EX-99.2 3 v151082_ex99-2.htm

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK


	)
In re:	)	Chapter 11
	)
U.S. ENERGY SYSTEMS, INC., et al.,	)	Case No. 08-10054 (RDD)
	)
Debtors.1	)	(Jointly Administered)
	)

DISCLOSURE STATEMENT WITH RESPECT TO THE

MODIFIED SECOND AMENDED PLAN OF REORGANIZATION OF GBGH, LLC

		Peter S. Partee
		Scott H. Bernstein
		HUNTON & WILLIAMS LLP
		200 Park Avenue, 53rd Floor
		New York, New York 10166

		-and-

		Michael G. Wilson
		HUNTON & WILLIAMS LLP
		Riverfront Plaza, East Tower
		951 East Byrd Street
		Richmond, Virginia 23219


Dated: April 30, 2009		Attorneys for Debtors and
New York, New York		Debtors-in-Possession

The other Debtors in the jointly administered cases are the following: U.S. Energy Overseas Investments, LLC, GBGH, LLC, U.S. Energy Biogas Corp., Biogas Financial Corp., Power Generation (Suffolk), Inc., Resources Generating Systems, Inc., Suffolk Biogas, Inc., USEB Assignee, LLC, ZFC Energy, Inc., ZMG Inc., and Oceanside Energy, Inc.

IMPORTANT NOTICE

THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT IS FOR PURPOSES OF SOLICITING ACCEPTANCES OF THE PLAN AND MAY NOT BE RELIED UPON OR OTHERWISE USED FOR ANY PURPOSE OTHER THAN TO DETERMINE HOW TO VOTE ON THE PLAN. NO PERSON MAY GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS DISCLOSURE STATEMENT REGARDING THE PLAN OR THE SOLICITATION OF ACCEPTANCES OF THE PLAN.

ALL CREDITORS ENTITLED TO VOTE ON THE PLAN SHOULD READ THIS DISCLOSURE STATEMENT AND ALL EXHIBITS HERETO, INCLUDING THE PLAN, BEFORE VOTING TO ACCEPT OR REJECT THE PLAN. PLAN SUMMARIES AND STATEMENTS MADE IN THIS DISCLOSURE STATEMENT ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE PLAN AND THE EXHIBITS ANNEXED TO THE DISCLOSURE STATEMENT AND THE PLAN. THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE ONLY AS OF THE DATE HEREOF UNLESS ANOTHER TIME IS SPECIFIED HEREIN. THE TRANSMISSION OF THIS DISCLOSURE STATEMENT SHALL NOT CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION STATED SINCE THE DATE HEREOF. AFTER THE DATE HEREOF, THERE CAN BE NO ASSURANCE THAT (A) THE INFORMATION AND REPRESENTATIONS CONTAINED HEREIN WILL BE MATERIALLY ACCURATE, AND (B) THIS DISCLOSURE STATEMENT CONTAINS ALL MATERIAL INFORMATION.

THIS DISCLOSURE STATEMENT HAS BEEN PREPARED IN ACCORDANCE WITH SECTION 1125 OF THE BANKRUPTCY CODE AND RULE 3016 OF THE· FEDERAL RULES OF BANKRUPTCY PROCEDURE, AND NOT NECESSARILY IN ACCORDANCE WITH FEDERAL OR STATE SECURITIES LAWS OR OTHER NON-BANKRUPTCY LAW. THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE “SEC”), NOR HAS THE SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED HEREIN. THIS DISCLOSURE STATEMENT WAS PREPARED TO PROVIDE HOLDERS OF CLAIMS AGAINST THE DEBTOR WITH “ADEQUATE INFORMATION” (AS DEFINED IN THE BANKRUPTCY CODE) TO DETERMINE WHETHER TO ACCEPT OR REJECT THE PLAN. PERSONS OR ENTITIES TRADING IN, OR OTHERWISE PURCHASING, SELLING, OR TRANSFERRING, SECURITIES OF THE DEBTOR SHOULD NOT RELY UPON THIS DISCLOSURE STATEMENT FOR SUCH PURPOSES AND SHOULD EVALUATE THIS DISCLOSURE STATEMENT AND THE PLAN IN LIGHT OF THE PURPOSE FOR WHICH THEY WERE PREPARED.

THIS DISCLOSURE STATEMENT SHALL NOT CONSTITUTE OR BE CONSTRUED AS AN ADMISSION OF ANY FACT OR LIABILITY, AS A STIPULATION OR AS A WAIVER, BUT RATHER, AS A STATEMENT MADE IN SETTLEMENT NEGOTIATIONS. THE DISCLOSURE STATEMENT SHALL NOT BE ADMISSIBLE IN ANY NON-BANKRUPTCY PROCEEDING INVOLVING THE DEBTOR OR ANY OTHER PARTY, NOR SHALL IT BE CONSTRUED TO BE CONCLUSIVE ADVICE ON THE TAX, SECURITIES, OR OTHER LEGAL EFFECTS OF THE REORGANIZATION OR THE PLAN ON HOLDERS OF CLAIMS AGAINST, OR EQUITY INTERESTS IN, THE DEBTOR.

PARTIES SHOULD CONSULT WITH THEIR OWN COUNSEL, ACCOUNTANTS, AND/OR TAX ADVISORS WITH RESPECT TO THE LEGAL EFFECTS AND OTHER CONSEQUENCES OF THE PLAN.

TABLE OF CONTENTS

			Page

I.	PURPOSE AND FUNCTION OF THIS DISCLOSURE STATEMENT		1

II.	OVERVIEW OF THE PLAN		2

III.	SOLICITATION AND VOTING PROCEDURES		7
	A.	Chapter 11 Generally	7
	B.	Notice to Holders of Claims and Interests	7
	C.	Solicitation of Acceptances of the Plan	8
	D.	Voting on the Plan	9
	E.	Voting Procedures	11
	F.	Withdrawal of Votes on the Plan	11
	G.	Other General Information	12

IV.	GENERAL BACKGROUND REGARDING THE DEBTOR		13
	A.	Overview	13
	B.	The Debtor’s Capital Structure	16
	C.	Description and History of the Chapter 11 Case	17

V.	SUMMARY OF THE MODIFIED SECOND AMENDED PLAN OF REORGANIZATION		22
	A.	Classification and Treatment of Claims and Interests	22
	B.	Disputed Claims	26
	C.	Means for Implementation of the Plan	27
	D.	Release, Injunctive and Related Provisions	32
	E.	Retention of Jurisdiction	36

VI.	CONFIRMATION OF THE PLAN		39
	A.	Confirmation Hearing	39
	B.	Statutory Requirements for Confirmation of the Plan	39

VII.	CERTAIN FEDERAL INCOME TAX CONSEQUENCES		44
	A.	Federal Income Tax Consequences of the Plan to GBGH	44
	B.	Federal Income Tax Consequences of the Plan to Holders of Claims and Interests	46
	C.	Supplemental Disclosure of Certain Tax Consequences to Holders of Allowed First and Second Lien Secured Claims	47

VIII.	CERTAIN RISK FACTORS AND OTHER CONSIDERATIONS		49
	A.	Failure to Confirm the Plan	49
	B.	Delays of Confirmation or the Effective Date	49
	C.	Forward Looking Statements in this Disclosure Statement May Prove to be Inaccurate	50

iii

TABLE OF CONTENTS

			Page

	D.	GBGH May Not be Able to Successfully Implement its Drilling Program	50
	E.	Reliance on One Customer	50
	F.	Litigation against Viking UK Gas Limited	52
	G.	Gas Licenses	52
	H.	UK Subsidiaries are Dependent upon GBGH for Essential Working Capital	53
	I.	Employee Incentive Plan for the Management of UK Energy Systems Limited	53

IX.	ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN		53
	A.	Liquidation Under Chapter 7 of the Bankruptcy Code	53
	B.	Alternative Plan(s) of Reorganization	55
	C.	Dismissal of the Case	56

X.	CONCLUSION		56

TABLE OF EXHIBITS

Exhibit A		Modified Second Amended Plan of Reorganization of GBGH, LLC

Exhibit B		Liquidation Analysis

Exhibit C		Projections

Exhibit D		Unaudited Financial Information of GBGH, LLC

Exhibit E		Warrant Term Sheet

I. PURPOSE AND FUNCTION OF THIS DISCLOSURE STATEMENT

This Disclosure Statement (the “Disclosure Statement”) has been prepared pursuant to section 1125 of the Bankruptcy Code by GBGH, LLC (“GBGH”), a Delaware limited liability company and a debtor and debtor-in-possession (the “Debtor” and collectively with the other debtors in the above-captioned chapter 11 cases, the “Debtors”) in the above-captioned cases in connection with the Debtor’s solicitation of votes to accept the Modified Second Amended Plan of Reorganization of GBGH, LLC dated April 30, 2009 (as may be amended, supplemented or otherwise modified from time to time, the “Plan”). Capitalized terms used in this Disclosure Statement and not otherwise defined herein shall have the respective meanings ascribed to them in the Plan.

The purpose of the Disclosure Statement is to set forth information: (i) regarding the history of the Debtor and its business, (ii) describing the Debtor’s chapter 11 case (the “Chapter 11 Case”); (iii) concerning the Plan and alternatives to the Plan; (iv) advising the Holders of Claims and Interests of their rights under the Plan; and (v) assisting the Holders of Claims entitled to vote on the Plan in making an informed judgment regarding whether they should vote to accept or reject the Plan. The purpose of the Plan is to effect a restructuring of the Debtor’s liabilities in a manner consistent with the Bankruptcy Code that will maximize recoveries by Creditors.

FOR A COMPLETE UNDERSTANDING OF THE PLAN, YOU SHOULD READ THE DISCLOSURE STATEMENT, THE PLAN, AND THE EXHIBITS HERETO AND THERETO IN THEIR ENTIRETY.

This Disclosure Statement:

Summarizes the Plan and the proposed treatment of Holders of Claims and Interests under the Plan (Section V.A., Classification and Treatment of Claims and Interests);

Describes the procedures for soliciting and casting votes on and confirming the Plan (Section III, Solicitation and Voting Procedures);

Describes the background and events leading to the Debtor’s decision to commence the Chapter 11 Case (Section IV, General Background regarding the Debtor);

Describes the Debtor’s capital structure (Section IV.B, The Debtor’s Capital Structure);

Describes how the Plan will be implemented (Section V.C., Means for Implementing the Plan);

Projects the total percentage recovery that each Class of Allowed Claims and Interests is likely to receive (Section II, Overview of the Plan); and

Evaluates the effects on creditors of liquidation under Chapter 7 of the Bankruptcy Code as an alternative to the Plan, other alternatives and dismissal of the Case (Section IX, Alternatives to Confirmation and Consummation of the Plan).

