Exhibit 99.2

THIS DISCLOSURE STATEMENT IS NOT A SOLICITATION OF ACCEPTANCES OR
REJECTIONS OF THE DEBTORS AND OFFICIAL COMMITTEE OF UNSECURED CREDITORS' JOINT
CHAPTER 11 PLAN OF REORGANIZATION. ACCEPTANCES OR REJECTIONS MAY NOT BE
SOLICITED UNTIL THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE
HAS APPROVED A DISCLOSURE STATEMENT UNDER SECTION 1125 OF TITLE 11 OF THE UNITED
STATES CODE. THIS PROPOSED DISCLOSURE STATEMENT IS BEING SUBMITTED FOR APPROVAL
ONLY AND HAS NOT YET BEEN APPROVED BY THE BANKRUPTCY COURT.

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

IN RE: ) CHAPTER 11
)
FLEMING COMPANIES, INC., ET AL.,(1) )
) CASE NO. 03-10945 (MFW)
DEBTORS. ) HONORABLE MARY F. WALRATH
) (JOINTLY ADMINISTERED)
)

DISCLOSURE STATEMENT IN SUPPORT OF DEBTORS AND OFFICIAL COMMITTEE
OF UNSECURED CREDITORS' JOINT PLAN OF REORGANIZATION
OF FLEMING COMPANIES, INC. AND ITS FILING SUBSIDIARIES
UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE

IMPORTANT DATES

- - Date by which Ballots must be received: [______], 2004

- - Date by which objections to Confirmation of the Plan must be filed and
served: [_____], 2004

- - Hearing on Confirmation of the Plan: [_______], 2004

- - Exercise of Rights Offering: [_______], 2004

THIS IS NOT A SOLICITATION OF ACCEPTANCE OR REJECTION OF THE JOINT PLAN OF
REORGANIZATION. ACCEPTANCES OR REJECTIONS MAY NOT BE SOLICITED UNTIL THE
BANKRUPTCY COURT HAS APPROVED THIS DISCLOSURE STATEMENT.

- --------------------------------------------------------------------------------

- ----------------

(1) The Debtors are the following entities: Core-Mark International, Inc.;
Fleming Companies, Inc.; ABCO Food Group, Inc.; ABCO Markets, Inc.;
ABCO Realty Corp.; ASI Office Automation, Inc.; C/M Products, Inc.;
Core-Mark Interrelated Companies, Inc.; Core-Mark Mid-Continent, Inc.;
Dunigan Fuels, Inc.; Favar Concepts, Ltd.; Fleming Foods Management
Co., L.L.C., Fleming Foods of Texas, L.P.; Fleming International, Ltd.;
Fleming Supermarkets of Florida, Inc.; Fleming Transportation Service,
Inc.; Food 4 Less Beverage Company, Inc.; Fuelserv, Inc.; General
Acceptance Corporation; Head Distributing Company; Marquise Ventures
Company, Inc.; Minter-Weisman Co.; Piggly Wiggly Company; Progressive
Realty, Inc.; Rainbow Food Group, Inc.; Retail Investments, Inc.;
Retail Supermarkets, Inc.; RFS Marketing Services, Inc.; and Richmar
Foods, Inc.

KIRKLAND & ELLIS LLP PACHULSKI, STANG, ZIEHL, YOUNG,
James H. M. Sprayregen, P.C. (ARDC No. 6190206) JONES & WEINTRAUB P.C.
Richard L. Wynne (CA Bar No. 120349) Laura Davis Jones (Bar No. 2436)
Janet Baer (ARDC No. 6182994) Ira D. Kharasch (CA Bar No. 109084)
Geoffrey A. Richards (ARDC No. 6230120) Robert M. Saunders (CA Bar No. 226172)
Shirley S. Cho (CA Bar No. 192616) Scotta E. McFarland (Bar No. 4184)
200 East Randolph Drive Christopher J. Lhulier (Bar No. 3850)
Chicago, IL 60601-6436 919 North Market Street, Sixteenth Floor, P.O. Box 8705
Telephone: (312) 861-2000 Wilmington, Delaware 19899-8705 (Courier No. 19801)
Facsimile: (312) 861-2200 Telephone: (302) 652-4100
Facsimile: (302) 652-4400

Co-Counsel for the Debtors and Debtors-in-Possession

Dated: ___________________

THIS DISCLOSURE STATEMENT SUMMARIZES CERTAIN PROVISIONS OF THE DEBTORS
AND OFFICIAL COMMITTEE OF UNSECURED CREDITORS' JOINT PLAN OF REORGANIZATION OF
FLEMING COMPANIES, INC. AND ITS FILING SUBSIDIARIES UNDER CHAPTER 11 OF THE
UNITED STATES BANKRUPTCY CODE ("PLAN") AS WELL AS CERTAIN OTHER DOCUMENTS AND
FINANCIAL INFORMATION. THE FINANCIAL INFORMATION SUMMARIES AND OTHER DOCUMENTS
ATTACHED HERETO OR INCORPORATED BY REFERENCE HEREIN ARE QUALIFIED IN THEIR
ENTIRETY BY REFERENCE TO THOSE DOCUMENTS. IN THE EVENT OF ANY INCONSISTENCY OR
DISCREPANCY BETWEEN A DESCRIPTION IN THIS DISCLOSURE STATEMENT AND THE TERMS AND
PROVISIONS OF THE PLAN, OR THE OTHER DOCUMENTS AND FINANCIAL INFORMATION
INCORPORATED HEREIN BY REFERENCE, THE PLAN OR THE OTHER DOCUMENTS AND FINANCIAL
INFORMATION, AS THE CASE MAY BE, SHALL GOVERN FOR ALL PURPOSES. CAPITALIZED
TERMS USED HEREIN BUT NOT DEFINED HEREIN SHALL HAVE THE MEANINGS SET FORTH IN
THE PLAN.

THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), ANY CANADIAN
SECURITIES ADMINISTRATOR ("CSA") OR ANY STOCK EXCHANGE, NOR HAS THE SEC, ANY CSA
OR ANY STOCK EXCHANGE PASSED UPON THE ACCURACY OR ADEQUACY OF THE STATEMENTS
CONTAINED HEREIN.

MOREOVER, THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE, AND MAY NOT BE
CONSTRUED AS, AN ADMISSION OF FACT, LIABILITY, STIPULATION OR WAIVER BUT RATHER
SHOULD BE CONSTRUED AS A STATEMENT MADE IN SETTLEMENT NEGOTIATIONS RELATED TO
CONTESTED MATTERS, ADVERSARY PROCEEDINGS AND OTHER PENDING OR THREATENED
LITIGATION OR ACTIONS.

THE DEBTORS MAKE THE STATEMENTS AND PROVIDE THE FINANCIAL INFORMATION
CONTAINED HEREIN AS OF THE DATE HEREOF UNLESS OTHERWISE SPECIFIED. HOLDERS OF
CLAIMS AND EQUITY INTERESTS REVIEWING THIS DISCLOSURE STATEMENT SHOULD NOT INFER
AT THE TIME OF SUCH REVIEW THAT THE FACTS SET FORTH HEREIN HAVE NOT CHANGED
SINCE THE DATE HEREOF UNLESS SO SPECIFIED. EACH HOLDER OF AN IMPAIRED CLAIM
ENTITLED TO VOTE SHOULD THEREFORE CAREFULLY REVIEW THE PLAN, THIS DISCLOSURE
STATEMENT AND THE EXHIBITS TO BOTH DOCUMENTS IN THEIR ENTIRETY BEFORE CASTING A
BALLOT. THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE LEGAL, BUSINESS, FINANCIAL
OR TAX ADVICE. ALL PERSONS DESIRING SUCH ADVICE OR ANY OTHER ADVICE SHOULD
CONSULT WITH THEIR OWN ADVISORS.

NO PARTY IS AUTHORIZED TO PROVIDE TO ANY OTHER PARTY ANY INFORMATION
CONCERNING THE PLAN OTHER THAN THE CONTENTS OF THIS DISCLOSURE STATEMENT. THE
DEBTORS HAVE NOT AUTHORIZED ANY REPRESENTATIONS CONCERNING THE DEBTORS OR THE
VALUE OF THEIR PROPERTY OTHER THAN THOSE SET FORTH IN THIS DISCLOSURE STATEMENT.
HOLDERS OF CLAIMS SHOULD NOT RELY ON ANY INFORMATION, REPRESENTATIONS OR
INDUCEMENTS MADE TO OBTAIN YOUR ACCEPTANCE OF THE PLAN THAT ARE OTHER THAN, OR
INCONSISTENT WITH, THE INFORMATION CONTAINED HEREIN AND IN THE PLAN.

THE DEBTORS' MANAGEMENT HAS REVIEWED THE FINANCIAL INFORMATION PROVIDED
IN THIS DISCLOSURE STATEMENT. ALTHOUGH THE DEBTORS HAVE USED THEIR BEST EFFORTS
TO ENSURE THE ACCURACY OF THIS FINANCIAL INFORMATION, THE FINANCIAL INFORMATION
CONTAINED IN, OR INCORPORATED BY REFERENCE INTO, THIS DISCLOSURE STATEMENT HAS
NOT BEEN AUDITED.

UNLESS OTHERWISE SPECIFIED, ALL REFERENCES TO "DOLLARS" OR "$" SHALL BE
DEEMED TO REFER TO UNITED STATES DOLLARS.

ALL CAPITALIZED TERMS IN THIS DISCLOSURE STATEMENT THAT ARE NOT
OTHERWISE DEFINED HEREIN HAVE THE MEANINGS GIVEN TO THEM IN THE PLAN.

TABLE OF CONTENTS

I. SUMMARY................................................................................................. 1
A. Plan Overview.................................................................................. 2
1. Purpose - Reorganization.............................................................. 2
2. Substantive Consolidation............................................................. 2
3. Creation of Core-Mark Newco........................................................... 2
4. Rights Offering....................................................................... 2
5. Summary of Plan Treatment............................................................. 3
6. Executory Contracts and Unexpired Leases.............................................. 6
B. Voting and Confirmation........................................................................ 7
1. Time and Place of the Confirmation Hearing............................................ 7
2. Deadline for Voting For or Against the Plan........................................... 7
3. Deadline for Objecting to the Confirmation of the Plan................................ 8
C. Risk Factors................................................................................... 8
D. Identity of Persons to Contact for More Information............................................ 8
E. Disclaimer..................................................................................... 8
1. Read This Disclosure Statement And The Plan Carefully................................. 8

II. RECOMMENDATIONS......................................................................................... 10
A. The Debtors And The Creditors' Committee Strongly Recommend That You
Vote In Favor Of The Plan............................................................................... 10

III. VOTING ON AND CONFIRMATION OF THE PLAN.................................................................. 11
A. Voting And Ballots............................................................................. 11
B. Confirmation Hearing For The Plan.............................................................. 12
C. Any Objections To Confirmation Of The Plan..................................................... 12
D. Questions About The Disclosure Statement, Plan Or Ballots...................................... 13

IV. ORGANIZATION AND ACTIVITIES OF THE DEBTORS.............................................................. 14
A. Operations..................................................................................... 14
B. Debt Structure................................................................................. 14
1. Debt.................................................................................. 14
2. Secured Debt.......................................................................... 14
3. Unsecured Debt........................................................................ 15
4. Trade Debt............................................................................ 15
5. PBGC Debt............................................................................. 16
C. Pre-Petition Operational Restructuring Efforts................................................. 16

V. THE CASES............................................................................................... 17
A. Events Leading to the Chapter 11 Cases............................................................... 17
B. The Auction and Sale Process For the Wholesale Distribution Assets & Plans for Fleming
Convenience Assets................................................................................... 17
1. Auction and Sale Process for Wholesale Distribution Assets............................ 17
2. Plans for Fleming Convenience Assets.................................................. 18
C. Significant Case Events........................................................................ 18
1. Summary of Significant Motions........................................................ 18
2. Retention of Professionals............................................................ 21
3. Appointment of Creditors' Committee and Retention of Professionals.................... 21
4. Asset Sales and Other Dispositions.................................................... 21
5. Debtor in Possession Operating Reports................................................ 24
6. Pending Litigation And The Automatic Stay............................................. 24

VI. SUMMARY OF THE PLAN OF REORGANIZATION................................................................... 33
A. Overview of Chapter 11......................................................................... 33

B. Generally...................................................................................... 34
1. Structure of Reorganizing Plan........................................................ 34
2. Creation of Core-Mark Newco........................................................... 34
3. Exit Financing Facility, Obtaining Cash for Plan Distributions and Transfers of
Funds Among the Debtors and the Reorganized Debtors................................... 35
4. Sale of Assets........................................................................ 35
C. Classification And Treatment Of Claims And Equity Interests.................................... 35
1. Summary of Unclassified Claims against all Debtors.................................... 35
2. Classification and Treatment of Classified Claims..................................... 36
D. Special Provision Governing Unimpaired Claims.................................................. 40
E. Acceptance And Rejection Of The Plan........................................................... 41
1. Voting Classes........................................................................ 41
2. Acceptance by Impaired Classes........................................................ 41
3. Presumed Acceptance of Plan........................................................... 41
4. Presumed Rejection of Plan............................................................ 41
5. Non-Consensual Confirmation........................................................... 41
F. Plan Implementation............................................................................ 41
1. The Rights Offering................................................................... 41
2. Substantive Consolidation............................................................. 45
3. Continued Corporate Existence and Vesting of Assets in the Reorganized Debtors........ 49
4. Cancellation of Old Notes, Old Stock and Other Equity Interests....................... 49
5. Issuance of New Securities; Execution of Related Documents............................ 49
6. Restructuring Transactions............................................................ 49
7. Corporate Governance, Directors and Officers, and Corporate Action.................... 50
G. Post-Confirmation Trust........................................................................ 51
1. Formation/Purpose..................................................................... 51
2. Powers................................................................................ 51
3. Funding............................................................................... 51
H. Creation of Professional Fee Escrow Account.................................................... 51
I. Executory Contracts............................................................................ 51
1. Assumption/Rejection of Executory Contracts and Unexpired Leases...................... 51
2. Claims Based on Rejection of Executory Contracts or Unexpired Leases.................. 51
3. Cure of Defaults for Executory Contracts and Unexpired Leases Assumed................. 52
4. Indemnification of Directors, Officers and Employees.................................. 52
5. Compensation and Benefit Programs..................................................... 52
J. Distributions.................................................................................. 52
1. Distributions for Claims Allowed as of the Effective Date............................. 52
2. Distributions by Core-Mark Newco...................................................... 52
3. Interest on Claims.................................................................... 53
4. Delivery and Distributions and Undeliverable or Unclaimed Distributions............... 53
5. Distribution Record Date.............................................................. 54
6. Timing and Calculation of Amounts to be Distributed................................... 54
7. Minimum Distribution.................................................................. 54
8. Setoffs............................................................................... 54
9. Old Notes............................................................................. 55
10. Failure to Surrender Canceled Instruments............................................. 55
11. Lost, Stolen, Mutilated or Destroyed Debt Securities.................................. 55
12. Share Reserve......................................................................... 55
13. Settlement of Claims and Controversies................................................ 55
K. Resolution of Disputed Claims.................................................................. 56
1. Prosecution of Objections to Claims................................................... 56
2. Estimation of Claims.................................................................. 56
3. Payments and Distributions on Disputed Claims......................................... 56
4. Allowance of Claims................................................................... 56
5. Controversy Concerning Impairment..................................................... 57

L. Retention Of Jurisdiction...................................................................... 57
M. Release, Injunctive And Related Provisions..................................................... 58
1. Subordination......................................................................... 58
2. MUTUAL RELEASES BY RELEASEES.......................................................... 58
3. RELEASES BY HOLDERS OF CLAIMS......................................................... 58
4. INDEMNIFICATION....................................................................... 58
5. EXCULPATION........................................................................... 59
6. DISCHARGE OF CLAIMS AND TERMINATION OF EQUITY INTERESTS............................... 59
7. INJUNCTION............................................................................ 59
N. Conditions Precedent to Plan Consummation...................................................... 59
O. Conditions Precedent to Occurrence of the Effective Date....................................... 60
P. Waiver of Conditions........................................................................... 61
Q. Effect of Non-occurrence of Conditions to Occurrence of the Effective Date..................... 61
R. Severability Of Plan Provisions................................................................ 61
S. Miscellaneous Provisions....................................................................... 61
1. Effectuating Documents, Further Transactions and Corporation Action................... 61
2. Dissolution of Committee.............................................................. 61
3. Payment of Statutory Fees............................................................. 61
4. Modification of Plan.................................................................. 62
5. Revocation of Plan.................................................................... 62
6. Successors and Assigns................................................................ 62
7. Reservation of Rights................................................................. 62
8. Section 1146 Exemption................................................................ 62
9. Further Assurances.................................................................... 62
10. Service of Documents.................................................................. 63
11. Filing of Additional Documents........................................................ 63
12. Transactions on Business Days......................................................... 63
13. Post-Effective Date Fees and Expenses................................................. 63
14. Conflicts............................................................................. 63
15. Term of Injunctions or Stays.......................................................... 63
16. Entire Agreement...................................................................... 64
17. Closing of the Chapter 11 Cases....................................................... 64

VII. DEBTORS' RETAINED CAUSES OF ACTION...................................................................... 65
A. Maintenance of Causes of Action................................................................ 65
B. Preservation of Causes of Action............................................................... 65
C. Preservation of All Causes of Action Not Expressly Settled or Released......................... 66

VIII. FEASIBILITY OF THE PLAN AND THE BEST INTERESTS TEST..................................................... 67
A. Feasibility of the Plan........................................................................ 67
B. Best Interests Test............................................................................ 68
1. Generally............................................................................. 68
2. Debtors' Best Interest Test........................................................... 69
C. Estimated Valuation of the Reorganized Debtors................................................. 70
D. Confirmation Without Acceptance by All Impaired Classes: The 'Cramdown' Alternative............ 70

IX. IMPORTANT CONSIDERATIONS AND RISK FACTORS............................................................... 71
A. The Debtors Have No Duty To Update............................................................. 71
B. No Representations Outside The Disclosure Statement Are Authorized............................. 71
C. Information Presented Is Based On The Debtors' Books And Records, And No Audit Was Performed... 71
D. All Information Was Provided by Debtors And Was Relied Upon By Professionals................... 71
E. Projections And Other Forward Looking Statements Are Not Assured, And Actual
Results Will Vary.............................................................................. 71
1. Claims Could Be More Than Projected................................................... 71
2. Projections........................................................................... 71

iii

F. This Disclosure Statement Was Not Approved By The Securities And Exchange
Commission..................................................................................... 72
G. No Legal Or Tax Advice Is Provided To You By This Disclosure Statement......................... 72
H. No Admissions Made............................................................................. 72
I. No Waiver Of Right To Object Or Right To Recover Transfers And Estate Assets................... 72
1. Business Factors and Competitive Conditions........................................... 72
2. Access to Financing and Trade Terms................................................... 73
3. Market for New Securities............................................................. 73
4. Impact of Interest Rates.............................................................. 73
J. Bankruptcy Law Risks and Considerations........................................................ 74
1. Confirmation of the Plan is Not Assured............................................... 74
2. The Plan May Be Confirmed Without the Approval of All Creditors Through
So-Called "Cramdown".................................................................. 74
3. The Effective Date Might Be Delayed or Never Occur.................................... 74
4. The Projected Value of Estate Assets Might Not Be Realized............................ 74
5. Allowed Claims in the Various Classes May Exceed Projections.......................... 74
K. Tax Considerations............................................................................. 74

X. EFFECT OF CONFIRMATION.................................................................................. 75
A. Binding Effect of Confirmation................................................................. 75
B. Vesting Of Assets Free And Clear Of Liens, Claims And Interests................................ 75
C. Good Faith..................................................................................... 75
D. Discharge of Claims............................................................................ 75
E. Judicial Determination of Discharge............................................................ 75

XI. CERTAIN SECURITIES LAW CONSIDERATIONS................................................................... 76
A. Exemptions from Registration under Securities Act.............................................. 76
B. Applicability Of Certain Canadian Securities Laws.............................................. 77

XII. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN................................................ 78
A. Certain U.S. Federal Income Tax Consequences To U.S. Holders Of Claims And Equity
Interests...................................................................................... 78
1. Consequences to Holders of Prepetition Lenders' Secured Claims........................ 79
2. Consequences to Holders of Other Secured Claims, Approved Trade Creditor
Lien Claims, DSD Trust Claims and PACA/PASA Claims.................................... 79
3. Consequences to Holders of Allowed Valid Reclamation Claims........................... 79
4. Consequences to Holders of General Unsecured Claims................................... 80
5. Consequences to Holders of Equity Interests........................................... 80
6. Receipt of Interests in Post Confirmation Trust....................................... 80
7. Treatment of Subsequent Distributions on Preferred Stock and New Common Stock......... 81
B. Certain U.S. Federal Income Tax Consequences to Non-U.S. Holders of Claims..................... 82
1. Accrued Interest, Market Discount and Original Issue Discount......................... 82
C. Certain U.S. Federal Income Tax Consequences To Reorganized Debtors............................ 83
1. Transfer of Business Assets........................................................... 83
2. Cancellation of Indebtedness and Reduction of Tax Attributes.......................... 84
3. Limitation of Net Operating Loss Carryovers and Other Tax Attributes.................. 84
D. Backup Withholding............................................................................. 85

XIII. CERTAIN CANADIAN FEDERAL INCOME TAX CONSEQUENCES OF CONSUMMATION OF THE PLAN............................ 86
A. General........................................................................................ 86
B. Settlement of Debt............................................................................. 86
C. Resident Holders............................................................................... 86
D. Non-Resident Holders........................................................................... 87
E. Expiry or Disposition of Equity Subscription Rights............................................ 87

1. Resident Holders...................................................................... 87
2. Non-Resident Holders.................................................................. 88

XIV. ALTERNATIVES TO PLAN.................................................................................... 89
A. Liquidation Under Chapter 7.................................................................... 89
B. Dismissal...................................................................................... 89
C. Alternative Plan............................................................................... 89

XV. CONCLUSION.............................................................................................. 90

EXHIBITS
Exhibit 1 Plan
Exhibit 2 Solicitation Order

I. SUMMARY

On the Petition Date, the following companies filed petitions under
chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") in the
United States Bankruptcy Court for the District of Delaware: Core-Mark
International, Inc.; Fleming Companies, Inc.; ABCO Food Group, Inc.; ABCO
Markets, Inc.; ABCO Realty Corp.; ASI Office Automation, Inc.; C/M Products,
Inc.; Core-Mark Interrelated Companies, Inc.; Core-Mark Mid-Continent, Inc.;
Dunigan Fuels, Inc.; Favor Concepts, Ltd.; Fleming Foods Management Co., O.K.,
Fleming Foods of Texas, L.P.; Fleming International, Ltd.; Fleming Supermarkets
of Florida, Inc.; Fleming Transportation Service, Inc.; Food 4 Less Beverage
Company, Inc.; Fuelserv, Inc.; General Acceptance Corporation; Head Distributing
Company; Marquise Ventures Company, Inc.; Minter-Weisman Co.; Piggly Wiggly
Company; Progressive Realty, Inc.; Rainbow Food Group, Inc.; Retail Investments,
Inc.; Retail Supermarkets, Inc.; RFS Marketing Services, Inc.; and Richmar
Foods, Inc. Collectively, these entities are referred to herein as the
"Debtors."

The Debtors are operating their businesses and managing their
properties as debtors and debtors-in-possession pursuant to sections 1107(a) and
1108 of the Bankruptcy Code.

As of the Petition Date, the Debtors were one of the largest
distributors of consumable goods in the United States, supplying food,
food-related and general merchandise products to approximately 45,000 retail
locations throughout the continental United States, Hawaii, Western Canada, and
the Caribbean, with distribution centers throughout the country. As of the
Petition Date, the Debtors employed over 15,000 people.

As of the Petition Date, the Debtors' distribution business operated
within two overall lines of business -- (i) wholesale grocery distribution (the
"Wholesale Distribution Business"), which supplied a full line of products to
grocery stores, discount stores, supercenters and specialty retailers and (ii)
convenience store wholesale distribution ("Fleming Convenience"), which supplied
(and continues to supply) products to traditional convenience retailers. The
majority of Fleming Convenience is operated under the corporate name of
Core-Mark International, Inc. and its subsidiaries Core-Mark Interrelated
Companies, Inc., Core-Mark Mid Continent Inc., Minter-Weisman Co., Head
Distributing Co. and the Debtors' other related convenience store operations.
Pursuant to section 363 of the Bankruptcy Code, the Bankruptcy Court approved
the sale of the Wholesale Distribution Business to C&S Acquisition, LLC (C&S),
which sale closed on August 23, 2003 and generated an initial net amount of $237
million and is expected to generate additional sums in the future for the
Debtors' estates. The sale to C&S did not include or otherwise affect the assets
of Fleming Convenience. By the proposed Joint Plan of Reorganization (the
"Plan"), the Debtors seek to reorganize their operations around Fleming
Convenience.

The Debtors' third line of business, consisting of retail operations,
has been discontinued and the Debtors have either sold or closed all of their
retail grocery stores.

Chapter 11 of the Bankruptcy Code allows a debtor to sponsor a plan of
reorganization that proposes how to dispose of a debtor's assets and treat
claims against, and interests in, such debtor. A plan of reorganization
typically may provide for a debtor-in-possession to reorganize by continuing to
operate, to liquidate by selling assets of the estate or to implement a
combination of both. As mentioned above, the Plan is a reorganizing plan.

WHY YOU ARE RECEIVING THIS DOCUMENT

The Bankruptcy Code requires that the party proposing a chapter 11 plan
of reorganization prepare and file with the Bankruptcy Court a document called a
"disclosure statement." THIS DOCUMENT IS THE DISCLOSURE STATEMENT (THE
"DISCLOSURE STATEMENT") FOR THE PLAN. THE DISCLOSURE STATEMENT INCLUDES CERTAIN
EXHIBITS AND A SUPPLEMENT, EACH OF WHICH IS INCORPORATED HEREIN BY REFERENCE.

PLEASE NOTE THAT ANY TERMS NOT SPECIFICALLY DEFINED IN THIS DISCLOSURE
STATEMENT HAVE THE MEANINGS ASCRIBED TO THEM IN THE PLAN, AND ANY CONFLICT
ARISING THEREFROM SHALL BE GOVERNED BY THE PLAN.

This Disclosure Statement summarizes the Plan's content and provides
information relating to the Plan and the process the Bankruptcy Court will
follow in determining whether to confirm the Plan. The Disclosure Statement

also discusses the events leading to the Debtors' filing their Chapter 11 Cases,
describes the main events that have occurred in the Debtors' Chapter 11 Cases,
and, finally, summarizes and analyzes the Plan. The Disclosure Statement also
describes certain potential U.S. and Canadian Federal income tax consequences to
Holders of Claims and Equity Interests, voting procedures and the confirmation
process.

THE BANKRUPTCY CODE REQUIRES A DISCLOSURE STATEMENT TO CONTAIN
"ADEQUATE INFORMATION" CONCERNING THE PLAN. IN OTHER WORDS, A DISCLOSURE
STATEMENT MUST CONTAIN SUFFICIENT INFORMATION TO ENABLE PARTIES WHO ARE AFFECTED
BY THE PLAN TO VOTE INTELLIGENTLY FOR OR AGAINST THE PLAN OR OBJECT TO THE PLAN,
AS THE CASE MAY BE. THE BANKRUPTCY COURT HAS REVIEWED THIS DISCLOSURE STATEMENT
AND HAS DETERMINED THAT IT CONTAINS ADEQUATE INFORMATION AND MAY BE SENT TO YOU
TO SOLICIT YOUR VOTE ON THE PLAN.

