UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF OKLAHOMA

IN RE: )
)
ROWE OIL PROPERTIES POWER WELL ) Case No. 09-81219
SERVICE, LLC ) Chapter 11
Debtor )
)

AMENDED DISCLOSURE STATEMENT

Jeff Potts, OBA# 13756

Jeff Potts Law Office
1515 East Okmulgee
Muskogee, OK 74403
(918) 687-7755
(918) 681-3939 – fax
jeffpottslawoffice@yahoo.com

Gerald R. Miller, OBA# 6205

Gerald R. Miller, PC
627 West Broadway
Muskogee, OK 74401
(918) 687-1347
Gerald@gmillerpc.com

Dated: December 21, 2010

 UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF OKLAHOMA

IN RE: )
)
Rowe Oil Properties Power Well Service, LLC ) Case No. 09-81219
) Chapter 11
Debtor )
)

AMENDED DISCLOSURE STATEMENT

I. INTRODUCTION

Rowe Oil Properties Power Well Service, LLC, (the “Debtor”), filed a voluntary
petition for relief under Chapter 11 of Title 11 of the United States Code (The
“Bankruptcy Code”) on July 27, 2009 (the “Petition Date”) in the United States
Bankruptcy Court for the Eastern District of Oklahoma (the “Court”). The Debtor
originally filed this case as having both possession and operational control of the
company, however, on March 29, 2010 Karen Carden Walsh (the “Trustee”) was
appointed Chapter 11 trustee. While the Debtor is the proponent of this plan, the trustee
has reviewed and approved the plan as filed subject to the agreed amendments as ordered
on May 26, 2010.

This Amended Disclosure Statement has been prepared by the Debtor. This
Amended Disclosure Statement is distributed pursuant to the provisions of Section 1125
of the Bankruptcy Code which require that there be submitted to holders of Claims against
and Interest in the Debtor, a copy of the plan and a written Amended Disclosure Statement
containing information adequate to enable Creditors and other interested parties to make
an intelligent decision regarding the Plan.

After review of its business operations and reorganization alternatives, the Debtor
has concluded that in order to maximize value for Creditors and Interest holders they will
be best served by liquidation of all assets through a Chapter 11 Liquidation Plan.

Please read this Amended Disclosure Statement and the Plan carefully and follow
the instructions set forth below to vote on the Plan. The Debtor believes that the Plan
provides the best recoveries possible for the holders of Claims against the Debtor and
strongly recommends that you vote to accept the Plan.

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 II. PROCEDURE FOR CONFIRMATION OF PLAN

A. Approval of the Disclosure Statement

Approval of the Disclosure statement was set for the 26th day of May, 2010, at 9:00
a.m., United States Bankruptcy Court, 111 W. 4th Street, Okmulgee, Oklahoma 74447.
Objections to the approval of the Disclosure Statement were to be filed on or before the
12th day of May, 2010 (Docket Entry #155). Trustee Karen Walsh filed various objections
to the disclosure statement (Docket Entry #159) and those objections have been included
in the Amended Disclosure Statement per the Court’s order of May 26, 2010 (Docket
Entry #161).

THE BANKRUPTCY COURT’S APPROVAL OF THIS DISCLOSURE

STATEMENT DOES NOT CONSTITUTE EITHER A GUARANTY OF THE
ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED HEREIN
OR AN ENDORSEMENT OF THE PLAN BY THE BANKRUPTCY COURT.

B. The Confirmation Hearing.

The Bankruptcy Court has set the 9th day of February, 2011, at 9:00 a.m., United
States Bankruptcy Court, 111 W. 4th Street, Okmulgee, Oklahoma 74447, as the date, time
and location for the hearing on the acceptance and confirmation of the Plan.

A Creditor or Interest holder, in order to be able to vote on the Plan, must have
filed a Proof of Claim or Interest on or before the Bar Date of November 29, 2009.

C. Voting Requirements for Confirmation.

As a Creditor or Interest holder, your vote is important. The Plan can be

confirmed by the Court if (1) it is accepted by the holders of two-thirds in amount and
more than one-half in number of claims in each Impaired Class of claims voting on the
Plan, (2) it is accepted by the holders of two-thirds in amount of the interest in each
Impaired Class of equity interests voting on the Plan, and (3) the Plan satisfies the other
requirements of the Code. Classes which are not impaired by the Plan are conclusively
presumed to have accepted the Plan.

The Court may confirm the Plan notwithstanding the fact that one or more
Impaired Classes have rejected the Plan if at least one impaired Class has accepted the
Plan and the Court finds that the Plan does not discriminate unfairly, and is fair and
equitable with respect to each Class of Impaired Claims or Interests which has not
accepted the Plan.