II. OVERVIEW OF THE PLAN

The Plan provides for:

Holders of Allowed First Lien Secured Claims, on the Effective Date or as soon as reasonably practicable thereafter, to receive their Ratable Portion of (i) the New First Lien Credit Facility in the aggregate principal amount of $50 million, (ii) the New Second Lien Credit Facility in the aggregate principal amount of $15 million, and (iii) New Membership Interests representing 97.5% of the aggregate New Membership Interests, before giving effect to the exercise of any Warrants;

Holders of Allowed Second Lien Secured Claims that vote in favor of the Plan and accept the releases set forth in Article X of the Plan, on the Effective Date or as soon as reasonably practicable thereafter, to receive their Ratable Portion of (i) New Membership Interests representing 2.5% of the aggregate outstanding New Membership Interests, before giving effect to the exercise of any Warrants, and (ii) 100% of the Warrants. The claims held by Holders of Allowed Second Lien Secured Claims that vote to reject the Plan will not be counted as Allowed Claims when determining the respective Ratable Portions of the New Membership Interests and Warrants that will be distributed under the Plan to the Holders of Allowed Second Lien Secured Claims that vote to accept that Plan and accept the releases set forth in Article X of the Plan, and the Holders of Allowed Second Lien Secured Claims that vote to reject the Plan will receive no distribution or property under the Plan. To the extent that Holders of least two-thirds (2/3) in amount of Allowed Claims actually voting this class have not voted to accept the Plan and the Holders (other than any Holder not accepting or rejecting the Plan in good faith or as having their vote solicited or procured in good faith) of more than one-half (1/2) in number of the Allowed Claims actually voting in this class have not voted to accept the Plan, the Holders of the Allowed Second Lien Secured Claims shall receive no distribution or property under the Plan;

Reinstatement of all Allowed Other Secured Claims, if and to the extent that any such Claims exist;

Payment in full of all Unclassified Claims, if and to the extent that any such Claims exist;

Payment in full of all Allowed Priority Non-Tax Claims; and

No distribution in respect of all General Unsecured Claims and the cancellation of all outstanding Interests in the Debtor.

The following table briefly summarizes the treatment of Allowed Claims and Interests. For a more detailed description of the terms and provisions of the Plan, see Article V below.

In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax Claims have not been classified under the Plan. Similarly, Professional Fee Claims are not classified under the Plan. Section V.A.1. below describes the treatment of such Unclassified Claims.

Class		Treatment Under the Plan and Entitlement to Vote		Estimated Allowed Claims			Estimated Recovery
Class 1 First Lien Secured Claims		Impaired; Entitled to Vote. On the Effective Date, Holders of the Allowed First Lien Secured Claims will receive their Ratable Portion of (i) the New First Lien Credit Facility in the aggregate principal amount of $50 million, (ii) the New Second Lien Credit Facility in the aggregate principal amount of $15 million; and (iii) New Membership Interests representing 97.5% of the aggregate New Membership Interests, before giving effect to the exercise of any Warrants. Holders of Class 1 Claims will not receive full Cash payment of their Claims.		$	116,266,549		Less than 100%

Class	Treatment Under the Plan and Entitlement to Vote	Estimated Allowed Claims		Estimated Recovery
Class 2 Second Lien Secured Claims	Impaired; Entitled to Vote. On the Effective Date, Holders of the Allowed Second Lien Secured Claims which vote in favor of the Plan and accept the releases set forth in Article X of the Plan will receive their Ratable Portion of (i) New Membership Interests representing 2.5% of the aggregate New Membership Interests, before giving effect to the exercise of any Warrants, and (ii) 100% of the Warrants. Holders of Class 2 Claims will not receive full Cash payment of their Claims. The claims held by Holders of Allowed Second Lien Secured Claims that vote to reject the Plan will not be counted as Allowed Claims when determining the respective Ratable Portions of the New Membership Interests and Warrants that will be distributed under the Plan to the Holders of Allowed Second Lien Secured Claims that vote to accept the Plan and accept the releases set forth in Article X of the Plan, and the Holders of the Allowed Second Lien Secured Claims that vote to reject the Plan will receive no distribution or property under the Plan. To the extent that Holders of least two-thirds (2/3) in amount of Allowed Claims actually voting in Class 2 have not voted to accept the Plan and the Holders (other than any Holder designated under section 1126(e) of the Bankruptcy Code) of more than one-half (1/2) in number of the Allowed Claims actually voting in such Class have not voted to accept the Plan, the Holders of the Allowed Second Lien Secured Claims will receive no distribution or property under the Plan.	$	32,447,093.88	Less than 100%
Class 3 Other Secured Claims	Unimpaired; Deemed to Accept; Not entitled to Vote. Holders of the Allowed Other Secured Claims will have their Claims Reinstated.	$	0	100	%

Class	Treatment Under the Plan and Entitlement to Vote	Estimated Allowed Claims		Estimated Recovery
Class 4 Priority Non-Tax Claims	Unimpaired; Deemed to Accept; Not Entitled to Vote. Unless the Holder of an Allowed Priority Non-Tax Claim and the Debtor agree to a different treatment, each Holder of an Allowed Priority Non-Tax Claim will receive one of the following alternative treatments, at the election of the Debtor: (i) to the extent, then due and owing on the Effective Date, payment of such Holder’s Allowed Priority Non-Tax Claim in full, in Cash, by Reorganized GBGH, (ii) to the extent not due and owing on the Effective Date, payment of such Holder’s Allowed Priority Non-Tax Claim in full, in Cash, by Reorganized GBGH when such Allowed Priority Non-Tax Claim becomes due and owing in the ordinary course of business in accordance with the terms thereof; or (iii) other treatment in any manner such that Priority Non-Tax Claims shall not be impaired pursuant to section 1124 of the Bankruptcy Code.	$	0	100	%
Class 5 General Unsecured Claims	Impaired; Deemed to Reject; Not entitled to Vote. Each Holder of an Allowed General Unsecured Claim will neither receive nor retain any distribution or property on account of its General Unsecured Claim and the Holders of Class 5 Claims are conclusively deemed to have voted to reject the Plan.	$	0	0	%
Class 6 Interests	Impaired; Deemed to Reject; Not entitled to Vote. On the Effective Date, Interests will be cancelled and each Holder of an Interest will neither receive nor retain any distribution or property on account of its Interest. Holders of Interests are conclusively deemed to have voted to reject the Plan.		N/A	0	%

III. SOLICITATION AND VOTING PROCEDURES

A.	Chapter 11 Generally

Under chapter 11 of the Bankruptcy Code, a debtor is authorized to take certain actions to reorganize or sell its business for the benefit of its creditors, shareholders and other parties in interest. The confirmation and consummation of a plan of reorganization is the objective of a chapter 11 reorganization case. A plan of reorganization sets forth the means for satisfying claims against, and interests in, a debtor, and is implemented only after it has been confirmed by the Bankruptcy Court. Confirmation of a plan of reorganization by the Bankruptcy Court makes the plan binding upon the debtor, any issuer of securities under the plan, any person acquiring property under the plan and any creditor or equity security holder of the debtor. Subject to certain limited exceptions, the confirmation order discharges the debtor from any debt that arose before the date of confirmation of the plan in exchange for the consideration specified under the confirmed plan.

The Plan provides for specified payments and distributions to the various Holders of Claims (unclassified and classified) and Interests, which are described in detail herein. The Debtor believes that the Plan provides consideration to all Holders of Claims (unclassified and classified) and Interests that reflects an appropriate resolution of the Claims and Interests, taking into account the differing nature and priority (including applicable contractual subordination) of Claims and Interests. In addition to the voting requirements discussed below, the Bankruptcy Court must find that various statutory tests are met before it may confirm the Plan. Many of these tests are designed to protect the interests of Holders of Claims or Interests who do not vote to accept the Plan, but who nevertheless will be bound by the provisions of the Plan if it is confirmed. For a more complete description of the requirements of such tests and how the Plan satisfies such tests, see Section VI.B. of this Disclosure Statement.

B.	Notice to Holders of Claims and Interests

This Disclosure Statement is being transmitted to Holders of certain Claims against and Interests in the Debtor. The primary purpose of this Disclosure Statement is to provide those parties voting on the Plan with adequate information to make an informed decision on whether to vote to accept or reject the Plan.

On May 1, 2009, the Bankruptcy Court entered an order [Docket ____] approving this Disclosure Statement, finding that it contains information of a kind and in sufficient detail to enable the Holders of Claims and Interests against the Debtor that are entitled to vote to make an informed judgment about the Plan.

THE BANKRUPTCY COURT’S APPROVAL OF THIS DISCLOSURE STATEMENT CONSTITUTES NEITHER A GUARANTY OF THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED HEREIN, NOR AN ENDORSEMENT OF THE PLAN BY THE BANKRUPTCY COURT.

IF CONFIRMED BY THE BANKRUPTCY COURT, THE PLAN WILL BIND ALL HOLDERS OF CLAIMS AGAINST AND INTERESTS IN THE DEBTOR, WHETHER OR NOT THEY ARE ENTITLED TO VOTE OR DID VOTE ON THE PLAN AND WHETHER OR NOT THEY RECEIVE ANY DISTRIBUTIONS OF PROPERTY UNDER THE PLAN. THUS, YOU ARE ENCOURAGED TO READ THIS DISCLOSURE STATEMENT CAREFULLY. IN PARTICULAR, HOLDERS OF IMPAIRED CLAIMS WHO ARE ENTITLED TO VOTE ON THE PLAN ARE ENCOURAGED TO READ THE DISCLOSURE STATEMENT AND ANY EXHIBITS THERETO, THE PLAN, AND ANY EXHIBITS TO THE PLAN CAREFULLY AND IN THEIR ENTIRETY BEFORE VOTING TO ACCEPT OR TO REJECT THE PLAN.

CERTAIN OF THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT BY ITS NATURE IS FORWARD LOOKING OR CONTAINS OR MAY CONTAIN ESTIMATES, ASSUMPTIONS AND PROJECTIONS THAT MAY BE MATERIALLY DIFFERENT FROM ACTUAL FUTURE RESULTS.

Except as otherwise specifically and expressly stated herein, this Disclosure Statement does not reflect any events that may occur after the date hereof and that may have a material impact on the information contained in this Disclosure Statement. Further, the Debtor does not anticipate that any amendments or supplements to this Disclosure Statement will be distributed to reflect such occurrences. Accordingly, the delivery of this Disclosure Statement shall not under any circumstances imply that the information herein is correct or complete as of any time after the date hereof.

