (6496); Capmark Finance Inc. ("CFI") (3444); Commercial Equity Investments, Inc.("CEl") (4153); Mortgage Investments, LLC ("MIL") (6319); Net Lease Acquisition LLC ("NLA") (9658); SJMCap, LLC ("SJM") (0862); Capmark Affordable Equity Holdings Inc. ("CAEH") (2379); Capmark REO HoldingLLC ("CREO") (3951); Capmark Affordable Properties Inc. ("CAP") (3435); Capmark Affordable Equity Inc.("CAE") (2381); Capmark Investments LP ("CILP") (7999); and Protech Holdings C, LLC ("ProtechC") (7929).3 These Findings and Conclusions constitute the Court's findings of fact and conclusions of law under Federal Ruleof Civil Procedure 52, as made applicable herein by Bankruptcy Rules 7052 and 9014. Each fmding of fact, to theextent it is or may be deemed a conclusion of law, shall also constitute a conclusion of law. Each conclusion of law,to the extent it is or may be deemed a finding of fact, shall also constitute a finding of fact.

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(VI) Approving Solicitation Packages and Procedures for Distribution Thereof (VII) ApprovingForms o fBallots and Voting Procedures, (VlII) Approving Form and Manner ofNotices to Non-Voting Plan Classes, (IX) Fixing Voting Deadline, and (XJ Approving Vote TabulationProcedures [Docket No. 3230] (the "Disclosure Statement Order"), by which the BankruptcyCourt, among other things, (i) approved the Proposed Second Amended Disclosure Statement forJoint Plan ofCapmark Financial Group Inc. and Certain Affiliated Proponent Debtors underChapter 11 of the Bankruptcy Code, dated as of July 8, 2011 [Docket No. 3226] (the "DisclosureStatement"), (ii) established procedures for the solicitation and tabulation of votes to accept orreject the Plan, and approved the forms of ballots to be used in connection therewith, and(iii) scheduled a hearing on August 19, 2011, to consider confirmation of the Plan (the"Confirmation Hearing"). The Disclosure Statement, Disclosure Statement Order, and Plan wereadmitted into evidence at the Confirmation Hearing as Exhibits 1,2, and 4.

2. An affidavit of service was executed by Epiq Bankruptcy Solutions, LLC("Epig"), in its capacity as the Bankruptcy Court-appointed voting and solicitation agent,attesting to the mailing of the notice of the Confirmation Hearing and solicitation materials inrespect of the Plan in accordance with the Disclosure Statement Order and filed with theBankruptcy Court on July 21,2011 [Docket No. 3311].

3. An affidavit of publication of the notice of the Confirmation Hearing inThe New York Times, The Wall Street Journal (National Edition), the National Post (Canada),and The Philadelphia Inquirer was filed with the Bankruptcy Court on August 17,2011 [DocketNo. 3488], as required by the Disclosure Statement Order.

4. As reflected in the various affidavits of service, due notice of theConfirmation Hearing was provided to holders of Claims and Equity Interests in the Proponent

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6. On August 16, 2011, the Proponent Debtors filed the followingdeclarations in support of confirmation of the Plan, together with their respective exhibits:(i) Declaration of Thomas 1. Fairfield in Support ofConfirmation of the Third Amended JointPlan ofCapmark Financial Group Inc. and Certain AffiliatedProponent Debtors under Chapter11 of the Banlcruptcy Code [Docket No. 3480] (the "Fairfield Declaration"); (ii) Declaration ofMohsin Y Meghji in Support of Confirmation of the Third Amended Joint Plan of CapmarkFinancial Group Inc. and Certain Affiliated Proponent Debtors under Chapter 11 of theBanlcruptcy Code [Docket No. 3478] (the "Meghji Declaration"); (iii) Declaration of CarolFlaton in Support of Confirmation of the Third Amended Joint Plan of Capmark FinancialGroup Inc. and Certain Affiliated Proponent Debtors under Chapter 11 ofThe Banlcruptcy Code

Debtors and to other parties in interest, in accordance with the Bankruptcy Code, BankruptcyRules, and the Disclosure Statement Order.

5. In accordance with the Plan and Disclosure Statement, on July 29, 2011,the Proponent Debtors filed the Plan Supplement with the Bankruptcy Court, which, asanticipated by and in accordance with the Plan and the Disclosure Statement, contained certainschedules and exhibits to the Plan that were not included in the Disclosure Statement. The PlanSupplement was subsequently amended by (i) the Amended Plan Supplement to the ThirdAmendedJoint Plan ofCapmark Financial Group Inc. and Certain Affiliated ProponentDebtorsunder Chapter 11 of the Banlcruptcy Code, filed on August 16, 2011 [Docket No. 3483], and(ii) the Second Amended Plan Supplement to the Third Amended Joint Plan of CapmarkFinancial Group Inc. and Certain Affiliated Proponent Debtors under Chapter 11 of theBanlcruptcy Code, filed on August 18, 2011 [Docket No. 3527] (collectively, the "PlanSupplement").

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10.

[Docket No. 3482] (the "Flaton Declaration"). On August 18, 2011, Epiq filed the AmendedDeclaration of Christina Pullo of Epiq Bankruptcy Solutions, LLC, Regarding Voting andTabulation ofBallots Accepting and Rejecting Debtors' SecondAmendedJoint Plan ofCapmarkFinancial Group Inc. and Certain Affiliated Proponent Debtors under Chapter 11 of theBankruptcy Code [Docket No. 3522] (the "Voting Declaration," and together with the FairfieldDeclaration, the Meghji Declaration, and the Flaton Declaration, the "Declarations"), certifyingthe tabulation compiled by Epiq and reflecting the results of voting with respect to the Plan. TheDeclarations were admitted into evidence at the Confirmation Hearing as Exhibits 7, 8, 9, and

7. The Voting Declaration shows that, with the exception of the Planproposed by Proponent Debtor CFGI, the requisite votes were obtained to support confirmationof the Plan. The CFGI Plan did receive requisite votes of one accepting class without countingthe votes of any insiders and, accordingly, the CFGI Plan may be confirmed in accordance withthe provisions of Bankruptcy Code sections 1129(a)(10) and 1129(b), as further determined inthese fmdings of fact.

8. Objections to confirmation of the Plan were filed on or before August 9,2011, by: (i) the Tennessee Department of Revenue, (ii) the State ofMichigan, Department ofTreasury, (iii) the Commonwealth of Pennsylvania, Department of Revenue, and (iv) ASMCapital III, LP (collectively, the "Confirmation Objections"). The Confmnation Objections filedby the State ofMichigan and the Commonwealth of Pennsylvaniawere subsequently withdrawn,as noted by the statements of counsel on the record at the Confirmation Hearing.

9. OnAugust 12,2011, Deutsche Bank Trust Company Americas, the formerindenture trustee under the indentures governing the Unsecured Notes ("DBTCA"), filed the

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13. The Court, after due deliberation and for sufficient cause, fmds that theevidence admitted in support of the Plan at the Confirmation Hearing satisfies the Proponent

Statement of Deutsche Bank Trust Company Americas Supporting Confirmation of SecondAmended Joint Plan and Reserving Its Rights in the Event the Plan is Modified [Docket No.3457] (the "DBTCAReservation ofRights").

10. On August 16, 2011, the Proponent Debtors filed the Memorandum ofLaw in Support of Third Amended Joint Plan of Capmark Financial Group Inc. and CertainAffiliated Proponent Debtors under Chapter 11 of the Bankruptcy Code [Docket No. 3479], asfurther supplemented by the Supplemental Memorandum ofLaw in Support of Third AmendedJoint Plan ofCapmark Financial Group Inc. and Certain Affiliated Proponent Debtors underChapter 11 of the Bankruptcy Code, dated August 18, 2011 [Docket No. 3521] (together, the"ConfIrmation Brief'), in support of confIrmation of the Plan and in response to theConfirmation Objections and the DBTCAReservation ofRights.

11. The Court has reviewed the Plan, the Plan Supplement (as amended), theDisclosure Statement, the Disclosure Statement Order, the Declarations, the Affidavits ofService, the Publication Affidavits, the Confirmation Objections, the Confirmation Brief, and theadditional exhibits admitted into evidence at the Confirmation Hearing, and has heard thetestimony, the arguments of counsel, and all other evidence propounded at the ConfirmationHearing in support of and in opposition to confirmation of the Plan.

12. The Court has taken judicial notice of the entire record, including thepapers and pleadings on file with the Bankruptcy Court and all prior hearings held in the Chapter11 Cases.

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Debtors' burden to prove the facts necessary for confirmation by a preponderance of theevidence and that their witnesses were persuasive and credible.

B. The Chapter 11 Cases14. Case Commencement. On October 25, 2009, each of the Capmark

Debtors other than CILP and Protech C (collectively, the "First Filed Debtors") commenced avoluntary case under chapter 11 of the Bankruptcy Code. On January 15, 2010, CILPcommenced a voluntary case under chapter 11 of the Bankruptcy Code. On July 29, 2010,Protech C commenced a voluntary case under chapter 11 of the Bankruptcy Code.

