Specialty Retail Shops Holding Corp. (Shopko Stores) – Files Amended Plan and Disclosure Statement; Seeks Approval of Disclosure Statement and Plan Solicitation Procedures

• The issuance of the New Shopko Interests;
• The Debtors Prepetition ABL Obligations being rolled up into the DIP Facility;
• The entrance by the Reorganized Debtors into the Exit Facility, pursuant to which either: (i) the Prepetition ABL Lenders, DIP ABL Lenders, and Term B Lenders will convert their Claims into commitments under such an Exit Facility; or (ii) the Reorganized Debtors will enter into a new credit facility sufficient to both repay the Claims of the Prepetition ABL Lenders, DIP ABL Lenders, and Term B Lenders and to provide incremental liquidity;;

• Selection by the Debtors of the Plan Administrator who will act in the fiduciary capacity as a board of managers or directors. As of the Effective Date, the Plan Administrator would become the sole manager, director, and officer of Reorganized Shopko and act to wind down the business affairs of the Debtors and Reorganized Shopko;
• The Debtors paying all outstanding Claims in accordance with the Bankruptcy Code’s priority waterfall;
• The Plan Administrator will establish each of the Distribution Reserve Accounts in accordance with Article VIII of the Plan and administer the distribution thereof to Holders of Allowed Claims;
• Vesting of all assets of the Debtors in Reorganized Shopko for the purpose of liquidating the Estates; and
• Interests in Shopko being canceled and extinguished.

• Class 1 (“Other Secured Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. The estimated aggregate amount of claims is $15,631,000 and the estimated recovery is 100%.
• Class 2 (“Other Priority Claims”) is impaired and entitled to vote on the Plan. Each Holder of an Allowed Other Priority Claim will receive its Pro Rata share of the Priority Claims Reserve. The estimated aggregate amount of claims is $1,781,000 and the estimated recovery is 45.7% to 100%.
• Class 3 (“Term Loan Secured Claims”) is impaired and entitled to vote on the Plan. The estimated aggregate amount of claims is $82,078,000 and the estimated recovery is 58.6% to 95.5%. If the Equitization Restructuring occurs, Holders of Allowed Term Loan Secured Claims will receive either: (a) Cash equal to the outstanding amount of the Term Loan B Claims; (b) any remaining Cash on hand as of the Effective Date less (x) the Minimum Liquidity Threshold and (y) Cash necessary to make distributions to Holders of all Allowed Claims pursuant to Article II hereof and Holders of Allowed Other Secured Claims and Holders of Allowed Other Priority Claims pursuant to Article III hereof ; or (c) as agreed by such Holder of an Allowed Term Loan Secured Claim and the Debtors, its Pro Rata share of the Exit Facility. If the Asset Sale Restructuring occurs, each Holder of an Allowed Term Loan Secured Claim shall receive its Pro Rata share of the Distribution Proceeds available for distribution to Holders of Allowed Term Loan Secured Claims from time to time as provided in Article VIII.G hereof, until such Allowed Term Loan Secured Claims are paid in full.
• Class 4 (“General Unsecured Claims”) is impaired and entitled to vote on the Plan. The estimated aggregate amount of claims is $536,800,000 and the estimated recovery is 0%. If the Equitization Restructuring occurs, each Holder of an Allowed General Unsecured Claim shall receive its Pro Rata share of, at the election of the Debtors, either (a) 100% of the New Shopko Interests, subject to dilution by the Plan Sponsor Investment and the Management Incentive Plan or (b) its Pro Rata share of the GUC Equitization Reserve in one or more distributions. If the Asset Sale Restructuring occurs, each Holder of a General Unsecured Claim will receive its Pro Rata share of the Distribution Proceeds as provided in Article VIII.G of the Plan.
• Class 5 (“Intercompany Claims”) is unimpaired/impaired and not entitled to vote on the Plan. The estimated aggregate amount of claims is NA and the estimated recovery is 0%. Each Allowed Intercompany Claim, unless otherwise provided for under the Plan, will either be Reinstated or canceled and released at the option of the Debtors; provided, that no distributions shall be made on account of any such Intercompany Claims.
• Class 6 (“Intercompany Interests”) is unimpaired/impaired and not entitled to vote on the Plan. The estimated aggregate amount of claims is NA and the estimated recovery is 0%. Each Allowed Intercompany Interest shall be Reinstated for administrative convenience or cancelled and released without any distribution on account of such interests at the option of the Debtors.
• Class 7 (“Interests in Shopko”) is impaired, deemed to reject and not entitled to vote on the Plan. The estimated aggregate amount of claims is NA and the estimated recovery is 0%. Each Allowed Interest in Shopko shall be canceled, released, and extinguished, and will be of no further force or effect and no Holder of Interests in Shopko shall be entitled to any recovery or distribution under the Plan on account of such Interests.
• Class 8 (“Section 510(b) Claims”) is impaired, deemed to reject and not entitled to vote on the Plan. The estimated aggregate amount of claims is NA and the estimated recovery is 0%. Section 510(b) Claims will be canceled, released, and extinguished as of the Effective Date, and will be of no further force or effect, and each Holder of a Section 510(b) Claim will not receive any distribution on account of such Section 510(b) Claim. The Debtors are not aware of any valid Section 510(b) Claims and believe that no such Section 510(b) Claims exist.

• Exhibit A: Plan of Reorganization 
• Exhibit B: Corporate Structure Chart
• Exhibit C: Disclosure Statement Order (to be filed)
• Exhibit D: Financial Projections 
• Exhibit E: Liquidation Analysis

• Disclosure Statement Objection Deadline: February 21, 2019
• Disclosure Statement Hearing Date: February 28, 2019
• Solicitation Deadline: Expected to be March 4, 2019
• Plan Objection Deadline: March 29, 2019
• Voting Deadline: March 29, 2019
• Plan Confirmation Hearing Date: April 3, 2019

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