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 D. Voting Procedure.

The Disclosure Statement is being delivered to holders of Claims in Classes 5

through 7. Claims in these Classes are impaired under the Plan, and the holders of such
Claims are entitled to vote to accept or reject the Plan.

Claims in Class 1,2,3,4 and 8 are not impaired; therefore these Claims are
presumed to have accepted the Plan and are not entitled to vote to accept or reject the Plan.

E. Disclosure Statement Purpose.

The purpose of this Disclosure Statement is to provide the holders of Claims in

Classes 5 through 7 with adequate information to enable them to make a reasonably
informed decision with respect to the Plan before either: (a) voting to accept or reject the
Plan; or (b) filing a response or objection to the Plan.

Your are encouraged to read this Disclosure Statement and its Exhibits
carefully and in their entirety before deciding to vote either to accept or reject the
Plan.

This Disclosure Statement is the only document authorized by the Bankruptcy

Court to be used in connection with the solicitation of votes on the Plan. No
solicitation of votes may be made except pursuant to this Disclosure Statement, and
no Person has been authorized by the Bankruptcy Court or the Debtor to use or
disclose any information concerning the Debtor other than the information contained
herein

F. Recommendation.

The Debtor believes that confirmation of the Plan is desirable and in the best
interests of Creditors. Any alternative to confirmation of the Plan, such as conversion to
Chapter 7 liquidated or attempts by another party in interest to file a plan, would result in
significant delays, litigation, appeals and expense.

III. HISTORY OF THE DEBTOR

A. Description of the Business.

Rowe Oil Properties Power Well Service, LLC (the “Debtor”) is a part of a three
(3) company business which has been in the oil and gas production industry since 1946.
The three companies are Bobby Rowe Energy, Inc.(“Bobby Rowe”), Stephen Rowe Oil
Properties, LLC (“Stephen Rowe”) and the Debtor, collectively, (“Rowe Entities”). All
three companies have sought Chapter 11 relief. The Debtor's primary business has been
the serving and pulling of the Rowe entities’ oil and gas wells in Okmulgee, Muskogee,
Creek, Wagoner, Tulsa and Okfuskee Counties in Oklahoma.

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 The Rowe Entities were started as a family business which was originally founded
by the late Robert W. Rowe in 1946. It was later passed on to his son Bobby D. Rowe and
his mother, Maryetta Rowe. Bobby D. Rowe and his wife, Kathy Rowe Bogie, built the
company into a major independent oil and gas company with over 120 barrels of
production per day.
In October of 2005, the Debtor was founded as a limited liability company with all
units owned by Stephen P. Rowe. The company was founded as a serving and pulling
company for the Rowe entities and third party oil companies in Eastern Oklahoma.
On the bankruptcy petition date, the Rowe entities owned interests in
approximately 89 producing oil wells, about 40 non-producing wells and approximately 8
gas wells.
The Rowe entities also lease over 1,500 net acres of oil and gas prospective lands.
This land base includes a large inventory of drillable prospects.
The Debtor is the pulling unit portion of the Rowe Entities. The Debtor owned
the building and shops used to conduct the daily operations of the Rowe Entities.
Additional assets included all the rolling stock, including two pulling units, pump truck,
various trucks, oil equipment parts; oil equipment; and miscellaneous pipe and supplies.
B. The Causes of Bankruptcy.

The primary cause of the Debtor’s Bankruptcy was the lack of cash flow after the
summer of 2008. In July of 2008, the price of oil was at a record high level of $145 per
barrel, but within six months dropped to $30 per barrel. The other Rowe entities were not
generating enough income to support the servicing and pulling operations of the Debtor.

By early 2009, the Debtor was unable to pay its bills as they became due and
American Heritage moved to sell the real estate of the Debtor. Additionally, the other
Rowe entities were beginning forced to sell their assets by other third party banks. The
Debtor was forced to file Chapter 11 in order to stop the sale of substantially all of the
Debtor’s real estate.

C. Liquidation

On July 27, 2009, the Debtor filed a voluntary petition for relief under Chapter 11
of Title 11 of the United States Code. Since petition date through March 29, 2010, the
Debtor remained in possession of its property. On March 29, 2010 Karen Carden Walsh
was appointed Chapter 11 Trustee.

As of the commencement of this case, the Debtor’s Schedules of Assets and

Liabilities reflected assets in the amount of $419,586.89 and liabilities of $436,465.68.

