IN THE UNITED STATES BANKRUPTCY COURT FOR THE … · 547, 551 (5th Cir. 2011). (“[T]he disclosure...

IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

§ In re: § Chapter 11 § KP ENGINEERING, LP, et al., §

§ Case No. 19-34698 (DRJ)

§ (Jointly Administered) Debtors.1 § §

DEBTORS’ EMERGENCY MOTION FOR ENTRY OF AN ORDER

APPROVING (I) ADEQUACY OF THE DISCLOSURE STATEMENT; (II) FORM OF SOLICITATION MATERIALS; AND (III) PROCEDURES FOR SOLICITING

AND VOTING ON THE JOINT CHAPTER 11 PLAN OF REORGANIZATION EMERGENCY RELIEF HAS BEEN REQUESTED. A HEARING WILL BE CONDUCTED ON THIS MATTER ON APRIL 8, 2020 AT 10:30 AM. IN COURTROOM 400, 4th FLOOR, UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS, 515 RUSK STREET, HOUSTON, TEXAS 77002. IF YOU OBJECT TO THE RELIEF REQUESTED OR YOU BELIEVE THAT EMERGENCY CONSIDERATION IS NOT WARRANTED, YOU MUST EITHER APPEAR AT THE HEARING OR FILE A WRITTEN RESPONSE PRIOR TO THE HEARING. OTHERWISE, THE COURT MAY TREAT THE PLEADING AS UNOPPOSED AND GRANT THE RELIEF REQUESTED. RELIEF IS REQUESTED NOT LATER THAN APRIL 8, 2020.

KP Engineering, LP and KP Engineering, LLC, the above-captioned debtors and debtors in

possession (collectively, the “Debtors”), hereby file this Emergency Motion for Entry of an Order

Approving (I) Adequacy of the Disclosure Statement; (II) Form of Solicitation Materials; and (III)

Procedures for Soliciting and Voting on the Joint Chapter 11 Plan of Reorganization (the “Motion”),

and in support hereof, respectfully state as follows:

1 The Debtors in these cases, along with the last four digits of each Debtor’s federal tax identification number, are: KP Engineering, LP (7785) and KP Engineering, LLC (0294). The location of the Debtors’ corporate headquarters and the Debtors’ service address is: 5555 Old Jacksonville Highway, Tyler, TX 75703.

Case 19-34698 Document 454 Filed in TXSB on 04/01/20 of 13

2

I. JURISDICTION AND VENUE

1. The Court has jurisdiction to consider this Motion pursuant to 28 U.S.C. § 1334.

This matter is a core proceeding pursuant to 28 U.S.C. § 157(b), and this Court may enter a final

order consistent with Article III of the United States Constitution. Venue is proper before this

Court pursuant to 28 U.S.C. §§ 1408 and 1409.

2. The bases for the relief requested in this Motion are 11 U.S.C. §§ 105(a) and 1125,

Rules 2002, 3017, 3018 and 9006 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy

Rules”), Rules 2002-1, 3016-2, and 9013-1 of the Bankruptcy Local Rules for the Southern District

of Texas (the “Bankruptcy Local Rules”) and the Procedures for Complex Chapter 11 Cases in the

United States Bankruptcy Court for the Southern District of Texas (the “Complex Case

Procedures”).

II. BACKGROUND

3. On August 23, 2019 (the “Petition Date”), the Debtors filed voluntary petitions for

relief (the “Bankruptcy Cases”) under Chapter 11, title 11 of the United States Code (the

“Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas,

Houston Division (the “Court”). The Debtors are operating their businesses and managing their

properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.

The Bankruptcy Cases have been consolidated for procedural purposes only and are being jointly

administered pursuant to Bankruptcy Rule 1015(b). [Doc. No. 39].

4. On February 28, 2020, the Debtors filed their Joint Chapter 11 Plan of

Reorganization of KP Engineering, LP and KP Engineering, LLC [Doc. No. 437] (the “Plan”)2

2 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan.


3

and their Disclosure Statement in Support of Joint Chapter 11 Plan of Reorganization of KP

Engineering, LP and KP Engineering, LLC [Doc. No. 438] (the “Disclosure Statement”).

III. RELIEF REQUESTED

5. By this Motion, the Debtors request: (i) that their solicitation materials

(collectively, the “Solicitation Materials”) be approved; (ii) that the notice periods proscribed by

Bankruptcy Rule 2002(b) be shortened and a Confirmation Hearing be set as promptly as the

Court’s schedule permits; and (iii) that the Court authorize the Debtors to serve the Solicitation

Materials upon Holders of Claims and Interests in the Classes entitled to vote to accept or reject

the Plan – Classes 2, 3, 4, 5, 6, 7, and 8 (the “Voting Classes”) – and other non-voting creditors

and parties in interest as required by the Bankruptcy Code, Bankruptcy Rules, Bankruptcy Local

Rules, or Complex Case Procedures.

6. As set forth herein, the Debtors’ Solicitation Materials include, inter alia: (i) the

Court’s Order approving the relief requested in this Motion (the “Disclosure Statement Approval

Order”) setting forth (a) the date by which the Solicitation Materials must be mailed to Holders of

Claims and Interests (the “Mailing Deadline”); (b) a date by which objections, if any, to the

Confirmation of the Plan must be Filed with the Court and served upon the Debtors (the “Objection

Deadline”); and (c) a date by which acceptances or rejections of the Plan must be returned in order

to be counted (the “Voting Deadline”); (ii) the Disclosure Statement, Plan and all Exhibits and

appendices thereto, (iii) the form of ballots (the “Ballots”), substantially in the form attached hereto

as Exhibit A, to be distributed to Holders of Claims and Interests that are classified as Impaired

under the Plan for voting purposes; and (iv) a form of notice (the “General Notice”), substantially

in the form attached hereto as Exhibit B, containing the relevant dates, deadlines, and procedures

for soliciting and voting on the Plan.