15. Joint Administration. On October 27, 2009, this Court entered an orderauthorizing the joint administration of the First Filed Debtors' chapter 11 cases. On January 19,2010, this Court entered an order authorizing the joint administration of CILP's chapter 11 casewith the jointly administered chapter 11 cases of the First Filed Debtors. On August 17, 2010,this Court entered an order authorizing the joint administration of Protech C's chapter 11 casewith the chapter 11 cases of all other Capmark Debtors. The Debtors whose chapter 11 caseshave not been dismissed continue to operate their businesses and manage their properties asdebtors in possession as authorized by sections 1107(a) and 11 08 of the Bankruptcy Code. Notrustee or examiner has been appointed in these Chapter 11 Cases.

16. Claims andNoticing Agent. By order dated October 27,2009, this Courtapproved the retention ofEpiq as claims and noticing agent in the Debtors' Chapter 11 Cases.

17. Statutory Committee Appointment. On November 2, 2009, the Office ofthe United States Trustee for the District ofDelaware appointed a statutory unsecured creditors'committee pursuant to section 1102 of the Bankruptcy Code (the "Committee").

18. Bar Date. On February 19, 2010, this Court issued an order(i) establishing April 23, 2010, as the date by which each person or entity, other than

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ProtechC.

19. On September 14, 2010, this Court issued an order establishing October

Hearing date.

7

C. Approval of the Disclosure Statement and Solicitation of Votesfor the Plan

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21. Consistent with the Disclosure Statement Order, the Proponent Debtors(li) The Solicitation and Tabulation ofVotes

Epiq for the acceptance or rejection of the Plan, and August 19, 2011, as the Confirmation

(i) The Disclosure StatementHearing20. On July 8, 2011, the Proponent Debtors filed the Second Amended Plan

the Disclosure Statement as containing information of a kind, and in sufficient detail, adequate toand the proposed Disclosure Statement. By the Disclosure Statement Order, the Court approved

distributed to all claim holders entitled to vote sealed solicitation packages (the "Solicitation

acceptance or rejection of the Plan in accordance with section 1125 of the Bankruptcy Code.enable a hypothetical, reasonable investor to make an informed judgment with respect to the

The Court also established August 9,2011, as the voting deadline for ballots to be delivered to

by which any governmental unit must ftle a proof of claim based upon prepetition claims against

25, 2010, as the date by which each person or entity, other than governmental units, must file aproof of claim based on prepetition claims against Protech C and January 25,2011, as the date

C), and (ii) approving related notice procedures.must file a proof of claim based upon prepetition claims against the Debtors (other than Protechcommencement of each Debtor's Chapter 11 Case as the date by which any governmental unit(other than Protech C) and the later of April 23, 2010, and the date that is 180 days after thegovernmental units, must file a proof of claim based on prepetition claims against the Debtors

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record of the Confinnation Hearing and technical comments the Proponent Debtors received ator immediately after the ConfirmationHearing. These amendments include a revision to Section6.3 of the Plan to provide for a claims objection reserve on account of Disputed Claims in anyClass as to which the Plan does not provide for the distribution ofCash, Reorganized CFGI DebtSecurities or Reorganized CFGI Cornmon Stock.

24. The Court finds these changes, and others made to the Plan, as reflected ina blacklined copy filed with the Court after the confirmation hearing, and/or admitted intoevidence as Exhibit 5, are not material or adverse changes warranting a resolicitation of votes,and do not require additional disclosure. The amendments to the Plan do not amend or affect theclassification of Claims, the treatment of Claims or the distributions to be made upon Claims.See Bankruptcy Code section 1127(a) and (c) and Bankruptcy Rule 3019(a).

(iv) Disdosure Statement Error Regarding Securities Legends25. Section XILB of the Disclosure Statement contemplates that a restrictive

legend will be placed on the Reorganized CFGI Debt Securities and Reorganized CFGI CommonStock to be issued under the Plan. The legend cautions that the securities may not be resoldunless the seller obtains an opinion of counsel as to the availability of an exemption fromregistration under the Securities Act.

26. The requirement for this legend is in error, as the Reorganized CFGI DebtSecurities and Reorganized CFGI Common Stock are being issued under the Plan in relianceupon Section 1145 of the Code. That section provides that, subject to certain exceptions, thesecurities may be issued without registration under federal or state securities laws, and aredeemed to be issued in a public offering.

27. A legend would impose procedural requirements on transfer and therebyimpede the ability of a holder of the Reorganized CFGI Debt Securities and Reorganized CFGI

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Claims and Equity Interests relevant to the applicable Proponent Debtor as follows:Interests in that Class. Specifically, Article III of the Plan segregates into separate Classes the

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CFGI Class 1 - Non-Tax Priority Unimpaired. Not entitled to vote. Presumed toClaims accept the Plan.CFGI Class 2 - Secured Claims Unimpaired. Not entitled to vote. Presumed toaccept the Plan.CFGI Class 3A - General Impaired. Entitled to vote to accept or rejectUnsecured Claims (other than CFGI the Plan.Class 3B Claims)CFGI Class 3B - Junior Unsecured Impaired. Entitled to vote to accept or rejectSubordinated Debenture Claims the Plan.CFGI Class 3C - Junior Unsecured Impaired. Entitled to vote to accept or rejectSubordinated Debenture Guaranty the Plan.ClaimsCFGI Class 4 - Convenience Unimpaired. Not entitled to vote. Presumed toClaims accept the Plan.CFGI Class SA - Debtor Impaired. Entitled to vote to accept or rejectIntercompany Claims the Plan.CFGI Class SB - Affiliate Impaired. Entitled to vote to accept or rejectIntercompany Claims the Plan.CFGI Class 6 - Equity Interests Impaired. Not entitled to vote. Deemed toreject the Plan.

GD Class I - Non-Tax Priority Unimpaired. Not entitled to vote. Presumed toClaims accept the Plan.GD Class 2 - Secured Claims Unimpaired. Not entitled to vote. Presumed toaccept the Plan.GD Class 3 - General Unsecured Impaired. Entitled to vote to accept or rejectClaims the Plan.GD Class 4 - Convenience Claims Unimpaired. Not entitled to vote. Presumed toaccept the Plan.

Claims or Equity Interests that are substantially legally similar to the other Claims or Equity

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CLASS STATUSGD Class SA - Debtor Impaired.Intercompany ClaimsGD Class 5B - Affiliate Impaired.Intercompany ClaimsGD Class 6 - Equity Interests Unimpaired.

VOTING RIGHTSEntitled to vote to accept or rejectthe Plan.Entitled to vote to accept or rejectthe Plan.Not entitled to vote. Presumed toaccept the Plan.

AD Class 1 - Non-Tax Priority Unimpaired.ClaimsAD Class 2 - Secured Claims Unimpaired.

AD Class 3 - General Unsecured Impaired.ClaimsAD Class 4 - Convenience Claims Unimpaired.AD Class SA - Debtor Impaired.Intercompany ClaimsAD Class 5B -Mfiliate Impaired.Intercompany ClaimsAD Class 6 - Equity Interests Unimpaired.

Not entitled to vote. Presumed toaccept the Plan.Not entitled to vote. Presumed toaccept the Plan.Entitled to vote to accept or rejectthe Plan.Not entitled to vote. Presumed toaccept the Plan.Entitled to vote to accept or rejectthe Plan.Entitled to vote to accept or rejectthe Plan.Not entitled to vote. Presumed toaccept the Plan.

Protech C Class 1 - GeneralUnsecured Claims Unimpaired. Not entitled to vote. Presumed toaccept the Plan.Protech C Class 2 - Equity Interests Unimpaired. Not entitled to vote. Presumed toaccept the Plan.

32. The separate Classes reflect the diverse nature of the Claims against andEquity Interests in the Proponent Debtors, and the legal rights under the Bankruptcy Code ofeach of the holders ofClaims or Equity Interests in a particular Class.

33. Priority non-tax claims are classified in CFGI Class 1, OD Class 1, andAD Class 1, respectively, because section 507 of the Bankruptcy Code entitles holders of suchclaims to priority status. Secured claims are classified in CFGI Class 2, GD Class 2, and AD

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35. Debtor Intercompany Claims and Affiliate Intercompany Claims are alsoclassified separately from General Unsecured Claims, in CFGI Class 5A, GD Class SA, ADClass SA, CFGI Class 5B, GD Class 5B, and AD Class 5B, respectively, because such Claimsconsist of either an unsecured Intercompany Claim by a Proponent Debtor against anotherProponent Debtor, or an unsecured Intercompany Claim by a Non-Proponent Debtor or a nondebtor Affiliate against a Proponent Debtor. Separately classifying Intercompany Claims fromGeneral Unsecured Claims is reasonable, as making actual distributions upon IntercompanyClaims in the manner afforded to General Unsecured Claims in the Plan would result in acontinuous circular and immaterial distribution scheme upon the IntercompanyClaims.

Class 2, respectively, because such Claims are secured by collateral. General Unsecured Claimsare classified in CFGI Class 3A, GD Class 3, AD Class 3, and Protech C Class 1.