The Debtor owned a 7-acre tract of developed land in Beggs, Oklahoma,

Okmulgee County. This real estate was sold via credit bid to American Heritage Bank on
September 30, 2010. The Debtor has also sold rolling stock and equipment. All
remaining vehicles have been returned to the secured creditors. The Debtor has no hard

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assets remaining. After payment of professional expenses, the Debtor estimates that it will
have approximately $27,000.00 remaining for distribution.

D. Litigation.
The following lawsuits involving the Debtor were pending as of the petition date:

American Heritage Bank vs. Rowe Oil Properties Power Well Service, LLC
District Court of Okmulgee County, State of Oklahoma for foreclosure of real estate.

IV. SUMMARY OF THE PLAN

A. Introduction.

The Plan will be funded by the sale of all the Debtor’s assets The Plan Trustee
Karen Carden Walsh, (the “Trustee”) will serve as an impendent Disbursement
Agent/Plan Trustee to review and, if necessary, object to claims before making a
distribution to the allowed claims of creditors.

The Plan divides Claims against and Interests in the Debtor into various Classes,
each of which are defined in the Plan. The general treatment of Claims and Interest in
each Class is set forth below:

Class No. 1. Administrative Expense Claims

A person holding an Allowed Administrative Expense Claim, including the Plan

Trustee or a professional hired by the Plan Trustee, will receive cash equal to the unpaid
portion of such Allowed Administrative Expense Claim after the Effective Date or on the
date on which such person becomes the holder of such Allowed Administrative Expense
Claim after the Effective Date.

The United States Trustee requested appointment of a Chapter 11 Trustee. Karen

Walsh (“the “Trustee”) was appointed Trustee and the law firm of Riggs, Abney, Neal,
Turpen, Orbison & Lewis (the “Trustee’s Law Firm’) as her counsel. The Trustee
anticipates that attorney and trustee fees and expenses will total about $25,000.00. Fee
Applications will be filed within thirty (30) days after the Effective Date of the Plan.
On July 27, 2009, The Debtor requested Court approval to retain Jeff Potts and the
law firm Potts & Jones, LLP (the “Law Firm”) as its counsel. Prior to the filing of the
petition herein, Kathy Bogie, mother of the President of the Debtor, loaned $15,000 to
Stephen Rowe in order that he may then pay the same to the Law firm for legal fees for
the Debtor. The Law Firm estimates that a final fee application in the approximate
amount of $50,000 within thirty (30) days after the Effective Date of the Plan.

On August 6, 2009, The Debtor requested Court approval to retain Gerald Miller
and the Law firm Gerald Miller, PC (the “Miller Law Firm”) as counsel. The Miller Law

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Firm estimates that a final fee application in the approximate amount of $5,000 within
thirty (30) days after the Effective Date of the Plan.

On July 27, 2009, the Debtor requested Court approval to retain Jimmie Clunn as
accountant (“Accounting Firm”) for the Debtor. The Accounting Firm estimates that a
final fee application in the approximate amount of $10,000 within thirty (30) days after the
Effective Date of the Plan.

On March 30, 2009, the Chapter 11 Trustee requested Court approval to retain
Philip O. Bayouth as account ant for the Trustee (“Trustee’s Accounting Firm:“). The
Trustee’s Accounting Firm estimates that a final fee application in the approximate
amount of $10,000 within thirty (30) days after the Effective Date of the Plan.

The administrative claim of the Plan Trustee, which is unknown at this time.

The United States Trustee Fee, estimated in the amount of $675.00 shall be paid in
full on the Effective Date. The Debtor shall continue to pay the United States Trustee fee
until a Final Decree is entered in this case.

Any other Administrative Expense Claim incurred pursuant to 11 U.S.C.

Section 503 shall also be paid when allowed. No other Administrative Expense Claims are
expected.

This Class is deemed impaired.

Class No. 2: Priority Claims

The IRS has a priority claim pursuant to 11 U.S.C. section 507(a)(8) in the amount
of $65,312.29; the Oklahoma Tax Commission has a priority claim in the amount of
$6,849.29; the Okmulgee County Treasurer may have a claim, but is undetermined at this
time. No payments are anticipated to Class 2.

This Class is deemed not impaired.

Class No. 3 Secured Claim of American Heritage Bank

American Heritage Bank (“American”) has an Allowed Claim in the amount of

$145,707.05. This claim has been satisfied.
The collateral held by this class was sold on September 30, 2010 to American
Heritage Bank pursuant to their credit bid of $150,000. After the live auction sale on
September 30, 2010 of the collateral, this class obligation was paid in full. (Docket Entry#
208 and #229).

This Class is deemed not impaired.