4

IV. BASIS FOR RELIEF REQUESTED

A. Adequacy and Approval of the Disclosure Statement

7. Section 1125(b) of the Bankruptcy Code prohibits post-petition solicitation of

acceptances or rejections of a plan unless the bankruptcy court, after notice and hearing, has

approved a written disclosure statement that contains adequate information. 11 U.S.C. § 1125(b);

see also Spicer v. Laguna Madre Oil & Gas II, L.L.C. (In re Tex. Wyo. Drilling, Inc.), 647 F.3d

547, 551 (5th Cir. 2011). (“[T]he disclosure statement is the primary notice mechanism for

informing a creditor’s vote for or against a plan.”). Bankruptcy Code section 1125(a)(1) defines

“adequate information,” as that term is used in subsection (b), to include:

[I]nformation of a kind, and in sufficient detail, as far as is reasonably practicable in light of the nature and history of the debtor and the condition of the debtor’s books and records, including a discussion of the potential material Federal tax consequences of the plan to the debtor, any successor to the debtor, and a hypothetical investor typical of the holders of claims or interests in the case, that would enable such a hypothetical investor of the relevant class to make an informed judgment about the plan;

11 U.S.C. § 1125(a)(1). Thus, a disclosure statement must, as a whole, provide “adequate

information so that an informed determination can be made whether to accept or reject a

reorganization plan.” In re 266 Washington Assoc., 141 B.R. 275, 288 (Bankr. E.D.N.Y. 1992).

8. Bankruptcy courts have broad discretion in determining whether a disclosure

statement contains adequate information; the determination must be made on a case-by-case basis,

focusing on the unique facts and circumstances of each case. See, e.g., Mabey v. Southwestern

Elec. Power Co. (In re Cajun Elec. Power Coop.), 150 F.3d 503, 518 (5th Cir. 1998) (“The

legislative history of § 1125 indicates that, in determining what constitutes ‘adequate information’

with respect to a particular disclosure statement, ‘both the kind and form of information are left

essentially to the judicial discretion of the court’ and that ‘the information required will necessarily

be governed by the circumstances of the case.’”) (internal citations omitted), cert. denied, 526 U.S.


5

1144 (1999); In re PC Liquidation Corp., 383 B.R. 856, 865 (E.D.N.Y. 2008) (standard for

Chapter 11 disclosure statement is flexible, determined on a case-by-case basis); Kirk v. Texaco,

Inc., 82 B.R. 678, 682 (S.D.N.Y. 1988) (“The legislative history could hardly be more clear in

granting broad discretion to bankruptcy judges under § 1125(a).”).

9. The Debtors submit that their Disclosure Statement contains adequate information

within the meaning of Bankruptcy Code section 1125. The Disclosure Statement is extensive and

comprehensive, and it contains specific descriptions and summaries of, among other things: (i) the

Debtors’ Plan; (ii) their businesses prior to the Petition Date; (iii) certain events leading to the

commencement of the Bankruptcy Cases; (iv) important events and milestones during the

Bankruptcy Cases; (v) various risk factors affecting the Plan; (vi) a liquidation analysis setting

forth the estimated return that creditors would receive in a Chapter 7 liquidation proceeding; and

(vii) federal tax law consequences of the Plan.

10. The Debtors submit that the Disclosure Statement contains adequate information

within the meaning of Bankruptcy Code section 1125 for Holders of Claims and Interests in the

Voting Classes to make an informed decision about the Plan. Accordingly, the Debtors request

that the Disclosure Statement be approved by the Court.

B. Approval of Ballots and General Notice

11. In addition to the Disclosure Statement, the Solicitation Materials will include an

appropriate Ballot, the General Notice setting forth the Voting Deadline, the Objection Deadline,

and the Confirmation Hearing date, and a return-addressed envelope. The Debtors submit that the

forms of Ballots attached hereto as Exhibit A and the General Notice attached hereto as Exhibit

B should also be approved by the Court.

12. Bankruptcy Rule 3017(d) sets forth the required information to be transmitted to all

creditors, equity interest holders, and the United States Trustee’s office upon approval of a


6

disclosure statement. See FED. R. BANKR. P. 3017(d) (distinguishing items to be included in

solicitation materials, including voting deadlines, objection deadlines, and confirmation hearing

date). With respect to ballots, Bankruptcy Rule 3018(c) provides that an acceptance or rejection

of a Chapter 11 plan shall (i) be in writing; (ii) identify the plan to being accepted or rejected; (iii)

be signed by the creditor, equity interest holder, or an authorized agent; and (iv) conform to the

appropriate Official Form. FED. R. BANKR. P. 3018(c).

13. The Debtors submit that proposed forms of Ballots and General Notice satisfy each

of the foregoing requirements, as applicable. Specifically, the General Notice should be approved

because it provides requisite notice of, among other things, the Voting Deadline, the Objection

Deadline, and the Confirmation Hearing date. The Ballot forms should also be approved because

they substantially conform to the Official Form, provide notice of the Voting Deadline, and are

structured to ensure proper execution by the Claim or Interest Holder in compliance with

Bankruptcy Rule 3018(c).

14. Additionally, pursuant to the Bankruptcy Local Rules and the Complex Case

Procedures, the Ballots provide information regarding the consensual releases proposed in the Plan

and a check-box for creditors to indicate their assent or opposition to such releases.3 See Complex

Case Procedures, § K, ¶ 32 (explaining ballot and notice requirements when a plan proposes

consensual releases with respect to claims that creditors may hold against non-debtor parties).

Accordingly, the Debtors hereby request that the Court approve the forms of Ballots and General

Notice to be included in the Solicitation Materials.

3 In accordance with the Complex Case Procedures, creditors and other parties in interest that are not entitled to vote to accept or reject the Plan will receive a separate notice to indicate their assent or opposition to the consensual releases.


7

C. Approval of Mailing Deadline, Objection Deadline, Voting Deadline, and Confirmation Hearing Date

15. Bankruptcy Rule 2002 requires that 28 days’ notice of “the time fixed for filing

objections and the hearing to consider confirmation of a . . . chapter 11 . . . plan” be provided to

all of the Debtors’ creditors, equity interest holders, committees and other parties in interest. FED.

R. BANKR. P. 2002(b). However, the 28-day period may be shortened if appropriate circumstances

are present. See FED. R. BANKR. P. 9006(c) (stating that bankruptcy courts have discretion to

reduce the time period for cause shown). Further, section 105(a) of the Bankruptcy Code provides

that “[t]he court may issue any order, process, or judgment that is necessary or appropriate to carry

out the provisions of this title.” 11 U.S.C. § 105(a).