C.	Solicitation of Acceptances of the Plan

Under the Plan, all Claims and Interests that are required to be designated in Classes pursuant to sections 1122 and 1123(a)(1) of the Bankruptcy Code have been placed in various Classes based on the nature and priority of the Claim or Interest. Each Class is either impaired or unimpaired under the Plan, as such terms are defined in section 1124 of the Bankruptcy Code. A Class of Claims or Interests that is Unimpaired is conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code and, accordingly, is not entitled to vote on the Plan. Similarly, a Class of Claims or Interests that does not receive or retain any property under the Plan is conclusively deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code and, likewise, is not entitled to vote. Accordingly, acceptances of the Plan are being solicited only from Holders of Claims in Impaired Classes that are to receive distributions under the Plan. The only such Classes are Classes 1 and 2. Holders of Claims in Classes 3 and 4 are Unimpaired under the Plan, and therefore conclusively are presumed to have accepted the Plan. Holders of Claims in Class 5 and Holders of Interests in Class 6 will receive no distribution under the Plan and, therefore, are deemed to have rejected the Plan.

The Bankruptcy Code provides that a Class of Impaired Claims shall have accepted the Plan if Holders (other than any Holder designated under section 1126(e) of the Bankruptcy Code as described below) of at least two-thirds (2/3) in amount of Allowed Claims actually voting in such Class have voted to accept the Plan and (b) the Holders (other than any Holder designated under section 1126(e) of the Bankruptcy Code) of more than one-half (1/2) in number of the Allowed Claims actually voting in such Class have voted to accept the Plan. Pursuant to section 1126(c) of the Bankruptcy Code, a vote may be disregarded if the Bankruptcy Court determines, after notice and a hearing, that such an acceptance or rejection of the Plan was not in good faith or was not solicited or procured in good faith or in accordance with the provisions of the Bankruptcy Code. For a more complete description of the requirements of confirmation of the Plan, see Section VI.B. of this Disclosure Statement.

If a Class of Claims entitled to vote on the Plan does not accept the Plan, the Debtor reserves the right to amend the Plan or to request confirmation of the Plan (or both) pursuant to section 1129(b) of the Bankruptcy Code. Section 1129(b) permits the confirmation of a plan of reorganization notwithstanding the rejection of the Plan by one more Impaired Classes of Claims. Under that section, a plan may be confirmed by a bankruptcy court, if among other things, the plan does not “discriminate unfairly” and is “fair and equitable” with respect to each rejecting class. For a more complete description of the requirements of confirmation of a nonconsensual plan, see Section VI.B. of this Disclosure Statement.

In the event that a Class of Claims entitled to vote does not vote to accept the Plan, the Debtor’s determination as to whether to request confirmation of the Plan pursuant to section 1129(b) of the Bankruptcy Code will be announced prior to the Confirmation Hearing.

D.	Voting on the Plan

The Voting Deadline is May 20, 2009 at 5:00 p.m. (prevailing Eastern Time). To be counted for purposes of voting on the Plan, all of the information requested on the applicable Ballot must be provided. The Debtor reserves the right, in its sole discretion, to extend the Voting Deadline, in which case the term “Voting Deadline” will mean the latest date on which a Ballot will be accepted. To the extent the Voting Deadline is extended by the Debtor, the Debtor will notify you of any extension by oral or written notice and as promptly as practicable mail written notice thereof to each record Holder of Claims entitled to vote. The notice may state that the Debtor is extending the Voting Deadline for a specified period of time or on a daily basis until 5:00 p.m., prevailing Eastern Time, on the date on which the Debtor has received sufficient acceptances to seek Confirmation of the Plan.

If you are entitled to vote to accept or reject the Plan, enclosed is a Ballot for the acceptance or rejection of the Plan and a pre-addressed return envelope for the return of the Ballot.

BALLOTS FOR ACCEPTANCE OR REJECTION OF THE PLAN ARE BEING PROVIDED ONLY TO HOLDERS OF CLAIMS IN CLASSES 1 AND 2 BECAUSE THEY ARE THE ONLY HOLDERS OF CLAIMS THAT ARE ENTITLED TO VOTE TO ACCEPT OR REJECT THE PLAN.

Please use only the official Ballot or Ballots that accompanies this Disclosure Statement. All votes to accept or reject the Plan must be cast by using that Ballot. Votes that are cast in any manner other than on the designated Ballot will not be counted. Ballots must be actually received by Epiq Bankruptcy Solutions, LLC (“Epiq” or the “Voting Agent”), at one of the addresses indicated on the Ballot, by no later than 5:00 p.m., prevailing Eastern Time, on May 20, 2009. If you elect to vote on the Plan, you should complete and sign the Ballot in accordance with the instructions on the Ballot, being sure to (i) fill in the amount of your Claim in the appropriate space provided and check the appropriate box entitled “Accept the Plan” or “Reject the Plan,” and (ii) fill in the appropriate box indicating whether you accept the releases set forth in section 10.2 of the Plan. You may not split your vote on the Plan with respect to a particular Class.

If you are the Holder of a Claim in Class 1 or Class 2 and did not receive a Ballot, received a damaged or illegible Ballot or lost your Ballot, of if you are a party in interest and have any questions concerning this Disclosure Statement, any of the exhibits hereto, the Plan or the voting procedures in respect thereof, please contact the Debtor’s Voting Agent, at (546) 228-2500.

After carefully reviewing this Disclosure Statement and the exhibits annexed hereto, please indicate on the enclosed Ballot your vote with respect to the Plan and whether you accept the releases set forth in section 10.2 of the Plan, and transmit the Ballot to Epiq in accordance with either of the following two methods:

By Hand or Overnight Delivery:

GBGH, LLC Ballot Processing

c/o Epiq Bankruptcy Solutions, LLC

757 Third Avenue, Third Floor

New York, New York 10017

By Mail:

GBGH, LLC Ballot Processing

c/o Epiq Bankruptcy Solutions, LLC

FDR Station

P.O. Box 5014

New York, New York 10150-5014

FAILURE TO COMPLY WITH THE REQUIREMENTS OF EITHER OF THESE METHODS MAY RESULT IN YOUR VOTE NOT BEING COUNTED. YOU MUST RETURN YOUR BALLOT TO THE VOTING AGENT BY THE VOTING DEADLINE.

THE DEBTOR BELIEVES THAT PROMPT CONFIRMATION AND IMPLEMENTATION OF THE PLAN IS IN THE BEST INTERESTS OF THE DEBTOR, ITS ESTATE AND ALL HOLDERS OF CLAIMS. THE DEBTOR STRONGLY URGES CREDITORS TO VOTE TO ACCEPT THE DEBTOR’S PLAN.

E.	Voting Procedures

In the event that a Ballot is properly executed, but leaves the amount of the Claim blank, the amount of the Claim for voting purposes will be the amount shown on the Debtor’s books and records and listed in the Debtor’s Schedules of Assets and Liabilities, unless otherwise ordered by the Bankruptcy Court. If the aggregate amount of the Claims filled in on your Ballot exceeds the amount indicated by the Debtor’s books and records and listed in the Debtor’s Schedules of Assets and Liabilities, the Debtor reserves the right to seek an order of the Bankruptcy Court determining the proper amount of your Claims for voting purposes pursuant to Bankruptcy Rule 3018. Failure by a Holder of a Claim to deliver a duly signed Ballot will constitute an abstention by that Holder with respect to a vote on the Plan. Abstentions will not be counted as either acceptances or rejections of the Plan. Because abstentions will have no effect on voting with respect to the Plan, it is extremely important that you timely return your Ballot to indicate whether you accept or reject the Plan. Any executed Ballots that are timely received but do not indicate either an acceptance or a rejection of the Plan or indicate both an acceptance and a rejection of the Plan will not be counted.

Submission of all Ballots must be made directly to Epiq in accordance with the instructions on the Ballots. In all cases, sufficient time should be allowed to assure timely delivery. You may receive multiple solicitation packages. You should only vote one Ballot for each Class of which you are a member.

F.	Withdrawal of Votes on the Plan

The solicitation of acceptances of the Plan will expire on the Voting Deadline. A properly submitted Ballot may be withdrawn by delivering a written notice of withdrawal to Epiq at one of the addresses set forth on the Ballot at any time prior to the Voting Deadline. Thereafter, withdrawal may be effected only with the approval of the Bankruptcy Court, pursuant to Bankruptcy Rule 3018(a).

To be valid, a notice of withdrawal must:

specify the name of the holder who submitted the votes on the Plan to be withdrawn;

contain the description of the Claim; and

be signed by the holder in the same manner as on the Ballot.

The Debtor expressly reserves the absolute right to contest the timeliness or validity of any withdrawals of votes on the Plan.

In addition to withdrawal as specified above, any holder who has previously submitted a properly completed Ballot may revoke and change its vote by submitting to Epiq prior to the Voting Deadline a subsequent properly completed Ballot. If more than one timely, properly completed Ballot is received, only the Ballot that bears the latest date will be counted. If more than one Ballot is submitted, and the later dated Ballot(s) supplement rather than supersede the earlier Ballot(s), the subsequent Ballot(s) must be marked with the words “Additional Votes” or other language customarily used to indicate additional votes that are not meant to revoke earlier votes.

G.	Other General Information

The Debtor believes that the Plan provides equal or greater value to creditors than other available alternatives. A Liquidation Analysis containing a comparison of recoveries under the Plan versus a liquidation under chapter 7 of the Bankruptcy Code is annexed hereto as Exhibit B. The Debtor believes that acceptance of the Plan is in the best interests of each and every Class of Creditors entitled to vote on the Plan and recommends that each Creditor vote to accept the Plan. The Disclosure Statement contains good faith estimates and assumptions which are based on facts currently known to the Debtor and which may be materially different from actual future results.

EACH CREDITOR SHOULD READ THIS DISCLOSURE STATEMENT AND THE PLAN IN THEIR ENTIRETY AND CONSULT WITH ITS LEGAL AND/OR BUSINESS ADVISORS AS IT DEEMS APPROPRIATE BEFORE VOTING ON THE PLAN. THIS DISCLOSURE STATEMENT IS NOT LEGAL ADVICE TO YOU. THIS DISCLOSURE STATEMENT MAY NOT BE RELIED UPON FOR ANY PURPOSE OTHER THAN TO DETERMINE HOW TO VOTE ON THE PLAN. THIS DISCLOSURE STATEMENT IS NOT INTENDED TO REPLACE CAREFUL AND DETAILED REVIEW AND ANALYSIS OF THE PLAN BY EACH HOLDER OF A CLAIM ENTITLED TO VOTE THEREON, BUT IS INTENDED TO AID AND SUPPLEMENT THAT REVIEW. THE DESCRIPTION OF THE PLAN HEREIN IS ONLY A SUMMARY, AND HOLDERS OF CLAIMS AND OTHER PARTIES IN INTEREST ARE CAUTIONED TO REVIEW THE PLAN THEMSELVES FOR A FULL UNDERSTANDING OF THE PLAN. IF ANY INCONSISTENCY EXISTS BETWEEN THE PLAN AND THIS DISCLOSURE STATEMENT, THE TERMS OF THE PLAN SHALL GOVERN.

