Debtors have continued to seek to obtain support for a plan that would provide holders of General Unsecured Claims with enhanced distributions and would also be supported by more than 80% of the Consenting Lenders, in accordance with the RSA. However, the Debtors, the Ad Hoc Committee Lenders and the Creditors’ Committee have been unable to reach consensus regarding plan distributions to General Unsecured Creditors. Accordingly, the Plan that the Debtors have filed provides that holders of General Unsecured Claims will receive their pro rata share of the Debtors’ unencumbered assets in the form of (i) cash, subject to reductions for certain fees and, potentially, adequate protection claims and (ii) shares of Prairie Holdings, Inc., which is the Debtor that owns a 49% interest in Knight Hawk Holdings, LLC, but only if it is judicially determined that Prairie Holdings’ interests in Knight Hawk Holdings, LLC are unencumbered.
Further, as discussed in detail in this Amended Disclosure Statement, the Plan is premised on a global settlement and compromise of certain claims and causes of action that could be asserted by the Debtors against certain of the First Lien Lenders for actions taken in connection with the Debtors’ prepetition exchange offers and certain of the Debtors’ employees. The consideration for the global settlement is to be provided by the holders of First Lien Credit Facility Claims, who will waive the Prepetition Lender Adequate Protection Claim in respect of any diminution in the value of the Prepetition Collateral from the Petition Date through and including June 22, 2016 and, potentially, through the Effective Date, subject to certain exceptions.