16. The Debtors submit that cause exists to shorten the 28-day period imposed by

Bankruptcy Rule 2002, and respectfully request that the Court shorten the time for notice of the

Confirmation Hearing date and Objection Deadline so that the Debtors may proceed expeditiously

to Confirmation of the Plan. In re Holland, 85 B.R. 735, 737 (Bankr. W.D. Tex. 1988) (holding

that bankruptcy courts have the power to reduce the time periods in Bankruptcy Rule 2002(b) for

giving notice of hearing on confirmation of a plan); In re Epic Assocs. V, 62 B.R. 918, 922 (Bankr.

E.D. Va. 1986) (court acted sua sponte to shorten the time for notice of the plan confirmation

hearing). In this case, good cause exists to expedite the Confirmation process and shorten the notice

requirements. As of the filing of this Motion, the Debtors’ Plan and Disclosure Statement have

been on file with the Court for over a month. Additionally, given the recent passage of the

Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) resulting from COVID-

19 pandemic, the Debtors have been exploring the potential benefits of the Paycheck Protection


8

Program, among other programs, implemented by the CARES Act.4 The Debtors believe that

successfully confirming their Plan and emerging from Chapter 11 as Reorganized Debtors as

promptly as possible will aid in these efforts and afford the greatest opportunity to support their

employees and sustain long-term success.

17. To ensure that all parties in interest receive adequate notice, notwithstanding the

shortened time period, the Debtors request that the Court establish the date that is five (5) Business

Days after entry of the Disclosure Statement Approval Order as the Mailing Deadline by which

the Debtors shall serve the Solicitation Materials upon the respective Classes. Given the Mailing

Deadline, the Debtors propose that (i) the Confirmation Hearing date be set as promptly as Court’s

schedule permits; (ii) the Voting Deadline be set no later than three days before the Confirmation

Hearing; and (iii) the Objection Deadline be set no later than two days before the Confirmation

Hearing.

18. The Objection Deadline will be the last day for filing with the Court written

objections to the Confirmation of the Plan. The objecting party must serve such objections by

filing them on the Court’s CM/ECF system prior to the Objection Deadline. The Debtors propose

that a party’s failure to timely file and serve any objections, comments, or responses to the Plan

by the Objection Deadline will result in the waiver of such objections, comments, or responses and

the Court may determine not to consider the same.

D. Approval of the Record Date for Claims and Equity Interests

19. Bankruptcy Rule 3017(d) provides, in relevant part, that, for purposes of soliciting

votes in connection with the confirmation of a plan of reorganization, “creditors and equity security

holders shall include holders of stocks, bonds, debentures, notes and other securities of record on

4 The CARES Act appropriates up to $500 billion in funding for loans, loan guarantees and investments to provide liquidity to eligible businesses suffering as a result of the COVID-19 pandemic.


9

the date the order approving the disclosure statement is entered or another date fixed by the court,

for cause, after notice and a hearing.” FED. R. BANKR. P. 3017(d). Additionally, Bankruptcy Rule

3018(a) provides, in relevant part, that “an equity security holder or creditor whose claim is based

on a security of record shall not be entitled to accept or reject a plan unless the equity security

holder or creditor is the holder of record of the security on the date the order approving the

disclosure statement is entered or on another date fixed by the court, for cause, after notice and a

hearing.” FED. R. BANKR. P. 3018(a).

20. The Debtors propose that each Holder of a Claim or Interest against the Debtors

within the Voting Classes be entitled to vote the amount of such Claim held as of the date the

Disclosure Statement Approval Order is entered by the Court (the “Voting Record Date”).

E. Voting and Balloting Procedures for Claims and Equity Interests

21. Solely for purposes of voting on the Plan, each record Holder of a Claim in the

Voting Classes who votes to accept or reject the Plan should be deemed to have voted its Claim in

the principal amount of such Claim.

22. So as to avoid uncertainty and inconsistent results, the Debtors submit that Ballots

in the following categories should be deemed defective and void, and thus not be counted, unless

otherwise ordered by the Court:

a. Ballots that partially reject and partially accept the Plan;

b. Any Ballot that is illegible or contains insufficient information to permit the identification of the Claim or Interest Holder;

c. Ballots that fail to indicate an acceptance or rejection of the Plan, or that indicate both acceptance and rejection of the Plan;

d. Unless previously authorized in writing by the Debtors, Ballots that are not timely received by the Voting Deadline, including, for the avoidance of doubt, Ballots that are postmarked prior to the Voting Deadline but not actually received by the Debtors until after the Voting Deadline; and


10

e. If a Holder of a Claim simultaneously casts inconsistent Ballots, such Ballots shall not be counted.

23. The Debtors submit that designating the foregoing categories of Ballots defective

and void is necessary and appropriate to upholding the integrity of the Plan solicitation process,

and should therefore be approved by the Court.

F. Withdrawal of Ballots and Revocation

24. Any Holder of a Claim or Interest in the Voting Classes who has delivered a valid

Ballot to the Debtors for the acceptance or rejection of the Plan may withdraw such acceptance or

rejection by delivering a written notice of withdrawal to the Debtors at any time prior to the Voting

Deadline. A notice of withdrawal, to be valid, must: (i) contain the description of the Ballot(s) to

which it relates and the aggregate amount represented by such Claim(s); (ii) be signed by the

withdrawing Holder in the same manner as the Ballot being withdrawn; (iii) contain a certification

that the withdrawing Holder owns the Claim(s) and possesses the right to withdraw the vote sought

to be withdrawn; and (iv) be received by the Debtors in a timely manner at the address of the

Debtors’ counsel, below. A purported notice of withdrawal of Ballots that is not received in a

timely manner by the Debtors shall not be effective to withdraw a previously cast Ballot.

25. Additionally, any Claim or Interest Holder who has submitted a properly completed

Ballot to the Debtors prior to the Voting Deadline may change such vote by submitting to the

Debtors, prior to the Voting Deadline, a subsequent Ballot for acceptance or rejection of the Plan.

In the case where more than one timely, properly executed Ballot is received, only the Ballot which

bears the latest date shall be counted.