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Class No. 4 Secured Claim First National Bank & Trust Company

First National has a claim in the approximate amount of $83,220.18. The

obligation is secured by a lien on two pulling units. The collateral was sold and the claim
of First National has been paid in full. (Docket Entry #210).

This Class is deemed not impaired

Class No. 5 Secured Claim of GMAC

GMAC has a claim in the approximate amount of $55,595.79. The obligation is

secured by a lien on a 2009 GMC Sierra 2500 Pickup Truck. The collateral for this class
has been returned to the creditor as payment in full.

This Class is deemed impaired.

Class No. 6 Secured Claim of Ford Motor Credit

Ford has a claim in the approximate amount of $23,334.30. The obligation is

secured by a lien on a 2008 Ford F150 Pickup Truck. The collateral for this class has been
returned to the creditor as payment in full.

This Class is deemed impaired.

Class No. 7 General Unsecured Claims

There are 11 Allowed General Unsecured Claims that total $25,668.27. No

payments will be made to Class 7. The Allowed General Unsecured Claims are:

1. Beggs Supermart $901.80

2. Big & Little Tire $658.59
3. Certified Laboratories $1,733.60
4. Clunn & Tygart & Company, CPA $7,950.00
5. Diamond D Enterprises, Inc. $470.00
6. Johnny’s Napa $678.43
7. National Occupational Health $70
8. Okmulgee Tag Office $2,753.00
9. Wynnco Alarms, Inc. $1,893.20
10. Yale Uniforms $2,686.96
11. American Heritage Bank $5,872.69

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 This Class is deemed impaired

Class No. 8 Equity Interest

All the units of the Debtor are owned by member Stephen P. Rowe. No payments
will be made to Class No. 8.

B. Impairment and Acceptance of the Plan.

Claims in Class 2, 3 and 4 are not impaired under the Plan, because the holders of
Allowed Claims and Interest in such Classes will retain all rights against the Reorganized
Debtor as such holders possessed prior to the commencement of this case. These Classes
have conclusively presumed to have accepted the Plan and are not entitled to vote to
accept or reject the Plan.

Claims in Class 5, 6 and 7 are impaired under the Plan and each holder of a Claim
in such Class is entitled to vote to accept or reject the Plan. An impaired Class of Claims
has voted to accept the Plan if: (a) at least two-thirds in amount of the Allowed Claims
voting such Class have voted to accept the Plan; and (b) more than one-half of the number
of the holders of such Allowed Claims voting in such Class have voted to accept the Plan.

C. Disputed Claims.

The Debtor, the Reorganized Debtor, Trustee or the Plan Trustee may object to the
allowance of Claims filed with the Bankruptcy Court. Objections will be litigated to a
final order, however, the Debtor, the Reorganized Debtor, Trustee or the Plan Trustee may
compromise and settle any objections to Claims, subject to the approval of the Bankruptcy
Court.

D. Means for Execution of the Plan.

Except as otherwise provided in the Plan, on the Effective Date, all assets of the
Debtor’s Estate shall vest in the Reorganized Debtor free and clear of all liens, Claims,
encumbrances and Interests, but subject to the rights of holders of Allowed Claims to
obtain distributions provided in the Plan. The Reorganized Debtor shall administer its
business and property from and after the Effective Date with the exception of distributions
allowed by the Plan Trustee.

The Reorganized Debtor shall be responsible for the affairs of the Reorganized
Debtor from and after the Effective Date except for distributions pursuant to the Plan. The
Plan Trustee has the authority to review and litigate all unsecured claims and make the
required Plan distributions.

From and after the Effective Date, the Reorganized Debtor may retain such
personnel or professionals (including, without limitation, legal counsel, financial advisors
or other agents) as it deems appropriate, and compensate such professionals without prior

9
approval of the Bankruptcy Court. However, all parties seeking payment of
reimbursement of attorneys’, accountant, or other professionals’ fees incurred from and
after the Petition Date through the Effective Date, pursuant to any provision of the
Bankruptcy Code or the Plan, must obtain approval of the Bankruptcy Court for such
payment pursuant to a motion or application for such payment filed not less than 30 days
after the Effective Date.

