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Triad Guaranty Bankruptcy Reorganization Plan Filed

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Triad Guaranty filed with the U.S. Bankruptcy Court a Joint Plan of Reorganization for Triad Guaranty and Wolfgang Holdings.

According to documents filed with the Court, “On the Effective Date, the term of the current members of the Debtor’s board of directors shall expire and the New Board shall be appointed. The Reorganized Debtor’s Board shall consist of three (3) members upon the Effective Date: (i) Manderson, (ii) William T. Ratliff, III (or other nominee of the Holders of the Previously Issued Common Stock), and (iii) one (1) nominee recommended by the Investors and agreed upon by the Plan Proponents…. On the Effective Date, the New Board shall remove and replace the existing officers of the Debtor unless otherwise agreed by the New Board and such officers. The New Board shall hire and retain management for the Reorganized Debtor to manage the Reorganized Debtor and execute its growth strategy….The Proponents, certain Holders of more than 5% of the Previously Issued Common Stock, and the Investors shall enter a Stockholders’ Agreement containing customary terms and conditions, including, without limitation, provisions for the nomination of and voting for candidates for the New Board.”

In addition, “From and following the Effective Date, Manderson or his designee shall be entitled to receive annual Cash bonus payments equal to 5% of the amount of the gross Tax Savings of the Reorganized Debtor (or its successor) attributable to the Reorganized Debtor’s use, if any, of NOLs or similar Tax attributes following the Effective Date, including, without limitation, all NOLs or similar Tax attributes arising from future tax losses, for as long as Manderson remains a director or officer of the Reorganized Debtor or its successors; provided however, that the calculation of gross Tax Savings shall exclude any Tax Savings attributable to utilization of the NOLs or similar tax attributes in connection with taxable income or discharge of indebtedness of TGIC or TGAC.”

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