Vous êtes sur la page 1sur 44

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 1 of 44

Desc

1 ROBERT E. OPERA - State Bar No. 101182 ropera@winthropcouchot.com

2 RICHAR H. GOLUBOW - State Bar No. 160434


rgolubow@winthropcouchot.com 3 PAY AM KHODADADI - State Bar No. 239906 pkhodadadi@winthropcouchot.com

4 WINTHROP COUCHOT
PROFESSIONAL CORPORATION
5 660 Newport Center Drive, Fourth Floor Newport Beach, CA 92660
6 Telephone: (949) 720-4100
Facsimile: (949) 720-4111

Counsel for the Offcial Committee


8 of Unsecured Creditors
9 Scott C. Clarkson, Esq. (CA Bar No. 143271)

Eve A. Marsella, Esq. (CA Bar No. 165797) 10 CLARKSON, GORE & MARSELLA, APLC
3424 Carson Street, Suite 350

11 Torrance, California 90503


Telephone: 310/542-0111

12 Facsimile: 310/214-7254

Email: sclarkson@lawcgm.com
13

Counsel for Debtor and Debtor-in-Possession

14 MTI Technology Corporation

15 UNITED STATES BANKRUPTCY COURT

16 SANTA ANA DIVISION


17
18

CENTRAL DISTRICT OF CALIFORNIA


Case No. 8:07-13347-ES

In re:

19

MTI TECHNOLOGY CORPORATION, a Delaware corporation,

Chaptcr 11 Proceeding

20
21

Debtor and
Debtor- i n- Possession.

22
23

DEBTOR'S AND COMMITTEE'S JOINT MOTION FOR ORDER APPROVING NONMATERIAL MODIFICATIONS TO DEBTOR'S AND COMMITTEE'S JOINT THIRD AMENDED CHAPTER 11 PLAN; MEMORANDUM OF POINTS AND AUTHORITIES AND DECLARATION OF ROBERT E. OPERA IN SUPPORT THEREOF
(11 U.S.c. 1127(a); Fed. R. Bank. P. 3019(a)J

24
25

26 27
28

DATE: TIME: PLACE:

August 26, 2010


10:30 a.m.

Courtroom 5A

411 West Fourth Street Santa Ana, CA

MAINDOCS-# 149892-vI -MTI . MtnReApprovalNonMaterialModToPlan.DOC

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 2 of 44

Desc

1 TO THE HONORABLE ERITHE A. SMITH, UNITED STATES BANKRUPTCY JUDGE,


2 AND PARTIES-IN-INTEREST:

3 MTI Technology Corporation, the debtor and debtor-in-possession ("Debtor"), and the
4 Official Committee of

Unsecured Creditors ("Committee") in this case (together, "Plan

5 Proponents") hereby jointly move the Court for an order granting to them the following relief:
6
7
8
1.

Authorizing the Plan Proponents to make certain modifications to the

Debtor's and Committee's Joint Third Amended Chapter 11 Plan ("Third Amended Plan"), which modifications have been incorporated into the Plan Proponents' proposed Joint Fourth Amended Chapter 11 PIan (the "Fourth Amended Plan"), filed concurrently
herewith by the PIan Proponents;
2.

9 10
11

Finding that such modifications to the Third Amended Plan do not affect
the Claim of any Creditor or the Interest of any Interest Holder

12
13

adversely the treatment of

who has not accepted, in writing, such modifications; 1


3.

14
15

Ordering that the modifications to the Third Amended Plan are deemed

accepted by all Creditors who already have accepted the Third Amended Plan; and
4.

16

Such other and further relief as the Court deems just and proper.

17 This Motion is made pursuant to section 1127(a) ofthe Bankrptcy Code and Rule 3019(a)
18 of the Federal Rules of

Bankptcy Procedure, and is based upon the attached Memorandum of


Robert E. Opera ("Opera Declaration"), the Fourth

19 Points and Authorities and Declaration of

20 Amended Plan filed concurrently herewith, all pleadings, papers, and documents on fie in this

21 III
22
23

24
25

26
27
i Unless otherwise defined herein, the definitions of

28

the capitalized term set forth herein are as set forth in the Fourth

Amended Plan.
-2MAINDOCS-li

49892-v I-MTI_ MtnReApprovalNonMaterialModToPlan.DOC

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 3 of 44

Desc

1 case, and upon any such other evidence, both oral and documentary, as may be presented to the

2 Court at the time of the hearing on this Motion.


3

DATED: August 5,2010

WINTHROP COUCHOT

4
5

BY:~~
PROFESSIONAL CORPORATION
Robert E. Opera Richard H. Golubow
Counsel for the Official Committee of

6 7 8 9

Unsecured

Creditors

10
11

12 13

14
15

16 17 18

19

20
21

22
23

24
25

26 27 28
-3MAINDOCS-#149892-v I-MTI_ MtiiReApprovalNonMalerialModToPlan.DOC

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 4 of 44

Desc

2 BACKGROUND I. 3
4 A. The Debtor's Case.

1 MEMORANDUM OF POINTS AND AUTHORITIES

5 When the Debtor operated, the Debtor was a global provider of end-to-end information
6 infrastructure solutions and had strategic technology and service relationships with industry

7 leaders, including EMC Corporation ("EMC"), Microsoft, VMWare, Symantec and Cisco. The

8 Debtor's revenues for its fiscal year 2006 exceeded $135.0 million.
9 In 2007, the Debtor experienced substantial cash flow difficulties which made its

10 continued business operations impossible. The Debtor was compelled to file, on October 15,

11 2007, a Chapter 11 petition for relief commencing the Case.

12 Since the Petition Date, the Debtor has liquidated its operating assets for the benefit of

13 Creditors. The Debtor sold its interests in its European subsidiaries for an aggregate amount of
14 $7,275,000, permitting it to satisfy its obligations to its primary secured creditors. The Debtor
15 also sold various assets located in the United States, including the following: the assets

16 associated with the Debtor's "Collective" information technology services division, formerly

17 located in Austin, Texas; excess furniture, fixtures and equipment; and certain assets associated

18 with the Debtor's "Legacy Hardware." Moreover, the Debtor has acted diligently to collect its

19 accounts receivable.
20 In addition to the Debtor's liquidation of

its operating assets, the Plan Proponents have

21 acted diligently to recover value for the benefit of Creditors.


22 1. Wells Fargo. The Committee was successful in recovering approximately

23 $120,000 that was paid to Wells Fargo as a penalty demanded by Wells Fargo for an
24 early termination of

Wells Fargo's lending facility with the Debtor.

25 2. Canopy. Pursuant to a settlement that the Committee negotiated with

26 Canopy Group, Tnc_ ("Canopy"), the Committee was able to recover for the benefit of
27 Creditors approximately $3,500,000 against which Canopy had asserted a secured claim.

28
-4MAINDOC S-L i 49892-v

l-MTI_ MtnReAppruva INonMaterialModToPlan.DOC

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 5 of 44

Desc

1 3. EMC. In or about March 2010, the Debtor and EMC negotiated a


2 settlement of

litigation that the Debtor had filed against EMC pursuant to which

3 settlement EMC paid to the Debtor $1,900,000 cash, and EMC waived and released its
4 Administrative Claim against the Debtor, asserted to be in an amount of approximately

5 $578,649, and EMC waived and released its General Unsecured Claims against the
6 Debtor, asserted to be in an aggregate amount of

approximately $4,464,523.

7 4. Preference Litigation. The Committee is pursuing on behalf of

the Estate

8 preference litigation. The Debtor also has pursued preference litigation. The Committee

9 and the Debtor have recovered to date approximately $90,000 for the estate and

10 anticipate that a substantial additional recovery wil be obtained therefrom.


11 5. FusionStorm. The Debtor is pursuing litigation against FusionStorm

12 which the Debtor anticipates will result in a significant recovery by the estate.
13 6. Pencom Parties. On October 14,2009, the Committee filed a complaint
14 against Pencom Systems, Inc., Edgar Saadi, Wade Saadi and Edward Ateyeh

15 (collectively, "Pencom Defendants") asserting, in part, the following causes of action:


16 avoidance and recovery of transfers of property; disallowance of claims; and breach of
17 fiduciary duties ("Pencom Action"). The Debtor and the Pencom Defendants have

18 reached a preliminary settlement of such litigation and are in the process of documenting

19 such settlement.
20 In addition to the efforts that the Debtor and the Committee have made and are making

21 to recover value for the benefit of Creditors, in order to reduce the amount of claims against the
22 estate, the Debtor has filed objections to Disputed Claims. The Debtor estimates that, by such

23 claims objections, the Debtor has been able to have disallowed in excess of $15.0 millon in
24 Disputed Claims, exclusive ofEMC's Administrative Claim and General Unsecured Claims

25 disallowed pursuant to the Debtor's settlement with EMC and any Disputed Claims disallowed

26 pursuant to preference actions prosecuted by the Committee.


27
28
-5MAINDOCS-# 149892-vl-MT 1_ M tiiReApprovalNonMaterialModToPlan.DOC

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 6 of 44

Desc

1 B. Consensual Plan Confirmation Proceedings.


2 The Debtor initially filed a Chapter 11 plan on June 12, 2009. The Plan Proponents
3 thereafter reached an agreement regarding the terms of a consensual Chapter 11 plan, and, on
4 June 3,2010, fied

jointly the Third Amended Plan and accompanying Disclosure Statement.

5 On June 10,2010, the Court entered the Disclosure Statement Order, approving the Disclosure
6 Statement as containing "adequate information" in accordance with the provisions of
7 section 1125 of

the Bankruptcy Code, and authorizing the Plan Proponents to solicit votes with

8 respect to the confirmation of the Third Amended Plan.


9 Support for the confirmation of

the Third Amended Plan is virtually unanimous, with


the number of

10 approximately 97% of

the Allowed General Unsecured Claims, representing

11 approximately 99% in dollar amount of

the Allowed General Unsecured Claims, that were cast


the confirmation of

12 with respect to the Third Amended Plan voting in favor of

the Third

13 Amended Plan_

14 C. Objections Asserted with Respect to Third Amended Plan.


15 No objections to the confirmation of

the Third Amended Plan were fied by any Creditor,

16 but informal objections to the confirmation of

the Plan were asserted by Canopy, and the United

17 States Securities and Exchange Commission ("SEC") fied its Objection of U.S. Securities
18 Exchange Commission to Confirmation of

Debtor's and Committee's Third Amended

19 Chapter 11 Plan ("SEC Plan Objection"). The Plan Proponents now have been able to resolve

20 the objections raised by Canopy and by the SEC.


21 1. Canopy. Canopy requested that the Plan Proponents make certain

22 amendments to the Third Amended Plan in order to clarify the treatment of the Canopy

23 Claim pursuant to the Plan (Class 4 under the Plan). These amendments to the Third
24 Amended Plan merely acknowledge Canopy's rights pursuant to the Canopy Agreement

25 (Exhibit "I" to the Third Amended Plan), do not change in any manner the treatment of
26 Canopy's rights or interests under the Canopy Agreement or under the Third Amended

27 Plan, are not substantive in nature and do not affect the rights and interests of any other

28 Creditor under the Plan.


-6MAINDOCS-# 149892-vl-MTI__M tnReApprovalNonMateria IModToPlan,DOC

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 7 of 44

Desc

i 2. SEC. By the SEC Plan Objection, the SEC raised two primary concerns
2 with respect to the confirmation of the Third Amended Plan -- the provisions of the Third

3 Amended Plan providing for the possibility of a Merger Transaction could be contrary to
4 public policy, and certain exculpatory provisions provided in the Third Amended Plan
5 for the benefit of

the Debtor, the Committee, their successors under the Third Amended

6 Plan, and their Representatives and Professionals are overly broad. The Plan Proponents

7 worked with the SEC to resolve the SEC Plan Objection, and agreed to amend the Third

8 Amended Plan in order to address the SEC's concerns. By reason ofthe amendments
9 that the Plan Proponents have made to the Third Amended Plan, incorporated into the

10 Fourth Amended Plan, the SEC has agreed to withdraw the SEC Plan Objection.
11 By reason ofthe foregoing, subject to the Court's approval of

this Motion, there will be


the Third Amended

12 at the Confirmation Hearing no pending objections to the confirmation of

13 Plan, as amended by the Fourth Amended Plan.

14 D. Plan Modification/Fourth Amended Plan.

15 In order to effectuate the settlements reached with Canopy and with the SEC, the Plan
16 Proponents hereby request that this Court authorize them to modify the Third Amended Plan in
17 order to incorporate the agreed-upon clarifications of the treatment of

the Canopy Claim and to

18 make the amendments to the Third Amended Plan requested by the SEC. The Plan Proponents

19 hereby also request that this Court authorize them to modify the Third Amended Plan in order to

20 make certain other non-substantive modifications to the Third Amended Plan for the purpose of
21 clarifying the provisions ofthe Third Amended Plan. The Fourth Amended Plan, incorporating

22 such proposed modifications to the Third Amended Plan, is filed concurrently herewith, and a
23 "redlined" version of

the Fourth Amended Plan, reflecting the modifications made to the Third

24 Amended Plan, is attached as Exhibit "A" to the Opera Declaration.

25 E. Benefits of Plan Modification.


26 As demonstrated hereinbelow, all of

the proposed modifications to the Third Amended

27 Plan do not affect adversely the interests of Creditors pursuant to the Third Amended Plan.
28
-7MAINDOCS-#149892-vl-MTI_ MtnReApprovalNonMateria lMoToPlan.DOC

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 8 of 44

Desc

The proposed modifications to the Third Amended Plan will resolve the objection to the
Third Amended Plan asserted by Canopy and by the SEC. Approval of

2
3

this Motion, then, will

eliminate the objections asscrted with respect to thc Third Amended Plan, and, accordingly, will
facilitate the confirmation of the Fourth Amended Plan, for the benefit of

4
5

Creditors.