The Plan Trustee

1. On the Effective Date, all cash of the Estate will vest in the Debtor and all
assets will vest in the Debtor. The Plan Trustee shall be charged with the
affairs and administration of the Cash and the affairs of the Debtor as governed
by the Plan, the Confirmation Order and applicable bankruptcy and non-
bankruptcy law.
2. The Plan Trustee shall have all rights and powers of a trustee or debtor in
possession under Section 1107 of the Code, and in accordance with Section
1123(b)(3)(B) of the Code, shall be designated by the Confirmation Order to
serve as the representative of the Estate.
3. The Plan Trustee shall be authorized to employ such professionals and other
persons as she may deem necessary to enable her to perform her functions
hereunder, including (without limitation) former counsel or accountants for the
Chapter 11 Trustee. The costs of such employment and other expenditures
shall be paid professional fee application. The Plan Trustee is authorized to
establish appropriate reserves to cover all Plan Costs and payment of Allowed
Claims.
4. The Plan Trustee shall have the full power, authority and standing to prosecute,
compromise or otherwise resolve any claims of Debtor, with all proceeds
derived therefrom to be vested in the Plan Trustee and distributed in
accordance with the Plan by the Plan Trustee.
5. The Plan Trustee shall be the standing and authority to object to Claims, as
filed with the Court or scheduled by the Debtor, and to defend any
counterclaims asserted in connection therewith.
6. The Plan Trustee shall be authorized to execute, deliver, file or record such
contracts, instruments, releases and other agreements or documents and to take
such action as may be necessary or appropriate to effectuate and further
evidence the terms and conditions of the Plan. All transactions that are
required to occur on the Effective Date under the terms of the Plan shall be
deemed to have occurred simultaneously.
7. The Plan Trustee shall be authorized to enter into compromises of disputed
claims, subject to Court approval.
8. Upon completion of her function and designated herein, the Plan Trustee shall
file a final report.
9. Neither the Debtor nor any of its employees, officers, directors, agents or
representatives, nor the Plan Trustee or any professional employed by her shall
have or incur any liability to any Person or entity for any act taken or omission
made in good faith in connection with or related to formulating, implementing,

10
 confirming, or consummating the Plan, the Disclosure Statement, or any
contract, instrument, release, or other agreement or document created in
connection with the Plan.

Cash payments to domestic entities holding Allowed Claims will be tendered in

United States dollars and will be made by checks drawn on a United States domestic bank
or by wire transfer from a United States domestic bank. Any domestic entity holding an
Allowed Claim that wishes to receive a cash payment by wire transfer shall provide wire
instructions to the Plan Trustee. In any such case, the Plan Trustee shall make the cash
payment(s) by wire transfer in accordance with the wire instructions, provided that the
costs of such wire transfer shall be deducted from such entity’s distribution.

No payments of cash or distribution of the property or other consideration of any

kind shall be made on account of any Disputed Claim unless and until such Claim
becomes an Allowed Claim or is deemed to be such for purposes of distribution, and then
only to the extent that the Claim becomes, or is deemed to be for distribution purposes, an
Allowed Claim. Unless otherwise provided in the Plan, any holder of a Claim that
becomes an Allowed Claim after the Effective Date will receive any distribution that it
would have received had its Allowed Claim been Allowed as of the Effective Date within
fifteen (15) days from the date that such Claim becomes an Allowed Claim.

Subject to the Plan, the Plan Trustee shall (i) prosecute, compromise, settle and/or
abandon the Designated Avoidance Actions, in her reasonable discretion, for the benefit of
the holders of Allowed General Unsecured Claims, (ii) object to General Unsecured
Claims, in her reasonable discretion, for the benefit of the holders of Allowed General
Unsecured Claims, (iii) manage and maintain an accounting of the Distribution, (iv) file
all tax and regulatory forms, returns, reports and other documents required with respect to
the Plan; (v) distribute the net proceeds of the Plan to the holders of Allowed General
Unsecured Claims; and (vi) take all actions necessary and create any documents necessary
to wind up the affairs of the Debtor. All expenses incurred by or on behalf of the Plan
Trustee shall be borne by the Debtor.

The Plan Trustee, and any professionals hired by the Trustee, shall be paid as an
administrative fee and outlined in Class I of the Plan.

E. Cancelation of Notes, Leases and Instruments.

On the Effective Date, the respective rights and obligations of the Debtor and each
holder of a Claim existing as of the Effective Date shall be terminated and canceled except
to the extent of a right to receive a distribution under the Plan.

F. Preservation of Rights of Action.

Except as otherwise provided in the Plan, or in any contract, instrument, release, or

other agreement entered into in connection with the Plan, in accordance with Section
1123(b) of the Bankruptcy Code, the Debtor shall be deemed to have transferred to the

11
Reorganized Debtor including without limitation, all rights under the Bankruptcy Code
Sections 329, 510 and 544 through 550 inclusive. The Reorganized Debtor may, in its
sole discretion, pursue or refrain from pursuing those rights or causes of action, as
appropriate, in accordance with what is in the best interest of the Reorganized Debtor.