All Creditors should carefully review both the Disclosure Statement and
the Plan before voting to accept or reject the Plan. Indeed, Creditors should
not rely solely on the Disclosure Statement but should also read the Plan.
Moreover, the Plan provisions will govern if there are any inconsistencies
between the Plan and the Disclosure Statement.

A. Plan Overview

1. Purpose - Reorganization

The purpose of the Plan is to provide the Debtors with a
capital structure that can be supported by cash flows from operations. The
Debtors believe that the reorganization contemplated by the Plan is in the best
interests of their creditors as a whole. If the Plan is not confirmed, the
Debtors believe that they will be forced either to file an alternate liquidating
plan of reorganization or liquidate under Chapter 7 of the Bankruptcy Code. In
either event, the Debtors believe that the Debtors' unsecured creditors would
realize a less favorable distribution of value, or, in certain cases, none at
all, for their Claims. See Article X hereof and the Liquidation Values set forth
in the Best Interest Test analysis in the Disclosure Statement Supplement.

2. Substantive Consolidation

On the Effective Date, each of the Debtors' estates will be
substantively consolidated pursuant to section 105(a) of the Bankruptcy Code for
the limited purposes of allowance, treatment and distributions under the Plan.
As a result of the substantive consolidation, on the Effective Date, all
property, rights and claims of the Debtors shall be deemed pooled for purposes
of allowance, treatment and distributions under the Plan. See Section VI.F.2
hereof.

3. Creation of Core-Mark Newco

The Plan will provide for the reorganization of the Debtors
centered around their Fleming Convenience businesses through the formation of a
new entity, Core-Mark Newco, as outlined in more detail in Section VI.B.2
herein.

4. Rights Offering

In order to fund the Debtors' obligations under the Plan, the
Debtors, among other things, will offer Holders of General Unsecured Claims the
opportunity to purchase, for cash, additional equity in the Reorganized Debtors'
businesses through Core-Mark Newco. This opportunity shall be in the form of a
Rights Offering whereby each Holder of a General Unsecured Claim that is listed
on the Rights Participation Schedule (attached to the Plan as Exhibit B) shall
be entitled to exercise their right to purchase shares of Preferred Stock in
Core-Mark Newco ("Equity Subscription Rights"), up to the amount of each
Holder's Rights Participation Claim Amount listed on the Rights Participation
Schedule.

5. Summary of Plan Treatment

UNCLASSIFIED
CLAIMS PLAN TREATMENT
- -------------- --------------------------------------------------------------

Administrative Subject to the provisions of sections 330(a) and 331 of the
Claims:(2) Bankruptcy Code, each Holder of an Allowed Administrative
Claim, including Holders of Allowed Approved Trade Creditor
Lien Claims, but excluding Claims for Professional Fees, will
be paid the full unpaid amount of such Allowed Administrative
Claim in Cash (i) on the Effective Date or as soon as
practicable thereafter, or (ii) if such Administrative Claim
is Allowed after the Effective Date, as soon as practicable
after the date such Claim is Allowed, or (iii) upon such other
terms as may be agreed upon by such Holder and the applicable
Reorganized Debtor or otherwise upon an order of the
Bankruptcy Court; provided that Allowed Administrative Claims
including Allowed Approved Trade Creditor Lien Claims
representing obligations incurred in the ordinary course of
business or otherwise assumed by the Debtors or Reorganized
Debtors pursuant hereto will be assumed on the Effective Date
and paid or performed by the applicable Reorganized Debtor
when due in accordance with the terms and conditions of the
particular agreements governing such obligations.

Except as provided in the Plan, Holders of Administrative
Claims that arose on or before October 31, 2003 shall file an
Administrative Claim on or before the First Administrative Bar
Date pursuant to the First Administrative Bar Date Order.
Except as provided in the Plan, Holders of Administrative
Claims that arose after October 31, 2003 that have not been
paid as of the Effective Date, must file an Administrative
Claim by the Second Administrative Bar Date. If an
Administrative Claim is not timely filed by the First
Administrative Bar Date or the Second Administrative Bar Date,
as applicable, then such Administrative Claim shall be forever
barred and shall not be enforceable against the Debtors or the
Reorganized Debtors, their successors, their assigns or their
property. The foregoing requirements to file Administrative
Claims by the relevant bar date shall not apply to the (i)
Administrative Claims of Professionals retained pursuant to
sections 327 and 328 of the Bankruptcy Code; (ii) expenses of
members of the Official Committee of Unsecured Creditors;
(iii) all fees payable and unpaid under 28 U.S.C. Section
1930; (iv) any fees or charges assessed against the estates of
the Debtors under 28 U.S.C. Section 123; (v) Intercompany
Claims between Debtors and their affiliates; and (vi)
Administrative Claims arising in the ordinary course of
business relating to inventory, services or supplies provided
by trade vendors or service providers which are paid or
payable by the Debtors in the ordinary course of business. An
objection to an Administrative Claim filed pursuant to this
provision must be filed and properly served within 220 days
after the Effective Date. The Debtors and the Post
Confirmation Trustee, as applicable, reserve the right to seek
an extension of such time to object.

- ----------

(2) Includes any claim for costs and expenses of administration pursuant to
Sections 503(b), 507(a)(1), 507(b) or 1114(e)(2) of the Bankruptcy
Code, including, but not limited to: (a) the actual and necessary costs
and expenses incurred after the petition date of preserving the estates
and operating the businesses of the Debtors (such as wages, salaries or
commissions for services and payments for goods and other services and
leased premises); (b) compensation for legal, financial advisory,
accounting and other services and reimbursement of expenses awarded or
allowed pursuant to Sections 328, 330(a) or 331 of the Bankruptcy Code
or otherwise for the period commencing on the petition date and ending
on the effective date of the Plan; and (c) all fees and charges
assessed against the estates pursuant to Chapter 123 of Title 28 United
States Code, 28 U.S.C. Sections 1911 through 1930. This excludes
Reclamation Claims.

UNCLASSIFIED
CLAIMS PLAN TREATMENT
- -------------- --------------------------------------------------------------

and (ii) the date upon which the Bankruptcy Court order
allowing such Claim becomes a Final Order; or (b) upon such
other terms as may be mutually agreed upon between such
Professional and the Reorganized Debtors. On or before the
Effective Date and prior to any distribution being made under
the Plan, the Debtors shall escrow into the Professional Fee
Escrow Account, the Carve-Out and the Additional Carve-Out as
outlined in the Final DIP Order and any additional estimated
accrued amounts owed to Professionals through the Effective
Date. Except as otherwise provided by Court order for a
specific Professional, Professionals or other entities
requesting compensation or reimbursement of expenses pursuant
to sections 327, 328, 330, 331, 503(b) and 1103 or 363 of the
Bankruptcy Code for services rendered prior to the Effective
Date must file and serve an application for final allowance of
compensation and reimbursement of expenses no later than
forty-five (45) days after the Effective Date. All such
applications for final allowance of compensation and
reimbursement of expenses will be subject to the authorization
and approval of the Court. Any objection to the Claims of
Professionals shall be filed on or before thirty (30) days
after the date of the filing of the application for final
compensation.

Priority Tax Claims Each Holder of an Allowed Priority Tax Claim thatis due and
payable on or prior to the Effective Date shall be paid, at
the option of the respective Reorganized Debtor, in full
satisfaction, settlement, release, and discharge of and in
exchange for such Priority Tax Claim either: (i) in Cash in
full on the Effective Date or as soon as practicable
thereafter or (ii) in deferred Cash payments over a period
not to exceed six years after the date of assessment in
accordance with Section 1129(a)(9)(C) of the Bankruptcy Code
with interest at a rate agreed to by the parties or set by
the Court.

DIP Claims: On the Effective Date, or as soon as practicable thereafter,
each Holder of an Allowed DIP Claim shall be paid in full in
Cash in full satisfaction, settlement, release and discharge
of and in exchange for each and every Allowed DIP Claim,
unless such Holder consents to other treatment.

PLAN TREATMENT
CLASS CLAIM OF CLASS
- ----- ------------------- --------------------------------------------

1 Other Priority Non- On the Effective Date, or as soon as
Tax Claims practicable thereafter, each Holder of an
Allowed Other Priority Non-Tax Claim shall
be paid in full satisfaction, settlement,
release and discharge of and in exchange for
each and every Allowed Other Priority
Non-Tax Claim in Cash in full, unless such
Holder agrees to other treatment. THE CLASS
IS UNIMPAIRED AND IS DEEMED TO ACCEPT.

2 Pre-Petition On the Effective Date, or as soon as
Lenders' Secured practicable thereafter unless such Holder
Claims treatment, each Holder of an Allowed
Pre-Petition Lenders' Secured Claim shall be
paid in full and shall either (i) assign its
liens in the Debtors' assets to the lender
under the Exit Financing Facility Agreement
or (ii) assign its liens in the Debtors'
assets to Core-Mark Newco which liens as
assigned shall have the same validity and
priority as such liens held by the Holders
of the Class 2 Claims, and which liens as
assigned shall be subject to further
transfer to the Post Confirmation Trust, as
applicable. THE CLASS IS UNIMPAIRED AND IS
DEEMED TO ACCEPT.

3(A) Other Secured On the Effective Date or as soon as
Claims practicable thereafter, each Holder of an
Allowed Other Secured Claim (e.g. PMSI
Holders, equipment financing lenders, etc.)
shall receive one of the following
treatments, at the Debtors' option, such
that they shall be rendered unimpaired
pursuant to section 1124 of the Bankruptcy
Code: (i) the payment of such Holder's
Allowed Other Secured Claim in full, in
Cash; (ii) the sale or disposition proceeds
of the property securing such Allowed Other
Secured Claim to the extent of the value of
the Holder's interest in such

PLAN TREATMENT
CLASS CLAIM OF CLASS
- ----- ------------------- --------------------------------------------

property; or (iii) the surrender to the
Holder of the property securing such Claim.
THE CLASS IS UNIMPAIRED AND IS DEEMED TO
ACCEPT.

3(B) Approved Trade On the Effective Date, or as soon as
Creditor practicable thereafter, Core-Mark Newco or
Reclamation Lien the Post Confirmation Trust, as applicable,
Claims shall issue a promissory note in favor of
the Holders of Allowed Approved Trade
Creditor Reclamation Lien Claims in the
estimated aggregate amount of such Allowed
Claims to be reissued as such Claims are
Allowed by Final Order or settlement and
grant a first priority lien to such Holders
on the proceeds of the Litigation Claims,
entitling each Holder of an Allowed Approved
Trade Creditor Reclamation Lien Claim to its
Ratable Proportion of net Cash recoveries
from Litigation Claims up to the total
amount of each Holders' Allowed Approved
Trade Creditor Reclamation Lien Claim, in
full satisfaction, settlement, release and
discharge of each Allowed Approved Trade
Creditor Reclamation Lien Claim, unless such
Holder agrees to other treatment, and
subject at the Debtors' option, to reduction
for unpaid post-petition deductions,
preference payments and other applicable
setoff rights. THE CLASS IS UNIMPAIRED AND
IS DEEMED TO ACCEPT.

3(C) DSD Trust Claims (i) In the event that the DSD Trust Claim
Holders obtain a Final Order in their favor
in the pending litigation allowing their
Claims, on the later of (a) the Effective
Date or as soon as practicable thereafter;
or (b) the date the DSD Trust Claim Holders
obtain a Final Order allowing their Claims
or as soon as practicable thereafter, each
Holder of an Allowed DSD Trust Claim shall
be paid in full satisfaction, settlement,
release and discharge of each Allowed DSD
Trust Claim in Cash in full, unless such
Holder agrees to other treatment, subject,
at the Debtors' option to reduction for
unpaid post-petition deductions, preference
payments and other applicable setoff rights.
In the event the DSD Trust Claim Holders do
not prevail in their litigation, all Allowed
DSD Trust Claims shall be treated as Class 6
General Unsecured Claims hereunder. THE
CLASS IS UNIMPAIRED AND IS DEEMED TO ACCEPT.

4 PACA/PASA On the Effective Date, or as soon as
Claims:(3) practicable thereafter, unless such Holder
agrees to other treatment, each Holder of an
Allowed PACA/PASA Claim shall be paid in
full satisfaction, settlement, release, and
discharge of and in exchange for each and
every Allowed PACA/PASA Claim in Cash in
full from the previously established PACA
trust or from Core-Mark Newco to the extent
the PACA trust is insufficient to satisfy
all the Allowed PACA/PASA Claims with any
remaining proceeds of the PACA trust to be
distributed to Core-Mark Newco. THE CLASS IS
UNIMPAIRED AND IS DEEMED TO ACCEPT.

5 Reclamation Claims To the extent it is determined that the
that are not Class Debtors' Inventory in which the Holders of
3(B) Claims Allowed Valid Reclamation Claims have
asserted an interest, had Residual Inventory
Value as of the Petition Date, on the
Effective Date, or as soon as practicable
thereafter, Core-Mark Newco or the Post
Confirmation Trust, as applicable, shall
issue a promissory note in favor of the
Holders of Allowed Valid Reclamation Claims
that are not Class 3(B) Claims in the amount
of the Residual Inventory Value and grant a
second priority lien on the proceeds of
Litigation Claims, entitling each Holder of
an Allowed Valid Reclamation Claim that is
not a Class 3(B) Claim, to its Ratable
Proportion of net Cash recoveries from
Litigation Claims, after all Class 3(B)
Claims are paid in full. In the event the
Residual Inventory Value is less than the
Allowed Amount of the Valid Reclamation
Claims,

- ----------

(3) Includes claims asserted pursuant to the Perishable Agricultural
Commodities Act, 7 U.S.C. Section 499a et seq. ("PACA"), the Packers
and Stockyard Act, 7 U.S.C. Section 181 et seq. ("PASA"), or state
statutes or similar import.

PLAN TREATMENT
CLASS CLAIM OF CLASS
- ----- ------------------- --------------------------------------------

the remainder of the Valid
Reclamation Claims in excess of the Residual
Inventory Value shall be treated as Class 6
General Unsecured Claims hereunder. THE
CLASS IS IMPAIRED AND IS ENTITLED TO VOTE.

6 General Unsecured On the Effective Date, or as soon as
Claims other than practicable thereafter, each Holder of an
Convenience Claims Allowed General Unsecured Claim other than
Convenience Claims, shall be paid in full
satisfaction, settlement, release, and
discharge of and in exchange for each and
every Allowed General Unsecured Claim other
than Convenience Claims, at the Debtors'
option, in one or a combination of the
following manners: (i) issuance of a Ratable
Proportion of New Common Stock subject to
dilution from the shares of New Common Stock
issued upon the conversion of Preferred
Stock issued pursuant to the Rights Offering
and through the Management Incentive Plan;
and/or (ii) in the event the Debtors, with
the consent of the Creditors Committee,
elect to sell some or all of their assets as
outlined herein, a Ratable Proportion of
Cash remaining from the sale of such assets
after all of the Allowed Unclassified Claims
and Claims of Holders in Classes 1 through 5
have been satisfied in full. As additional
consideration, each Holder of a General
Unsecured Claim that is listed on the Rights
Participation Schedule shall be entitled to
receive in exchange for such Holders' Claim
its Equity Subscription Rights for shares of
Preferred Stock as outlined in Section
VII.B. of the Plan. THE CLASS IS IMPAIRED
AND IS ENTITLED TO VOTE.

7 Convenience Claims On or as soon as practicable after the
Effective Date, each Holder of an Allowed
Class 7 Claim shall receive, in full and
final satisfaction of such claim, a cash
distribution equal to 10% of the amount of
its Class 7 Claim, provided however, the
aggregate amount of such Allowed Class 7
Claims shall not exceed $1,000,000. If the
aggregate amount of the Allowed Class 7
Claims exceeds $1,000,000, each Holder of an
Allowed Class 7 Claim shall receive its
Ratable Proportion of $1,000,000. THE CLASS
IS IMPAIRED AND IS ENTITLED TO VOTE.

8 Equity Interests: Receives no distribution and are canceled.
THE CLASS IS FULLY IMPAIRED AND DEEMED TO
REJECT.

9 Intercompany Receives no distribution and are canceled.
Claims THE CLASS IS FULLY IMPAIRED AND DEEMED TO
REJECT.

THE BANKRUPTCY COURT HAS NOT YET CONFIRMED THE PLAN DESCRIBED
IN THIS DISCLOSURE STATEMENT. IN OTHER WORDS, THE TERMS OF THE PLAN ARE NOT YET
BINDING ON ANYONE. HOWEVER, IF THE BANKRUPTCY COURT LATER CONFIRMS THE PLAN,
THEN THE PLAN WILL BE BINDING ON ALL CLAIM AND EQUITY INTEREST HOLDERS.

6. Executory Contracts and Unexpired Leases

Immediately prior to the Confirmation Date, except as
otherwise provided herein, all executory contracts or unexpired leases of the
Debtors will be deemed rejected in accordance with the provisions and
requirements of sections 365 and 1123 of the Bankruptcy Code except those
executory contracts and unexpired leases (i) have been previously rejected or
assumed by Order of the Bankruptcy Court, (ii) are subject to a pending motion
to reject or assume, (iii) are executory contracts and unexpired leases related
to the Wholesale Distribution Business for which the Option Period to assume or
reject such executory contract or unexpired lease has not yet expired or (iv)
are specifically listed on the Assumption Schedule filed with the Plan
Supplement. The Debtors, with the consent of the Creditors' Committee, reserve
the right for 30 days after the Confirmation Date to modify the Assumption
Schedule to add Executory Contracts or Leases or remove Executory Contracts or
Leases from such Assumption Schedule. The Debtors shall provide appropriate
notice to any party added or removed from the Assumption Schedule after the
Confirmation Date and any such party removed from the Assumption Schedule shall
have thirty days from the receipt of such notice to file a proof of claim with
the Bankruptcy Court.

B. Voting and Confirmation

Each Holder of a Claim in Classes 5, 6 and 7 will be entitled to vote
either to accept or reject the Plan. Classes 5, 6 and 7 shall have accepted the
Plan if: (i) the Holders of at least two-thirds in dollar amount of the Allowed
Claims actually voting in each such Class have voted to accept the Plan and (ii)
the Holders of more than one-half in number of the Allowed Claims actually
voting in each such Class have voted to accept the Plan. Assuming the requisite
acceptances are obtained, the Debtors intend to seek confirmation of the Plan at
the Confirmation Hearing scheduled to commence on [_________], 2004 before the
Bankruptcy Court. Notwithstanding the foregoing, the Debtors will seek
Confirmation of the Plan under section 1129(b) of the Bankruptcy Code with
respect to the Impaired Classes presumed to reject the Plan and reserve the
right to do so with respect to any other rejecting Class or to modify the Plan
in accordance with Article XIII.D of the Plan.

Article III of this Disclosure Statement specifies the deadlines,
procedures and instructions for voting to accept or reject the Plan and the
applicable standards for tabulating Ballots. The Bankruptcy Court has
established [_________], 2004, (the "Voting Record Date") as the date for
determining which Holders of Claims are eligible to vote on the Plan. Ballots
will be mailed to all registered Holders of Claims as of the Voting Record Date
who are entitled to vote to accept or reject the Plan. An appropriate return
envelope will be included with your Ballot, if necessary. Beneficial Holders of
Claims who receive a return envelope addressed to their bank, brokerage firm or
other Nominee, or any agent thereof, (each, a "Nominee") should allow sufficient
time for the Nominee to receive their votes and process them on a Master Ballot
before the Voting Deadline, as defined below.

The Debtors have engaged the Solicitation Agent to assist in the voting
process. The Solicitation Agent will answer questions, provide additional copies
of all materials and oversee the voting tabulation. The Solicitation Agent will
also process and tabulate ballots for each Class entitled to vote to accept or
reject the Plan. The "Solicitation Agent" is Bankruptcy Management Corporation,
1330 E. Franklin Avenue, El Segundo, California 90245, (888) 909-0100 (toll
free).

1. Time and Place of the Confirmation Hearing

The hearing at which the Bankruptcy Court will determine
whether to confirm the Plan will take place on [__], 2004 AT _:__ _.M.,
PREVAILING EASTERN TIME, in the United States Bankruptcy Court, District of
Delaware, before the Honorable Mary F. Walrath, United States Bankruptcy Judge.

2. Deadline for Voting For or Against the Plan

If you are entitled to vote, it is in your best interest to
vote timely on the enclosed ballot (the "Ballot") and return the Ballot in the
enclosed envelope to the Solicitation Agent.

TO BE COUNTED, THE SOLICITATION AGENT MUST RECEIVE YOUR BALLOT (OR
MASTER BALLOT OF YOUR NOMINEE HOLDER) INDICATING ACCEPTANCE OR REJECTION OF THE
PLAN NO LATER THAN 5:00 P.M., PREVAILING EASTERN TIME, ON [_____], 2004 (THE
"VOTING DEADLINE"), UNLESS THE BANKRUPTCY COURT EXTENDS OR WAIVES THE PERIOD
DURING WHICH VOTES WILL BE ACCEPTED BY THE DEBTORS, IN WHICH CASE THE TERM
"VOTING DEADLINE" FOR SUCH SOLICITATION SHALL MEAN THE LAST TIME AND DATE TO
WHICH SUCH SOLICITATION IS EXTENDED. ANY EXECUTED BALLOT OR COMBINATION OF
BALLOTS REPRESENTING CLAIMS IN THE SAME CLASS OR SUBCLASS HELD BY THE SAME
HOLDER THAT DOES NOT INDICATE EITHER AN ACCEPTANCE OR REJECTION OF THE PLAN OR
THAT INDICATES BOTH AN ACCEPTANCE AND REJECTION OF THE PLAN SHALL BE DEEMED TO
CONSTITUTE AN ACCEPTANCE OF THE PLAN. ANY BALLOT RECEIVED AFTER THE VOTING
DEADLINE MAY NOT BE COUNTED IN THE DISCRETION OF THE DEBTORS AND THE CREDITORS'
COMMITTEE.

THE DEBTORS AND THE CREDITORS' COMMITTEE BELIEVE THAT THE PLAN IS IN
THE BEST INTEREST OF ALL OF THEIR CREDITORS AS A WHOLE. THE DEBTORS AND THE
CREDITORS' COMMITTEE THEREFORE RECOMMEND THAT ALL HOLDERS OF CLAIMS SUBMIT
BALLOTS TO ACCEPT THE PLAN.

At the Debtors' request, the Bankruptcy Court has established
certain procedures for the solicitation and tabulation of votes on the Plan.
They are described in the Order entitled "Order (A) Approving Disclosure
Statement; (B) Scheduling A Hearing To Confirm The Plan; (C) Establishing A
Deadline For Objecting To The Plan; (D) Approving Form Of Ballots, Voting
Deadline And Solicitation Procedures; And (E) Approving Form And Manner Of
Notices" and the "Notice Of (I) Entry Of Order Approving Disclosure Statement;
(II) Hearing To Confirm Plan Of Reorganization; And (III) Related Important
Dates" (the "Confirmation Hearing Notice") that accompany this Disclosure
Statement as Exhibit 2.

3. Deadline for Objecting to the Confirmation of the
Plan

Objections to Plan confirmation must be filed with the
Bankruptcy Court and served upon the following, so that they are ACTUALLY
RECEIVED on or before [__] P.M. PREVAILING EASTERN TIME ON [__], 2004.

COUNSEL TO THE DEBTORS UNITED STATES TRUSTEE
- ------------------------------------------------------ -----------------------------------

Kirkland & Ellis LLP Office of the United States Trustee
777 South Figueroa Street Joseph McMahon, Esq.
Los Angeles, CA 90017 844 N. King Street, Second Floor
Attn: Richard L. Wynne, Esq. Wilmington, Delaware 19801
Shirley S. Cho, Esq.
COUNSEL FOR THE CREDITORS COMMITTEE

Kirkland & Ellis LLP
200 East Randolph Drive Pepper Hamilton LLP
Chicago, Illinois 60601 100 Renaissance Center
Attn: Janet Baer, Esq. Detroit, Michigan 48243
Geoffrey A. Richards, Esq. Attn: I. William Cohen, Esq.
Robert Hertzberg, Esq.
Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C.
919 N. Market Street, Sixteenth Floor Milbank, Tweed, Hadley & McCloy LLP
Post Office Box 8705 1 Chase Manhattan Plaza
Wilmington, Delaware 19899-8705 (Courier 19801) New York, New York 10005
Attn: Laura Davis Jones, Esq. Attn: Dennis Dunne, Esq.
Christopher J. Lhulier, Esq. Paul S. Aronzon, Esq.

C. Risk Factors

Prior to deciding whether and how to vote on the Plan, each Holder of a
Claim should consider carefully all of the information in this Disclosure
Statement and should particularly consider the Risk Factors described in Article
IX hereof.

D. Identity of Persons to Contact for More Information

Any interested party desiring further information about the Plan should
contact: Counsel for the Debtors: Kirkland & Ellis LLP, 777 South Figueroa
Street, Los Angeles, California, via e-mail at scho@kirkland.com.

E. Disclaimer

1. Read This Disclosure Statement And The Plan Carefully

All creditors are urged to carefully read this Disclosure Statement,
with all attachments and enclosures, in their entirety, in order to formulate an
informed opinion as to the manner in which the Plan affects their Claims against
the Debtors and to determine whether to vote to accept the Plan.

You should also read the Plan carefully and in its entirety. The
Disclosure Statement contains a summary of the Plan for your convenience, but
the terms of the Plan, itself, supersede and control the summary.

In formulating the Plan, the Debtors relied on financial data derived
from their books and records. The Debtors therefore represent that everything
stated in this Disclosure Statement is true to the best of their knowledge. We
nonetheless cannot, and do not, confirm the current accuracy of all statements
appearing in this Disclosure Statement.

The discussion in this Disclosure Statement regarding the Debtors may
contain "forward looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements consist of any
statement other than a recitation of historical fact and can be identified by
the use of forward-looking terminology such as "may," "expect," "believe,"
"anticipate," "estimate" or "continue" or the negative thereof or other
variations thereon or comparable terminology. The reader is cautioned that all
forward looking statements are necessarily speculative, and there are certain
risks and uncertainties that could cause actual events or results to differ
materially from those referred to in such forward looking statements. The
liquidation analyses, distribution projections and other information are
estimates only, and the timing and amount of actual distributions to creditors
may be affected by many factors that cannot be predicted. Therefore, any
analyses, estimates or recovery projections may or may not turn out to be
accurate.

NOTHING CONTAINED IN THIS DISCLOSURE STATEMENT IS, OR SHALL BE DEEMED
TO BE, AN ADMISSION OR STATEMENT AGAINST INTEREST BY THE DEBTORS FOR PURPOSES OF
ANY PENDING OR FUTURE LITIGATION MATTER OR PROCEEDING.

ALTHOUGH THE ATTORNEYS, ACCOUNTANTS, ADVISORS AND OTHER PROFESSIONALS
EMPLOYED BY THE DEBTORS HAVE ASSISTED IN PREPARING THIS DISCLOSURE STATEMENT
BASED UPON FACTUAL INFORMATION AND ASSUMPTIONS RESPECTING FINANCIAL, BUSINESS
AND ACCOUNTING DATA FOUND IN THE BOOKS AND RECORDS OF THE DEBTORS, THEY HAVE NOT
INDEPENDENTLY VERIFIED SUCH INFORMATION AND MAKE NO REPRESENTATIONS AS TO THE
ACCURACY THEREOF. THE ATTORNEYS, ACCOUNTANTS, ADVISORS AND OTHER PROFESSIONALS
EMPLOYED BY THE DEBTORS SHALL HAVE NO LIABILITY FOR THE INFORMATION IN THIS
DISCLOSURE STATEMENT.

