Docket#735, page22 III. The Proposed Settlement Contains Provisions That Must Be Stricken Or Modified
https://www.kccllc.net/gtat/document/1411916141205000000000027
47. Even if the Committee concludes, upon completion of its investigation, that a settlement with Apple along the parameters set forth in the Proposed Settlement is appropriate, there are several provisions that must be revised before the Committee can support settlement. These include:
No Payments To Apple In Excess of Furnace Sale Prices.
As currently drafted, the Proposed Settlement requires the Debtors to pay the Apple Repayment Amount for each furnace sale regardless of whether the actual sale price is equal to or greater than such amount. This could result in a substantial drain on the estates‘ financial resources and is certainly not a
non-recourse claim. The Apple Repayment Amount for each furnace sale must be capped at the actual sale price
No Future Claims Against Debtors
If the proposed sale price of a furnace is
less than the Apple Prepayment Amount, the Proposed Settlement should provide the Debtors, in consultation with the Committee, an absolute right to determine whether to accept or reject such sale without any threat of a claim by Apple for such decision. These estates should not be subject to claims based upon second
guessing by Apple.
Payments Only Upon Final Sales
The Proposed Settlement should be expressly clear that Apple Repayment Amounts shall only be paid upon final and completed sales. Apple should not be entitled to payment on account of any deposits or prepayments made in connection with the sale of
ASF furnaces that subsequently fail to close, which could result in a substantial economic burden to the estates.
Extended Use Of The Mesa Facility
Given that the sale of Mesa Furnaces inures primarily to Apple‘s benefit, and that repayment may occur over a 4 year period, the Debtors‘ right to continue to use the Mesa Facility should be extended beyond September 2015. An abrupt requirement to move large quantities of furnaces will hamper the Debtors‘ ability to sell furnaces and be extremely expensive for the estates.
Termination Of Apple‘s Payment Stream Upon Default
Apple‘s payment stream from the sale of ASF furnaces should terminate in the event of a default under a Priming Financing as opposed to an event of default and acceleration and the exercise of such remedies. Such an excessive requirement will make it significantly more difficult for the Debtors to obtain DIP financing at a reasonable cost.
Identification Of Equipment At The Mesa Facility
In order to avoid any confusion regarding identification of assets belonging to the Debtors, the proposed Settlement should include an agreed schedule of all Apple assets located in Mesa.
The Committee reserves its right to modify or further supplement this objection, if appropriate, following the conclusion of its investigation.
Dated: December 5, 2014
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