G. Objections of Claims.

Objections to Claims, including Administrative Expense Claims, shall be filed

with the Bankruptcy Court and served upon the holder of such Claim within 30 days after
the Effective Date. The Debtor, the Reorganized Debtor, Trustee and the Plan Trustee
shall have standing to file and prosecute such objections.

H. Distribution of Property Under the Plan.

The Plan Trustee shall make all distributions under the Plan.

I. Deliver of Distributions.

Distributions to a holder of an Allowed Claim shall be distributed by mail as

follows: (a) at the address set forth on the respective proof of claim filed by such claimant;
or (b) at the address set forth in any written notice of address change delivered to the
Reorganized Debtor after the date of any related proof of claim.

J. Compliance with Tax Requirements.

In connection with the Plan, to the extent applicable, the Reorganized Debtor shall
comply with all withholding and reporting requirements imposed on it by any
governmental unit, and all distributions pursuant to the Plan shall be subject to such
withholding and reporting requirements.

K. Setoffs.

The Disbursement Agent may, but shall not be required to, set off against any
Allowed Claim, claims or any nature that the Debtor or the Reorganized Debtor may have
against the holder of such Allowed Claim; provided, however, that neither the failure to
effect such a setoff nor the allowance of any claim against the Debtor or the Reorganized
Debtor shall constitutes a waiver or release by the Debtor or the Reorganized Debtor of
any Claim that the Debtor or the Reorganized Debtor may possess against such holder.

L. Other Documents and Actions.

The Debtor, the Reorganized Debtor or Plan Trustee may execute such documents
and take such other action as is necessary to effectuate the transactions provided for in the
Plan.

M. Effects of Confirmation.

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 1. Discharge

Upon the Effective Date, the provisions of the Plan shall bind the Debtor and all
holders of Claims and Interests, whether or not they accept the Plan. The Plan also
provides that the Debtor and the Reorganized Debtor shall be discharged from all Claims
that arose before the Effective Date, subject to the terms of the Plan. In addition, the
distribution shall be in exchange for and in complete satisfaction, discharge and release of
all Claims that Creditors may have against the Debtor, or the Reorganized Debtor as
successor to the Debtor under the Plan, or any of their assets or properties, and any such
Creditor shall be precluded from asserting against the Debtor, the Reorganized Debtor,
any of their assets any other or further Claims based on any act or omission, transaction or
other activity of any kind or nature that occurred prior to the Effective Date.

2. Retention of Jurisdiction

The Bankruptcy Court shall retain general jurisdiction of this case until the closing
of this case, for at least the following purposes:

The classification of the Claim of any creditors, the re-examination of Claims

which have been estimated for purposes of voting, and the determination of such
objections as may be filed to creditor’s Claims. The estimation of failure by the Debtor or
the Reorganized Debtor to object to or to examine any Claim for the purpose of voting,
shall not be deemed to be a waiver of the Debtor’s, the Reorganized Debtor’s or the
Disbursement Agent’s right to object to, or re-examine the Claim in whole or in part as to
the allowability for payment.

The determination of any rejection, assumption or assumption and assignment of

any executory contract or unexpired lease, to hear and determine, and if need be, to
liquidate any and all Claims arising therefrom, and to adjudicate any other issues.

The determination of applications, adversary proceedings and contested matters

that may be pending on the Effective Date.

The determination of all questions and disputes regarding title to or sale of the
assets of the Estate, and determination of all causes of action, controversies, disputes or
conflicts, whether or not subject to action pending as of the date of confirmation, between
the Debtor or the Reorganized Debtor and any other party, including, but not limited to,
any right of the Debtor or the Reorganized Debtor to recover assets pursuant to the
provisions of Title 11 of the United States Code.

The correction of any defect, the curing of any omissions, or the reconciliation of
any inconsistency in this Plan or the Confirmation Order as may be necessary to carry out
the purposes and intent of this Plan.

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 The modification of this Plan after confirmation pursuant to the Bankruptcy Rules
and Title 11 of the United States Code.

The enforcement and interpretation of the terms and conditions of this Plan.

The entry of any order, including injunctions, necessary to enforce the title, rights
and powers of the Debtor or the Reorganized Debtor and the imposition of such
limitations, restrictions, terms and conditions of such title, rights and powers as this
Bankruptcy Court may deem necessary.

The entry of an order concluding and terminating this case.

The determination of applications for allowances of compensation and

reimbursement of expense and reasonableness of any fees and expenses authorized to be
paid or reimbursed under the Bankruptcy Code or the Plan.

The Bankruptcy Court shall retain jurisdiction of all parties until the Plan has been
fully implemented.