Subject to the Court's granting this Motion, there wil be !! objections to the

6
7 8 9

confirmation of the Fourth Amended Plan pending as of the Confirmation Hearing.

Moreover, the Fourth Amended Plan wil have been accepted by each Class of Claims that
has cast a vote with respect to the Third Amended Plan. The votes cast with respect to the
confirmation of the Third Amended Plan are overwhelmingly in support of the

10
11

confirmation of the Third Amended Plan. All of the major Creditor constituents in the
Debtor's Case support the confirmation ofthe Fourth Amended Plan.2
Confirmation of

12
13

the Fourth Amended Plan is in the best interests of Creditors. The

Fourth Amended Plan provides that Allowed Administrative Claims, Allowed Priority Tax
Claims and Allowed Priority Non- Tax Claims will be paid in fulL. Confirmation ofthe Fourth

14
15

Amended Plan wil produce for holders of Allowed General Unsecured Claims the most
favorable recovery on their Allowed Claims as is possible under the circumstances of

16 17 18 19

this Case,

and the Fourth Amended Plan is supported by the Committee and has been approved
overwhelmingly by the holders of Allowed General Unsecured Claims.

II.

20
21

THE COURT MAY AUTHORIZE THE PROPOSED


MODIFICATIONS OF THE THIRD AMENDED PLAN
A bankptcy court has the authority to authorize the modification of a Chapter 11 plan. In
this regard, sections 1127(a) and (d) of

22 23

the Bankruptcy Code provide as follows:

24
25

2 The Class ofInterests established by the Third Amended Plan (Class 6) very likely will neither receive nor retain any

26 27
28

value under the Third Amended Plan. Therefore, in accordance with the provisions of section II 29(g) of the Bankptcy Code, the Class of Interests established by the Third Amended Plan is deemed to have rejected the Third Amended Plan. As is demonstrated by that Commttee's and Debtor's Brief in Support of Confirmation of Joint Fourth Amended Chapter 11 Plan filed concurrently herewith by the Plan Proponents, the Fourth Amended Plan meets
all of the requirements for confirmation under section I 129(a) of

the Bankmptcy Code, except for section 1129(a)(8)

because the Class ofInterests is deemed to have rejected the Fourth Amended Plan, and the Fourth Amended Plan satisfies all of the requirements for "cram down" under section I 1 29(b) of the Bankmptcy Code with respect to the Class of Interests.
-8MA1NDOCS-# 149892-vl-MTI_ MtnReApprovalNonMaterialModToPlan DOC

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 9 of 44

Desc

2
3

(a) The proponcnt of a plan may modify such plan at any time before confirmation, but may not modify such plan so that such plan as modified fails to meet the requirements of sections 1122 and 1123 ofthis title. After the proponent of a plan fies a modification of such plan with the court, the plan as modified
becomes the plan.
* * *

4
5

6
7
8

(d) Any holder of a claim or interest that has accepted or rejected a plan is deemed to have accepted or rejected, as the case may be, such plan as modified, unless, within the time fixed by the court, such holder changes such holder's previous acceptance or rejection.
11 U.S.C. 1127(a) and (d).
Rule 3019 of the Federal Rules of

Bankruptcy Procedure provides as follows:

In a chapter 9 or chapter 11 case, after a plan has been accepted and before
10
11
its confirmation, the proponent may fie a modification of the plan. If

the court

finds after hearing on notice to the trustee, any committee appointed under the Code, and any other entity designated by the court that the proposed modifcation

12
13

does not adversely change the treatment of the claim of any creditor or the
interest of any equity security holder who has not accepted in writing the modification, it shall be deemed accepted by all creditors and equity security holders who have previously accepted the plan.
Rule 3019(a)(emphasis added).

14
15

Thus, a bankruptcy court has authority to approve proposed modifications to a Chapter 1 i


16
plan after voting on the plan has taken place but before confirmation of

the plan. Moreover,

17

proposed modifications to a plan may be approved without any need for revoting on the plan;
18

notice and an opportunity to revote on the plan are applicable only as to any creditor for whom the
19
proposed modifications of the plan "adversely change the treatment of

20
21

(its) claim." Tfthe

proposed modifications to the plan are not adverse as to a creditor, then any prior acceptance of

the plan by that creditor is a deemed acceptance of the plan, as modified. As stated in Norton
22

Bankptcy Law and Practice 2d:


23

24
25

(IJfthe court, after hearing on notice to the trustee and appointed committees, if any, and others designated by the court, concludes that a proposed modification does not "adversely change thc treatment of the claim of any creditor
or the interest of any equity security holder," there is no need for setting a time

26

27
28

within which to reject or give any notice thereof. Instead, this finding under the Bankruptcy Rules results in a "deemed acceptance" ofthe plan as
modified by the creditors and equity security holders who previously

accepted the plan


-9MAINDOCS-#149892-vl-MTI _ MtnReApprovalNon:vateriaIModToPlan.DOC

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 10 of 44

Desc

2
3

(ei ourts do not require notice of a modification if the modifcation does not adversely change a claimant's treatment. To enforce a literal interpretation of the Code and require formalistic notice when the modifcations are not substantial would needlessly delay confirmation and
heighten the risk of a plan's failure.

4
5

4 Norton Bankr. L. & Prac. 2d 94: 1 (emphasis added).

By this Motion, the Plan Proponents seek from this Court an order authorizing them to

6 7
8

modify the Third Amended Plan in order to incorporate the modifications to the Third Amended
Plan upon which the Plan Proponents and Canopy have agreed and to incorporate the

modifications to the Third Amended Plan upon which the Plan Proponents and the SEC have
agreed, and to make certain other non-substantive modifications to the Third Amended Plan in

9
10
11

order to clarify the provisions of the Third Amended Plan. All of such proposed modifications to
the Third Amended Plan either enhance the interests of Creditors, or do not affect adversely the

12
13

interests of Creditors pursuant to the Third Amended Plan. Similarly, all of such proposed
modifications of the Third Amended Plan do not affect adversely the Interests of Interest Holders
pursuant to the Third Amended Plan.

14
15

A discussion of each of the modifications proposed to be made to the Third Amended Plan,
and the effect of each such modification on the interests of Creditors, follows immediately below.

16 17 18

PROPOSED MODIFICATION
TO THE THIRD

EFFECT OF PROPOSED MODIFICATION


No substantive effect on the interests of Creditors. This proposed modification to the Third Amended Plan merely clarifies the provisions of the Third Amendecl Plan regarding the classification of the Canopy Claim. Under the Third Amcndcd Plan, the Canopy Claim (Class 4) is classified separately from the Class of Allowed General Unsecured Claims (Class 3). Canopy's rights and interests derive from the Canopy Agreement (Exhibit "1" to the Third Amended Plan), and, under the Third Amended Plan, Canopy retains all of its rights and interests under the Canopy Agreement. Canopy does not receive under the Third An1ended Plan the treatment afforded thereunder to holders of Allowed General Unsecured Claims.

AMENDED PLAN
1. Section 2.1.62 - Clarifies that the Canopy Claim is not a General

19

20
21

Unsecured Claim.

22
23

24
25

26
27
28

-10MAINDOCS-#149892-v J -MTI _ MtnReApprovalNoiiMaterialModToPlaii.DOC

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 11 of 44

Desc

2
3

PROPOSED MODIFICATION TO THE THIRD AMENDED PLAN


2. Sections 2.1.81, 6.6, 6.6.1,

OF PROPOSED MODIFICATION
EFFECT

No substantive effect on the interests of Creditors.


These proposed modifications to the Third Amendcd Plan merely clarify the provisions of the Third Amended Plan regarding the revesting of the Plan Assets to be administered by the Plan Agent under the Plan. There are no changes made to the Third Amended Plan regarding the establishment of the Plan Fund, the disposition ofthe Plan Fund Proceeds, the Plan Agent's administration of the Plan Fund, or to the treatment of Allowed Claims under the Third Amended
Plan.

4
5

6.6.2 and 6.8.3 -- Clarfy that the Plan Assets will be revested in the
Reorganized Debtor, but wil be

6 7
8

administered by the Plan Agent in accordance with the terms and conditions of the Plan.

9
3. Scctions 2.1.82 and 6.8.1 -

No substantive effect on the interests of Creditors.


These proposed modifications to the Third Amended Plan merely clarfy that, to the extent that Canopy is entitled to any Distribution on account of the Canopy Claim, it will be paid from the Plan Fund. There are no changes made to the Third Amended Plan regarding the amount of the Canopy Claim, the provisions of the Canopy Agreement, the treatment of the Canopy Claim, the disposition of the Plan Fund Proceeds, or to the treatment of Allowed Claims under the Third Amended Plan.

10
11

Clarify that any Distribution to be made under the Plan on account of the Canopy Claim wil be paid from
the Plan Fund.

12
13

14
15

16 17
18

4. Section 3.1.4 - Clarifies that

No substantive effect on the interests of Creditors.


This proposed modification to the Third Amended Plan merely clarifies that the United States Trustee Fees will be paid from the Plan Fund. There are no changes made to the Third Amended Plan regarding the payment of the United States Trustee Fees or to the treatment of Allowed Claims under the Third Amended
Plan.

the United States Trustee Fees will be paid from the Plan Fund.

19

20
21
5. Sections 6.6, 6.8.2, 6.11, 6.13,
6.14,9.1, 9.2 - Clarify

No substantive effect on the interests of Creditors.


These proposed modifications to the Third Amended Plan merely acknowledge the rights of Canopy pursuant to the Canopy Agreement that already are set forth in the Third Amended Plan. There are no changes made to the Third Amended Plan regarding the treatment of the Canopy Claim, the provisions of the Canopy Agreement, or the treatment of Allowed Claims under the Third Amended Plan.

the Third

22
23

Amended Plan by acknow lcdging

"Canopy's rights under the Canopy Agreement."

24
25

26
6. Section 6.16 - Adds Canopy as

No substantive effect on the interests of Creditors.


obtain notice of

27
28

a party that is entitled to obtain certain post-confirmation notices.

Canopy merely is added as a party that is entitled to post-confirmation matters in the Case as a "Post-Effective Date Notice Party."
-11MAINDOCS-# 149892-vl-MTl_:vtneApprovaINonMateria lModToPlan.DOC

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 12 of 44

Desc

2
3

PROPOSED MODIFICATION THIRD TO THE AMENDED PLAN


7. Sections 6.18.4, 6.18.7,

OF PROPOSED MODIFICATION
EFFECT

No substantive effect on the interests of Creditors.


Section 6.18.4 of the Third Amended Plan provides that the Plan Agent must obtain from the Court approval of any proposed Merger Transaction, after giving to Post-Effective Date Notice Parties and other parties-in-interest notice and an opportunity to obtain a
hearing thereon. In accordance with the Plan

4
5

6
7 8 9

6.18.7.1,6.18.7.2 - Adds language to address the SEC's concerns about any Merger Transaction after the Effective Date of the Third Amended Plan.