G. Waivers of Defects and Irregularities

26. Unless otherwise directed by the Court, the Debtors submit that all questions as to

the validity, form, eligibility (including time of receipt), acceptance, and revocation, withdrawal


11

or interpretation of Ballots should be determined by the Debtors, in their sole discretion, which

determination the Debtors propose be final and binding on all parties. Specifically, the Debtors

expressly reserve their right to: (i) contest the validity of any withdrawal of a Ballot; (ii) reject any

and all Ballots not in proper form, the acceptance of which would, in the opinion of the Debtors,

violate the procedures set forth in the Disclosure Statement Approval Order or otherwise be

unlawful; and (iii) waive any defects, irregularities, or conditions of delivery as to any particular

Ballot.

27. Unless waived, any defects or irregularities in connection with the execution and

delivery of Ballots must be cured within such time as the Debtors (or the Court) determine. Neither

the Debtors, their Professionals, nor any other Person or Entity, will be under any duty to provide

notification of defects or irregularities with respect to deliveries of Ballots nor will any of them

incur any liabilities for failure to provide such notification. Unless otherwise directed by the Court,

delivery of such Ballots will not be deemed to have been made until such irregularities have been

cured or waived in writing by the Debtors. Ballots previously furnished, and as to which any

irregularities or defects have not been timely cured or waived, will be invalidated.

V. BASIS FOR EMERGENCY RELIEF

28. The Debtors respectfully request emergency consideration of this Motion in

accordance with Bankruptcy Local Rule 9013-1(i) and the Complex Case Procedures.

Notwithstanding the notice requirements of Bankruptcy Rule 2002(b), the Debtors’ believe that

the relief quested in this Motion is critical to moving these Bankruptcy Cases forward

expeditiously to Confirmation. Without the Court granting the relief on an emergency basis and

authorizing the Debtors to begin the solicitation process, the Confirmation process will be

unnecessarily extended. Any additional delay could also impact the Debtors’ ability to take


12

advantage of the applicable provisions of the CARES Act. Moreover, the Plan and Disclosure

Statement have been on file since February 28, 2020, and the major creditor constituencies and

other parties in interest have had ample opportunity to review the Disclosure Statement and

formulate a response, if any. Accordingly, the Debtors respectfully request that the Court approve

the relief on an emergency basis.

VI. RESERVATION OF RIGHTS

29. The Debtors reserve their right to supplement this Motion prior to the hearing

thereon, but hereby request that the Court approve the Disclosure Statement as containing adequate

information under Bankruptcy Code section 1125.

VII. PRAYER

Wherefore, the Debtors respectfully request that the Court enter a Disclosure Statement

Approval Order: (i) authorizing the Debtors to solicit their Plan; (ii) approving the form of

Solicitation Materials, including (a) the Disclosure Statement, (b) the Ballots to be distributed to

Voting Classes under the Plan, (c) the General Notice of relevant dates, deadlines, and procedures

for soliciting and voting on the Plan; and (iii) granting the Debtors such other and further relief, at

law or in equity, to which they may be entitled.


13

Respectfully submitted on the 1st day of April, 2020.

OKIN ADAMS LLP

By: /s/ Christopher Adams Christopher Adams Texas Bar No. 24009857 [email protected] James W. Bartlett, Jr. Texas Bar No. 00795238 [email protected] Ryan A. O’Connor Texas Bar No. 24098190 [email protected] 1113 Vine St., Suite 240 Houston, Texas 77002 Tel: 713.228.4100 Fax: 888.865.2118

ATTORNEYS FOR THE DEBTORS

CERTIFICATE OF SERVICE I hereby certify that on April 1, 2020, a true and correct copy of the foregoing Motion was

served via the Court’s CM/ECF system to all parties consenting to service through the same. By: /s/ Ryan A. O’Connor

Ryan A. O’Connor

CERTIFICATE OF ACCURACY PURSUANT TO LOCAL RULE 9013-1(i) In accordance with Local Bankruptcy Rule 9013-1(i), I hereby certify to the accuracy of the matters set forth in the foregoing Motion.

By: /s/ Christopher Adams Christopher Adams


mailto:[email protected]



HOUSTON DIVISION


§ Case No. 19-34698 (DRJ)

§ (Jointly Administered) Debtors. § §

ORDER GRANTING DEBTORS’

EMERGENCY MOTION FOR ENTRY OF AN ORDER APPROVING (I) ADEQUACY OF THE DISCLOSURE STATEMENT; (II) FORM OF

SOLICITATION MATERIALS; AND (III) PROCEDURES FOR SOLICITING AND VOTING ON THE JOINT CHAPTER 11 PLAN OF REORGANIZATION

(Relates to Doc. No. ___)

The Court considered the Emergency Motion for Entry of an Order Approving (I)

Adequacy of the Disclosure Statement; (II) Form of Solicitation Materials; and (III) Procedures for

Soliciting and Voting on the Joint Chapter 11 Plan of Reorganization (the “Motion”)1 filed by KP

Engineering, LP and KP Engineering, LLC, the above-captioned debtors and debtors in

possession (the “Debtors”). The Court having reviewed the Motion, the Disclosure Statement,

and any objections thereto; and based on the matters reflected in the record of the hearing held

on the Motion; finds that: (a) it has jurisdiction to consider the Motion pursuant to 28 U.S.C. §

1334; (b) this matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A); (c) the relief

requested in the Motion is in the best interests of the Debtors, their estates, creditors, equity

security holders, and other parties in interest; (d) proper and adequate notice of the Motion, the

Disclosure Statement, and the hearing thereon has been given and that, except as set forth herein,

no other or further notice is necessary; (e) good and sufficient cause exists for the granting of the

relief requested in the Motion after having given due deliberation upon the Motion, the

1 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Motion.

Case 19-34698 Document 454-1 Filed in TXSB on 04/01/20 Page 1 of 9

2

Disclosure Statement, all testimony, evidence, and representations regarding the Disclosure

Statement, and all of the proceedings had before the Court in connection with the Motion and the

Disclosure Statement; and (f) the Motion should be GRANTED. It is therefore hereby

ORDERED that:

Approval of Disclosure Statement and Pertinent Dates

1. The Disclosure Statement is hereby approved as containing information of a kind,

and in sufficient detail, as far as is reasonably practicable in light of the nature and history of the

Debtors and the facts and circumstances of the Bankruptcy Cases, that would enable a

hypothetical investor typical of the Holders of Claims and Equity Interests to make an informed

judgment regarding the Plan (defined below) pursuant to sections 1125(a)(1) and (2) of the

Bankruptcy Code.