34. Under the CFGI Plan, Junior Unsecured Subordinated Debenture Claimsand Junior Unsecured Subordinated Debenture Guaranty Claims are classified in CFGI Class 3Band CFGI Class 3C, respectively. Claims in CFGI Class 3B and CFGI Class 3C are classifiedseparately from General Unsecured Claims because these unsecured Claims arise solely from the$250 million of Junior Unsecured Subordinated Debentures issued by CFGI to Capmark Trust, aDelaware statutory trust, and CFGl's guaranty of the mirror-image Trust-Preferred Securitiesissued by Capmark Trust to GMAC, and represent bargained-for rights of payment differentfrom and subordinate to those of certain General Unsecured Claims. In addition, holders ofClaims arising under the Unsecured Loans and UnsecuredNotes are also entitled to Distributionsthat would otherwise be payable to holders of Allowed CFGI Class 3B Claims because of thesubordination provisions in the indenture governing the Junior Unsecured SubordinatedDebentures.

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36. Finally, Equity Interests are classified in CFOI Class 6, OD Class 6, ADClass 6, and Protech C Class 2, respectively, because such interests represent the Equity Interestsin the respective Proponent Debtors.

(c) Compliance with Section 1122(b) ofthe Bankruptcy Code37. In accordance with section 1122(b) of the Bankruptcy Code, Section

1.2.46 of the Plan defines Convenience Claims and Sections 3.3.6, 3.4.4, and 3.5.4 set forth thetreatment of Convenience Claims. The Proponent Debtors' use of convenience classes reducesthe administrative burden and expense of making multiple distributions upon small unsecuredClaims. Accordingly, the designation of Classes of Convenience Claims in CFOI Class 4, ODClass 4, and AD Class 4 complies with the purpose and intent of section 1122(b) of theBankruptcy Code and is reasonable and necessary for administrative convenience.

(d) Compliance with Section 1123(a) ofthe Bankruptcy Code38. The Plan fulfills each of the requirements that a chapter II plan must

satisfy, set forth in section I I23(a) of the Bankruptcy Code.i. Designation of Classes of Claims and Interests

39. Article III of the Plan designates separate Classes of Claims and EquityInterests properly and thus satisfies the requirement of section 1123(a)(1).

ii . Specification of Unimpaired Classes40. In accordance with section 1I23(a)(2), the Plan identifies each unimpaired

Class. Specifically, Article III of the Plan specifies that Claims in CFGI Class 1, OD Class I,AD Class I, CFGI Class 2, GD Class 2, AD Class 2, CFGI Class 4, GD Class 4, AD Class 4, ODClass 6, AD Class 6, Protech C Class 1, and Protech C Class 2 are unimpaired under the Plan.

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iii. Treatment of Impaired Classes41. In accordance with section 1123(a)(3), the Plan specifies the treatment of

treatment of the Claims and in each such Class.

holders of Allowed Claims in each Class will receive the same treatment as other Allowed

favorable treatment than other holders ofAllowed Claims in their Class.

15

Section 7.2 of the Plan provides for the curing of defaults underassumed executory contracts and unexpired leases, in accordancewith subsection 1123(a)(5)(G);

Section 4.9 of the Plan provides for the cancellation and surrenderof certain instruments and agreements, in accordance withsubsection 1123(a)(5)(F);

Section 4.11 of the Plan provides for preservation of rights ofaction by the Reorganized Debtors, in accordance with subsection1123(a)(5)(A);

Section 9.1 of the Plan provides for the vesting of all property ofthe Proponent Debtors' Estates in the Reorganized Debtors, inaccordance with subsection 1123(a)(5)(A);b.

d.

c.

a.

v. Adequate Means for Implementation of the Plan

iv. Equal Treatmentwithin Classes

43. In accordance with section 1123(a)(5) of the Bankruptcy Code, the Plan

42. In accordance with section 1123(a)(4), under Article II I of the Plan,

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Claims within their respective Classes, except to the extent of holders who have agreed to less

specifically:provisions of the Plan provide for the means by which the Plan will be implemented,provides adequate means for its implementation. Article IV of the Plan and various other

GD Class 5B, AD Class SA, AD Class 5B, and CFGI Class 6 as impaired and describes the3B, CFGI Class 3C, GD Class 3, AD Class 3, CFGI Class SA, CFGI Class 5B, GD Class SA,each impaired Class. Specifically, Article III of the Plan identifies CFGI Class 3A, CFGI Class

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e. Section 8.2 of the Plan provides for the amendment ofGovernanceDocuments that will govern the Reorganized Debtors, inaccordance with subsection 1123(a)(5)(1); andf. Section 4.5.3 of the Plan provides for the cancellation andextinguishment of the existing common stock of CFGI, theissuance of Reorganized CFGI Debt Securities and ReorganizedCFGI Common Stock, and, following the Effective Date, thedistribution of Cash, Reorganized CFGI Debt Securities andReorganized CFGI Common Stock to holders of Allowed GeneralUnsecured Claims, in accordance with subsection 1123(a)(5)(J).The form of the Reorganized CPGI Debt Securities Indenture isattached to the Plan as Exhibit I.

vi. Prohibition Against Issuance ofNonvoting Securities44. In accordance with section 1123(a)(6), Section 8.2 of the Plan provides

that the Reorganized Debtors' Governance Documents shall contain provisions prohibiting theissuance of nonvoting equity securities. Forms of the Reorganized Debtors' GovernanceDocuments are included in the Plan Supplement, admitted into evidence as Exhibit 6, whichGovernance Documents contain provisions prohibiting the issuance of nonvoting equitysecurities.

vii. Selection of Directors and Officers in a MannerConsistent with the Interests of Creditors and EquitySecurity Holders and Public Policy45. The Plan Supplement disclosed the identities and affiliations of the

individuals who are proposed to serve on or after the Effective Date as officers and directors ofthe Reorganized Debtors. Section 8.1 of the Plan provides that the Boards of Directors of theReorganized Debtors will be composed, on and after the Effective Date, of members jointlyappr?ved by the Proponent Debtors, the Committee, and the Ad Hoc Unsecured Lender Group.The initial officers of the Reorganized Debtors will be those officers serving immediately beforethe Effective Date.

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viii. Section 1123(a)(8) Does Not Apply to the ProponentDebtors' Chapter 11 Cases46. Section II23(a)(8) applies to chapter 11 plans involving an individual

debtor. None of the Proponent Debtors is an "individual" and, as such, section II23(a)(8) isinapplicable.

(e) Section 1123(b): The Plan Contains Certain DiscretionaryProvisions47. In accordance with section 1123(b), the Plan contains discretionary

provisions permitted by section II23(b) ofthe Bankruptcy Code, as described below.i. Section 1123(b)(1): Impairment of Claims and Interests

48. Pursuant to section II23(b)(I), Article III of the Plan impairs or leavesunimpaired, as the case may be, each Class ofClaims. Specifically, Claims in CFGI Class 3A,CFGI Class 3B, CFGI Class 3C, CFGI Class 5A, CFGI Class 5B, CFGI Class 6, GD Class 3,GD Class 5A, GD Class 5B, AD Class 3, AD Class 5A, and AD Class 5B are impaired by thePlan. CFGI Class 1, CFGI Class 2, CFGI Class 4, GD Class 1, GD Class 2, GD Class 4, GDClass 6, AD Class 1, AD Class 2, AD Class 4, AD Class 6, Protech C Class 1, and Protech CClass 2 are unimpaired by the Plan.

ii. Section 1123(b)(2): Assumption and Rejection ofExecutory Contracts and Leases49. In accordance with section 1123(b)(2), Article VII of the Plan provides

that, on the Confinuation Date, any executory contract or unexpired lease of personal propertyset forth on Schedule 7.1 of the Plan Supplement (i) that has not expired by its own tenns on orprior to the Confinnation Date, (ii) which has not been assumed, assumed and assigned, orrejected with the approval of the Bankruptcy Court, or (iii) which is not the subject of a motionto assume, assume and assign, or reject as of the ConfIrmation Date, shall be deemed rejected by

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the Proponent Debtors on the Confirmation Date and the entry of the Confirmation Order by theBankruptcy Court shall constitute approval of such rejection pursuant to sections 365(a) and1123 of the Bankruptcy Code. The Plan further provides that any executory contract orunexpired lease of personal property not listed on Schedule 7.1 of the Plan Supplement shall bedeemed assumed.

iii. Section 1123(b)(3)(A): Settlement of Claims and CausesofAction50. Section 1123(b)(3)(A) of the Bankruptcy Code and Bankruptcy Rule 9019

permit a plan to provide for "the settlement or adjustment of any claim or interest belonging tothe debtor or to the estate." The Plan incorporates the terms and provisions of the Crystal Ball

reasonableness.

for Debtor CAP to (a) transfer a membership interest in an investment fund within the Debtors'LIHTC Business (the "GE Fund") to an affiliate of GE Capital, DCT, Inc. ("DeT"), and

18

Affiliates to take certain actions in accordance with the terms of the GE SettlementAgreement.

(b) assume and assign certain executory contracts to nCT, free and clear of all liens, claims,

51. To effectuate the GE Settlement, the GE Settlement Agreement provides

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Settlement, including, without limitation, actions that may be required to direct their non-debtor

encumbrances and interests (collectively, the "Liens"). In addition, pursuant to the GE

Settlement Agreement, CAP and the other Debtors or Reorganized Debtors may take such other

Settlement Agreement are included in the Plan Supplement. The terms of the Crystal Ball

actions as may be required outside of the ordinary course of business to effectuate the GE

Debtors' estates and claim holders, and fall well above the lowest point in the range ofSettlement and the GE Settlement are fair, reasonable, and in the best interests of the Proponent

Settlement and the GE Settlement. The Crystal Ball Settlement Agreement and the GE

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52. CAP's agreement to transfer its membership interest in the GE Fund toDCT is based upon its sound business judgment. In addition, it is within the sound businessjudgment ofCAP and the other Debtors or Reorganized Debtors to take any other actions that arerequired outside of the ordinary course of business to effectuate the GE Settlement, including,without limitation, actions that may be required to direct their non-debtor Affiliates to takecertain actions in accordance with the terms of the GE Settlement Agreement.