General information regarding the Debtor, its businesses and material events leading to the commencement of the Chapter 11 Case and the history of the Chapter 11 Case is set forth in Article IV. Except where otherwise noted, this information is provided by the Debtor and its management. The statements as to the Debtor’s financial condition contained in this Disclosure Statement are made as of April 30, 2009 (unless another time is specified), and there is no representation or implication that the information contained herein will not have changed as of any time subsequent to that date, nor will you receive any notice of such changes.

Certain risk factors and other considerations are described in Article VIII below. Alternatives to confirmation and consummation of the Plan are described in Article IX below.

THIS DISCLOSURE STATEMENT INCLUDES CERTAIN STATEMENTS, ESTIMATES AND PROJECTIONS PROVIDED BY THE DEBTOR AS TO CERTAIN FUTURE MATTERS THAT REFLECT VARIOUS ASSUMPTIONS, WHICH ASSUMPTIONS MAY OR MAY NOT PROVE TO BE CORRECT. THE DEBTOR DOES NOT UNDERTAKE ANY OBLIGATION TO PROVIDE ADDITIONAL INFORMATION OR TO CORRECT OR UPDATE ANY OF THE INFORMATION SET FORTH IN THIS DISCLOSURE STATEMENT OR THE EXHIBITS HERETO.

IV. GENERAL BACKGROUND REGARDING THE DEBTOR

Overview

Debtor U.S. Energy Systems, Inc. (“USEY”), the ultimate parent of GBGH, owns 100% of the Class A (voting) Membership Interests in Debtor U.S. Energy Overseas Investment, LLC (“USEO,” and together with GBGH and USEY, the “USEY Debtors”), which in turn owns 79% of the membership interests of GBGH. The remaining 21% of the outstanding membership interests of GBGH is owned by Marathon Capital Holdings (UK), LLC (“Marathon”).

On August 7, 2006, GBGH completed the acquisition of certain energy assets in the United Kingdom through its wholly-owned subsidiary, UK Energy Systems Limited (“UKES”), a non-debtor company registered under the laws of England and Wales. Specifically, UKES, through its acquisition of 100% of the equity interests (the “UK Subsidiaries Equity Interests”) of the UK Subsidiaries acquired (i) gas licenses (the “Gas Licenses”) in respect of gas fields located in North Yorkshire, England, containing significant proven and probable natural gas reserves that are currently believed to approximate 35.1 billion cubic feet, (ii) the Knapton Generating Station, a 42 MW gas-fired power plant (the “Knapton Plant”) associated with and located in the vicinity of the natural gas reserves in North Yorkshire, England, and (iii) certain related gas gathering and processing assets (the “Related Assets”). As part of the acquisition, one of the UK Subsidiaries entered into a power purchase agreement and a gas sales agreement with Scottish Power Energy Management (“Scottish Power”) under which Scottish Power is required to purchase all of the electricity generated by the Knapton Plant and all of the natural gas produced from the associated reserves up to 100 billion cubic feet in the aggregate for a term of up to 12 years (collectively, the “Scottish Power Agreement”). At the same time, the UK Subsidiaries entered into a hedge agreement for natural gas pricing (which has since been sold) and an electricity hedge agreement that expires in June of 2009 (the “Electricity Hedge Agreement,” and together with the UK Subsidiaries Equity Interests, the Gas Licenses, the Knapton Plant, the Related Assets and the Scottish Power Agreement, the “UK Assets”), and GBGH entered into a swap agreement (the “Swap Agreement”) with Credit Suisse International (“CSIN”) that has since been terminated, as described further below.

At the time of the acquisition of the UK Assets, GBGH intended to further develop the natural gas fields subject to the Gas Licenses and local planning laws in a several phase process. That development plan included: (i) the expansion of the natural gas collection system in order to supply the Knapton Plant with sufficient gas to operate at full capacity on a 24 hours per day, seven days per week basis; (ii) the making of modifications to the Knapton Plant to increase efficiency; (iii) the expansion of proved and collectible gas reserves; and (iv) the construction of a pipeline to the UK’s national gas transmission system to allow UKES and the UK Subsidiaries to more widely market the natural gas collected.

As UKES and the UK Subsidiaries moved to implement the development and expansion plans discussed above, the USEY Debtors budgeted approximately $36 million of the proceeds of the various financing transactions for capital expenditures to permit the UK Subsidiaries to realize on the potential of the UK Assets. Those funds were to be used to bring the Knapton Plant to full capacity, to make certain gas field production investments and to conduct 3D seismic analyses of the gas properties. The initial results of UKES’s and the UK Subsidiaries’ development efforts appeared promising.

In June 2007, however, USEY’s board of directors were informed for the first time that the capital expenditure requirements for completion of the planned expansion of the UK Assets, based on expenditures and commitments to date, were higher than anticipated and were expected to significantly exceed the budget of $36 million—perhaps by more than 100%. In response, the USEY board of directors took a number of immediate actions, including the removal of the CEO of UKES and the UK Subsidiaries, hiring an outside law firm in the UK to investigate the failure of management to keep the respective boards of the USEY Debtors, UKES and the UK Subsidiaries properly informed, and retaining independent engineers to determine the actual extent of the capital requirements necessary to implement the planned expansion.

USEY, through its public SEC filings, also announced to the market the increase in the capital requirements and informed its investors that failure to complete the expansion of the UK Assets likely would result in the USEY Debtors’ inability to generate sufficient revenue to service the debt under the Loan Agreements (as defined below). Furthermore, USEY determined that absent a refinancing or the raising of additional capital, the USEY Debtors would not be able to meet their capital contribution obligations and likely would be in default under the Loan Agreements.

The USEY Debtors, the Prepetition Lenders, and the numerous other constituencies that have an interest in the USEY Debtors worked diligently to address the working capital concerns faced by the USEY Debtors’ operations in the United Kingdom. The USEY Debtors’ boards of directors and managers, however, determined that a negotiated resolution among the numerous constituencies could not be accomplished in a timely manner outside of a court supervised process and that the commencement of bankruptcy cases was necessary to protect the value of the USEY Debtors’ businesses for the benefit of the USEY Debtors’ creditors and shareholders. Accordingly, on January 9, 2008, each of the USEY Debtors filed their respective voluntary petitions for relief under chapter 11 of the Bankruptcy Code.

Due to the inability to obtain an allocation of funds necessary to pursue a drilling program in accordance with the business plan for the UK operations, the natural gas fuel for the Knapton Plant has been primarily supplied by a single production natural gas well (“KM-4”). Prior to August 23, 2008, KM-4 was flowing natural gas at such a rate that, coupled with minor contributions from two other wells, there was sufficient natural gas to operate the Knapton Plant on a 24/7 basis, albeit not at full capacity.

On August 23, 2008, the Knapton Plant was shut down in order to perform scheduled maintenance in accordance with the long term maintenance program. As the shut down of the generating facility eliminated the need for natural gas, gas flows from KM-4 were shut down in order to preserve gas reserves. Maintaining gas flows utilizing flaring was not possible during a significant portion of the shut-down due to maintenance activities on the gas flare and due to environmental compliance issues. In addition, the shut-down of gas production from KM-4 allowed for additional tests on the well that would assist in the reaffirmation of current reserve estimates. Based upon the operating characteristics of KM-4 prior to its shut down, it was assumed that the failure to reestablish gas flows at KM-4 was not a significant risk.

On August 28, 2008, upon the completion of the scheduled maintenance work, attempts to restart the gas flows from KM-4 failed. Over the next few weeks, various procedures were tried and techniques utilized in attempts to restart the gas flow from KM-4. To date, all attempts have been unsuccessful. It has been determined that ground water likely has overtaken the natural gas in KM-4’s reservoir thereby “choking off” gas flows to the wells. The likelihood of successfully reestablishing natural gas flow from KM-4 is minimal.

During the scheduled maintenance period, maintenance also was performed on a older and nearly exhausted natural gas well (“KM-1”). To date, natural gas production has not been reestablished at KM-1. It is believed that, over a period of many weeks or months, production may be reestablished at KM-1 by the natural processes within KM-1’s reservoir.

During the time that it was not possible to obtain gas production from KM-4 and KM-1, electricity production at the Knapton Plant had been reduced to two to four hours per day. On December 12, 2008, the Knapton Plant ceased production of electricity entirely as management was concerned about further deterioration of the gas turbine (the “Gas Turbine”) at that location that was being caused by the part time production of electricity.

The current business plan contemplates the drilling of new wells in April and May of 2009 and the UK Subsidiaries have started drilling their first new well. The current high demand for drilling rigs throughout the world makes an acceleration of this drilling timetable not possible because additional drilling rigs are not available.

B.	The Debtor’s Capital Structure

To finance the acquisition of the UK Assets, the USEY Debtors entered into three inter-related secured credit facilities: (i) that certain First Lien Credit Agreement, dated August 7, 2006 (the “First Lien Credit Agreement”), by and among GBGH, as borrower, certain lenders party thereto (the “First Lien Lenders”), and Credit Suisse, Cayman Islands Branch (“Credit Suisse”), as administrative agent (the “Original First Lien Administrative Agent”) and collateral agent (the “Original First Lien Collateral Agent”, and together with the Original First Lien Administrative Agent, the “First Lien Agent”); (ii) that certain Second Lien Credit Agreement, dated August 7, 2006 (the “Second Lien Credit Agreement”; together with the First Lien Credit Agreement, the “GBGH Credit Agreements”), by and among GBGH, as borrower, certain lenders party thereto (the “Second Lien Lenders”; together with the First Lien Lenders, the “Prepetition Lenders”), and Credit Suisse, as administrative agent (the “Original Second Lien Administrative Agent”) and collateral agent (the “Original Second Lien Collateral Agent, and together with the Original Second Lien Administrative Agent, the “Second Lien Agent”); and (iii) that certain Credit and Guaranty Agreement (the “USEO Credit Agreement”; together with the GBGH Credit Agreements, the “Loan Agreements”), dated August 7, 2006, by and among Debtor USEO, as borrower, Debtor USEY, as guarantor, the lenders party thereto (the “USEO Lenders”), and Silver Point Finance, LLC (“Silver Point”), as administrative and collateral agent (the “Third Lien Agent”).

Pursuant to the GBGH Credit Agreements, GBGH borrowed $113.5 million from the First Lien Lenders and $29.5 million from the Second Lien Lenders. The proceeds of those transactions were used by GBGH to acquire the UK Assets, to fund certain reserve accounts, to acquire certain hedging instruments, and to pay the costs and fees related to those transactions. Similarly, pursuant to the USEO Credit Agreement, USEO borrowed approximately $23.3 million from the USEO Lenders, the proceeds of which were (i) contributed to GBGH to facilitate its acquisition of the UK Assets and to fund certain reserve accounts owned by GBGH for the development and expansion of the UK Assets, and (ii) used to pay the fees and expenses associated with that transaction.

