Unassociated Document

PLEASE READ THIS DISCLOSURE STATEMENT CAREFULLY. THIS DISCLOSURE STATEMENT CONTAINS INFORMATION THAT MAY BEAR UPON YOUR DECISION TO ACCEPT OR REJECT THE PLAN OF REORGANIZATION WHICH IS ENCLOSED WITH THIS DISCLOSURE STATEMENT. THE DEBTORS BELIEVE THAT ACCEPTANCE OF THE PLAN OF REORGANIZATION IS IN THE BEST INTEREST OF THE DEBTORS AND THEIR CREDITORS.

On October 13, 2004, Ideal Accents, Inc. ("Ideal") commenced a bankruptcy case by filing a voluntary petition for relief under chapter 11, title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the District of New York (the "Bankruptcy Court"). On January 5, 2005, Ideal Accents, Inc., filed Chapter 11 petitions for two of its non-operating U.S. Subsidiaries: Ideal Accents, Inc. (Ferndale) (“Ferndale”) and T.O.E., Inc. (“TOE,” and together with Ferndale, the “U.S. Subsidiaries”).

Ideal, Ferndale, and T.O.E., Inc. (collectively, the “Debtors”) have remained in possession of their property and continued in the management and operations of its affairs as a debtor-in-possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code. On December 20, 2004, the first meeting of creditors was held pursuant to Section 341 of the Bankruptcy Code. On February 7, 2005, counsel to an Ad Hoc Committee of Creditors filed a Notice of Appearance. The Ad Hoc Committee is composed of three creditors holding claims against Ideal Accents, Inc.: Roger Holt, DGI Investors, and Medallion Capital Corp. No official committee, trustee or examiner has been appointed to date.

Pursuant to Section 1125 of the Bankruptcy Code, the Debtors hereby submit this Disclosure Statement (the "Disclosure Statement") for its Plan of Reorganization (the "Plan"). A copy of the Plan accompanies this Disclosure Statement as EXHIBIT "A". Unless otherwise defined herein, capitalized terms used in this Disclosure Statement are defined in Article I of the Plan or are defined in the Bankruptcy Code or the Bankruptcy Rules.

(iv) appointment of an Estate Representative to prosecute Causes of Action including but not limited to avoidance actions arising from pre-petition transfers of assets belonging to Ideal’s subsidiaries and to administer and distribute estate assets and proceeds of Causes of Action for the benefit of creditors; and

IN THE OPINION OF THE DEBTORS, THE TREATMENT OF CREDITORS AND INTEREST HOLDERS UNDER THE PLAN CONTEMPLATES A GREATER RECOVERY THAN THAT WHICH IS LIKELY TO BE ACHIEVED UNDER ANY OTHER ALTERNATIVE FOR THE REORGANIZATION OF THE DEBTORS, OR THE LIQUIDATION OF THE DEBTORS UNDER CHAPTER 7 OF THE BANKRUPTCY CODE. ACCORDINGLY, THE DEBTORS BELIEVE THAT CONFIRMATION OF THE PLAN IS IN THE BEST INTERESTS OF THE DEBTORS’ CREDITORS AND INTEREST HOLDERS AND RECOMMENDS THAT YOU VOTE TO ACCEPT THE PLAN.

This Disclosure Statement has been prepared by the Debtors and delivered to all known parties ordinarily entitled to vote on a plan of reorganization in a chapter 11 bankruptcy case for the purpose of disclosing information that will allow such parties to make an informed decision when exercising their rights, if any, to vote to accept or reject or otherwise object to the plan. This Disclosure Statement summarizes the Plan and outlines certain information relating to the Plan and the process which the Bankruptcy Court will follow in determining whether to confirm the Plan. This Disclosure Statement does not purport to be a complete description of the Plan and, therefore, you should examine the Plan document itself carefully.

You are urged to read the contents of the Disclosure Statement in order to determine what rights you may have to vote on or object to the Plan and before making any decision on any such course of action. Particular attention should be directed to the provisions of the Plan affecting or impairing your rights as they existed before the institution of this bankruptcy proceeding. Please note, however, that this Disclosure Statement cannot tell you everything about your rights. For instance, this Disclosure Statement cannot and does not provide a complete description of the financial status of the Debtors, all of the applicable provisions of the Bankruptcy Code, or other matters that may be deemed significant by creditors and other parties in interest. You are also encouraged to consult with your lawyers and/or advisors as you review and consider the Disclosure Statement and the Plan to enable you to obtain more specific advice on how the Plan will affect you. If there are any inconsistencies between the Plan and the Disclosure Statement, the Plan provisions will govern.

NO PERSON IS AUTHORIZED BY THE DEBTORS IN CONNECTION WITH THE PLAN OR THE SOLICITATION OF VOTES THEREON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED IN THIS DISCLOSURE STATEMENT AND THE EXHIBITS ANNEXED HERETO OR INCORPORATED BY REFERENCE OR REFERRED TO HEREIN, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MAY NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE DEBTORS.

THE INFORMATION CONTAINED HEREIN HAS BEEN PREPARED BY THE DEBTORS IN GOOD FAITH, BASED UPON UNAUDITED INFORMATION AVAILABLE TO THE DEBTORS AS OF THE DATE HEREOF. ALTHOUGH THE DEBTORS HAVE USED THEIR BEST EFFORTS TO ENSURE THAT SUCH INFORMATION IS ACCURATE THE INFORMATION CONTAINED HEREIN IS UNAUDITED. THE DEBTORS BELIEVE THAT THIS DISCLOSURE STATEMENT COMPLIES WITH THE REQUIREMENTS OF THE BANKRUPTCY CODE AND, UPON THE ADVICE OF SPECIAL SECURITIES COUNSEL, THE REQUIREMENTS OF ALL APPLICABLE SECURITIES LAWS AND REGULATIONS.

THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE AS OF THE DATE HEREOF, UNLESS ANOTHER TIME IS SPECIFIED HEREIN, AND DELIVERY OF THIS DISCLOSURE STATEMENT SHALL NOT CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH HEREIN SINCE THE DATE OF THIS DISCLOSURE STATEMENT AND THE DATE THE MATERIALS RELIED UPON IN PREPARATION OF THIS DISCLOSURE STATEMENT WERE COMPILED.

THE DISCLOSURE STATEMENT MAY NOT BE RELIED ON FOR ANY PURPOSE OTHER THAN TO DETERMINE HOW TO VOTE ON THE PLAN, AND NOTHING CONTAINED HEREIN SHALL CONSTITUTE AN ADMISSION OF ANY FACT OR LIABILITY BY ANY PARTY, OR BE ADMISSIBLE IN ANY PROCEEDING INVOLVING THE DEBTORS OR ANY OTHER PARTY, OR BE DEEMED CONCLUSIVE ADVICE ON THE TAX OR OTHER LEGAL EFFECTS OF THE PLAN ON HOLDERS OF CLAIMS AGAINST OR AN INTEREST IN THE DEBTORS.

THE DESCRIPTION OF THE PLAN CONTAINED IN THIS DISCLOSURE STATEMENT IS INTENDED AS A SUMMARY ONLY AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE PLAN ITSELF, WHICH IS INCLUDED AS EXHIBIT "A" HERETO. EACH CREDITOR AND INTEREST HOLDER IS ENCOURAGED TO READ, CONSIDER AND CAREFULLY ANALYZE THE TERMS AND PROVISIONS OF THE PLAN.

THE DEBTORS BELIEVE THAT THIS DISCLOSURE STATEMENT CONTAINS INFORMATION OF A KIND AND IN SUFFICIENT DETAIL TO ENABLE A HYPOTHETICAL REASONABLE INVESTOR TYPICAL OF HOLDERS OF CLAIMS OF RELEVANT CLASSES TO MAKE AN INFORMED JUDGMENT CONCERNING WHETHER TO VOTE FOR OR AGAINST THE PLAN. THE BANKRUPTCY COURT HAS NOT VERIFIED THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED HEREIN, AND THE BANKRUPTCY COURT WILL CONSIDER APPROVAL OF THIS DISCLOSURE STATEMENT ON OCTOBER __, 2006.

