Steve Meldahl Debtor's Amended Disclosure Statement.pdf

8/13/2019 Steve Meldahl Debtor's Amended Disclosure Statement.pdf

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IN THE UNITED STATES BANKRUPTCY COURT

DISTRICT OF MINNESOTA

In re:

Steven F. Meldahl, BKY 12-46965

Debtor.

DEBTORS AMENDED DISCLOSURE STATEMENT

Steven F. Meldahl (Debtor) proposes the following as his Disclosure Statement pursuant to theUnited States Bankruptcy Code.

I. INTRODUCTION

On December 12, 2012 (Filing Date), the Debtor filed a case pursuant to Chapter 11 of theCode. The Debtor is filing this Disclosure Statement and the related Plan of Reorganization(Plan). Terms used in this Disclosure Statement have the meanings given to them in theBankruptcy Code unless the context requires otherwise.

Debtors Disclosure Statement is furnished pursuant to section 1125 of the Bankruptcy Code andis intended to provide all persons known to have claims against Debtor with sufficientinformation to permit them to make an informed judgment as to their votes to accept or reject thePlan. No representations concerning the Debtor or the Plan are authorized by the Debtor.

ANY REPRESENTATIONS OR INDUCEMENTS MADE FOR THE PURPOSE OFSOLICITING YOUR ACCEPTANCE, OTHER THAN THOSE IN THIS DISCLOSURESTATEMENT, SHOULD NOT BE RELIED UPON, AND ANY SUCH ADDITIONALREPRESENTATIONS OR INDUCEMENTS SHOULD BE REPORTED TO COUNSEL FORDEBTOR OR TO THE UNITED STATES TRUSTEE, WHO WILL, IN NECESSARY,CONVEY THIS INFORMATION TO THE BANKRUPTCY COURT FOR SUCH ACTIONAS MAY BE DEEMED APPROPRIATE.

THE FINANCIAL INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENTHAS BEEN PROVIDED BY DEBTOR, BUT HAS NOT BEEN INDEPENDENTLYAUDITED. ALL STATEMENTS CONCERNING FINANCIAL DATA ARE MADE INGOOD FAITH AND ARE INTENDED TO BE AS COMPLETE AND AS ACCURATE ASPOSSIBLE. BANKRUPTCY COUNSEL FOR THE DEBTOR HAS NOT INDEPENDENTLYVERIFIED ANY OF THE INFORMATION SET FORTH IN THIS DISCLOSURESTATEMENT.

Case 12-46965 Doc 183 Filed 11/25/13 Entered 11/25/13 13:42:48 Desc MainDocument Page 1 of 27


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Defined Terms. Terms used in this Plan have the meanings given to them in the BankruptcyCode unless the context requires otherwise. In addition, the following definitions will be usedfor purposes of the Plan:

Effective Date means the eleventh (11th

) day after the day on which the Court enters an order

confirming this plan. If the eleventh day is a Saturday, Sunday or Holiday, the Effective Dateshall be the next day that is not a Saturday, Sunday or Holiday. Holidays shall be determined asdefined in Minnesota Statute 645.44, Subd. 5.

II. BACKGROUND OF DEBTOR'S BUSINESS, EVENTS LEADING TO THE

CHAPTER 11 CASE, AND CURRENT STATUS OF CERTAIN MOTIONS

BEFORE THE COURT

The Debtor has been in the real estate business for nearly his entire adult life. He commencedowning and renting properties in 1971. Since that time, the Debtor has purchase and remodeledover 300 properties in the States of Minnesota and Florida.

The Debtor has no source of income other than that derived from the real estate rental business.The Debtor has 81 rental properties in the State of Minnesota and 3 rental properties in the Stateof Florida.

In 2007 at a time when the real estate market was crashing, the Debtor chose to re-invest in theNorth Minneapolis rental market and purchase 48 properties at huge discounts. These wereprimarily foreclosed properties. They required light rehabilitation. The Debtor used hissubstantial savings and also secured credit lines from three banks to accomplish the purchasesand remodeling of these properties. At about the same time, the Debtor loaned a group ofMinnesota investors led by Bruce Jorgensen a sum in excess of $350,000.00 to purchase newproperties in Florida with guaranteed returns secured by the properties and personal guaranteesfrom the Florida investors. The Florida investment turned out to be disastrous. The Debtor lostall of his money. The properties were lost and Bruce Jorgensen declared personal bankruptcy.

Since 2008, the Debtor has been challenging real estate property value assessments by HennepinCounty. At the current time there are five challenges pending in Minnesota Tax Court.

Commencing in March of 2011, the Debtor attempted to work out a resolution of a Mortgageheld by TCF Bank on the Debtors former home at 7409 Hyde Park Drive, Edina, MN. Theproperty was suffering structural problems. The Debtor believed that he had negotiated a shortsale of the property. For some reason or reasons unknown to the Debtor, TCF Bank reneged onthe short sale and commenced legal proceedings, suing the Debtor and foreclosing on theproperty in 2012. This dispute was one of the reasons the Debtor was forced to file Chapter 11.

In May 2011, a tornado went thru North Minneapolis. 28 of the Debtors rental properties werehit by the tornado. 12 were damaged severally. The Debtor spent over $150,000.00 in repairingthese damaged properties and lost varying amounts of rental income, some as much as 6 monthsof rental income. The Debtor worked to make all the necessary repairs and return the properties



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to the rental market. The expenses incurred in doing so were the contributing factor to theDebtors filing Chapter 11.

During 2011, the Debtor was told by Mid-Country Bank that it would not renew a loan made tothe Debtor in the amount of $250,000.00. In May 2012 Mid-Country Bank retained counsel and

commenced an action in Hennepin County District Court to collect on the loan and foreclose onthe property pledged to secure the loan. The litigation brought by Mid-Country Bank was amajor factor in forcing the Debtor to seek bankruptcy protection.

The Debtor has worked out loan repayment schedules with most of his secured creditors. Inaddition, the Debtor has agreed with the Committee of Unsecured Creditors to sell real estate topay back Unsecured Creditors in full. The Debtor has signed Purchase Agreements for the saleof four (4) duplexes. The hearing to obtain approval of these sales is set for November 5, 2013.The net proceeds of these sales will be used to pay Administrative Expenses and to fund theTrust created in favor of the Debtors Unsecured Creditors. In addition, the Debtor has listedother properties in Florida and in Minnesota for sale and intends to sell properties to fund most

of the payment to Unsecured Creditors. In this regard, see Class 1 and the Treatment ofUnsecured Creditors.

III. TREATMENT OF CLAIMS AND INTERESTS

3.1 Formulation of Plan of Reorganization

A plan of reorganization outlines each of the different types of a debtors debts and equityinterests and contains the terms pursuant to which they are to be treated. The bankruptcy lawsrequire that certain types of claims and interests be grouped into classes, and that other types ofclaims not be grouped into classes. The designation of classes of claims and interests, and thetreatment of both classified and unclassified claims, and of interests, is detailed in the Plan. Inthe event of any inconsistency between the contents of this Disclosure Statement and the Plan,the terms of the Plan control.

