Consistent with the intended treatment of the Plan as a plan of liquidation for
federal income tax purposes, the Debtors have sought a ruling from the IRS that no COD should
be incurred by a Debtor as a result of the implementation of the Plan prior to the disposition by
such Debtor of all or substantially all of its assets (other than to the extent any Allowed Claim’s
distribution is subject to a maximum amount (such as the Convenience Claims and Convenience
Guarantee Claims), or has been or is separately settled for less than its carrying value). In such
case, the reduction of tax attributes resulting from such COD (which, as indicated above, only
occurs as of the end of the tax year in which the COD occurs) generally should not have a
material impact on the Debtors. There can be no assurance that the IRS will issue a favorable
ruling on these matters and thus there can be no assurance that all or a substantial amount of the
COD will not be incurred earlier due to, among other things, a lack of direct authoritative
guidance as to when COD occurs in the context of a liquidating Chapter 11 plan.
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