THIS DISCLOSURE STATEMENT AND THE PLAN AT SECTION 10.1 ET. SEQ. PROVIDES FOR INJUNCTIVE RELIEF AS TO, AMONG OTHERS, THE DEBTORS, THE ESTATE, THE ESTATE REPRESENTATIVE AND ANY ENTITY INTO WHICH THE DEBTORS ARE MERGED OR WHICH MERGES INTO THE DEBTORS. THE PERMANENT INJUNCTIONS SET FORTH IN THE PLAN WILL APPLY TO HOLDERS OF ANY CLAIM, LIEN OR DEBT, WHETHER SECURED OR UNSECURED, PRIORITY TAX (FEDERAL OR STATE), NON-PRIORITY UNSECURED CLAIM OR ANY INTEREST IN THE DEBTORS. CREDITORS AND INTEREST HOLDERS WILL BE BOUND BY THESE INJUNCTIVE PROVISIONS UNLESS OBJECTING CREDITORS TIMELY FILE OBJECTIONS IN ACCORDANCE WITH THE PROVISIONS SET FORTH HEREIN AND APPEAR AT THE CONFIRMATION HEARING ON OCTOBER __, 2006, TO PROSECUTE ANY OBJECTION.

Chapter 11 of the Bankruptcy Code provides the principal framework for the reorganization of the financial affairs of businesses and, in some instances, individuals. The filing of a petition in bankruptcy creates an estate comprised of all the debtors’ interests in property of any type as of the date the petition is filed. In a chapter 11 case, the debtor is typically authorized to remain in possession and control of its property and assets as a "debtor-in-possession." Upon the commencement and during the pendency of the case, the Bankruptcy Code imposes an automatic stay against attempts by creditors of the debtor to collect or enforce, through litigation or otherwise, claims against the debtor that arose prior to the commencement of the bankruptcy proceedings. In a chapter 11 case, the automatic stay provisions of the Bankruptcy Code are designed to allow the debtor time to develop, propose, confirm and implement a plan of reorganization which will provide for the payment and/or discharge of claims. The Bankruptcy Code also provides the debtor with an exclusive period of time (which may be extended) during which only the debtor may file and seek acceptances of a plan.

A plan of reorganization sets forth the proposed method of compensating the holders of claims against and interests in the debtor. The plan of reorganization may provide for reorganization of the debtors’ affairs, liquidation of the assets of the debtors’ estates, or a combination thereof. After the plan of reorganization has been filed, the holders of claims against and/or interests in a debtor may be permitted to vote to accept or reject the plan. The Bankruptcy Court must find that the plan of reorganization has received sufficient acceptances to satisfy the voting requirements of the Bankruptcy Code and meets a number of other statutory tests before it may confirm the plan of reorganization (see, generally, Articles V and VI below). These tests are designed to protect the rights of holders of claims or interests who do not vote to accept the plan of reorganization but who will nonetheless be bound by the plan's provisions if it is confirmed by the Bankruptcy Court.

Section 1125 of the Bankruptcy Code requires a plan proponent, before soliciting acceptances of the proposed plan, to prepare a disclosure statement containing adequate information of such kind, and in such detail, as to enable a hypothetical reasonable investor to make an informed judgment about the plan. As noted above, the Bankruptcy Court has determined that this Disclosure Statement meets that test.

On October __, 2006 at __:__ a.m. (New York City time), the Court will conduct a hearing to consider the Debtors' request for confirmation of the Plan (the "Confirmation Hearing"). The Confirmation Hearing will be held before the Honorable Allan L. Gropper, United States Bankruptcy Judge, Alexander Hamilton Custom House, One Bowling Green, New York, New York 10004-1408. The Confirmation Hearing may be continued from time to time with notice only to those who have filed a timely objection to the Plan. The Confirmation Hearing may also be continued from time to time, without further notice, by announcement in open court on the day of the scheduled Confirmation Hearing or any continuance thereof.

On January 21, 1999, Natquote Financial Inc. (“Natquote”) formed Interact Technologies, Inc. (“Interact”) under the laws of the State of Florida. Natquote was in the business of compiling and printing financial information with respect to Canadian public companies for investment professionals. On February 18, 1999, Interact changed its name to Fairhaven Technologies, Inc. (“Fairhaven”). Fairhaven business plan was to develop cancer treatment technology under a license agreement with the University of Illinois. On March 6, 1999, Natquote transferred ownership of Fairhaven to the shareholders of Natquote by declaring a dividend of one share of Fairhaven common stock for each share of common stock of Natquote.

In order to implement its business plan, Fairhaven required additional capital, which it intended to raise through a private placement of securities. The private placement was unsuccessful causing Fairhaven to abandon its business operations. From approximately June of 1999 until December 2001, Fairhaven did not have business operations of any kind.

On December 14, 2001, in connection with a reverse merger between six companies, Fairhaven changed its name to Ideal Accents, Inc. The reverse merger consolidated under one holding company - Ideal Accents, Inc. - the U.S. businesses of Joseph P. O’Connor and the Canadian businesses of Karim Suleman and Ayaz Somani. Attached hereto is a chart detailing the corporate structure EXHIBIT “B”.

A typical business transaction proceeded as follows: (i) a new vehicle dealer offered Ideal’s accessories to its customer at the point of sale; (ii) the new vehicle dealer’s customer selected an Ideal add-on option(s) to be installed on the newly purchased vehicle; (iii) Ideal would then pick-up the vehicle from the dealer or send a mobile installation unit to the dealer; (iv) Ideal would install the add-on option(s) and deliver the vehicle back to the dealer; and (v) the new vehicle dealer would then deliver the vehicle to the customer. In most instances, therefore, Ideal’s direct client was the new vehicle dealer.

Prior to the Petition Date, the Debtors’ Board of Directors was comprised of Joseph P. O’Connor, Ayaz Somani and Karim Suleman (the “Board”). After authorizing the Chapter 11 filing in the Southern District of New York, Messrs. O’Connor and Somani resigned. The Debtors’ Board is now comprised of Mr. Suleman and an independent director. Another independent director resigned in January 2005.

The U.S. Subsidiary Operations - incorporated under the laws of the State of Michigan - included four wholly-owned Subsidiaries: (i) Ideal Accents, Inc. (Ferndale) (JTM, Inc. d/b/a Motor City Sunroof); (ii) Ideal Accents, Inc. (Ann Arbor); (iii) Ideal Accents, Inc. (Taylor); and (iv) T.O.E., Inc. In the Detroit market, these Subsidiaries, at their peak, serviced up to 78% of the new vehicle dealers. Prior to the Petition Date, operations of all four U.S. Subsidiaries were consolidated into the Ferndale location, and, as explained below, assets were transferred to a senior secured creditor in return for the forgiveness of certain debt. On January 5, 2005, Ferndale and TOE filed voluntary chapter 11 petitions.

The Canadian Subsidiary Operations - incorporated under the laws of Canada - include two wholly-owned Subsidiaries: (i) Ideal Accents (Nova Scotia Company); and (ii) Ideal Accents Holdings, Inc. (Somani Holdings, Inc. (d/b/a Automotive Sunroof Company) and AutoFun Canada, Inc.). In the Toronto market, these Subsidiaries, at their peak, serviced up to 40% of the new vehicle dealers.

The Subsidiaries were authorized by leading tier one suppliers to Original Equipment Manufacturers (“OEM”s) like General Motors, Ford and Toyota to sell and install their accessory products on vehicles in the aftermarket. The Subsidiaries maintained installation shops in the Metro Detroit and Lansing, Michigan areas and in the Metro Toronto area (Ontario, Canada). In addition to these shops, the Subsidiaries employed Mobile Installation Units, which offered dealers fast, efficient installation service of some of Ideal’s products right on-site. The Subsidiaries direct client, in most instances, was the dealer and the Subsidiaries were paid by the dealer. The Subsidiaries product line included styling accessories (sunroofs, leather seats, wood dashes, wheels, spoilers, ground effects, etc.), vehicle electronics (keyless entry, remote starters, vehicle tracking systems, GPS navigation systems, TVs, VCRs, DVDs, CD Changers, etc.) and performance enhancement parts (exhaust systems, etc). The Subsidiaries accessorizing services, therefore, addressed the styling and functional needs of new vehicle buyers and covered most vehicle makes and models.

The Debtor was unable to achieve its intended results due in part to a slowdown in the automotive industry experienced during the second half of 2004. This industry-wide slowdown caused the Debtor to revise its projected sales goals, acquisition strategy, and projected earnings. Accordingly, the Debtors’ plan to meet operating and financing needs for July 2004 - December 2004 was to seek alternate sources of equity and debt financing to support operations.