THE DEBTORS AND THEIR PROFESSIONALS ALSO HAVE MADE A DILIGENT EFFORT TO
IDENTIFY IN THIS DISCLOSURE STATEMENT AND IN THE PLAN PENDING LITIGATION CLAIMS
AND PROJECTED CAUSES OF ACTION AND OBJECTIONS TO CLAIMS. HOWEVER, NO RELIANCE
SHOULD BE PLACED ON THE FACT THAT A PARTICULAR LITIGATION CLAIM OR PROJECTED
CAUSE OF ACTION OR OBJECTION TO CLAIM IS, OR IS NOT, IDENTIFIED IN THIS
DISCLOSURE STATEMENT OR THE PLAN. THE DEBTORS, THE REORGANIZED DEBTORS OR THE
POST CONFIRMATION TRUST MAY SEEK TO INVESTIGATE, FILE AND PROSECUTE LITIGATION
CLAIMS AND PROJECTED CAUSES OF ACTION AND OBJECTIONS TO CLAIMS AFTER THE
CONFIRMATION OR EFFECTIVE DATE OF THE PLAN IRRESPECTIVE OF WHETHER THIS
DISCLOSURE STATEMENT OR THE PLAN IDENTIFIES ANY SUCH CLAIMS, CAUSES OF ACTION OR
OBJECTIONS TO CLAIMS.

II. RECOMMENDATIONS

A. The Debtors And The Creditors' Committee Strongly Recommend
That You Vote In Favor Of The Plan

The Debtors and the Creditors' Committee strongly recommend that you
vote in favor of the Plan. Your vote on the Plan is important. Nonacceptance of
the Plan may result in protracted delays, a chapter 7 liquidation or the
confirmation of another less favorable chapter 11 plan. These alternatives may
not provide for distribution of as much value to Holders of Allowed Claims as
does the Plan. The Debtors and the Creditors' Committee believe that unsecured
creditors will receive a greater distribution under the Plan than they would in
a chapter 7 liquidation, as more fully discussed in "Alternatives to the Plan -
Liquidation Under Chapter 7" below.

III. VOTING ON AND CONFIRMATION OF THE PLAN

A. Voting And Ballots

IF YOU OWN ANY OF FLEMING'S OLD NOTES, PLEASE RETURN YOUR INDIVIDUAL
BALLOT TO THE NOMINEE THAT SENT THE BALLOT TO YOU (AS DISCUSSED BELOW). ALL
OTHER INDIVIDUAL BALLOTS SHOULD BE RETURNED TO THE SOLICITATION AGENT.

If one or more of your Claims is in a voting Class, the Debtors'
Solicitation Agent has sent you one or more individual Ballots, with return
envelopes (WITHOUT POSTAGE ATTACHED) for voting to accept or reject the Plan.
The Debtors and Creditors' Committee urge you to accept the Plan by completing,
signing and returning the enclosed Ballot(s) in the return envelope(s) (WITH
POSTAGE AFFIXED BY YOU), to the Solicitation Agent as follows (the "Solicitation
Agent"):

Bankruptcy Management Corporation
1330 E. Franklin Avenue
El Segundo, CA 90245
Attn: Fleming Solicitation Agent

OR, IF YOU BENEFICIALLY OWN OLD NOTES THROUGH A NOMINEE OR OTHER RECORD HOLDER,
SUCH AS A BANK, BROKERAGE FIRM OR ANY OTHER AGENT THEREOF and you received this
Disclosure Statement directly from such Nominee, then you should return your
ballot to such Nominee. You should allow for enough time so that the Nominee can
receive your vote and present it on a Master Ballot before the Voting Deadline.

Ballots must be sent so that each Ballot is RECEIVED WITH AN ORIGINAL
SIGNATURE (NOT A PHOTOCOPIED OR FACSIMILE SIGNATURE) NO LATER THAN 5:00 P.M.,
PREVAILING EASTERN TIME, ON _________ __, 2004.

Detailed voting instructions are printed on and/or accompany each
Ballot. Any Ballot and Master Ballot sent by mail must be received before the
first mail collection by the Solicitation Agent after the Voting Deadline, and
any Ballot or Master Ballot received after such first mail collection shall not
be counted. Any Ballot or Master Ballot sent by any other means must be
physically received by the Solicitation Agent or a Nominee, as the case may be,
by the Voting Deadline or it shall not be counted. Any unsigned Ballot or any
Ballot that has no original signature, including any Ballot received by
facsimile or other electronic means, or any Ballot with only a photocopy of a
signature shall not be counted. Any Ballot that is not clearly marked as voting
for or against the Plan, or marked as both voting for and against the Plan,
shall be deemed to constitute an acceptance of the Plan. Any Ballot that is
properly completed and timely received shall not be counted if such Ballot was
sent in error to, or by, the voting party, because the voting party did not have
a Claim that was entitled to be voted in the relevant Voting Class as of the
Voting Record Date. A Beneficial Holder (but not an entity voting acting in a
fiduciary capacity and on behalf of more than one Beneficial Holder, such as a
Nominee) that is voting more than one Claim in a Voting Class must vote all of
its Claims within a particular Voting Class either to accept or to reject the
Plan and may not split its vote in the same Voting Class, and thus, any Ballot
(or Ballots in the same Voting Class) of a Beneficial Holder that partially
rejects and partially accepts the Plan shall be deemed as accepting the Plan.
Whenever a Holder of a Claim in a Voting Class casts more than one Ballot voting
the same Claim prior to the Voting Deadline, the last Ballot physically received
by the Solicitation Agent or a Nominee, as the case may be, prior to the Voting
Deadline shall be deemed to reflect the voter's intent and thus shall supersede
and replace any prior cast Ballot(s), and any prior cast Ballot(s), shall not be
counted.

The Debtors and the Creditors' Committee filed their Joint Plan of
Reorganization of Fleming Companies, Inc. and its Filing Subsidiaries Under
Chapter 11 of the United States Bankruptcy Code [DOCKET NO. __]; and the
Bankruptcy Court has entered the Solicitation Order requested thereby, which,
among other things, approved the voting procedures addressed herein. You should
carefully read the Solicitation Order, which is annexed hereto as Exhibit 2. It
establishes, among other things: (a) the deadlines, procedures and instructions
for voting to accept or reject the Plan; (b) the Voting Record Date, which is
[____________], 2004 (c) the applicable standards for tabulating Ballots; (d)
the deadline for filing objections to Confirmation of the Plan; and (e) the date
and time of the Confirmation Hearing (also set forth below).

The Solicitation Order should be referred to if you have any questions
concerning the procedures described herein. If there are any inconsistencies or
ambiguities between this Disclosure Statement and the Solicitation Order, the
Solicitation Order will control.

B. Confirmation Hearing For The Plan

The Bankruptcy Court has set a hearing on the Confirmation of the Plan
(the "Confirmation Hearing") to consider objections to Confirmation, if any,
commencing at _:__ _.M., PREVAILING EASTERN TIME on _________ __, 2004, in the
United States Bankruptcy Court, 824 Market Street, Wilmington, Delaware 19801.
The Confirmation Hearing may be adjourned, from time to time, without notice,
other than an announcement of an adjourned date at such hearing or an adjourned
hearing.

C. Any Objections To Confirmation Of The Plan

Any responses or objections to Confirmation of the Plan must be in
writing (with proposed changes to the Plan being marked for changes, i.e.,
blacklined against the Plan), and must be filed with the Clerk of the Bankruptcy
Court with a copy to the Court's Chambers, together with a proof of service
thereof, and served on counsel for the Debtors, counsel for the Committee and
the Office of United States Trustee ON OR BEFORE _________ __, 2004 AT 5:00
P.M., PREVAILING EASTERN TIME. Bankruptcy Rule 3007 governs the form of any such
objection.

COUNSEL ON WHOM OBJECTIONS MUST BE SERVED ARE:

Counsel for the Debtors:
Kirkland & Ellis LLP Pachulski, Stang, Ziehl, Young, Jones &
777 South Figueroa Street Weintraub P.C.
Los Angeles, California 90017 919 N. Market Street, Sixteenth Floor
Attn: Richard L. Wynne, Esq. Post Office Box 8705
Shirley S. Cho, Esq. Wilmington, Delaware 19899-8705 (Courier 19801)
Attn: Laura Davis Jones, Esq.
Christopher J. Lhulier, Esq.
Counsel for the United States Trustee
Office of the United States Trustee
844 N. King Street, Second Floor
Wilmington, Delaware 19801
Attn: Joseph McMahon, Esq.

Counsel for the Official Committee of Unsecured Creditors Pepper Hamilton LLP
Milbank, Tweed, Hadley & McCloy 100 Renaissance Center
1 Chase Manhattan Plaza Detroit, Michigan 48243
New York, New York 10005 Attn: I. William Cohen, Esq.
Attn: Dennis Dunne, Esq. Robert Hertzberg, Esq.
Paul S. Aronzon, Esq.

D. Questions About The Disclosure Statement, Plan Or Ballots

You may address any questions you have about this Disclosure Statement,
the Plan or your Ballot(s) to general bankruptcy counsel for the Debtors:

Kirkland & Ellis LLP
777 South Figueroa Street
Los Angeles, California 90017
Attn: Shirley Cho, Esq.
Tel.: (213) 680-8400
Fax: (213) 680-8500
Email: scho@kirkland.com

Unsecured creditors may also address any questions they may have to counsel for
the Creditors' Committee:

Dennis Dunne, Esq. Dennis S. Kayes, Esq.
Milbank, Tweed, Hadley & McCloy Pepper Hamilton LLP
1 Chase Manhattan Plaza 100 Renaissance Center
New York, New York 10005 Detroit, Michigan 48243
Tel: (212) 530-5000 Tel: (313) 259-7110
Fax: (212) 530-5219 Fax: (313) 259-7926
Email: ddunne@milbank.com Email: kayesd@pepperlaw.com

IV. ORGANIZATION AND ACTIVITIES OF THE DEBTORS

A. Operations

As of the Petition Date, Fleming, together with its Debtor and
non-debtor affiliates, was an industry leading distributor of consumable
packaged goods in the United States. The Debtors' distribution business for both
the Wholesale Distribution Business and the Convenience Business involved
purchasing, receiving, warehousing, selecting, loading, delivering and
distributing a wide variety of consumable items including groceries, meat,
dairy, delicatessen products and packaged goods, as well a variety of general
merchandise such as health and beauty care items. As of the Petition Date, the
Debtors' distribution network operated through 50 distribution centers. In 2002,
the average number of stock-keeping units, or SKUs, carried in the Debtors'
wholesale distribution centers ranged from 6,000 to 19,000 based on the size and
focus of the specific distribution center.

Largely independent of its distribution segment, certain of the Debtor
entities also maintained retail operations. As of the Petition Date, the retail
segment operated approximately 100 stores under the Food 4 Less, Rainbow and
yes!LESS(R) trade names, serving primarily middle and lower income consumers.
The Debtors' retail establishments were concentrated in Texas, Arizona,
Minnesota, New Mexico, Northern California, Utah, Wisconsin and Louisiana. The
Debtors' retail operations have been discontinued and all of the retail stores
have since been sold or closed.

The Debtors' corporate headquarters are located in Lewisville, Texas,
with accounting and information technology operations located in Oklahoma City,
Oklahoma. The corporate headquarters of Fleming Convenience, which is a premier
distributor of food and consumer products for convenience stores in North
America, are located in San Francisco, California.

B. Debt Structure

1. Debt

The Debtors, and their non-debtor subsidiaries, historically
have generated some of the cash necessary to finance operations by incurring
certain debt obligations primarily through bank loans and through the issuance
of a series of notes under indentures from time to time. Accordingly, the
Debtors are party to prepetition financing arrangements including secured bank
debt arising under a credit facility and obligations arising under a series of
unsecured indentures. Each of the foregoing types of indebtedness is described
more fully below.

2. Secured Debt

On June 18, 2002, Fleming entered into a $975 million secured
credit facility with a syndicate of banks led by Deutsch Bank and J.P. Morgan
(the "Pre-Petition Lenders") to refinance the then existing $850 million
Pre-Petition Credit Agreement. Under the terms of the Pre-Petition Credit
Agreement, the Pre-Petition Lenders made loans and advances to Fleming and
issued or caused to be issued letters of credit on Fleming's behalf. The loans
and advances were secured by first-priority security interests and liens on all
or substantially all of the then existing and after-acquired accounts
receivable, inventory, instruments and chattel paper evidencing accounts
receivable (or into which any accounts receivable have been, or hereafter are,
converted), securities, limited liability company interests, partnership
interests, security entitlements, financial assets and investment property, and
all proceeds and products of any and all of the foregoing (the "Prepetition
Collateral"). The Prepetition Collateral includes all of the proceeds of the
Prepetition Collateral, existing before and after the commencement of these
Cases.

As of the Petition Date, Fleming's entire obligation to the
Pre-Petition Lenders under the Pre-Petition Credit Agreement totaled
approximately $609 million. Of this entire obligation, $219 million was
outstanding under the revolving loan, $239 million was outstanding under the
term loan, and $146 million was outstanding under certain letters of credit
issued on Fleming's account. Of the $609 million outstanding on the Petition
Date, $284 million remains outstanding. See Section V.C.1b herein.

On April 24, 2003, the Bankruptcy Court approved an interim
"bridge" debtor in possession loan facility of $50 million from the Pre-Petition
Lenders (Docket No. 565), and on May 7, 2003, the Bankruptcy Court approved a
final debtor in possession loan facility of $150 million (Docket No. 743). Both
the interim DIP Credit Facility and the DIP Credit Facility are subject to
borrowing base requirements and are secured by virtually all of the Debtors'
assets on a superpriority basis. The DIP Credit Facility is paid off except for
$18 million in outstanding letters of credit.

3. Unsecured Debt

Prior to the Petition Date, Fleming issued a series of
unsecured notes under indentures. Each of these notes is guaranteed by the
Fleming Subsidiaries.

Outstanding obligations under these indentures are as follows:

- 10 1/8% SENIOR NOTES DUE IN 2008.

Under an Indenture dated as of March 15, 2001, Fleming issued its 10
1/8% senior notes due in 2008 in a principal amount of $355 million.

- 9 1/4% SENIOR NOTES DUE IN 2010.

Under an Indenture dated as of June 18, 2002, Fleming issued its 9 1/4%
senior notes due in 2010 in a principal amount of $200 million.

- 10 5/8% SENIOR SUBORDINATED NOTES DUE IN 2007 (TWO TRANCHES).

Under an Indenture dated as of October 15, 2001, Fleming issued two
series of 10 5/8% senior subordinated notes due in 2007 in a principal
amount of $400 million.

- 5 1/4% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE IN 2009.

Under an Indenture dated as of March 15, 2001, Fleming issued 5 1/4%
convertible senior subordinated notes due in 2009 in a principal amount
of $150 million. The holders of these notes may elect to convert these
notes into the common stock of Fleming at an initial conversion price
of $30.27 per share, subject to adjustment under certain circumstances
as described in the Indenture.

- 9 7/8% SENIOR SUBORDINATED NOTES DUE IN 2012.

Under an Indenture dated as of April 15, 2002, Fleming issued its 9
7/8% senior subordinated notes due in 2012 in a principal amount of
$260 million.

4. Trade Debt

Debtors' businesses involve the resale of goods that are
purchased from third party vendors.

The Debtors transacted business with vendors that are
typically the sole suppliers of uniquely branded products for which there are no
viable substitutes, such as food products from major food distributors,
including, but not limited to, ConAgra Foods, Kraft and Nestle (collectively,
the "Merchandise Suppliers"). In addition to the Merchandise Suppliers, the
Debtors rely on other vendors to support their core business functions by way of
administrative and ancillary support, such as production of advertising
circulars for goods distributed.

The Debtors also contracted with transportation vendors to
support their core business of distributing food and consumer products from
their warehouses across the country to their customers in some 45,000 retail
locations.

5. PBGC Debt

The Debtors sponsor five tax qualified defined benefit pension
plans that are currently underfunded. With respect to each of these plans, the
Pension Benefit Guaranty Corporation (the "PBGC") has filed Administrative
Claims for missed minimum funding contributions, unfunded benefit liabilities
and missed PBGC premium payments. The PBGC estimates the claims total
approximately $400 million. The Debtors dispute the categorization and amount of
these claims. The Debtors believe that most, if not all, of the claims are
General Unsecured Claims and that the entire General Unsecured Claim will be
substantially less than the PBGC estimate. Benefits under four of the pension
plans have been frozen for a number of years, and benefits on the fifth plan
will be frozen as of December 31, 2003. The Debtors are attempting to terminate
all five pension plans, either through direct petition to the PBGC or otherwise
through the Bankruptcy Court, in order to relieve themselves of future funding
obligations towards these plans. Settlement negotiations with respect to all of
the above are on-going.

C. Pre-Petition Operational Restructuring Efforts

Prior to the filing of these Chapter 11 Cases, the Debtors attempted
several cost-cutting measures designed to increase their competitiveness and
focus on their core competencies, including consolidating distribution
operations, reducing overhead and operating expenses by centralizing functions
at the Debtors' headquarters in Dallas, Texas, and by selling their retail
grocery operations.

V. THE CASES

A. Events Leading to the Chapter 11 Cases

Both the wholesale food distribution and retail food industries are
highly competitive. Generally, the consumable goods industry is marked by bulk
sales with low profit margins. Consequently, even the slightest price changes
have significant economic implications. Given the recent instability of the
national economy, the Debtors' businesses have suffered greatly.

In February 2003, Kmart Corporation, then the largest customer of the
Debtors' Wholesale Distribution Business, moved in its chapter 11 case in the
Northern District of Illinois to reject its supply agreement with Fleming. In
2002, Kmart accounted for approximately twenty percent (20%) of Fleming's net
sales, and Kmart listed Fleming as its single largest supplier of food and
consumable products in its bankruptcy pleadings, accounting for in excess of
$3.0 billion of total sales per annum.

The subsequent termination of the Kmart supply agreement as well as the
disputes over the amount of Fleming's claim for damages exacerbated existing
liquidity issues. In addition, the negative marketplace perceptions lead to
tightening of the credit terms offered to the Debtors by their suppliers which,
in turn, directly led to decreased liquidity.

Given the Debtors' liquidity crises, the Debtors attempted to
renegotiate with their Pre-Petition Lenders and Agents to reach an agreement and
amend the terms of the Pre-Petition Credit Facility in order to provide
liquidity and to avoid Debtors' default under the Pre-Petition Credit Agreement.
The Debtors were unsuccessful in renegotiating that amendment prior to the
Petition Date.

Furthermore, the Debtors were unable to meet a March 28, 2003 deadline
for the filing of their Form 10-K Annual Report with the SEC. On the Petition
Date, Debtors were obligated to make a scheduled $18 million interest payment to
the holder of the 10 1/8% Senior Notes, which Debtors did not make. The Debtors
filed for bankruptcy protection under Chapter 11 of the title 11 of the United
States Code on April 1, 2003 (the "Petition Date").

B. The Auction and Sale Process For the Wholesale Distribution
Assets & Plans for Fleming Convenience Assets

1. Auction and Sale Process for Wholesale Distribution
Assets

Certain of the Debtors(4) began an auction process after the
Petition Date for the sale of the assets of the Wholesale Distribution Business.
C&S Wholesale Grocers, Inc., a Vermont corporation ("C&S"), placed the largest
initial bid and became the "stalking horse" bidder in the auction process.
Solicitations were sent out, but no other qualified bids were received pursuant
to the bidding procedures order dated July 18, 2003.

The Bankruptcy Court approved the asset purchase agreement
with C&S (the "C&S Purchase Agreement") by its sale order dated August 15, 2003.
The C&S transaction initially closed August 23, 2003. Pursuant to the C&S
Purchase Agreement, C&S, its affiliates or third parties designated by C&S may
have the Debtors acquire or reject certain assets of the Wholesale Distribution
Business and may assume and assign or reject contracts related to the Wholesale
Distribution Business on a continual basis over a six-month Option Period. Such
Option Period will expire on February 23, 2004.

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(4) This includes Fleming, Fleming Transportation Service, Inc., Fleming
International Ltd., Piggly Wiggly Company, RFS Marketing Services,
Inc., Fleming Foods Of Texas L.P., Fleming Foods Management Co.,
L.L.C., ABCO Food Group, Inc., ABCO Markets, Inc. and ABCO Realty Corp.

2. Plans for Fleming Convenience Assets

The Debtors intend to restructure around the Fleming
Convenience assets pursuant to the Plan under which Core-Mark Newco shall be
formed as detailed in the Plan.

C. Significant Case Events

1. Summary of Significant Motions

The following summarizes significant motions that have been
filed in the Chapter 11 Cases. You can view these motions at
www.bmccorp.net/fleming or from the Bankruptcy Court's docket.

a. Post-Petition Financing

Debtors' Emergency Motion for (A) Interim and Final
Approval of Post-Petition Financing, Under 11 U.S.C. Sections 105, 361, 362, 363
and 364, Fed. R. Bankr. P. 2002, 4001(b), 4001(c) and 9014, and Del. Bankr. LR
4001-2, (B) Approving Terms of Trade Credit Program, and (C) Scheduling Final
Hearing Pursuant to Bankruptcy Rule 4001(c) (Docket No. 16). The Debtors
received postpetition financing from the Post-Petition Lenders. Pursuant to the
terms of the credit agreement, the Post-Petition Lenders were granted
super-priority liens on substantially all of the Debtors' assets. The Debtors do
not currently owe any amounts under these postpetition credit agreements except
for $18 million in outstanding letters of credit. See Final Order Authorizing
(I) Post-Petition Financing Pursuant to 11 U.S.C. Section 364 and Bankruptcy
Rule 4001(c); (II) Use of Cash Collateral Pursuant to 11 U.S.C. Section 363 and
Bankruptcy Rules 4001(b) and (d); (III) Grant of Adequate Protection Pursuant to
11 U.S.C. Sections 361 and 363; and (IV) Approving Secured Inventory Trade
Credit Program and Granting of Subordinate Liens, Pursuant to 11 U.S.C. Sections
105 and 364(c)(3) and Rule 4001(c) (Docket No. 743).

b. Pay-Down of Pre-Petition Loans

Joint Motion of Debtors and Pre-Petition Agents for
Authorizing, Pursuant to Sections 363 and 105 of the Bankruptcy Code, to Pay
Amounts to the Pre-Petition Agents on Behalf of the Pre-Petition Lenders (Docket
No. 4011). On October 10, 2003, the Debtors and the Pre-Petition Lenders filed
this motion to pay down $325 million of the Pre-Petition Lenders' Secured
Claims. After two contested hearings, the Bankruptcy Court approved the motion,
thus reducing the amount of the Pre-Petition Lenders' Secured Claims from $609
million to $282 million. See Order Approving Joint Motion of Debtors and
Pre-Petition Agents for Authorization, to Pay Amounts to the Pre-Petition Agents
on Behalf of the Pre-Petition Lenders (Docket No. 4776).

c. Cash Management Motion

Motion for Order (A) Authorizing (i) Maintenance of
Existing Bank Accounts, (ii) Continued Use of Existing Business Forms, (iii)
Continued Use of Existing Cash Management System and (iv) Existing Investment
Practices (Docket No. 16). The Bankruptcy Court granted the Debtors' request to
continue to utilize the same centralized cash management system, bank accounts
and investment practices, among other things, after the Petition Date that had
been in use before the Petition Date in order to effectuate a seamless
transition into Chapter 11. The Bankruptcy Court entered the Final Order (A)
Authorizing (i) Maintenance of Existing Bank Accounts, (ii) Continued Use of
Existing Business Forms, (iii) Continued Use of Existing Cash Management System
and (iv) Existing Investment Practices on April 22, 2003 (Docket No. 562).

d. Employee Wages and Benefits Motion

Motion of Debtors an Order Pursuant to Sections 105
and 363(b) of the Bankruptcy Code (I) Authorizing the Payment of Employee
Obligations and (II) Authorizing Institutions to Honor and Process Checks and
Transfers Related to Such Obligations (Docket No. 15). The Bankruptcy Court
granted the Debtors' request to pay certain employee obligations arising before
the Petition Date, including: wages, salaries, commissions and other
compensation, severance (subject to certain conditions precedent as set forth in
docket no. 1697), vacation, other paid leave, federal and state withholding
taxes, payroll taxes and medical benefits up to specified dollar amounts and

upon the terms as set forth in the orders approving components of the motion.
See Various Orders re Wage Motion (Docket Nos. 70, 557, 741, 1352, 1492, 1493,
1697). Although the Debtors sought authority to pay obligations arising in the
prepetition period for the Senior Executive Retirement Program ("SERP"), Senior
Executive Relocation Program, Aim High Program, Incentive Programs, Fleming
Pension Plan and Core-Mark Pension Plan, this request was ultimately withdrawn.

e. Employee Stay Program

Motion of Debtors for an Order Pursuant to Section
105 and 363(b) of the Bankruptcy Code Authorizing the Debtors to Implement
Wholesale and Convenience Business Employee Stay Program (Docket No. 1852). The
Bankruptcy Court granted the Debtors' request to pay $12,000,000 to those
certain eligible employees of Fleming Convenience and Debtors' Wholesale
Distribution Business as an incentive to stay in the Debtors' employ during its
critical stage of selling the Wholesale Distribution Business and to preserve
the value of those assets. See Order Pursuant to Section 105 and 363(b) of the
Bankruptcy Code Authorizing the Debtors to Implement Wholesale and Convenience
Business Employee Stay Program (Docket No. 2079).

f. Critical Trade Motion

Motion for Order Authorizing the Payment of Critical
Trade Vendors in Exchange for Continuing Relationship Pursuant to Customary
Trade Terms (Docket No. 11). The Bankruptcy Court granted the Debtors' request
to pay $100,000,000 to certain vendors with outstanding pre-petition claims
deemed critical to the Debtors' operations upon the restoration of customary
trade terms and the execution of the Critical Trade Agreement, as defined in
that Motion and Order. See Order Granting Motion for Order Authorizing the
Payment of Critical Trade Vendors in Exchange for Continuing Relationship
Pursuant to Customary Trade Term (Docket No. 733). Of the $100,000,000, the
Debtors have paid $____________ to those vendors who qualify.

g. Junior Trade Lien

Supplement to Motion for Order Authorizing the
Granting of Junior Trade Lien Status to Critical Vendors in Exchange for
Continuing Relationship Pursuant to Customary Trade Terms (Docket No. 297). In
connection with the critical trade vendor motion discussed above, the Bankruptcy
Court granted the Debtors' request to provide a junior trade lien to vendors who
provided trade terms to the Debtors after the Petition Date. See Order Granting
Motion for Order Authorizing the Payment of Critical Trade Vendors in Exchange
for Continuing Relationship Pursuant to Customary Trade Term (Docket No. 733).
The Debtors' Post-Petition Lenders consented to the granting of the junior trade
liens as set forth in the Final DIP Order. See Docket No. 743.

h. Pre-Petition Tax Motion

Motion of Debtors for Order Authorizing Payment of
Prepetition Taxes and Authorizing the Use of Existing Bonds to Pay Prepetition
Taxes (Docket No. 697). The Debtors obtained approval to pay up to $49,000,000
of taxes arising before the Petition Date on account of sales/use, tobacco and
excise taxes. See Order Authorizing Debtors to Pay Prepetition Taxes (Docket No.
1067).

i. Equity Bar Trading Motion

Emergency Motion for an Interim Order Under 11
U.S.C. Sections 105(a), 362(a)(3), and 541 Limiting Trading in Equity Securities
of the Debtors (Docket No. 937). The Debtors filed this motion on an emergency
basis requesting that the Bankruptcy Court institute procedures to prohibit,
without the consent of the Debtors or the Bankruptcy Court, sales and other
transfers of the outstanding common stock of Fleming by Substantial
Equityholders (those owning equity securities of any of the Debtors with an
aggregate fair market value equal to or greater than 5% of the fair market value
of the common stock of Fleming as defined in the motion). The Debtors requested
this relief in order to guard against an unplanned change in control for
purposes of section 382 of the Internal Revenue Code, which could limit the
Debtors' ability to use net operating losses in the future. The Bankruptcy Court
granted this motion and entered a final order on May 20, 2003. See Order Under
11 U.S.C. Sections 105(a), 362(a)(3), and 541 Limiting Trading in Equity
Securities of the Debtors (Docket No. 978).

j. PACA/PASA Claims Motion

Motion for Authority to Pay Prepetition Claims Under
the Perishable Agricultural Commodities Act and the Packers and Stockyard Act
(Docket No. 12). Prior to the Petition Date, certain of the Debtors' vendors (i)
sold goods to the Debtors that such vendors assert are covered by the Perishable
Agricultural Commodities Act ("PACA") and/or by state statutes of similar
effect, including the Minnesota Wholesale Produce Dealers Act (the "PACA
Claims") and/or (ii) sold livestock or other similar goods to the Debtors which
they assert are covered by the Packers and Stockyard Act ("PASA") and/or state
statutes of similar effect (the "PASA Claims"). Therefore, the Debtors filed a
Motion for Authority to Pay Prepetition Claims Under the Perishable Agricultural
Commodities Act and the Packers and Stockyard Act (Docket No. 12). On May 6,
2003, the Bankruptcy Court entered the Order Requiring Segregation of Funds to
Cover Certain PACA Claims and Authorizing Procedure for Reconciliation and
Payment of Valid Claims Under the Perishable Agricultural Commodities and the
Packers and Stockyard Act (the "PACA/PASA Order")(Docket No. 725). Since that
time, the Debtors have filed their (a) Report of Claims (Docket No. 1505), (b)
First Supplemental Report of Claims (Docket No. 1992), (c) Second Supplemental
Report of Claims (Docket No. 3210), (d) Third Supplemental Report of Claims
(Docket No. 3695), (e) Fourth Supplemental Report of Claims (Docket No. 4088)
and (f) Fifth Supplemental Report of Claims (Docket No. 4613) (collectively the
"Supplemental Reports"). To date, approximately $56.3 million(5) in PACA Claims
have been asserted in these Cases. Of the asserted PACA Claims, the Debtors have
paid $41.8 million and $2.9 million has been disallowed pursuant to the
PACA/PASA Order. In addition, with respect to $7.9 million of the asserted PACA
Claims, the Debtors are seeking to disallow such claims as invalid PACA Claims
but the applicable claimant is contesting such disallowance. The remaining $3.4
million of PACA Claims have not been reconciled on a final basis. The Debtors'
next Supplemental PACA Report is scheduled to be filed on December 16, 2003. The
Debtors do not believe there are any valid PASA Claims in these Cases.

k. Reclamation Motion

Motion of Debtors for an Order, Under 11 U.S.C.
Sections 105(a), 503(b) and 546(c): (a) Establishing Procedure for Treatment of
Reclamation Claims and (b) Prohibiting Third Parties from Interfering with
Delivery of Debtors' Goods (Docket No. 8). The Debtors anticipated that a number
of vendors would seek reclamation Claims against the Debtors and otherwise
interfere with the delivery of goods after receiving notice of the commencement
of these Chapter 11 Cases. Therefore, in the Motion of Debtors for an Order (the
"Reclamation Procedures Order"), Under 11 U.S.C. Sections 105(a), 503(b) and
546(c): (a) Establishing Procedure for Treatment of Reclamation Claims and (b)
Prohibiting Third Parties from Interfering with Delivery of Debtors' Goods
(Docket No. 8), the Debtors requested a procedure by which reclamation claimants
could proceed against the Debtors' goods. The Bankruptcy Court entered the Order
(the "Reclamation Procedures Order") Under 11 U.S.C. Sections 105(a) 503(b),
546(c) and 546(g), (a) Establishing Procedure for Treatment of Reclamation
Claims and (b) Prohibiting Third Parties from Interfering with Delivery of
Debtors' Goods on April 22, 2003 (Docket No. 559). On July 21, 2003, the Debtors
filed their Motion For Entry Of An Order With Respect To The Reclamation Claims
Filed In The Debtors' Cases [Docket No. 2050] (the "Initial Reclamation Motion")
pursuant to the Reclamation Procedures Order.