N. Modification of the Plan.

This Plan may be amended or modified by the Debtor at any time prior to the
Confirmation Date upon such notice as the Court may require. After the Confirmation
Date, the Debtor may, with the approval of the Court and as long as it does not materially
and adversely affect the interest of creditors, remedy any defects or omissions or reconcile
any inconsistencies in the Plan or in the Order of confirmation in such manner as may be
necessary to carry out the purpose and intent of this Plan.

O. Lien Releases.

Upon receipt of the sums provided for in this Plan to satisfy their respective
Secured Claims, holders of Secured Claims shall be obliged to provide releases of all liens
and security interest held or claimed by them against property of the Estates.

V. CONFIRMATION

A. Confirmation Requirements.

The Bankruptcy Code requires the Bankruptcy Court, after notice, to hold a
confirmation hearing. At the confirmation hearing, the Bankruptcy Court will confirm the
Plan only if all the requirements of Section 1129(a) of the Bankruptcy Code are met.
Among the requirements for confirmation of the Plan under Section 1129(a) of the
Bankruptcy Code are that:

The Plan complies with all provisions of the Bankruptcy Code. This Plan contains
all the mandatory provisions required by Section 1123(a) of the Bankruptcy Code. The

14
Plan also satisfies certain discretionary provisions set forth in Section 1123(b) of the
Bankruptcy Code.

The Plan is proposed in good faith. The Plan is the result of negotiations
conducted by the Debtor on behalf of its creditors and provides for the maximum
distribution to the Debtor’s creditors. The Plan provides holders of Allowed Claims with
full payment of their Claims.

Acceptance by an impaired class. Classes 5 through 7 are impaired, and are

entitled to vote on the Plan. The Bankruptcy Code defines acceptance of a plan by a Class
of Claims as acceptance by holders of two-thirds in dollar amount and more than one-half
in number of the claims of that Class that timely voted on a plan.

Feasibility. The Bankruptcy Code requires a finding that confirmation is not likely
to be followed by the need for further reorganization. The Debtor believes that the
Reorganized Debtor will not require further financial reorganization after the
Confirmation Date.

Best interests test. Even if the Plan is accepted by each Class of Impaired Claims,
in order to confirm the Plan, the Bankruptcy Court must independently determine that the
best interests test under Section 1129(a)(7) of the Bankruptcy Code is satisfied. This test
requires that either: (a) each member of an impaired Class of Claims or Interest has
accepted the Plan; or (b) the Plan will provide any non-accepting member a recovery that
has a value equal to at least the value of the distribution that such non-accepting member
would receive if the Debtor were liquidated under Chapter 7 of the Bankruptcy Code.
Recoveries under the Plan are substantially better than those in an liquidation under
Chapter 7, therefore satisfying the test. A Chapter 7 liquidation analysis is set forth
below.

B. Confirmation without Acceptance by All Impaired Classes.

If any Class votes not to accept the Plan, the Debtor will seek to have the Plan
confirmed pursuant to Section 1129(b) of the Bankruptcy Code which provides that, so
long as at least one impaired Class has accepted the Plan, the Debtor may seek
confirmation of the Plan over the rejection of a Class of creditors or equity Interests. To
obtain such confirmation, the Debtor must demonstrate to the Bankruptcy Court that the
Plan “does not discriminate unfairly” and is “fair and equitable” with respect to any
dissenting Class. The Debtor believes the Plan satisfies these requirements.

VI. ALTERNATIVES TO CONFIRMATION AND CONSUMATION OF THE PLAN

If the Plan is not confirmed, this Case could be dismissed, the Debtor’s assets
could be liquidated under Chapter 7, or an alternative plan of reorganization could be
filed.

A. Dismissal of the Debtor’s Case.

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 Upon dismissal of the case, those creditors whose pending actions have been
stayed by the filing of the Petition would be free to pursue their litigation. In addition,
those creditors who have not previously commenced actions against the Debtor would be
able to pursue their non-bankruptcy remedies. This simply creates a race to the
courthouse and the Debtor’s assets. Due to the extent of the Debtor’s assets and the prices
commonly generated in foreclosure sales, the Debtor is confident the vast majority of
creditors would receive substantially less in the event of a dismissal of this case than they
would under the Plan.

B. Conversion to Chapter 7.

ALTHOUGH THE DESCRIBED ALTERNATIVES TO THE PLAN EXIST,

CREDITORS ARE CAUTIONED THAT THEIR VOTE MUST BE EITHER FOR
OR AGAINST THE PLAN. A VOTE ON THE PLAN DOES NOT INCLUDE A
VOTE ON ALTERNATIVES TO THE PLAN. THERE IS NO ASSURANCE
WHAT TURN THE PROCEEDINGS WILL TAKE IF THE PLAN FAILS TO BE
ACCEPTED. IF YOU BELIEVE ONE OF THE ALTERNATIVES REFERRED
TO IS PREFERABLE TO THE PLAN AND YOU WISH TO URGE IT UPON THE
COURT, YOU SHOULD CONSULT COUNSEL.