10
11

12
13

Proponents' agreement with the SEC, the Plan Proponents propose to modify Section 6.18.4 as follows: (i) to provide expressly that the Plan Agent must give to the SEC notice of any proposed Merger Transaction; and (ii) to provide that the Plan Agent will have the burden of demonstrating to the Court that any such Merger Transaction is in the best interests of holders of Allowed General Unsecured Claims and that any such Merger Transaction is in compliance with thc laws, rules and regulations with respect to the issuance
of securities, as set forth in Section 6.18.7 of

the Fourth

14
15

Amended Plan.

16
17
18

19

20
21

22
23

A new Section 6.18.7 has been added to the Fourth Amended Plan, setting forth restrictions on the effectuation of any proposed Merger Transaction. Section 6.18.7 provides that the Reorganizcd Debtor will not issue any securities pursuant to the Plan unless: any such issuance of securities complies with the requirements of section 1145 of the Bankruptcy Code; or any such issuance of securities is either exempt from the registration requirements of the Securities Act, or is registered in accordance with the applicable rcquircments of the Securities Act. Section 6.18.7 provides further that the Reorganized Debtor will not consummate any Merger Transaction with a private
company unless: the Reorganized Debtor is current in

its reporting obligations under Sections 13(a) or 15(d)


of the Exchange Act at the time of

24
25

the consummation

26 27
28

of any such Merger Transaction; and any such Merger Transaction is consummated by the Reorganized Debtor in accordance with the requirements of the Securities Act, the Exchange Act, and all applicable rules and regulations promulgated by the SEC.

-12MAINDOCS-# 149892-vl-MTI MtnReApprovalNonMaterialModToPlan.DOC

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 13 of 44

Desc

PROPOSED MODIFICATION
TO THE THIRD

EFFECT

OF

PROPOSED MODIFICATION
The proposed modifications to Section 6.18.4 of the
Third Amended Plan and the addition of

2 3

AMENDED PLAN
Section 6.18.7

4
5

6 7
8

to the Fourth Amended Plan do not affect adversely the interests of any Creditors. In essence, these proposed modifications to the Third Amended Plan reflect only an agreement that any Court approval of any proposed Merger Transaction will be sought only after notice to the SEC, and that no Merger Transaction will be effectuated unless it is in compliance with applicable law, rules and regulations.
8. Sections 7.2.5 and 12.3 - Limit exculpatory provisions contained in the Third Amended Plan.

9
10
11

These proposed modifications to the Third Amended Plan wil enhance the interests of Creditors, or wil have no effect on the interests of
Creditors. In accordance with the Plan Proponents'

12
13

agreement with the SEC, the Plan Proponents propose to modify the limitation ofliability provisions contained in Sections 7.2.5 and 12.3 of the Third Amended Plan to limit the scope of such provisions.

14 Thus, it is clear that the proposed modifications to the Third Amended Plan either enhance

15 the interests of Creditors, or wil have no adverse effect on the treatment of Creditors under
16 the Third Amended Plan. Moreover, these proposed modifications to the Third Amended Plan

17 will have no effect of any nature on the treatment ofthe Interests ofInterest Holders under the
18 Third Amended Plan_
19 Approval of

this Motion will eliminate the risks and costs associated with any protracted

20 confirmation dispute, will effectuate the agreements reached with the SEC and with Caropy, and
21 will facilitate greatly the confimiation of

the Third Amended Plan, as modified by the Fourth


this Motion is in the best interests of

22 Amended Plan. Accordingly, approval of

~ CONCLUSION ~ 25
23 Debtor's Creditors.
27 or even at, a hearing on the confirmation of 28 of creditors. In fact, this is an integral part of

the Debtor and the

26 It is common for a debtor to make reasonable modifications to a Chapter 11 plan prior to,
the plan, in order to address and resolve the objections

the reorganization process. Here, the Plan


-13MAINDOCS-#149892-v I-MTI _ MtnReApprovalNonMaterialModToPlan, DOC

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 14 of 44

Desc

1 Proponents propose to make modest, non-material modifications to the Third Amended Plan in
2 order to eliminate objections to the Third Amended Plan asserted by Canopy and by the SEC and
3 thereby obtain a fully consensual plan. The proposed modifications to the Third Amended Plan

4 either enhance the interests of Creditors, or do not affect adversely the interests of Creditors, and
5 the proposed modifications have the support of the Debtor and the Committee. The Plan

6 Proponents respectfully submit that the relief sought herein is fair and is wholly appropriate and
7 should be authorized by this Court.

8 DATED: August 7,2010


9
10
11

WINTHROP COUCHOT PROFESSIONAL CORPORATION

BY~'c9~
Creditors

12
13

o ert E. Opera Richard H. Golubow Counsel for the Official Committee ofUnsecuied

14
15

16
17
18

19

20
21

22
23

24
25

26

27
28
-14MAl NDOCS-# 149892-v I-MTI _ MtnReApprovalNoiiMaterialModToPlan. DOC

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 15 of 44

Desc

I DECLARATION OF ROBERT E. OPERA


2
3

I, Robert E. Opera, hereby declare and state as follows:


1.

I am an attorney with the law firm of Winthrop Couchot Professional Corporation,

4 counsel for the Official Committee of U nsecUfed Creditors in the Chapter 11 case of MTI

5 Technology Corporation ("Debtor"). The matters set forth herein are within my own personal
6 knowledge, and, if called upon as a witness, I could and would competently testify thereto.
7

2.

This Declaration is provided in support of

the Debtor's and Committee's Joint

8 Motion for Order Approving Non-Material Modifications to Debtor's and Committee's Joint
9 Third Amended Chapter 11 Plan ("Plan Modification Motion")?
10 3.
No objections to the confirmation of

the Third Amended Plan were fied by any


the Plan were asserted by Canopy, and the
u.s. Securities

11 Creditor, but informal objections to the confirmation of

12 United States Securities and Exchange Commission ("SEC") filed its Objection of

13 Exchange Commssion to Confirmation of

Debtor's and Committee's Third Amended Chapter 11

14 Plan ("SEC Plan Objection").


15

4.

Canopy requested that the Plan Proponents make certain amendments to the Third

16 Amended Plan in order to clarify the treatment of the Canopy Claim pursuant to the Plan (Class 4
17 under the Plan). The Plan Proponents now have made amendments to the Third Amended Plan in
18 order to address Canopy's concerns, and such amendments to the Third Amended Plan have been

19 incorporated into the Fourth Amended Plan. Canopy's counsel has confirmed that, with such
20 amendments to the Third Amended Plan, as incorporated into the Fourth Amended Plan, Canopy
21 has no objection to the confirmation of

the Fourt Amended Plan.

22

5.

By the SEC Plan Objection, the SEC raised two primary concerns with respect to
the Third Amended Plan -- the provisions of

23 the confirmation of

the Third Amended Plan

24 providing for the possibility of a Merger Transaction could be contrary to public policy, and
25 certain exculpatory provisions provided in the Third Amended Plan for the benefit of

the Debtor,

26 the Committee, their successors under the Third Amended Plan, and their Representatives and
27
3 Unless otherwise defined herein, the definitions of

28

the capitalized terms contained herein are as set forth in the Plan

Modification Motion.
-15MAOCS-l149892-v I-MTI _ MtnReApprovalNonMaterialModToPlanDOC

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 16 of 44

Desc

1 Professionals are overly broad. The Plan Proponents worked with the SEC to resolve the SEC

2 Plan Objection, and agreed to amend the Third Amended Plan in order to address the SEC's
3 concerns. By reason of

the amendments that the Plan Proponents have madc to the Third

4 Amended Plan, incorporated into the Fourth Amended Plan, the SEC has agreed to withdraw the

5 SEC Plan Objection.


6
6.
By reason of the foregoing, subject to the Court's approval of

the Plan

7 Modification Motion, there will be at the Confirmation Hearing no pending objections to the
8 confirmation of

the Third Amended Plan, as amended by the Fourth Amended Plan.


7.

The Fourth Amended Plan, incorporating the Plan Proponents' proposed

10 modifications to the Third Amended Plan, is filed concurrently herewith. A "redlined" version of
11 the Fourh Amended Plan, reflecting the proposed modifications to the Third Amended Plan, is
12 attached as Exhibit "A" hereto and is incorporated herein by this reference.
13

8.

Approval of

the Plan Modification Motion wil effectuate the agreements reached

14
15

with the SEC and with Canopy to resolve their concerns regarding the Third Amended Plan and

thereby wil eliminate the risks and costs associated with any protracted confirmation dispute.
Accordingly, approval of the Plan Modification Motion wil facilitate the confirmation of

16 17 18 19

the

Third Amended Plan, as modified by the Fourth Amended Plan.

I declare under penalty of perjury that the foregoing is true and correct.
Executed this 5th day of August 2010, at Newport Beach, California.

20
21

r. .

/~~
Robert E. Opera
-16-

22
23

24
25

26
27
28

MANDOCS-# 149892-vl -MTI MtnReApprovalNonMaterialModToPlan.DOC

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 17 of 44

Desc

EXHIBIT "A"

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 18 of 44

Desc

2
3

Scott C. Clarkson, Esq. (CA Bar No. 143271) Eve A. Marsella, Esq. (CA Bar No. 165797) Clarkson, Gore & Marsella, APLC
3424 Carson Street, Suite 350

Torrance, California 90503


Telephone: 310/542-0111

4
5

Facsimile: 310/214-7254 Email: sclarkson@lawcgm.com


Attorneys for Debtor and Debtor-in-Possession MTI Technology Corporation
Robert E. Opera, Esq. (CA Bar No. 101182) Winthrop Couchot Professional Corporation 660 Newport Center Drive, Suite 400 Newport Beach, CA 92660 Telephone: 949/720-4100 Facsimile: 949/720-4111
Email: ropera@winthropcouchot.com

6 7
8

10
u .. Do
-i
'" '" "' '" 0: '" :E

11

.,

12
13

Attorneys for the Official Committee of Unsecured Creditors

~
"' 0:

c.

c
~
'"

14
15

UNITED STATES BANKRUPTCY COURT

z"

CENTRAL DISTRICT OF CALIFORNIA


SANTA ANA DIVISION

" '"

16
17
18

In re

Case No.: 8:07-13347-ES


Chapter 11

19

MTI TECHNOLOGY CORPORATION, a Delaware corporation,

20
21

Debtor

DEBTOR'S AND COMMITTEE'S JOINT THIRD FOURTH AMENDED CHAPTER 11 PLAN


Date: Time: Location:
August 26, 20 i 0
10:30 a.m.

22 23

Courroom 5A

24
25

Judge:

The Honorable Erithe A. Smith

26 27
28

MAINDOCS-#149105-v2-MTI_ 4th_Amended_ Ch_1I_Plan.DOC

Exhibit A, Page 17

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 19 of 44

Desc

MTI Technology Corporation and the Official Committee of

Unsecured Creditors hereby

2
3

propose jointly this Joint Second Fourth Amended Chapter 11 Plan and request confirmation hereof

pursuant to section 1129 ofthe Bankuptcy Code.

4
5

i.
INTRODUCTION
This Plan is proposed jointly by the Debtor and by the Committee for the resolution of the
Claims against the Estate.

6 7
8

1 This Plan provides for a comprehensive debt restructuring of the

Debtor. Pursuant to this Plan, the Allowed Claims of Creditors wil be paid in accordance with the
terms and conditions of

9
10 u .. ""
..
. .. ..

this Plan and otherwise will be discharged.

Sent to you in the same envelope as this Plan is the Debtor's Disclosure Statement. The

11

Disclosure Statement has been approved by the Bankptcy Court, and is being provided along
with this Plan in order to help you to understand this Plan and to evaluate the merits of this Plan.
The Disclosure Statement discusses, among other things, the Debtor's business, the results of

12
13

:;
Od "' '"

~ '" ~

the

l?

0
'" '" '"

14
15

Debtor's operations, the Debtor's assets and liabilities and the material terms of this Plan.
Creditors are encouraged to read the Disclosure Statement.

z 0
.. u
~

16 17
18

The objective of this Plan is to liquidate the Debtor's Assets for the benefit of Creditors and

make Distributions to the holders of Allowed Claims. By this Plan, the Reorganized Debtor will
continue in existence as appropriate to effectuate a Merger Transaction prior to the Merger Consummation Date, with any value obtained from any such Merger Transaction distributed to
holders of Allowed General Unsecured Claims in accordance with the terms and conditions of

19

20
21

this

Plan.

