Item 1.01 Entry into a Material Definitive Agreement.
The information set forth under Item 1.03 below relating to the Exit Facility (as defined below) is incorporated into this Item 1.01 by reference.
Item 1.03 Bankruptcy or Receivership.
In
The following summarizes certain material terms of the Plan. This summary highlights only certain substantive provisions of the Plan and is not intended to be a complete description of the Plan. This summary is qualified in its entirety by reference to the full text of the Confirmation Order and the Plan, which are attached hereto as Exhibits 10.4 and 10.5, respectively, and are incorporated by reference herein. Capitalized terms used but not defined in this Current Report on Form 8 K shall have the meanings ascribed to such terms in the Plan.
Pursuant to the terms of the Plan, claims against IT'SUGAR were treated as follows:
· the Company's subsidiary, which held an Allowed Prepetition Line of Credit
Secured Claim, was repaid in full through the Exit Facility (as defined and
more particularly described below);
· the Allowed Prepetition Equipment Loan Secured Claim held by the Company's
subsidiary was assumed, ratified, and reinstated on the Effective Date;
· each holder of an
in full in cash on the Effective Date or, in some cases, will receive such
payment as soon as practicable after the Effective Date;
· each holder of an Allowed General Unsecured Claim received, in full
satisfaction of such claims, a one-time lump sum distribution equal to 15% of its Allowed General Unsecured Claim on the Effective Date or, in some cases, will receive such payment as soon as practicable after the Effective Date; and
· holders of Subordinated Claims will not receive any distributions in respect
thereof.
Payments of claims made pursuant to the Plan, along with the payment of administrative expenses and professional fees, are being funded by IT'SUGAR's cash on-hand and net proceeds from the Exit Facility.
Ownership and Consolidation of IT'SUGAR
Pursuant to the terms of the Plan, the Company's equity interests in IT'SUGAR were revested on the Effective Date, and all organizational documents of IT'SUGAR were assumed, ratified, and reinstated.
As a result of the confirmation and effectiveness of the Plan and the revesting of its equity interests in IT'SUGAR, the Company was deemed to have reacquired a controlling financial interest in IT'SUGAR and will consolidate the results of IT'SUGAR into its consolidated financial statements from and after the date that it acquired control of IT'SUGAR. The Company will account for the consolidation of IT'SUGAR under the acquisition method of accounting, which requires that the assets acquired and liabilities assumed associated with an acquiree be recognized at their fair values at the acquisition date. The Company will be required to remeasure the carrying value of its equity interests in IT'SUGAR at fair value as of the acquisition date, with the remeasurement adjustment recognized in the Company's statement of operations, and recognize goodwill (or a bargain purchase gain, if applicable) based on the difference between (i) the fair values of
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IT'SUGAR's identifiable assets and liabilities at the acquisition date and (ii) the fair values of the Company's equity interests in IT'SUGAR and the noncontrolling interests in IT'SUGAR.
Exit Facility
Prior to the Effective Date, IT'SUGAR owed a wholly-owned subsidiary of the
Company approximately
On the Effective Date, the Company's wholly-owned subsidiary entered into a
secured exit credit facility with IT'SUGAR (the "Exit Facility") which provides
for advances to IT'SUGAR of up to
The foregoing description of the Exit Facility is a summary only, does not purport to be complete, and is qualified in its entirety by reference to the full text of the documents related to the Exit Facility, copies of which are attached hereto as Exhibits 10.1, 10.2 and 10.3 and are incorporated by reference herein.
As a result of the Company reconsolidating IT'SUGAR in connection with the
confirmation of the Plan, the amounts due from IT'SUGAR pursuant to the Exit
Facility and the remaining amount of approximately
Releases and Exculpations
The Plan incorporates an integrated compromise and settlement of claims designed to achieve a beneficial and efficient resolution of the Chapter 11 Cases. Unless otherwise specified, the settlement, distributions, and other benefits provided under the Plan, including the releases and exculpation provisions included therein, are in full satisfaction of all claims and causes of action that could be asserted.
The Plan provides releases and exculpations for the benefit of IT'SUGAR, certain of its claimholders, other parties in interest, and various parties related thereto, each in their capacity as such, from various claims and causes of action, as further set forth in Articles IX and XI of the Plan.
Certain Information Regarding Assets and Liabilities of IT'SUGAR
Information as to the assets and liabilities of IT'SUGAR as of
IT'SUGAR Business Update
During the pendency of the Chapter 11 Cases, IT'SUGAR permanently closed 17
retail locations and opened 10 "temporary" retail locations in select
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negotiating a lease agreement for a potential "large format" retail location that is similar in size to its candy department store at American Dream and is currently projecting to open the location in late 2021. . . .
Item 2.01 Completion of Acquisition or Disposition of Assets.
The information set forth under the caption "Ownership and Consolidation of IT'SUGAR" in Item 1.03 above is incorporated into this Item 2.01 by reference.
Item 9.01 Financial Statements and Exhibits
(b) Pro forma financial information. The unaudited pro forma condensed
consolidated statement of financial condition of
(d) Exhibits. Exhibit No. Description 10.1 Exit Credit Facility Term Loan Agreement Between IT'SUGAR and SHLHoldings, Inc. 10.2 Exit Credit Facility Term Note Between IT'SUGAR andSHL Holdings , Inc. 10.3 Exit Financing Security Agreement Between IT'SUGAR andSHL Holdings , Inc. 10.4Bankruptcy Court Order Confirming the Plan of Reorganization forIT'SUGAR, LLC . 10.5 IT'SUGAR, LLC Plan of Reorganization. 99.1 Unaudited pro forma condensed consolidated statement of financial condition ofBBX Capital, Inc. and its subsidiaries as ofMarch 31, 2021 and unaudited pro forma condensed consolidated statements of operations for the year endedDecember 31, 2020 and the three months endedMarch 31, 2021 and the related notes. 99.2 Confirmation of IT'SUGAR's Plan of Reorganization Press Release. 99.3 IT'SUGAR Emergence from Bankruptcy Press Release. 4
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