The Debtor is also required to identify those classes of claims and interests that are impairedunder the Plan and what classes of claims and interests are unimpaired under the Plan. Ingeneral, a claim or interest is impaired if the plan alters the legal, equitable, or contractual rightsto which the holder of the claim or interest would be entitled absent the filing of the BankruptcyCase.

3.2 Classified Claims and Interests - Description of Holders and Treatment

The Bankruptcy Code permits certain claims and interests to be placed in particular classes in aplan of reorganization. In broad terms, any claim or interest within a class must be substantiallysimilar to the other claims or interests in such class. The classification of claims and interests issignificant because, subject to certain limitations and requirements, different classes of claimsand interests may be subject to different treatment. In addition, the holders of claims andinterests are permitted to cast ballots only within the classes to which their claims and interests



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belong; as more fully described in Article IX below, a plan of reorganization generally may beconfirmed so long as it is accepted by at least one impaired class.

The classification regimen provided for in the Debtors Plan, along with a brief description of thenature of each of the classes of claims and interests, and the respective treatment of each, is

given below.

Class 1 - Class of Unsecured Creditors

Class 1 consists of the general unsecured claims against the Debtor (Class 1 Claims), includinganticipated deficiency claims related to the claims secured by the rental properties. TheCommittee of Unsecured Creditors estimates that Class 1 Claims will total approximately$600,000.00. The Debtor disputes a number of Unsecured Claims. The Debtors Schedulesreflect Unsecured Claims in the amount of $960,000.00. Some of these Claims have beenresolved during the course of the Bankruptcy Case

Treatment of Class 1

The Debtor will pay in full without interest all allowed Class I Claims. The Debtor has agreedwith the Committee of Unsecured Creditors that the Committee will continue to monitor theDebtors post-confirmation operations. The Debtor will enter into a Trust Agreement with theCommittee of Unsecured Creditors that will set forth the rights, obligations and responsibilitiesof the Debtor and the Committee of Unsecured Creditors as to the trust assets and distributions.That Agreement is attached as Exhibit A to the Debtors Plan. The Trustee will be MarkHoiland. The Trustee will charge an hourly rate of $250.00. The Trust Agreement will beapproved by separate court order and will control if the Agreement conflicts with the Plan ofReorganization. The Debtors Liquidation Analysis is attached hereto as Exhibit A. TheDebtors average income and expenses is attached hereto as Exhibit B.

The Debtor will continue to operate his business and generate sufficient funds to pay allobligations arising under this plan of reorganization. The Debtor will make contributions to theTrust as set forth in the Trust Agreement.

The Debtor will give notes for amounts due to the Class 1 claimants and grant to the Trustmortgages on designated unencumbered rental property to secure each note and a note andmortgage on all remaining unencumbered rental property to secure payment in full of the Class 1claims. The Trust Agreement between the Debtor and the Trustee will provide a releasemechanism to release properties at such time as they are sold and a mortgage satisfactionprovision at such time as the notes payable to the Trust have been paid in full.

Creditors holding allowed Class 1 claims will be paid on a pro rata basis from four sources.

The first source will be net proceeds of the Debtors sale of real estate. The Debtor will pay100% of the net real estate sales proceeds to the Trust. The Debtor will sell sufficient real estateparcels each year to insure the minimum annual distribution (including all contributions to the



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trust by the Debtor) to the Class 1 claims is $200,000.00 Payments will be distributed by theTrustee to Class 1 Claims as provided in the Trust Agreement. The Debtor will commence salesof the real estate at the end of the first full quarter after confirmation of the Debtors plan ofreorganization. The contributions will continue until all class 1 claims are paid in full. Net realestate proceeds are defined to be gross sales proceeds, less real estate commissions, less standard

sellers closing costs, less unpaid post-petition real estate taxes, less unpaid post-petition cityassessments, fines and less unpaid post-petition water bills.

The second source of contributions to the Creditor Trust for Class 1 Claims will be fromproceeds of avoidance actions after the payment of all costs and administrative expenses incurredin prosecuting such claims. At present, the Debtor has yet to identify any avoidance actions orbankruptcy causes of action. These claims, if any, will be pursued by the creditor Trusteereferenced in this section. The Debtor does not anticipate there will be any significantcontributions from this source.

The third source of contributions to the Creditor Trust for Class 1 Claims will be monthly

payments from the Debtor in the amount of $8,000.00 per month. These payments willcommence 30 days after the Effective Date.

The fourth source of contributions will be from the net profits generated from the rental businessof the Debtor. Each quarter, the Debtor will determine the profit or loss incurred by the business.The Debtor will provide an accounting of this profit or loss to the Trustee. The Trustee will havethe right to approve or challenge the accounting. In the event of a challenge, the Trustee mayaudit of the books and records of the business of the Debtor, either directly by the Trustee orthrough a certified accounting firm. Such audit shall be conducted solely at the discretion of theTrustee and the Trust shall be responsible for paying any costs associated therewith. The Debtorshall cooperate fully and completely with the Trustee or the auditor. The results of the auditshall be binding on both the Debtor and the Trust. Once the accounting is accepted by theTrustee, the Debtor shall pay one-half (1/2) of the net profits to the Trust within 20 days of theacceptance of the accounting by the Trustee.

Net operating income is defined as gross rents less:

1. The Debtors agreed upon management fee for living expenses in the amount of$12,000.00 per month;

2. The Debtors monthly payment payable to the creditors trust in the amount of$8,000.00 per month;

3. The monthly escrow for real estate taxes of $10,000.00 per month;4. The monthly escrow for insurance of $3,000.00 per month;5. All debt service on properties owned by the Debtor in the approximate amount of

$9,095.53;6. All of the Debtors rental business operating expenses which average approximately

$30,000.00 per month;7. Professional fees which average approximately $2,000.00 per month;8. Interest calculated on pre-bankruptcy real estate taxes or priority claims owed

governmental entities; and



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9. An amount needed to service Hennepin County Confessions of Judgment.Within ten days after the Effective Date, the Debtor will record any deeds or transfer documentswithout cost pursuant to 11 U.S.C. 1146 on all properties owned by the Debtor but not currentlytitled in the Debtors name. In addition, within the same timeframe, the Debtor will record

mortgages granted by the Debtor to the trust created for the benefit of the Debtors unsecuredcreditors. All deeds, transfer documents and mortgages will be recorded without cost to theDebtor pursuant to 11 U.S.C. 1146.

The Debtor has, and will post-confirmation, maintain an insurance escrow account into whichthe Debtor will deposit $3,000.00 per month until the escrow account reaches a balance of$50,000.00. So long as any amounts remain unpaid on the Class 1 Claims, the Debtor willmaintain the insurance escrow fund. In addition, the Debtor has created a tax escrow accountand will deposit $10,000.00 per month into that account. These funds will be used to pay realcurrent estate taxes on the Debtors real property.

During the course of the case, and pursuant to the terms of this plan, the Debtor will pay no lessthan what is necessary to pay unsecured creditors more than they would receive in a chapter 7liquidation proceeding. Unsecured creditors in Class 1 have the right to object to the Debtorsplan pursuant to 11 U.S.C. 1129(a)(15).