22
23

This Plan divides Creditors and Interest Holders into Classes based upon their respective legal rights and interests, and provides for the satisfaction of Allowed Claims in accordance with
the terms and conditions ofthis Plan. Interest Holders wil not receive or retain any value on
account of

24
25

their Interests, except as provided expressly to the contrary in Section 5.6 hereof.

26 27
28
2
i The definitions of the capitalized terms contained herein are set forth in Article II of

this Plan.

MIl Plan v3.0


MANDOCS-# 1491 05-v2-MTl_ 4th_Amended_ Ch_11_PlanDOC

Exhibit A, Page 18

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 20 of 44

Desc

UNLESS SPECIFICALLY SET FORTH IN THIS PLAN TO THE CONTRARY,


2
3

THE INFORMATION CONTAINED OR REFERRD TO IN THIS PLAN HAS NOT

BEEN SUBJECT TO CERTIFIED AUDIT. RECORDS KEPT BY THE DEBTOR RELY

4
5

FOR THEIR ACCURACY ON BOOKKEPING PERFORMED INTERNALLY BY THE


DEBTOR. ALTHOUGH THE PLAN PROPONENTS BELIEVE THAT EVERY
REASONABLE EFFORT HAS BEEN MADE TO PRESENT HEREIN ACCURATE

6 7
8

FINANCIAL INFORMATION, THE RECORDS KEPT BY THE DEBTOR ARE

NEITHER WARRNTED NOR REPRESENTED TO BE FREE OF INACCURACY.


NEITHER THE PLAN PROPONENTS NOR ANY OF THE PROFESSIONALS
EMPLOYED BY THE PLAN PROPONENTS HAS INDEPENDENTLY VERIFIED THE
INFORMATION CONTAINED HEREIN, AND NONE OF THEM MAKES ANY

10 u ..
'"

11

..
.: ..
..
, 3

12
13

REPRESENTATION OR WARRNTY WITH RESPECT TO THE ACCURACY OF


SUCH INFORMATION.

;; "
~ ~

~ j

, z

'" "

ti "

o ~

14
15

ANY CREDITOR ENTITLED TO VOTE ON THIS PLAN IS URGED TO REVIEW


CAREFULLY THIS PLAN PRIOR TO VOTING ON THIS PLAN, AND MAY DESIRE TO

z
'" '"

;;

.. u

-(

16 17
18

CONSULT WITH ITS OWN LEGAL COUNSEL PRIOR TO VOTING ON THIS PLAN IN
ORDER TO ENSURE A COMPLETE UNDERSTANDING OF THE TERMS OF THIS
PLAN.

19

II.

20
21

DEFINITIONS AND RULES OF CONSTRUCTION


2.1 Defined Terms. The following terms (which appear in this Plan as capitalized

22
23

terms), when used in this Plan, have the meanings set forth below.

2.1.1 "Administrative Claim" means a Claim for costs or expenses that are
allowable under sections 503(b) or 507(b) of

24
25

the Bankptcy Code or 28 U.S.C. 1930.

These costs or expenses may include: (a) actual, necessary costs and expenses of preserving
the Estate after the Petition Date; (b) Ordinary Course Administrative Claims; (c) Pre-Effective Date Professional Fee Claims; (d) Administrative Tax Claims; and
(e) United States Trustee Fees.
3

26 27
28

MTl Plan v3.0


MAOCS..149105-v2-MTl_ 4th _Amended _ Ch _11_P1an.DOC

Exhibit A, Page 19

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 21 of 44

Desc

2.1.2 "Administrative Claims Bar Date" has the meaning set forth in

2
3

Section 3.1.2 of this Plan.


2.1.3 "Administrative Claims Objection Deadline" has the meaning set forth

4
5

in Section 3.1.3 of this Plan.


2.1.4 "Administrative Tax Claim" means a Tax Claim, other than a Secured

6 7
8

Claim, that a governental unit asserts against the Debtor for any tax period that, in whole
or in part, falls within the period commencing on the Petition Date and ending on the
Effective Date.
2.1.5 "Allowed Administrative Claim" means an Administrative Claim that is

9 10 u o0.

allowed as set forth in Section 3.1 hereof or otherwise by a Final Order.


2.1.6 "Allowed Avoidance Action Payment Claim" means an Allowed Claim

11

~ -:~ .. ..
;;
'"

12
13

based upon or arising from an entity's payment to the Debtor or Reorganized Debtor of a

:;
OI "' '"

-:

claim asserted against the entity pursuant to an Avoidance Action. Any Allowed Avoidance
Action Payment Claim shall be treated hereunder as a Class 3 Claim.

a
ui

a
..
'"

14
15

2.1.7 "Allowed Claim" means a Claim (a) that is listed in the Bankptcy

.. u

-:

16 17
18

Schedules filed with the Banptcy Court by the Debtor and not listed as disputed,
contingent, unliquidated or unkown as to amount and as to which no timely objection has
been filed; or (b) with respect to which a Proof of Claim has been fied by the Bar Date, and
as to which no objection is filed within the time period fixed by the Bankruptcy Code, the

19

20
21

Banptcy Rules, this Plan or by order of the Bankrptcy Court, or as to which any such
objection has been determined by a Final Order. The amount of an Allowed Claim shall be
as follows: (i) if thc Creditor did not fie a Proof of Claim with the Banptcy Court on or

22
23

before the Bar Datc, the amount of the Creditor's Claim as listed in the Bankptcy
Schedules as neither disputed, contingent, unliquidated or unkown; or (ii) if the Creditor

24
25

filed a Proof of Claim with the Bankptcy Cour on or before the Bar Date, (I) the amount
stated in such Proof of Claim if no objection to such Proof of Claim is filed within the time

26 27
28

period fixed by the Bankruptcy Code, the Bankptcy Rules, this Plan or by order of the
Bankuptcy Court, or (2) the amount thereof fixed by a Final Order of

the Banptcy Court

MTI Plan v3.0


IVWNDOCS-#I 49 I 05-v2-MTI_

4th_Amended_Ch_ll_PlanDOC

Exhibit A, Page 20

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 22 of 44

Desc

if an objection to such Proof of Claim is filed within the time period fixed by the
2
3

Banptcy Code, the Bankptcy Rules, this Plan or by order of the Banptcy Court.
Any Claim that is not filed by the Bar Date and that is listed in the Banptcy Schedules as

4
5

disputed, unliquidated, contingent or unkown, or that is not allowed under the terms of this
Plan, shall be disallowed, and no Distribution shall be made on account of such Claim. No
default interest or late charges or comparable fees, charges or penalties shall be included as
part of an Allowed Claim.
2.1.8 "Allowed Class '**' Claim" means an Allowed Claim classified in the

6
7
8

9 10 u ,. 0.
"' '" '" '"

specified Class.
2.1.9 "Allowed Deficiency Claim" means that portion of an Allowed Claim

11

that is in excess of the value of any Collateral which is security for the repayment of such
Claim, calculated in accordance with the provisions of section 506 of the Banptcy Code.
2.1.10 "Allowed General Unsecured Claim" means an unsecured Allowed

.. .. ..

12
13

::
d "' '"

:i 0
'" '" '"

14
15

Claim against the Debtor, however arising, not entitled to priority under section 507(a) of
the Bankruptcy Code, including, without limitation, an Allowed Deficiency Claim, an
Allowed Rejection Claim or an Allowed Avoidance Action Payment Claim.

-' u

.;

16
17
18

2.1.11 "Allowed Interest" means an Interest to the extent, and only to the extent,
of the amount of such Interest allowed by this Plan or by Final Order of the Banptcy
Court.

19

20
21

2.1.12 "Allowed Penalty Claims" means a Penalty Claim that is allowed by a


Final Order. Any Allowed Penalty Claim shall be treated hereunder as an Allowed Class 5
Claim.
2.1.13 "Allowed Priority Non-Tax Claim" means an unsecured Allowed Claim
entitled to priority pursuant to sections 507(a)(4), 507(a)(5), or 507(a)(7) of

22
23

24
25

the Banruptcy

Code.
2.1.14 "Allowed Priority Tax Claim" means an Allowed Claim entitled to
priority under section 507(a)(8) of

26 27
28

the Bankruptcy Code.

MTI Plan v3.0


MAOCS-I149105-v2-MT'- 4th ~ Amended_ Ch_ll_PlanDOC

Exhibit A, Page 21

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 23 of 44

Desc

2.1.15 "Allowed Rejection Claim" means any Allowed General Unsecured

2
3

Claim based upon or arising from the rejection of an executory contract or unexpired lease

pursuant to a Final Order of the Banptcy Court or pursuant to this Plan. Any Allowed
Rejection Claim shall be treated hereunder as a Class 3 Claim.
2.1.16

4
5

"Allowed Secured Claim" means an Allowed Claim secured by a valid

6 7
8 9

and unavoidable Lien against property in which the Estate has an interest, or which is
subject to setoff under section 553 of

the Banuptcy Code, to the extent ofthe value,


the Banuptcy Code, of the interest of

determined in accordance with section 506(a) of

the

holder of such Allowed Claim in the Estate's interest in such property, or to the extent of

10 u ..
11

the amount subject to any setoff, as the case may be. Unpaid principal and any accrued
interest allowable under section 506 of the Bankruptcy Code with respect to an Allowed
Secured Claim shall be computed as of

0-

.i .l oJ
oJ

12
13

the Effective Date, and the Allowed Secured Claim

-: :g

"

shall thereafter bear interest as provided in this Plan.


2.1.17 "Allowed Subordinated Claim" means any Allowed Claim that is

~ "' " 0
,.

14
15


~
oJ u

subordinated to Allowed Class 3 Claims to the extent provided by the Bankruptcy Code or a
Final Order.
2.1.18 "Assets" means all assets and properties of

" -:

16

17
18

the Debtor's Estate including

"property of the estate" as described in section 541 of the Bankruptcy Code.

19

2.1.19 "Avoidance Action" means an adversary proceeding, lawsuit or other


action or proceeding filed pursuant to sections 502(d), 506, 510, 542,543,544,545,547,
548,549,550,551,552 or 553 of

20
21

the Banptcy Code, an adversary proceeding, lawsuit or

22
23

other action or proceeding based on applicable non-bankptcy law that may be


incorporated or brought under the foregoing sections of the Bankptcy Code, an adversary

24
25

proceeding, lawsuit or other action or proceeding arising under, or relating to, any similar
state law or federal law, and any other similar action or proceeding filed to recover property
for or on behalf of

26 27
28

the Estate, or to avoid a Lien or transfer, whether or not such adversary

proceeding, lawsuit, action or proceeding is initiated on or before the Effective Date.

MTI Plan v3.0


MANDOCS-#149105-v2-MTI_ 4lhj.mended ~ Ch_ll_PlanDOC

Exhibit A, Page 22

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 24 of 44

Desc

2.1.20 "Avoidance Action Payment Claim" means a Claim based upon or

2
3

arising from an entity's payment to the Debtor or Reorganized Debtor of a claim asserted
against the entity pursuant to an A voidance Action.

4
5

2.1.21 "Bankruptcy Code" means the United States Bankptcy Code, as set
forth in 11 U.S.C. 101-1532, as now in effect and as may be hereafter amended.

6 7
8

2.1.22 "Bankruptcy Court" means the United States Bankptcy Court for the
Central District of California, Santa Ana Division.

2.1.23 "Bankruptcy Rules" means, collectively, the Federal Bankptcy Rules


and the Local Bankptcy Rules.

9
10

2.1.24 "Bankruptcy Schedules" means the Schedules of Assets and Liabilities


and Statement of

u .. '" ..
.,-

11

Financial Affairs filed by the Debtor in the Case, as they may have been

.. .. ;:
'"

12
13

amended and as they may be amended hereafter from time to time.

::
oM "' '"

."

2.1.25 "Bar Date" means the last date for Creditors and Interest Holders whose
Claims or Interests, respectively, are not scheduled, or whose Claims or Interests are

" '"
."

14
15

0 OJ
.. u

scheduled in the Banptcy Schedules as disputed, contingent, unliquidated or unown as


to amount, to file Proofs of Claim or Interests, as set forth in an order of the Banptcy
Court entered on April 7, 2008.