53. No party has a right to affirmatively consent to the transfer, and CAP'smembership interest is unencumbered by any recorded lien, security interest, mortgage,judgment, or other encumbrance. To the extent there is any unrecorded "interest" in CAP'smembership interest other than CAP's, the rights of such unknown claimant can be valued andallowed as a claim against the Debtors' estates, and thus the claimant would be compelled toaccept a money satisfaction of its interest in property.

54. DCT has acted in good faith in all respects in connection with thisproceeding, in that: (i) all consideration to be provided by DCT under the GE Settlement hasbeen disclosed; (ii) the negotiation and execution of the GE Settlement Agreement was in goodfaith and at arm's-length; and (iii) the disclosure requirements required by Local Rule 6004-1have been satisfied.

55. The consideration received by CAP from DCT and its affiliate investor(the "GE Investor Members") for the transfer pursuant to GE Settlement Agreement (i) is fairand reasonable; (ii) represents the best resolution of CAP's interest in the GE Fund and anyclaims arising from the Debtors' management of the GE Fund under the circumstances; and(iii) constitutes reasonably equivalent value and fair consideration.

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56. CAP's agreement to assume and assign its rights and obligations undercertain executory contracts relating to the GE Fund to DCT pursuant to the GE SettlementAgreement is also within CAP's sound business judgment. These agreements have been enteredinto solely by CAP, the GE Fund and the GE Investor Members. Pursuant to section 6 of the GESettlement Agreement, the GE Investor Members acknowledge and agree that they have no cureclaims against CAP under the contracts except for the consideration to be provided under the GESettlement Agreement. The parties also acknowledge and agree that adequate assurance offuture performance under the contracts has been satisfied by virtue of DCT, one of the GEInvestor Members, taking assignment of the contractual obligations.

iv. Section 1123(b)(3)(B): Retention and Enforcement ofClaims and Interests57. In accordance with section 1123(b)(3)(B), Section 4.11 of the Plan

provides that "the Preserved Rights shall remain assets of and vest in the Reorganized Debtors"except to the extent the Preserved Rights are otherwise dealt with in the Plan or are expressly andspecifically released in connection with the Plan. The Preserved Rights are adequately andappropriately identified and disclosed in the Disclosure Statement and Plan.

v. Section 1123(b)(S): Modification of the Rights ofHolders of Claims58. In accordance with section 1123(b)(5), Article III of the Plan provides that

the legal, equitable, and contractual rights of holders of Claims in CFGI Class 1, CFGI Class 2,GD Class 1, GD Class 2, GD Class 6, AD Class 1, AD Class 2, AD Class 6, Protech C Class 1,and Protech C Class 2 will remain unimpaired. Article III of the Plan further provides that therights of holders of Claims in CFGI Class 3A, CFGI Class 3B, CFGI Class 3C, CFGI Class 5B,CFGI Class 5C, CFGI Class 6, GD Class 3, GD Class SA, GD Class 5B, AD Class 3, AD ClassSA, and AD Class 5B are impaired.

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Exemption From Transfer Taxes62. Section 13.3 of the Plan provides that, pursuant to section 1146(a) of the

Bankruptcy Code, the issuance, transfer or exchange of notes, equity interests or other plansecurities pursuant to the Plan or any of the Plan Documents, the creation of any mortgage, deedof trust, or other security interest, the making or assignment of any lease or sublease, or themaking or delivery of any deed or other instrument of transfer under, in furtherance of, or inconnection with the Plan or any of the Plan Documents, shall not be subject to any stamp, realestate transfer, mortgage recording or other similar tax or government assessment.

63. Section 13.3 of the Plan further provides the Bear Creek Sale and allrelated issuances, transfers, exchanges, documentation, and conveyances in furtherance of thesale are expressly deemed to have occurred pursuant to and under the Plan, and within thepurview of section 1146(a). As referenced above, the disposition of the assets relating to theBear Creek Sale is largely intertwined with the resolution of outstanding claims, and the Courthas retained jurisdiction over the sale. The continued jurisdiction of the Court over the BearCreek Sale is specifically set forth in the retention ofjurisdiction section of the Plan. As a result,the sales of the Initial Sale Assets and Subsequent Sale Assets as part of the Bear Creek Sale willbe "under a plan confirmed" within the meaning of section 1146 of the Bankruptcy Code.

64. The exemption from transfer taxes under the Plan is consistent withsection 1123(b)(6) of the BankruptcyCode.

Exculpations65. Sections 9.3, 9.7, 9.8, and 9.9 of the Plan contain certain exculpations (the

"Exculpations"), and Releases (as defined below), and injunctions (the "Injunctions") in favor ofthe Proponent Debtors and certain Releasees, which include current and former (a) shareholders

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of the Debtors (the "Shareholders"), (b) directors and officers, members of management, andother employees of the Debtors (the "D&O Releasees"), (c) members of the Committee and theAd Hoc Unsecured Lender Group, (d) Agents and Indenture Trustees, and (e) attorneys,advisors, consultants, and other professionals to the foregoing entities (the "Professionals"). TheExculpations, Releases, and Injunction are fully consistent with the Bankruptcy Code andapplicable jurisprudence, and are warranted by the facts of the Proponent Debtors' chapter 11cases.

Releases66. Section 9.8 of the Plan provides for releases (the "Debtor Releases") by

the Proponent Debtors, the Reorganized Debtors and their Estates of all Releasees, i.e., theShareholders, D&O Releasees, Committee and Ad Hoc Unsecured Lender Group members,Agents, Indenture Trustees, and the Professionals, from all claims relating to the Debtors, theirchapter 11 cases and the Plan, with the exception of those claims that (i) are expressly reservedin the Plan, (ii) are derived from any express contractual obligations or reimbursementobligations (relating to a loan or advance) owing by any Releasee to any Proponent Debtor, or(iii) result from the gross negligence, willful misconduct, or actual fraud of any Releasee.

67. The Debtor Releases constitute a sound exercise of business judgment bythe Proponent Debtors. The Proponent Debtors share an identity of interest with the D&OReleasees, Agents, and Indenture Trustees.

68. The Shareholders, D&O Releasees, Agents, and Indenture Trustees haveall made substantial contributions towards the Plan, especially given the fact that there exists nopending, asserted, or identified claims against any of these Releasees. See Ex. 7 (FairfieldDeclaration). Any person or group of persons constituting a "fifty percent shareholder" of CFGI

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within the meaning of section 382(g)(4)(D) of the Tax Code is enjoined from claiming aworthless stock deduction with respect to its CFGI stock for any taxable year of such person orgroup ofpersons ending on or prior to the Effective Date. See id ; see also Plan, Section 9.6. Noshareholder has objected to this injunction. The deferral of this deduction helps the Debtorspreserve substantial tax net operating losses. See Ex. 7 (Fairfield Declaration). DBTCA, one ofthe Indenture Trustees, is providing consideration to the Noteholder creditors by agreeing towaive its rights to a charging lien on the distribution to be made to the Noteholder creditors forpast and future fees and expenses against the Debtors. Id Third, the Agents, Indenture Trustees,and the D&O Releasees have tirelessly shepherded the Proponent Debtors through a virtuallyuncontested yet extremely complex reorganization process. Id

69. The Debtor Releases are essential. They represent a key component of apainstakingly negotiated and fastidiously crafted agreement between the Proponent Debtors andthe applicable Releasees. The Debtor Releases are indispensable in achieving the gradualformation of consensus among the implicated parties, and to deny the Debtor Releases woulddisturb the balance between the different constituencies' claims and interests built into the Plan.The entire new governance structure of the Reorganized Debtors and protection of D&OReleasees who will continue to serve as directors and officers might have to be renegotiated ifthe Debtor Releases are not granted.

70. There is no pending litigation relating to a claim against a Releasee thatwill be released by the Debtor Releases, there is no such threatened litigation or claim, and theDebtors are not aware of the existence of any such claim.

71. The Plan is supported by the Committee and the Ad Hoc UnsecuredLender Group, which represent together a substantial number of all the creditors of the

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75. This Court 's factual fmdings with respect to the Plan's compliance with11 U.S.C. 1129(a)(1)-(3) necessarily creates a collateral estoppel effect that supports approvalof the Holder Releases.

76. The Releasees who are receiving the benefit of the Holder Releases havemade material contributions to the Proponent Debtors' chapter 11 cases, which have floweddirectly to the recovery afforded the creditors and thus are indispensible to the Plan and thesuccess of the Proponent Debtors' reorganization. See Ex. 7 (Fairfield Declaration). Moreover,certain Releasees hold administrative or surviving indemnification claims against the Proponent

Proponent Debtors and creditors who hold billions of dollars of unsecured claims. See Ex. 1(Disclosure Statement), at 3. The Committee and Ad Hoc Unsecured Lender Group alsosubmitted letters supporting the Plan, which letters were included in the Solicitation Package.