2. The Joint Chapter 11 Plan of Reorganization of KP Engineering, LP and KP

Engineering, LLC (the “Plan”) should be transmitted to Holders of Claims and Equity Interests

for consideration and voting, as provided herein.

3. To the extent not withdrawn, settled, or otherwise resolved, any objection(s) to

the Disclosure Statement are hereby overruled.

4. The Confirmation Hearing to consider Confirmation of the Plan shall be held

before the Honorable David R. Jones, Chief United States Bankruptcy Judge, in the United

States Bankruptcy Court for the Southern District of Texas, Houston Division, 515 Rusk Street,

4th Floor, Courtroom No. 400, Houston, Texas 77002 on [x], 2020 at [x:xx] [x].m. (prevailing

Central Time). The Confirmation Hearing may be adjourned from time to time by the Court

without further notice other than an announcement made at the Confirmation Hearing or at any

adjourned hearing thereon. Emergency motions concerning Confirmation of the Plan may be

filed and self-calendared for the Confirmation Hearing.


3

5. [x], 2020 is fixed as the Voting Record Date, which shall be the date for the

determination of Holders of Claims and Equity Interests entitled to receive the Solicitation

Materials and vote to accept or reject the Plan. Holders of Claims and Equity Interests in the

Voting Classes shall be entitled to vote the amount of such Claim held as of the Voting Record

Date.

6. [x], 2020 is fixed as the Mailing Deadline by which the Debtors shall serve the

Solicitation Materials to Holders of Claims and Equity Interests, and other interested parties as

may be required by the Bankruptcy Code, Bankruptcy Rules, Bankruptcy Local Rules or

Complex Case Procedures.

7. [x], 2020 is fixed as the Voting Deadline by which acceptances or rejections of

the Plan must be actually received by the Debtors in order to be counted.

8. [x], 2020 is fixed as the Objection Deadline and shall be the last day for filing

written objections to the Confirmation of the Debtors’ Plan and serving the same via the Court’s

CM/ECF system. Failure to timely file and serve any objections, comments, or responses to the

Plan may result in the waiver of such objections, comments, responses and claims and the Court

may determine not to consider the same.

Approval of Form of General Notice and Ballots

9. The forms of Ballots attached to the Motion as Exhibit A are hereby approved.

10. The form of the General Notice attached to the Motion as Exhibit B is hereby

approved.

11. In accordance with the Complex Case Procedures, the Debtors shall serve a copy

of the Notice of Consensual Releases in the Plan, together with a return addressed envelope, on

non-voting creditors and other parties in interest to indicate their assent or opposition to the

consensual releases contained in the Plan. The Voting Deadline shall apply as the deadline by


4

which the Debtors must actually receive such Person or Entity’s assent or opposition to the

releases in the Plan.

Service of Solicitation Materials

12. No later than the Mailing Deadline, and in accordance with Bankruptcy Rule

2002(b), the Debtors are authorized to cause the Solicitation Materials to be mailed to Holders of

Claims and Interests in Classes 2, 3, 4, 5, 6, 7, and 8 by serving a copy of such Solicitation

Materials on all parties listed on the creditor matrix and claims register.

13. The Solicitation Materials shall include: (i) a copy of this Order; (ii) a copy of the

Disclosure Statement, the Plan and all Exhibits and appendices attached thereto; (iii) the Ballots;

(iv) the General Notice; and (v) a return addressed envelope.

14. Service of this Order, the Disclosure Statement, Plan, and other Solicitation

Materials shall be, at the Debtors’ discretion, by first class mail or overnight delivery, and all

documents will be addressed to the party at the most recent address contained on the Debtors’

matrix or claims register.

Voting Procedures and Requirements

15. If any Holder of a Claim or Interest in a Voting Class does not receive a Ballot for

such Class, if a Ballot is damaged or lost, or if any Holder should have any questions regarding

the procedures for voting on the Plan, such Holder should contact the Debtors by email at

[email protected] or by phone at (713) 228-4100.

16. By enclosing the Ballots with the Solicitation Materials, the Debtors do not make

any representation or admission that a Holder of a Claim or Equity Interest is entitled to vote on

the Plan or that such Claim or Equity Interest is an Allowed Claim or an Allowed Equity Interest.



5

17. The Debtors’ rights to object to any Ballot(s) submitted are specifically reserved

for the Confirmation Hearing, and the Court shall resolve all such objection(s), if any, at the

Confirmation Hearing.

Voting Instructions

18. The Court hereby directs that, in order to be counted for voting purposes, Ballots

for accepting or rejecting the Plan must be actually received by the Debtors prior to the Voting

Deadline and must be submitted via (i) regular mail, (ii) overnight delivery, (iii) hand delivery,

or (iv) email, using the contact information below.

OKIN ADAMS LLP Christopher Adams

James W. Bartlett, Jr. Ryan A. O’Connor

1113 Vine St., Suite 240 Houston, Texas 77002

Tel: 713.228.4100 [email protected] [email protected] [email protected]

19. Except as otherwise provided herein, a Ballot will not be counted if it is received

by the Debtors after the Voting Deadline. Votes cast will be irrevocable after the Voting

Deadline, unless the Court, after application, notice, and hearing, permits a change of vote.

Tabulation of Ballots

20. Solely for purposes of voting on the Plan, each record Holder of a Claim in the

Voting Classes who votes to accept or reject the Plan shall be deemed to have voted its Claim in

the principal amount of its Claim.

21. So as to avoid uncertainty and inconsistent results, Ballots in the following

categories shall not be counted, unless otherwise ordered by the Court:

a. Ballots that partially reject and partially accept the Plan;





6

b. Any Ballot that is illegible or contains insufficient information to permit the identification of the Claim or Interest Holder;

c. Ballots that fail to indicate an acceptance or rejection of the Plan, or that indicate both acceptance and rejection of the Plan;

d. Unless previously authorized in writing by the Debtors, Ballots that are not timely received by the Voting Deadline, including, for the avoidance of doubt, Ballots that are postmarked prior to the Voting Deadline but not actually received by the Debtors until after the Voting Deadline; and

e. If a Holder of a Claim simultaneously casts inconsistent Ballots, such Ballots shall not be counted.