Class 2 - Priority Claims Under Section 507(a)(7)

Class 2 consists of all timely filed and allowed priority claims for security deposits paid bytenants prior to December 12, 2012 (the filing date of this case). No Claims in this Class havebeen timely filed and the Debtor has not identified any tenants or individuals entitled to a Class 2Claim.


Class 2 Claims will be paid in full on the Effective Date or when they come due, whichever islater, unless the Debtor intends to object to such claim and in such case they will be paid on theeleventh (11th) day after the date on which such claim is allowed.

Class 3 Bridgewater Bank

The Class 3 Claim is made up of the Debtors obligations to Bridgewater Bank under that certainNote in the original principal amount of $700,000.00 (the Bridgewater Note). The balance asof February 12, 2013 was $676,249.00.

The Debtors obligations under the Bridgewater Note are secured under that certain Mortgagedated July 16, 2009 (the Bridgewater Mortgage), under which the Debtor granted BridgewaterBank a mortgage interest in his principal residence located at 18407 Bearpath Trail, Eden Prairiein Hennepin County, Minnesota. The property is legally described as follows:



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Bearpath Second Addition, Lot 14, Block 2.

(the Property).

The Bridgewater Mortgage on Property was recorded in the office of the Hennepin County

Recorder on August 11, 2009 as document number A9405702. Class 3 is in a first position ofpriority on the Property.


Class 3, pursuant to a Loan Modification Agreement dated February 12, 2013, and approved byseparate Court Order, will have an allowed secured claim in the amount of $676,249.00. TheClaim will be paid with monthly payments in the amount of $3,426.46 commencing February 16,2013. Interest shall accrue at the rate of 4.5%. The maturity date of the Loan will be January 31,2018. The Loan will be amortized based upon a 30 year amortization. The remaining terms ofthe underlying loan documents will remain in effect.

Class 4 Bridgewater Bank

The Class 4 Claim is made up of the Debtors obligations to Bridgewater Bank under that certainNote in the original principal amount of $250,000.00 (the Bridgewater Note 2). The balanceas of February 13, 2013 was $250,000.00.

The Debtors obligations under the Bridgewater Note 2 are secured under that certain Mortgagedated July 16, 2009 (the Bridgewater Mortgage 2), under which the Debtor grantedBridgewater Bank a mortgage interest in his properties located at the following addresses:

(a)2319 Aldrich Avenue North, Minneapolis, in Hennepin County, Minnesota;(b)321 31stAvenue North, Minneapolis, in Hennepin County, Minnesota;(c)4411 Aldrich Avenue North, Minneapolis, in Hennepin County, Minnesota;(d)528 Morgan Avenue North, Minneapolis, in Hennepin County, Minnesota; and(e)2414 Logan Avenue North, Minneapolis, in Hennepin County, Minnesota.

The properties are legally described as follows:

(a)Highland Park Addition to the City of Minneapolis, Lot 003, Block 012, HennepinCounty, Minnesota;

(b) Morrisons Addition to North Minneapolis, # 45 Ft of W 85 Ft of Lots 13 and 14,Block 011, Hennepin County, State of Minnesota;

(c) S.W. Ponds Addition to Minneapolis, Lot 008, Block 001, Hennepin County, Stateof Minnesota;

(d) Maben, White, and LeBrons Addition to Minneapolis, Lots 13 and 14, Block 005,Hennepin County, State of Minnesota; and

(e) Forest Heights, Lot 016, Block 008, Hennepin County, State of Minnesota.

(the Properties).



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The Bridgewater Mortgage 2 on the Properties was recorded in the office of the HennepinCounty Recorder on August 11, 2009 as document number A9405716.Class 4 is in a first position of priority on the Properties.


Class 4, pursuant to a Loan Modification Agreement dated February 13, 2013, and approved byseparate Court Order, will have an allowed secured claim in the amount of $250,000.00. TheClaim will be paid with monthly payments in the amount of $1,226.71 commencing February 16,2013. Interest shall accrue at the rate of 4.5%. The maturity date of the Loan will be January 31,2018. The Loan will be amortized based upon a 30 year amortization. The remaining terms ofthe underlying loan documents will remain in effect.

Class 5 JSRS Capital, LLC

The original JSRS Note was signed by SJM Properties, Inc., a non-profit corporation ownedentirely by the Debtor. All of the loan proceeds went into the Debtors checking account. Allpayments made prior to Bankruptcy were made by the Debtor against the JSRS Note. The Class5 Claim is made up of the Debtors obligations to JSRS Capital, LLC under that certain Note inthe original principal amount of $75,000.00 (the JSRS Note). The balance as of December 12,2012 was $43,125.00. The Debtor made two payments to JSRS after an agreement was reachedin January 2013. The payments were in the amount of $4,312.50 on February 1, 2013 and$4,312.50 on February 28, 2013. These two payments reduced the balance to $34,500.00 as ofMarch 2, 2013.

The Debtors obligations under the JSRS Capital, LLC Note are secured under certain Mortgagesdated May 24, 2012 (the JSRS Capital, LLC Mortgage), under which the Debtor granted JSRSCapital, LLC a mortgage interest in his properties located at the following locations:

(a)2815 14thAvenue South, Minneapolis in Hennepin County, Minnesota; and(b)425 24thAvenue North, Minneapolis in Hennepin County, Minnesota.

The properties are legally described as follow:

(a)Merrian and Shaws Addition to Minneapolis, South of Lot 8, Block 2, HennepinCounty, State of Minnesota; and

(b)Cobbs Addition to North Minneapolis, West 77 Feet of Lots 13 and 14, Block 8,Hennepin County, State of Minnesota.

(the Properties).

The JSRS Capital, LLC Mortgage on the Property located at 2815-14th

Avenue South wasrecorded in the office of the Hennepin County Recorder on July 11, 2012 as document numberT4972115; andThe JSRS Capital, LLC Mortgage on the Property located at 425-24

thAvenue North was

recorded in the office of the Hennepin County Recorder on July 6, 2012 as document numberA9813049.



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Class 5 is in a first position of priority on the Properties.


As a result of Lift Stay Motion and litigation between the Debtor and the Class 5 Creditor, theDebtor has agreed to pay the Class 5 Creditor $48,000.00. The Debtor, pursuant to Courtauthorization, will pay the Class 5 Claim without interest in monthly payments in the amount of$3,000.00 per month commencing September 1, 2013 and continuing on the 1

stday of each

subsequent month until August 31, 2014. On August 31, 2014 the full remaining balance of thedebt is due and payable to the Class 5 Creditor. The Debtor has listed both properties that arepledged and mortgaged to the Class 5 Creditor. The Debtor has sold one of the two propertiesand will use the proceeds of the sale to pay the Class 5 Claim in full.

Class 6 MidCountry Bank, fsb

The Class 6 Claim is made up of the Debtors obligations to MidCountry Bank, fsb under thatcertain Note in the original principal amount of $250,000.00 (the MidCountry Note).