On September 11, 2004, the Board convened a special meeting to discuss the urgent financial condition of the company (the “September 11 Board Meeting”).² During the September 11 Board Meeting, the Board resolved to authorize Mr. O’Connor to “commence an orderly liquidation” of the company which could include, but not be limited to, liquidating the company by an orderly liquidation of the assets and/or by filing a Chapter 11 bankruptcy; relinquishing corporate assets to secured creditors, with remaining assets used to make payments to unsecured creditors.

From June 30, 2004 to September 23, 2004 (based on an internally prepared balance sheet), Ideal’s assets declined from $1,313,210 to $302,300 primarily due to significant declines in accounts receivable and inventory. The decline in accounts receivable was attributed both to reductions in Ideal’s business and significantly greater factoring of receivables necessitated by its liquidity needs. The decline in inventory was attributed to Ideal’s inability to maintain substantial inventories with its financial resources.

The internally prepared September 23 balance sheet also reflected negative working capital close to $2,000,000 and total stockholders deficit in excess of $4,000,000. Those amounts included related-party indebtedness of approximately $2,000,000, the major portion of this indebtedness owing to AVG (OEAM), Inc.³

¹ Unless otherwise indicated, all financial information is presented on an unaudited consolidated basis.

² Mr. Somani was not present at the September 11 Board Meeting but did sign the Minutes.

³ AVG (OEAM), Inc. is controlled by Karim Suleman and Ayaz Somani both are shareholders of Ideal Accents, Inc.

On September 24, 2004, the Board convened a special meeting to discuss the company’s financial condition and courses of action (the “September 24 Board Meeting”).⁴ During the September 24 Board Meeting, the Board resolved to take action which could include but was not limited to: (i) voluntarily surrendering assets of two U.S. Subsidiaries to Citizens Bank in full satisfaction of amounts owing by the two U.S. Subsidiaries and for a release and discharge of Citizens Bank’s liens on assets of the two U.S. Subsidiaries; (ii) ceasing all operations in southeastern Michigan; (iii) authorizing the company to restructure and seek a merger partner in connection with a Chapter 11 bankruptcy filing. It was contemplated that assets surrendered to Citizens Bank would eventually be sold by Citizens Bank.

The Debtor was experiencing substantial negative working capital and had a large stockholders deficit. Accounts receivable and inventories remained substantially below totals from earlier reporting periods and the business continued to decline. Soon after the September 24 Board Meeting, the Debtor sought out new bankruptcy counsel to discuss a Chapter 11 bankruptcy filing.

By October 8, 2004, the transaction with Citizens Bank had been substantially consummated. The Debtor is advised that the transaction with Citizens Bank involved a four-step process: first, the creation of Ideal Auto Restyling (“IAR”) (an entity owned by Frank Sterbin - that will employ Joe O’Connor - and in which Jim Erickson, a shareholder of Ideal, expects to obtain an interest); second, IAR purchased the claim of Citizens Bank; third, Mr. O’Connor consented to a “voluntary surrender” of specified assets of the two U.S. Subsidiaries’; and finally, IAR agreed to release the indebtedness. The ultimate result of this transaction is that the U.S. Subsidiaries have been effectively returned to the control of Joseph P. O’Connor through Frank Sterbin.

The Debtors believe that the transfer to IAR is within the preference period and is subject to recovery by the estates. Creditors of Ferndale and TOE will only receive distributions arising from successfully prosecuted Chapter 5 Claims brought against recipients of preferences of their estates, and any recovery from IAR.

Since the Petition Date, the Debtors have maintained possession of their property and assets as Debtors-in-Possession. No trustee or examiner has been appointed for the Debtors or its property and the Debtors are represented in the Bankruptcy Case by Arent Fox LLC as Debtors’ bankruptcy counsel and Heskett & Heskett as Debtors’ special securities counsel.

Ideal Accents (Nova Scotia) and Ideal Accents Holdings (Somani Holdings and AutoFun Canada are wholly owned by Ideal Accents Holdings) are the wholly owned Canadian Subsidiaries of Ideal Accents, Inc. As of the Petition Date these remained operating entities. Shortly after the Petition Date, however, their operations were terminated.

Due, in part to the fact that Ideal Accents, Inc. did not have cash on hand when it entered into bankruptcy, Ideal sought approval to borrow $75,000.00 from certain Lenders as a prelude to a plan with a similar reverse merger component. That motion was not approved and the prior reverse merger candidate decided not to move forward. The current plan provides substantially more cash and stock to the estate. In addition, the merger candidate is a domestic company with reputable management, as opposed to the prior candidate’s Chinese status.

Upon Confirmation of the Debtors’ Plan, Ideal will merge with DAG or may effectuate another merger on substantially similar terms which in lieu of the proposed merger with DAG under the terms of the Exchange Agreement annexed hereto as Exhibit C and the currently issued and outstanding shares of Ideal’s common stock (including exchangeable shares) will be reduced to 25,000 common shares on a pro rata basis. Further, creditors of Ideal will receive shares of common shares post-reverse split as described below.

An Estate Representative shall be appointed to administer, if any, estate assets and proceeds of Causes of Actions for the benefit of creditors. Also, the Estate Representative may pursue Causes of Action, including but not limited to avoidance actions arising from certain pre-petition transfers of assets belonging to the Debtors and certain of the Debtors’ affiliates. It is not certain whether the Causes of Actions will ultimately bring cash into the Estates for distribution. Prosecution of the Causes of Actions will be at the discretion of the Estate Representative.

As of the Petition Date, the Debtors schedules reflected that the total of all Non-Priority Unsecured Claims of Ideal Accents, Inc. was $1,552,951.00. To date, 30 claims have been filed totaling approximately $1,478,938.89, those claims are subject to objection by the Debtors or any other party in interest. The total Administrative Claims, subject to Allowance, is expected to exceed the Debtors' cash on hand.

The Debtors believe that the plan provides for each class of creditors to receive at least as much as such Creditors would receive in a Chapter 7 liquidation and that conversion to Chapter 7 would wipe out the possibility of any distribution (of either cash or securities), delay any distribution and add an additional layer of administrative expenses.

As a result of the pre-petition transfer effectuated by IAR, the Debtors are not in possession of the books and records of Ferndale and TOE. IAR has refused to comply with the Debtors requests and demands to provide access to or copies of such books and records. It is expected that the Estate Representative will commence an action against IAR, and may seek the return of the books and records.

On February 7, 2005, this Court entered an order jointly administering these cases. This order provides for procedural consolidation only. The Plan provides for the separate treatment of the Debtors' estates. As of the Confirmation Date, all assets of and claims against Ideal, Ferndale and TOE shall be treated separately by the Estate Representative and, to the extent available, in separate funds established for each of the Debtors’ three estates.

Except for Administrative Claims and Priority Tax Claims, the Bankruptcy Code requires that a plan of reorganization designate Classes of Claims and Interests. As summarized below, the Plan classifies all Claims and Interests into five separate Classes. The classification of Claims and Interests is made for the purposes of voting on the Plan and making distributions thereunder, and for ease of administration of the Plan. A Claim or Interest is classified in a particular Class only to the extent that the Claim or Interest qualifies within the description of the Class, and is classified in other Classes to the extent that any remainder of the Claim qualifies within the description of one or more other Classes.

Class	Description
N/A	Allowed Administrative Claims
N/A	Allowed Priority Tax Claims
1A	Allowed Non-Tax Priority Claims of Ideal Accents, Inc.
1B	Allowed Non-Tax Priority Claims of Ferndale
1C	Allowed Non-Tax Priority Claims of TOE
2A	Allowed Secured Claims of Ideal Accents, Inc.
2B	Allowed Secured Claims of Ferndale
2C	Allowed Secured Claims of TOE
3A	Allowed Unsecured Claims of Ideal Accents, Inc.
3B	Allowed Unsecured Claims of Ferndale
3C	Allowed Unsecured Claims of TOE
4A	Allowed Interests of Ideal Accents, Inc.
4B	Allowed Interests of Ferndale
4C	Allowed Interests of TOE

An Administrative Claim is a Claim for payment of an administrative expense of a kind specified in Section 503(b) of the Bankruptcy Code and entitled to priority pursuant to Section 507(a)(1) of the Bankruptcy Code, including, but not limited to: (a) the actual, necessary costs and expenses, incurred after the Petition Date, of preserving the Estate and operating the business of the Debtors, including wages, salaries, or commissions for services rendered after the commencement of the Chapter 11 Case; (b) Fee Requests and all fees and charges assessed against the Estate under Section 1930 of Title 28 of the United States Code; and (c) certain Allowed Claims that are entitled to be treated as Administrative Claims pursuant to a Final Order of the Bankruptcy Court under Section 546(c)(2) of the Bankruptcy Code. Each holder of an Allowed Administrative Claim shall be paid the Allowed Amount of such Claim in full, in Cash, on the Effective Date.