22. Whenever two or more Ballots are cast voting the same Claim or Equity Interest

prior to the Voting Deadline, the last validly completed Ballot received prior to the Voting

Deadline shall be deemed to reflect the voter’s intent and will supersede any prior Ballot(s),

without prejudice to the Debtors’ right to object to the validity of the second Ballot on any basis

permitted by law; and, if the objection to such second Ballot or subsequent Ballot is sustained, to

count the first Ballot for all purposes.

23. Prior to the Confirmation Hearing, the Debtors shall file with the Court a

summary of all Ballots tabulated as of the Voting Deadline.

24. At the Confirmation Hearing, the Debtors and other parties in interest may seek

further clarification from the Court on vote tabulation, and retain the right to object or raise any

issue with respect to any Ballot, including issues pertaining to Impairment of the Classes.

Fiduciaries and Other Representatives

25. If a Ballot is signed by a trustee, executor, administrator, guardian, attorney-in-

fact, officer of a corporation, or another acting in a fiduciary or representative capacity, such

person should indicate such capacity when signing.

Withdrawal of Ballots and Revocation

26. Any Holder of a Claim or Interest in the Voting Classes who has delivered a valid

Ballot to the Debtors for the acceptance or rejection of the Plan may withdraw such acceptance


7

or rejection by delivering a written notice of withdrawal to the Debtors at any time prior to the

Voting Deadline. A notice of withdrawal, to be valid, must: (i) contain the description of the

Ballot(s) to which it relates and the aggregate amount represented by such Claim(s); (ii) be

signed by the withdrawing party in the same manner as the Ballot being withdrawn; (iii) contain

a certification that the withdrawing Holder owns the Claim(s) and possesses the right to

withdraw the vote sought to be withdrawn; and (iv) be received by the Debtors in a timely

manner at the address of the Debtors’ counsel set forth above.

27. A purported notice of withdrawal of a Ballot that is not received in a timely

manner by the Debtors shall not be effective to withdraw a previously cast Ballot.

28. Any party who has submitted a properly completed Ballot to the Debtors prior to

the Voting Deadline may revoke such Ballot and change their vote by submitting to the Debtors,

prior to the Voting Deadline, a subsequent properly completed Ballot for acceptance or rejection

of the Plan. In the case where more than one timely, properly completed Ballot is received, only

the Ballot that bears the latest date shall be counted for purposes of determining whether the

requisite acceptances have been received.

Waivers of Defects and Irregularities

29. Unless otherwise directed by the Court, and subject to Paragraph 23, above, all

questions as to the validity, form, eligibility (including time of receipt), acceptance, and

revocation or withdrawal of Ballots will be determined by the Debtors in their sole discretion.

30. The Debtors’ rights to: (i) contest the validity of any withdrawal of a Ballot;

(ii) reject any and all Ballots not in proper form, the acceptance of which would, in the opinion

of the Debtors or their counsel, violate the procedures set forth in this Order, or otherwise be

unlawful; and (iii) waive any defects or irregularities or conditions of delivery as to any

particular Ballot, are hereby expressly reserved. The interpretation (including of the Ballot and


8

the respective instructions thereto) by the Debtors, unless otherwise directed by the Court, will

be final and binding on all parties.

31. Unless waived, any defects or irregularities in connection with the execution and

delivery of Ballots must be cured within such time as the Debtors (or the Court) determine.

Neither the Debtors, their Professionals, nor any other Person or Entity, will be under any duty to

provide notification of defects or irregularities with respect to deliveries of Ballots nor will any

of them incur any liabilities for failure to provide such notification.

32. Unless otherwise directed by the Court, delivery of such Ballots will not be

deemed to have been made until such irregularities have been cured or waived in writing by the

Debtors. Ballots previously furnished, and as to which any irregularities or defects have not

been timely cured or waived, will be invalidated.

Miscellaneous

33. The form and manner of notice approved in this Order is adequate, appropriate,

and satisfies the requirements of the Bankruptcy Code, Bankruptcy Rules, Bankruptcy Local

Rules, Complex Case Procedures, and other Orders of this Court to the extent applicable to

Persons or Entities affected thereby.

34. Prior to mailing, the Debtors may make final, non-substantive edits (consisting

solely of correcting typographical and grammatical errors, making stylistic and formatting

improvements, adding updates of dates and information as may be helpful, and adding revisions

announced on the record at the hearing on the Disclosure Statement) to the Disclosure Statement,

Plan, all notices to be served, and all versions of Ballots and all other notices, which shall be

deemed approved by this Order without further notice or hearing.


9

35. To the extent modifications are made by the Debtors, the Debtors shall file the

final versions of the Disclosure Statement, Plan and any other Solicitation Materials on the

Court’s docket prior to service.

36. This Court retains exclusive jurisdiction with respect to all matters arising from or

related to the implementation, interpretation, and enforcement of this Order.

Dated: _________________________, 2020 ________________________________________ THE HONORABLE DAVID R. JONES

UNITED STATES BANKRUPTCY JUDGE


EXHIBIT A



HOUSTON DIVISION


§ Case No. 19-34698 (DRJ)


SECURED BALLOT FOR ACCEPTING OR REJECTING PLAN

(CLASSES 2 & 3)

KP Engineering, LP and KP Engineering, LLC, the above-captioned debtors

and debtors in possession (collectively, the “Debtors”) filed a Joint Chapter 11 Plan of Reorganization dated February 28, 2020 [Doc. No. 437] (the “Plan”). The Bankruptcy Court has conditionally approved the Disclosure Statement [Doc. No. 438] in support of the Debtors’ Plan. The Disclosure Statement provides information to assist you in deciding how to vote your Ballot. Bankruptcy Court approval of the Disclosure Statement does not indicate approval of the Plan by the Bankruptcy Court. If you did not receive a Disclosure Statement in your Solicitation Materials, you may obtain a copy by contacting Debtors’ counsel by email at [email protected] or by phone at (713) 228-4100.