In addition to the GBGH Credit Agreements, the USEY Debtors also entered into a number of security and intercreditor agreements related to the GBGH Credit Agreements, including: (i) that certain First Lien Security Agreement, dated August 7, 2006 (the “First Lien Security Agreement”), by and between GBGH and the Original First Lien Collateral Agent; (ii) that certain Second Lien Security Agreement, dated August 7, 2006 (the “Second Lien Security Agreement”), by and between GBGH and the Original Second Lien Collateral Agent; (iii) that certain Collateral and Intercreditor Agreement (the “Intercreditor Agreement”), dated August 7, 2006, by and among GBGH, the First Lien Agent, the Second Lien Agent, the Third Lien Agent, certain of the UK Subsidiaries as guarantors, and USEO and Marathon, as pledgors; and (iv) that certain Equity Support Agreement (the “Equity Support Agreement”; together with the First Lien Security Agreement, the Second Lien Security Agreement, the Intercompany Agreement and certain related agreements, the “GBGH Security Agreements”), by and among USEY, GBGH and Credit Suisse, in its capacity as Original First Collateral Lien Agent and Original Second Lien Collateral Agent. Pursuant to the GBGH Security Agreements, Debtors USEO and GBGH and the non-debtor UK Subsidiaries, among other things, granted security interests in, and liens on, substantially all of their assets as collateral security for their obligations under the GBGH Credit Agreements.

In connection with the GBGH Security Agreements, GBGH granted security interests and provided customary borrower covenants. The GBGH Security Agreements also required that GBGH establish and fund certain reserve accounts in the United States (collectively, the “Accounts”) from the proceeds from the financing or from other sources. GBGH’s ability to utilize the funds in each of the Accounts, which in the aggregate totaled approximately $13 million as of the Petition Date (collectively, the “Cash Collateral”), is proscribed by the terms of the GBGH Credit Agreements and the other Loan Documents because those funds are pledged to the First Lien Collateral Agent as collateral for the benefit of the First Lien Lenders and to the Second Lien Collateral Agent as collateral for the Second Lien Lenders.

The current amounts outstanding under the GBGH Credit Agreements and certain unaudited financial information for GBGH is annexed hereto as Exhibit D.

C.	Description and History of the Chapter 11 Case

General Case Background

On the Petition Date, the Debtor voluntarily commenced the Chapter 11 Case before the Bankruptcy Court. The Debtor is continuing in possession of its properties and continuing to operate and manage its business as a debtor-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. On January 11, 2008, the Bankruptcy Court entered an order [Docket No. 21] directing that the USEY Debtors’ chapter 11 cases be procedurally consolidated and jointly administered for procedural purposes only under Case No. 08-10054. On January 26, 2009, the Bankruptcy Court entered an order [Docket No. 326] directing that the USEY Debtors’ chapter 11 cases be procedurally consolidated and jointly administered with the chapter 11 cases of the other Debtors for procedural purposes only under Case No. 08-10054. The Honorable Robert D. Drain is presiding over the Debtors’ chapter 11 cases. As of the date hereof, an official committee of unsecured creditors has not been appointed and no request has been made for the appointment of a trustee or an examiner in the Debtors’ chapter 11 cases.

First Day Orders

On January 11, 2008, the Bankruptcy Court entered certain “first day” orders granting the USEY Debtors various forms of relief designed to stabilize, and minimize any disruption to, the Debtors’ business operations, including: (i) authorizing the joint administration of the USEY Debtors’ chapter 11 cases [Docket No. 21], (ii) authorizing the continued maintenance of the USEY Debtors’ bank accounts and continued use of existing business forms [Docket No. 25], and (iii) authorizing the USEY Debtors to pay certain prepetition employee wage and benefit claims [Docket No. 26].

Corporate Governance Litigation

On or about October 4, 2007, Asher E. Fogel (the former CEO and chairman of USEY) instituted litigation in Delaware (the “Fogel Litigation”) by filing a complaint in the Court of Chancery of the State of Delaware (the “Chancery Court”) against USEY and its then three independent directors (together with USEY, the “Delaware Defendants”). In the Fogel Litigation, Mr. Fogel requested that the Chancery Court order the Delaware Defendants to give notice and hold a special meeting of shareholders to vote on the removal of the then independent directors and to elect new directors.

On or about January 23, 2008, Nakash Energy LLC and certain of its affiliates (collectively, “Nakash”), who collectively own over fifteen percent of the outstanding shares of USEY and USEY’s largest shareholder, instituted litigation in Delaware (the “Nakash Litigation,” and together with the Fogel Litigation, the “Corporate Governance Litigation”) by filing a complaint (the “Nakash Complaint”) in the Chancery Court. Through the Nakash Complaint, Nakash sought, among other things, to compel an annual general meeting of shareholders for the election of directors and the removal of the then current members of the USEY Board.

On February 25, 2008, the Bankruptcy Court entered an order [Docket No. 98] (the “Settlement Order”) approving a proposed settlement under Rule 9019 of the Federal Rules of Bankruptcy Procedure of the majority of the corporate governance disputes involving the USEY Debtors. The Settlement Order authorized the reconstitution of the respective boards of directors or board of managers of the USEY Debtors, and directed that the reconstituted board of directors of USEY shall remain as reconstituted until further order of the Bankruptcy Court or confirmation and substantial consummation of a chapter 11 plan for each of the USEY Debtors. Pursuant to the terms of the Settlement Order, the Nakash Litigation was voluntarily dismissed without prejudice. Since the entry of the Settlement Order, Mr. Fogel has not prosecuted the Fogel Litigation.

Retention of the USEY Debtors’ Professionals

a. Hunton & Williams LLP

To assist them in carrying out their duties as debtors-in-possession, and to represent their interests otherwise in the chapter 11 cases, the USEY Debtors, on January 10, 2008, filed with the Bankruptcy Court an application [Docket No. 18] (the “Hunton & Williams Application”) seeking entry of a final order authorizing the USEY Debtors to retain Hunton & Williams LLP as their lead counsel. On January 31, 2008, the Bankruptcy Court entered a final order [Docket No. 67] approving the Hunton & Williams Application.

b. Jefferies & Company, Inc.

To assist them in carrying out their duties as debtors-in-possession, the USEY Debtors, on January 10, 2008, filed with the Bankruptcy Court an application [Docket No. 17] (the “Jefferies Application”) seeking entry of a final order authorizing the USEY Debtors to retain Jefferies & Company, Inc. (“Jefferies”) as their financial advisor. On February 14, 2008, the Bankruptcy Court entered an order [Docket No. 81] (the “Jefferies Order”) approving the Jefferies Application on an interim basis and, on February 22, 2008, the Jefferies Order, in the absence of any objections to the Jefferies Application, became a final order.

c. Epiq Bankruptcy Solutions, LLC

On the Petition Date, the USEY Debtors filed with the Bankruptcy Court an application [Docket No. 12] (the “Epiq Application”) seeking entry of a final order authorizing the USEY Debtors to retain Epiq Bankruptcy Solutions, LLC as their noticing, claims and Voting Agent. On January 31, 2008, the Bankruptcy Court entered a final order [Docket No. 66] approving the Epiq Application.

d. Eckert Seamans Cherin & Mellott, LLC

On February 1, 2008, the USEY Debtors filed with the Bankruptcy Court an application [Docket No. 71] (the “Eckert Application”) seeking entry of a final order authorizing the USEY Debtors to retain Eckert Seamans Cherin & Mellott, LLC as the USEY Debtors’ Delaware counsel. On February 26, 2008, the Bankruptcy Court entered a final order [Docket No. 100] approving the Eckert Application.

e. Reed Smith LLP

On April 7, 2008, the USEY Debtors filed with the Bankruptcy Court an application [Docket No. 131] (the “Reed Smith Application”) seeking entry of a final order authorizing the USEY Debtors to retain Reed Smith LLP as the USEY Debtors’ corporate governance counsel. On April 28, 2008, the Bankruptcy Court entered a final order [Docket No. 157] approving the Reed Smith Application.

Cash Collateral

On January 10, 2008, the USEY Debtors filed with the Bankruptcy Court, a motion [Docket No. 16] (the “Cash Collateral Motion”) seeking the entry of interim and final orders (i) authorizing GBGH to use Cash Collateral, and (ii) approving an adequate protection package to the First Lien Lenders and the Second Lien Lenders. On February 25, 2008, the Bankruptcy Court entered an order [Docket No. 94] approving the Cash Collateral Motion on an interim basis and, on March 4, 2008, entered an order [Docket No. 114] (the “2008 Cash Collateral Order”) approving the Cash Collateral Motion on a final basis. The 2008 Collateral Order expired by its own terms on March 31, 2008.

On April 3, 2009, the Bankruptcy Court entered a final order [Docket No. 475] (as amended, the “2009 Cash Collateral Order”) authorizing GBGH to use Cash Collateral to fund (i) operating and reorganization expenses, and (ii) the UK Subsidiaries’ drilling of new wells to supply natural gas to the Knapton Plant and the overhaul of the Gas Turbine (collectively, the “Drilling Program”).

Claims Process and Bar Date

On January 24, 2008, GBGH filed with the Bankruptcy Court a statement of financial affairs, and schedules of assets, liabilities and executory contracts and unexpired leases.

On April 23, 2008, the USEY Debtors filed with the Bankruptcy Court a motion [Docket No. 150] seeking the entry of a final order establishing a deadline for filing prepetition proofs of claim in the chapter 11 cases. On May 7, 2008, the Bankruptcy Court entered a final order [Docket No. 159] establishing July 1, 2008 at 5:00 p.m. as the deadline for filing prepetition proofs of claim in the USEY Debtors’ chapter 11 cases.

THE PLAN ESTABLISHES THAT THE BAR DATE FOR ADMINISTRATIVE CLAIMS IS FORTY-FIVE (45) CALENDAR DAYS AFTER THE EFFECTIVE DATE OF THE PLAN.

Exclusivity

The Bankruptcy Code grants a debtor an initial period of 120 days after the commencement of the chapter 11 case during which the debtor has an exclusive right to propose and file a plan of reorganization (the “Exclusive Filing Period”). If the debtor proposes and files a plan within the initial 120-day Exclusive Filing Period, then the debtor has until the end of the period ending on the 180th day after the commencement of the chapter 11 case to solicit and to obtain acceptances of such plan (the “Exclusive Solicitation Period,” and together with the Exclusive Filing Period, the “Exclusive Periods”). The Exclusive Periods may be extended by an order of the Bankruptcy Court. Beginning on October 14, 2008, the Bankruptcy Court has entered a series of orders, without prejudice to the right of GBGH to seek further extensions, sequentially extending GBGH’s Exclusive Solicitation Period through and including May 1, 2009. On April 16, 2009, GBGH filed a motion [Docket No. 499] (the “Exclusivity Motion”) requesting an extension of GBGH’s Exclusive Solicitation Period through and including June 1, 2009, without prejudice to the right of GBGH to seek a further extension of its Exclusive Solicitation Period. At a hearing held on April 30, 2009, the Honorable Robert D. Drain granted the relief sought in the Exclusivity Motion.