16 17
18

2.1.26 "Business Day" means any day other than a Saturday, Sunday or a legal
holiday (as defined in Rule 9006(a) of

19

the Federal Bankptcy Rules).

20
21

2.1.27 "Canopy" means Canopy Group, Inc.


2.1.28 "Canopy Claim" means the Allowed Claim of Canopy.
2.1.29 "Case" means the case under Chapter i 1 of the Bankptcy Code

22
23

commenced by the Debtor on the Petition Date and bearng Case Number 8:07-13347-ES.
2.1.30 "Case Closing Date" means the date on which the Banptcy Court
enters a Final Decree closing the Case, in accordance with section 350 of

24
25

the Bankptcy

26 27
28

Code.

2.1.31 "Cash" means cash or cash equivalents including, but not limited to, ban
deposits, checks or other similar forms of payment or exchange.
7

MTI Plan v3.0


MANDOCS-# 149105-v2-MTI_ 4th_Amended_Ch_ll_PlanDOC

Exhibit A, Page 23

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 25 of 44

Desc

2.1.32 "Causes of Action" means any and all claims, demands, rights, actions,
causes of action and suits of

2
3

the Debtor or the Estate, of any kind or character whatsoever,

known or unkown, suspected or unsuspected, whcther arising prior to, on or after the
Petition Date, in contract or in tort, at law or in equity or under any other theory of law, that

4
5

the Debtor or the Debtor's Estate has or asserts, or may have or assert, against third paries,
whether or not brought as of the Effective Date, and which have not been settled or
otherwise resolved by Final Order as of the Effective Date, including but not limited to

6 7
8

(a) rights of seton: counterclaim or recoupment, (b) claims on contracts or for breaches of
duties imposed by law, (c) rights to object to Claims or Interests, (d) such claims and
defenses as fraud, mistake, duress or usury, (e) Avoidance Actions, (f) claims for tax

9 10
u .. ~
,.

11

refunds, (g) claims to recover accounts receivable, and (h) any other claims which may be
asserted against third paries.

.i ~ ,.
::
o:
"' '"
'" '"

12
13

;;

2.1.33 "Claim" means a "claim" against the Debtor, as such term is defined in
section 101(5) of

'" '" '"

0 0 OJ

14 15 16 17
18

the Bankrptcy Code.


the following dates:

z
,.

2.1.34 "Claims Objection Deadline" means the latest of

(a) the one hundred eightieth (1

80th) day after the Effective Date; (b) with respect to a

specific Claim, the ninetieth (90th) day after a Proof of Claim with respect to such Claim is

filed by a Creditor; (c) with respect to a Claim that is not listed in the Bankptcy
Schedules, the ninetieth (90th) day after the Plan Agent learns of the existence of such
Claim; or (d) such greater period of limitation as may be fixed or extended by the

19

20
21

Banptcy Cour or by agreement between the Plan Agent and the Creditor.
2.1.35 "Class" means a group of Claims or Interests as classified in Article IV of

22
23

this Plan.
2.1.36 "Collateral" means any property or interest in property of

24
25

the Estate

subject to a Lien of a Secured Creditor that is not subject to avoidance under the Bankptcy Code or otherwise invalid under the Bankptcy Code or applicable federal or state law.

26 27 28

2.1.37 "Committee" means the Offcial Committee of Unsecured Creditors


appointed in the Case by the United States Trustee.
8

MTI Plan v3.0


MANDOCS-#l 491

05-v2-MTI_ 4th_Amended Ch_II_Plan.DOC

Exhibit A, Page 24

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 26 of 44

Desc

2.1.38 "Confirmation" means the entry of

the Confirmation Order by the

2
3

Banptcy Court.
2.1.39 "Confirmation Date" means the date on which the Bankruptcy Cour

4
5

enters the Confirmation Order on its docket.


2.1.40

"Confirmation Hearing" means the hearing before the Bankptcy Court


this Plan pursuant to section 1128(a) of

6 7
8

to consider the confirmation of

the Bankptcy

Code, as such hearing may be continued from time to time.


2.1.41

"Confirmation Hearing Date" means the first date on which the

9 10 u -'
-.
~

Bankruptcy Court holds the Confirmation Hearing.


2.1.42

"Confirmation Order" means the order of the Bankptcy Court

11

confirming this Plan under section 1129 of the Bankptcy Code.

~
-:" .. ..

12
13

2.1.43 "Creditor" means the holder of a Claim against the Debtor.


2.1.44 "Cure Claims" has the meaning set forth in Section 10.5 of

" -: ::
o:
"'

this Plan.

"

14
15

2.1.45 "Cure Claims Schedule" has the meaning set forth in Section 10.5 of

this

i 0
g

Plan.

.. u

" -:

16
17 18

2.1.46 "Debtor" means MTI Technology Corporation, the debtor and debtor-inpossession in the Case. For the purpose of

this Plan, references to the "Debtor" shall

include the Reorganized Debtor.

19

2.1.47 "Deficiency Claim" means that portion of a Claim that is in excess of the
value of the Collateral which is security for the repayment of such Claim, calculated in
accordance with the provisions of section 506 of the Bankruptcy Code.

20
21

22
23

2.1.48 "De Minimis Distribution" has the meaning set forth in Section 7.2.3 of
this Plan.

24
25

2.1.49 "Disbursing Agent" means the entity charged with making Distributions
under this Plan. The Plan Agent shall serve as Disbursing Agent under this Plan.
2.1.50 "Disclosure Statement" means the Joint Third Amended Disclosure

26 27
28

Statement relating to this Plan, including, without limitation, all exhibits and schedules

thereto, as approved by the Bankruptcy Court pursuant to section 1125 of the Banruptcy
9

MTI Plan v3.0


MAINDOCS-#l 491 05-v2-MTI_ 4th_Amended_ Ch~ 1 I_Plan

Exhibit A, Page 25

DOC

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 27 of 44

Desc

Code, as may be amended, modified or supplemented from time to time in accordance with
the provisions of the Bankruptcy Code and Banptcy Rules.
2.1.51

2
3

"Disclosure Statement Order" means the Final Order entered by the

4
5

Banptcy Court approving the Disclosure Statement.


2.1.52

"Disputed Claim" means any Claim as to which: (a) a Proof of Claim

6
7
8

has been filed and the dollar amount of such Claim is not specified in a fixed amount; (b) a

Proof of Claim has been fied, to the extent to which the stated amount of such Claim

exceeds the amount of such Claim listed in the Banuptcy Schedules; (c) a Proof of Claim

9
10 u ,. 0.
~
'"
J
OJ ","

has been filed and such Claim is not listed in the Banuptcy Schedules; (d) a Proof of
Claim has been filed, or is deemed filed under Rule 3003(b)(1) of

the Federal Bankruptcy

11

Rules, and is listed in the Bankruptcy Schedules as contingent, disputed, liquidated, or

.. ..

12
13

unkown as to amount; or (e) an objection, or request for estimation, has been filed by the
Claims Objection Deadline and such objection or request for estimation has neither been
withdrawn nor been denied by a Final Order.
2.1.53

~
""

;s
'"

Z ~
.. u
'" '" ""

14
15 16 17 18 19

"Disputed Claims Reserve" has the meaning set forth in Section 8.4.3 of

this Plan.

2.1.54

"Distribution" means any transfer under the Plan of Cash, or other

property or instruments, to the holder of an Allowed Claim.


2.1.55
Plan.
"Distribution Schedule" has the meaning set forth in Section 7.2.9 of

this

20
21

2.1.56

"Effective Date" means the eleventh (II th) day following the waiver or
this Plan.

22
23

satisfaction ofthe conditions set forth in Section 6.3 of

2.1.57 "Estate" means the estate created in the Case under section 541 of the
Bankptcy Code.

24
25

2.1.58 2.1.59

"Expenses" has the meaning set forth in Section 2.1.88 of

this Plan.

26 27
28

"Federal Bankruptcy Rules" means the Federal Rules of

Banptcy

Procedure, as now in effect and as may be hereafter amended.


2.1.60

"Final Decree" has the meaning set forth in Section 6. i 7 of this Plan.
10

MTI Plan v3.0


MANDOCS-#149105-v2-MTI_ 4th_Amended _ Ch_1I_PlanDOC

Exhibit A, Page 26

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 28 of 44

Desc

2.1.61

"Final Order" means an order or judgment of

the Bankptcy Court or

2
3

other applicable court, as entered on the applicable docket, that has not been reversed,

stayed, modified or amended, and as to which the time to appeal, petition for certiorari, or

4
5

move for reargument or rehearing has expired and as to which no appeal, petition for
certiorari, or other proceedings for reargument or to obtain a rehearing shall then be pending
or as to which any right to appeal, petition for certiorari, reargue, or obtain a rehearing shall

6
7
8

have been waived in writing in form and substance satisfactory to the Plan Proponents prior
to the Effective Date, or to the Plan Agent after the Effective Date, as applicable, or, in the

event that an appeal, wrt of certiorari, or proceeding for reargument or rehearing of such
order or judgment has been sought, such order or judgment shall have been affirmed by the
highest court to which such order or judgment was appealed, or certiorari has been denied, or from which reargument or rehearing was sought, and the time to take any further appeal, petition for certiorari or move for reargument or rehearing shall have expired.
2.1.62

10
u ,. 0.
11

----

.
OJ '" '"

12
13

;;
0:
OJ '"

..

~
'" '"

14
15

"General Unsecured Claim" means any Claim that is not an

~
-u

Administrative Claim, a Priority Tax Claim, a Priority Non-Tax Claim, a Secured Claim",

..

16

the Canopy Claim or a Subordinated Claim, including, without limitation, a Rejection


Claim, a Deficiency Claim or an A voidance Action Payment Claim.
2.1.63

17
18

"Initial Distribution Date" has the meaning set forth in Section 7.2.8 of

19

this Plan.
2.1.64

20
21

"Interest" means an "equity security" in the Debtor, as such term is

defined in section 101 (16) of the Bankrptcy Code, no matter how held, including, without
limitation, issued and outstanding shares ofMTI Stock, and all rights and interests arising
thereunder, and all rights to acquire equity securities in the Debtor, including, without

22
23

24
25

limitation, pursuant to options, warants, employee plans, or similar agreements, contracts


or instruents, provided that such rights are exercised on or prior to the Effective Date.

26 27
28

2.1.65 "Interest Holder" means a holder of an Interest.


2.1.66 "Internal Revenue Code" means the Internal Revenue Code of 1986,

now in effect and as may be hereafter amended.


11

MTI Plan v3.0


MA1NDOCS-#149I05-v2-MTI_ 4th _ Amended_Ch_Il_PlanDOC

Exhibit A, Page 27

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 29 of 44

Desc

2.1.67 "Late-Filed Claim" means any General Unsecured Claim described in

2
3

sections 726(a)(2)(C) or 726(a)(3) of

the Bankptcy Code.

2.1.68

"Lien" means any lien, security interest, mortgage, deed of trust,


the Debtor.

4
5

encumbrance, pledge or other charge against Assets of

2.1.69 "Loan Documents" has the meaning set forth in Section 13.21 of

this

6 7
8

Plan.
2.1. 70 "Local Bankruptcy Rules" means the Local Bankrptcy Rules applicable

to cases pending before the Banruptcy Court, as now in effect and as may be hereafter
amended.
2.1.71

9
10
c.

"Merger Consummation Date" has the meaning set forth in

..
'"

11

Section 6.18.2 of this Plan.


2.1.72
Plan.
"Merger Transaction" has the meaning set forth in Section 6.18.1 of

~
...

,.
,.

12
13

this

~ ~

'" '

.. ..
~ z

~ ~ ~ ~

;;
:

o ~

'" "

14
15

2.1.73 "MTI Stock" means the issued and outstanding shares of common stock
and preferred stock of the Debtor as of the Effective Date.
2.1. 74 "Ordinary Course Administrative Claim" means an Administrative
Claim allowable under section 503(b) of

.. ,. c.

'" '"

16 17
18

the Bankuptcy Code, that is incurred in the

ordinary course of the Debtor's operations or the Case, or the payment of which is provided for by an order of the Bankruptcy Court, exclusive of any Pre-Effective Date Professional
Fee Claims, Administrative Tax Claims and United States Trustee Fees.