The Debtors’ Plan can be confirmed by the Bankruptcy Court and thereby made binding on you if it is accepted by the Holders of two-thirds in amount and more than one-half in number of Claims in each Class voting on the Plan. In the event that the requisite acceptances are not obtained, the Bankruptcy Court may nevertheless confirm the Plan if it finds that the Plan affords fair and equitable treatment to the Class or Classes rejecting it and otherwise satisfies the requirements of section 1129(b) of the Bankruptcy Code. If the Plan is confirmed by the Bankruptcy Court, it will be binding on you whether or not your vote. Only Holders of Claims in Classes 2, 3, 4, 5, 6, 7, and 8 may vote.

PLEASE TAKE NOTICE that the Debtors have enclosed detailed instructions for voting to accept or reject the Plan. Holders of Claims and Interests are encouraged to read the instructions and other Solicitation Materials carefully and comply with the voting procedures and deadlines approved by the Bankruptcy Court.



ACCEPTANCE OR REJECTION OF PLAN

I hereby certify that I am a Holder of a Secured Claim in Class # _______ against the Debtors in the amount of $_________________________. As a Holder of a Secured Claim, I hereby vote as follows (check only one box):

Accept the Plan Reject the Plan

With respect to the consensual release provisions contained in Article VIII of

the Debtors’ Plan, I hereby vote as follows (check only one box):

Accept the Releases Reject the Releases

Dated: _____________________ ___, 2020.

______________________________ ______________________________ Name of Claim Holder Holder’s Address ______________________________ ______________________________ (signature) City, State, Zip Code

______________________________ Name and Title of Person Signing for Claim Holder * Please promptly execute and return this Ballot so that it is actually received by Debtors’ counsel prior to the Voting Deadline of [x], 2020.


Instructions: 1. The Bankruptcy Court has set [x], 2020 as the Voting Deadline. 2. You should review the Disclosure Statement and the Plan before you vote. You may wish to

seek legal advice concerning the Plan and your classification and treatment under the Plan. If you are a Holder of Claims or Interests in more than one Class, you will receive a Ballot for each Class in which you are entitled to vote.

3. Secured Claims are classified as follows under the Plan:

Secured Class Treatment

2

Class 2 consists of the Secured Claim of Texas Capital Bank, N.A. and shall be treated in accordance with Article III.C.2 of the Plan.

3

Class 3 consists of the Holders of Allowed Other Secured Claims and shall be treated in accordance with Article III.C.3 of the Plan. On the Effective Date, Holders of Class 3 Claims will receive: With respect to any collateral (other than TCB’s collateral) that is subject

to a prepetition agreement and that has not been sold or surrendered during the Bankruptcy Cases, the Debtors will remain bound and perform in accordance with the applicable agreement.

With respect to any collateral (other than Aviation Sale Proceeds) sold during the Bankruptcy Cases, (i) a secured claim in the amount of such sale proceeds, and (ii) any deficiency claim, which shall be treated as a General Unsecured Claim in Class 7.

4. In order to be counted, Ballots must be duly completed, executed, and actually received by

the Debtors prior to the Voting Deadline. You should complete and sign each Ballot and return it to the address provided below via (i) regular mail, (ii) overnight delivery, (iii) hand delivery, or (iv) email, using the contact information below.





5. The information contained herein is qualified in its entirety by the Bankruptcy Court’s

Disclosure Statement Approval Order [Doc. No. ___] and the procedures approved therein. For additional information regarding voting and tabulation of Ballots, please refer to the Disclosure Statement Approval Order included in your Solicitation Materials.






HOUSTON DIVISION


§ Case No. 19-34698 (DRJ)


UNSECURED BALLOT FOR ACCEPTING OR REJECTING PLAN

(CLASSES 4, 5, 6, & 7)








I hereby certify that I am a Holder of an Unsecured Claim in Class # _______ against the Debtors in the amount of $_________________________. As a Holder of an Unsecured Claim, I hereby vote as follows (check only one box):





Dated: _____________________ ___, 2020.

______________________________ ______________________________ Name of Claim Holder Holder’s Address ______________________________ ______________________________ (signature) City, State, Zip Code

______________________________ Name and Title of Person Signing For Claim Holder * Please promptly execute and return this Ballot so that it is actually received by Debtors’ counsel prior to the Voting Deadline of [x], 2020.




3. Unsecured Claims are classified as follows under the Plan:

Unsecured Class Treatment

4

Class 4 consists of the Johnson Creditors holding Allowed Claims against the Debtors arising from the Johnson Project and related Johnson Project Litigation. Class 4 shall be treated in accordance with Article III.C.4 of the Plan.

5

Class 5 consists of the Channelview Creditors holding Allowed Claims against Debtor KPE LP arising from the Channelview Project. Class 5 shall be treated in accordance with Article III.C.5 of the Plan.

6

Class 6 consists of the Geismar VI Creditors holding Allowed Claims against Debtor KPE LP arising from the Geismar VI Project. Class 6 shall be treated in accordance with Article III.C.6 of the Plan.

7

Class 7 consists of the Debtors’ General Unsecured Creditors that are not Johnson Creditors, Channelview Creditors, or Geismar VI Creditors. Class 7 shall be treated in accordance with Article III.C.7 of the Plan.














HOUSTON DIVISION


§ Case No. 19-34698 (DRJ)


EQUITY INTEREST BALLOT FOR ACCEPTING OR REJECTING PLAN

(CLASS 8)








I hereby certify that I am a Holder of an Equity Interest consisting of _____________ shares or other interests in the Debtors. As a Holder of an Equity Interest in Class # 8, I hereby vote as follows (check only one box):





Dated: _____________________ ___, 2020.

______________________________ ______________________________ Name of Equity Interest Holder Holder’s Address ______________________________ ______________________________ (signature) City, State, Zip Code

______________________________ Name and Title of Person Signing for Equity Interest Holder * Please promptly execute and return this Ballot so that it is actually received by Debtors’ counsel prior to the Voting Deadline of [x], 2020.