Termination of the Swap Agreement

Under the Swap Agreement, GBGH was entitled to receive, on specified quarterly payment dates, payments if any, (i) based on a floating rate of interest and a notional principal amount, and (ii) a specified exchange rate between U.S. Dollars and British Pounds and a notional exchange amount. The final payment under the Swap Agreement was due on June 30, 2009, but GBGH had the right to extend the Swap Agreement for an additional four years by payment of an additional sum.

Following discussions with CSIN, on March 6, 2009, GBGH filed a motion [Docket No. 387] (the “Termination Motion”) with the Bankruptcy Court seeking entry of an order authorizing, among other things, the early termination of Swap Agreement in exchange for a settlement payment from CSIN to GBGH. On March 10, 2009, the Bankruptcy Court entered an order [Docket No. 402] (as amended, the “Termination Order”) granting the Termination Motion. On March 13, 2009, GBGH entered into a contract to terminate the Swap Agreement in exchange for CSIN making a one-time cash payment in the amount of $18.5 million to GBGH. GBGH has received the payment from CSIN.

Marketing of the Assets of UKES

Beginning in the fall of 2007, the board of directors of USEY (the “USEY Board”) undertook a program to explore the possible sale of UKES. The USEY Board requested that Jefferies, an investment banking and advisory firm acting as exclusive advisor to USEY, assist and advise the USEY Board with respect to a possible sale. Jefferies identified prospective purchasers of the assets of UKES and contacted over forty of them. Over thirty companies requested and received non-confidential opportunity summaries, and twenty companies signed confidentiality agreements and were provided access to an electronic due diligence room. The USEY Board received proposals from at least six interested parties with implied valuations for UKES ranging from $30 million to $145 million. All proposals were subject to significant due diligence and the majority were subject to financing.

Despite the USEY Debtors’ and Jefferies’ efforts to provide interested parties with sufficient information to submit proposals that were not subject to further due diligence or financing, none of the interested parties removed both contingencies. Moreover, parties who entered into advanced due diligence subsequently lowered their initial implied valuations for at least four reasons. First, there has been a significant reduction in forward electricity curve prices ranging between approximately 35% and 55% (depending on the period measured) since June of 2008. Second, the freezing of the credit markets has resulted in financing no longer being available for smaller, speculative ventures. Third, the significant and unexpected operational difficulties that have been experienced by the UK Subsidiaries as discussed in greater detail in Section IV.A herein. Fourth, there has been a significant reduction in third party assessed level of the UK Subsidiaries’ proven and probable natural gas reserves from approximately 65.5 billion cubic feet on December 31, 2006 to approximately 35.1 billion cubic feet on July 31, 2008.

10. The Services Agreement Motion

On April 16, 2009, GBGH filed a motion [Docket No. 502] (the “Services Agreement Motion”) seeking entry of an order (i) authorizing GBGH to employ and retain Biogas Energy Solutions, LLC (“BES”) to perform certain services that are necessary to operate GBGH’s business (and the businesses of its subsidiaries) and to wind-up its bankruptcy estate, including but not limited to preparing GBGH’s financial reports and managing the restructuring of GBGH (collectively, the “Services”), nunc pro tunc to March 27, 2009, pursuant to the terms and conditions of the letter agreement between GBGH and BES, dated March 27, 2009 (the “Services Agreement”), and (ii) approving nunc pro tunc GBGH’s $800,000 payment to U.S. Energy Biogas Corp. (“USEB”) in full and final satisfaction of its administrative expense claim for post-petition services rendered to GBGH from January 9, 2008 through and including March 27, 2009 (the “Services Period”). A hearing on the Services Agreement Motion is scheduled for May 5, 2009 at 10:00 a.m. before the Honorable Robert D. Drain.

During the Services Period, employees of USEB rendered services to GBGH pertaining to financial reporting, accounting, cash management and the restructuring of GBGH (the “Pre-March 27 Services”) because GBGH has no employees. GBGH accrued the unpaid amounts owed to USEB for the Pre-March 27 Services rendered by USEB’s employees and the expenses incurred in connection therewith. USEB’s employees, including Richard Augustine, have not and will not receive any additional compensation for the performance of the Pre-March 27 Services.

On March 25, 2009, in the ordinary course of business, GBGH paid $800,000 to USEB in full and final satisfaction for the Pre-March 27 Services rendered to GBGH and to reimburse USEB for the expenses incurred in connection therewith (the “March 25 Payment”). On March 26, 2009, in the ordinary course of business, USEB made a debt service payment that was due on February 28, 2009 in the amount of $1,420,358 to Silver Point in its capacity as administrative and collateral agent for USEB’s prepetition secured lenders. This payment was partially funded with the proceeds of the March 25 Payment.

V. SUMMARY OF THE MODIFIED SECOND AMENDED PLAN OF

REORGANIZATION

THE FOLLOWING SUMMARY PROVIDES ONLY A GENERAL OVERVIEW OF THE PLAN, WHICH IS QUALIFIED IN ITS ENTIRETY BY THE PLAN AND ITS EXHIBITS, ALL OF WHICH ARE ANNEXED HERETO AS EXHIBIT A. IN THE EVENT OF ANY INCONSISTENCY BETWEEN THE PROVISIONS OF THE PLAN AND THE SUMMARY CONTAINED HEREIN, THE TERMS OF THE PLAN SHALL GOVERN.

A.	Classification and Treatment of Claims and Interests

The categories of Claims and Interests listed below classify Claims and Interests that are required to be designated in Classes pursuant to sections 1122 and 1123(a)(1) of the Bankruptcy Code. Classification of Claims and Interests in the Plan is for all purposes, including voting, confirmation and distribution pursuant to the Plan.

A Claim or an Interest shall be deemed classified in a particular Class only to the extent that the Claim or Interest qualifies within the description of that Class and shall be deemed classified in a different Class only to the extent that any remainder of such a Claim or an Interest qualifies within the description of such different Class.

A Claim or Interest is placed in a particular Class only to the extent that such a Claim or an Interest is Allowed in that Class and has not been paid, released or otherwise settled prior to the Effective Date. Notwithstanding any distribution provided for in the Plan, no distribution on account of any Claim or Interest is required or permitted unless and until such a Claim or an Interest becomes an Allowed Claim or an Allowed Interest, as the case may be, if at all, until after the Effective Date.

In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax Claims of the kinds specified in sections 507(a)(1) and 507(a)(8) of the Bankruptcy Code have not been classified, and their treatment is set forth in Article III of the Plan.

The Plan designates five Classes of Claims, one Class of Interests and leaves certain claims unclassified. The following sections describe more fully the classification and treatment of Claims and Interests under the Plan.

Unclassified Claims – Administrative Claims and Priority Tax Claims

(a)

Administrative Claims

Administrative Claims are those Claims asserted against GBGH that constitute a cost or an expense of administration of the Chapter 11 Case allowed under Bankruptcy Code sections 503(b), 507(a)(2) or 507(b) including without limitation (i) any actual and necessary costs and expenses incurred after the Petition Date of preserving any of the Assets of GBGH and any actual and necessary costs and expenses of operating GBGH’s business; (ii) any allowance of compensation and reimbursement of expenses of professionals, pursuant to sections 328, 330 or 331 of the Bankruptcy Code, to the extent allowed by the Court and certain other amounts as set forth in the Plan; and (iii) any fees or charges assessed against GBGH under 28 U.S.C. §§ 1911-1930. The Bankruptcy Code does not require Administrative Claims to be classified under a plan. It does, however, require that Allowed Administrative Claims be paid in full in Cash in order for a plan to be confirmed, unless a Holder of an Allowed Administrative Claim consents to different treatment.

Pursuant to the Plan, on the Distribution Date, or as soon thereafter as is reasonably practicable, the Holder of each Allowed Administrative Claim shall receive Cash in an amount equal to the unpaid portion of such an Allowed Claim, unless GBGH and the holder of an Allowed Administrative Claim has agreed to other less favorable treatment of such an Allowed Administrative Claim; provided, however, that Allowed Administrative Claims for goods or non-professional services provided to the Debtor during the Chapter 11 Case in the ordinary course of the Debtor’s business will be paid or satisfied in accordance with the terms and conditions of the particular transactions and any agreements relating thereto.

THE PLAN ESTABLISHES THE ADMINISTRATIVE CLAIMS BAR DATE AS THE DATE THAT IS FORTY-FIVE (45) DAYS AFTER THE EFFECTIVE DATE OF THE PLAN. ALL ADMINISTRATIVE CLAIMS ARISING ON OR BEFORE THE CONFIRMATION DATE AND NOT PAID IN THE ORDINARY COURSE SHALL BE FILED WITH THE COURT AND SERVED IN ACCORDANCE WITH THE PLAN, THE BANKRUPTCY CODE AND THE BANKRUPTCY RULES OR BE FOREVER BARRED.

(b)

Professional Fee Claims

Professional Fee Claims are Administrative Claims asserted against GBGH for allowance of compensation and reimbursement of expenses by (i) Professionals pursuant to sections 330 or 331 of the Bankruptcy Code, or (ii) any Person or Entity making a claim for compensation and reimbursement of expenses under section 503(b) of the Bankruptcy Code. All final applications for the allowance and payment of Professional Fee Claims for services rendered and expenses incurred in connection with the Chapter 11 Case through and including the Effective Date must be filed with the Bankruptcy Court no later than forty-five (45) days after the Effective Date. Without limiting the foregoing, GBGH or Reorganized GBGH, as the case may be, may pay the charges incurred by GBGH on or after the Confirmation Date for Professionals’ fees, disbursements, expenses or related support services (including fees and expenses related to the preparation of the GBGH’s Advisors’ fee applications) without application to, or approval of, the Bankruptcy Court.

(c)

Priority Tax Claims

Priority Tax Claims are Claims asserted by governmental units entitled to priority under Bankruptcy Code section 507(a)(8). The Bankruptcy Code does not require Priority Tax Claims to be classified under a plan, but requires that such claims receive the treatment described below unless the holder of such Claim consents to different treatment. Any Holder of an Allowed Priority Tax Claim will be paid by GBGH or Reorganized GBGH, as the case may be, in full, in Cash, upon the later of (a) the Effective Date, (b) the date upon which there is a Final Order allowing such Priority Tax Claim, (c) the date upon which such an Allowed Priority Tax Claim would have been due and payable if the Chapter 11 Case had not been commenced, or (d) as may be agreed upon between the Holder of such an Allowed Priority Tax Claim and GBGH. A Priority Tax Claim that is a Disputed Claim will not receive any distribution unless and until such a Claim becomes an Allowed Priority Tax Claim. To the extent that some or all of an Allowed Secured Claim for taxes does not qualify as a Priority Tax Claim, but is a valid Allowed Secured Claim, it will be classified as a Class 3 Other Secured Claim.

