13. Under the Plan Settlement, the Liquidating Trust will be funded by the Operating Agreement Payment, which is an approximation of the purchase price which LIMAB offered to pay as a stalking horse bidder in connection with the Asset Purchase Agreement. Subject to reductions for Administrative Expenses, the Operating Agreement Payment is ultimately expected to be between $4,125,000 and $4,650,000, which consists of the following components: (i) $3,050,000, which was paid to the Debtors at the inception of the term of the Operating Agreement, (ii) $1,075,000, which will be paid to the Debtors on the Effective Date subject to approval of the settlement agreement with franchisee Fast Casual (the “Fast Casual Settlement Agreement”)3 and after reduction of approximately $10,000 for expenses incurred by the Supporting Parties in connection with Fast Casual, and (iii) $525,000, which will be paid subject to and upon the extension of a franchise agreement with a franchisee located in Dubai. The Liquidating Trust may also be supplemented with recoveries from those Avoidance Actions that do not qualify as Acquired Avoidance Actions under the Plan. The Operating Agreement Payment and such recoveries will be the sole source of payment for (i) Administrative Expenses not required to be paid by LIMAB under the Operating Agreement, (ii) Priority Claims, (iii) Priority Tax Claims, and (iv) General Unsecured Claims.
14. Under the Plan Settlement, (i) the Noteholders will receive, on account of their $5,000,000 Allowed Noteholder Secured Claims, the New Stock in the Reorganized Debtors, (ii) LIMAB will receive a payment from the Liquidating Trustee in the amount of $625,000, which will be treated as a reduction of the Operating Agreement Payment, and (iii) after General Unsecured Creditors other than the Noteholders receive aggregate Distributions of $1,500,000, the Noteholders will receive, on account of their $2,786,195.05 Allowed Noteholder General Unsecured Claims, 40% of any funds available for subsequent Distributions to General Unsecured Creditors, which shall be paid to LIMAB and treated as a reduction of the Operating Agreement Payment. The amount of the Noteholder Claims allocated in the Plan as between Noteholder Secured Claims and Noteholder General Unsecured Claims remains subject to reallocation.
Currently, the Fast Casual hold back funds are held by Debtors’ counsel ($975,000) and LIMAB ($100,000).