C. Liquidation Analysis.

Below is a liquidation analysis prepared by the Debtor to reflect the anticipated

affect on creditors if this company was liquidated as of December 1, 2010. The Debtor
does not anticipate that the results would be significantly different if the liquidation were
to occur on the date the Court has set to determine whether the Plan will be confirmed.
There does not appear to be enough funds to pay all administrative, priority or unsecured
claims. Liquidation under Chapter 7 will likely increase administrative costs, fees and
expenses.

NOTE: The subsequent auction on September 30, 2010 (Docket Entry# 210) did not
produce the results that had been anticipated with regard to the Debtor’s real estate. The
actual live auction sale produced $150,000 as a credit bid by American Heritage Bank.

The Debtor’s “best case” liquidation analysis is:

Real Estate & Equipment: $336,000

Less payments to Secured Claims $309,000
Net proceeds: $27,000

Administrative Costs:
Trustee fee (estimated) $675
Attorney for Trustee $25,000
Attorneys for Debtor $50,000
Accountant for Trustee $10,000

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 Accountant for Debtor $10,000
($90,675)

Net Loss ($63,675)

VII. TRANSACTIONS WITH INSIDERS

Unsecured creditor of the Debtor is Stephen P. Rowe ($50,000), Kathy Bogie

($25,000). The Plan Trustee shall not pay any payments to insiders, unless ordered to do
so through an adversarial proceeding. In the event the Court orders the payment to an
insider through and adversarial proceeding, the claim shall be a general unsecured claim.
Debtor does not expect that either Stephen P. Rowe or Kathy Bogie will seek
compensation for any insider unsecured claims.

VIII. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following discussion is a summary of certain U.S. federal income tax

consequences expected to result from the implementation of the Plan. This discussion is
based on the Internal Revenue Code of 1986, as amended (the “Code”), as in effect o the
date of this Disclosure Statement and on United States treasury Regulations in effect (or in
certain cases, proposed) on the date of this Disclosure Statement, as well as judicial and
administrative interpretations thereof available on or before such date. All of the
foregoing are subject to change, which could apply retroactively and could affect the tax
consequences described below. There can be no assurance that the IRS will not take a
contrary view with respect to one or more of the issues discussed below, and no ruling
from the IRS has been or will be sought with respect to any issues which may arise under
the Plan. The following summary is for general information only and does not purport to
address all of the U.S. federal income tax consequences that may be applicable to the
Debtor or the Plan. The following discussion does not address state, local or foreign tax
considerations that may be applicable to the Debtor.

Holders of Allowed Claims may realize income, gain, loss, or deductions as a

result of the Plan. Such income, gain, loss or deduction may or may not be recognized,
depending upon the circumstances giving rise to the Claims, the type of consideration
received, and their federal income tax accounting method.

The federal income tax consequences of the plan are complex. The foregoing
summary does not discuss all aspects of federal income taxation that may be relevant to a
particular holder in light of his or her particular circumstances and income tax situation.
The tax consequences to each claim holder will vary based on the holder’s circumstances.
Accordingly, each claim holder should consult with a tax advisor as to the specific tax
consequences to such holder of the Plan, including the application and effect of federal,
state, local, foreign and other tax laws.

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 IX. MISCELLANEOUS

THIS DISCLOSURE STATEMENT MAY NOT BE RELIED UPON FOR

ANY PURPOSE OTHER THAN HOW TO VOTE ON THE PLAN. NOTHING
CONTAINED IN THIS DISCLOSURE STATEMENT SHALL CONSTITUTE AN
ADMISSION OR ANY FACT OR BE ADMISSIBLE IN ANY PROCEEDING
INVOLVING THE DEBTOR.

The statements contained in this Disclosure Statement are made as of December

21, 2010 unless otherwise indicated. The information contained in this Disclosure
Statement may be rendered inaccurate by events occurring after its date.

/s/Jeff Potts___________________
Jeff Potts, OBA#13756
Potts & Jones, LLP
1515 East Okmulgee
Muskogee, OK 74403
(918) 687-7755
(918) 681-3939 – fax
jeffpottslawoffice@yahoo.com

Gerald R. Miller, OBA# 6205

Gerald R. Miller, PC
627 West Broadway
Muskogee, OK 74401
(918) 687-1347
Gerald@gmillerpc.com

Attorneys for Debtor

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