Class 1 - First Lien Secured Claims

(a) Classification: Class 1 consists of Allowed First Lien Secured Claims against GBGH.

(b) Treatment: In full and complete satisfaction, settlement and release of the Allowed First Lien Secured Claims, on the Effective Date or as soon as reasonably practicable thereafter, Holders of the Allowed First Lien Secured Claims will receive their Ratable Portion of (i) the New First Lien Credit Facility in the aggregate principal amount of $50 million, (ii) the New Second Lien Credit Facility in the aggregate principal amount of $15 million and (iii) New Membership Interests representing 97.5% of the aggregate New Membership Interests, before giving effect to the exercise of any Warrants. A summary of the principal terms and conditions of the New First Lien Credit Facility and the New Second Lien Credit Facility is contained in the Exit Credit Facilities Term Sheet, a copy of which is annexed to the Plan as Exhibit A.

(c) Voting: Class 1 is Impaired. The Holders of Allowed First Lien Secured Claims are entitled to vote to accept or reject the Plan.

Class 2 - Second Lien Secured Claims

(a) Classification: Class 2 consists of Allowed Second Lien Secured Claims against GBGH.

(b) Treatment: In full and complete satisfaction, settlement and release of the Allowed Second Lien Secured Claims, on the Effective Date or as soon as reasonably practicable thereafter, Holders of the Allowed Second Lien Secured Claims that vote in favor of the Plan and accept the releases set forth in Article X of the Plan will receive their Ratable Portion of (i) New Membership Interests representing 2.5% of the aggregate New Membership Interests, before giving effect to the exercise of any Warrants, and (ii) 100% of the Warrants. The claims held by Holders of Allowed Second Lien Secured Claims that vote to reject the Plan will not be counted as Allowed Claims when determining the respective Ratable Portions of the New Membership Interests and Warrants that will be distributed under the Plan to the Holders of Allowed Second Lien Secured Claims that vote to accept that Plan and accept the releases set forth in Article X of the Plan, and the Holders of the Allowed Second Lien Claims who vote to reject the Plan will receive no distribution or property under the Plan. To the extent that Holders of least two-thirds (2/3) in amount of Allowed Claims actually voting in Class 2 have not voted to accept the Plan and the Holders (other than any Holder designated under section 1126(e) of the Bankruptcy Code) of more than one-half (1/2) in number of the Allowed Claims actually voting in such Class have not voted to accept the Plan, the holders of the Allowed Second Lien Secured Claims will receive no distribution or property under the Plan. A summary of the principal terms of the Warrants is contained in the Warrant Term Sheet, a copy of which is annexed hereto as Exhibit E.

(c) Voting: Class 2 is Impaired. The Holders of Allowed Second Lien Secured Claims are entitled to vote to accept or reject the Plan.

Class 3 - Other Secured Claims

(a) Classification: Class 3 consists of Allowed Other Secured Claims against GBGH.

(b) Treatment: The legal, equitable and contractual rights of the Holders of Allowed Other Secured Claims will be unaltered by the Plan. Unless a Holder of an Other Secured Claim and GBGH agree to a different treatment, on the Effective Date, each Holder of an Allowed Other Secured Claim will have its Claim Reinstated.

(c) Voting: Class 3 is Unimpaired. Holders of Allowed Other Secured Claims are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code and, therefore, are not entitled to vote to accept or reject the Plan.

Class 4 – Priority Non-Tax Claims

(a) Classification: Class 4 consists of Allowed Priority Non-Tax Claims against GBGH.

(b) Treatment: The legal, equitable and contractual rights of Holders of Allowed Priority Non-Tax Claims will be unaltered by the Plan. Unless a Holder of an Allowed Priority Non-Tax Claim and GBGH agree to a different treatment, each Holder of an Allowed Priority Non-Tax Claim will receive one of the following treatments at the election of GBGH:

(i)

to the extent then due and owing on the Effective Date, such an Allowed Priority Non-Tax Claims will be paid in full, in Cash, by Reorganized GBGH;

(ii)

to the extent not due and owing on the Effective Date, such Allowed Priority Non-Tax Claims will be paid in full, in Cash, by Reorganized GBGH when and as such Allowed Priority Non-Tax Claim becomes due and owing in the ordinary course of business in accordance with the terms thereof; or

(iii)

such Allowed Priority Non-Tax Claims will be otherwise treated in any manner such that Class 4 will not be Impaired.

(c) Voting: Class 4 is Unimpaired. Holders of Priority Non-Tax Claims are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code and, therefore, are not entitled to vote to accept or reject the Plan.

Class 5 - General Unsecured Claims

(a) Classification. Class 5 consists of Allowed General Unsecured Claims that are not otherwise classified.

(b) Treatment. Holders of Claims in Class 5 will receive no property or other distributions under the Plan.

(c) Voting. Class 5 is Impaired. The Holders of the Allowed General Unsecured Claims are conclusively presumed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code and, therefore, are not entitled to vote to accept or reject the Plan.

Class 6 - GBGH Equity Interests

(a) Classification: Class 6 consists of Interests in GBGH.

(b) Treatment: On the Effective Date, the Interests in GBGH will be cancelled.

(c) Voting: Class 6 is Impaired. The Holders of the Allowed Interests in GBGH are conclusively presumed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code and, therefore, are not entitled to vote to accept or reject the Plan.

B.	Disputed Claims

No distribution or other payment or treatment will be made on account of a Disputed Claim, even if a portion of the Claim is not disputed, unless and until such Disputed Claim becomes an Allowed Claim and the amount of such an Allowed Claim is determined by a Final Order, by a stipulation between GBGH and the Holder of the Claim, or by a stipulation between Reorganized GBGH and the Holder of the Claim. Within ten (10) Business Days following the Allowance Date for each Disputed Claim that becomes an Allowed Claim after the Distribution Date, Reorganized GBGH will pay directly to the Holder of such an Allowed Claim the amount provided for in Articles III or IV of the Plan, as applicable.

C.	Means for Implementation of the Plan

Sources of Cash for Plan Distribution

All Cash necessary for Reorganized GBGH to make payments pursuant to the Plan will be obtained from existing Cash balances of GBGH and the Guarantors, and the operations of GBGH or Reorganized GBGH or the Guarantors.

Granting of Security Interests and Liens in Connection with the Exit Credit Facilities

Reorganized GBGH’s and the Guarantors’ obligations under the New First Lien Credit Facility will be secured by a valid and perfected first priority lien and security interest in the following:

(i) all of the present and future ownership interests in each Guarantor (but not Reorganized GBGH);

(ii) all present and future intercompany debts between Reorganized GBGH and each Guarantor (or between any two Guarantors);

(iii) all of the present and future property and assets, real and personal of Reorganized GBGH and each Guarantor, including machinery and equipment, inventory and other goods, accounts receivable, owned real estate, leaseholds, fixtures, bank accounts, general intangibles, financial assets, investment property, license rights, patents, trademarks, trade names, copyrights, chattel paper, insurance proceeds, contract rights, hedge agreements, documents, instruments, indemnification right, tax refunds and cash; and

(iv) all proceeds and products of the property and assets described above in clauses (i) through (iii).

Reorganized GBGH’s obligations under the New Second Lien Credit Facility will be secured by a valid and perfected second priority lien and security interest in all of the above-mentioned collateral that is the direct property of Reorganized GBGH, but excluding any property or assets that are the direct property of any of the Guarantors. The Guarantors will not guarantee the New Second Lien Credit Facility.

Authorization, Issuance and Distribution of the New Membership Interests

The issuance of the New Membership Interests by Reorganized GBGH is authorized pursuant to the Plan without the need for any further corporate action or compliance with any non-applicable bankruptcy law. On or as soon as reasonably practicable after the Effective Date, Reorganized GBGH will distribute the New Membership Interests in accordance with the Plan.

Execution of Plan Documents

On the Effective Date, all Plan Documents will be executed and delivered by Reorganized GBGH and will become effective and binding in accordance with their respective terms and conditions upon the parties thereto and as specified in the Plan.

Corporate Governance, Mangers and Officers, and Corporate Action

(a) Reorganized GBGH Operating Agreement. On the Effective Date, the Reorganized GBGH Operating Agreement will be deemed to have been executed by all Creditors, and other parties in interest, that receive the New Membership Interests or Warrants pursuant to, or in accordance with, the Plan. The Reorganized GBGH Operating Agreement will, among other things, prohibit the issuance of nonvoting equity securities to the extent required by section 1123(a)(6) of the Bankruptcy Code. Following the Effective Date, Reorganized GBGH may amend and reinstate its operating agreement and other constituent documents as permitted by applicable state law.

(b) Management Services Agreement. Upon the Effective Date, the Management Services Agreement among Reorganized GBGH and Silver Point (the “Management Services Agreement”) will be effective. Pursuant to the Management Services Agreement, Silver Point and/or certain of its affiliates and their respective principals and employees (collectively, the “Advisor”) will provide to Reorganized GBGH and its subsidiaries management, consulting, financial advisory and strategic services as are reasonably requested from time to time by Reorganized GBGH (the “Management Services”), which services will include rendering advice and assistance concerning any and all aspects of the operations, planning and financing of Reorganized GBGH and its subsidiaries and conducting relations on behalf of the Reorganized GBGH and its subsidiaries with accountants, financial advisors and other professionals. The Management Services Agreement will provide for payment to the Advisor of an annual advisory fee equal to $1 million payable in quarterly installments. It is possible that certain principals and employees of the Advisor providing the Management Services may from time to time also serve as members of the Reorganized GBGH Board of Managers or equivalent governing body of Reorganized GBGH or its subsidiaries. In providing the Management Services, the Advisor and its principals and employees will be acting in separate capacities as advisors and not as members of the Reorganized GBGH Board of Managers or equivalent governing body of Reorganized GBGH and/or its subsidiaries. The Management Services Agreement will contain customary provisions governing certain matters relating to conflict of interests and will provide for customary indemnification of the Advisor and its principals, officers, directors, employees and representatives. The Management Services Agreement will be substantially in the form annexed to the Plan Supplement.

(c) Managers and Officers of Reorganized GBGH. Subject to any requirement for Bankruptcy Court approval pursuant to section 1129(a)(5) of the Bankruptcy Code, and except as may otherwise be disclosed in the Disclosure Statement, on the Effective Date, the managers who are identified in the Plan Supplement will serve as the initial Reorganized GBGH Board of Managers. Pursuant to section 1129(a)(5) and the Plan, GBGH will disclose in the Plan Supplement, on or prior to the Confirmation Date, the identity and affiliations of any Person proposed to serve on the initial Reorganized GBGH Board of Managers and, to the extent such Person is an insider, the nature of any compensation for such Person. The classification and compensation of the Reorganized GBGH Board of Managers will be consistent with the Reorganized GBGH Operating Agreement and any applicable law. After the Effective Date, the corporate governance and management of Reorganized GBGH will be determined by the Reorganized GBGH Board of Managers in accordance with the Reorganized GBGH Operating Agreement and applicable non-bankruptcy law.