72. No objections have been filed with respect to the Debtor Releases, amplydemonstrating the overwhelming consent to the Debtor Releases.

73. Under the Plan, holders of the vast majority ofGeneral Unsecured Claims(the Unsecured Loans and Unsecured Notes) stand to recover in excess of 50% of their AllowedClaim amounts under the Plan. Denial of the Debtor Releases would not translate into greaterrecoveries on Claims.

74. Section 9.9 of the Plan provides for releases (the "Holder Releases" andtogether with the Debtor Releases, the "Releases") by all claimholders and interest holders of theProponent Debtors in favor of all Releasees from all claims and liabilities related to the Debtors,their chapter 11 cases and the Plan. The Holder Releases carve out claims resulting from thegross negligence, willful misconduct, or actual fraud of any Releasee other than the ProponentDebtors.

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or Reorganized Debtors; their failure to obtain the requested Releases will only imposeadditional costs upon the Reorganized Debtors' estates, and diminish creditor recoveries. Id

77. No viable claims have been identified to date with respect to theReleasees. Id. In each of the major cases where Third Circuit courts have refused to grant thirdparty releases, such releases would have foreclosed claims that were actually pending, assertedand/or identified, a circumstance clearly not present in this Chapter 11 Case.

78. No evidence was offered and no argument made of the existence of anyclaim against Releasees benefiting from the Holder Releases that would be barred by approval ofthe Holder Releases.

79. Even if the Holder Releases were the subject of objections, this Courtwould approve the Holder Releases over such objections because the Releasees have grantedvaluable consideration (in exchange for releases of virtually nonexistent and, hence, valuelessclaims), and such consideration has been indispensible to the success of the Plan and thesophisticated calculus embodied therein.

80. In the absence of contention and identifiable claims to be released, theHolder Releases, as well as the Debtor Releases, serve two simple but valuable functions:(i) incentivizing the applicable Releasees to support, and undertake actions that support,confirmation of the Plan without the fear of future baseless lawsuits, and (ii) facilitating theReorganized Debtors' fresh start post emergence from the Chapter 11 Cases. See Ex. 7 (FairfieldDeclaration).

Injunctions81. Section 9.3 of the Plan provides for an injunction against all holders of

Claims and Equity Interests from undertaking any action to recover andlor collect from the

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Debtors and Releasees on account of their Claims, liabilities and Equity Interests that arereleased or discharged pursuant to the Plan. The Injunction is necessary to preserve and enforcethe Releases and Exculpations, and is sufficiently narrowly tailored to achieve that purpose.

(1) Section 1123(c) is Inapplicable to the Proponent Debtors 'Chapter 11 Cases

82. Section 1123(c) applies to chapter 11 plans involving an individual debtor.None of the Proponent Debtors is an "individual" and, as such, section 1123(c) is inapplicable.

(g) Section 1123(d): Cure of Defaults

(a) Section 1125: Solicitation, Voting, and Tabulation1126 of the Bankruptcy Code, regarding disclosure and solicitation of the Plan.

84. As set forth below, the Proponent Debtors have complied with the

27

(ii) Section 1129(a)(2): Compliance with Applicable Provisions of theBankruptcy Code

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85. On July 8, 2011, after notice and a hearing and by entry of the Disclosure

Order, the Court also approved, among other things: (i) all materials to be included in the

83. In accordance with section 1123(d), Section 7.2 of the Plan provides for

informed judgment whether to accept or reject the Plan. Pursuant to the Disclosure Statementenable hypothetical, reasonable investors typical of the Proponent Debtors' creditors to make an

Statement Order, this Court approved the Disclosure Statement pursuant to section 1125 of theBankruptcy Code as containing "adequate information" of a kind and in sufficient detail to

applicable nonbankruptcy law, and pursuant to the procedures established in the Plan.All cure amounts will be determined in accordance with the underlying agreements and

applicable provisions of the Bankruptcy Code, including the provisions of sections 1125 and

the satisfaction of cure amounts associated with each executory contract and unexpired lease tobe assumed pursuant to the Plan in accordance with section 365(b)(1) of the Bankruptcy Code.

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Solicitation Packages, (ii) the fonns of ballots, (iii) the procedures for voting and for tabulationof votes to accept or reject the Plan, and (iv) the manner of service of the Solicitation Packages.

86. Thereafter, in accordance with the Disclosure Statement Order, theProponent Debtors, by and through Epiq, the Debtors' Balloting Agent, distributed SolicitationPackages to all Claim holders entitled to vote, which contained (i) the Disclosure StatementOrder (without the exhibits thereto), (ii) the notice setting forth the time, date, and place of theConfinnation Hearing (the "Confirmation Hearing Notice"), (iii) a CD containing the DisclosureStatement (together with all exhibits thereto), (iv) the appropriate form of ballot, withinstructions for completing the ballot, and a pre-addressed, pre-paid return envelope, (v) aBrokerage Account Information Form, (vi) a W-9 form or W-8 BEN form, as appropriate, for.purposes of collecting certain tax related information relating to distributions under the Plan, and(vii) Plan support letters executed by the Committee and the Ad Hoc Unsecured Lenders Group.The Proponent Debtors did not solicit the acceptance or rejection of the Plan from any holder ofClaims or Equity Interests prior to the transmission of the Solicitation Packages. The VotingDeclaration states that Epiq solicited and tabulated votes in accordance with the DisclosureStatement Order.

87. Additionally, as required by the Disclosure Statement Order, theProponent Debtors published the Confirmation Hearing Notice once in each of The New YorkTimes, The Wall Street Journal (National Edition), the National Post (Canada), and ThePhiladelphia Inquirer, on a date not less than 28 or more than 35 calendar days prior to the dateof the Confirmation Hearing.

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(b) Section 1126: Requirements for Acceptance of a Chapter 11Plan

88. The Proponent Debtors solicited votes from the holders of all AllowedClaims in each Class of Impaired Claims entitled to vote on the Plan. Specifically, votes weresolicited from the holders of Claims in CFGI Class 3A, CFGI Class 3B, CFGI Class 3C, CFGIClass 5A, CFGI Class 5B, GD Class 3, GD Class 5A, GD Class 5B, AD Class 3, AD Class SA,and AD Class 5B. See Voting Decl., at Ex. A.

90. CFGI Class 3A, GD Class 3, AD Class 3, CFGI Class 5A, CFGI Class 5B,non-voting status to each holder ofClaims or Equity Interests in the Non-Voting Classes.

GD Class SA, GD Class 5B, AD Class SA, and AD Class 5B voted to accept the Plan in the

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accordance with Bankruptcy Rule 3020(b)(2), the Court finds the Plan was proposed in good

(iii) Section 1129(a)(3): Proposal of the Plan in Good Faith and Not byAnyMeans Forbidden by Law

91. No objections have been filed on the grounds of lack of good faith. In

pursuant to Bankruptcy Code sections 1129(a)(10) and 1129(b).

Bankruptcy Code have been satisfied as to all the Proponent Debtor Plans with the exception ofAccordingly, the requirements for acceptance of a plan set forth in section 1126 of thenumbers and amounts required under sections 1I26(c) and 1126(d) of the Bankruptcy Code.

89. In accordance with section 1126(t) of the Bankruptcy Code, holders of

Proponent Debtor CFGI's Plan. The Proponent Debtors proposed to confirm the CFGI Plan

with the Disclosure Statement Order, however, the Proponent Debtors distributed a notice ofsection I I 26(g) of the Bankruptcy Code and were not entitled to vote on the Plan. In accordance

not entitled to vote on the Plan. Holders of Claims in the non-voting Impaired Classes will notClaims in the Unimpaired Classes are conclusively presumed to have accepted the Plan and were

receive any distribution under the Plan, are conclusively deemed to reject the Plan pursuant to

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faith and not by any means forbidden by law. Additionally, the Committee and the Ad HocUnsecured Lender Group each submitted letters in support of the Plan, included in theSolicitation Packages, underscoring the overall fairness of the Plan and acknowledging the Planhas been proposed in good faith, and in the beliefthat it will maximize the value of the ultimaterecoveries to all creditor groups. The Plan promotes the rehabilitative objective and purposes ofthe Bankruptcy Code and satisfies the requirements of section 1129(a)(3) of the BankruptcyCode.

(iv) Section 1129(a)(4): Payments Made by the Proponent Debtors forServices or in Respect of Costs and Expenses are Subject to CourtApproval

92. Sections 2.1 and 2.2 of the Plan provide for the payment of variousAdministrative Expense Claims, including Claims for services rendered by professionals, whichare subject to Bankruptcy Court approval and the standards of the Bankruptcy Code. Section11.1 G) of the Plan provides the Bankruptcy Court will retain jurisdiction after the Effective Dateto hear and determine all applications for allowance of compensation or reimbursement of

. expenses of professionals and any other fees and expenses authorized to be paid or reimbursedunder the Bankruptcy Code or the Plan.

93. All payments to be made in connection with the Effective Date or whichrelate to the success of the reorganization or which otherwise are required to be disclosed,including any amounts to be paid to officers and directors, have been disclosed in the PlanSupplement.