It is nearly certain that there will not be sufficient funds to satisfy all administrative expenses. In such event, counsel to the Debtor has agreed to reduce its fees to the extent necessary to (a) confirm the plan and (b) ensure adequate funds are available to pay counsel to the Committee and fund the Estate Representative’s initial efforts.

Priority Tax Claims in the Debtors' Bankruptcy Cases consists of Claims for certain income, employment, real estate and other taxes described by Bankruptcy Code § 507(a)(8). The Bankruptcy Code requires that each holder of a § 507(a)(8) Allowed Priority Claim receive the present value of such Allowed Claim in deferred cash payments, over a period not exceeding five years from the date of the assessment of such tax.

The Debtors believe there are no valid Priority Tax Claims. Only two claims have been filed as Priority Tax Claims, by ADP Total Source, Inc. and East Washington Partnership, for a total of $229,775.58. The Debtors believe these claims are not entitled to priority, because, among other reasons, the Claims are not due to a governmental unit.

Each holder of an Allowed Priority Tax Claim shall be paid in full in cash on the later of: (a) the Effective Date or as soon thereafter as practical or (b) upon such terms as may be agreed to between the Estate Representative and such Creditor. In the event that any Priority Tax Claim is a Disputed Claim on the Effective Date, such Claim shall be paid to the extent it becomes an Allowed Claim, in the same manner as all priority tax claims are paid.

Certain claims were filed against the Debtors that relate to the operations and assets transferred to IAR. The Debtors believe that IAR is obligated to pay these claims. The Plan contemplates that the Estate Representative may commence an action against IAR and such other persons and entities as the Estate Representation deems appropriate, to compel the payment of these claims. Nothing contained in the Plan shall reduce, limit or abridge any Creditor’s rights as against IAR.

Class 1A consists of Non-Tax Priority Claims specified under Bankruptcy Code §§ 507(a)(3) through 507(a)(7) inclusive. The Claims in Class 1 are not impaired under the Plan and, therefore, the members of this Class are not entitled to vote to accept or reject the Plan. Each Holder of an Allowed Non-Tax Priority Claim shall be paid (a) in full in cash on the later of the Effective Date, or (b) upon such other terms as may be agreed to between the Estate Representative and each such Creditor. In the event a Priority Claim is a Disputed Claim on the Effective Date, such Claim shall be paid in full in cash within thirty (30) days after such Claim becomes an Allowed Priority Claim or as soon thereafter as practical, or upon such other terms as may be agreed to between the Estate Representative and the Creditor. Indeed, as can be discerned from the face of the proofs of claim, the only claims that assert priority status against Ideal are not Claims against at all, but merely Interests in Ideal. The Debtors do not believe that any unpaid Class 1A Claims exist.

Class 1B consists of Non-Tax Priority Claims specified under Bankruptcy Code §§ 507(a)(3) through 507(a)(7) inclusive. The Claims in Class 1 are not impaired under the Plan and, therefore, the members of this Class are not entitled to vote to accept or reject the Plan. Each Holder of an Allowed Non-Tax Priority Claim shall be paid (a) in full in cash on the Effective Date, or (b) upon such other terms as may be agreed to between the Estate Representative and each such Creditor. In the event a Priority Claim is a Disputed Claim on the Effective Date, such Claim shall be paid in full in cash within thirty (30) days after such Claim becomes an Allowed Priority Claim or as soon thereafter as practical, or upon such other terms as may be agreed to between the Estate Representative and the Creditor. The Debtors do not believe that any unpaid Class 1B Claims exist.

Class 1C consists of Non-Tax Priority Claims specified under Bankruptcy Code §§ 507(a)(3) through 507(a)(7) inclusive. The Claims in Class 1 are not impaired under the Plan and, therefore, the members of this Class are not entitled to vote to accept or reject the Plan. Each Holder of an Allowed Non-Tax Priority Claim shall be paid (a) in full in cash on the Effective Date, or (b) upon such other terms as may be agreed to between the Estate Representative and each such Creditor. In the event a Priority Claim is a Disputed Claim on the Effective Date, such Claim shall be paid in full in cash within thirty (30) days after such Claim becomes an Allowed Priority Claim or as soon thereafter as practical, or upon such other terms as may be agreed to between the Estate Representative and the Creditor. The Debtors do not believe that any unpaid Class 1C Claims exist.

Each holder of an Allowed Class 2A Claim shall be entitled to recover from any bailee, or purchaser except to the extent otherwise ordered by the Court on the Effective Date the property that secures such Claim, on the later of: (i) the Effective Date or as soon thereafter as practical; or (ii) upon such other terms as may be agreed to between the Estate Representative and each such Creditor. In the event a Class 2A Claim is a Disputed Claim on the Effective Date, such Claim shall be treated as may be ordered by the court consistent with §1129(b)(2)(A) or upon such terms as may be agreed to between the Estate Representative and such Creditor. Creditors holding Class 2A Claims are not Impaired by the Plan.

The Debtors do not believe that any Allowed Class 2A Claims exist. Three secured claims have been asserted against Ideal. Ideal has no property against which any lien could attach. The Debtors (and according to discussions with some of these creditors, the Creditors) believe that, IAR has possession of some or all of the property these liens attach to. Each class 2A Creditors rights, shall be fully preserved as against IAR.

Each holder of an Allowed Class 2B Claim shall be entitled to recover from any bailee, or purchaser except to the extent otherwise ordered by the Court on the Effective Date the property that secures such Claim, on the later of: (i) the Effective Date or as soon thereafter as practical; or (ii) upon such other terms as may be agreed to between the Estate Representative and each such Creditor. In the event a Class 2B Claim is a Disputed Claim on the Effective Date, such Claim shall be treated as may be ordered by the court consistent with §1129(b)(2)(A) or upon such terms as may be agreed to between the Estate Representative and such Creditor. Creditors holding Class 2B Claims are not Impaired by the Plan. The Debtors do not believe that any Allowed Class 2B Claims exist.

Each holder of an Allowed Class 2C Claim shall be entitled to recover from any bailee, or purchaser except to the extent otherwise ordered by the Court on the Effective Date the property that secures such Claim, on the later of: (i) the Effective Date or as soon thereafter as practical; or (ii) upon such other terms as may be agreed to between the Estate Representative and each such Creditor. In the event a Class 2C Claim is a Disputed Claim on the Effective Date, such Claim shall be treated as may be ordered by the court consistent with §1129(b)(2)(A) or upon such terms as may be agreed to between the Estate Representative and such Creditor. Creditors holding Class 2C Claims are not Impaired by the Plan. The Debtors do not believe that any Allowed Class 2C Claims exist.

Each holder of an Allowed Unsecured Claim shall be paid, its pro rata share of 100,000 shares of New Common Stock on the later of: (i) the date on which Allowed Administrative Claims, Allowed Priority Tax Claims and creditors holding Allowed Class 1A, 1B, 1C, 2A, 2B, and 2C Claims are paid in full or as soon as thereafter practical; (ii) the Effective Date or as soon thereafter as practical; (iii) upon such other terms as may be agreed to between the Estate Representative and each such Creditor or (iv) within thirty (30) days after such Claim becomes an Allowed Unsecured Claim. Any securities issued to creditors that are also insiders will be Restricted securities.

Creditors will also be protected in the event this transaction is not successful. In the event the shares issued to Class 3A Creditors are not freely tradable on a public exchange within twelve months of the Confirmation Date, at a level of at least $1 per share (calculated by using the average daily share price for any 30 day period), then, and only then, each Class 3A Creditor holding newly issued Common Stock will have the absolute right to put their shares to Acquirer for one dollar and ten cents ($1.10) per share. Such option shall remain open and exercisable for a period of 3 months, from the date that is twelve months from the Confirmation Date. In the event any Class 3A Creditor exercises this option (each, an “Exercising Holder”), Acquirer shall be obligated to purchase all shares of each Exercising Holder and pay such Exercising Holder one dollar and ten cents ($1.10) per share.