On November 25, 2003, the Debtors filed their
Combined Amended Reclamation Report and Motion to Determine that Reclamation
Claims are Valueless (the "Amended Report and Motion") (Docket No. 4596)(6). The
Amended Report and Motion consists of two parts. In Part I of the Amended Report
and Motion, the Debtors seek the entry of an order that provides that the
Reclamation Claims are General Unsecured Claims that are not entitled to any
priority (administrative or otherwise) and that such Claims may not be asserted
as secured claims. Part II of the Amended Report and Motion includes detail
regarding the Debtors reconciliation of the reclamation

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(5) All numbers in this paragraph have been rounded to the nearest hundred
thousand. Exact figures are contained in the Supplemental Reports.

(6) The Amended Report and Motion amends and supercedes the Initial
Reclamation Motion, and the Debtors have sought leave of court to
withdraw the Initial Reclamation Motion.

claims that have been filed. The Debtors have not set an objection deadline with
respect to Part II at this time. With respect to the relief sought in Part I,
the Amended Report and Motion is set for hearing on December 23, 2003 at 2:00
p.m., Prevailing Eastern Time.

l. Schedules and Statements

The Debtors filed their respective schedules of
assets and liabilities and statement of financial affairs (the "Schedules") with
the Bankruptcy Court on July 1, 2003. The Schedules can be reviewed at the
office of the Clerk of the Bankruptcy Court for the District of Delaware or can
be obtained on the website www.bmccorp.net/fleming.

2. Retention of Professionals

At various times through the Chapter 11 Cases, the Bankruptcy
Court has approved the retention of certain professionals to represent and
assist the Debtors in connection with the Chapter 11 Cases. These professionals
were intimately involved with the negotiation and development of the Plan. These
professionals include, among others: AP Services, LLC, crisis managers for the
Debtors (Docket No. 1698); Kirkland & Ellis LLP, co-counsel for Debtors (Docket
No. 740); Pachulski, Stang, Ziehl Young, Jones & Weintraub, P.C., co-counsel for
the Debtors (Docket No. 852); and The Blackstone Group, L.P., financial advisors
to the Debtors (Docket No. 1692).

The Bankruptcy Court also approved requests to retain other
professionals to assist the Debtors in ongoing specialized matters. These
professionals include, but are not limited to: McAfee & Taft, special corporate
counsel for the Debtors (Docket No. 1028); Ernst & Young LLP, inside auditor and
tax accountant for the Debtors (Docket No. 219); Baker, Botts, LLP, special
corporate and securities counsel for the Debtors (Docket No. 1241);
PricewaterhouseCoopers, LLP, forensic accountants for the audit committee of the
Board of Directors of the Debtors (Docket No. 732); Rider Bennett, LLP, special
labor relations and business litigation counsel for the Debtors (Docket No.
1065); and Kekst and Company, public relations and corporate communications
consultant to the Debtors (Docket No. 1380).

The Bankruptcy Court also approved requests to retain
real-estate professionals to assist the Debtors in their disposition efforts.
These professionals include, but are not limited to: Dovebid, Inc., auctioneers
for the sale of residual assets (Docket No. 1359); The Food Partners, retail
grocery financial advisor to the debtors (Docket No. 1691); Retail Consulting
Services, Inc./Staubach Retail Services, Inc., exclusive real estate consultants
to the debtors (Docket No. 1361); DMC Real Estate, Inc., realtors for the
Debtors (Docket No. 3948); and Keen Realty, LLP, special real estate consultant
to the Debtors (Docket No. 2161).

3. Appointment of Creditors' Committee and Retention of
Professionals

On April 16, 2003, the United States Trustee appointed the
following unsecured creditors to the Committee: (a) Bank One Trust Company,
N.A., as Indenture Trustee; (b) Apollo Management V, L.P.; (c) Northeast
Investors Trust; (d) Kraft Foods; (e) Nestle USA; (f) ConAgra Foods, Inc; and
(g) Pension Benefit Guaranty Corporation. The ex officio members of the
committee are S.C. Johnson and the Bank of New York.

The Bankruptcy Court also approved the retention of the
following professionals to represent and assist the Committee in connection with
these Chapter 11 Cases: Pepper Hamilton, LLP, co-counsel to the Official
Unsecured Committee of Creditors (Docket No. 1415); Milbank, Tweed, Hadley &
McCloy, LLP, co-counsel to the Official Committee of Unsecured Creditors (Docket
No. 2155); KPMG, LLP, accountants and restructuring advisors to the Official
Committee of Unsecured Creditors (Docket No. 1356); and Compass SRP Associates,
LLP, advisors to the Official Committee of Unsecured Creditors (Docket No.
2155).

4. Asset Sales and Other Dispositions

The Debtors have filed several motions for the sale of
disposal of the Debtor's assets as follows:

a. Sale of Debtors' Wholesale Distribution
Business

On or about July 11, 2003, the Debtors filed their
Motion For Order (A) Approving Asset Purchase Agreement With C&S Wholesale
Grocers, Inc. And C&S Acquisition LLC, (B) Authorizing (I) Sale Of Substantially
All Of Selling Debtors' Assets Relating To The Wholesale Distribution Business
To Purchaser Or Its Designee(s) Or Other Successful Bidder(s) At Auction, Free
And Clear Of All Liens, Claims, Encumbrances And Interests And (II) Assumption
And Assignment Of Certain Executory Contracts, License Agreements And Unexpired
Leases, And (C) Granting Related Relief (Docket No. 1906). This motion sought
the sale of substantially all of the Wholesale Distribution Business, which
supplied a full line of products to grocery stores, discount stores,
supercenters and specialty retailers. The winning bidder was determined to be
C&S Acquisition, LLC, whose bid was an estimated $400 million. After three days
of hearings, the Bankruptcy Court entered an order approving the sale on August
15, 2003 (Docket No. 3142) and the transaction was closed on August 23, 2003.

b. Sale of California Stores

On November 13, 2002, Fleming, Richmar and Save Mart
entered into an asset purchase agreement for the sale of twenty-eight (28)
Food-4-Less grocery stores located in California (the "California Stores") for
an aggregate purchase price of $105 million plus inventory at cost (subject to
certain purchase price adjustments). Due to the inability to receive the timely
approval of the transaction by the Federal Trade Commission (the "FTC"),
however, closing of the sale of all 28 stores never occurred. In late January
2003, the FTC permitted the parties to break the California Stores transaction
into two parts, one involving the sale of nineteen (19) of the California Stores
with a value of approximately $71 million plus inventory and the second
involving the sale of nine (9) stores with a value, at that time, of
approximately $34 million plus inventory. The parties closed the nineteen (19)
store transaction in late January 2003.

On or about May 12, 2003, the Debtors filed a motion
in these Chapter 11 Cases seeking to convey their interests in the remaining
nine (9) stores and certain contracts and leases to two (2) buyers for an
aggregate purchase price of approximately $27 million plus inventory (Docket No.
817). The Bankruptcy Court entered its orders approving this motion and the sale
to each buyer on June 4, 2003 (Docket Nos. 1375 & 1377).

c. Sale of Rainbow Food Retail Grocery Stores

On or about May 12, 2003, the Debtors filed their
Debtors' Motion For Order Authorizing: (A) Sale Of 31 Rainbow Food Retail
Grocery Stores' Assets Free And Clear Of All Liens, Claims, Interests And
Encumbrances; And (B) Assumption And Assignment Of Acquired Contracts And Leases
(Docket No. 816). This Motion sought to sell the assets used in the operation of
thirty-one (31) of the Rainbow Food retail grocery stores. The aggregate
purchase price was approximately $44 million plus inventory. The Bankruptcy
Court entered an order approving this motion on June 4, 2003 (Docket No. 1362).

d. Sale of Pharmacy Assets

On or about April 15, 2003, the Debtors filed their
Emergency Motion For An Order Authorizing Sale Of Pharmacy Assets Located At
Seven Of The Debtors' Stores (Docket No. 323). This motion sought the sale of
the Debtors' drug inventory, prescription files and related assets located at
seven (7) of the Debtors' stores to two (2) bidders for approximately $1.5
million. The Bankruptcy Court entered an order approving this motion on April
21, 2003 (Docket No. 556).

e. Sale of Fleming-Owned Real Property

On or about September 12, 2003, the Debtors filed
their "Debtors' Motion For Order: (A) Authorizing and Scheduling an Auction for
the Sale of Certain of the Debtors' Real Property; (B) Approving the Terms and
Conditions of Such Auction, Including Bidding Procedures Related Thereto; and
(C) Approving Assignment Procedures For Affected Unexpired Leases" (Docket No.
3666). This motion sought, among other things, approval of bidding procedures
for the sale of certain real property owned by the Debtors and the assignment of
the Debtors' rights under certain real property leases. The real property
subject to these proposed sales and

assignments consisted of certain of the Debtors' assets not associated with the
Wholesale Distribution Business and therefore not associated with the C&S
Purchase Agreement.

At a hearing on October 2, 2003, the Bankruptcy Court
approved the motion and authorized the Debtors to proceed with an auction, upon
the terms described within the motion, on October 14, 2003. On October 14, 2003,
the auction was held, and the Debtors identified the highest and best bidders
for each of the real property locations subject to the auction. On October 24,
2003, the Bankruptcy Court entered an order approving the sale or assignment, as
applicable, of the auctioned properties to the highest and best bidders
identified by the Debtors at the auction (Docket No. 4205). The gross proceeds
received by the Debtors as a result of the auction were approximately $4.8
million.

f. Order Authorizing Store Closing Sales and
Abandonment of Assets re Closing Locations

Pursuant to the "Order Authorizing The Debtor To
Conduct Store Closing Sales Pursuant To Section 363 Of The Bankruptcy Code And
Abandon Inconsequential Assets Related To The Closing Locations" (the "Store
Closing Sale Order"), entered on May 21, 2003 (Docket No. 1014), the Debtors are
authorized to conduct store closing sales free and clear of liens in the
ordinary course of business pursuant to a procedure whereby the Debtors give
notice of any store closing sale, and the Debtors may consummate the sale
without further order of the Court if there are no objections. Pursuant to this
procedure, the Debtors may also give notice of abandonment of assets at the
closed locations. If no timely objections are filed, the Debtors may abandon the
assets without further order of the Court.

g. Order Authorizing Sale or Abandonment of
Assets of De Minimis Value

Pursuant to the "Order Pursuant To Sections 363(b),
363(f), 554(a) And 1146(c) Of The Bankruptcy Code Authorizing And Approving
Expedited Procedures For The Sale Or Abandonment Of The Debtors' De Minimis
Assets" (the "De Minimis Sale Order"), entered May 21, 2003 (Docket No. 1018),
the Debtors may sell free and clear of liens various assets, including customer
lists and accounts receivable that are past due and owing to the Debtors,
remaining inventory in retail stores, tractors, trailers, furniture, fixtures
and other excess warehouse and supermarket equipment such as coolers,
refrigeration compressor systems, shelving, generators and material handling
equipment (e.g. stock carts, pallet jacks and fork lifts), and assets of de
minimis value to the Debtors, such as notes owing to the Debtors and franchise
rights (which may include the Debtors' rights under trademark licenses of de
minimis value to the Debtors), that relate to the Debtors' abandoned, or to be
abandoned, relationships with retail grocery store businesses.

Depending on whether the assets to be sold or
abandoned have a value under $2.5 million or a value between $2.5 million and
$6.5 million, different notice periods apply. Under both procedures, if no
timely objection is filed, the Debtors may file a Certificate of No Objection
and consummate the sale after entry of the order.

h. Order Authorizing Sale of Obsolete and Other
Excess Inventory

Pursuant to the "Order Under 11 U.S.C. Sections
105(a), 363(b) And 363(f) Granting Authority To Debtors To Dispose Of Obsolete
And Other Excess Inventory Free And Clear Of Any Existing Liens, Claims And
Interests" (the "Excess Inventory Sale Order"), entered on May 20, 2003 (Docket
No. 1031), the Debtors may sell free and clear of liens certain excess
inventory. Prior to accepting any bid to sell excess inventory to a diverter or
liquidator, the Debtors must give the Committee and the Lenders written notice
of its intention to accept such bid at least five (5) days prior to accepting
the bid.

i. Order Approving Going Out of Business
("GOB") Sale

Under the Order Approving GOB Procedures In
Connection With The Final Dip Order, (Final Order Authorizing (I) Post-Petition
Financing Pursuant to 11 U.S.C. Section 364 and Bankruptcy Rule 4001(c); (II)
Use of Cash Collateral pursuant to 11 U.S.C. Section 363 and Bankruptcy Rule
4001(b) and (d); (III) Grant of

Adequate Protection Pursuant to 11 U.S.C. Sections 361 and 363; and (IV)
Approving Secured Inventory Trade Credit Program and Granting of Subordinate
Liens, Pursuant to 11 U.S.C. Sections 105 and 364(c)(3) and Rule 4001 (c)
(Docket No. 743)) entered May 20, 2003 (Docket No. 1030), the Debtors are
entitled, under certain circumstances, to vacate and surrender certain premises,
as well as abandon assets located in the premises. On the surrender date, the
lease is deemed rejected unless the Debtors have filed a specific notice to
assume the lease.

5. Debtor in Possession Operating Reports

Consistent with the operating guidelines and reporting
requirements established by the United States Trustee (the "Guidelines") in
these Chapter 11 Cases, the Debtors have satisfied their initial reporting
requirements, have filed their first six Monthly Operating Reports(7) and will
continue to file such Monthly Operating Reports as required by the Guidelines.
Each Monthly Operating Report includes for the relevant period, among other
things, (a) information regarding the Debtors' cash receipts and disbursements,
(b) an income statement (prepared on an accrual basis), (c) a balance sheet
(prepared on an accrual basis), (d) a statement regarding the status of the
Debtor's post-petition taxes and (e) a statement regarding the status of
accounts receivable reconciliation and aging.

6. Pending Litigation And The Automatic Stay

a. Directors' & Officers' Litigation

In re Fleming Companies Inc. Securities and
Derivative Litigation, United States District Court for the Eastern District of
Texas, Texarkana Division, Case No. MDL 1530. During 2002, a number of
securities class action cases were commenced by and on behalf of persons who
purchased Fleming's publicly traded securities. The actions named Fleming and
certain of Fleming's directors and officers as defendants and sought damages
under either or both of the Securities Exchange Act of 1934 (the "Exchange Act")
and the Securities Act of 1933 (the "Securities Act"). During the same time
period, two derivative actions were filed on Fleming's behalf, seeking damages
from various of Fleming's directors and officers for alleged violations of
securities laws. Those derivative actions have been, or are in the process of
being, administratively closed or dismissed without prejudice. Various parties
to those actions asked the Judicial Panel on Multidistrict Litigation (the
"JPML") to consolidate that litigation, then consisting of 14 separately filed
cases, in a single court. On June 25, 2003, the JPML issued an order directing
that all of those actions be transferred to the Eastern District of Texas,
Texarkana Division, for coordinated or consolidated pretrial proceedings.

On February 20, 2003, while the JPML proceedings were
pending, a class action generally captioned Massachusetts State Carpenters
Pension Fund, etc. v. Fleming Companies, Inc., et al., was filed in the 160th
District Court, Dallas County, Texas, and thereafter removed to the United
States District Court for the Northern District of Texas, Dallas Division, as
Case No. 3-03CV0460-P. That action named Fleming, various of Fleming's directors
and officers, Lehman Brothers, Inc., Deutsche Bank Securities, Inc., Wachovia
Securities, Morgan Stanley & Co., Inc., and Deloitte & Touche, L.L.P., as
defendants, and sought damages under the Securities Act. Subsequently, on April
17, 2003, an identical action (except for the elimination of Fleming as a
defendant) was commenced in the Eastern District of Texas, Texarkana Division,
as Case No. 03-CV-83, where it could be, and ultimately was, consolidated with
the Fleming securities litigation pending in that Court. Meanwhile, the District
Court for the Northern District of Texas denied the plaintiffs' motion to
dismiss that action without prejudice. Ultimately, the action was transferred to
the Eastern District of Texas where it, too, was consolidated with the
litigation pending in that district.

- ----------

(7) The Debtors have filed the following Monthly Operating Reports which
Reports can be obtained from the court's docket in these cases: 4/1/03
- 4/19/03 [Docket No. 3102]; 4/20-03 - 5/19/03 [Docket No. 3103];
5/18/03 - 6/14/03 [Docket No. 3214]; 6/15/03 - 7/12/03 [Docket No.
3373]; 7/13/03 - 8/9/03 [Docket No. 3754]; 8/10/03 - 9/6/03 [Docket No.
4139].

On June 27, 2003, eighty individual plaintiffs
commenced an action against various present and former directors and officers of
Fleming and against Deloitte & Touche, L.L.P. That action, captioned Rick
Fetterman, et al., v. Mark Hansen, et al., United States District Court for the
Northern District of Texas, Dallas Division, Case No. 3:03-CV-1435 (L), sought
damages for alleged violations of the Exchange Act and certain Texas securities
statutes. The JPML has transferred that case to the Eastern District of Texas as
a "tag-along" case, and it has been consolidated with the other cases pending in
that district.

On August 28, 2003, sixty-three individual plaintiffs
commenced an action against various present and former directors and officers of
Fleming and against Deloitte & Touche, L.L.P. That action, captioned Christopher
L. Doucet, et al. v. Mark Hansen, et al., United States District Court for the
Northern District of Texas, Dallas Division, Case No. 3-03-CV-1950 H, sought
damages for alleged violations of the Exchange Act and certain Louisiana
securities statutes and under theories of fraud, misrepresentation and
conspiracy. A "tag along" notice has been filed with the JPML, but the case has
not yet been transferred to the Eastern District of Texas for consolidated or
coordinated pretrial proceedings in that court.

b. SEC Investigation

The lawsuits described above encompass allegations
dealing with accounting, financial reporting and other disclosures and claim
that Fleming falsely inflated its stock price by means of accounting fraud and
false public statements about its business operations and profit. Shortly after
the first lawsuit was filed, the Wall Street Journal published an article on
September 5, 2002, citing examples where Fleming allegedly had taken certain
aggressive deductions against its suppliers.

These events prompted an informal inquiry by the SEC.
On November 13, 2002, Fleming announced that the SEC had initiated an informal
inquiry related to Fleming's vendor trade practices, the presentation of second
quarter 2001 adjusted earnings per share data in Fleming's second quarter 2001
and 2002 earnings press releases, Fleming's accounting for drop-ship sales
transactions with an unaffiliated vendor in Fleming's discontinued retail
operations, and its calculation of comparable store sales in its discontinued
retail operations.

The SEC converted the informal inquiry into a formal
investigation on February 13, 2003. The formal investigation has focused on
whether any persons or entities engaged in any acts, transactions, practices or
courses of business which operated or would operate as a fraud or a deceit upon
purchasers of Fleming securities or upon other persons in violation of the
federal securities laws. Fleming has answered questions submitted by the SEC and
has produced documents to the SEC. The SEC has interviewed several current and
former employees of Fleming as well as third parties. Fleming continues to be in
discussions with the SEC and intends to continue to fully cooperate with the
SEC. Kraft Foods, Dean Food and Frito-Lay recently announced they have been
notified that the SEC is considering filing charges against those companies in
connection with their business dealings with Fleming, including whether
employees of those companies aided Fleming in accelerating revenue improperly.

After receiving notice of the informal SEC inquiry,
Fleming undertook an independent investigation related to the same topics. The
Audit and Compliance Committee of the Board of Directors of Fleming ("Audit
Committee") engaged independent legal counsel and independent accounting
consultants to assist in connection with the independent investigation. The
independent investigation included a review of transactions that occurred during
the 2000, 2001 and 2002 time periods. These periods are the subject of the SEC
investigation. The scope of the independent investigation included the original
topics identified by the SEC as well as issues related to the timing of
recording revenue, documentation of certain vendor transactions and certain
initiatives undertaken for the purpose of increasing reported income.

On April 17, 2003, Fleming issued a press release
(the "April 17 Release") announcing that it would restate its 2001 annual and
quarterly financial statements and 2002 quarterly financial statements
previously filed with the SEC and that it would revise its previously announced
2002 fourth quarter and annual financial results. Fleming announced that the
restatements and revisions reflected significant business issues and
developments affecting it, including the recent termination of Fleming's supply
agreement with Kmart and events leading to Fleming's voluntary Chapter 11
bankruptcy filing on April 1, 2003, as well as adjustments identified in

connection with the continuing independent investigation by the Audit Committee
into certain accounting and disclosure issues.

The April 17 Release also reported that the
restatements of the results for the full-year 2001 and the first three quarters
of 2002 would reduce the pre-tax financial results from continuing operations
for such periods by an aggregate amount of not more than $85 million and that
the restatements would mainly correct the timing of when certain vendor
transactions are recognized and the balance of certain reserve accounts.

The April 17 Release also announced that Fleming
would revise its previously announced 2002 fourth quarter and annual financial
results to reflect a loss from continuing operations. In accordance with
Statement of Financial Accounting Standards ("SFAS") No. 142, Fleming announced
that it expects to record a non-cash adjustment to continuing operations for a
full impairment of goodwill currently valued at approximately $645 million, due
to an overall decrease in the value of Fleming. In accordance with SFAS No. 144,
Fleming also announced that it would record an additional impairment charge to
discontinued operations of approximately $90 million related to retail store
operations held for sale, due to a reduction in the net realizable value of such
operations. In accordance with SFAS No. 109, Fleming announced that it had
determined that it would record a non-cash charge against continuing operations
in the fourth quarter of 2002 relating to its deferred tax assets in the range
of $275-325 million, due to uncertainties as to whether net operating losses
would be utilized against future tax payments. Fleming also announced that its
fourth quarter 2002 pre-tax loss from continuing operations would be increased
by expenses totaling not more than $80 million as a result of a number of
factors, including increased vendor payback rates, the Kmart contract
cancellation and corrections identified as a result of the Audit Committee's
independent investigation.

Finally, Fleming announced on April 17, 2003, that it
would early adopt EITF 02-16, Accounting by a Reseller for Cash Consideration
Received from a Vendor, retroactive to the beginning of fiscal year 2002. This
rule requires cash consideration received from a vendor to be recorded as an
adjustment to the prices for the vendor's products and therefore characterized
as a reduction of cost of sales when recognized in the customer's income
statement. Fleming announced that the 2002 effect of adopting EITF 02-16 is
expected to reduce the pre-tax loss from 2002 annual results in the range of
$5-15 million, although the cumulative effect that will be recorded as of the
beginning of 2002 is expected to be an expense of not more than $45 million.

In a Form 12b-25 filed by Fleming with the SEC on
June 4, 2003, Fleming announced that it would restate its 2000 annual financial
statements previously filed with the SEC. The June 4th announcement stated that
it expects the related restatements of the results for the full-year 2000 will
reduce consolidated pre-tax financial results for such period by an aggregate
amount of not more than $2 million, reflecting an increase in 2000 pre-tax loss
from continuing operations of not more than $6 million and a decrease in 2000
pre-tax loss from discontinued operations of not more than $4 million. As stated
in the June 4th announcement, those restatements will principally correct the
timing of when certain vendor transactions were recognized and will reflect
other adjustments and corrections identified as a result of the Audit
Committee's independent investigation.

c. Significant Prepetition Litigation

(1) DiGiorgio Corp. v. Fleming
Companies, Inc., et al., United
States District Court for the
District of New Jersey, Case No.
02-2887-DMC. DiGiorgio alleged that
Fleming breached a non-compete
agreement with respect to supplying
certain grocery items in
Connecticut, New York and parts of
New Jersey. DiGiorgio sought
injunctive relief and an
unspecified amount of damages and
requested an audit of Fleming's
books and an order extending the
term of the non-compete agreement
beyond its scheduled June 2004
expiration date. Fleming denied
that it breached the agreement and,
additionally, claimed that the
non-compete agreement was invalid
because it was unreasonably broad.
Finally, Fleming asserted that even
if there were an enforceable
agreement that had been breached,
DiGiorgio's damages, if any, were
nominal. On April 1, 2003, the
court granted DiGiorgio's motion
for a preliminary injunction and
prohibited Fleming from, among
other

things, engaging in wholesale
distribution of meat, dairy, deli,
frozen meats, frozen dairy and
frozen deli products for retail
sale within the Amended Restricted
Territory. On April 23, 2003, the
Bankruptcy Court lifted the
automatic stay to permit Fleming to
appeal and/or pursue other actions
regarding the order granting the
preliminary injunction, and on
April 30, 2003, Fleming filed its
notice of appeal to the United
States Court of Appeals for the
Third Circuit. All other
proceedings in the action remain
stayed.