The Debtors obligations under the MidCountry Note are secured under that certain Mortgagedated April 29, 2008 (the MidCountry Mortgage), under which the Debtor grantedMidCountry Bank a mortgage interest in his properties located at the following:

(a)3709 2ndAvenue South, Minneapolis in Hennepin County, Minnesota; and(b)2442 15thAvenue South, Minneapolis in Hennepin County, Minnesota.


(a)Channells 2ndAddition to Minneapolis, Lot 014, Block 001, Hennepin County, Stateof Minnesota; and

(b)Gales 1stAddition to Minneapolis, That part of Lot 004, Block 007 Lying S of N14.33 FT, Hennepin County, State of Minnesota.

(the Properties).

The MidCountry Mortgage on the Properties was recorded in the office of the Hennepin CountyRecorder on May 8, 2008 as document number 9130898.

Class 6 is in a first position of priority on the Properties.


The Debtor and Class 6 creditor previously have stipulated as follows: (1) the Bankruptcy Courthas terminated the automatic stay; (2) The Debtor and the Class 6 creditor have entered intoVoluntary Foreclosure Agreements, which have been recorded; (3) the Class 6 creditor has



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collected rents as of the date of Court approval; and (4) the Class 6 creditor will not file a claimin the Debtors bankruptcy case.

Class 7 - Private Bank

The Class 7 Claim is made up of the Debtors obligation to Private Bank under that certain Notein the original principal amount of $350,000.00 (the Private Bank Note).

The Debtors obligations under the Private Bank Note are secured under that certain Mortgagedated September 2, 2009 (the Private Bank Mortgage) and recorded September 23, 2009 asdocument number A9423855, as thereafter modified by Modification of Mortgage datedFebruary 14, 2012 and recorded on February 24, 2012 as document number A975488, underwhich the Debtor granted Private Bank a second mortgage interest in his principal residencelocated at 18407 Bearpath Trail, Eden Prairie, Minnesota. The property is legally described asfollows:

Bearpath Second Addition, Lot 014, Block 002, Eden Prairie, Hennepin County, State ofMinnesota

(the Property).

Class 7 is in a second position of priority on the Property.

As of the Filing Date, the unpaid balance under the Private Bank Note, including principal andunpaid interest, was $347,782.60. The fair market value of the Property is $1,270,000.00. Assuch, Class 7 is fully secured.


Class 7, pursuant to a Loan Modification Agreement dated March 12, 2013, and approved byseparate Bankruptcy Court Order, will have an allowed secured claim in the amount of$347,782.60. The Claim will be paid with monthly payments in the amount of $1,655.60commencing March 15, 2013. The interest will accrue at the rate of 4% for the term of the loanand the maturity date of the loan will be February 18, 2018. The Loan will be amortized basedupon a 30 year amortization. The remaining terms of the underlying loan documents will remainin effect.

Class 8 Private Bank

The Class 8 Claim is made up of the Debtors obligations to Private Bank under that certain Notein the original principal amount of $182,000.00 (the Private Bank Note).

The Debtors obligations under the Private Bank Note are secured by Mortgages dated April 14,2009 (the Private Bank Mortgage), under which the Debtor granted Private Bank mortgageinterest in his properties located at the following addresses:



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3311 Oakland Avenue South, Minneapolis, in Hennepin County, Minnesota; and2018 11

thAvenue South, Minneapolis, in Hennepin County, Minnesota.


Nichols and Seagers Addition to Minneapolis, Lot 005, Block 006, City of Minneapolis,County of Hennepin, State of Minnesota; andHerricks Addition to Minneapolis, Lot 012, Block 002, City of Minneapolis, County ofHennepin, State of Minnesota.

(the Properties).

The Private Bank Mortgage on the Property located at 3311 Oakland Avenue South wasrecorded in the office of the Hennepin County Recorder on April 28, 2009, as document numberA9354450; and

The Private Bank Mortgage on the Property located at 2018 11

th

Avenue North was recorded inthe office of the Hennepin County Recorder on April 28, 2009, as document number A9354451.

Class 8 is in a first position of priority on the Property.As of the Filing Date, the unpaid balance under the Private Bank Note, including principal andunpaid interest, was $178,051.58. The fair market value of the Properties is $180,000.00. Assuch, Class 8 is fully secured.


Class 8, pursuant to a Loan Modification Agreement dated March 12, 2013 and approved by aseparate Bankruptcy Court Order will have an allowed secured claim in the amount of$178,051.58. The Claim will be paid in monthly payments in the amount of $1,075.86commencing March 15, 2013. Interest shall accrue at the rate of 4%. The maturity date of theLoan will be February 15, 2018. The Loan will be based upon a 20 year amortization schedule.The remaining terms of the underlying loan documents will remain in effect.

Class 9 Wachovia Mortgage

The Class 9 Claim is made up of the Debtors obligations to Wachovia Mortgage under thatcertain Note in the original principal amount of $397,400.00 (the Wachovia Mortgage Note).The balance as of December 12, 2012 was $358,367.00. Mortgage servicing is now performed

by Fay Servicing, 939 West North Avenue, Chicago, IL 60642.

The Debtors obligations under the Wachovia Mortgage Note is secured under that certainMortgage dated February 21, 2006 (the Wachovia Mortgage), under which the Debtor grantedWachovia Mortgage a mortgage interest in his property located at 9086 Prosperity Way, Ft.Myers, in Lee County, Florida. The property is legally described as follows:



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Colonial Country Club Par 118 PB 72 PGS 60-61 Lot 12, Lee County, Florida

(the Property).

The Wachovia Mortgage on the Property was recorded in the office of the Lee County Circuit

Court on February 21, 2006, as document number 2006000080551.

Class 9 is in a first position of priority on the Property.

As of the Filing Date, the unpaid balance under the Wachovia Mortgage Note, includingprincipal and unpaid interest, was $358,367.00. The fair market value of the Property is$295,594.00. As such, Class 9 is not fully secured.


Class 9 will have an allowed secured claim in the amount of principal and interest due as of the

confirmation date, currently approximately $358,367.00. This sum will be paid with monthlypayments in the amount of $1,815.79 commencing on the Effective Date. . The Debtor will alsomake a monthly insurance and tax escrow payment to the Class 9 Creditor. The interest willaccrue on the unpaid balance at the rate of 4.5% per annum. The Claim will be amortized basedupon a 30 year amortization. The remaining terms of the underlying loan documents will remainin effect. In the event of a default by the Debtor making payments as described to the Class 9creditor, the Class 9 creditor will be entitled to declare a default and obtain expedited relief fromthe Automatic Stay to pursue its remedies. The terms of this Plan of Reorganization shallcontrol.