19

20
21

2.1.75 "Penalty Claim" means any Claim for any fine, penalty, or forfeiture, or
for multiple, exemplary, or punitive damages, arising before the Petition Date, to the extent that such fine, penalty, forfeiture, or damages are not compensation for actual pecuniary

22
23

24
25

loss suffered by the holder of such Claim, as set forth in section 726(a)( 4) of the Banuptcy
Code.
2.1.76 "Petition Date" means October 15, 2007, the date on which the Debtor

26
27 28

filed its voluntary petition commencing the Case.

12

MTI Plan v3.0


MAINOCS-I149I 05-v2-MTl_ 4th_ Amended_ Ch _ll_PIan.DOC

Exhibit A, Page 28

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 30 of 44

Desc

2.1.77

"Plan" means this Joint ::Fourth Amended Chapter II Plan,

2
3

including, without limitation, all exhibits, supplements, appendices, and schedules hereto, either in its present form or as it may be altered, amended, or modified from time to time.
2.1.78

4
5

"Plan Agent" means the entity appointed by this Plan to administer this

Plan and to make the Distributions provided by this Plan, in accordance with the provisions
of Section 6.6.1 of this Plan.
2.1.79

6
7
8

"Plan Agent Certifcation" has the meaning set forth in Section 6.16 of

this Plan.
2.1.80

"Plan Agent Disclosure" has the meaning set forth in Section 6.8.4 of

10
u .. ~
11

this Plan.
2.1.81
Effective Date of

"Plan Assets" means the Assets, which shall be transferred on the


this Plan in trust to the Reorganized Debtor, to be administered by the

0(

.. .. ..
W en '"

12
13

-:

Plan Agent~ on the Effective Date of this Plan, free and clear of any Liens that otherwise

:E

ol

0 " z
~
'" '"

OJ '"

14
15

might have existed in favor of any Secured Creditor.


2.1.82

"Plan Fund" means a segregated, interest-bearng account established at a

-:

..

16 17
18

financial institution which is an authorized depository under United States Trustee


Guidelines, into which the Plan Agent will deposit all Cash of the Estate as of the Effective
Date, less the Cash used to make, or reserve for the making of, the Distributions required to

19

be made on or about the Effective Date, and all Cash received by the Reorganized Debtor

20
21

after the Effective Date. The Plan Fund Proceeds shall be made available for making Distributions to the following Creditors: the holders of Allowed General Unsecured

22
23

Claims: Canopy on account of any Canopy Claim: anany Allowed Subordinated Claims~
and for paying the Post-Effective Date Plan Expenses.
2.1.83

24
25

"Plan Fund Proceeds" means the Cash available in the Plan Fund for

making Distributions on account of Allowed General Unsecured Claims, the Canopy Claim, and any Allowed Subordinated Claims and for paying the Post-Effective Date Plan
Expenses.

26 27
28

13

MTl Plan v3.0


MAOCS-#149105-v2-MT1_ 4tli_ Arnended_ Ch_ 1 I_PlanDOC

Exhibit A, Page 29

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 31 of 44

Desc

2.1.84 "Plan Proponents" mcans, together, the Debtor and the Committee, the
2
3

proponents of this Plan.

2.1.85 "Post-Effective Date Committee" means the Committee, as it shall be


reconstituted and fuction after the Effective Date, pursuant to the provisions of this Plan.

4
5

2.1.86 "Post-Effcctivc Datc Committee Disclosure" has the meaning set forth
in Section 6.9.1 of

6
7
8

this Plan.

2.1.87 "Post-Effective Datc Noticc Partics" has the meaning set forth in

Section 6.16 of this Plan.


2.1.88

9 10
u .. Po ..
~ ,.
,.
"' '" '" '" 1 1

"Post-Effective Date Plan Expenses" means all voluntary and

involuntar costs, expenses, charges, obligations, or liabilities of any kind or nature,


whether matured, unmatured, non-contingent, contingent, liquidated, or unliquidated

12
13

(collectively, "Expenses") incurred after the Effective Date related to the implementation of

""

this Plan, including, but not limited to: (a) the Expenses associated with administering this
Plan, including any taxes assessed against the Assets; (b) all United States Trustee Fees;

0 (j
'" '" '"

"' '"

14
15

0 ui
,. u

(c) the Expenses associated with making the Distributions required by this Plan; (d) any

16 17 18

Expenses associated with preparing and fiing tax returns and paying taxes; (e) any
reasonable Expenses incurred by a member of

the Post-Effective Date Committee, but

excluding the attorneys' fees or other professional fees, if any, incured by it, except for any
such fees to which it is entitled by indemnification; (f) the Expenses of

19

independent

20
21

contractors and Professionals providing services to the Plan Agent or the Post-Effective

Date Committee; (g) the Expenses associated with the Plan Agent's indemnity obligations,

22
23

the purchase of errors and omissions insurance andlor other forms of indemnification; and
(h) the fees of

the Plan Agent, and the reimbursement of expenses, to which the Plan Agent

24
25

is entitled under this Plan.


2.1.89 "Post-Effective Date Stock" means any shares of common stock in the

26
27 28

Reorganized Debtor issued on account ofthe holders of Allowed General Unsecured


Claims, pursuant to section 1145 of

the Bankptcy Code, in accordance with the provisions


this Plan.
14

of

Sections 5.3.1.5 and 6.18 of

MTI Plan v3.0


MAOCS-#149105-v2-MTI_ 4th_ Amended_Ch_l1 Plan.DOC

Exhibit A, Page 30

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 32 of 44

Desc

2.1.90
2
3

"Postpetition Interest" means any interest accrual on any Allowed

Claim from and after the Petition Date, in accordance with the provisions of
Sections 5.3.1.3 and 5.5.1.3 of

this Plan. Any Postpctition Interest shall accrue at the


the Petition Date.

4
5

federal judgment rate, as set forth in 28 U.S.c. 1961(a), in effcct as of

2.1.91

"Pre-Effective Date Professional" means a person employed in the Case

6
7
8

prior to the Effective Date pursuant to an order of the Bankptcy Cour in accordance with
sections 327 or 1103 of

the Banptcy Code.

2.1.92 "Pre-Effective Date Professional Fee Claim" means:

9 10
u .. Po ..
-;-

(a) A Claim of a Pre-Effective Date Professional undcr sections 327, 328,


330,331, 503(b) or 1103 of

the Bankptcy Code for compensation for services

11

rendered or expenses incurred prior to the Effective Date on behalf of thc Estate; or

12
13

(b) A Claim, arising prior to the Effective Date, either under


section 503(b)(4) of the Bankptcy Code or under section 503(b)(3)(D) of

:;
o:
"' " 0

" '"

the

14
15

Bankptcy Code.

z 0
ui '"

2.1.93 "Priority Non-Tax Claim" means a Claim, other than an Administrative


Claim or a Priority Tax Claim, entitled to priority in right of payment undcr section 507(a)

.. u

" '"

16 17 18 19

of the Banptcy Code.


2.1.94 "Priority Tax Claim" means a Claim entitled to priority under
section 507(a)(8) of

the Banptcy Code.

20
21

2.1.95 "Professional" means any attorney, accountat, appraiser, auctioneer,


broker, financial consultant, expert or other professional person.

22
23

2.1.96 "Proof of Claim" means a statement under oath filed in the Case by a
Creditor in which the Creditor sets forth the amount claimed to be owed to it and detail
sufficient to identify the basis for the Claim, in accordance with Rule 3001 of

24
25

the Federal

Bankptcy Rules.
2.1.97 "Pro Rata" means proportionately so that the ratio of (a) the amount of
consideration distributed on account of an Allowed Claim to (b) the amount of the Allowed Claim is the same as the ratio of (x) the amount of consideration available for distribution
15

26 27 28

MIl Plan v3.0


MAOCS-#14910S-v2-MTI 4th Amended_Ch_ll_P1anDOC

Exhibit A, Page 31

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 33 of 44

Desc

on account of all Claims in the Class in which that Allowed Claim is included to (y) the
amount of all Claims in that Class.

2
3

The Pro Rata formula is ilustrated as follows:


(a)

4
5

Amount of consideration distributed to a holder of an Allowed Claim


Amount of such Allowed Claim

(x)

Total consideration available for


distribution to holders of

Claims ofthat

Class
(y)

6
7

(b)

Amount of all Allowed Claims in that Class

For the purpose ofthe application of

this definition, in calculating the Distributions to be

made under this Plan, the Plan Agent, as Disbursing Agent under this Plan, shall establish
9
Reserves, on account of Disputed Claims, in accordance with the provisions of

Section 8.4.3

10

of this Plan.
u .. ~
..
'"

11
2.1.98 "Rejection Claim" means any General Unsecured Claim based upon or

. -i -i

12

arising from the rejection of an executory contract or unexpired lease pursuant to a Final
13

::
;
"' '"

-.

Order of the Bankuptcy Court or pursuant to this Plan.


14

lJ
z'

0 0
..

2.1.99 "Reorganized Debtor" means the Debtor, as its financial affairs are
15
reorganized from and after the Effective Date. For the purpose of

ui '" '"

this Plan, a reference to

-i u

16

the "Reorganized Debtor" shall include the Debtor.


17
2.1.100 "Representatives" has the meaning set forth in Section 6.8.5 of

this Plan.

18

2.1.101 "Reserves" means, collectively, the Disputed Claims Reserve, the


19

Unclaimed Property Reserve, and other reserves that the Plan Agent, as Disbursing Agent
20

under this Plan, is required to establish pursuant to this Plan.


21

2.1.102 "Secured Claim" means a Claim that is secured by a Lien against


22
property in which the Estate has an interest or that is subject to setoff

under section 553 of


the value, as

23
the Bankptcy Code. A Claim is a Secured Claim only to the extent of

24
determined under section 506(a) ofthe Bankptcy Code, of

the Secured Creditor's interest


the amount subject to setoff,

25
in the Collateral securing the Claim or to the extent of

26

whichever is applicable.
27

2.1.103 "Secured Creditor" means the holder of a Secured Claim.


28
16

MTI Plan v3.0


MAINDOCS-#149105-v2-MTI 4th Amended _ Ch _ll_PlanDOC

Exhibit A, Page 32

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 34 of 44

Desc

2.1.104 "Stock Termination Approval" has the meaning set forth in


Section 6.18.3 of

2
3

this Plan.

2.1.105 "Subordinated Claim" means any Claim that is subordinated to Allowed


Class 3 Claims to the extent provided by the Bankptcy Code or a Final Order.

4
5

2.1.106 "Tax" means any tax, charge, fee, levy, or other assessment by any
federal, state, local or foreign taxing authority, including, without limitation, income,

6 7
8

excise, property, sales, transfer, employment, payroll, franchise, profits, license, use, ad

valorem, estimated, severance, stamp, occupation and withholding tax. "Tax" shall include
any interest, penalties or additions attributable to, or imposed on or with respect to, such
assessments.

9 10 u .. 0.
11

2.1.107 "Tax Claim" means any Claim, pre-petition or post-petition, relating to a


Tax.
2.1.108 "Unclaimed Propert" has the meaning set forth in Section 7.2.7 of

-i
. .. ..

12
13

;;

;;
tJ
'" '" '"

'" -0

this

01 "' '"

14
15

Plan.

z 0
..

2.1.109 "Unclaimed Propert Reserve" has the meaning set forth in


Section 7.2.7 of

16
17 18

this Plan.

2.1.110 "United States Trustee" means the Office of

the United States Trustee

for the Central District of California.