Each holder of an Allowed Unsecured Claim shall be paid, pro rata, on the later of: (i) the date on which Allowed Administrative Claims, Allowed Priority Tax Claims and creditors holding Allowed Class 1A, 1B, 1C, 2A, 2B, and 2C Claims are paid in full or as soon as thereafter practical; (ii) the Effective Date or as soon thereafter as practical or (iii) upon such other terms as may be agreed to between the Estate Representative and each such Creditor. In the event an Unsecured Claim is a Disputed Claim on the Effective Date, such Claim shall be paid pro rata in cash within thirty (30) days after such Claim becomes an Allowed Unsecured Claim or upon such other terms as may be agreed to between the Estate Representative and the Creditor. Creditors holding Class 3B Claims are impaired by the Plan.

The Class of Allowed Interests consists of the Allowed Interests of any equity security holders (i.e., stockholders) of Ideal Accents, Inc. including freely tradable shares, any shares granted, held in escrow, exchangeable shares, and or Restricted shares. All Interests shall be subordinated in all respects to all distributions to all other Classes made under the Plan. After all Creditors and all post-confirmation expenses are paid in full, including, without limitation, the fees and expenses of the Estate Representative and the professionals employed or retained by the Estate Representative, any surplus shall be distributed to Allowed Interest Holders.

Ideal Accents, Inc. is the sole holder of Allowed Interests in Ferndale. The Debtors believe that such interests are valueless. On the Effective Date, all issued and authorized shares will be transferred to the Estate Representative. Ideal Accents Inc.’s Interest in Ferndale shall cease and be completely extinguished.

Ideal Accents, Inc. is the sole holder of Allowed Interests in T.O.E., Inc. The Debtors believe that such interests are valueless. On the Effective Date, all issued and authorized shares will be transferred to the Estate Representative. Ideal Accents Inc.’s interests in T.O.E., Inc. shall cease and be completely extinguished.

Prior to the Filing Date, Ferndale and TOE transferred their assets to an entity known as IAR. The Estate Representative may pursue claims against IAR, other potential Chapter 5 Claims, and any other Causes of Action. Estimates of the value of Chapter 5 claims at this time are highly speculative and any recovery likely will only result from litigation. The Estate Representative shall be authorized to pursue Causes of Action on behalf of Ideal, Ferndale and TOE. However, recoveries achieved from Causes of Action may be subject to distribution, in accordance with the Classes set forth in the Plan, to creditors of the debtor who caused the transfer and will not be shared on a consolidated basis unless the Estate Representative determines otherwise.

The Exchange Agreement will be consummated according to the terms set forth on Exhibit C. Once the Exchange Agreement is consummated, DAG intends to execute its 5 year operations plan which is based on its intention to acquire and operate multiple automobile dealerships across the nation. DAG intends to reach $1.5 to $2 billion annual revenue and will focus on the following growth strategy to accomplish this: (a) acquire top five brand dealerships, (b) acquire dealerships at a reasonable valuation, (c) acquire larger dealerships, (d) acquire real estate underlying dealerships and (e) acquire dealers in rapidly growing Sunbelt cities.

DAG’s growth and operations strategy are more fully described in Exhibit E. DAG’s senior management has strong experience built over decades in the automotive and other relevant industries. Detailed information about DAG’s senior executives is contained in Exhibit F. DAG’s annual financial statements for 2004 and 2005 and for the first quarter of 2006 are attached as Exhibit G.

DAG has received copies of the Debtors’ Disclosure Statement, Plan of Reorganization and Motion for Interim DIP Financing. Further, DAG has received copies of the Debtors’ Audited Financial Statements. DAG will receive more than 10% of the securities to be issued by the Reorganized Debtors. DAG has been notified that they will be presumed to be control persons, and the transferability of their securities will be Restricted.

Ideal currently has 50,000,000 common and 50,000,000 preferred shares authorized, of which 14,891,273 common shares are issued and outstanding and another 4,312,450 common shares are reserved for exchange with "exchangeable shares." The total issued and outstanding common shares on a fully diluted basis, therefore, are 19,203,723.

Of these shares, 4,471,755 shares are registered and freely tradable. The balance of 14,731,968 shares are Restricted and of these Restricted shares, 9,061,931 shares (controlled by Joseph O’Connor [4,750,000 shares], Ayaz Somani [2,280,000 shares] and Karim Suleman [2,030,000 shares]) are further restricted by a management performance escrow. Karim Suleman and Ayaz Somani own another 1,600,000 shares through an affiliate AVG (OEAM), Inc.

(i) Reduce to 25,000 the common shares issued and outstanding from the Company’s authorized shares under its Articles of Incorporation. Consequently, all existing issued and outstanding shares (including exchangeable shares), believed to be 19,203,723, will be reduced to 25,000 shares in the Reorganized Debtor.

In general, securities issued by a debtor under a plan of reorganization may be resold by their holder without registration under the 1933 Act or other laws, unless the holder is an "underwriter" with respect to such securities, as that term is defined in section 1145(b)(1) of the Bankruptcy Code, which provides that "except with respect to ordinary trading transactions...an entity is an underwriter" if such entity: (i) purchases a claim against or interest in a debtor with a view to the distribution of the securities received in exchange for such claim or interest; (ii) offers to sell securities on behalf of the holders thereof (except certain offers to sell fractional interests); (iii) offers to buy the securities if the offer is made with a view to distributing them or is pursuant to a distribution agreement made in connection with the plan of reorganization or (iv) is an "issuer" with respect to a reorganized debtor's securities, as the term "issuer" is defined in section 2(11) of the 1933 Act.

In the context of the Plan, an "issuer" under section 2(11) includes any person directly or indirectly controlling or controlled by the Debtors, or any person under direct or indirect control with the Debtors. Whether a person is an "issuer," and therefore an "underwriter" for purposes of section 1145(b), depends upon a number of factors, including: the relative size of the person's Interest in the Debtors; the distribution and concentration of other Interests in the Debtors; whether the person, either alone or acting in concert with others, has a contractual or other relationship giving that person power over management policies and decisions; and whether the person actually has such power notwithstanding the absence of formal indicia of control. An officer or director of the Debtors may be deemed to be a controlling person, particularly if his position is coupled with ownership of a significant percentage of voting stock. In addition, the legislative history of section 1145 suggests that a creditor receiving at least ten percent (10%) of the securities of a reorganized debtor would be deemed to be a controlling person.

Based on the published views of the Securities and Exchange Commission, the Debtors believe that a person who receives less than one percent (1%) of a class of securities generally would not be deemed to be an underwriter and that a person receiving more than one percent (1%) (but less than ten percent (10%)) are not necessarily deemed to be underwriters. Because of the complex and subjective issues involved in determining underwriter status, creditors and interest holders are urged to consult with their attorneys concerning whether they will be able to trade freely the securities received. Persons who may be underwriters must either register the securities under the 1933 Act in connection with a resale or utilize an exemption from registration.

Upon the Confirmation Date, to the extent available the Estate Representative will establish three funds (one each established for each debtor). All remaining Property of the Estate including claims and Causes of Action of any kind or nature shall vest with the Estate Representative for the benefit of the holders of Allowed Claims, free and clear of all liens, claims and encumbrances of any kind or nature, except as otherwise provided for herein.

The Confirmation Date, Joseph Myers of Clear Thinking Group shall be appointed to serve as Estate Representative under this Plan until death, resignation or discharge. Currently, there is no available funding to pay the fees of the Estate Representative. Upon confirmation, however, counsel to the Debtors has agreed to reduce its fees to the extent necessary to ensure the Estate Representative receives $10,000 in initial funding. The Estate Representative, shall be responsible for holding the Property of the Estate for the primary purpose of administering, liquidating and distributing same pursuant to the terms and conditions set forth in this Plan, but not to continue or engage in the conduct of the Debtors’ trade or business. The Estate Representative, pursuant to the terms and conditions of the Plan, will administer and liquidate the Property of the Estate for the benefit of holders of Allowed Claims and will oversee the distribution of the proceeds derived from the liquidation of the Property of the Estate in accordance with the terms and conditions of this Plan and those contained in the Estate Representative Agreement, to be filed with the Bankruptcy Court ten days before the hearing on confirmation.

The Estate Representative is authorized to commence, prosecute, and may engage such professionals as he deems necessary, settle (subject to Court approval) and litigate any and all Avoidance Actions or Other Actions, including without limitation bringing any claims to determine that IAR is the successor to Ferndale and TOE or is responsible to pay the obligations of Ferndale and TOE or to avoid the transfer of assets to IAR.