Class 10 Hennepin County Judgments

The Class 10 Claim consists of Judgments entered by way of Confessions of Judgment againstthe Debtor and in favor of Hennepin County representing unpaid real estate taxes as follows:

$11,366.00 pertaining to 3701 6th

Street North, Minneapolis, MN$14,192.00 pertaining to 3906 Emerson Avenue North, Minneapolis, MN$13,166.00 pertaining to 1518 Thomas Avenue North, Minneapolis, MN$11,445.00 pertaining to 1714 Queen Avenue North, Minneapolis, MN$8,241.00 pertaining to 2807 Knox Avenue North, Minneapolis, MN$13,217.00 pertaining to 2942 Dupont Avenue North, Minneapolis, MN$11,733.00 pertaining to 421 Morgan Avenue North, Minneapolis, MN$9,036.00 pertaining to 2634 13

thAvenue South, Minneapolis, MN

$25,005.00 pertaining to 2500 Humboldt Avenue North, Minneapolis, MN$16,789.00 pertaining to 2306 James Avenue North, Minneapolis, MN$9,644.00 pertaining to 425 24

thAvenue North, Minneapolis, MN

The Debtors obligations under the 12 Confessions of Judgments are secured by the Judgmentson each of the following properties legally described as follows:



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Nichols-Frissell Co.s Lyndale Park Addition to Minneapolis, Lot 010, Block 003,Hennepin County, State of Minnesota;Higgins and Sinclairs Addition to Minneapolis, Lot 017, Block 001, Hennepin County,State of Minnesota;W H Lauderdales Addition to Minneapolis, Lot 027, Block 001, Hennepin County, State

of Minnesota;Eastlawn Addition to Minneapolis, Lot 015, Block 001, Hennepin County, State ofMinnesota;Whitney and Goulds Subdivision of Lot M of Babbitts Outlots to the City ofMinneapolis, Lot 007, Block 002, Hennepin County, State of Minnesota;Harmony Terrace, Lot 026, Block 004, Hennepin County, State of Minnesota;Maben, White and LeBrons Addition to Minneapolis, MN, Block 007, Lot 4 and N 26 Ftof Lot 5, Hennepin County, State of Minnesota;Wrights Addition to Minneapolis, Lot 002, Block 002, Hennepin County, State ofMinnesota;Highland Park Addition to the City of Minneapolis, S 2 Ft of 89 Ft of E 179 Ft of Lot 7,

Block 043, Hennepin County, State of Minnesota;Forest Heights, Lot 023, Block 018, Hennepin County, State of Minnesota; andCobbs Addition to North Minneapolis, W 77 Ft of Lots 13 and 14, Block 008, HennepinCounty, State of Minnesota.

(the Properties).

Class 10 is in a first position of priority on the Property.


Class 10 will have allowed secured claims in the amount of the Judgment balances as of theConfirmation Date. The Debtor will make payments on the Confessions of Judgments inaccordance with their terms. The annual payments to be made by the Debtor range between$1,300.00 and $2,900.00 annually for each year. The Confessions of Judgments all call forannual payments to be made by the Debtor on or before December 31 of each calendar year. TheConfessions of Judgments are payable over ten (10) years from their execution in 2012. Theamount of payments vary depending on the terms of each Confession of Judgment.

Class 11 Hennepin County Ad Valorem Property Tax Claims

This section shall govern the ad valorem property tax claims Tax Claims filed by Hennepin

County County for taxes owing on properties owned by the Debtor. These Tax Claims are

secured by a lien on real property and are not personal liabilities of the Debtor. See Minn. Stat.

272.31. These Tax Claims reflect all property taxes secured by liens that had attached as of the

petition date, any interest and penalty that had accrued as of the petition date, and any special

assessments certified to the County for inclusion on a property tax bill as of the petition date. As

it deems necessary, the County may amend its Tax Claims to reflect more accurate petition-date

claim totals.



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1. Liens Preserved. All property tax liens that attached to real properties included inthe estate as of the petition date are preserved. Property tax liens shall attach post-

petition to real properties by operation of Minnesota law.

2. Interest on Tax Claims. To the extent the Countys Tax Claims are over-secured,those Tax Claims shall be entitled to interest at the state statutory rate for delinquent

taxes. 11 U.S.C. 511. Interest shall accrue on any part of the Tax Claims that are

delinquent or become delinquent at the rate and in the method prescribed by Minn.

Stat. 279.03.

3. Penalties on Tax Claims. Notwithstanding Minn. Stat. 279.01, no penalties shallaccrue or be charged on unpaid property taxes on properties owned by the Debtor

during the period of the automatic stay, which period shall be determined by 11

U.S.C. 362(c).

4. Payment of Tax Claims. Tax Claims shall be paid in full with interest, in monthlycash installments within five years after the order for relief. Payments shall be

directed to the Hennepin County Treasurer at the following address:

Hennepin County Treasurer

Attn: Vicci Lee

A-600 Government Center

300 S Sixth Street

Minneapolis, MN 55487-0060

5. Application of Tax Claim Payments. Hennepin County shall apply Tax Claimpayments in the manner provided by Minnesota Statutes and in its ordinary course of

business.

6. Recording Real Estate Documents. Pursuant to 11 U.S.C. 1146, the Debtor mayrecord real property documents without payment of a stamp tax or similar tax when

the document to be recorded is an instrument of transfer or security, which

memorializes a transaction made pursuant to this Plan. For purposes of clarification,

stamp tax refers to the deed tax. At the time such document is presented for

recording, the Debtor shall present an order of the Bankruptcy Court in this

proceeding authorizing the transaction which is the subject of the document to be

recorded. Additionally, Minn. Stat. 272.12 shall not preclude the recording of a

document when the Debtor presents an order of the Bankruptcy Court in this

proceeding authorizing the transaction which is the subject of the document to be

recorded.



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7. Payment of Post-Petition Property Taxes.a. No Administrative Expense Claims Need Be Filed. The County need not

file administrative expense claims for any taxes not included in its Tax Claims

and payable post-petition.

b. Payment Directly to County Treasurer. Property taxes that are payablepost-petition, and that are not included in the Countys Tax Claims, shall be

paid in full directly to the County Treasurer in the ordinary course of

business on or before the statutory payment dates of May 15 and October

15 each year. To the extent that taxes payable post-petition are included in

the Countys Tax Claims and are paid timely in the manner of taxes paid in

the ordinary course of business, those payments shall be applied to the Tax

Claims.

c. Tax Petitions. The Debtor is currently contesting the Claims for real estatetaxes and assessments from Hennepin County and the City of Minneapolis.

That litigation is pending in the Minnesota Tax Court and Minnesota State

District Court. The Debtor will continue to prosecute the tax challenges. As a

result of the Courts approval of this Plan, the Tax Creditors shall retain their

pre-bankruptcy liens on the Debtors assets. At such time as the State Court

actions are determined by Final Order, the amount to be refunded to the

Debtor, if any, shall be retained by the Debtor for purposes of paying future

real estate taxes. In the event the tax creditors prevail, the Debtor will pay anybalance due on the pre-bankruptcy Claims over four years with interest to

accrue at the statutory rate provided by Minnesota Law. In the event Debtor

sells a parcel of real estate subject to unpaid tax claims held by Hennepin

County or the City of Minneapolis, the full balance of the claim for the parcel

to be sold shall be escrowed pending the entry of a final order determining the

amount of the allowed tax claim. In addition, the Debtor will file claim

objections to the claims filed by Hennepin County and/or the City of

Minneapolis. Claim objections shall be held in abeyance pending the

resolution in the appropriate state court forum of the amount of the claim

owed on the Debtors real estate.

The Debtor believes that once the values of the Debtors property are

determined either by this Court or in Minnesota Tax Court, the Debtor will

owe no money to Hennepin County and will in fact be entitled to a refund.