(2) Harvest Logistics, Inc. and
Iceworks Logistics, Inc. v. Fleming
Companies, Inc., United States
District Court for the Northern
District of Texas, Case No.
301-CV1813-L. After the parties
mutually agreed to terminate
Harvest's five-year written
warehouse management contract for a
Ft. Wayne facility and Iceworks'
five-year oral warehouse management
contract for a Grand Rapids
perishable produces facility in
August 2001, those entities sued
Fleming for breach of contract,
alleged anticipatory repudiation of
Fleming's obligation to pay future
management fees, unjust enrichment
and quantum meruit. Plaintiffs
claimed that they were owed
$6,000,000 for unreimbursed
expenses and $10,000,000 for five
years of future management fees.
Fleming denied Harvest's and
Iceworks' claims and asserted
counterclaims against them for
breach of contract and against
their parent entity, Tibbett &
Britten Group North America, Inc.,
for failure to properly supervise
performance of those agreements.
Fleming alleged that Harvest and
Iceworks were corporate shells and
alter egos of Tibbett & Britten and
sought damages of approximately
$5,600,000, subsequently reduced to
$3,900,000. Discovery has been
completed, and the case was set for
trial in June 2003. Fleming moved
for summary judgment on the Harvest
and Iceworks' claims for alleged
anticipatory repudiation of
Fleming's obligation to pay future
management fees, and Harvest and
Iceworks cross-moved for summary
judgment on Fleming's claim that
they were corporate shells and
alter egos of Tibbett & Britten.
The automatic stay that has been
imposed when Fleming commenced its
chapter 11 case was lifted to
permit the parties to brief these
motions. Thereafter, the parties
reached an agreement in principle
that Fleming will dismiss with
prejudice its claims against
Tibbett & Britten (but not against
Harvest and Iceworks), and Harvest
and Iceworks will dismiss with
prejudice their claims against
Fleming insofar as those claims
pertains to loss of future
management fees, but not as to
claimed unreimbursed expenses. This
agreement in principle will result
in the withdrawal of the
cross-motions for summary judgment,
which no longer will be necessary.

(3) SuperValu, Inc. and SuperValu
Holdings, Inc. v. Rainbow Food
Group, Inc. H. Brooks & Co., LLC
and Fleming Companies, Inc., Second
Judicial District Court, Ramsey
County, Minnesota, Case No.
C4-02-4394. SuperValu alleged that
Rainbow had used Rainbow's broker,
H. Brooks, to obtain SuperValu's
ads and used the information in
those ads to undercut Cub Foods
prices or to reschedule promotions.
SuperValu asserted claims of
misappropriation of trade secrets
and tortious interference with
prospective business advantage and
sought injunctive relief,
unspecified compensatory and
punitive damages and attorneys'
fees. Rainbow and Fleming denied
SuperValu's claims and asserted
counterclaims for misappropriation
of trade secrets and confidential
information, tortious interference
with contract, unfair competition
and tortious employee raiding
stemming from SuperValu's wrongful
raiding

of former Rainbow associates and
subsequent use of confidential
information possessed by those
associates, and claims for
unlawful restraint of trade and
violation of the Minnesota
antitrust monopolization of food
products statute. Rainbow and
Fleming sought injunctive relief,
unspecified actual and treble
damages, interest and attorneys'
fees. The parties agreed to a
confidential settlement prior to
commencement of the Chapter 11
Cases, and consummated that
settlement after the Petition Date.

(4) Home Depot v. Ronald Griffin and
Fleming Companies, Inc., Court of
Chancery of the State of Delaware,
Case No. 19649-NC. Griffin, a
former employee of Home Depot, was
hired by Fleming. Home Depot
alleged that Griffin breached his
agreement not to solicit Home Depot
employees and that Fleming
tortiously interfered with
Griffin's non-solicitation
agreement and sought compensatory
damages in excess of $6,000,000
(including $1,000,000 in Griffin's
stock option gains), plus
attorneys' fees totaling more than
$300,000. Griffin and Fleming
denied the allegations, Fleming has
tendered Griffin's defense to its
directors' and officers' liability
insurance carrier.

(5) Fleming Companies, Inc. v. Clark
Retail Enterprises, Inc., American
Arbitration Association Case No. 51
181 00447 01; In re Clark Retail
Enterprises, Inc., United States
Bankruptcy Court for the Eastern
District of Illinois, Case No.
02-40045 (JHS). Fleming asserted
that Clark committed to at least
$80,000,000 annually in
non-cigarette purchases under a
five-year supply agreement and that
such commitment induced Fleming to
enter into the agreement and to
agree to provide over $40,000,000
in incentive payments over the
five-year term of the agreement.
Fleming sought to rescind the
agreement due to Clark's failure to
make the requisite non-tobacco
purchases. Clark requested
termination of the agreement due to
Fleming's unilateral modification
of contract terms in alleged breach
of the agreement. Fleming agreed to
the requested termination. Fleming
sought damages, including the
reimbursement of the approximately
$8,000,000 unamortized portion of
the $12,000,000 incentive payment
it made to Clark, plus more than
$20,000,000 for Fleming's start-up
warehousing and other costs. Clark
replaced Fleming with a new
supplier and claimed related
damages in excess of $5,000,000,
including lost "benefit of the
bargain" resulting from termination
of the agreement. The dispute was
scheduled for mandatory
arbitration, but all proceedings
were stayed when Clark filed its
liquidating chapter 11 case in
October 2002. Fleming filed a
$31,600,000 proof of claim in the
Clark chapter 11 case. Just before
the commencement of the Chapter 11
Cases, Clark sought to lift the
stay in its own chapter 11 case to
proceed with the arbitration. All
proceedings were stayed when
Fleming filed its bankruptcy case.
The parties have tentatively
settled their matter by agreeing to
mutual releases subject to their
respective bankruptcy courts'
approval.

(6) Russell Stover Candies, Inc., et
al. v. Fleming Companies, Inc.,
United States District court for
the Western District of Missouri,
Case No. 01-1022-CV-W-3. Stover
commenced an action against Fleming
based upon Fleming's distribution
of Stover candy that allegedly had
become heat damaged while in
Fleming's custody. Ultimately,
Stover and Fleming entered into a
settlement agreement resolving the
litigation, subject to full
performance of the settlement. A
dispute arose over the

manner in which a term of the
settlement agreement was to be
interpreted. Stover asserted that
Fleming was required to pay an
additional $737,000 under the
agreement. On February 28, 2003,
the parties filed cross motions for
summary judgment. The matter was
submitted to the court, and the
parties engaged in settlement
negotiations, and those motions
were pending when Fleming commenced
bankruptcy. On September 15, 2003,
the court dismissed the summary
judgment motions without prejudice
to their being reset if and when
the parties obtain relief from the
automatic stay in the Fleming
bankruptcy case.

(7) Bank of New York v. Fleming
Companies, Inc., New York Supreme
Court, Erie County, Index No.
2001-9864. One of the principals of
Avery's Markets, a grocery store
operator supplied by Fleming, owned
real property subject to a mortgage
to Bank of New York ("BONY"). The
mortgage contained an assignment of
rents clause. Fleming leased the
property and subleased the premises
to Avery's. The principal defaulted
on the BONY mortgage, Avery's and
its principals filed bankruptcy
cases and BONY foreclosed on its
mortgage. Five years later BONY
sued Fleming to enforce its
assignment of rents rights and to
collect approximately $203,000.
Fleming asserted defenses of
setoff, improper exercise of the
assignment of rents clause and
laches. The parties filed and
argued cross-motions for summary
judgment. The Chapter 11 Cases were
commenced before those motions were
decided, and all proceedings in the
case are now stayed.

(8) Wayne Berry v. Fleming Companies,
Inc., et al, USDC Hawaii No. 01
00446 SPK-LEK. Wayne Berry,
designer of certain software used
by Fleming at its Kapolei, Hawaii
facilities to track freight, sued
Fleming for copyright infringement.
Fleming denied the allegations, and
the matter went to trial. On March
6, 2003, the jury found in favor of
Fleming on all claims but one. With
regard to the claim on which the
jury found in Berry's favor, the
jury awarded damages of $98,250 and
found that Fleming had willfully
infringed. Post-trial motions were
still pending when the bankruptcy
petition was filed on April 1,
2003, staying the proceedings.

d. Adversary Proceedings Filed in the Debtors'
Chapter 11 Cases

Listed below are the major ongoing adversary
proceedings filed in these Chapter 11 Cases.

(1) The Kroger Co. v. Fleming
Companies, Inc., 03-52915. This is
a reclamation claim. The parties
have stipulated to suspend
proceedings pending general
resolution of reclamation claims
collectively.

(2) Farris Produce, Inc., et al. v.
Fleming Companies, Inc., et al.
03-54449. This proceeding is a
class action brought by and on
behalf of numerous vendors who
delivered certain goods directly to
retailers and invoiced Fleming for
such deliveries. Plaintiffs contend
that certain funds in Fleming's
possession are held in constructive
trust for the benefit of the class
of vendors. The judge granted an
injunction in favor of the
plaintiffs, then certified the
class. Under the injunction order,
Fleming has escrowed and/or paid
out $14.7 million. Fleming has
appealed the Bankruptcy Court's
ruling on class certification.
Discovery is ongoing in advance of
a final hearing still to be
scheduled.

(3) Fleming Companies, Inc. v. Jackson
Capital Management, et al.
03-54449. This proceeding is a
request for an injunction under 11
U.S.C. Section 105 to prevent class
actions against present and former
directors. The parties have
postponed the proceedings by
stipulation.

(4) Fleming Companies, Inc. v. Robert
Ellis et al., 03-54756. This
proceeding is a request for an
injunction under 11 U.S.C. Section
105 to prevent the State of Georgia
from criminally prosecuting a
Fleming executive. The Bankruptcy
Court granted a preliminary
injunction against the prosecution.
Discovery is ongoing in advance of
an unscheduled final hearing.

(5) Wayne Berry v. Hawaiian Express
Service et al., USDC Hawaii No. CV
03 00385 SOM-LEK. In this
proceeding, Wayne Berry has sued
Fleming, C&S and other companies
and individuals in the United
States District Court for Hawaii
alleging that the defendants
continue to violate his copyright
in certain freight tracking
software previously used by Fleming
at its facilities in Kapolei,
Hawaii. Berry's software was the
subject of a prepetition lawsuit,
discussed in the prepetition
section above, in which Berry won
$98,250 and a finding of willful
infringement against Fleming, but
the bankruptcy stay went into
effect before the judgment was
entered. In the postpetition
lawsuit, originally filed on July
22, 2003 and amended on August 13,
2003 to include Fleming, C&S and
various employees as individuals,
Berry alleges that the defendants
continue to infringe on his
software copyrights notwithstanding
the prepetition jury verdict. The
defendants deny the allegations and
have filed motions to dismiss, stay
or transfer. Discovery is ongoing.

(6) Gorman Foods, LLC v. Fleming
Companies, Inc., 03-55518. This
proceeding is a complaint brought
by a group of store owners seeking
over $445,000 in damages on the
basis that Fleming is holding in
trust for the benefit of the store
owners certain funds remitted by
certain vendors to Fleming to pay
for various product advertisements
run by the group of store owners.
Discovery is ongoing.

(7) The Unofficial Committee of
Unsecured Trade Creditors of
Dunigan Fuels, Inc. v. Deutsche
Bank Trust Company Americas, et
al., 03-55715. This proceeding is a
fraudulent conveyance complaint
brought by a group of creditors
against various banks and Fleming
for $9.2 million which was
allegedly owed by Dunigan Fuels,
Inc. The creditors group contends
that but for Fleming's causing
Dunigan Fuels to guarantee
unrelated debts, Dunigan Fuels
would have been able to repay the
group. The group therefore seeks to
have this money repaid by the banks
or by Fleming.

(8) Cavendish Farms et al. v. Fleming
Companies, Inc., et al., Adv. Proc.
No. 03-56207 (MFW), United States
Bankruptcy Court for the District
of Delaware. This proceeding is an
adversary proceeding filed on
September 26, 2003, by eleven PACA
claimants against Fleming
Companies, Inc. and three of its
officers. In their adversary
complaint, plaintiffs seek to
recover $3,203,608.89 (plus costs
and attorneys' fees) as statutory
trust assets pursuant to the PACA.
In addition, plaintiffs assert
common law claims of breach of
contract and breach of fiduciary
duties.

e. Claims Bar Date

On June 25, 2003, the Bankruptcy Court entered an
order (the "Bar Date Order") establishing September 15, 2003 as the bar date
(the "Non-Governmental Claims Bar Date") for all non-governmental Persons and
Entities to file prepetition Claims in these Chapter 11 Cases and October 1,
2003 as the bar date (the "Governmental Bar Date") for all governmental Persons
and Entities to file prepetition Claims in these Chapter 11 Cases. The Bar Date
Order further provides that, among other things, any Person or Entity that is
required to file a Proof of Claim in these Chapter 11 Cases but fails to do so
in a timely manner shall be forever barred, estopped and enjoined from (a)
asserting any Claim against the Debtors that such Person or Entity has that (i)
is in an amount that exceeds the amount, if any, that may be set forth in the
Schedules or (ii) is of a different nature or in a different classification than
what may be set forth in the Schedules (in either case any such Claim referred
to as an "Unscheduled Claim") and (b) voting upon, or receiving distributions
under, any plan or plan of reorganization in these Chapter 11 Cases in respect
of an Unscheduled Claim.

f. Administrative Claim Bar Date

On December 3, 2003, the Bankruptcy Court entered an
order approving January 15, 2004 as the bar date for all persons or entities
holding an Administrative Claim arising on or after April 1, 2003, through and
including October 31, 2003 (the "First Bar Date Order") [Docket No. 4738]. For
purposes of the First Administrative Bar Date, an Administrative Claim includes
any Claim (as defined in 11 U.S.C. Section 101(5)) with respect to which the
holder intends to seek priority of payment pursuant to sections 503 and
507(a)(1) of the Bankruptcy Code, except for the following: (i) Administrative
Claims of professionals retained pursuant to sections 327 and 328 of the
Bankruptcy Code; (ii) expenses of members of the Creditors' Committee; (iii) all
fees payable and unpaid under 28 U.S.C. Section 1930; (iv) any fees or charges
assessed against the estates of the Debtors under 28 U.S.C. Section 123; (v)
intercompany Claims between Debtors and their affiliates; (vi) Administrative
Claims arising in the ordinary course of business relating to inventory,
services or supplies provided by trade vendors or service providers which are
paid or payable by the Debtors in the ordinary course of business; (vii) Claims
for reclamation asserted pursuant to section 546(c) of the Bankruptcy Code;
(viii) Administrative Claims relating to executory contracts and unexpired
leases that have neither been rejected nor assumed by the Debtors, as well as
Administrative Claims relating to, or arising under, executory contracts or
unexpired leases, regardless of whether such executory contracts or unexpired
leases have been assumed or rejected, that are unknown to the claim holder; (ix)
Administrative Claims that have previously been filed or for which any request
for payment pursuant to section 503(a) of the Bankruptcy Code or adversary
proceeding is pending; and (x) any Claims of the Pre-Petition Lenders' agents
and Pre-Petition Lenders as well as those of the Post-Petition Lenders' agents
and Post-Petition Lenders arising under or in connection with the Pre-Petition
Credit Agreement, DIP Credit Facility and the Final DIP Order. The
Administrative Bar Date Order further provides that any person or entity that is
required to file a Proof of Administrative Claim in these Chapter 11 Cases, but
fails to do so on or before the Administrative Claims Bar Date, shall not, with
respect to any such Administrative Claim, be treated as a creditor of the
Debtors for purposes of allowing such Claim. The court-approved Administrative
Claims Bar Date Notice provides that, among other things, any Person or Entity
that is required to file a Proof of Administrative Claim in these Chapter 11
Cases, but fails to do so in a timely manner, shall be forever barred, estopped
and enjoined from (a) asserting any such Administrative Claim against the
Debtors and (b) voting upon, or receiving distributions under, any plan or plan
of reorganization in these Chapter 11 Cases in respect of such Administrative
Claim.

g. Claims Review Process

The Debtors have begun to evaluate the numerous
Claims filed in these Cases to determine, among other things, whether it is
necessary and appropriate to file objections seeking to disallow, reduce and/or
reclassify such Claims The Debtors expect to also reconcile the Claims against
their Schedules in an effort to (a) eliminate duplicative or erroneous Claims
and (b) ensure that the Bankruptcy Court allows only valid Claims. If the
Debtors, Core-Mark Newco, or the Post Confirmation Trust, as applicable, object
to a Claim, a hearing regarding such objection will be held and notice of such
objection and the related hearing will be provided to affected Claim Holders as
well as to other parties entitled to receive notice. To the extent necessary,
the Bankruptcy Court will rule on the objection and ultimately determine
whether, and in what amount and priority, to allow the applicable Claim. If the
Debtors, Core-Mark Newco, or the Post Confirmation Trust, as applicable, do not
object to a Claim by the Objection Deadline, such Claim will be deemed allowed
and will receive the treatment accorded such Claim under

the Plan. As appropriate, the Debtors, Core-Mark Newco, or the Post Confirmation
Trust, as applicable, may seek to negotiate and/or settle disputes regarding a
Claim or Claims as an alternative to filing objections to the allowance or
treatment of such Claims. On December 5, 2003, the Debtors filed their First
Omnibus Objection to Claims (Docket No. 4790). The objection deadline for those
wishing to object to the relief sought in the First Omnibus Objection to Claims
is December 29, 2003.

VI. SUMMARY OF THE PLAN OF REORGANIZATION

A. Overview of Chapter 11

Chapter 11 is the principal business reorganization chapter of the
Bankruptcy Code. Under chapter 11 of the Bankruptcy Code, a debtor is authorized
to reorganize its business for the benefit of itself, its creditors and interest
holders. Another goal of chapter 11 is to promote equality of treatment for
similarly situated creditors and similarly situated interest holders with
respect to the distribution of a debtor's assets.

The commencement of a chapter 11 case creates an estate that is
comprised of all of the legal and equitable interests of the debtor as of the
filing date. The Bankruptcy Code provides that the debtor may continue to
operate its business and remain in possession of its property as a
"debtor-in-possession."

The consummation of a plan of reorganization is the principal objective
of a chapter 11 case. A plan of reorganization sets forth the means for
satisfying claims against, and interests in, a debtor. 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 or entity acquiring property
under the plan and any creditor of, or equity holder in, the debtor, whether or
not such creditor or equity holder (a) is impaired under or has accepted the
plan or (b) receives or retains any property under the plan. Subject to certain
limited exceptions and other than as provided in the plan itself or the
confirmation order, the confirmation order discharges the debtors from any debt
that arose prior to the date of confirmation of the plan and substitutes
therefore the obligations specified under the confirmed plan.

A chapter 11 plan may specify that the legal, contractual and equitable
right of the holders of claims or interests in classes are to remain unaltered
by the reorganization effectuated by the plan. Such classes are referred to as
"unimpaired" and, because of such favorable treatment, are deemed to accept the
plan. Accordingly, it is not necessary to solicit votes from the holders of
claims or equity interests in such classes. A chapter 11 plan also may specify
that certain classes will not receive any distribution of property or retain any
claim against a debtor. Such classes are deemed not to accept the plan and,
therefore, need not be solicited to vote to accept or reject the plan. Any
classes that are receiving a distribution of property under the plan but are not
"unimpaired" will be solicited to vote to accept or reject the plan.

Section 1123 of the Bankruptcy Code provides that a plan of
reorganization shall classify the claims of a debtor's creditors and equity
interest holders. In compliance therewith, the Plan divides Claims and Equity
Interests into various Classes and sets forth the treatment for each Class. The
Debtors also are required under section 1122 of the Bankruptcy Code to classify
Claims and Equity Interests into Classes that contain Claims and Equity
Interests that are substantially similar to the other Claims and Equity
Interests in such Classes. The Debtors believe that the Plan has classified all
Claims and Equity Interests in compliance with the provisions of section 1122 of
the Bankruptcy Code, but it is possible that a Holder of a Claim or Equity
Interest may challenge the classification of Claims and Equity Interests and
that the Bankruptcy Court may find that a different classification is required
for the Plan to be confirmed. In such event, the Debtors intend, to the extent
permitted by the Bankruptcy Court and the Plan, to make such reasonable
modifications of the classifications under the Plan to permit confirmation and
to use the Plan acceptances received in this solicitation for the purpose of
obtaining the approval of the reconstituted Class or Classes of which the
accepting Holder is ultimately deemed to be a member. Any such reclassification
could adversely affect the Class in which such Holder was initially a member, or
any other Class under the Plan, by changing the composition of such Class and
the vote required of that Class for approval of the Plan.

The Debtors (and each of their respective Affiliates, agents,
directors, officers, employees, advisors and attorneys), the Creditors Committee
(and each of their respective Affiliates, agents, directors, officers,
employees, advisors and attorneys) have, and upon confirmation of the Plan will
be deemed to have, participated in good faith and in compliance with the
applicable provisions of the Bankruptcy Code with regard to the distributions of
the securities under the Plan, and therefore are not, and on account of such
distributions will not be, liable at any time for the violation of any
applicable law, rule or regulation governing the solicitation of acceptances or
rejections of the Plan or such distributions made pursuant to the Plan.

THE REMAINDER OF THIS SECTION PROVIDES A SUMMARY OF THE STRUCTURE AND
MEANS FOR IMPLEMENTATION OF THE PLAN AND THE CLASSIFICATION AND TREATMENT OF

CLAIMS AND EQUITY INTERESTS UNDER THE PLAN AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE PLAN (AS WELL AS THE EXHIBITS THERETO AND DEFINITIONS IN THE
PLAN).

THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT INCLUDE SUMMARIES
OF THE PROVISIONS CONTAINED IN THE PLAN AND IN THE DOCUMENTS REFERRED TO IN THE
PLAN. THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT DO NOT PURPORT TO BE
PRECISE OR COMPLETE STATEMENTS OF ALL THE TERMS AND PROVISIONS OF THE PLAN OR
DOCUMENTS REFERRED TO IN THE PLAN, AND REFERENCE IS MADE TO THE PLAN AND TO SUCH
DOCUMENTS FOR THE FULL AND COMPLETE STATEMENT OF SUCH TERMS AND PROVISIONS.

THE PLAN ITSELF AND THE DOCUMENTS IN THE PLAN CONTROL THE ACTUAL
TREATMENT OF CLAIMS AGAINST, AND EQUITY INTERESTS IN, THE DEBTORS UNDER THE PLAN
AND WILL, UPON THE OCCURRENCE OF THE EFFECTIVE DATE, BE BINDING UPON ALL HOLDERS
OF CLAIMS AGAINST, AND EQUITY INTERESTS IN, THE DEBTORS, THE DEBTORS' ESTATES,
ALL PARTIES RECEIVING PROPERTY UNDER THE PLAN AND OTHER PARTIES IN INTEREST. IN
THE EVENT OF ANY CONFLICT BETWEEN THIS DISCLOSURE STATEMENT, ON THE ONE HAND,
AND THE PLAN OR ANY OTHER OPERATIVE DOCUMENT, ON THE OTHER HAND, THE TERMS OF
THE PLAN AND/OR SUCH OTHER OPERATIVE DOCUMENT SHALL CONTROL.

B. Generally

1. Structure of Reorganizing Plan

The Debtors believe that the Plan provides the best and most
prompt possible recovery to Holders of Claims and Equity Interests. For purposes
of this Disclosure Statement, the term Holder refers to the holder of a Claim or
Equity Interest in a particular Class under the Plan. If the Plan is confirmed
by the Bankruptcy Court and consummated, on the Effective Date or as soon as
practicable thereafter, the Debtors will make distributions in respect of
certain Classes of Claims and Equity Interests as provided in the Plan. The
Classes of Claims against, and Equity Interests in, the Debtors created under
the Plan, the treatment of those Classes under the Plan and distributions to be
made under the Plan are described below.

2. Creation of Core-Mark Newco

The Plan will provide for the reorganization of the Debtors
centered around their remaining convenience store wholesale distribution
business. As a result of the restructuring transactions described below in
Section IX. hereof, Debtors' corporate structure will change as of the Effective
Date. On the Effective Date, as a result of the transfer of Fleming's assets to
Core-Mark Holdings III, Core-Mark International, Inc., Core-Mark Interrelated
Companies, Inc., Core-Mark Mid-Continent, Inc., Minter-Weisman Co., Head
Distributing Co. and other subsidiaries of Fleming will become indirect,
wholly-owned subsidiaries of Core-Mark Newco. Two new, wholly-owned subsidiaries
of Core-Mark Newco ("Core-Mark Holdings I" and "Core-Mark Holdings II") will
each own 50% of another new subsidiary ("Core-Mark Holdings III"). An
organizational chart depicting the anticipated corporate structure of the new
holding companies of the Reorganized Debtors as of the Effective Date is set
forth below.

Core-Mark NewCo

Core-Mark Holdings I Core-Mark Holdings II

Core-Mark Holdings III

Remaining Subsidiaries of the
Debtors

3. Exit Financing Facility, Obtaining Cash for Plan
Distributions and Transfers of Funds Among the
Debtors and the Reorganized Debtors

All Cash necessary for Core-Mark Newco and the Post
Confirmation Trust, as applicable, to make payments pursuant to the Plan will be
obtained from the Reorganized Debtors' existing Cash balances, operations, the
Exit Financing Facility, the Rights Offering and prosecution of Causes of
Action, including collections of the Litigation Claims, unless such Cash is not
sufficient to fund the Plan, in which case the Debtors, with the consent of the
Committee, reserve the right to raise Cash from a sale of some or substantially
all of their assets. On the Effective Date, the Reorganized Debtors are
authorized to execute and deliver those documents necessary or appropriate to
obtain the Exit Financing Facility. The purpose of the Rights Offering is to
allow the Debtors, through a sale of stock of Core-Mark Newco, to raise funds
not otherwise available from the Exit Financing Facility and other sources.

4. Sale of Assets

In the event that the Debtors do not have sufficient Cash from
their (i) existing Cash balances on the Effective Date, (ii) operations, (iii)
the Exit Financing Facility, (iv) the Rights Offering or (v) pursuit of Causes
of Action to make the required payments under the Plan, the Debtors, with the
consent of the Creditors Committee, reserve the right to fund the Plan through a
sale of some or substantially all of the assets of the Debtors under section 363
of the Bankruptcy Code.

C. Classification And Treatment Of Claims And Equity Interests

1. Summary of Unclassified Claims against all Debtors

a. Administrative Claims

Subject to the provisions of section 330(a)
and 331 of the Bankruptcy Code, each Holder of an Allowed Administrative Claim,
including Holders of Allowed Approved Trade Creditor Lien Claims, but excluding
claims for Professional Fees, will be paid the full unpaid amount of such
Allowed Administrative Claim in Cash (i) on the Effective Date or as soon as
practicable thereafter, or (ii) if such Administrative Claim is Allowed after
the Effective Date, as soon as practicable after the date such Claim is Allowed,
or (iii) upon such other terms as may be agreed upon by such Holder and the
applicable Reorganized Debtor or otherwise upon an order of the Bankruptcy
Court; provided that Allowed Administrative Claims including Allowed Approved
Trade Creditor Lien Claims representing obligations incurred in the ordinary
course of business or otherwise assumed by the Debtors or Reorganized Debtors
pursuant hereto will be assumed on the Effective Date and paid or performed by
the applicable Reorganized Debtor when due in accordance with the terms and
conditions of the particular agreements governing such obligations.