(v) Section 1129(a)(5): Disclosure of Necessary Information RegardingDirectors, Officers, and Insiders94. Section 8.1 of the Plan expressly states the Board of Directors of

Reorganized CFGI will be composed initially, on and after the Effective Date, of eightmembers

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jointly approved by the Proponent Debtors, the Committee, and the Ad Hoc Unsecured LenderGroup. Further, the Plan provides that the number and members of the Boards of Directors ofthe other Reorganized Debtors will be similarly jointly approved. The names of such membershave been disclosed in the Amended Plan Supplement. The initial officers of the ReorganizedDebtors will all be officers serving the Reorganized Debtors immediately before the EffectiveDate. They are familiar with the Proponent Debtors' businesses and are needed to maintaincritical business relationships. Further, the Plan Supplement discloses the insiders4 of theReorganized Debtors and the nature of any compensation for those individuals.

(vi) Section 1129(a)(6): The Plan Does Not Contain Any Rate ChangesSubject to the Jurisdiction of Any Governmental RegulatoryCommissions95. The Proponent Debtors' businesses do not involve rates over which any

regulatory commission has or will have jurisdiction after Confirmation.(vii) Section 1129(a)(7): Best Interests ofHolders of Claims and Interests96. Comparing the Plan's projected recoveries with the Liquidation Analysis

9, is credible and supports the Liquidation Analysis and its conclusions.at the Confirmation Hearing through the Meghji Declaration, admitted into evidence as Exhibit

contained in Exhibit E to the Disclosure Statement (the "Liquidation Analysis") demonstrates

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recoveries to such holders under the Plan. Further, the testimony ofMohsin Y. Meghji (Chief

4 The insiders of the Reorganized Debtors are those previously detennined to be insiders by the Court in its OrderDetermining Entitlement of Debtors' Employees to Payments under the Court-Approved Bonus and DeferredAwards Programs andSeverance Plan, entered on December 23, 2009 [Docket No. 530] and who will be employedby the Reorganized Debtors.

Restructuring Officer of CFGI and Managing Director ofLoughlin Meghji + Company), offered

of the Proponent Debtors' assets in a hypothetical chapter 7liquidation is less than the projectedthat the value that would be realized by holders of all Claims and Equity Interests in a disposition

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(viii) Section 1129(a)(8): Acceptance of the Plan by Impaired Classes97. Under the Plan, each of CFGI Class I, CFGI Class 2, CFGI Class 4, GD

Class I, GD Class 2, GD Class 4, GDClass 6, ADClass I, AD Class 2, AD Class 4, AD Class 6,Protech C Class 1, and Protech C Class 2 is unimpaired. The Voting Declaration demonstratesthat, with the exception of CFGI Class 3B, CFGI Class 3C, and CFGI Class 6, each of theImpaired Classes, comprised of CFGI Class 3A, CFGI Class SA, CFGI Class 5B, GD Class 3,GD Class SA, GD Class 5B, AD Class 3, AD Class SA, and AD Class 5B voted to accept thePlan with the requisite numerosity and dollar amounts required by section 1126(g) of theBankruptcy Code. CFGI Class 3B and CFGI Class 3C cast no votes, and thus did not accept theCFGI Plan. CFGI Class 6 is deemed to reject the Plan because the Equity Interests receivenothing under the Plan and are to be extinguished. As a result, the CFGI Plan does not satisfysection 1129(a)(8) of the Bankruptcy Code because three of its Classes did not vote to accept thePlan. The CFGI Plan is confirmable, however, because the CFGI Plan satisfies the requirementsof sections 1129(a)(10) (CFGI Class 3A is an accepting class without counting the votes ofinsiders) and 1129(b) of the Bankruptcy Code (the "no unfair discrimination" and "fair andequitable" tests have been satisfied as to CFGI Class 3B, CFGI Class 3C, and CFGI Class 6).Accordingly, the Proponent Debtor Plans either satisfy the requirements of section 1129(a)(8) orovercome the requirement by satisfying the requirements of section 1129(a)(10) and Il29(b).

(ix) Section 1129(a)(9): Treatment of Claims entitled to Priority Pursuantto Section 507(a) ofthe Bankruptcy Code98. In accordance with sections 1129(a)(9)(A) and (B), Section 2.1 of the Plan

provides that all Allowed Administrative Expense Claims will be paid in full, in Cash, on thelater of the Effective Date and the date on which an Administrative Expense Claim is Allowed,or as soon as practicable thereafter. Allowed Administrative Expense Claims representing

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liabilities incurred in the ordinary course of business by the Reorganized Debtors will be paid infull and performed by the applicable Reorganized Debtor in the ordinary course of business inaccordance with the terms and subject to the conditions of any agreements governing,instruments evidencing, or other documents relating to, such transactions.

99. In accordance with section 1129(a)(9)(C) of the Bankruptcy Code, Section2.3 of the Plan provides that each holder of an Allowed Priority Tax Claim shall receive, at thesole option of the applicable Proponent Debtor, and in full and complete satisfaction of any andall liability attributable to such Priority Tax Claim, on the latest of (i) the Effective Date, (ii) thedate on which such Priority Tax Claim becomes an Allowed Priority Tax Claim, and (iii) thedate such Allowed Priority Tax Claim is payable under applicable non-bankruptcy law, or assoon thereafter as is reasonably practicable, (a) Cash, (b) a transferable note that provides forregular installment Cash payments ofa total value as of the Effective Date equal to the Allowedamount of such Claims and paid over a period ending not later than five years after theCommencement Date, or (c) any combination ofCash and a note.

(x) Section 1129(a)(10): Acceptance by at Least One Class of Impaired,Non-Insider Claims100. The evidence presented at the Confirmation Hearing established that the

CFGI Plan is the only Plan that does not satisfy section I 129(a)(8) and therefore must satisfysection 1129(a)(l0) (and 1129(b to be confirmable. The Voting Declaration shows that CFGIClass 3A, an impaired Class in the CFGI Plan, has accepted the Plan. See Voting Decl., at Ex.A. The insider Claims are not included in CFGI Class 3A. Accordingly, the requirement ofsection 1129(a)(l 0) is satisfied.

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(xi) Section 1129(a)(1l): Feasibili ty ofthe Plan101. The Financial Projections establish that the Proponent Debtors will have

sufficient cash to meet all of their obligations under the Plan on the Effective Date and thereafter,including, without limitation, to meet the payment obligations under the Reorganized CFGIDebtor Securities. As demonstrated by the Financial Projections, and as established by thetestimony of Thomas Fairfield (Chief Operating Officer, Executive Vice President, GeneralCounsel, and Secretary of CFGI) and Carol Flaton (Managing Director of Lazard), at theConfirmation Hearing, as set forth in the Fairfield Declaration and Flaton Declaration admittedinto evidence at the Confirmation Hearing as Exhibits 7 and 8, confirmation of the Plan is notlikely to be followed by liquidation or the need for further [mancial reorganization of theReorganized Debtors or any successor to the Reorganized Debtors. On the Effective Date theReorganized Debtors will distribute to General Unsecured Creditors $900 million in cash, $1.25billion of Reorganized CFGI Debt Securities, and Reorganized CFGI Common Stock having animplied value of $1.834 billion, resulting in a total of $3.984 billion in value to be distributed toGeneral Unsecured Creditors. See id Additional Cash is available to make all other EffectiveDate Cash payments under the Plan. ld. And the Financial Projections show that after theEffective Date the Reorganized Debtors will continue to generate sufficient cash to servicepayments on the CFGI Debt Securities and to adequately maintain their operations. ld Basedupon information contained in the Disclosure Statement, the Financial Projections, and otherevidence admitted at the Confirmation Hearing, after making all payments required pursuant tothe Plan the Reorganized Debtors will be viable entities, thereby satisfying 1129(a)(1l) of theBankruptcy Code.

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(xiv) Section 1129(b)(2): Cram Down Requirements107. As discussed above, holders ofClaims in CFGI Class 3B, CFGI Class 3C,

and CFGI Class 6 did not vote to accept the CFGI Plan. Accordingly, the Proponent Debtorsmust satisfy section I 129(b) with respect to these Classes to confirm the CFGI Plan.

(a) No Unfair Discrimination108. The CFOI Plan does not discriminate unfairly pursuant to section

1129(b)(1). The CFGI Plan's treatment of Claims and Equity Interests is proper because allsimilarly situated holders of Claims and Equity Interests will receive similar treatment. WhileCFOI Class 3A, CFGI Class 3B, and CFGI Class 3C are all unsecured claims in "Class 3"Classes, the Claims comprising CFGI Class 3B and CFGI Class 3C are contractuallysubordinated to certain Claims in CFGI Class 3A. Specifically, Claims in CFOI Class 3B aresubordinated to Claims arising under the Unsecured Loans, Unsecured Notes, and to the Claimsof certain other holders of CFGI General Unsecured Claims. Similarly, Claims in CFGI Class3C are subordinated to CFGI General Unsecured Claims and CFOI Debtor IntercompanyClaims. Thus, the distributions that otherwise would have been payable to the holders ofClaimsin Classes CFGI Class 3B and CFGI Class 3C are to be distributed instead to the appropriateholders in CFGI Class 3A, consistent with the applicable contractual subordinations. There areno other Classes in the CFGI Plan similar in priority to CFGI Classes 3B and 3C, and CFGIClasses 3B and 3C are receiving similar treatment. Accordingly, the Plan treatment afforded toCFOI Class 3B and CFGI Class 3C does not unfairly discriminate against these Classes, asprovided in section 1129(b) of the Bankruptcy Code. With regard to CFGI Class 6, it is the soleClass ofEquity Interests in CFGI's Plan, and therefore no unfair discrimination issues are raised.

