Kitty thought it was time to go on to her next interest, coffee, after developing a successful bakery firm called Cutie owner and president. In 2018, Kitty sold all of her Cutie, a Delaware business, ownership to John, a former culinary school classmate. John lacked the funds to pay for the 15 million stock purchase, but he did have $7 million in cash from an inheritance and earnings from a previous company sale. The 8 million $ balance was funded by John through a seller note to a cat, which was secured by Cutie's grant to kitty of an all-asset lien on all Cutie assets, including the bakery's mortgage. The loan arrangement stipulated that the principal and interest payments be made on a monthly basis for a period of 15 years. Furthermore,John signed a personal guaranty of Cutie's loan obligations to kitty.

When the virus struck in early 2020, cutie sales plummeted by 80%, and most tourists ceased. Cutie defaulted on its vendor and monthly loan payments to Kitty, skipping 7 payments in a row. Cutie eventually declared monthly loan payments to kitty after skipping 7 installments in a row. Cutie eventually declared default, expedited the promissory note, and began foreclosure proceedings on the premises as well as a UCC secured party sale of any personal property collateral. In addition, Kitty threatened to sue John for breach of the guarantee. Kitty entered Cutie when it was open a few days before the secured party sale and informed the shop manager that she was seizing the industrial capacity standing mixer due to the loan default. She knew the mixer would move fast, so she wanted to make sure it was in fine working shape before the UCC collateral auction. While kitten was recovering the mixer, John was meeting with Cutie's attorneys at Suffolk & Associates and signing documents to file for chapter 11 bankruptcy, which Cutie did the next morning, before kitty could perform her secured party sale or foreclosure. Kitty issued John a letter demanding immediate payment of the 7-month arrears or she would be at Cutie the following day to confiscate additional baking equipment, even before she had notification of the bankruptcy filing. John sent Kitty an email with the chapter 11 voluntary petition for relief attached and a demand for the stand mixer's return. When Kitty learned of Cutie's bankruptcy, she immediately discontinued all collection efforts against her, but she refused to return the stand mixer. She also filed a fresh case on the guaranty against non-debtor John.

Kitty filed a timely single proof of claim for 7.5 million dollars on time. This included $7 million in the outstanding loan principal, $400,000 in unpaid interest, and $100,000 in legal expenses. According to Cutie, the actual estate is valued 5.0 million dollars, and the machines and equipment are worth another 1.5 million dollars.

Cutie came up with a plan immediately and issued its disclosure statement. Cutie would continue in business and pay its creditors using a mix of future income and a big monetary contribution from John received from a recent inheritance, according to the disclosure statement. Financial predictions generated by John were included in the disclosure statement, showing that if Cutie was liquidated, no money would be available for general unsecured creditors. Kitty recently got a default judgment against John on the guarantee claim, which is not included in the disclosure statement.

Cutie's plan had the following classification and treatment of claims:

Class 1: kitty Secured Claim (all asset lien)/ Issuance of a promissory note for 6.5 million, with fixed interest at a rate equal to the prime rate (currently, 3.5%) note would have a 30-year term, with level amortization.

Class 2: Priority Tax claims/ Paid in full over a period of five years effective date of the plan.

Class 3: kitty unsecured claims/ Paid 35% of Cutie's net profits, if any, over a 5-year period beginning on the effective date of the Plan.

Class 4. All other unsecured Claims without priority/ Paid 35% of the face value of the claim on the effective date of the Plan, estimated to be 2 million paid by John as a contribution to Cutie for 100% of the stock of reorganized Cutie.

Class 5: Equity Interest/ Old equity canceled, but John is to receive 100% of the equity in exchange for the 2 million contributions he is making to fund general unsecured creditor claims in Class 4.

The plan contained a release of all claims against John relating to Cutie which if confirmed would prevent kitty from pursuing collection on the judgment against John on the guaranty.

Kitty was heartbroken that her beloved business had been contaminated by a chapter 11 filing, and she believed she could do better than John in turning the bakery back and making it prosperous. She was also planning to utilize Cutie's loan payments to help fund her new coffee shop, thus Cutie's financial troubles had a direct impact on her own future. Kitty addressed a letter to a dozen of her former Cutie suppliers who still do business and are current Cutie creditors, representing almost half of the general creditor class, before the court's hearing on the disclosure statement and the general creditors even received a ballot for the plan. Her letter indicated that she had no faith in John's plan to turn Cutie around and that his offer of $200,000 was illusory because he owed her that amount on the guaranty. kitty ended the letter by stating that if Cutie's Plan failed, she would file her own plan, which would include her return as Cutie's operator, a guarantee that all of Cutie's vendors would be paid in full and on time, and an exchange of 2 million of her secured debt for 100% of the equity of a reorganized Cutie.

Question A week before the hearing to consider approval of Cutie's disclosure statement. One of Cutie's vendors forwards a copy of Kitty's letter to John and John sent it to his lawyer. John explains all of Kitty's actions both before and after chapter 11 (stated above) John asks what his options are to stop Kitty from destroying Cutie's chance to reorganize. Any claims and arguments Cutie can raise against Kitty and in response to Kitty's actions taken since chapter 11 was filed?, and (B) anticipated arguments and claims that Kitty may raise in response to Cutie's claim/arguments against her, and what objections Kitty may make to the disclosure statement? should not raise any specific arguments in support or objections to the confirmation plan.