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Any refund received may be used by the Debtor to offset future real estate

taxes due and owing on the Debtors properties.

Class 12 Florida Property Tax Claims

The Debtor believes that Hillsboro County, State of Florida and Lee County, State of Floridaholds pre-petition priority tax claims pursuant to 11 U.S.C. 1123(a)(1), the Claims areclassified. They are entitled to priority pursuant to 11 U.S.C. 507(a)(8). After the EffectiveDate, the Florida property tax claims will accrue interest on the terms and at the rate provide forin 20 U.S.C. 6621(b) and will be paid in periodic payments so that the claims are fullyamortized and paid over a period of 5 years from the Petition Date, all pursuant to 11 U.S.C.1129(a)(9)(c).

3.3 Impaired and Unimpaired Classes

Classes 1, 3, 4, 5, 7, 8 and 9 are impaired and entitled to vote on the Plan. Classes 2, 6, 10, 11

and 12 are unimpaired.

3.4 Unclassified Claims Description of Holders and Treatment of Claims

Administrative Expenses

Administrative Claim means any claim for the payment of any administrative expense arisingunder Section 503(b) of the Bankruptcy Code.

Subject to the specific terms set forth below, the Debtor will pay each holder of an allowedAdministrative Claim (except any such holder that agrees to different treatment) the allowed

amount of such holders allowed Administrative Claim, in cash, on the Effective Date; provided,however, that allowed Administrative Claims representing post-petition liabilities incurred in theordinary course of business by the Debtor will be paid as they come due. The Debtor has beenadvised by the counsel for the Committee of Unsecured Creditors that unpaid AdministrativeClaims asserted by the attorney for the Committee of Unsecured Creditors and the Consultantretained by the Committee are, at present, between $85,000.00 to $90,000.00. The Debtorsattorney estimates that his fees approximate $10,000.00.

3.4.1 U.S. Trustee Fees and Court Costs

U.S. Trustee fees and court costs that constitute Administrative Claims are those obligations

imposed by operation of 28 U.S.C. 1930 (all such fees and costs will be referred to as U.S.Trustee Fees).

The Debtor will pay all U.S. Trustee Fees owed by the Debtor, as and when due, until theBankruptcy Case is closed. In addition, the Debtor will continue to comply with all reportingrequirements imposed by the U.S. Trustee until this Bankruptcy Case is closed.



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Other Administrative Expense Claims

There may be other Administrative Claims, such as the following: (1) filed proofs of claim foradministrative expenses; (2) post-petition taxes; (3) unpaid post-petition claims incurred in theordinary course of business; and (4) certain claims associated with executory contracts and

unexpired leases (the treatment of claims arising out of executory contracts and unexpired leasesis more fully described in Section 3.5 below) (all of the foregoing will be referred to as OtherAdministrative Claims). The Debtor has remained current on all of its post-petition obligations,and does not believe that it is liable on any Other Administrative Claims, except as discussedbelow for post-petition property taxes.

To the extent that there are any allowed Other Administrative Claims, such claims will be paid,in full and in cash, on the Effective Date, or as otherwise agreed to by the Debtor and theclaimant, subject to the following exception: For claims incurred in the ordinary course ofbusiness after the Filing Date, the Debtor will pay such claims as they become due, or otherwisein the ordinary course of Debtors business.

3.5 Executory Contracts and Unexpired Leases

The Debtor is a party to executory contracts and unexpired leases for properties the Debtor isleasing to third parties. Pursuant to Section 365 of the Bankruptcy Code, a debtor in possessionmay either (i) assume the contract, (ii) reject the contract, or (iii) assume and assign the contract.The treatment that any contract or lease receives in the course of a bankruptcy case dictates thenature of the claim that the non-debtor party may have by reason of the contract or lease.Generally, the rejection of a contract or lease will give rise to a general unsecured claim fordamages and pre-petition arrearages, while the assumption of a contract or lease will require thatall defaults be cured, and claims related to monetary defaults will be afforded priority statusunder the Bankruptcy Code.

The Debtor will assume all Lease Agreement with third parties to whom the Debtor is leasing arental property owned by the Debtor.From and after the date on which an order confirming the Plan is entered, the Debtor will timelyperform his obligations according to the terms of all assumed contracts, as the same may bemodified by the terms of the Plan. Notwithstanding the foregoing, with respect to arrearagesoutstanding as of the date on which a contract or lease is assumed, the Debtor will cure sucharrearages promptly after the Effective Date, or as otherwise agreed to by the Debtor and theother party to any affected contract.

As to rejected contracts and leases, the parties to such contracts and leases may have claimsarising under the terms of the relevant agreement, or arising from the rejection of the contract orlease, or both. In accordance with the provisions of the Bankruptcy Code, any claim based onthe rejection of an executory contract or unexpired lease will be treated as an unsecured claim.

Unless otherwise ordered by the Court, the deadline for filing a proof of claim for any such claimarising from rejection of a contract or lease will be fixed at 30 days from the date on which an



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order confirming the Plan is entered. Any creditors whose contract or lease has been rejectedmay file a Claim as an Unsecured Claim in Class 1.

THE INFORMATION PROVIDED HEREIN CONSTITUTES NOTICE OF THE DEADLINEFOR ASSERTING CLAIMS FOR DAMAGES FROM REJECTION OF ANY EXECUTORY

CONTRACT OR UNEXPIRED LEASE.

Other than the Debtors Leases of his rental properties, all other Executory Contracts orunexpired Leases are rejected.

IV. PROOFS OF CLAIMS AND OBJECTIONS TO CLAIMS

In general, creditors are permitted to file proofs of claims with the Bankruptcy Court pursuant toBankruptcy Rules 3001 or 3002. The deadline for timely filing a proof of claim for non-governmental creditors was April 11, 2013 and the deadline for governmental creditors was June10, 2013.

Certain creditors may hold or assert claims for the payment of administrative expenses of thetypes described in Section 503(b) of the Bankruptcy Code. Unless otherwise ordered by theBankruptcy Court, the deadline by which administrative claims must be timely filed is thirtydays after the date on which an order confirming the Plan is entered. Administrative expenseclaims must be asserted by motion filed and served by the deadline set forth herein.SUBJECT TO SUBSEQUENT ORDER OF THE BANKRUPTCY COURT, THISINFORMATION CONSTITUTES NOTICE OF THE DEADLINE FOR ASSERTINGADMINISTRATIVE EXPENSE CLAIMS.

Certain creditors may have claims arising from the rejection of executory contracts or unexpiredleases, whether rejected under the Plan or pursuant to a motion filed during the pendency of theBankruptcy Case. Claims for damages arising out of such rejection must be asserted by thefiling of a proof of claim within thirty days after the date on which an order confirming the Planis entered. Parties to executory contracts and unexpired leases that have been or may yet berejected by the Debtor, by motion or otherwise, at or before confirmation must file proofs ofclaims for any damages from such rejection in accordance with the Bankruptcy Courts orderapproving such rejection, or, if the order does not so provide, pursuant to the terms of thisparagraph.