In addition to reimbursement for the actual out of pocket expenses incurred, the Estate Representative and any and all professionals employed or retained by the Estate Representative, shall be entitled to reasonable compensation for services rendered in connection with the implementation of the Plan. With respect to compensating the professionals employed or retained by the Estate Representative, such compensation shall be in an amount and on such terms as may be agreed to by the Estate Representative, and the particular professional employed or retained by the Estate Representative. Any dispute with respect to such compensation shall be resolved by agreement among the parties or, if the parties are unable to agree, as determined by the Bankruptcy Court.

After all of the Claims have been resolved, all Property of the Estate has been liquidated, and the Estate Representative has made all of the disbursements required to be made under the Plan, the Estate Representative shall file a statement of Distribution with the Bankruptcy Court along with a motion requesting the entry of a Final Decree closing the Bankruptcy Case. Upon the entry of a Final Decree, the Bankruptcy Case shall be closed.

Except as otherwise provided for in the Plan, any and all executory contracts, including any labor contracts, and unexpired leases, including capital leases which are not expressly assumed by the Debtors or which are not the subject of a pending motion to assume on or prior to the Confirmation Date shall be deemed rejected by the Confirmation Order.

Except as otherwise provided in the Plan, no payments shall be made with respect to the disputed portion of a Disputed Claim unless and until any and all objections to such Disputed Claim have been determined by a Final Order or otherwise resolved. Payments and distributions to each holder of a Disputed Claim, to the extent that the disputed portion ultimately becomes an Allowed Claim, shall be made in accordance with the provisions of the Plan.

Claim objections presently pending may continue to be prosecuted by the Estate Representative or other objecting party and the objecting party shall have the discretion to litigate to judgment, settle or withdraw its objection to the Disputed Claim(s). Following the occurrence of the Effective Date, only the Estate Representative may make and file new objections to Claims provided, however, that (i) the Estate Representative has not previously filed an objection with respect to such claim or claims and/or (ii) that any such objections shall be filed with the Bankruptcy Court within one-hundred eighty (180) days after the Effective Date. The Estate Representative shall have the discretion to litigate to judgment, settle or withdraw its objection to the Disputed Claim(s).

The provisions of the Plan and the Confirmation Order shall be binding upon all parties-in-interest and all other Persons to the fullest extent permitted by the Bankruptcy Code. The provisions of the Plan and the Confirmation Order shall also inure to the benefit of the Debtors, the holders of Claims and Interests and their respective successors, assigns, heirs and personal representatives, whether or not the Claims or Interests are Impaired by the Plan and whether or not the holder of any Claim or Interest voted to accept or reject the Plan or was deemed to have accepted or rejected the Plan.

(a) Before the Confirmation Date. The Debtors, as proponents of the Plan, shall have the exclusive right to modify the Plan at any time prior to the Confirmation Date, however, the Debtors may not modify the Plan so that the Plan, as modified, fails to meet the requirements of the Bankruptcy Code. Once the Debtors file a modification with the Court, the Plan, as modified, becomes the Plan.

(b) After the Confirmation Date. The Estate Representative shall have the exclusive right to modify the Plan at any time after the Confirmation Date provided, however, that any modification occurs prior to the substantial consummation of the Plan. The Estate Representative may not modify the Plan so that the Plan, as modified, fails to meet the requirements of the Bankruptcy Code. The Plan, as modified, becomes the Plan under this subsection only if the Court, after notice and a hearing, confirms the modified Plan pursuant to the Bankruptcy Code and the circumstances warrant such modification.

If no plan of reorganization of the Debtors is confirmed, the Chapter 11 Cases may be converted to cases under Chapter 7 of the Bankruptcy Code, pursuant to which a trustee would be elected or appointed to liquidate the assets of the Debtors for distribution to Holders of Claims and Interests in accordance with the priorities established by the Bankruptcy Code. A discussion of the effects that a liquidation under Chapter 7 of the Bankruptcy Code would have on the recovery of holders of Claims and Interests is set forth under Section C "Best Interests of Creditors." For the reasons discussed thereunder, the Debtors believe that confirmation of the Plan will provide each holder of a Claim and Interest entitled to receive a distribution under the Plan with a recovery that is not less (and is expected to be substantially more) than such holder would receive pursuant to liquidation of the Debtors under Chapter 7 of the Bankruptcy Code.

If the Plan is not confirmed, the Debtors (or if the Debtors' exclusive period in which to file a plan of reorganization of the Debtors has expired, any other party in interest) could file a different plan. Such a plan might involve either a reorganization and continuation of the Debtors' businesses or an orderly liquidation of their assets. With respect to an alternative plan, the Debtors have explored various other alternatives in connection with the formulation and development of the Plan. In an alternative liquidation under Chapter 11 of the Bankruptcy Code, the Debtors' assets would be sold in an orderly fashion over a more extended period of time than in a liquidation under Chapter 7 of the Bankruptcy Code, probably resulting in somewhat greater (but indeterminate) recoveries than would be obtained in a liquidation under Chapter 7 of the Bankruptcy Code. Further, if a trustee were not appointed because such appointment is not required in a case under Chapter 11 f the Bankruptcy Code, the expenses for professional fees would most likely be lower than those incurred in a case under Chapter 7 of the Bankruptcy Code. Although preferable to a liquidation under Chapter 7 of the Bankruptcy Code, the Debtors believe that any alternative liquidation under Chapter 11 of the Bankruptcy Code is a much less attractive alternative to Holders of Claims and Interests than the Plan because of the greater recovery provided for by the Plan.

Initially, the plan and the proponents of the plan must comply with the applicable provisions of the Bankruptcy Code and the plan must have been proposed in good faith and not by any means forbidden by law. Any payment made or to be made by the Debtors for services or for costs and expenses in or in connection with the case, or in connection with the plan and incident to the case, must be disclosed to the court and approved or subject to the approval of the court as reasonable.

The Debtors must disclose the identity and affiliations of any individual proposed to serve, after confirmation of the plan, as a director or officer of the Debtors, of an affiliate of the Debtors participating in the plan with the Debtors, or of any successor to the Debtors under the plan. The appointment to, or continuance in, such office of such individual must be consistent with the interests of the Debtors' creditors, equity holders, and with public policy. The Debtors must also disclose the identity of any insider that will be employed or retained by the Debtors or the successor under the plan and the nature of any compensation for such insider.

As is described in greater detail in Article V, Section C below, the plan must meet the "best interests of creditors test," which requires that each holder of a Claim or Interest in a Class of Claims or Interests that is Impaired under a plan (1) either accept the plan or receive or (2) retain under the plan on account of such Claim or Interest property of a value, as of the effective date of the plan, that is not less than the amount that such holder would receive or retain if the Debtors was liquidated on such date under Chapter 7 of the Bankruptcy Code. In addition, each Impaired Class of Claims or Interests must accept the plan, or alternatively, as long as one Impaired Class of Claims has accepted the plan, the "cram-down" requirements of the Bankruptcy Code for confirming a plan over the dissent of a Class or Classes of Claims must be met. The cram-down provisions are described in greater detail in Article IV, Section B below.

Except to the extent that the holder of a particular Claim has agreed to a different treatment of such Claim, the Plan must provide that (1) holders of Administrative Expense Claims will be paid in full in cash on the effective date of the plan, (2) that the holders of Priority Claims (other than tax Claims) be paid in cash in full on the effective date of the plan or, if the Class to which such Claim belongs consents, receive deferred cash payments of a present value equal to the amount of such Allowed Claim, and (3) that holders of Priority Tax Claims will receive on account of such Claims deferred cash payments over a period not exceeding five years after the date of assessment of such tax of a value, as of the effective date of the plan, equal to the amount of such Allowed Claim.

Finally, the plan must be feasible, all fees required to be paid under the Bankruptcy Code must be paid (or the plan shall provide for such payment on its effective date), and the plan must provide for the continuation after the effective date of all retiree benefits for the period the Debtors have obligated itself to provide such benefits.

Even if a plan it is not accepted by all Impaired Classes, a court may confirm a Plan if all other requirements for confirmation of a plan have been met, the Plan has been accepted by at least one Impaired Class of Claims (determined without including the acceptance of the Plan by any insider holding a Claim in such Class), and the bankruptcy court finds that the plan is "fair and equitable" and "does not discriminate unfairly" with respect to each non-accepting Impaired Class of Claims or Interests.