19

2.1.111 "United States Trustee Fees" means all fees and chargcs assessed against
the Debtor or the Reorganized Debtor by the United States Trustee and due pursuant to
section 1930 of title 28 of the United States Code.
2.2 Rules of Interpretation. For the purpose of

20
21

22
23

this Plan, unless otherwise provided in

this Plan, (a) the rules of construction set forth in section 102 ofthe Bankptcy Code apply to this
Plan; (b) Rule 9006(a) of

24
25

the Federal Bankptcy Rules applies when computing any time period

under this Plan; (c) a term that is used in this Plan and that is not defined in this Plan has the

26 27
28

meaning attributed to that term, if any, in the Bankrptcy Code or in the Bankptcy Rules; (d) the
definition given to any term or provision in this Plan supersedes any different meaning that may be
given to that term or provision in the Disclosure Statement; (e) whenever it is appropriate from the
17

MTI Plan v3.0


MAOCS-#149105-v2-MT'- 4th _ Amended_ Ch_ll_Plan. DOC

Exhibit A, Page 33

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 35 of 44

Desc

context, each term, whether stated in the singular or the plural, includes both the singular and the
plural; (f) each pronoun stated in the masculine, feminine or neuter includes each of

2
3

the masculine,

feminine and neuter; (g) any reference to an exhibit, schedule, instruent or other document means
such exhibit, schedule, instrument or other document as it has been, or may be, amended, modified,

4
5

restated or supplemented as of the Confirmation Date, and any such exhibit, schedule, instrment or
other document shall be deemed to be included in this Plan, regardless of when it is filed; (h) the

6 7
8

phrases "under this Plan," "hereof," "hereto," "hereunder," and similar words or phrases, refer to
this Plan in its entirety rather than to only a portion of this Plan; (i) unless otherwise indicated, all
references in this Plan to sections, aricles or exhibits are references to sections, aricles or exhibits

9 10 u .. 0..
.

in this Plan; G) section captions and headings are used for convenience only and do not affect the
meaning of

11

this Plan; and (k) any reference to the holder ofa Claim or Interest includes that entity's

.. ..
'"

12
13

successor and assigns.

:;

..
:E

2.3 Exhibits. All exhibits to this Plan are incorporated into and are a par of this Plan as
if set forth in full herein.

ot
OJ

'"

Z ~
'" '"

14
15

III.
UNCLASSIFIED CLAIMS
As required by the Bankruptcy Code, this Plan places Claims and Interests into various
Classes according to their respective legal rights and interests, including their respective rights to
priority. However, in accordance with the provisions of section 1123(a)(l) of

.. u

-(

16 17
18 19

the Bankptcy Code,

20
21

Administrative Claims and Priority Tax Claims are deemed "unclassified." These Claims are not
considered impaired under section 1124 of the Banptcy Code, and the holders of

these Claims

22
23

do not vote on this Plan, because these Claims are automatically entitled to specific treatment
provided for them in the Banptcy Code. Accordingly, the Plan Proponents have not placed

24
25

Administrative Claims and Priority Tax Claims in a Class. The treatment ofthese unclassified
Claims is as provided below.

26 27
28

3.1 Allowed Administrative Claims. Administrative Claims generally are Claims for
the expenses of administering the Debtor's Case that are allowed under section 503(b) of the
Bankptcy Code. Administrative Claims also include Claims provided for by section 503(b )(9) of
18

MTI Plan v3.0


MANDOCS-# 1491 05-v2-MTI_ 4th ~ Amended _ Ch _1 i _P1an.DOC

Exhibit A, Page 34

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 36 of 44

Desc

the Banruptcy Code. The Banruptcy Code requires that all Administrative Claims be paid on the

2
3

Effective Date of this Plan, unless a paricular Creditor agrees to a different treatment of its Claim.
The treatment of Administrative Claims under this Plan is as described below.
3.1.1 Payment. Except to the extent that the holder of an Allowed Administrative

4
5

Claim agrees to a less favorable treatment of its Allowed Administrative Claim, and, subject to the Administrative Claims Bar Date set forth in Section 3.1.2 hereof, each holder of an Allowed Administrative Claim shall receive, in full satisfaction, discharge, exchange and release of its Allowed Administrative Claim, Cash in an amount equal to such Allowed Administrative Claim, on the latest of (i) the Effective Date, (ii) the fifteenth (15th) Business
Day after the date upon which such Administrative Claim becomes an Allowed

6 7
8

9 10 u .. ..
-.
..
..
00" on " 00

11

Administrative Claim, or (iii) the date upon which such Allowed Administrative Claim
becomes due according to its terms; provided, however, that an Ordinary Course Administrative Claim shall be paid in full in accordance with the terms and conditions of the
agrecmcnts giving rise to such Ordinary Course Administrative Claim.

12
13

;,

:E

;,

c:

" 0

14
15

i :;

3.1.2 Administrative Claims Bar Date. Except for Pre-Effective Date


Professional Pee Claims, United States Trustee Pees and Ordinary Course Administrative
Claims, and, except as set forth in section 503(b)(l)(D) of

.. u

" " 00

16 17
18

the Banptcy Code, all requests

for payment of Administrative Claims shall be filed with the Banptcy Court and served no

19

later than thirty (30) days after the Effective Date (the "Administrative Claims Bar Datc"). Any holder of an Administrative Claim that is required to file a request for payment of its
Administrative Claim by the Administrative Claims Bar Date and that does not file by the Administrative Claims Bar Date such a request for payment of its Administrative Claim shall be forever barred from asserting such Administrative Claim against the Debtor, the
Reorganized Debtor, the Estate or any of the property or assets of

20
21

22
23

24
25

the Debtor or the

Reorganized Debtor.
3.1.3 Deadline for Objections. All objections to allowance of Administrative

26
27
28

Claims that are subject to the Administrative Claims Bar Date must be fied by the Plan
Agent no later than forty-five (45) days after the Administrative Claims Bar Date (the
19

MTl Plan v3.0


MAINOOCS-#149105-v2-MTI_ 4th _ Amended_ Ch _ll_PIan.DOC

Exhibit A, Page 35

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 37 of 44

Desc

"Administrative Claims Objection Deadline"). The Administrative Claims Objection

2
3

Deadline may be extended for a one-time thirty (30) day period by the Plan Agent by filing a

notice of the extended Administrative Claims Objection Deadline with the Bankptcy
Court. Thereafter, the Administrative Claims Objection Deadline may be furher extended
only by an order of the Banptcy Court. If the Plan Agent fails to file, by the

4
5

6 7
8

Administrative Claims Objection Deadline, an objection to an Administrative Claim that

must be filed, and is filed, by the Administrative Claims Bar Date, such Administrative
Claim shall be deemed allowed as of the Administrative Claims Objection Deadline.
3.1.4 United States Trustee Fees. United States Trustee Fees shall be paid prior to

9
10

the Effective Date by the Debtor, and, after the Effective Date by the Plan Agent from the Plan Fund, in each case, when due in accordance with applicable law until the entry of a
Final Decree.
3.1.5 Pre-Effective Date Professional Fee Claims. Each Pre-Effective Date

u ,.
'"

11

~
-(.

.. ..
'"

12
13

:;

:;
J '" '"

-(

c.

14
15

Professional seeking from the Banptcy Court an award with respect to a Pre-Effective

i ;;
,.
'"

Date Professional Fee Claim shall file its final application for allowance of compensation for
services rendered and reimbursement of expenses incurred through the Effective Date by no

.. u

-(

16 17
18

later than the forty-fifth (45th) day after the EtIective Date or such later date as may be fixed

by the Banptcy Court. Such Pre-Effective Date Professional shall receive, in full
satisfaction, discharge, exchange and release of its Pre-Effective Date Professional Fee
Claim, Cash in such amounts as are allowed by the Bankptcy Court. All objections to
allowance of

19

20
21

Pre-Effective Date Professional Fee Claims must be filed and served timely in

22
23

accordance with the requirements of the Banptcy Rules.

3.2 Allowed Priority Tax Claims. Except to the extent that a holder of an Allowed
Priority Tax Claim agrees to a less favorable treatment of its Allowed Priority Tax Claim, each

24
25

holder of an Allowed Priority Tax Claim shall receive, in full satisfaction, discharge, exchange and
release of its Allowed Priority Tax Claim, Cash in an amount equal to such Allowed Priority Tax
Claim, on the later of (i) the Effective Date or (ii) the fifteenth (15th) Business Day after such
Priority Tax Claim becomes an Allowed Priority Tax Claim.
20

26 27
28

MTI Plan v3.0


MAINnOCS-#149I05-v2-MTI_ 4th_Amended _ Ch_ll_PlanDOC

Exhibit A, Page 36

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 38 of 44

Desc

iv.
2
3

CLASSIFICATION OF CLAIMS AND INTERESTS

4.1 Overview. As required by the Banruptcy Code, this Plan places Claims and
Interests into Classes according to their respective legal rights and interests, including their

4
5

respective rights to priority. In Section 4.2 hereof, the Plan Proponents list each Class of Claims
and Interests established under this Plan and state whether each Class is impaired or is unimpaired
by this Plan. A Class is "unimpaired" by this Plan if

7
8

this Plan leaves unaltered the legal, equitable

and contractual rights to which the holders of Claims or Interests in the Class are entitled, as
provided in section 1124 of the Bankptcy Code. Aricle V of

9
10

this Plan sets forth the treatment

that each Class will receive under this Plan.

u .. 0. ..
-'

11

Pursuant to this Plan, a Claim shall be deemed classified in a paricular Class only to the
extent that the Claim qualifies within the description of that Class and shall be deemed classified in
another Class or Classes to the extent that any remainder of the Claim qualifies within the

., -'
:,
on '"

12
13

;: ~
:,
'"

.,

0 ..
;;
'" '"

14
15

description of such other Class or Classes. A Claim is classified in a paricular Class only to the
extent that the Claim is an Allowed Claim in that Class and has not been paid, released or otherwise
satisfied prior to the Effective Date.

.. u

.,

16 17 18 19

4.2 Designation of Classes. This Plan designates the following Classes of Claims and
Interests:
4.2.1 Allowed Claims.
4.2.1.1 Class 1: Any Allowed Secured Claims. This Class is unimpaired

20
21

by this Plan.
4.2.1.2 Class 2: Allowed Priority Non-Tax Claims. This Class is

22
23

unimpaired by this Plan.


4.2.1.3 Class 3: Allowed General Unsecured Claims. This Class is

24
25

impaired by this Plan.


4.2.1.4 Class 4: The Canopy Claim. This Class is unimpaired by this Plan.

26 27 28

21

MTI Plan v3.0


MAINDOCS-#149105-v2-MTI_ 4th _Amended_ Ch_ll_P1anDOC

Exhibit A, Page 37

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 39 of 44

Desc

4.2.1.5 Class 5: Any Allowed Subordinated Claims. This Class is

2
3

impaired by this Plan.

4.2.2 Interests.
4.2.2.1 Class 6: Tnterests of

4
5

the Interest Holders. This Class is impaired

by this Plan.

6 7
8

4.3 Summary of Classification. The following table summarizes the Classes of Claims
and Interests established by this Plan:

CLASS
Class I
Class 2

DESCRIPTION
Allowed Secured Claims

9
10
u ,. Po
~
,," -'
; ~'

IMPAIRED! UNIMPAIRED
Unimpaired Unimpaired
Impaired

VOTING STATUS
Deemed to Accept Plan Deemed to Accept Plan Entitled to Vote on Plan
Deemed to Accept Plan
Entitled to Vote on Plan
Deemed to Reject the Plan

11

Allowed Priority Non-Tax Claims


Allowed General Unsecured Claims
Canopy Claim

12
13

Class 3

:: ~ '" "
c:
:

"

Class 4
Class 5

Unimpaired
Impaired
Impaired

14
15

Allowed Subordinated Claims


Interests

~
'"

Class 6

" " -'

16 17
18

As set forth above, Classes 1, 2 and 4 are unimpaired by this Plan; holders of Claims in
these Classes are conclusively presumed to have accepted this Plan and, hence, are not entitled to

19

vote with respect to this Plan. Classes 3 and 5 are impaired by this Plan, and holders of Claims in
these Classes are entitled to vote to accept or reject this Plan. Interests in Class 6 are impaired; the
Plan Proponents believe that it is very likely that Interest Holders will not receive or retain under
this Plan any value on account of

20
21

22
23

their Interests, and, hence, Interest Holders are deemed to reject

this Plan in accordance with section 1126(g) ofthe Banptcy Code.


The treatment of Claims and Interests under this Plan is in full and complete satisfaction of
the legal, contractual, and equitable rights that each Creditor or Interest Holder may have in or

24
25

26 27
28

against the Debtor or its property. This treatment supersedes and replaces any agreements or fights

which those entities have in or against the Debtor or its property. NO DISTRIBUTIONS SHALL

22

MTI Plan v3.0


MANDOCS-#14910S-v2-MTI_ 4th_Amended_ Ch_ll_PlanDOC

Exhibit A, Page 38

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 40 of 44

Desc

BE MADE, AND NO RIGHTS SHALL BE RETAINED, ON ACCOUNT OF ANY CLAIM

2
3

THAT IS NOT AN ALLOWED CLAIM.

v.
TREATMENT OF CLASSES UNDER THIS PLAN
The following sets forth the treatment of Classes established by this Plan.
5.1 Class 1 -- Any Allowed Secured Claims. Class 1 consists of any Allowed Secured

4
5

6 7
8 9

Claims. Class 1 is unimpaired by this Plan. In the event that there is more than one holder of an
Allowed Class 1 Claim, the Allowed Secured Claim of each such Secured Creditor shall be deemed to be classified in a separate sub-class of Class 1, and each such sub-class of Class 1 shall be
deemed to be a separate Class under this Plan.
5.1.1 Treatment of Allowed Secured Claims. Within fifteen (15) Business Days

10 u ..
-.
.. ..