THE INFORMATION PROVIDED HEREIN CONSTITUTES NOTICE OF THE DEADLINEFOR ASSERTING CLAIMS FOR DAMAGES FROM REJECTION OF ANY EXECUTORYCONTRACT OR UNEXPIRED LEASE.

V. CLAIMS OF THE DEBTOR AGAINST OTHERS

5.1 Claims from Bankruptcy Laws Preferences, etc.

The bankruptcy laws create a number of claims and causes of action that a debtor-in-possessionmay pursue for the benefit of the bankruptcy estate. Among the rights of recovery that are



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available to a debtor-in-possession are those based on theories of preferential and fraudulenttransfer.

A preference is a payment or other transfer of property to or for the benefit of a creditor, beforethe bankruptcy case was commenced, on account of an antecedent debt, that: (1) was made while

the debtor was insolvent; (2) was made within the time period(s) specified in Section 547(b)(4)of the Bankruptcy Code; and (3) enabled the creditor receiving the transfer to receive more thanthe creditor would receive if the case were a case under Chapter 7 of the Bankruptcy Code.When a debtor avoids a preferential transfer, the preference defendant is required to return thepayment or other transfer made, and the preference defendant then ordinarily has an unsecuredclaim in the amount of the returned preference.

An avoidable fraudulent conveyance under the bankruptcy laws is a transfer of an interest of thedebtor in property, or any obligation incurred by the debtor, that was either: (a) undertaken withactual intent to hinder, delay, or defraud any present or future creditor; or (b) a transaction underwhich the debtor received less than a reasonably equivalent value, and (i) the debtor was

insolvent on the date the transfer was made or such obligation was incurred or became insolventas a result of such transfer or obligation; (ii) the debtor was engaged in business or a transaction,or was about to engage in such business or transaction for which the debtors remaining assetswould be insufficient; or (iii) the debtor intended to incur or believed that it would incur debtsthat would be beyond the debtors ability to pay as such debts matured.

Based on a review of its records so far, the Debtor believes that there are no viable constructivelyfraudulent or preferential transfers that would be subject to avoidance

The Debtor will continue its review and will pursue any avoidance actions that they determineare likely to generate recoveries for the benefit of creditors. Any cash proceeds recovered byreason of the disposition of any avoidance action will be used first to pay administrativeexpenses associated with such avoidance action, and the remainder will be paid to the CreditorTrust for distribution to the Class 1 Creditors.

5.2 Setoffs

Subject to the limitations provided in Section 553 of the Bankruptcy Code, the Debtor may, butwill not be required to, setoff against any claim and the payments or other distributions to bemade pursuant to the Plan in respect of such claim, claims of any nature whatsoever the Debtormay have against the holder of such claim. Neither the failure to setoff, nor the allowance of anyclaim hereunder will constitute a waiver or release by the Debtor of any such claim that theDebtor may have against such holder.



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VI. POST CONFIRMATION

6.1 Means for Execution

6.1.1 Plan Funding

The Debtor will continue to earn income from the operation of rental properties. This incomewill be used to fund the Debtors operating expenses and living expenses.In 2013, and subsequent to Confirmation, the Debtor will sell rental properties. The sales will benegotiated on a non-liquidation basis. In doing so, the Debtor will incur commissions andclosing costs. Net sales proceeds are defined elsewhere in this Plan. Net sales proceeds will beused by the Debtor to fund this Plan of Reorganization.

6.1.2 Plan Distributions

The distributions under the Plan to Class 1 Unsecured Creditors will be made by the Creditor

Trust Trustee on the dates as provided for in the Plan, or on such earlier dates as the Trustee, inhis sole discretion, may choose. Any payment or distribution required to be made under thisPlan on a day other than a business day will be made on the next succeeding business day, or assoon thereafter as practicable.

The Trustee will not be required to make any payment or distribution on account of a disputedclaim unless the dispute has been resolved and then only to the extent the disputed claimbecomes an allowed claim, whether by agreement of the parties of by a final order of theBankruptcy Court. After the claim is resolved and subject to the terms of the Plan, the Trusteewill pay and distribute to the holder. The Debtor may choose, in the alternative, to make anyadditional payment or distribution to the creditor holding a previously disputed allowed claim tobring distributions on account of such claim current with where they would have been had theclaim never been subject to objection.

In the event that any property to be distributed under the Plan remains unclaimed or otherwisenot deliverable to a creditor entitled thereto as of the later of: (a) one year after the date on whichan order confirming the Plan is entered; or (b) one hundred twenty (120) days after anydistribution called for under the terms of the Plan, such property will become vested in and willbe transferred and delivered to the Debtor. Unclaimed property includes, but is not limited to,checks issued pursuant to the Plan and not negotiated within ninety (90) days of the date suchcheck was issued.

The Debtor will withhold from any property distributed under this Plan, any amounts required tobe withheld for federal, state, or local taxes. The issuance, transfer or exchange of any of thesecurities issued under, or the transfer of any other property pursuant to this Plan, or the makingor delivery of an instrument of transfer under this Plan, is exempt from application of any lawimposing a stamp tax, transfer tax, or other similar tax.

Except as expressly stated in the Plan or otherwise allowed by a final order of the BankruptcyCourt, no interest, penalty, or late charge arising after the Filing Date will be allowed on any



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claim, regardless of whether there is any objection to the claim. No attorneys fees will be paidwith respect to any claim except as specified in the Plan, or as allowed by a final order of theBankruptcy Court.

Distributions to be made under this Plan to holders of allowed claims will be delivered by first

class United Sates mail, postage prepaid to (a) the latest mailing address set forth in theschedules if no proof of claim was filed with respect to such claim; or (b) to the addressappearing on a proof of claim as the address to which notices should be sent if a proof of claimwas filed with respect to such claim. Distributions will be deemed made as of the time they aredeposited in the United States mail.

Any notices related to the Plan must be addressed as follows:

Steven F. Meldahl18047 Bearpath TrailEden Prairie, MN 55347

and

Steven B. Nosek, Attorney at Law2855 Anthony Lane South, #201St. Anthony, MN 55418

6.1.3 Implementation of Plan

The Plan will be implemented upon entry of an order confirming the Plan.

The Plan may be modified in the manner provided for under Section 1127 of the Code. TheDebtor will give notice of any proposed modification to the United States Trustee and to anyother parties designated by applicable rules or by Court order. The Debtor reserves the right tomake such modifications at any hearing on confirmation as may be necessary to facilitateconfirmation of the Plan, as well as the right to seek modification after confirmation to the fullextent permitted under the Bankruptcy Code.

The Debtors obligations under the Plan are contingent upon entry of an order confirming thePlan, and said order not being stayed, appealed, or otherwise challenged before the expiration ofthe applicable deadline; provided, however, that the Debtor may, in its sole discretion, choose toundertake and perform its obligations under the Plan notwithstanding the pendency of an appeal.

