welcome to the 12 Posts of $BBBYQ -mas. my goal is to try to review and simplify concepts from my research into $BBBY (old). no. 4! having concluded my thoughts about the third-party release I want to put the cherry on top by continuing with the distribution of beneficial interests that will come from the Reorganized NewCo. today we will explore Section 1146, non-voting equity securities and the Liquidating Trust as they are described in the Plan—yes, they are all there! ..and always have been. first we will look at Section 1146: 11 U.S. Code § 1146 - Special tax provisions The issuance, transfer, or exchange of a security, or the making or delivery of an instrument of transfer under a plan confirmed under section 1129 or 1191 of this title, may not be taxed under any law imposing a stamp tax or similar tax. that is a very specific legal definition and I will reiterate, it is not a coincidence that it is found in the Confirmed Plan for this Chapter 11! It exists to provide legal protections that are related to the transactions contemplated by the Plan: yep I do have an order to these posts and as we see in the Plan, the Section 1146 tax exemption is connected to the Asset Sale Transaction, which you will remember is a large component of the third-party release—I hope you’re reading all the posts. these are specific, contextual mentions throughout the Plan and cannot be dismissed as “boilerplate”. exciting! the issuance of securities that will come from the Reorganized entity will be non-voting equity securities. you may be wondering how I am so confident, well you guessed it I just read it from the Plan: a few things I want to go over here. Section 1123(a)(6) states; “11 U.S. Code § 1123 - Contents of plan (6) provide for the inclusion in the charter of the debtor, if the debtor is a corporation, or of any corporation referred to in paragraph (5)(B) or (5)(C) of this subsection, of a provision prohibiting the issuance of nonvoting equity securities, and providing, as to the several classes of securities possessing voting power, an appropriate distribution of such power among such classes, including, in the case of any class of equity securities having a preference over another class of equity securities with respect to dividends, adequate provisions for the election of directors representing such preferred class in the event of default in the payment of such dividends;..” emphasis mine. I highlight this because the reason for this disclosure at all is to make sure the Plan is compliant and confirmable according to the law. normally, non-voting securities are not generally permitted so that when the NewCo emerges there aren't issues with preferred voting power. however, for many reasons which I won’t get into now—i.e. cancellation of Common Stock, Class 6 not voting in favour of the Plan—non-voting securities are permitted. ..and revealed! notice the red square, do you see that interests is not capitalized? this is intentional and the Plan is communicating a general statement, not describing Interests as they are defined in the earlier section of the Plan. to summarize here, there will be beneficial interests that will come along with the assets deposited into the Liquidating Trust, they will meet the definition of being a security and they will be non-voting. spoiler: this is the rights offering, likely warrants. the Liquidating Trust is a big part of this and may get its own post but for now I would like to focus the attention on this section of the Plan: notice the distinction in naming “Holders of applicable Claims” instead of Holders of Claims? as we have said going back to the first post, the legal language is filled with clues that are left behind. this is deliberate use because it refers only to the DIP and FILO lenders. very cool. further down, here’s another really good one: “holder of Claims”; now that is a good one. you guessed it, a holder of Claims and a Holder of Claims imply two different meanings and you know what else? a holder of Claims incorporates a Holder of Interests according to the definitions in the Plan. (important!) we know this by reviewing the legal definition of a “Claim: (5) The term “claim” means— (A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or (B) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured.” a co-debtor, a creditor, a party in interest.. they would have a right to payment. a Holder of Interests may qualify under part (A) and definitely qualifies under part (B) if you have followed the post series when we reviewed the third-party release. aside from that let’s appreciate the plain admission in the second highlight that there are holders of Claims receiving interests in the Liquidating Trust. tough to discredit when it is right there. naturally the next question becomes how is it possible that all these things are not known and in the public eye? I’ll be honest I don’t think these attorneys bill 1000$ and higher for no reason. if you guessed that it’s explained in the plan then you get a bingo. from a great comment here: xitter.cf/youknowwho2b/status/20… we explored my belief that Section 107 allows that only involved parties need to have the full picture and public facing disclosure can be limited. there is a great ongoing discussion there if you are curious: thinking again about “this would not be written if it were not necessary” I would ask that everyone look at the image above and have a look at what I highlighted in the red box. isn't that something? remember: • the holder of Claims is receiving interests in the Liquidating Trust, and; • the holder of Claims incorporates the Holder of Interests, and; • I believe—and have extensively shared—the Holder of Interests can only be a Class 9 shareholder, therefore; • there is a documented and legally protected pathway in the Confirmed Plan, through the Liquidating Trust, where equity shareholders can receive a distribution of interests. until tomorrow!