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E. Special Findings Affecting Protech C112. No objections were filed to the Protech C Plan. The Protech C Plan is

confirmable, subject to Protech C and the counterparties to its executory contracts having signeda term sheet providing for agreed upon tenns for Protech C's assumption of their executorycontracts and the cure amounts payable upon assumption. Defmitive documentationmemorializing the term sheet agreements will be submitted to the Court by stipulation of theparties as a condit ion to the occurrence of the Effective Date of the Protech C Plan. If thedefinitive documentation is not agreed to by the parties or the stipulation is not approved by theCourt, the Confirmation Order will be void as to the Protech C Plan, and the parties restored totheir respective positions immediately prior to the issuance of the Confirmation Order, all as setforth in the term sheet executed by Protech C and the counterparties to its executory contracts.

F. Special FindingsAffecting CAP113. No objections were filed to the CAP Plan. The CAP Plan is confirmable,

subject to CAP, CFGI, CCI, and a claim holder against CAP, Prairie Enterprises, Ltd. ("Prairie"),having signed a term sheet providing for agreed upon terms for a common interest agreementbetween Prairie and CAP relating to proposed settlements of contingent and/or unliquidatedclaims against CAP and a stipulation for the allowance of Prairie 's claims against CFGI andCAP and disallowance of Prairie's claim against CCl. Definitive documentation memorializingthe term sheet agreements will be submitted to the Court by st ipulation of the parties as acondition to the occurrence of the Effective Date of the CAP Plan. I f the definitivedocumentation is not agreed to by the parties or the stipulation is not approved by the Court, theConfirmation Order will be void as to the CAP Plan, and the parties restored to their respectivepositions immediately prior to the issuance of the Confirmation Order, all as set forth in the termsheet executed by CAP CFGI, CCI, and Prairie.

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II. CONCLUSIONS OF LAW114. Based upon the findings of fact set forth above, the Court makes the

following conclusions of law:A. Burden ofProof

115. To obtain confirmation of the Plan, the Proponent Debtors mustdemonstrate that the Plan satisfies the provisions of section 1129 of the Bankruptcy Code by apreponderance of the evidence. See In re Combustion Eng'g, Inc., 391 F.3d 190,243 n. 59 (3dCir. 2004); In re Armstrong World Indus., Inc., 348 B.R. 111, 119-20 (D. Del. 2006); US BankNat'l Assn.. v. Wilmington Trust Co. (In re Spansion, Inc.), 426 B.R. 114, 12829 (Bankr. D. Del.2010). The Proponent Debtors have satisfied that burden by having demonstrated, by apreponderance of the evidence, that all of the requirements of section 1129 of the BankruptcyCode have been satisfiedwith respect to the Plan.

B. The Plan Complies with the Requirements of Section 1129 ofthe Bankruptcy Code

This provision ensures the requirements of sections 1122 and 1123 of the Bankruptcy Code,

116. Pursuant to section 1129(a)(1) of the Bankruptcy Code, a plan must

Sourcing Corp., 398 B.R. 816, 824 (Bankr. D. Del. 2008) (citations omitted); In re Johns-

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grounds, 78 B.R. 407 (S.D.N.Y. 1987), aff'd, 843 F.2d 636 (2d Cir. 1988). The Plan compliesManville Corp., 68 B.R. 618, 629 (Bankr. S.D.N.Y 1986), aff'd in part, rev'd in part on other

(i) Section 1129(a)(1): The Plan's Compliance with ApplicableProvisions of the Bankruptcy Code

which govern classification of claims and contents of a plan, respectively, are met. H.R. REp.No. 95-595, at 412 (1977); S. REp. No. 95-989, at 126 (1978); see also In re Nutritional

"compl[y] with the applicable provisions of [the Bankruptcy Code]." 11 U.S.C. 1129(a)(I).

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fully with the requirements of sections 1121, 1122, and 1123, as well as other applicableprovisions of the Bankruptcy Code.

(a) Section 1121117. Section 1121 of the Bankruptcy Code provides that a debtor may file a

plan at any time during a voluntary case and, during the exclusive period to file a plan, only thedebtor may do so. On April 15,2011, prior to the expiration of the Debtors' exclusive periods,the Proponent Debtors filed the initial version of the Plan. As result, the Proponent Debtors havesatisfied section 1121.

(b) Section 1122(a)118. Section 1122 of the Bankruptcy Code sets forth the requirements for the

classification of claims and interests in a plan. Section 1122(a) provides:(a) Except as provided in subsection (b) of this section, a planmay place a claim or an interest in a particular class only if suchclaim or interest is substantially similar to the other claims orinterests of such class.

11 U.S.C. 1122(a). Thus, a plan may provide for multiple classes of claims or interests as longas each claim or interest within a class is substantially similar to other claims or interests in thatclass. See In re Combustion Eng'g, Inc., 391 F. 3d 190,239 (3d Cir. 2004) (substantially similarclaims should be classified together); In re Armstrong World Indus., Inc., 348 B.R. 136, 159(Bankr. D. Del. 2006) ("A classification strUcture satisfies section 1122 of the Bankruptcy Code

be placed in one class:

when a reasonable basis exists for the structure, and the claims or interests within each particularclass are substantially similar."). The Bankruptcy Code does not require that all similar claims

40

The express language of this statute explicitly forbids a plan fromplacing dissimilar claims in the same class; it does not, though,address the presence of similar claims in different classes.Although the legislative history behind 1122 is inconclusive

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regarding the significance (i f any) of this omission, it remains clearthat Congress intended to afford bankruptcy judges broaddiscretion to decide the propriety of plans in light of the facts ofeach case.In re Jersey City Med. Ctr., 817 F.2d 1055, 1060-61 (3d Cir. 1987); see also John Hancock Mut.Lift Ins. Co. v. Route 37 Bus. Park Assocs., 987 F.2d 154, 158 (3d Cir. 1993) ("[T]heclassification of the claims or interests must be reasonable.") (citation omitted); Aetna Cas. &Sur. Co. v. Clerk, United States Bankr. Court (In re Chateaugay Corp.), 89 F.3d 942, 949 (2dCir. 1996) ("[C]lassification is constrained by two straight-forward rules: [d]issimilar claimsmay not be classified together; similar claims may be classified separately only for a legitimatereason.").

119. The classification scheme set forth in the Plan, and the underlying basesfor the separate classifications of the Claims and Equity Interests into the Classes, as set forth atlength in Section LD.(i).(b) above, demonstrates that the Plan satisfies the requirements ofsection 1122(a) of the Bankruptcy Code.

(e) Section 1122(b)

Section 1.2.46 of the Plan defines Convenience Claims and Sections 3.3.6, 3.4.4, and 3.5.4 set

1122(b) of the Bankruptcy Code and is reasonable and necessary for administrative convenience.

a separate class of claims consisting only of every unsecured claim that is less than or reduced to

41LF15317643v.l

in CFGI Class 4, GD Class 4, and AD Class 4 complies with the purpose and intent of sectionforth the treatment of Convenience Claims. The designation of Classes of Convenience Claims

120. Section 1122(b) of the Bankruptcy Code provides: "A plan may designate

11 U.S.C. 1122(b). See also In re Armstrong World Indus., 348 B.R. 136, 160; In re AlerisInt'l, Inc., No. 09-10478, 2010 Bankr. LEXIS 2997, at *43 (Bankr. D. Del. May 13, 2010).

an amount that the court approves as reasonable and necessary for administrative convenience."

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same treatment for each Claim or interest of a particular Class unless the holder of such a Claimor interest agrees to less favorable treatment.

v. Means for Implementation125. Section 1123(a)(5) of the Bankruptcy Code requires that the Plan provide

"adequate means" for its implementation. 11 U.S.c. 1123(a)(5). As described in SectionI.D.(i).(d), above, in accordance with section 1123(a)(5), Article IV of the Plan and various otherprovisions of the Plan provide sufficient means by which the Planwill be implemented.

vi. Issuance ofNon-Voting Securities126. Section 1123(a)(6) of the Bankruptcy Code provides that a plan must

"provide for the inclusion in the charter of the debtor, if the debtor is a corporation .. . of aprovision prohibiting the issuance ofnonvoting equity securities, and providing, as to the severalclasses of securities possessing voting power, an appropriate distribution of voting power." 11U.S.C. 1123(a)(6). The Reorganized Debtors' Governance Documents comply with thisrequirement.

vii Selections of Directors and Officers in a MannerConsistent with the Interests of Creditors, SecurityHolders, and Public Policy127. Section 1123(a)(7) requires that a plan's provisions with respect to the

manner of selection of any director, officer, or trustee, or any other successor thereto, be"consistent with the interests of creditors and equity security holders and with public policy." 11u.s.C. 1123(a)(7). In accordance with section 1I23(a)(7), the Plan Supplement disclosed theidentities and affiliations of the individuals who are proposed to serve on or after the EffectiveDate as officers and directors of the Reorganized Debtors. Section 8.1 of the Plan provides thatthe Boards ofDirectors of the Reorganized Debtors will be composed, on and after the EffectiveDate, of members jointly approved by the Proponent Debtors, the Committee, and the Ad Hoc

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Unsecured Lender Group. The initial officers of the Reorganized Debtors will be those officersserving immediately before the Effective Date. The Plan complies with section 1123(a)(7).

viii. Section 1123(a)(8) Does Not Apply to the ProponentDebtors' Chapter 11 Cases128. Section 1123(a)(8) applies to chapter 11 plans involving an individual

debtor. See 11 U.S.C. 1123(a)(8). None of the Proponent Debtors is an "individual" and, assuch, section 1I23(a)(8) is inapplicable.