Except as provided in the Plan, Holders of
Administrative Claims that arose on or before October 31, 2003 shall file an
Administrative Claim on or before the First Administrative Bar Date pursuant to
the First Administrative Bar Date Order. Except as provided in the Plan, Holders
of Administrative Claims that arose after October 31, 2003 that have not been
paid as of the Effective Date, must file an Administrative Claim by the Second
Administrative Bar Date. If an Administrative Claim is not timely filed by the
First Administrative Bar Date or the Second Administrative Bar Date, as
applicable, then such Administrative Claim shall be forever barred and shall not
be enforceable against the Debtors or the Reorganized Debtors, their successors,
their assigns or their property. The foregoing requirements to file
Administrative Claims by the relevant bar date shall not apply to the (i)
Administrative Claims of Professionals retained pursuant to sections 327 and 328
of the Bankruptcy Code; (ii) expenses of members of the Official Committee of
Unsecured Creditors; (iii) all fees payable and unpaid under 28 U.S.C. Section
1930; (iv) any fees or charges assessed against the estates of the Debtors under
28 U.S.C. Section 123; (v) Intercompany Claims between Debtors and their
affiliates; and (vi) Administrative Claims arising in the ordinary course of
business relating to inventory, services or supplies provided by trade vendors
or service providers which are paid or payable by the Debtors in the ordinary
course of business. An objection to an Administrative Claim filed pursuant to
this provision must be filed and properly served within 220 days after the
Effective Date. The Debtors and the Post Confirmation Trustee, as applicable,
reserve the right to seek an extension of such time to object.

All Professionals that are awarded compensation or
reimbursement by the Bankruptcy Court in accordance with sections 330, 331 or
363 of the Bankruptcy Code that are entitled to the priorities established
pursuant to sections 503(b)(2), 503(b)(3), 503(b)(4), or 503(b)(5) of the
Bankruptcy Code, shall be paid in full, in Cash, the amounts allowed by the
Bankruptcy Court: (a) on or as soon as reasonably practicable following the
later to occur of (i) the Effective Date; and (ii) the date upon which the
Bankruptcy Court order allowing such Claim becomes a Final Order; or (b) upon
such other terms as may be mutually agreed upon between such Professional and
the Reorganized Debtors. On or before the Effective Date and prior to any
distribution being made under the Plan, the Debtors shall escrow into the
Professional Fee Escrow Account, the Carve-Out and the Additional Carve-Out as
outlined in the Final DIP Order and any additional estimated accrued amounts
owed to Professionals through the Effective Date.

Except as otherwise provided by Court order for a
specific Professional, Professionals or other entities requesting compensation
or reimbursement of expenses pursuant to sections 327, 328, 330, 331, 503(b) and
1103 or 363 of the Bankruptcy Code for services rendered prior to the
Confirmation Date must file and serve an application for final allowance of
compensation and reimbursement of expenses no later than forty-five (45) days
after the Effective Date. All such applications for final allowance of
compensation and reimbursement of expenses will be subject to the authorization
and approval of the Court. Any objection to the Claims of Professionals shall be
filed on or before thirty (30) days after the date of the filing of the
application for final compensation.

b. Priority Tax Claims

Each Holder of an Allowed Priority Tax Claim
that is due and payable on or prior to the Effective Date shall be paid, at the
option of the respective Reorganized Debtor, in full satisfaction, settlement,
release, and discharge of and in exchange for such Priority Tax Claim either:
(i) in Cash in full on the Effective Date or as soon as practicable thereafter
or (ii) in deferred Cash payments over a period not to exceed six years after
the date of assessment in accordance with Section 1129(a)(9)(C) of the
Bankruptcy Code with interest at a rate agreed to by the parties or set by the
Court, unless such Holder consents to other treatment.

c. DIP Claims

On the Effective Date, or as soon as practicable
thereafter, each Holder of an Allowed DIP Claim shall be paid in full in Cash in
full satisfaction, settlement, release and discharge of and in exchange for each
and every Allowed DIP Claim, unless such Holder consents to other treatment.

2. Classification and Treatment of Classified Claims

a. Class 1--Other Priority Non-Tax Claims

(1) Classification: Class 1 consists of
all Allowed Other Priority Non-Tax
Claims.

(2) Treatment: On the Effective Date,
or as soon as practicable
thereafter, unless such Holder
agrees to other treatment, each
Holder of an Allowed Other Priority
Non-Tax Claim shall be paid in full
satisfaction, settlement, release
and discharge of and in exchange
for each and every Allowed Other
Priority Non-Tax Claim in Cash in
full.

(3) Voting: Class 1 is not impaired and
the Holders of Class 1 Claims are
conclusively deemed to have
accepted the Plan pursuant to
section 1126(f) of the Bankruptcy
Code. Therefore, the Holders of
Claims in Class 1 are not entitled
to vote to accept or reject the
Plan.

b. Class 2--Pre-Petition Lenders' Secured
Claims

(1) Classification: Class 2 consists of
all Allowed Pre-Petition Lenders'
Secured Claims.

(2) Treatment: On the Effective Date,
or as soon as practicable
thereafter, unless such Holder
consents to other treatment, each
Holder of an Allowed Pre-Petition
Lenders' Secured Claim shall be
paid in full and shall either (i)
assign its liens in the Debtors'
assets to the lender under the Exit
Financing Facility Agreement or
(ii) assign its liens in the
Debtors' assets to Core-Mark Newco,
which liens as assigned shall have
the same validity and priority as
such liens held by the Holders of
the Class 2 Claims, and which liens
as assigned shall be subject to
further transfer to the Post
Confirmation Trust, as applicable.

Any default with respect to any
Class 2 Claim that existed
immediately prior to the filing of
the Chapter 11 Cases shall be
deemed cured upon the Effective
Date.

(3) Voting: Class 2 is not impaired and
the Holders of Class 2 Claims are
conclusively deemed to have
accepted the Plan pursuant to
section 1126(f) of the Bankruptcy
Code. Therefore, the Holders of
Claims in Class 2 are not entitled
to vote to accept or reject the
Plan.

c. Class 3(A)-- Other Secured Claims

(1) Classification: Class 3(A) consists
of all Allowed Other Secured
Claims.

(2) Treatment: On the Effective Date or
as soon as practicable thereafter,
each Holder of an Allowed Other
Secured Claim (e.g. PMSI Holders,
equipment financing lenders, etc.)
shall receive one of the following
treatments, at the Debtors' option,
such that they shall be rendered
unimpaired pursuant to section 1124
of the Bankruptcy Code: (i) the
payment of such Holder's Allowed
Other Secured Claim in full, in
Cash; (ii) the sale or disposition
proceeds of the property securing
such Allowed Other Secured Claim to
the extent of the value of the
Holder's interests in such
property; or (iii) the surrender to
the Holder of the property securing
such Claim.

(3) Voting: Class 3(A) is unimpaired
and Holders of Class 3 Claims are
conclusively deemed to have
accepted the Plan pursuant to
section 1126(f) of the Bankruptcy
Code. Therefore, the Holders of
Claims in Class 3(A) are not
entitled to vote to accept or
reject the Plan.

d. Class 3(B)--Approved Trade Creditor
Reclamation Lien Claims

(1) Classification: Class 3(B) consists
of all Allowed Approved Trade
Creditor Reclamation Lien Claims.

(2) Treatment: On the Effective Date,
or as soon as practicable
thereafter, Core-Mark Newco or the
Post Confirmation Trust, as
applicable, shall issue a
promissory note in favor of the
Holders of Allowed Approved Trade
Creditor Reclamation Lien Claims in
the estimated aggregate amount of
such Allowed Claims to be reissued
as such Claims are

Allowed by Final Order or
settlement and grant a first
priority lien to such Holders on
the proceeds of the Litigation
Claims, entitling each Holder of an
Allowed Approved Trade Creditor
Reclamation Lien Claim to its
Ratable Proportion of net Cash
recoveries from Litigation Claims
up to the total amount of each
Holders' Allowed Approved Trade
Creditor Reclamation Lien Claim, in
full satisfaction, settlement,
release and discharge of each
Allowed Approved Trade Creditor
Reclamation Lien Claim, unless such
Holder agrees to other treatment,
and subject at the Debtors' option,
to reduction for unpaid
post-petition deductions,
preference payments and other
applicable setoff rights.

(3) Voting: Class 3(B) is not impaired
and the Holders of Class 3(B)
Claims are conclusively deemed to
have accepted the Plan pursuant to
section 1126(f) of the Bankruptcy
Code. Therefore, the Holders of
Claims in Class 3(B) are not
entitled to vote to accept or
reject the Plan.

e. Class 3(C)--DSD Trust Claims

(1) Classification: Class 3(C) consists
of all Allowed DSD Trust Claims.

(2) Treatment: (i) In the event that
the DSD Trust Claim Holders obtain
a Final Order in their favor in the
pending litigation allowing their
Claims, on the later of (a) the
Effective Date or as soon as
practicable thereafter; or (b) the
date the DSD Trust Claim Holders
obtain a Final Order allowing their
Claims or as soon as practicable
thereafter, each Holder of an
Allowed DSD Trust Claim shall be
paid in full satisfaction,
settlement, release and discharge
of each Allowed DSD Trust Claim in
Cash in full, unless such Holder
agrees to other treatment, subject,
at the Debtors' option to reduction
for unpaid post-petition
deductions, preference payments and
other applicable setoff rights and
(ii) in the event the DSD Trust
Claim Holders do not prevail in
their litigation, all Allowed DSD
Trust Claims shall be treated as
Class 6 General Unsecured Claims
hereunder.

(3) Voting: Class 3(C) is unimpaired
and Holders of Claims in Class 3(C)
are conclusively deemed to have
accepted the Plan pursuant to
section 1126(f) of the Bankruptcy
Code. Therefore, the Holders of
Claims in Class 3(C) are not
entitled to vote to accept or
reject the plan.

f. Class 4--PACA/PASA Claims

(1) Classification: Class 4 consists of
all Allowed PACA/PASA Claims.

(2) Treatment: On the Effective Date,
or as soon as practicable
thereafter, unless such Holder
agrees to other treatment, each
Holder of an Allowed PACA/PASA
Claim shall be paid in full
satisfaction, settlement, release,
and discharge of and in exchange
for each and every Allowed
PACA/PASA Claim in Cash in full
from the previously established
PACA trust or from Core-Mark Newco
to the extent the PACA trust is
insufficient to satisfy all the
Allowed PACA/PASA Claims with any
remaining proceeds of the PACA
trust to be distributed to
Core-Mark Newco.

(3) Voting: Class 4 is unimpaired and
Holders of Allowed Claims in Class
4 are conclusively deemed to have
accepted the Plan pursuant to

section 1126(f) of the Bankruptcy
Code. Therefore, the Holders of
Claims in Class 4 are not entitled
to vote to accept or reject the
Plan.

g. Class 5--Valid Reclamation Claims that are
not Class 3(B) Claims

(1) Classification: Class 5 consists of
Allowed Valid Reclamation Claims
that are not Class 3(B) Claims.

(2) Treatment: To the extent it is
determined that the Debtors'
Inventory in which the Holders of
Allowed Valid Reclamation Claims
have asserted an interest, had
Residual Inventory Value as of the
Petition Date, on the Effective
Date, or as soon as practicable
thereafter, Core-Mark Newco or the
Post Confirmation Trust, as
applicable, shall issue a
promissory note in favor of the
Holders of Allowed Valid
Reclamation Claims that are not
Class 3(B) Claims in the amount of
the Residual Inventory Value and
grant a second priority lien on the
proceeds of the Litigation Claims,
entitling each Holder of an Allowed
Valid Reclamation Claim, that is
not a Class 3(B) Claim, to its
Ratable Proportion of net Cash
recoveries from Litigation Claims,
after all Class 3(B) Claims are
paid in full. In the event the
Residual Inventory Value is less
than the Allowed Amount of the
Valid Reclamation Claims, the
remainder of the Valid Reclamation
Claims in excess of the Residual
Inventory Value shall be treated as
Class 6 General Unsecured Claims
hereunder.

(3) Voting: Class 5 is impaired and
Holders of Allowed Claims in Class
5 are entitled to vote to accept or
reject the Plan.

h. Class 6--General Unsecured Claims other than
Convenience Claims

(1) Classification: Class 6 consists of
all Allowed General Unsecured
Claims other than Convenience
Claims.

(2) Treatment: On the Effective Date,
or as soon as practicable
thereafter, each Holder of an
Allowed General Unsecured Claim
other than Convenience Claims,
shall be paid in full satisfaction,
settlement, release, and discharge
of and in exchange for each and
every Allowed General Unsecured
Claim other than Convenience
Claims, at the Debtors' option, in
one or a combination of the
following manners: (i) issuance of
a Ratable Proportion of New Common
Stock subject to dilution from the
shares of New Common Stock issued
upon the conversion of Preferred
Stock issued pursuant to the Rights
Offering and through the Management
Incentive Plan; and/or (ii) in the
event the Debtors, with the consent
of the Creditors Committee, elect
to sell some or all of their assets
as outlined herein, a Ratable
Proportion of Cash remaining from
the sale of such assets after all
of the Allowed Unclassified Claims
and Claims of Holders in Classes 1
through 5 have been satisfied in
full.

As additional consideration, each
Holder of a General Unsecured Claim
that is listed on the Rights
Participation Schedule shall be
entitled to receive, in exchange
for such Holder's Claim, its Equity
Subscription Rights for shares of
Preferred Stock as outlined in
Section VII.B of the Plan.

(3) Voting: Class 6 is impaired and
Holders of Claims in Class 6 are
entitled to vote to accept or
reject the Plan.

i. Class 7 - Convenience Claims

(1) Classification: Class 7 consists of
all General Unsecured Claims of
$5,000 or less held by a single
Holder

(2) Treatment: On or as soon as
practicable after the Effective
Date, each Holder of an Allowed
Class 7 Claim shall receive, in
full and final satisfaction of such
Claim, a cash distribution equal to
10% of the amount of its Class 7
Claim, provided however, the
aggregate amount of such Allowed
Class 7 Claims shall not exceed
$1,000,000. If the aggregate amount
of the Allowed Class 7 Claims
exceeds $1,000,000, each Holder of
an Allowed Class 7 Claim shall
receive its Ratable Proportion of
$1,000,000.

(3) Voting: Class 7 is impaired, and
Holders of Class 7 Claims are
entitled to vote to accept or
reject the Plan.

j. Class 8--Equity Interests

(1) Classification: Class 8 consists of
all Equity Interests.

(2) Treatment: Receives no distribution
and are canceled as of the
Effective Date.

(3) Voting: Class 8 is impaired, but
because no distributions will be
made to Holders of Class 8 Claims
nor will such Holders retain any
property, such Holders are deemed
to reject the Plan pursuant to
section 1126(g) of the Bankruptcy
Code. Class 8 is not entitled to
vote to accept or reject the Plan.

k. Class 9--Intercompany Claims

(1) Classification: Class 9 consists of
all Intercompany Claims.

(2) Treatment: Receives no distribution
and are canceled as of the
Effective Date.

(3) Voting: Class 9 is impaired, but
because no distributions will be
made to Holders of Class 9 Claims
nor will such Holders retain any
property, such Holders are deemed
to reject the Plan pursuant to
section 1126(g) of the Bankruptcy
Code. Class 9 is not entitled to
vote to accept or reject the Plan.

D. Special Provision Governing Unimpaired Claims

Except as otherwise provided in the Plan, nothing under the Plan shall
affect the Debtors' or the Reorganized Debtors' rights in respect of any
Unimpaired Claims, including, but not limited to, all rights in respect of legal
and equitable defenses to or setoffs or recoupments against such Unimpaired
Claims.

E. Acceptance And Rejection Of The Plan

1. Voting Classes

Each Holder of an Allowed Claim or Allowed Interest in Classes
5, 6 and 7 shall be entitled to vote to accept or reject the Plan.

2. Acceptance by Impaired Classes

An Impaired Class of Claims shall have accepted the Plan if
(a) the Holders (other than any Holder designated under section 1126(e) of the
Bankruptcy Code) of at least two-thirds in amount of the 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 in number of the Allowed Claims actually voting in such Class have
voted to accept the Plan.

3. Presumed Acceptance of Plan

Classes 1, 2, 3(A), 3(B), 3(C) and 4 are unimpaired under the
Plan and, therefore, are presumed to have accepted the Plan pursuant to section
1126(f) of the Bankruptcy Code.

4. Presumed Rejection of Plan

Classes 8 and 9 are impaired and shall receive no
distributions and, therefore, are presumed to have rejected the Plan pursuant to
section 1126(g) of the Bankruptcy Code.

5. Non-Consensual Confirmation

The Debtors and the Committee reserve the right to seek
Confirmation of the Plan under section 1129(b) of the Bankruptcy Code, to the
extent applicable, in the event that any Voting Class fails to accept the Plan
in accordance with section 1129(a)(8) of the Bankruptcy Code. The Debtors and
the Committee reserve the right (a) to request that the Bankruptcy Court confirm
the Plan in accordance with section 1129(b) of the Bankruptcy Code and/or (b) to
modify the Plan in accordance with Section XIV.D. thereof.

F. Plan Implementation

1. The Rights Offering

a. The Rights Offering

Each Holder of a Class 6 General Unsecured
Claim that is listed on the Rights Participation Schedule (attached to the Plan
as Exhibit B) shall receive under the Plan, and be entitled to exercise, Equity
Subscription Rights to purchase shares of Preferred Stock. The Preferred Stock
will be convertible into New Common Stock at a conversion price of ____, will
carry a PIK dividend of ____, and will have a liquidation preference over the
Common Stock of $______ per share. See the Equity Commitment Letter attached to
the Plan as Exhibit E for a more detailed description of the Preferred Stock.
Each Holder listed on such Schedule will receive its Ratable Portion of the
total amount of Equity Subscription Rights based on the ratio of such Holder's
Rights Participation Claim Amount to the total of the Rights Participation Claim
Amounts for all Holders listed on such Schedule (as set forth in the Rights
Participation Schedule). Each Holder listed on the Equity Participation Schedule
will be entitled to purchase up to an amount of Preferred Stock equal to its
Ratable Portion of the Equity Subscription Rights multiplied by the total number
of shares of Preferred Stock being offered for sale under the Rights Offering,
subject to adjustment as described below. Depending on the amount of additional
cash required to fund the Plan, up to a maximum of [$__] million of Preferred
Stock will be offered under the Rights Offering, which, at a Subscription
Purchase Price of $____________ per share of Preferred Stock, represents up to a
maximum of _______ shares of Preferred Stock.

If any Holder of a General Unsecured Claim
is not listed on the Rights Participation Schedule or disputes the Rights
Participation Claim Amount listed on the Rights Participation Schedule, such
General Unsecured Claim Holder may file a motion with the Bankruptcy Court for
estimation of its Claim for purposes of the Rights Offering. Disputing Holders
shall be entitled to participate in the Rights Offering in the amount of their
Additional Participating Amount, if any, determined by the Bankruptcy Court or
agreed to by the Debtors with the consent of the Committee and the Equity
Investor prior to the Subscription Expiration Date, as further described in
Section VII.B.10 of the Plan. If, as a result of Disputing Holders exercising
their Equity Subscription Rights with respect to Additional Participating
Amounts, the Rights Offering is oversubscribed, each Claim Holder which has
exercised its Equity Subscription Rights shall be cut back pro rata based on the
number of shares of Preferred Stock for which such Claim Holder has exercised
its Equity Subscription Rights.

The Debtors have entered into an Equity
Commitment Letter with an Equity Investor which obligates the Equity Investor,
subject to the satisfaction or waiver of certain conditions, to purchase any
remaining shares of Preferred Stock available after the Holders of Class 6
Claims have exercised their Equity Subscription Rights, and which entitles the
Equity Investor, at its option, to purchase a minimum of $[__] million of
Preferred Stock at the Subscription Purchase Price, as further described in
Section VII.B.7. of the Plan. Accordingly, to the extent that a large enough
amount of Equity Subscription Rights are exercised such that less than $[__]
million of Preferred Stock remains available for sale to the Equity Investor and
the Equity Investor exercises its minimum purchase right, each Exercising Claim
Holder shall be cut back pro rata based on the number of shares of Preferred
Stock for which such Claim Holder has exercised its Equity Subscription Rights.

b. Issuance of Equity Subscription
Rights

The Equity Subscription Rights shall provide
the Holders of Class 6 Claims listed on the Rights Participation Schedule the
right to purchase Preferred Stock at the Subscription Purchase Price pursuant to
the terms and conditions set forth in this Section. After the Plan has been
confirmed and prior to the Effective Date, a Subscription Form will be
distributed to each Holder of a Claim in Class 6 listed on the Rights
Participation Schedule.

c. Subscription Period

The Rights Offering shall commence on the
Subscription Commencement Date (which will be a date after the Confirmation
Date) and shall expire on the Subscription Expiration Date (which will be a date
on or prior to the Effective Date of the Plan). Following the Confirmation Date,
a Subscription Form will be distributed to each Holder of a Claim in Class 6
listed on the Rights Participation Schedule. After the Subscription Expiration
Date, unexercised Equity Subscription Rights shall be treated as acquired by the
Equity Investor, Core-Mark Newco shall only be obligated to honor the exercise
of such Equity Subscription Rights by the Equity Investor, any subsequent
exercise of any such unexercised Equity Subscription Rights by any Person other
than the Equity Investor shall be null and void, and Core-Mark Newco shall not
be obligated to honor any such purported exercise received by the Subscription
Agent after the Subscription Expiration Date, regardless of when the documents
relating to such exercise were sent. The Debtors may, in their sole discretion,
extend the Subscription Period.

d. Subscription Purchase Price

Each Subscription Right will be exercisable
to purchase one share of Preferred Stock for $_______.

e. Exercise of Equity Subscription
Rights

In order to exercise the Equity Subscription
Rights, each Holder thereof must: (i) return a duly completed Subscription Form
to the Subscription Agent so that such form is received by the Subscription
Agent on or before the Subscription Expiration Date; and (ii) pay to the
Subscription Agent (on behalf of the Debtors) on or before the Subscription
Expiration Date immediately available funds in an amount equal to the
Subscription Purchase Price multiplied by the number of shares of Preferred
Stock for which such Holder is

exercising its Equity Subscription Rights (the "Purchase Price"), such payment
to be made either by wire transfer to the Subscription Agent in accordance with
the wire instructions set forth on the Subscription Form or by bank or cashier's
check delivered to the Subscription Agent along with the Subscription Form. If,
on or prior to the Subscription Expiration Date, the Subscription Agent for any
reason has not received from a given Holder of Equity Subscription Rights both a
duly completed Subscription Form and immediately available funds in an amount
equal to such Holder's Purchase Price, such Holder shall be deemed to have not
exercised its Equity Subscription Rights and to have relinquished and waived its
right to participate in the Rights Offering. A Subscription Form must also be
accompanied by sufficient evidence of ownership of the Claim giving rise to the
Equity Subscription Rights, as well as appropriate executed representations as
to ownership. The payments made in accordance with the Rights Offering shall be
deposited and held by the Subscription Agent in a trust account, escrow account,
or similar segregated account or accounts which shall be separate and apart from
the Debtors' general operating funds and any other funds subject to any cash
collateral arrangements and which segregated account or accounts will be
maintained for the purpose of holding the money for administration of the Rights
Offering until the Effective Date, or such other later date, at the option of
the Reorganized Debtors, but not later than _____ days after the Effective Date.
Notwithstanding the foregoing, in order for a Holder of a General Unsecured
Claim arising from an Old Note to exercise the Equity Subscription Rights, each
such Holder entitled to Equity Subscription Rights must provide its instruction
to its bank, broker, or other nominee, or to its agent by the deadline specified
on the Subscription Form. The bank or broker, in turn, must then convey the
instruction on a Master Subscription Form and arrange for the proper payment
either through DTC or, if DTC is unable to act as intermediary for subscription
instructions and payments, by following the payment instructions outlined above.

f. Transfer Restriction

Prior to the Subscription Expiration Date,
the Equity Subscription Rights must be transferred with the underlying Claim.
The Equity Subscription Rights are not separately transferable.

g. Equity Investor

Pursuant to the terms of the Equity
Commitment Letter and subject to the satisfaction or waiver by the Equity
Investor of all conditions precedent set forth therein, the Equity Investor
shall be obligated to, and shall, purchase all shares of Preferred Stock
remaining after the Holders of General Unsecured Claims have exercised their
Equity Subscription Rights, at the Subscription Purchase Price. The conditions
precedent include, among other things: completion of all legal documentation and
filings satisfactory to the Equity Investor; Administrative Claims not being
allowed or estimated in excess of a specified amount; Reclamation Claims not
being granted administrative status; receipt by Core-Mark Newco of a commitment
for an Exit Financing Facility acceptable to the Equity Investor; the timetable
for assessment of preferences and Reclamation Claims being acceptable to the
Equity Investor; the Equity Investor having the right to name ____ directors to
the Core-Mark Newco board; the Plan being acceptable to the Equity Investor;
Core-Mark Newco's reorganized capital structure having funded liabilities of no
more than [__] million; and no material deterioration occurring in the
underlying business of Core-Mark Newco. The Equity Investor has the right, at
its option, to purchase a minimum of $[__] million of Preferred Stock at the
Subscription Purchase Price. The Equity Investor shall pay to the Debtors, by
wire transfer in immediately available funds on or prior to the Effective Date,
Cash in an amount equal to the Purchase Price for all unexercised Equity
Subscription Rights (or the purchase price payable upon exercise of its minimum
purchase rights), pursuant to the terms of the Equity Commitment. To the extent
that the exemption under section 1145(a)(1) is not available to exempt the
issuance of the Preferred Stock to the Equity Investor, the offer and sale of
such securities shall be qualified under the section 4(2) private placement
exemption contained in the Securities Act. Core-Mark Newco shall grant
registration rights to the Equity Investor as further described in the
Registration Rights Agreement. The Equity Investor will be paid a fee in
Preferred Stock equal to ___% of the amount of the total Equity Subscription
Rights subscribed to under the Rights Offering.

h. Distribution of Preferred Stock

On, or as soon as practicable after the
Effective Date, Core-Mark Newco or a designated disbursing agent shall
distribute the Preferred Stock purchased by each Exercising Claim Holder to such
Exercising Claim Holder.

i. Fractional Interests

No fractional shares shall be issued under
the Rights Offering. In determining the Ratable Proportion of Equity
Subscription Rights among the participants, each Ratable Proportion shall be
rounded up or down to the nearest whole number.

j. Disputed Claims

For all purposes of this Section, each
Holder of a General Unsecured Claim in Class 6 listed on the Rights
Participation Schedule is entitled to participate in the Rights Offering to the
extent of its Rights Participation Claim Amount as listed on the Rights
Participation Schedule. The entitlement of Holders of General Unsecured Claims
in Class 6 to participate in the Rights Offering on the terms set forth in the
Plan shall not be affected by whether or not such General Unsecured Claim in
Class 6 is Allowed. If any Holder of a General Unsecured Claim is not listed on
the Rights Participation Schedule, or disputes the Rights Participation Claim
Amount listed on the Rights Participation Schedule, such disputing General
Unsecured Claim Holder may file a motion with the Bankruptcy Court at least ten
days prior to the Subscription Expiration Date for estimation of their Claim for
the purposes of the Rights Offering. Holders filing such a motion with the
Bankruptcy Court shall be entitled to participate in the Rights Offering up to
the Additional Participation Amount determined by the Bankruptcy Court or agreed
to by the Debtors with the consent of the Committee.

k. Subsequent Adjustments to the
Rights Participation Claim Amount;
Cut Back in Rights Offering

Holders of Class 6 Claims listed on the
Rights Participation Schedule attached to the Plan as Exhibit B shall be
entitled to participate in the Rights Offering solely to the extent of their
Rights Participation Claim Amount. If any Holder of a Class 6 Claim not listed
on the Rights Participation Schedule or a Disputing Holder has obtained an order
of the Bankruptcy Court estimating its General Unsecured Claim for the purpose
of participating in the Rights Offering prior to the Subscription Expiration
Date or reached an agreement with the Debtors and the Committee with respect
thereto, such Holder shall be entitled to participate in the Rights Offering in
the amount determined by the Bankruptcy Court or agreed to by the Debtors with
the consent of the Committee. If, as a result of such allowances of General
Unsecured Claims for purposes of participation in the Rights Offering and/or as
a result of the exercise by the Equity Investor of its minimum purchase rights,
more shares of Preferred Stock subject to the Rights Offering have been
subscribed for than are available for sale to Exercising Claim Holders, each
Exercising Claim Holder (including each Disputing Holder) shall be cut back pro
rata based on the number of shares of Preferred Stock for which such Exercising
Claim Holder has exercised its Equity Subscription Rights, and the difference
between the purchase price paid by such Exercising Claim Holder and the adjusted
Subscription Purchase Price shall be refunded to such Exercising Claim Holder,
without interest, as soon as practicable after the Effective Date.

l. No Interest

In the event that all or any part of the
Subscription Purchase Price is repaid to the entity making such payment, no
interest shall be paid thereon.

m. Validity of Exercise of Equity
Subscription Rights

All questions concerning the timelines,
validity, form and eligibility of any exercise of Equity Subscription Rights
shall be determined by the Debtors, whose determinations shall be final and
binding. The Debtors, with the consent of the Committee, may waive any defect or
irregularity, or permit a defect or irregularity to be corrected within such
times as it may determine, or reject the purported exercise of any Equity
Subscription Rights. Subscription Forms shall be deemed not to have been
received or accepted until all irregularities have been waived or cured within
such time as the Debtors determine, with the consent of the Committee. Neither
the Debtors nor the Subscription Agent shall be under any duty to give
notification of any defect or irregularity in connection with the submission of
Subscription Forms or incur any liability for failure to give such notification.

n. Use of Proceeds

On the Effective Date, the proceeds received
by the Reorganized Debtors from the Rights Offering shall be used to fund the
Cash payments required under the Plan and for general corporate purposes.