A court may find that the Plan is "fair and equitable" with respect to a Class of non-accepting Impaired Secured Claims only if the plan provides (a) that the holders of Secured Claims within such Class retain under the plan the liens securing their Claims and that each holder of a Claim of such Class receive deferred cash payments totaling at least the amount of its Allowed Secured Claim of a value, as of the effective date of the plan, of at least the value of the secured creditor's interest in the estate's interest in the secured property, (b) for the sale of the property securing the Claim pursuant to Section 363(k) of the Bankruptcy Code, with the secured creditor's lien attached to the proceeds of such sale and with such lien treated as in clause (a) above, or (c) for the realization by the secured creditor of the indubitable equivalent of its Claim.

A court may find that a Plan is "fair and equitable" with respect to a Class of non-accepting Impaired Unsecured Claims only if (a) each Impaired Unsecured creditor in such Class receives or retains under the Plan property of a value as of the effective date of such plan equal to the amount of its Allowed Claim, or (b) the holder of any Claim or Interest that is junior to the Claims of such dissenting Class does not receive or retain any property under the plan on account of its Claims.

A court may find that a Plan is "fair and equitable" with respect to a non-accepting Impaired Class of Interests if (a) the plan provides that each holder of an Interest of such Class receives or retains property of a value as of the effective date of the plan equal to the greatest of the allowed amount of any fixed liquidation preference to which such holder is entitled, or the value of such Interest, or (b) the holder of any Interest which is junior to the interests of such Class will not receive or retain any property under the plan on account of such Interest.

Even if a plan was accepted by each Impaired Class of Claims and Interests, to confirm a plan the court must determine that the plan is in the best interests of each individual holder of a Claim or Interest in an Impaired Class that did not vote to accept the Plan. Thus, if an Impaired Class does not unanimously accept the Plan, the "best interests of creditors test" must be met. That test requires that the Court find that the Plan provides to each holder of a Claim or Interest in such Impaired Class a recovery on account of the holder's Claim or Interest that has a value at least equal to the value of the distribution that each such holder would receive if the Debtors were liquidated under Chapter 7 of the Bankruptcy Code.

In a Chapter 7 case, the Debtors' assets are usually sold by a Chapter 7 trustee, not the Debtors. To calculate what non-accepting holders would receive upon a liquidation under Chapter 7, the court must first determine the dollar amount that would be generated upon the Chapter 7 trustee's disposition of the Debtors' assets and then reduce such amount by the costs of liquidation under Chapter 7. Such costs would include the fees of a trustee (as well as those of counsel and other professionals) and any additional expenses of a sale incurred by such trustee.

The distribution of the proceeds from the sale of the Debtors' assets in Chapter 7 would occur in much the same manner as proposed in the Plan. Secured Claims would be paid first from the sales proceeds of properties on which the secured creditors have a lien. Administrative Claims would be paid next. Unsecured Claims would be paid from any remaining sales proceeds, according to their relative priorities.

IN LIGHT OF THE FOREGOING, THE DEBTORS BELIEVE THAT CHAPTER 7 WOULD RESULT IN A SUBSTANTIAL DIMINUTION IN THE VALUE TO BE REALIZED BY HOLDERS OF CLAIMS AND INTERESTS DUE TO, AMONG OTHER FACTORS, (I) ADDITIONAL COSTS AND EXPENSES INVOLVED IN THE APPOINTMENT OF A CHAPTER 7 TRUSTEE AND THE TRUSTEE'S ATTORNEYS, ACCOUNTANTS, AND OTHER PROFESSIONALS, AND (II) THE TIME THAT WOULD ELAPSE BEFORE HOLDERS OF CLAIMS AND INTERESTS WOULD RECEIVE ANY DISTRIBUTION IN RESPECT OF THEIR CLAIMS AND INTERESTS, AS THE CASE MAY BE.

To the fullest extent possible under applicable law, each Creditor, holder of an Interest, and all parties in interest shall be deemed to forever release and waive all claims, demands, debts, rights, causes of action and liabilities (other than the right to enforce the obligations under the Plan), whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, in any way relating to the Debtors or the Debtors' Estate that such entity has, had or may have against: (i) the Debtors; (ii) the Property of the Estate; (iii) the Debtors' agents, advisors, attorneys and representatives (except as otherwise set forth in paragraph 10.4 of the Plan, the Debtors' current and former directors, officers, employees, shareholders and professionals); (iv) the Estate Representative; (v) the Estate Representative’s attorneys, advisors and representatives; and (vi) any entity into which the Debtors are merged or which merges into the Debtors, on or after the effective date of this plan. The administrative claims of professionals shall not be deemed discharged by the order of confirmation.

As of the Effective Date, the entry of the Confirmation Order shall permanently enjoin all Persons that have held, currently hold or may hold a Claim or other debt or liability that is subject to the Plan or who have held, currently hold or may hold an Interest that is subject to the Plan from taking any of the following actions in respect of such Claim, debt or liability or Interest: (i) commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind or means, whether directly or indirectly, any judgment, award, decree or order against the Debtors, the Estate and/or the Estate Representative; (ii) enforcing, levying, attaching, collecting or otherwise recovering in any manner or by any means, whether directly or indirectly, any judgment, award, decree or order against Property of the Estate; (iii) creating, perfecting or enforcing in any manner, directly or indirectly, any lien or encumbrance of any kind against the Estate or property thereof; (iv) asserting any setoff, right of subrogation or recoupment of any kind, directly or indirectly, against any debt, liability or obligation due and owing the Estate; and (v) commencing or continuing, in any manner or in any place, any action that does not comply with or is inconsistent with the provisions of the Plan or the Confirmation Order.

Except for their own gross negligence, willful misconduct or fraud, neither the Debtors, the Estate Representative, any entity into which the Debtors are merged or which merges into the Debtors, on or after the effective date of this plan, nor any of their respective members, officers, directors, employees, attorneys, agents or professionals, nor the heirs, executors, administrators, successors or assigns of any or all of the foregoing, shall have or incur any liability to any Person for any action taken or omitted to be taken prior to the Effective Date in connection with or related to the formulation, preparation, dissemination, implementation, confirmation or consummation of the Plan, the Disclosure Statement, or any other contract, instrument, release, agreement or other document created or entered into, or any act taken or omitted to be taken prior to the Effective Date, in connection with the Plan or the Bankruptcy Case. This provision shall not affect or prohibit the consideration of any matter in connection with the allowance, disallowance, determination, or reconsideration of any fees allowed or to be allowed to any professional retained in connection with this case. The exclusions of liability set forth herein shall not be effective to exclude claims to subordinate or object to claims of the insiders of the Debtors or their former officers. The release and injunction provisions shall apply to any entity into which the Debtors are merged or which merges into the Debtors, on or after the effective date of this plan.

Upon entry of the Confirmation Order, there shall be no successor liability for claims against the Debtors. No holder of any claim, lien or debt, whether secured, priority tax, non-priority unsecured claim or any interest against such entities will have any rights or claims that survive confirmation. In addition, any and all claims against Debtors shall be subject to paragraph 10.1.1 and 10.1.2 of the Plan and the Injunction and Release provisions set forth herein. Accordingly, holders of claims against Debtors including without limitation state and federal taxing authorities, shall be permanently enjoined as of the Effective Date from proceeding against the Debtors, its stockholders, officers, directors, responsible parties or any company into which the Debtors are merged or which merges into the Debtor on or after the Effective Date of the Plan.

Each Class of Claims or Interests that is Impaired and not otherwise deemed to have accepted or rejected a plan is entitled to vote on the Plan. Classes of Claims and Interests that are not Impaired under the Plan are deemed, as a matter of law under the Bankruptcy Code, to have accepted the plan and are therefore not permitted to vote on such plan. Similarly, Classes of Claims or Interests that will not receive or retain any property under the Plan on account of such Claims or Interests are deemed, as a matter of law under the Bankruptcy Code, to have rejected the plan and are likewise not entitled to vote on the plan.

A Class of Claims or Interests is generally considered "Impaired" under a plan unless, with respect to each Claim or Interest in such Class (i) the plan leaves unaltered the legal, equitable and contractual rights to which such Claims or Interest entitles the holder of such Claim or Interest; or (ii) notwithstanding any contractual provision or applicable law that entitled the holder of a Claim or Interest to receive accelerated payment of such Claim or Interest after the occurrence of a default, the plan cures any such default. Creditors whose Claims are classified in more than one Impaired Class are entitled to accept or reject a Plan in both capacities by casting one ballot for its Claim in each Class.