(d) GBGH and Reorganized GBGH Corporate Action. On the Effective Date, the adoption of the Reorganized GBGH Operating Agreement, the adoption of the Warrant Agreement, the adoption of the Management Services Agreement, the adoption of applicable constituent documents, the selection of the members of the Reorganized GBGH Board of Managers and officers for Reorganized GBGH, and all other actions contemplated by the Plan (whether to occur before, on or after the Effective Date of the Plan) will be authorized and approved in all respects (subject to the provisions of the Plan). All matters provided for in the Plan involving the corporate structure of GBGH or Reorganized GBGH, and any corporate action required by GBGH or Reorganized GBGH in connection with the Plan, will be deemed to have occurred and will be in effect, without any requirement of further action by the Holders of Interests in GBGH or Reorganized GBGH. On the Effective Date, the appropriate officers of Reorganized GBGH and members of the Reorganized GBGH Board of Managers will be authorized and directed to issue, execute and deliver the agreements, documents, securities and instruments contemplated by the Plan in the name of and on behalf of Reorganized GBGH. The authorization and approval of the corporate actions in section 6.3(c) of the Plan will be effective notwithstanding any requirements under any applicable state law or other applicable non-bankruptcy law.

Elimination of Classes

Any Class of Claims that is not occupied as of the date of the commencement of the Confirmation Hearing by an Allowed Claim, or a Claim temporarily allowed under Bankruptcy Rule 3018, will be deemed deleted from the Plan for all purposes.

Release of Liens

On or before the Effective Date, each of the Collateral Agents and GBGH shall (and in the case of GBGH, GBGH will procure that UKES and the UK Subsidiaries will) execute and file such document, notice or other public statement as is reasonably necessary or appropriate under applicable law in the relevant jurisdictions to evidence and effect the termination of the Liens formerly held by such parties or any liens held in favor of the Collateral Agents in respect of the assets of UKES or the UK Subsidiaries and the termination of any financing statements relating to any and all security interests in the Assets or the assets of UKES or the UK Subsidiaries held by the Collateral Agents. In addition, Reorganized GBGH will be appointed as attorney-in-fact under the laws of the United States of America for each party whose Lien is terminated pursuant to the Plan, with full power and authority to execute on behalf of such party any notices or other public statements as are necessary or appropriate to evidence the termination of such party’s Lien and any financing statement relating to any and all security interests in the Assets.

Indemnification of Directors, Officers and Employees

The obligations of GBGH to indemnify any Person serving at any time on or prior to the Effective Date as one of its directors, officers or employees by reason of such Person’s service in such capacity, or as a director, an officer, a partner, a trustee, an employee or an agent of GBGH to the extent provided in GBGH’s constituent documents, by a written agreement with GBGH or applicable state law, each as applicable, will be deemed and treated as executory contracts that are assumed by GBGH pursuant to the Plan and section 365 of the Bankruptcy Code as of the Effective Date. Accordingly, such indemnification obligations will survive unimpaired and unaffected by the Confirmation Order, irrespective of whether such indemnification is owed for an act or an event occurring before or after the Petition Date, except if such claim or liability is determined by a Final Order to have resulted from gross negligence, willful misconduct, fraud or criminal conduct of such indemnified Person. For a period of at least six years after the Effective Date, Reorganized GBGH will maintain directors’ and officers’ liability insurance similar in coverage and at least in amounts that were in effect immediately prior to the Effective Date (the “D&O Insurance”).

Cancellation of Existing Agreements and Securities

Except to the extent Reinstated or Unimpaired under the Plan, or for the purposes of evidencing a right to distributions under the Plan or as otherwise provided under the Plan, on the Effective Date, all the agreements or other documents evidencing any Claims or rights of any Holder of a Claim against GBGH, including all indentures, credit agreements, security agreements and notes evidencing such Claims, and any GBGH Equity Interests, options or warrants (regardless of whether exercised) to purchase GBGH Equity Interests, will be deemed cancelled, surrendered to GBGH, and of no further force or effect; provided, however, that such agreements will continue in effect solely for the purposes of allowing the Collateral Agents to make any distributions on account of holders of Allowed Claims in Classes 1 and 2 pursuant to the Plan and to perform such other necessary administrative functions with respect thereto.

10.

Continued Corporate Existence and Vesting of Assets in Reorganized GBGH

Reorganized GBGH will continue to exist after the Effective Date with all the powers of a limited liability company under the laws of the State of Delaware and without prejudice to any right to alter or terminate such existence (whether by merger or otherwise) under Delaware law; provided, however, that such an alteration or termination of the existence of Reorganized GBGH will not affect its obligation to maintain D&O Insurance. Except as otherwise provided in the Plan or any agreement, instrument or indenture relating thereto, on or after the Effective Date, all property of the Estate of GBGH, and any property acquired by GBGH or Reorganized GBGH under the Plan, will vest in Reorganized GBGH, free and clear of all Claims, Liens, charges or other encumbrances and Interests. On and after the Effective Date, Reorganized GBGH may operate its business and may use, acquire or dispose of property and compromise or settle any Claims, without supervision or approval of the Bankruptcy Court, and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those restrictions, if any, expressly imposed by the Plan and the Confirmation Order. Without limiting the generality of the foregoing, all rights, privileges, entitlements, authorizations, grants, permits, licenses, easements, franchises and other similar items which constitute part of, or are necessary or useful in the operation of, the property of the Estate or the business of Reorganized GBGH, whether in the United States or elsewhere, will vest in Reorganized GBGH on the Effective Date, and will thereafter be exercisable and useable by Reorganized GBGH to the same and fullest extent they have been exercisable and useable GBGH before the Petition Date.

11.

United States Trustee Fees

GBGH’s Estate will pay quarterly fees to the Office of the United States Trustee until its Chapter 11 Case is closed under section 350 of the Bankruptcy Code and provide relevant reports to show the amount of such fee that is due.

12.

Revocation and Withdrawal of the Plan

GBGH reserves the right to revoke or withdraw the Plan at any time before entry of the Confirmation Order. If GBGH revokes or withdraws the Plan prior to the Confirmation Hearing, or if Confirmation of the Plan or the Effective Date does not occur, then the Plan shall be deemed to be null and void as to the GBGH Estate. In such an event, nothing contained in the Plan or in any document relating to the Plan will be deemed to constitute an admission of validity, waiver or release of any Claims by or against GBGH or any Person or any Entity or to prejudice in any manner the rights of GBGH or any Person or any Entity in any proceeding involving GBGH.

13.

Compliance with Tax Requirements

In connection with the Plan, to the extent required by law, GBGH, Reorganized GBGH or any agent thereof making disbursements in accordance with the Plan will deduct any federal, state or local withholding taxes from distributions and will remit such taxes to the appropriate Governmental Unit on a timely basis. All Holders of Allowed Claims will be required to provide any information reasonably requested in writing to effect the withholding of such taxes, and GBGH, Reorganized GBGH or any disbursement agent thereof may withhold any distribution absent the provision of such information or further order of the Bankruptcy Court. GBGH, Reorganized GBGH or any agent thereof will reasonably cooperate with Holders in demonstrating an exemption from any applicable withholding taxes. If the Holder of an Allowed Claim fails to provide the information necessary to comply with any withholding requirement of any Governmental Unit within sixty (60) days after the date of the first written notification by GBGH, Reorganized GBGH or any disbursement agent to the Holder of the Claim of the need for such information, then such Holder’s distribution shall be treated as an unclaimed distribution in accordance with section 7.4(c) of the Plan.

14.

Section 1145 Exemption

Pursuant to section 1145(a) of the Bankruptcy Code, neither section 5 of the Securities Act of 1933 nor any state or local law requiring registration for offer or sale of a security or registration or licensing of an issuer of, underwriter of, or broker or dealer in, will apply with respect to any security being offered, sold or transferred under the Plan, including without limitation all of the New Membership Interests.

15.

Section 1146(a) Exemption

Pursuant to Bankruptcy Code section 1146(a), neither (i) the issuance, transfer or exchange of any security under the Plan, including the issuance of the New Membership Interests nor (ii) the assignment or surrender of any lease or sublease, or the delivery of any deed or other instrument of transfer under, in furtherance of, or in connection with, the Plan, including any deeds, bills of sale or assignments executed in connection with the disposition of assets contemplated by the Plan (including real and personal property) will be subject to any stamp, real estate transfer, mortgage recording sales, use or similar tax.

16.

UK Subsidiaries Restructuring Transactions

In order to satisfy each of the conditions precedent to the effectiveness of the Exit Credit Facilities, UKES and the UK Subsidiaries need to engage in various transactions both among themselves and with GBGH (collectively, the “UK Restructuring Transactions”). Salient among the UK Restructuring Transactions is the resolution of an existing intercompany receivable owed by UKES to GBGH in the principal amount of $100 million (the “Intercompany Receivable”). As the Intercompany Receivable was implemented with a view to facilitating the tax efficient movement of funds between GBGH and UKES, following its capitalization certain other tax efficient mechanisms will be used for funds transferred between GBGH and the UKES. Because the completion of the UK Restructuring Transactions requires a number of weeks, GBGH has filed a motion [Docket No. 517] for authorization to commence the UK Restructuring Transactions immediately. A hearing on such motion is scheduled for May 5, 2009 at 10:00 a.m. before the Honorable Robert D. Drain of the Bankruptcy Court.

D.	Release, Injunctive and Related Provisions

Subordination

The subordination and manner of satisfying all Claims and Interests and the respective distributions and treatments under the Plan take into account or conform to the relative priority and rights of the Claims and Interests in each Class in connection with any contractual, legal and equitable subordination rights relating thereto whether arising under general principles of equitable subordination, section 510(b) of the Bankruptcy Code or otherwise, and any and all such rights are settled, compromised and released pursuant to the Plan. The Confirmation Order shall permanently enjoin, effective as of the Effective Date, all Entities and Persons from enforcing or attempting to enforce any such contractual, legal and equitable subordination rights satisfied, compromised and settled pursuant to Article X of the Plan.

Releases

In consideration of the contributions of certain parties to the Chapter 11 Case, the Plan provides for certain waivers, exculpations, releases and injunctions.

Releases by GBGH and Reorganized GBGH. As of the Effective Date, for good and valuable consideration including but not limited to the service of the D&O Released Parties, the First Lien Collateral Agent, the Second Lien Collateral Agent, the First Lien Administrative Agent, the Second Lien Administrative Agent, and the Prepetition Lenders, to facilitate the expeditious reorganization of GBGH and the implementation of the restructuring contemplated by the Plan, the adequacy of which is hereby confirmed, GBGH and Reorganized GBGH hereby release:

(i)	all D&O Released Parties and their respective officers, directors, partners, members, employees, attorneys, financial advisors, accountants, investment bankers, agents, professionals and representatives, each in such capacity;