2. Substantive Consolidation

As set forth in Article V.A of the Plan, all of the Debtors
seek a limited substantive consolidation of their estates solely for purposes of
actions associated with the confirmation and consummation of the Plan,
including, but not limited to, voting, confirmation and distribution. The Plan
does not contemplate the merger or dissolution of any Debtor or the transfer or
commingling of any asset of any Debtor, except that the assets of Fleming
already being used by Fleming Convenience in its operations as shall be formally
vested in Core-Mark International, Inc., or one of its Debtor subsidiaries, and
except to accomplish the distributions under the Plan. Such limited substantive
consolidation shall not affect (other than for Plan voting, treatment and/or
distribution purposes) (i) the legal and corporate structures of a Reorganized
Debtor or (ii) equity interests in the Filing Subsidiaries.

a. Other Effects of Substantive
Consolidation

As set forth in Article V of the Plan, as a
result of substantive consolidation, a Holder of Claims against one or more of
the Debtors arising from or relating to the same underlying debt that would
otherwise constitute Allowed Claims against two or more Debtors, including,
without limitation, Claims based on joint and several liability, contribution,
indemnity, subrogation, reimbursement, surety, guaranty, co-maker and similar
concepts, shall have only one Allowed Claim on account of such Claims. In
addition, all Claims between and among Fleming and its Filing Subsidiaries shall
be eliminated as a result of substantive consolidation under the Plan.

b. Benefits of Substantive
Consolidation

The Debtors and the Committee believe that
substantive consolidation is in the best interest of the Debtors' estates and
will promote a more expeditious and streamlined distribution and recovery
process for Creditors. Substantive consolidation of the Debtors' estates will
result in (i) the deemed consolidation of the assets and liabilities of the
Debtors; (ii) the deemed elimination of intercompany claims, multiple and
duplicative creditor claims, joint and several liability claims and guarantees;
and (iii) the payment of Allowed Claims from a common pool of assets.
Substantive consolidation will relieve the Debtors' estates from having to
engage in the costly and time-consuming exercise of litigating intercompany
claims as those claims will be eliminated. It will also relieve the Debtors from
having to litigate creditor claims against multiple Debtor entities on the same
liability, as only one claim will be deemed allowed and payable from one common
pool of assets. The Debtors estimate that there have been over $20 billion of
duplicate proofs of claims filed against the Debtors' estates. Moreover,
substantive consolidation will provide for a greater recovery overall for the
vast majority of creditors of the Debtors' estates.

c. Legal Analysis of Substantive
Consolidation

Substantive consolidation is an equitable
doctrine that permits the Bankruptcy Court to merge the assets and liabilities
of affiliated entities so that the combined assets and liabilities are treated
as though held by one entity. It is well established that section 105(a) of the
Bankruptcy Code, which provides in pertinent part that the "court may issue any
order, process, or judgment that is necessary or appropriate to carry out the
provisions of this title," empowers a bankruptcy court to authorize substantive
consolidation. The Bankruptcy Code also contemplates consolidation in aid of
reorganization. 11 U.S.C. Section 1123(a)(5).

There are no express criteria in the
Bankruptcy Code for determining whether an order granting substantive
consolidation should issue, but the Third Circuit has generally articulated a
standard based on two cases, In re Auto-Train Corp., 810 F.2d 270 (D.C. Cir.
1987) and Union Savings Bank v. Augie/Restivo Baking Co. (In re Augie/Restivo
Baking Co.), 860 F.2d 515 (2d Cir. 1988). Under the Auto-Train test, the court
looks at (1) whether there is substantial identity between the entities to be
consolidated and (2) whether consolidation is necessary to avoid some harm or to
realize some benefit. Under the Augie/Restivo test, the court will examine: (1)

whether creditors dealt with the entities as a single economic unit and did not
rely on their separate identity in extending credit or (2) whether the affairs
of the debtor companies are so entangled that consolidation will be beneficial.

A party may be estopped from opposing
substantive consolidation where a reasonable party in a similar situation "knew
or should have known of the close association between affiliate and bankrupt,"
or where the party could be deemed to have dealt with the debtors with full
knowledge of their consolidated operations. In re Snider Bros., Inc., 18 B.R.
230, 237-38 (Bankr. Mass. 1982). The existence of cross-corporate guarantees
among each of the debtor entities may also put a party on notice of substantial
identity among affiliates. See In re Commercial Envelope Mfg. Co., 3 B.C.D. 647,
655 (Bankr. S.D.N.Y. 1977). Estoppel is warranted, even though a creditor may
not have dealt with more than any one debtor at a time, where the knowledge that
there existed an intercorporate relationship could have bolstered confidence in
dealing with any individual corporation because the creditor knew s/he could
rely on the credit and assets of all the entities, not just the one with which
s/he was dealing. Id.

Substantive consolidation is ultimately a
test of balancing of the equities where the court must weigh the economic
prejudice of continued debtor separateness against the economic prejudice of
substantive consolidation. As a court-made doctrine, substantive consolidation
is constantly evolving to meet the realities of the ever-changing and
increasingly complex business world. There is a modern trend towards favoring
substantive consolidation. This trend is driven by judicial cognizance of modern
business practices, which use complex interrelated business structures,
involving interconnected parents and subsidiaries, overlapping directorates, and
integrated administrative, operational and cash management systems. Murray
Indus., Inc., 119 B.R. 820, 832 (Bankr. M.D. Fla. 1990). Substantive
consolidation should be authorized whenever it will benefit the debtors' estates
without betraying legitimate expectations of the debtors and their respective
creditors. Id.

d. The Debtors Meet the Criteria for
Substantive Consolidation

The substantial interrelationship between
and among Fleming and the Filing Subsidiaries warrants substantive consolidation
in this case. For example, the Debtors share a joint corporate structure, joint
business operations and joint liability on the most significant and largest
outstanding debts in these Chapter 11 Cases.

(1) Joint Corporate Structure.

- Fleming operates as the parent company for the Filing
Subsidiaries as well as for the non-filing
subsidiaries and owns 100% of the capital stock
(directly or indirectly) of all of the Filing
Subsidiaries.

- Fleming's officers and directors also serve as
officers and directors of the Filing Subsidiaries'
boards.

- Important decisions were generally made by the
Fleming board and implemented by unanimous consent at
the subsidiary level without separate board meetings.

- The Debtors file joint tax returns and engage in
consolidated audits of their financial records.

- The Debtors file consolidated financial statements
and SEC filings.

(2) Joint Business Operations.

- The Debtors use a centralized cash management system
for operations conducted between themselves, their
affiliates and third parties, including the
Pre-Petition Lenders.

- The Fleming Subsidiaries have no access to capital
outside of Fleming's credit facility because all
funds in the Fleming Subsidiaries' accounts are swept
on a daily basis into Fleming's main concentration
accounts.

- The Filing Subsidiaries were managed as seamless
divisions of Fleming. For example, after the Fleming
acquisition of Core-Mark in June 2002, Core-Mark
interacted with the public as Fleming Convenience, a
division of Fleming. The Debtors also heavily
promoted the acquisition of Core-Mark as creating a
seamless national geographic network with respect to
Fleming Convenience (as discussed in more detail
infra).

- Fleming provides various insurance, SEC reporting and
other administrative services including legal
services for the Fleming Subsidiaries.

- Vendors perceived the Debtors as one integrated
company based on the fact that Vendors of Fleming
Convenience withdrew millions of dollars of credit
from Fleming Convenience because of fears concerning
Fleming Companies, Inc.'s economic condition.

(3) Joint Liability on Debt.

- The Filing Subsidiaries are liable to the
Pre-Petition Lenders for all Pre-Petition Lenders'
Claims arising under Class 2 of the Plan due to a
guarantee on the Pre-Petition Lenders' secured
pre-petition indebtedness executed by the Filing
Subsidiaries.

- The Filing Subsidiaries executed the Bond Guarantees
in favor of the Holders of Old Notes pre-petition and
are thus liable for amounts outstanding under the Old
Notes.

- The PBGC alleges that the Filing Subsidiaries, as
members of Fleming's controlled group, are liable for
the PBGC Claims.

- A substantial majority of the Claims filed against
the Debtors by the Bar Date are against multiple
Debtors for the same underlying debt.

Based upon the Debtors' joint corporate structure,
joint business operations, and joint liability on debt, among other things, the
Debtors believe that Fleming and all Filing Subsidiaries should be consolidated
for Plan purposes. The Debtors have undertaken an extensive factual review of
the factors in support of substantive consolidation and believe that the facts
in these cases warrant substantive consolidation.

For example, the Debtors believe that Core-Mark
International, Inc. ("Core-Mark") as well as its direct subsidiaries should be
consolidated with Fleming. Fleming acquired Core-Mark on June 18, 2002. The code
name for Fleming's acquisition of Core-Mark was "Project Platform." That is,
Fleming acquired Core-Mark as a platform to create a national convenience store
distribution business to compliment its national wholesale distribution
business. Immediately upon acquiring Core-Mark, Fleming went to work on
combining and promoting its new national convenience store distribution
business. For example, from the outset, Fleming instructed Core-Mark to change
the name under which it did business to include a reference to Fleming. Shortly
thereafter, Core-Mark and Fleming settled on the name "Fleming Convenience."
Fleming also gave operational control of its seven eastern convenience store
distribution centers to Fleming Convenience.

Core-Mark's transformation into Fleming Convenience
was accomplished both within the company and in the outside convenience
distribution world at large. Internally, Core-Mark changed virtually all aspects
of its identity from Core-Mark to Fleming Convenience. The company name on
everything from envelopes and letterhead to human resources forms and employee
benefits plans was changed from Core-Mark to Fleming Convenience. Core-Mark's
intercompany forms that were changed to Fleming Convenience forms included life
insurance forms, health insurance forms, job application forms, 401K plan forms,
designation of beneficiary forms, employee attendance record forms and summary
of benefits forms.

The change from Core-Mark to Fleming Convenience was
just as pronounced to the outside convenience distribution world. After the
acquisition, Core-Mark began answering its phones as Fleming-Convenience,
Fleming-Core-Mark, and/or Core-Mark-Fleming. The company name on the materials
given to the outside convenience distribution world was changed to Fleming
Convenience as well. For example, the name on company e-mails, letterhead,
envelopes, invoices, purchase orders, driver receipt forms, manual check stock,
customer reorder tags, credit-due-us forms and credit applications was changed
from Core-Mark to Fleming Convenience. In addition, shortly after the
acquisition, the business cards of the sales and marketing personnel added the
Fleming Convenience logo, and the business cards of the other Fleming
Convenience personnel changed thereafter as well.

By July 2002, less than a month after its acquisition
by Fleming, Core-Mark was marketing itself to the outside world as Fleming's
national convenience store distribution business. To accomplish this task,
Core-Mark changed the name on its Smart Stock, Smart Set, Cooler Door, Promo
Power and other marketing programs to Fleming Convenience. These Fleming
Convenience marketing materials were sent to its major vendors, as well as its
customers and potential customers. Core-Mark also changed the name on its
monthly newsletter which it sent to vendors and customers alike to Fleming
Convenience.

In addition, at the key convenience store industry
event of the year, the 2002 National Association of Convenience Stores (NACS)
conference in Orlando, Florida, Fleming went to great lengths to inform the
industry of the advent of Fleming Convenience, its new nationwide convenience
store distribution platform. Fleming Convenience sent invitations announcing the
change from Core-Mark to Fleming Convenience to all of the members of NACS,
which included vendors, distributors and customers alike. Fleming Convenience
also solicited its major vendors (now its creditors) to sponsor its much larger
than usual booth at the 2002 NACS Conference. Fleming Conveniences'
solicitations, as well as its NACS booth, heralded the change from Core-Mark to
Fleming Convenience. Fleming Convenience also hosted a golf tournament and a
separate gala at the NACS conference. Over 500 of its customers and vendors
participated in these events where the Fleming Convenience name was prominently
featured.

Fleming also held meetings with the industry's
largest trade credit group, the National Food Manufacturers Credit Group
(NFMCG), in which they discussed the acquisition of Core-Mark and its
transformation to Fleming Convenience. On October 25, 2002, representatives of
Fleming met with the NFMCG's Trade Relations Committee in Scottsdale, Arizona.
In that meeting, they discussed, among other things, Fleming's integration of
Core-Mark. On January 24, 2003, Fleming met again with the Trade Relations
Committee of the NFMCG. In that meeting, they discussed the success of Fleming's
acquisition of Core-Mark and presented the Trade Relations Committee with
consolidated financial information that included Fleming Conveniences' financial
information as well.

That the outside world knew full well of Fleming
Convenience's interconnection with Fleming was evident when the market became
aware of Fleming's financial troubles. Indeed, as early as November 2002, one or
more of Fleming Conveniences' large vendors tightened their credit terms with
Fleming Convenience as a result of an unfavorable article published about
Fleming in the Wall Street Journal. Thereafter, in March 2003, as the market
became more aware of Fleming's troubles, many of Fleming Conveniences' vendors
restricted their credit terms based on the reputed troubles of Fleming.

e. Substantive Consolidation Will Provide A
Benefit To The Estates And Result In A
Higher Recovery For Creditors

Under the circumstances of this case, substantive
consolidation is warranted because there is substantial identity between Fleming
and the Filing Subsidiaries, because the benefits outweigh the harm of
consolidation, because untangling intercompany accounts would be lengthy and
needlessly costly, and because creditors, who may or may not be prejudiced, and
who knew or should have known they were dealing with a single entity, are
estopped from asserting any kind of defense against substantive consolidation,
which will facilitate the expedient consummation of the Plan. In particular, the
very same creditors who, prior to the bankruptcy treated Fleming Convenience as
part of Fleming, cannot now be heard to complain that they did not believe that
they were dealing with Fleming.

A denial of substantive consolidation will result in
lengthy delay as intercompany liabilities and duplicate Claims are adjudicated,
thereby threatening the timely consummation of the Plan and jeopardizing the
patience and credit of customers and vendors willing to work with the
reorganized Debtors, or Core-Mark Newco. These lengthy adjudications will
necessitate large administrative costs, which will consume the assets of the
Debtors' estates that would otherwise be used for distribution to creditors.
Substantive consolidation will benefit the vast majority of creditors, who will
not only benefit from streamlined legal proceedings and the administrative cost
savings that engenders, but will realize a greater distribution than if the
Debtors were forced to pursue separate liquidations or plans. Lastly,
substantive consolidation will benefit the creditors of these cases because it
will facilitate a speedy and cost-effective reorganization that will hasten the
emergence of a viable Fleming Convenience business in which these creditors will
have an interest.

3. Continued Corporate Existence and Vesting of Assets
in the Reorganized Debtors

Each Debtor shall, as a Reorganized Debtor, continue to exist
after the Effective Date as a separate legal entity, each with all the powers of
a corporation or partnership, as applicable, under the laws of its respective
jurisdiction of organization and without prejudice to any right to alter or
terminate such existence (whether by merger or otherwise) under such applicable
state law. Except as otherwise provided in the Plan, on and after the Effective
Date all property of the Estate and any property acquired by the Debtors or the
Reorganized Debtors under the Plan shall vest in the applicable Reorganized
Debtor, free and clear of all Claims, liens, charges or other encumbrances. On
and after the Effective Date, the Reorganized Debtors may operate their
respective businesses and may use, acquire or dispose of property without
supervision or approval by the Bankruptcy Court and free of any restrictions of
the Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly
imposed by the Plan and the Confirmation Order.

4. Cancellation of Old Notes, Old Stock and Other Equity
Interests

On the Effective Date, except to the extent otherwise provided
in the Plan, all notes, instruments, certificates and other documents evidencing
(a) the Old Notes, (b) the Old Stock and (c) any stock options, warrants or
other rights to purchase Old Stock shall be canceled, and the obligations of the
Debtors thereunder or in any way related thereto shall be discharged. On the
Effective Date, except to the extent otherwise provided in the Plan, any
indenture relating to any of the foregoing, including, without limitation, the
Indentures, shall be deemed to be canceled, as permitted by section
1123(a)(5)(F) of the Bankruptcy Code, and the obligations of the Debtors
thereunder, except for the obligation to indemnify the Old Notes Trustees, shall
be discharged; provided that the indentures that govern the rights of the Holder
of a Claim and that are administered by the Old Notes Trustees, an agent or
servicer shall continue in effect solely for the purposes of (y) allowing the
Old Notes Trustees, agent or servicer to make the distributions to be made on
account of such Claims under the Plan and to perform such other necessary
administrative functions with respect thereto and (z) permitting the Old Notes
Trustees, agent or servicer to maintain any rights or liens it may have for
fees, costs and expenses under such indenture or other agreement. Any fees or
expenses due to any of the Old Notes Trustees, agent or servicer shall be paid
directly by the Debtors and shall not be deducted from any distributions to the
Holders of Claims and Equity Interests.

5. Issuance of New Securities; Execution of Related
Documents

On or as soon as practicable after the Effective Date,
Core-Mark Newco shall issue all securities, notes, instruments, certificates and
other documents of Core-Mark Newco required to be issued pursuant to the Plan,
including, without limitation, the New Common and Preferred Stock, each of which
shall be distributed as provided in the Plan. Core-Mark Newco shall execute and
deliver such other agreements, documents and instruments, including the
Registration Rights Agreement, if applicable.

6. Restructuring Transactions

On or before the Effective Date, Core-Mark Newco, a new
Delaware corporation, shall be formed by certain of the Debtors' creditors or a
nominee on their behalf. Core-Mark Newco shall form two wholly-owned
subsidiaries, Core-Mark Holdings I and Core-Mark Holdings II, both Delaware
corporations, and make a capital contribution of its stock to these entities.
Core-Mark Holdings I and Core-Mark Holdings II shall form another subsidiary,
Core-Mark Holdings III, owned equally by Core-Mark Holdings I and Core-Mark
Holdings II, and shall

make a capital contribution of the stock of Core-Mark Newco to Core-Mark
Holdings III. Core-Mark Newco, Core-Mark Holdings I, Core-Mark Holdings II,
Core-Mark Holdings III and Fleming shall engage in certain transactions on the
Effective Date that will result in, among other things, all of the stock of
Core-Mark Newco being distributed in accordance with Article III of the Plan.

In addition, on or after the Effective Date, the Reorganized
Debtors may continue to enter into such transactions and may continue to take
such actions as may be necessary or appropriate to effect a further corporate
restructuring of their respective businesses, including actions necessary to
simplify, reorganize and rationalize the overall reorganized corporate structure
of the Reorganized Debtors. While the Debtors are presently evaluating potential
restructuring transactions, the contemplated transactions may include (i)
dissolving various unnecessary subsidiary companies, including certain of the
Debtors, (ii) filing appropriate certificates or articles of merger,
consolidation or dissolution pursuant to applicable state law and (iii) any
other action reasonably necessary or appropriate in connection with the
contemplated transactions. In each case in which the surviving, resulting or
acquiring corporation in any of these transactions is a successor to a
Reorganized Debtor, such surviving, resulting or acquiring corporation will
perform the obligations of the applicable Reorganized Debtor pursuant to the
Plan, to pay or otherwise satisfy the Allowed Claims against such Reorganized
Debtor.

7. Corporate Governance, Directors and Officers, and
Corporate Action

a. Amended Certificate of Incorporation and
By-laws

After the Effective Date, the Reorganized Debtors, as
applicable, may, if necessary, reincorporate in their respective states of
incorporation and file their Restated Certificates of Incorporation with the
Secretary of State in the state in which they are incorporated. After the
Effective Date, the Reorganized Debtors may, if necessary, amend and restate
their Restated Certificates of Incorporation and other constituent documents as
permitted by applicable law.

b. Directors and Officers of the Reorganized
Debtors

Subject to any requirement of Bankruptcy Court
approval pursuant to section 1129(a)(5) of the Bankruptcy Code, as of the
Effective Date, the principal officers of the Debtors immediately prior to the
Effective Date will be the officers of the Reorganized Debtors. Pursuant to
section 1129(a)(5), the Debtors will disclose, on or prior to the Confirmation
Date, the identity and affiliations of any Person proposed to serve on the
initial board of directors of Core-Mark Newco and each Reorganized Debtor. The
initial board of directors of Core-Mark Newco shall consist of seven members,
the Chief Executive Officer of Core-Mark Newco,[___] representatives selected by
the Committee and [___] representatives selected by the Equity Investors. To the
extent any such Person is an "insider" under the Bankruptcy Code, the nature of
any compensation for such Person will also be disclosed. Each such director and
officer shall serve from and after the Effective Date pursuant to the terms of
such Reorganized Debtor's certificate of incorporation, and other constituent
documents.

c. Corporate Action

After the Effective Date, the adoption and filing, if
necessary, of any of the Reorganized Debtors' Restated Certificates of
Incorporation, the approval of their Restated By-laws, the appointment of
directors and officers for Core-Mark Newco, the adoption of the Management
Incentive Plan, and all other actions contemplated hereby with respect to each
of the Reorganized Debtors shall be authorized and approved in all respects
(subject to the provisions hereof). All matters provided for in the Plan
involving the corporate structure of any Debtor or any Reorganized Debtor, and
any corporate action required by any Debtor or any Reorganized Debtor in
connection with the Plan, shall be deemed to have occurred and shall be in
effect, without any requirement of further action by the security holders or
directors of such Debtor or Reorganized Debtor. On the Effective Date, the
appropriate officers of each Reorganized Debtor and members of the board of
directors of each Reorganized Debtor are 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 such Reorganized
Debtor.

G. Post-Confirmation Trust

1. Formation/Purpose

On the Effective Date or as soon as practicable thereafter, Core-Mark
Newco will form a Post Confirmation Trust to administer certain of its post
confirmation responsibilities under the Plan, including, but not limited to,
those responsibilities associated with the pursuit and collection of the
Litigation Claims.

2. Powers

The powers, authority, responsibilities and duties of the Post
Confirmation Trust and the allocation of such powers, authority,
responsibilities and duties between Core-Mark Newco and the Post Confirmation
Litigation Trust shall be set forth and governed by the Post Confirmation Trust
Agreement to be mutually agreed upon by the Debtors and the Committee. The
Debtors and the Committee shall also mutually agree upon appointment of the Post
Confirmation Trustee who shall have the power to administer the Post
Confirmation Trust and will be supervised by the Post Confirmation Trust
Advisory Board as specified in the Post Confirmation Trust Agreement. The Post
Confirmation Trust Advisory Board shall consist of the Post Confirmation Trustee
and [___] additional members, [___] members selected by the Committee, [___]
members selected by the Debtors and one member selected by the Equity Investor.

3. Funding

Core-Mark Newco will enter into a post confirmation funding agreement
with the Post Confirmation Trust to fund the Post Confirmation Trust with
appropriate funds to carry out its duties and responsibilities as set forth in
the Post Confirmation Trust Agreement.

H. Creation of Professional Fee Escrow Account

On or before the Effective Date, the Debtors shall establish and fund
the Professional Fee Escrow Account.

I. Executory Contracts

1. Assumption/Rejection of Executory Contracts and
Unexpired Leases

As of the Effective Date, except as otherwise provided in the
Plan, all executory contracts or unexpired leases of the Debtors will be deemed
rejected in accordance with the provisions and requirements of sections 365 and
1123 of the Bankruptcy Code except those executory contracts and unexpired
leases that (i) have been previously rejected or assumed by Order of the
Bankruptcy Court, (ii) are subject to a pending motion to reject or assume,
(iii) are executory contracts and unexpired leases related to the Wholesale
Distribution Business for which the Option Period to assume or reject such
executory contract or unexpired lease has not yet expired or (iv) are
specifically listed on the Assumption Schedule filed with the Plan Supplement.
The Debtors reserve the right for 30 days after the Confirmation Date to modify
the Assumption Schedule to add executory contracts or leases or remove executory
contracts or leases from such Assumption Schedule. The Debtors shall provide
appropriate notice to any party added or removed from the Assumption Schedule
after the Confirmation Date and any such party removed from the Assumption
Schedule shall have thirty days from the receipt of such notice to file a proof
of claim with the Bankruptcy Court.

2. Claims Based on Rejection of Executory Contracts or
Unexpired Leases

Except as provided in Section VIII.A. of the Plan, all proofs
of Claims with respect to Claims, if any, arising from the rejection of
executory contracts or unexpired leases that are rejected as a result of the
Plan must be filed with the Bankruptcy Court within thirty (30) days after the
Effective Date. Any Claims arising from the rejection of an executory contract
or unexpired lease not filed within such time or any applicable Contract Claims
Bar Date, will be forever barred from asserting against any Debtor or
Reorganized Debtor, their respective

Estates, their property and the Post Confirmation Trust unless otherwise ordered
by the Bankruptcy Court or provided in the Plan.

3. Cure of Defaults for Executory Contracts and
Unexpired Leases Assumed

Any monetary amounts by which each executory contract and
unexpired lease to be assumed pursuant to the Plan is in default shall be
satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, by payment of
the default amount in Cash as soon as practicable after the Effective Date or on
such other terms as the parties to such executory contracts or unexpired leases
may otherwise agree. In the event of a dispute regarding: (i) the amount of any
cure payments, (ii) the ability of the applicable Reorganized Debtor or any
assignee to provide "adequate assurance of future performance" (within the
meaning of section 365 of the Bankruptcy Code) under the contract or lease to be
assumed, or (iii) any other matter pertaining to assumption, the cure payments
required by section 365(b)(1) of the Bankruptcy Code shall be made following the
entry of a Final Order resolving the dispute and approving the assumption.