Applying the foregoing standards, the Debtors believe that Classes 1A, 1B, 1C, 2A, 2B, 2C, 3A, 3B, 3C, 4A, 4B and 4C are Impaired under the Plan and that holders of Claims in each of these Classes are therefore entitled to vote to accept or reject the Plan. ALL OTHER CLASSES OF CLAIMS AND INTERESTS ARE DEEMED TO ACCEPT OR ARE DEEMED TO REJECT THE PLAN AND, ACCORDINGLY, ARE NOT ENTITLED TO VOTE TO ACCEPT OR REJECT THE PLAN. PARTIES WHO DISPUTE THE DEBTORS' CHARACTERIZATION OF THEIR CLAIM AS BEING IMPAIRED MAY FILE AN OBJECTION TO THE PLAN CONTENDING THAT THE DEBTORS HAVE INCORRECTLY CHARACTERIZED THE CLASS.

As long as a Claim or Interest is contained within an Impaired class of Claims or Interests, each individual holder of a Claim or Interest within such Class is entitled to vote on and receive distributions under the Plan, but only to the extent that such Claim or Interest is an Allowed Claim or Allowed Interest and such Claim or Interest has not been paid or released prior to the Effective Date.

An Allowed Claim is a Claim which is (a) either filed timely or, with leave of the Bankruptcy Court, filed late, and as to which no party in interest files an objection on or before any applicable period of limitation that may be fixed by the Bankruptcy Code, the Bankruptcy Rules or the Bankruptcy Court or which is allowed by a Final Order of the Bankruptcy Court; (b) listed on the Debtors' schedules or any amendments thereto, as undisputed, liquidated and non-contingent and as to which no party in interest files an objection on or before any applicable period of limitation that may be fixed by the Bankruptcy Code, the Bankruptcy Rules or the Bankruptcy Court; or (c) objected to by a party in interest but which objection has been settled, withdrawn or resolved by a Final Order in favor of the Creditor; or (d) based upon an application of a professional person under §§ 327, 330 and 331 of the Bankruptcy Code for allowance of compensation and reimbursement of expenses in the Bankruptcy Case, to the extent that such application(s) is/are approved by a Final Order; or (e) expressly allowed under the Plan or the Confirmation Order. Unless otherwise specified herein or by order of the Bankruptcy Court, "Allowed Claim" shall not include any contingent or unliquidated Claim unless and until such Claim is no longer contingent and unliquidated nor shall "Allowed Claim" include interest on such Claim for the period from and after the Petition Date.

An Allowed Interest means an Interest, proof of which was timely and properly filed or, if no proof of Interest was filed, which has been or hereafter is listed by the Debtors on its schedules, or any amendments thereto, as liquidated in amount and not disputed or contingent, and, in either case, as to which no objection to the allowance thereof has been interposed on or before the Confirmation Date or such other applicable period of limitation fixed by the Bankruptcy Code, the Bankruptcy Rules or the Bankruptcy Court, or as to which an objection has been denied or overruled by a Final Order. The Debtors will dispute the Interests of any shareholder who is not a shareholder in good standing, including the Interests of any shareholder whose rights are the subject of litigation.

The Bankruptcy Code provides that the Bankruptcy Court may estimate or temporarily allow a disputed Claim for purposes of voting on the Plan. However, such an estimation or temporary allowance shall not be considered to provide the holder with an Allowed Claim. As of the date of this Disclosure Statement, no motions for estimations or temporary allowance of Claims have been filed.

Chapter 11 does not require that each individual holder of a Claim against or Interest in a Debtor accept a plan of reorganization in order for the bankruptcy court to confirm the plan. Ordinarily, if each Class of Impaired Claims and Interests accepts the plan, the plan will be confirmed. However, the plan must be accepted by at least one Class of Claims that is Impaired under the Plan, with such Class' acceptance determined without including any acceptances of the plan by insiders of the Debtors. A Class of Claims is deemed to have accepted the Plan if the Plan is accepted by Creditors in such Class who hold at least two-thirds in aggregate dollar amount and more than one-half of the number of the Claims of such Class for Creditors in such Class that have actually voted on the Plan.

As described in Article IV above, if all Impaired Classes do not accept the Plan, the Court may confirm the Plan if the non-accepting Classes are treated in the manner required by the Bankruptcy Code. The process by which non-accepting Classes are forced to be bound by the terms of the Plan is commonly referred to as "cramdown." Generally, the Bankruptcy Code allows the Plan to be "crammed down" on non-accepting Classes of Claims if it (1) meets certain requirements of the Bankruptcy Code, (2) does not discriminate unfairly, and (3) is fair and equitable toward each Class that has not voted to accept the Plan.

IF YOU DID NOT RECEIVE A BALLOT WITH THIS DISCLOSURE STATEMENT, IT MAY MEAN THAT YOU DO NOT HOLD A CLAIM THAT IS IMPAIRED UNDER THE PLAN. If you did not receive a Ballot for a certain Claim that you believe you hold and that you believe is also in a Class entitled to vote on the Plan, or if a ballot is damaged or lost, or if you have any questions regarding the procedures for voting on the plan, you should contact:

The Bankruptcy Court has fixed October __, 2006 as the time and date by which holders of Claims must vote to accept or reject the Plan. A holder of a Claim desiring to vote on the Plan should complete the enclosed ballot and send it to Arent Fox PLLC, 1675 Broadway, New York, New York 10019, Attention: Schuyler G. Carroll, Esq.

The Debtors will seek confirmation of the Plan at the Confirmation Hearing. Any creditor or party in interest who wishes to object to confirmation of the Plan must file a written objection on or before October __, 2006 with the Clerk of the United States Bankruptcy Court for the Southern District of New York, One Bowling Green, New York, New York 10004 with a courtesy copy to the Chambers of Allan L. Gropper. On or before October __, 2006, a copy of the objection must also served upon (i) counsel for the Debtors, Arent Fox PLLC, 1675 Broadway, New York, New York 10019, Attention: Schuyler G. Carroll, Esq., and (ii) Office of the United States Trustee, 33 Whitehall Street, New York, New York 10004. Any objection must be timely filed and served in order to enable the Creditor or Interest Holder filing such objection to be heard at the Confirmation Hearing.

The Debtors submit that the Plan complies in all respects with chapter 11 of the Bankruptcy Code and that confirmation and implementation of the Plan is preferable to any other alternative for the reorganization of the Debtors, or the liquidation of the Debtors under chapter 7 of the Bankruptcy Code because it will provide the greatest and fastest recovery to holders of Claims and Interests. Therefore, the Debtors recommends to holders of Claims and Interests who are entitled to vote on the plan that they vote to accept the Plan.

Class	No. of Members	Composition	Dollar Amount Asserted by Creditors
N/A	2	Priority Tax Claim	$229,775.58²
1A	2	Non-Tax Priority Claims of Ideal Accents	$17,500.00³
1B	1	Non-Tax Priority Claims of Ferndale	$5,327.52⁴
1C	0	Non-Tax Priority Claims of TOE	0.00
2A	3	Secured Claims of Ideal Accents	$75,705.54⁵
2B	0	Secured Claims of Ferndale	0.00
2C	0	Secured Claims of TOE	0.00
3A	54	Unsecured Claims of Ideal Accents	$4,047,337.60
3B	119	Unsecured Claims of Ferndale	$980,001.33
3C	53	Unsecured Claims of TOE	$323,532.55
4A	4	Interest of Ideal Accents	There are 626 shareholders of the parent company.
4B	0	Interest of Ferndale
4C	0	Interest of TOE

¹ THIS IS A PRELIMINARY ANALYSIS. The Debtors dispute many of the filed proofs of claim. For the purpose of this analysis, however, all scheduled and filed claims are included.

² The Debtors believe neither of these claims are valid, particularly since neither was filed by a governmental unit and will be filing an objection thereto shortly.

³ These proofs of claim assert priority but, as can be seen from the face of the claims, they are not entitled to priority and merely assert an Interest in Ideal Accents, Inc.

⁴ This Proof of Claim asserts priority, but is not entitled to priority and should be reclassified as unsecured.

⁵ The Debtors believe these Claims are not obligations of Ideal, but rather are the obligations of Ferndale, if any such obligation exists, but more properly should be paid by IAR.


In re		Chapter 11

IDEAL ACCENTS, INC., et al.,		Case No. 04-16632 (ALG)

Debtors.		(Jointly Administered)


	Respectfully submitted, IDEAL ACCENTS, INC., ET AL.

	By:	/s/ Karim Suleman
Dated: October 6, 2006 New York, New York		Karim Suleman