11

0.
,,"
'" en '"

12
13

after the Effective Date, each Secured Creditor holding an Allowed Class 1 Claim shall

"
'" '"

receive, at the election ofthe Plan Agent, made in the exercise of its sole and absolute
discretion, one of

;a ol

c:

14
15

the following treatments in full satisfaction, discharge, exchange and

~
'" '"

release of the Allowed Class I Claim:


5.1.1.1 Option I. The holder of the Allowed Class 1 Claim shall receive a
retu of the Collateral in which that Secured Creditor has a security interest.

.. u

"

16 17
18

Unless a Secured Creditor holding an Allowed Deficiency Claim should make an


election under section 1111 (b) ofthe Bankruptcy Code, its Allowed Deficiency
Claim shall be treated hereunder as a Class 3 Allowed General Unsecured Claim.
5.1.1.2 Option 2. The holder of the Allowed Class 1 Claim shall

19

20
21

receive

22
23

any proceeds actually received by the Debtor or Reorganized Debtor (as applicable)

from the sale or other disposition of the Collateral in which that Secured Creditor

24
25

has a security interest. Unless a Secured Creditor holding an Allowed Deficiency

Claim should make an election under section 1111 (b) of the Banptcy Code, its
Allowed Deficiency Claim shall be treated hereunder as a Class 3 Allowed General
Unsecured Claim

26 27 28

23

MTI Plan v3.0


MANDOCS-#149105-v2-MTl_ 4th_Amended _ Ch_ll_PlanDOC

Exhibit A, Page 39

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 41 of 44

Desc

5.1.1.3 Option 3. The holder of

the Allowed Class 1 Claim shall receive

2
3

Cash in the full amount of

that Secured Creditor's Allowed Class 1 Claim.


the Allowed Class 1 Claim shall receive

5.1.1.4 Option 4. The holder of

4
5

such other Distributions or treatment as is necessary to leave the rights of that

Secured Creditor unimpaired under the Bankptcy Code.


The Plan Agent shall have until the later of the tenth (10th) Business Day before the
Confirmation Hearing Date, or the tenth (10th) Business Day after the date on which a Class

6 7
8

1 Claim because an Allowed Secured Claim, to elect which treatment set fort under this
Section 5.1.1 to provide to the Secured Creditor holding such Allowed Class 1 Claim.

9 10 u ..
'"

5.2 Class 2 -- Allowed Priority Non-Tax Claims. Class 2 consists of all Allowed

11

Priority Non-Tax Claims. Class 2 is not impaired by this Plan.

-.
-:" .. .. :;

12
13

5.2.1 Treatment of Allowed Non-Tax Priority Claims. Except to the extent that
a holder of an Allowed Priority Non-Tax Claim agrees to a less favorable treatment of its

'"

~
"' '"

::
0

-:

14
15

Allowed Priority Non-Tax Claim, each holder of an Allowed Priority Non-Tax Claim shall receive, in full satisfaction, discharge, exchange and release of its Allowed Priority
Non-Tax Claim, Cash in the full amount of

-:

" 0
o: 0:

.. u

16

the Allowed Priority Non-Tax Claim on the


5th) Business Day after such Priority

17
18

later of (i) the Effective Date, and (ii) the fifteenth (1

Non-Tax Claim becomes an Allowed Priority Non-Tax Claim.


5.3 Class 3 -- Allowed General Unsecured Claims. Class 3 consists of all Allowed

19

20
21

General Unsecured Claims. Class 3 is impaired by this Plan.


5.3.1 Treatment of Allowed General Unsecured Claims. The treatment of

22
23

Allowed Class 3 Claims is as follows:

5.3.1.1 Subjectto the provisions of Sections 5.3.1.3, 5.3.1.4, 5.3.1.5 and


5.3 .1.6 of this Plan, except to the extent that the holder of an Allowed General

24
25

Unsecured Claim agrees to a less favorable treatment of its Allowed General Unsecured Claim, the holder of an Allowed General Unsecured Claim shall receive,
in full and complete satisfaction, discharge, exchange and release of its Allowed

26 27
28

24

MTI Plan v3.0


MAICS-#1491 05-v2-MTl_ 41h _Amended _ Ch _ll_PIanDOC

Exhibit A, Page 40

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 42 of 44

Desc

General Unsecured Claim, Pro Rata Distributions of

the Plan Fund Proceeds

2
3

available for distribution to holders of Allowed Class 3 Claims.


5.3.1.2 The Plan Agent shall make Distributions to the holders of Allowed

4
5

Class 3 Claims from the Plan Fund Proceeds. All holders of Allowed Class 3
Claims shall receive an initial Distribution of their Pro Rata share of

the Plan Fund

6
7
8

Proceeds within 180 days following the Effective Date, or on such later date as the Plan Agent determines to be practicable, in the exercise of its sole and absolute discretion, and shall receive thereafter during the Case Distributions of their Pro
Rata share of Plan Fund Proceeds on each I 80th-day anniversar of

9
10
u .. '"
.J

the Effective

Date, or on such later date as the Plan Agent determines to be practicable in the

11

exercise of its sole and absolute discretion. Holders of Allowed Class 3 Claims
shall receive any final Distribution of their Pro Rata share of

~
.J
."

..
'" co '"

12
13

Plan Fund Proceeds

within ten (10) days after the filing of the Plan Agent Certification, or as soon

.I
"' '" C!

14
15 16 17 18 19

thereafter as is practicable. Upon payment of the amount owed to the holder of any
Allowed Class 3 Claim under this Plan, such Allowed Class 3 Claim shall be
deemed to be fully and completely satisfied, discharge and released.
5.3.1.3 In accordance with section 726(a)(5) of

z'

~
'" '"

.J u

."

the Banruptcy Code, an

Allowed General Unsecured Claim shall not include Postpetition Interest on account
of such Allowed General Unsecured Claim, except to the extent that all of

the

20
21

following are satisfied and paid in full: (a) all Allowed Administrative Claims;
(b) all Allowed Priority Tax Claims; (c) all Allowed Priority Non-Tax Claims; (d) all Allowed Secured Claims (subject to the elections provided pursuant to Section 5.1.1 hereof); (e) all Allowed General Unsecured Claims; (f) the Canopy Claim; (g) all Late-Filed Claims; (h) all Post-Effective Date Plan Expenses; and

22
23

24
25

(i) all Allowed Penalty Claims. Any Postpetition Interest that may be payable on an
Allowed General Unsecured Claim shall be calculated from the Petition Date
through the date on which such Allowed General Unsecured Claim is paid in fulL.

26 27
28

25

MTI Plan v3.0


MAINDOCS-#I 491 05-v2-MTJ_ 41h _Amended _ Ch_ll_PlanDOC

Exhibit A, Page 41

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 43 of 44

Desc

5.3.1.4 Notwithstanding any other provision to the contrary contained in

2
3

this Plan, no Cash Distribution shall be made on account of any Allowed General
Unsecured Claim until each of

the following occurs: (a) all Allowed Administrative

4
5

Claims are paid; (b) all Allowed Priority Tax Claims are paid; (c) all Allowed

Priority Non-Tax Claims are paid; (d) all Allowed Secured Claims are paid (subject
to the elections provided pursuant to Section 5.1. i hereof); (e) the Disputed Claims

6 7
8

Reserve is adequately funded for the Claims referenced in subsections (a)


through (d) of

this Section 5.3.1.4; and (f) all outstanding Post-Effective Date Plan

9 10 u .. 0.
'" '" "' '"

Expenses have been paid in full and an adequate Reserve is established by the Plan
Agent providing for full payment of

the estimated amount of all Post-Effective Date

ii
12
13

Plan Expenses through the Case Closing Date, in an amount to be determined by the
Plan Agent in the exercise of its sole and absolute discretion.
5.3.1.5 Each holder of an Allowed General Unsecured Claim shall be

-. . .. ..
;g
'" "'

~
ti
z"
; '" "' '"

14
15

allocated its Pro Rata number of shares of Post -Effective Date Stock, to be held in

trust for such Creditor by the Plan Agent in contemplation of a potential Merger

16 17
i8

Transaction. Subject to the provisions of Section 6.18 hereof, each holder of an


Allowed General Unsecured Claim shall receive a Distribution of any Post-Effective
Date Stock, or the net proceeds realized from the disposition of such Post-Effective

19

Date Stock, in connection with any Merger Transaction; provided, however, that the holder of an Allowed General Unsecured Claim shall have the right to elect not to
receive any Distribution of

20
21

Post-Effective Date Stock, in accordance with the

22
23

provisions of Section 6.1 8.6 hereof.


5.3.1.6 Notwithstanding anything to the contrar contained in

24
25

Section 5.3.1, no holder of an Allowed General Unsecured Claim shall be entitled to


receive more than i 00% of the amount of its Allowed General Unsecured Claim, plus any Postpetition Interest thereon payable pursuant to Section 5.3.1.3 hereof.
For the purpose of this Section 5.3.1.6, the value of any Distribution of

26 27
28

Post-

26

MTI Plan v3.0


MATNOCS-#! 491 05-v2-MTI_ 4th _ Amended_Ch_l l_PlanDOC

Exhibit A, Page 42

Case 8:07-bk-13347-ES

Doc 1264 Filed 08/05/10 Entered 08/05/10 16:36:39 Main Document Page 44 of 44

Desc

Effective Date Stock shall be determined pursuat to the provisions of


Section 6.18.5 hereof.
5.4 Class 4 -- Canopy Claim. Class 4 consists of

2
3

the Canopy Claim. The Canopy

4
5

Claim is unimpaired under this Plan.


5.4.1 Treatment of Canopy Claim. Canopy shall be paid, without alteration or

6 7
8

modification, any and all amounts to which Canopy is entitled pursuant to paragraphs 2 and 3 of that Settlement Agreement and Mutual Release of Claims ("Canopy Agreement"),
approved by an order of

the Banptcy Court entered on November 13, 2008, a true and

complete copy of

which is attached hereto as Exhibit "I."

10
u ..
'"

5.5 Class 5 -- Allowed Subordinated Claims. Class 5 consists of all Allowed


Subordinated Claims. Class 5 is impaired by this Plan.
5.5.1 Treatment of Allowed Subordinated Claims. The treatment of any

11

~
.( .. ..
~ '" ..

12
13

:;
d1 "' '"

Allowed Class 5 Claim is as follows:


5.5.1.1 Subjectto the provisions of Sections 5.5.1.3, 5.5.1.4, 5.5.1.5
and 5.5.1.6 of

0 " 0

14
15

z'

this Plan, except to the extent that the holder of any Allowed

~ '" .. ..

16
17 18

Subordinated Claim agrees to a less favorable treatment of its Allowed Subordinated

Claim, in the event that all Allowed General Unsecured Claims are paid in full as set
forth in Section 5.3.1 of this Plan, the holder of an Allowed Subordinated Claim

19

shall receive, in full and complete satisfaction, discharge, exchange and release of
its Allowed Subordinated Claim, solely from the Plan Fund Proceeds, a Pro Rata
Distribution of any remaining Plan Fund Proceeds.
5.5.1.2 The Plan Agent shall make Distributions to the holders of

20
21

22
23

Allowed Class 5 Claims, from any Plan Fund Proceeds available for distribution to

24
25

holders of Allowed Class 5 Claims. All holders of Allowed Class 5 Claims shall
receive an initial Distribution of their Pro Rata share of any Plan Fund Proceeds
available for distribution to holders of Allowed Class 5 Claims on such date as the Plan Agent determines to be practicable, in the exercise of its sole and absolute
discretion, and thereafter shall receive Distributions of any such Plan Fund Proceeds
27

26 27 28

MTI Plan v3.0


MATNOOCS-#149105-v2-MTI_ 4th_Amended _ Ch _I I_PlanDOC

Exhibit A, Page 43