(e) Section 1123(b)129. In addition to the requirements of section 1123(a) of the Bankruptcy Code,

section 1123(b) contains discretionary provisions tha t may be (but are not required to be)incorporated into a chapter 11 plan. 11 U.S.C. 1123(b)(l-6). The discretionary provisions ofthe Plan are all consistent with section 1123(b).

i. Impairment ofClaims and Interests130. Section 1123(b)( l) provides that a plan may "impair or leave unimpaired

any class of claims, secured or unsecured, or of interests." 11 U.S.C. 1123(b)(1). Claims inCFGI Class 3A, CFGI Class 3B, CFGI Class 3C, CFGI Class 5A, CFGI Class 5B, CFGI Class 6,GD Class 3, GD Class 5A, GD Class 5B, AD Class 3, AD Class 5A, and AD Class 5B areimpaired by the Plan. CFGI Class 1, CFGI Class 2, CFGI Class 4, GD Class 1, GD Class 2, GDClass 4, GD Class 6, AD Class 1, AD Class 2, AD Class 4, AD Class 6, Protech C Class 1, and

of certain Claims and interests and leaves the rights of others unaffected.

131. Section 1123(b)(2) allows a Plan, subject to section 365 of the Bankruptcy

44

ii. Assumption, Assumption and Assignment or RejectionofExecutory Contracts and Unexpired Leases

Protech C Class 2 are not impaired by the Plan. The Plan thus modifies the rights of the holders

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Code, to provide for the assumption, assumption and assignment, or rejection of executory

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contracts and unexpired leases not previously rejected by the debtor. See 11 U.S.C. 1123(b)(2). On the Confirmation Date, the Debtors shall reject all executory contracts andunexpired leases that (i) have not been previously assumed, assumed and assigned, or rejectedwith the approval of the Bankruptcy Court, (ii) are not, as of the Confirmation Date, the subjectof a motion to assume, assume and assign, or reject, (iii) have not expired by their own terms onor prior to the Confirmation Date, or (iv) are listed on Schedule 7.1 of the Plan Supplement ofcontracts and leases to be rejected. Any executory contract or unexpired lease of personalproperty not listed on Schedule 7.1 shall be deemed assumed.

iii. Settlement of Claims and Causes ofAction132. Section I I23 (b)(3)(A) of the Bankruptcy Code and Bankruptcy Rule 9019

permit a plan to provide for "the settlement or adjustment of any claim or interest belonging tothe debtor or to the estate." See II U.S.C. 1123(b)(3)(A); Fed. R. Bankr. P. 9019. Inaccordance with section 1123(b)(3)(A), the Plan incorporates the terms and provisions of theCrystal Ball Settlement and the GE Settlement, as discussed at Section I.D.(i).(e). The terms ofthe Crystal Ball Settlement and the GE Settlement are fair, reasonable, and in the best interests ofthe Proponent Debtors' estates and claim holders, and fall well above the lowest point in therange of reasonableness.

133. To effectuate the GE Settlement, the GE Settlement Agreement providesfor Debtor CAP to (a) transfer a membership interest in the GE Fund to DCT, and (b) assumeand assign certain executory contracts to DCT, free and clear of all Liens. In addition, pursuantto the GE Settlement Agreement, CAP and the other Debtors or Reorganized Debtors may takesuch other actions as may be required outside of the ordinary course of business to effectuate theGE Settlement, including, without limitation, actions that may be required to direct their non-

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debtor Affiliates to take certain actions in accordance with the tenns of the GE SettlementAgreement.

134. Bankruptcy Code subsection 1123(a)(5)(A) provides that a plan mayinclude the "transfer of all or any part of the property of the estate to one or more entities" andsubsection 1123(a)(5)(D) provides that a plan may include the "sale of all or any part of theproperty of the estate, either subject to or free of any lien." 11 U.S.C. 1123(a)(5).

135. Section 363(b) of the Bankruptcy Code provides, in relevant part, that "thetrustee, after notice and a hearing, may use, sell, or lease, other than in the ordinary course ofbusiness, property of the estate." 11 U.S.C. 363(b)(1); see also 11 U.S.C. 1107(a) (providingthat debtors in possession have "all the rights .. . of a trustee"). Section 363(1) of the BankruptcyCode similarly provides that "a plan under chapter 11 .. . of this title may provide for the use,sale or lease of property." 11 U.S.C. 363(1). In addition, section 105(a) provides the authorityfor this Court to carry out the provisions of section 363(b). See 11 U.S.C. 105(a) ("The courtmay issue any order, process, or judgment that is necessary or appropriate to carry out theprovisions of this title."). Bankruptcy courts routinely authorize the use or sale of a debtor'sassets if such disposition or use is based upon the sound business judgment of the debtor. In reDura Ailto. Sys., 2007 Bankr. LEXIS 2764, at *258 (Bankr. D. Del. Aug. 15,2007) (citing In reMartin, 91 F.3d at 395); Comm. ofEquity Sec. Holders v. Lionel Corp. (In re Lionel Corp.), 722F.2d 1063, 1070 (2d Cir. 1983).

136. CAP's transfer of its membership interest in the GE Fund to DCT is basedupon its sound business judgment. In addition, it is within the sound business judgment of CAPand the other Debtors or Reorganized Debtors to take any other actions that are required outsideof the ordinary course of business to effectuate the GE Settlement, including, without limitation,

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139. Based upon the Court 's [mdings, DCT is a good faith purchaser undersection 363(m) of the Bankruptcy Code and as such is entitled to all of the protections affordedthereby.

140. Section 365 of the Bankruptcy Code authorizes a debtor to assume andassign its executory contracts and unexpired leases, subject to court approval, provided thedefaults under such contracts and leases are cured and adequate assurance of future performanceis provided. See 11 U.S.C. 365. Section 1123(b)(2) of the Bankruptcy Code provides that aplan may, "subject to section 365 of [the Bankruptcy Code], provide for the assumption,rejection, or assignment of any executory contract or unexpired lease of the debtor not previouslyrejected." 11 U.S.C. 1123(b)(2). The standard applied by the Third Circuit in determiningwhether an executory contract or unexpired lease may be assumed is the debtor's "businessjudgment" that the assumption is in its economic best interests. See, e.g., Sharon Steel Corp. v.Nat 'I Fuel Gas Distrib. Corp., 872 F.2d 36, 40 (3d Cir. 1989).

141. CAP's agreement to assume and assign its rights and obligations undercertain executory contracts relating to the GE Fund to DCT pursuant to the GE SettlementAgreement is within CAP's sound business judgment. The amounts set forth in the GESettlement Agreement are the amounts required to "cure" all "defaults" under the GE Fundcontracts pursuant to section 365(b) of the Bankruptcy Code. In addition, nCT has providedadequate assurance of future performance under the contracts.

iv. Retention, Enforcement, and Settlement of Claims Heldby the Proponent Debtors

"provide for the retention and enforcement by the debtor" of certain claims or interests. 11142. Section 1123(b)(3)(B) of the Bankruptcy Code provides that a plan may

U.S.c. 1123(b)(3)(B). In accordance with section 1123(b)(3)(B), Section 4.11 of the Plan

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provides for the preservation of certain Preserved Rights that shall remain assets of and vest inthe Reorganized Debtors. The Preserved Rights are adequately and appropriately identified inthe Disclosure Statement and Plan.

v. Modification ofthe Rights ofHolders ofClaims143. Section 1123(b)(5) states that a plan may "modify the rights of holders of

secured claims .. . or holders of unsecured claims, or leave unaffected the rights of holders of anyclass of claims." 11 U.S.C. II23(b)(5). In accordance with Section II23(b)(5), the legal,equitable, and contractual rights of holders of Claims in CFGI Class 1, CFGI Class 2, GD Class1, OD Class 2, OD Class 6, AD Class 1, AD Class 2, AD Class 6, Protech C Class 1, and ProtechC Class 2 will remain unaltered. The rights of holders ofClaims in CFOI Class 3A, CPGI Class3B, CPOI Class 3C, CPOI Class 5B, CFGI Class 5C, CFGI Class 6, GD Class 3, GD Class SA,GDClass 5B, AD Class 3, AD Class SA, and AD Class 5B are impaired.

vi. Other Permissible ProvisionsJurisdiction144. Section 11.1 provides that the Bankruptcy Court will retain jurisdiction

over any matter arising under the Bankruptcy Code, arising in or related to the ProponentDebtors' chapter 11 cases or the Plan, or that relates to a list of additional matters enumeratedtherein. This is consistent with applicable law. See, e.g., In re Magna Entm't Corp., No. 0910720 (MFW), 2010 Bankr. LEXIS 5230, at *83 (Bankr. D. Del. Apr. 29, 2010) (approvingretention of jurisdiction by the court over certain