6.2 Reservation of Rights, Powers and Jurisdiction

6.2.1 Rights and Powers

Except as otherwise expressly provided in the Plan, the Debtor will retain, after confirmation ofthe Plan, full right and power to do any of the following:



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(a) Object to the allowance of claims;

(b) Seek subordination of claims;

(c) Pursue any claims against third parties, including, but not limited to those based on

theories of preference, fraudulent transfer, or any other action arising under Chapter 5 ofthe Bankruptcy Code;

(d) Pursue any claims and enforce any rights arising under the Bankruptcy Code in favor of atrustee or debtor-in-possession; and

(e) Pursue any causes of action that the Debtor may have as of the date on which an orderconfirming the Plan is entered. Except to the extent explicitly released under the terms ofthe Plan, any and all causes of action that the Debtor may have had prior to confirmationof the Plan will survive confirmation of the Plan, will vest in the Debtor as ofconfirmation of the Plan, and will not be affected by confirmation or the passing of the

Effective Date of the Plan.

The Debtor may object to the allowance of claims within the time period provided for in theorder confirming the plan, or as otherwise dictated by order of the Court. The Debtors authorityto object to the allowance of claims will not be affected in any way by the Debtors failure toobject to allowance of any claim for purposes of voting.

6.2.2 Court Approval

After confirmation of the Plan, the Debtor may seek the Courts approval of any of thefollowing:

(a) settlements regarding objections to claims;

(b) settlements regarding claims against third parties;

(c) settlements regarding allowance of fees and expenses incurred by professionals employedduring the pendency of the Bankruptcy Case.

If the Debtor chooses to seek court approval of any such settlements, the Debtor will not berequired to provide notice to creditors as would typically be provided during the chapter 11 caseor to file and serve a motion for the approval of the settlement. Instead, the Debtor will beauthorized to seek approval by filing a stipulation setting forth the material terms of thesettlement, along with a proposed order providing for the approval of such stipulation.

6.2.3 Jurisdiction

Until the Plan has been fully consummated, the Court will retain jurisdiction over, and theDebtor will retain standing and the right to pursue any cause of action, proceeding, or otherrequest for relief related to the following:



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(a) classification of the claims of creditors;

(b) determination of the allowed amount of any claims arising before or during the pendencyof the Bankruptcy Case;

(c) subordination of the allowed claims of creditors or liens or other interests securing suchclaims;

(d) determination of any counterclaims against any creditor, including any claim for turnoverof property of the Debtor and any claim for offset of the value of the property against theclaim of the creditor;

(e) determination of the allowed amount of claims for damages from the rejection ofexecutory contracts or unexpired leases;

(f) determination of all issues and disputes regarding title to the assets of the estate and theDebtor;

(g) determination of all causes of actions between the Debtor and any other party, including,but not limited to, any right of the Debtor to recover assets pursuant to the provisions ofthe Bankruptcy Code, and to avoid any preferential or fraudulent transfers;

(h) correction of any defect, the curing of any omission or the reconciliation of anyinconsistency of the Plan or the order confirming the Plan as may be necessary to carryout the purpose and intent of the Plan;

(i) interpretation and enforcement of the terms of the Plan;

(j) shortening or extending, for cause, any time fixed for doing any act or thing under thePlan;

(k) entry of any order, including any injunction, necessary to enforce the title, rights, andpowers of the Debtor;

(l) entry of an order concluding and terminating the case; and

(m) approval of any settlement related to any of the foregoing.

The Debtors transfer or assignment of any interests or rights will not affect the Courts retentionof jurisdiction to the full extent provided herein.



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6.3 Effects of Plan Confirmation

6.3.1 Binding Effect

The Plan will be binding upon and inure to the benefit of the Debtor, all present and former

holders of claims against, or interests in, the Debtor, and all respective successors and assigns.

6.3.2 Discharge and Injunction

THE DEBTOR IS AN INDIVIDUAL. AFTER CONFIRMATION OF THE DEBTORSPLAN, THE DEBTOR INTENDS TO SEEK AN ORDER CLOSING THE CASE. UPONCOMPLETION OF THE PLAN PAYMENTS, THE DEBTOR INTENDS TO REOPEN THECASE AND FILE A MOTION SEEKING A DISCHARGE.

TO THE FULL EXTENT PROVIDED FOR IN SECTION 1141 OF THE CODE, ANDSUBJECT TO ANY EXCEPTION OR QUALIFICATION UNDER SUCH SECTION, THE

DEBTOR WILL BE ENTITLED TO ENTRY OF AN ORDER PROVIDING FOR THECOMPLETE DISCHARGE, WAIVER, RELEASE, AND SATISFACTION OF ALL CLAIMSAGAINST THE DEBTOR AS OF THE FILING DATE. THE DISCHARGE WILL OPERATETO RELEASE AND EXTINGUISH ANY PURPORTED LIENS, ENCUMBRANCES, ORSECURITY INTERESTS CLAIMED BY A CLAIMANT OR ANY OTHER ENTITYAGAINST PROPERTY OF THE DEBTOR, PROPERTY DEALT WITH BY THE PLAN,AND PROPERTY OF THE ESTATE, EXCEPT AS OTHERWISE SPECIFICALLYPROVIDED IN THE PLAN. THE ORDER CONFIRMING THE PLAN IS A GENERALADJUDICATION AND RESOLUTION WITH PREJUDICE OF ALL PENDING LEGALPROCEEDINGS AGAINST THE DEBTOR, PROPERTY OF THE DEBTOR, OR PROPERTYOF THE ESTATE, EXCEPT AS OTHERWISE PROVIDED IN THE PLAN.

THE DISCHARGE AND THE ORDER CONFIRMING THE PLAN OPERATE AS ANINJUNCTION TO THE EXTENT PROVIDED IN SECTION 524 OF THE BANKRUPTCYCODE, AND ONLY TO SUCH EXTENT. ANY CREDITOR OR EQUITY HOLDERENTITLED TO RECEIVE ANY DISTRIBUTION PURSUANT TO THIS PLAN WILL BEPRESUMED CONCLUSIVELY TO HAVE RELEASED THE DEBTOR FROM ANY CLAIMRELATED TO THAT WITH RESPECT TO WHICH THE DISTRIBUTION IS MADE. THISRELEASE WILL BE ENFORCEABLE AS A MATTER OF CONTRACT AGAINST ANYCREDITOR OR EQUITY HOLDER THAT ACQUIRES ANY RIGHT TO DISTRIBUTIONPURSUANT TO THIS PLAN.

SUBJECT TO ANY LIMITATIONS PROVIDED FOR IN THE BANKRUPTCY CODE,UNLESS A TAXING AUTHORITY HAS ASSERTED A CLAIM AGAINST THE DEBTORBEFORE THE DEADLINE FOR FILING CLAIMS, CONFIRMATION OF THE PLAN WILLOPERATE AS A DISCHARGE OF ANY CLAIM OR LIEN OF ANY TAXING AUTHORITYAGAINST THE DEBTOR, THE ESTATE, ANY PROPERTY OF THE DEBTOR, AND ANYPROPERTY OF THE ESTATE, FOR ANY TAXES, PENALTIES, OR INTEREST: (I) FORANY TAX YEAR FOR A PERIOD BEFORE THE FILING DATE; (II) ARISING OUT OFTHE FAILURE OF THE DEBTOR TO FILE ANY TAX RETURN; OR (III) ARISING OUT



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