3. Equity Interests are classified as follows under the Plan:

Class Treatment

8

Class 8 consists of the Allowed Equity Interests in the Debtors and shall be treated in accordance with Article III.C.8 of the Plan. On the Effective Date, in exchange for (i) the value provided by agreeing to work for the Debtors during the Bankruptcy Cases; (ii) their continued work for the Reorganized Debtors after Confirmation; and (iii) an agreement to contribute $[xxxxxx] of Cash into the Reorganized Debtors, Holders of Equity Interests in the Debtors shall receive their equity in the Debtors.














HOUSTON DIVISION


§ Case No. 19-34698 (DRJ)


NOTICE OF CONSENSUAL RELEASES IN THE PLAN


and debtors in possession (collectively, the “Debtors”) filed a Joint Chapter 11 Plan of Reorganization dated February 28, 2020 [Doc. No. 437] (the “Plan”). The Bankruptcy Court has conditionally approved the Disclosure Statement [Doc. No. 438] in support of the Debtors’ Plan and authorized the Debtors to solicit acceptances or rejections of the Plan from Holders of Claims and Equity Interests in the Voting Classes. If you did not receive the Plan, you may obtain a copy by contacting Debtors’ counsel by email at [email protected] or by phone at (713) 228-4100.

PLEASE TAKE NOTICE that Article VIII of the Debtors’ Plan contains consensual release provisions. Pursuant to the Procedures for Complex Chapter 11 Cases in the Southern District of Texas, creditors that are not entitled to vote to accept or reject the Plan must be provided notice of such releases and an opportunity to indicate assent or opposition to such consensual releases together with a method for returning the notice. Accordingly, as a non-voting creditor or other interested party, you are being provided with a copy of this Notice to indicate your assent or opposition to the consensual release provisions contained in the Debtors’ Plan. Please promptly execute and return the enclosed form so that it is actually received by Debtors’ counsel prior to the Voting Deadline of [x], 2020.

PLEASE TAKE FURTHER NOTICE that the Debtors have enclosed detailed instructions for voting. Parties are encouraged to read the instructions and other Solicitation Materials carefully and comply with the voting procedures and deadlines approved by the Bankruptcy Court.



ACCEPTANCE OR REJECTION OF CONSENSUAL RELEASES




Dated: _____________________ ___, 2020.

______________________________ ______________________________ Name of Party Party’s Address ______________________________ ______________________________ (signature) City, State, Zip Code

______________________________ Name and Title of Person Signing on behalf of Party * Please promptly execute and return this form so that it is actually received by Debtors’ counsel prior to the Voting Deadline of [x], 2020.



seek legal advice concerning the Plan and the consensual releases contained in Article VIII. 3. In order to be counted, Notices must be duly completed, executed, and actually received by

the Debtors prior to the Voting Deadline. You should complete and sign the Notice and return it to the address provided below via (i) regular mail, (ii) overnight delivery, (iii) hand delivery, or (iv) email, using the contact information below.











EXHIBIT B



HOUSTON DIVISION


§ Case No. 19-34698 (DRJ)


GENERAL NOTICE REGARDING DEADLINES

On [x], 2020, the Bankruptcy Court entered its Order Granting Debtors’ Emergency Motion for Entry of an Order Approving (I) Adequacy of the Disclosure Statement; (II) Form of Solicitation Materials; and (III) Procedures for Soliciting and Voting on the Joint Chapter 11 Plan of Reorganization [Doc. No. ___] (the “Order”). Among other things, the Order approved the Disclosure Statement in Support of Joint Chapter 11 Plan of Reorganization of KP Engineering, LP and KP Engineering, LLC [Doc. No. 438] (the “Disclosure Statement”) filed in the above-captioned Bankruptcy Cases. In the Order, the Bankruptcy Court found that the Disclosure Statement filed by the above-referenced Debtors contains adequate information within the meaning of Bankruptcy Code section 1125. You are being provided this Notice with respect to the Joint Chapter 11 Plan of Reorganization filed by the Debtors (the “Plan”). The Bankruptcy Court has set [x], 2020 at [x:xx] [x].m. (prevailing Central Time) as the date and time for hearing on Confirmation of the Plan and to consider any objections to the Plan. The Confirmation Hearing will be held before the Honorable David R. Jones, Chief United States Bankruptcy Judge, in the United States Bankruptcy Court for the Southern District of Texas, Houston Division, 515 Rusk Street, 4th Floor, Courtroom No. 400, Houston, Texas 77002. The Confirmation Hearing may be adjourned from time to time without further notice other than an announcement of the adjourned date(s) at the Confirmation Hearing, and, thereafter at any adjourned hearing(s). In addition, the Plan may be modified without further notice prior to or as a result of the Confirmation Hearing, and, thereafter, as otherwise provided in the Bankruptcy Code. Any objection to Confirmation of the Plan must be filed with the Clerk of the Bankruptcy Court. The Bankruptcy Court has set [x], 2020 as the date by which objections to Confirmation of the Plan must be filed. UNLESS AN OBJECTION IS TIMELY FILED AND SERVED, IT MAY NOT BE CONSIDERED BY THE COURT. To the extent that you hold an impaired claim and have the opportunity to vote to accept or reject the Plan, the Bankruptcy Court has fixed [x], 2020 as the Voting Deadline for the receipt of Ballots evidencing the votes accepting or rejecting the Plan.


You may obtain copies of the pleadings filed in the Bankruptcy Cases without charge by contacting Debtors’ counsel by email at [email protected] or by phone at (713) 228-4100. Dated: [x], 2020.

OKIN ADAMS LLP

By: /s/ Christopher Adams Christopher Adams Texas Bar No. 24009857 [email protected] James W. Bartlett, Jr. Texas Bar No. 00795238 [email protected] Ryan A. O’Connor Texas Bar No. 24098190 [email protected] 1113 Vine St., Suite 240 Houston, Texas 77002 Tel: 713.228.4100 Fax: 888.865.2118

ATTORNEYS FOR THE DEBTORS





IN THE UNITED STATES BANKRUPTCY COURT FOR THE … · 547, 551 (5th Cir. 2011). (“[T]he disclosure...

Documents

Transcript of IN THE UNITED STATES BANKRUPTCY COURT FOR THE … · 547, 551 (5th Cir. 2011). (“[T]he disclosure...