4. Indemnification of Directors, Officers and Employees

The obligations of each Debtor 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, officer or employee of any other corporation or legal entity, to the
extent provided in such Debtor's constituent documents, by a written agreement
with such Debtor or under Delaware or other applicable corporate law, and
specifically excluding any obligation to indemnify the Excluded D&O Releasees
listed on Exhibit C attached to the Plan, shall be deemed and treated as
executory contracts that are assumed by such Reorganized Debtor pursuant to the
Plan and section 365 of the Bankruptcy Code as of the Effective Date.
Accordingly, such indemnification obligations shall be treated as obligations of
the Reorganized Debtors and shall survive unimpaired and unaffected by entry of
the Confirmation Order, irrespective of whether such indemnification is owed for
an act or event occurring before or after the Petition Date.

5. Compensation and Benefit Programs

Except as otherwise expressly provided in the Plan, all
employment and severance agreements and policies, and all compensation and
benefit plans, policies, and programs of the Debtors applicable to their
employees, former employees, retirees and non-employee directors and the
employees, former employees and retirees of their subsidiaries, including,
without limitation, all savings plans, retirement plans, health care plans,
disability plans, severance benefit agreements and plans, incentive plans,
deferred compensation plans and life, accidental death and dismemberment
insurance plans shall be treated as executory contracts under the Plan and on
the Effective Date will be deemed rejected pursuant to the provisions of
sections 365 and 1123 of the Bankruptcy Code, except for those with respect to
the Reorganized Debtors' employees specifically designated on the Benefits
Schedule filed with the Plan Supplement.

J. Distributions

1. Distributions for Claims Allowed as of the Effective
Date

Except as otherwise provided in the Plan or as may be ordered
by the Bankruptcy Court, distributions to be made on the Effective Date on
account of Claims that are allowed as of the Effective Date and are entitled to
receive distributions under the Plan shall be made on the Effective Date as soon
thereafter as practicable. Except as evidenced by an electronic entry, as a
condition to receive any distribution under the Plan, each Old Note Holder must
comply with Sections IX.I. and IX.K. of the Plan. All distributions shall be
made in accordance with any applicable Indenture agreement, loan agreement or
analogous instrument or agreement.

2. Distributions by Core-Mark Newco

Except as otherwise provided in the Plan, Core-Mark Newco or
the Post Confirmation Trust, as applicable, shall make all distributions
required under the Plan. Notwithstanding the provisions of Section V.C. of

the Plan regarding the cancellation of the Indentures, the Indentures shall
continue in effect to the extent necessary to allow the Old Notes Trustees to
provide information to the Exchange Agent to permit distributions of the New
Common Stock and to receive New Common Stock on behalf of the Holders of the Old
Notes and make distributions pursuant to the Plan on account of the Old Notes as
agent for Core-Mark Newco. The Old Notes Trustees (or any agents or servicers)
providing services related to distributions to the Holders of Allowed Old Note
Claims shall receive, from Core-Mark Newco, reasonable compensation for such
services and reimbursement of reasonable expenses incurred in connection with
such services and upon the presentation of invoices to Core-Mark Newco. All
distributions to be made under the Plan shall be made without any requirement
for bond or surety with respect thereto.

3. Interest on Claims

Except as otherwise specifically provided for in the Plan or
in the Confirmation Order, or required by applicable bankruptcy law,
post-petition interest shall not accrue or be paid on any Claims, other than the
Pre-Petition Lender Secured Claims and the DIP Claims, and no Holder of a Claim
shall be entitled to interest accruing on or after the Petition Date on any
Claim.

4. Delivery and Distributions and Undeliverable or
Unclaimed Distributions

a. Delivery of Distributions in General

Distributions to Holders of Allowed Claims shall be
made at the address of the Holder of such Claim as indicated on the records of
Debtors or upon their proofs of Claims, if any, or, if such Holder holds Senior
Note Claims, distributions with respect to such Senior Note Claims will be made
to the Senior Notes Indenture Trustee which will make distributions to Holders
of Old Senior Notes. To the extent the Senior Notes Indenture Trustee makes
distributions to DTC, DTC will, in turn, make appropriate book entries to
reflect the distributions it makes to Holders. Except as otherwise provided by
the Plan or the Bankruptcy Code with respect to undeliverable distributions,
distributions to Holders of Old Note Claims shall be made in accordance with the
provisions of the applicable Indentures.

b. Undeliverable Distributions

(1) Holding of Undeliverable
Distributions. If any distribution
to a Holder of an Allowed Claim is
returned to Core-Mark Newco as
undeliverable, no further
distributions shall be made to such
Holder unless and until Core-Mark
Newco is notified in writing of
such Holder's then-current address.
Undeliverable distributions shall
remain in the possession of
Core-Mark Newco subject to Section
IX.E.2(b) of the Plan until such
time as a distribution becomes
deliverable. Undeliverable Cash
shall not be entitled to any
interest, dividends or other
accruals of any kind. As soon as
reasonably practicable, Core-Mark
Newco shall make all distributions
that become deliverable.

(2) Failure to Claim Undeliverable
Distributions. In an effort to
ensure that all Holders of Allowed
Claims receive their allocated
distributions, as of 120 days after
the Effective Date, the Debtors
will compile a listing of unclaimed
distribution Holders. This list
will be maintained for as long as
the Chapter 11 Cases stay open. Any
Holder of an Allowed Claim
(irrespective of when a Claim
became an Allowed Claim) that does
not assert a Claim pursuant to the
Plan for an undeliverable
distribution (regardless of when
not deliverable) within one year
after the Effective Date shall have
its Claim for such undeliverable
distribution discharged and shall
be forever barred from asserting
any such Claim against any
Reorganized Debtor or its
respective property. In such cases:
(i) any Cash held for distribution
on account of such Claims shall be
the property of Core-Mark Newco,
free

of any restrictions thereon;
and (ii) any New Common Stock held
for distribution on account of such
Claims shall be canceled and of no
further force or effect. Nothing
contained in the Plan shall require
Core-Mark Newco to attempt to
locate any Holder of an Allowed
Claim or Allowed Equity Interest.

(3) Abandoned Property Law. The
provisions of the Plan regarding
undeliverable distributions will
apply with equal force to
distributions made pursuant to the
Old Note Indentures notwithstanding
any provision in such indenture to
the contrary and notwithstanding
any otherwise applicable escheat,
abandoned or unclaimed property
law.

5. Distribution Record Date

As of the close of business on the Distribution Record Date,
the transfer register for the Old Notes, as maintained by the Debtors, the Old
Notes Trustees or their agents, shall be closed, and there shall be no further
changes in the record Holders of any Old Notes. Moreover, the Reorganized
Debtors shall have no obligation to recognize the transfer of any Old Notes
occurring after the Distribution Record Date and shall be entitled for all
purposes in the Plan to recognize and deal only with those Holders of record as
of the close of business on the Distribution Record Date.

6. Timing and Calculation of Amounts to be Distributed

Except as otherwise provided in the Plan, on the Effective
Date or as soon as practicable thereafter, each Holder of an Allowed Claim
against the Debtors shall receive the distributions that the Plan provides for
Allowed Claims in the applicable Class, provided however, Core-Mark Newco and
the Post Confirmation Trust, as applicable, shall maintain reserve accounts in
trust for the payment or distribution on account of potential or Disputed Claims
and shall make the appropriate adjustments in distributions to adequately take
into consideration and fund such reserve accounts. Core-Mark Newco and the Post
Confirmation Trust, as applicable, shall be authorized to make interim
distributions and any subsequent distributions necessary to distribute any Cash,
New Common Stock or other consideration held in any reserve account to the
appropriate Claim Holder as Claims are resolved and reserves are reduced in
accordance with the Plan. If and to the extent that there are Disputed Claims,
beginning on the date that is 45 calendar days after the end of the month
following the Effective Date and no more than 45 calendar days after the end of
each month thereafter, distributions shall also be made, pursuant to the Plan,
to Holders of Disputed Claims in any Class whose Claims were allowed during the
preceding month.

7. Minimum Distribution

The New Common Stock will be issued as whole shares. If a
registered record Holder of an Allowed Claim is entitled to the distribution of
a fractional share of New Common Stock, unless otherwise determined and approved
by the Bankruptcy Court, the fractional distribution to which such Holder would
be entitled shall be aggregated with all other such similar distributions by
Core-Mark Newco (or its agent), and as soon as practicable after the Effective
Date, sold by Core-Mark Newco (or its agent) in a commercially reasonable
manner. Upon the completion of such sale, the net proceeds thereof shall be
distributed (without interest), pro rata in the case of New Common Stock, to the
Holders of Allowed Claims, based upon the fractional share of New Common Stock
each such Holder would have been entitled to receive or deemed to hold had
Core-Mark Newco issued fractional shares of New Common Stock. Such distributions
shall be in lieu of any other distribution.

8. Setoffs

The Reorganized Debtors may, pursuant to section 553 of the
Bankruptcy Code or applicable non-bankruptcy law, set off against any Allowed
Claim and the distributions to be made pursuant to the Plan on account of such
Claim (before any distribution is made on account of such Claim), the Claims,
rights and Causes of Action of any nature that the Debtors or the Reorganized
Debtors may hold against the Holder of such Allowed Claim; provided that neither
the failure to effect such a setoff nor the allowance of any Claim hereunder
shall constitute a

waiver or release by the Debtors or the Reorganized Debtors of any such Claims,
rights and Causes of Action that the Debtors or the Reorganized Debtors may
possess against such Holder, except as specifically provided in the Plan.

9. Old Notes

Each record Holder of an Allowed Claim relating to the Old
Notes not held through DTC shall either (a) tender its Old Notes relating to
such Allowed Claim in accordance with written instructions to be provided to
such Holders by the applicable Reorganized Debtor as promptly as practicable
following the Effective Date, or (b) if the Holder's Old Note has been
destroyed, lost, stolen or mutilated, comply with Section IX.K. of the Plan.
Such instructions shall specify that delivery of such Old Notes will be
effected, and risk of loss and title thereto will pass, only upon the proper
delivery of such Old Notes with a letter of transmittal in accordance with such
instructions. All surrendered Old Notes shall be marked as canceled. If any
Holder of Old Notes not held through DTC submits bearer bonds without coupons or
coupons only, the Debtors shall adjust the consideration exchanged therefor
appropriately.

10. Failure to Surrender Canceled Instruments

Any Holder of Allowed Claims relating to the Old Notes not
held through DTC that fails to surrender or is deemed to have failed to
surrender its Old Notes required to be tendered hereunder or that has failed to
comply with Section IX.K. of the Plan within one year after the Effective Date
shall have its Claim for a distribution pursuant to the Plan on account of such
Allowed Claim discharged and shall be forever barred from asserting any such
Claim against any Reorganized Debtor or their respective properties. In such
cases, any New Stock held for distribution on account of such Claim shall be
disposed of pursuant to the provisions set forth in Section IX.E. of the Plan.

11. Lost, Stolen, Mutilated or Destroyed Debt Securities

In addition to any requirements under the Indentures or any
related agreement, any Holder of a Claim evidenced by an Old Note not held
through DTC that has been lost, stolen, mutilated or destroyed shall, in lieu of
surrendering such Old Note, deliver to the applicable Reorganized Debtor: (a) an
affidavit of loss reasonably satisfactory to such Reorganized Debtor setting
forth the unavailability of the Old Note not held through DTC; and (b) such
additional security or indemnity as may be reasonably required by such
Reorganized Debtor to hold such Reorganized Debtor harmless from any damages,
liabilities or costs incurred in treating such individual as a Holder of an
Allowed Claim. Upon compliance with this procedure by a Holder of a Claim
evidenced by an Old Note, such Holder shall, for all purposes under the Plan, be
deemed to have surrendered such non-DTC note.

12. Share Reserve

In addition to the provisions of Section X.A.3. of the Plan,
Core-Mark Newco shall be required to establish and maintain an appropriate
reserve of New Common Stock to ensure distribution of New Common Stock to the
Holder of any potential Claim or Disputed Claim.

13. Settlement of Claims and Controversies

Pursuant to Fed. R. Bankr. P. 9019 and in consideration for
the distributions and other benefits provided under the Plan, the provisions of
the Plan shall constitute a good faith compromise and settlement of claims or
controversies relating to the contractual, legal and subordination rights that a
Holder of a Claim may have with respect to any Allowed Claim, or distribution to
be made on account of any such Allowed Claim.

K. Resolution of Disputed Claims

1. Prosecution of Objections to Claims

After the Effective Date, except in regard to objections to
Professional fees and other fees, Core-Mark Newco and the Post-Confirmation
Trustee, as applicable, shall have the exclusive authority to file objections,
settle, compromise, withdraw or litigate to judgment objections to Claims on
behalf of the Debtors and Reorganized Debtors. From and after the Effective
Date, Core-Mark Newco and the Post-Confirmation Trustee, as applicable, may
settle or compromise any Disputed Claim on behalf of the Reorganized Debtors
without approval of the Bankruptcy Court. The party responsible between
Core-Mark Newco and the Post Confirmation Trust for the various Claims shall be
outlined in the Post Confirmation Trust Agreement.

2. Estimation of Claims

Core-Mark Newco and the Post Confirmation Trustee, as
applicable, may, at any time, request that the Bankruptcy Court estimate any
contingent or unliquidated Claim pursuant to section 502(c) of the Bankruptcy
Code regardless of whether the Debtors, Core-Mark Newco or the Post Confirmation
Trust, as applicable, has previously objected to such Claim or whether the
Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court will
retain jurisdiction to estimate any Claim at any time during litigation
concerning any objection to any Claim, including during the pendency of any
appeal relating to any such objection. In the event that the Bankruptcy Court
estimates any contingent or unliquidated Claim, that estimated amount will
constitute either the Allowed amount of such Claim or a maximum limitation on
such Claim, as determined by the Bankruptcy Court. If the estimated amount
constitutes a maximum limitation on such Claim, Core-Mark Newco and the Post
Confirmation Trustee, as applicable, may elect to pursue any supplemental
proceedings to object to any ultimate payment on such Claim. All of the
aforementioned Claims and objection, estimation and resolution procedures are
cumulative and not necessarily exclusive of one another. Claims may be estimated
and subsequently compromised, settled, withdrawn or resolved by any mechanism
approved by the Bankruptcy Court.

3. Payments and Distributions on Disputed Claims

Notwithstanding any provision in the Plan to the contrary,
except as otherwise agreed by Core-Mark Newco or the Post Confirmation Trust, as
applicable, Core-Mark Newco and the Post Confirmation Trust, as applicable, in
their sole discretion, shall not make any partial payments or partial
distributions with respect to a Disputed Claim until the resolution of such
disputes by settlement or Final Order. On the date or, if such date is not a
Business Day, on the next successive Business Day that is 45 calendar days after
the month in which a Disputed Claim becomes an Allowed Claim, the Holder of such
Allowed Claim will receive all payments and distributions to which such Holder
is then entitled under the Plan. Notwithstanding the foregoing, any Person or
Entity who holds both an Allowed Claim(s) and a Disputed Claim(s) will not
receive the appropriate payment or distribution on the Allowed Claim(s), except
as otherwise agreed by Core-Mark Newco or the Post Confirmation Trust, as
applicable, until the Disputed Claim(s) is or are resolved by settlement or
Final Order. In the event there are Disputed Claims requiring adjudication and
resolution, Core-Mark Newco and the Post Confirmation Trust, as applicable,
shall establish appropriate reserves for potential payment of such Claims.

4. Allowance of Claims

Except as expressly provided in the Plan or in any order
entered in the Chapter 11 Cases prior to the Effective Date (including the
Confirmation Order), no Claim shall be deemed Allowed unless and until such
Claim is deemed Allowed under the Bankruptcy Code and no objection to such Claim
has been filed by the Objection Deadline or the Bankruptcy Court enters a Final
Order in the Chapter 11 Cases allowing such Claim. Except as expressly provided
in the Plan or any order entered in the Chapter 11 Cases prior to the Effective
Date (including the Confirmation Order), the Reorganized Debtors and the Post
Confirmation Trust, as applicable, after confirmation will have and retain any
and all rights, remedies, causes of action and defenses the Debtors had with
respect to any Claim as of the date the Debtors filed their petitions for relief
under the Bankruptcy Code. All Claims of any Person or Entity that may owe money
to the Debtors shall be disallowed unless and until such Person or Entity pays
the amount it owes the Debtors in full.

5. Controversy Concerning Impairment

If a controversy arises as to whether any Claims, or any Class
of Claims, is Impaired under the Plan, the Bankruptcy Court shall, after notice
and a hearing, determine such controversy before the Confirmation Date.

L. Retention Of Jurisdiction

Notwithstanding the entry of the Confirmation Order and the occurrence
of the Effective Date, the Bankruptcy Court shall retain such jurisdiction over
the Chapter 11 Cases after the Effective Date as legally permissible, including
jurisdiction to:

1. allow, disallow, determine, liquidate, classify,
estimate or establish the priority or secured or
unsecured status of any Claim or Equity Interest,
including the resolution of any request for payment
of any Administrative Claim and the resolution of any
and all objections to the allowance or priority of
Claims or Equity Interests;

2. grant or deny any applications for allowance of
compensation or reimbursement of expenses authorized
pursuant to the Bankruptcy Code or the Plan, for
periods ending on or before the Effective Date;

3. resolve any matters related to the assumption,
assumption and assignment or rejection of any
executory contract or unexpired lease to which any
Debtor is party or with respect to which any Debtor
may be liable and to hear, determine and, if
necessary, liquidate, any Claims arising therefrom,
including those matters related to the amendment
after the Effective Date pursuant to Article VII in
the Plan to add or strike any executory contracts or
unexpired leases to the list of executory contracts
and unexpired leases to be assumed;

4. ensure that distributions to Holders of Allowed
Claims are accomplished pursuant to the provisions of
the Plan;

5. decide or resolve any motions, adversary proceedings,
contested or litigated matters and any other matters
and grant or deny any applications involving the
Debtors;

6. enter such orders as may be necessary or appropriate
to implement or consummate the provisions in the Plan
and all contracts, instruments, releases, indentures
and other agreements or documents created in
connection with the Plan or this Disclosure
Statement;

7. resolve any cases, controversies, suits or disputes
that may arise in connection with the occurrence of
the Effective Date, interpretation or enforcement of
the Plan or any Person's or Entity's obligations
incurred in connection with the Plan;

8. issue injunctions, enter and implement other orders
or take such other actions as may be necessary or
appropriate to restrain interference by any Person or
Entity with occurrence of the Effective Date or
enforcement of the Plan, except as otherwise provided
in the Plan;

9. resolve any cases, controversies, suits or disputes
with respect to the releases, injunction and other
provisions contained in Article XII of the Plan and
enter such orders as may be necessary or appropriate
to implement such releases, injunction and other
provisions;

10. enter and implement such orders as are necessary or
appropriate if the Confirmation Order is for any
reason modified, stayed, reversed, revoked or
vacated;

11. determine any other matters that may arise in
connection with or relate to the Plan, this
Disclosure Statement, the Confirmation Order or any
contract, instrument, release, indenture or other
agreement or document created in connection with the
Plan or the Disclosure Statement; and

12. enter an order and/or final decree concluding the
Chapter 11 Cases.

M. Release, Injunctive And Related Provisions

1. Subordination

The classification and manner of satisfying all Claims and
Equity Interests and the respective distributions and treatments hereunder take
into account and/or conform to the relative priority and rights of the Claims
and Equity 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 hereto. The Confirmation Order shall permanently enjoin, effective as
of the Effective Date, all Persons and Entities from enforcing or attempting to
enforce any such contractual, legal and equitable subordination rights
satisfied, compromised and settled in this manner.

2. MUTUAL RELEASES BY RELEASEES

ON AND AFTER THE EFFECTIVE DATE, FOR GOOD AND VALUABLE
CONSIDERATION INCLUDING THE SERVICES OF THE RELEASEES TO FACILITATE THE
EXPEDITIOUS REORGANIZATION OF THE DEBTORS AND THE IMPLEMENTATION OF THE
RESTRUCTURING CONTEMPLATED BY THE PLAN, EACH OF THE RELEASEES SHALL BE DEEMED TO
HAVE UNCONDITIONALLY RELEASED ONE ANOTHER FROM ANY AND ALL CLAIMS (AS DEFINED IN
SECTION 101(5) OF THE BANKRUPTCY CODE), OBLIGATIONS, RIGHTS, SUITS, DAMAGES,
REMEDIES AND LIABILITIES WHATSOEVER, INCLUDING ANY CLAIMS THAT COULD BE ASSERTED
ON BEHALF OF A DEBTOR, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN,
EXISTING OR HEREINAFTER ARISING, IN LAW, EQUITY OR OTHERWISE, THAT THE RELEASEES
OR THEIR SUBSIDIARIES WOULD HAVE BEEN LEGALLY ENTITLED TO ASSERT IN THEIR OWN
RIGHT (WHETHER INDIVIDUALLY OR COLLECTIVELY) OR ON BEHALF OF THE HOLDER OF ANY
CLAIM OR EQUITY INTEREST OR OTHER PERSON OR ENTITY, BASED IN WHOLE OR IN PART
UPON ANY ACT OR OMISSION, TRANSACTION, AGREEMENT, EVENT OR OTHER OCCURRENCE
TAKING PLACE ON OR BEFORE THE EFFECTIVE DATE, EXCEPT THAT THE DEBTORS, THE
REORGANIZED DEBTORS AND THE POST CONFIRMATION TRUSTEE RESERVE THEIR RIGHTS TO
BRING AVOIDANCE ACTIONS, COLLECT VENDOR DEDUCTIONS, OR ASSERT SETOFF, RECOUPMENT
AND OTHER SIMILAR DEFENSES OR CLAIMS AGAINST MEMBERS OF THE COMMITTEE WITH
RESPECT TO DEBTORS' ORDINARY COURSE BUSINESS DEALINGS WITH SUCH COMMITTEE
MEMBERS.

3. RELEASES BY HOLDERS OF CLAIMS

ON AND AFTER THE EFFECTIVE DATE, EACH CLAIM HOLDER (a) THAT
HAS ACCEPTED THE PLAN OR (b) THAT IS ENTITLED TO RECEIVE A DISTRIBUTION OF
PROPERTY UNDER THE PLAN IF THE PLAN IS CONFIRMED, SHALL BE DEEMED TO HAVE
UNCONDITIONALLY RELEASED THE RELEASEES FROM ANY AND ALL CLAIMS, OBLIGATIONS,
RIGHTS, SUITS, DAMAGES, REMEDIES AND LIABILITIES WHATSOEVER, INCLUDING ANY
CLAIMS THAT COULD BE ASSERTED ON BEHALF OF A DEBTOR, WHETHER KNOWN OR UNKNOWN,
FORESEEN OR UNFORESEEN, EXISTING OR HEREAFTER ARISING, IN LAW, EQUITY OR
OTHERWISE, THAT SUCH CLAIM HOLDER WOULD HAVE BEEN LEGALLY ENTITLED TO ASSERT
(WHETHER INDIVIDUALLY OR COLLECTIVELY), BASED IN WHOLE OR IN PART UPON ANY ACT
OR OMISSION, TRANSACTION, AGREEMENT, EVENT OR OTHER OCCURRENCE TAKING PLACE ON
OR BEFORE THE EFFECTIVE DATE IN ANY WAY RELATING OR PERTAINING TO (w) THE
PURCHASE OR SALE, OR THE RESCISSION OF A PURCHASE OR SALE, OF ANY SECURITY OF A
DEBTOR, (x) A DEBTOR, REORGANIZED DEBTOR OR CORE-MARK NEWCO, (y) THE CHAPTER 11
CASES OR (z) THE NEGOTIATION, FORMULATION AND PREPARATION OF THE PLAN, OR ANY
RELATED AGREEMENTS, INSTRUMENTS OR OTHER DOCUMENTS.

4. INDEMNIFICATION

THE DEBTORS, REORGANIZED DEBTORS AND CORE-MARK NEWCO SHALL BE
JOINTLY AND SEVERALLY OBLIGATED TO INDEMNIFY ALL D&O RELEASEES AND THEIR
RESPECTIVE AFFILIATES, AGENTS AND PROFESSIONALS AGAINST ANY CLAIMS, OBLIGATIONS,
SUITS, JUDGMENTS, DAMAGES, DEMANDS, DEBTS, RIGHTS, CAUSE OF ACTION OR
LIABILITIES WHETHER

DIRECT OR INDIRECT, DERIVATIVE, LIQUIDATED OR UNLIQUIDATED, FIXED OR CONTINGENT,
MATURED OR UNMATURED, KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, THEN EXISTING OR
THEREAFTER ARISING, IN LAW, EQUITY OR OTHERWISE, THAT ARE BASED IN WHOLE OR IN
PART ON ANY ACT OR OMISSION, TRANSACTION, EVENT OR OTHER OCCURRENCE TAKING PLACE
ON OR PRIOR TO THE EFFECTIVE DATE IN ANY WAY RELATING OR PERTAINING TO THE
DEBTORS, THE REORGANIZED DEBTORS, CORE-MARK NEWCO, THE CHAPTER 11 CASES, THE
PLAN OR THIS DISCLOSURE STATEMENT. THE DEBTORS WILL FUND THE PURCHASE OF TAIL
LIABILITY COVERAGE UNDER THE DEBTORS' DIRECTORS AND OFFICERS INSURANCE POLICIES.

5. EXCULPATION

THE DEBTORS, THE REORGANIZED DEBTORS, CORE-MARK NEWCO, THE D&O
RELEASEES, THE POST-PETITION LENDERS, THE OLD NOTES TRUSTEES, THE COMMITTEE, THE
POST CONFIRMATION TRUSTEE, AND THE POST CONFIRMATION ADVISORY BOARD, AND THEIR
MEMBERS AND PROFESSIONALS (ACTING IN SUCH CAPACITY) SHALL NEITHER HAVE NOR INCUR
ANY LIABILITY TO ANY PERSON OR ENTITY FOR ANY PRE- OR POST-PETITION ACT TAKEN OR
OMITTED TO BE TAKEN IN CONNECTION WITH OR RELATED TO THE FORMULATION,
NEGOTIATION, PREPARATION, DISSEMINATION, IMPLEMENTATION, ADMINISTRATION,
CONFIRMATION OR OCCURRENCE OF THE EFFECTIVE DATE OF THE PLAN, THE DISCLOSURE
STATEMENT OR ANY CONTRACT, INSTRUMENT, RELEASE OR OTHER AGREEMENT OR DOCUMENT
CREATED OR ENTERED INTO IN CONNECTION WITH THE PLAN OR ANY OTHER PRE-PETITION OR
POST-PETITION ACT TAKEN OR OMITTED TO BE TAKEN IN CONNECTION WITH, OR IN
CONTEMPLATION OF, RESTRUCTURING OF THE DEBTORS.

6. DISCHARGE OF CLAIMS AND TERMINATION OF EQUITY
INTERESTS

EXCEPT AS OTHERWISE PROVIDED IN THE PLAN: (1) THE RIGHTS
AFFORDED IN THE PLAN AND THE TREATMENT OF ALL CLAIMS AND EQUITY INTERESTS IN THE
PLAN, SHALL BE IN EXCHANGE FOR AND IN COMPLETE SATISFACTION, DISCHARGE AND
RELEASE OF CLAIMS AND EQUITY INTERESTS OF ANY NATURE WHATSOEVER, INCLUDING ANY
INTEREST ACCRUED ON CLAIMS FROM AND AFTER THE PETITION DATE, AGAINST ANY DEBTOR
OR ANY OF ITS RESPECTIVE ASSETS OR PROPERTIES, (2) ON THE EFFECTIVE DATE, ALL
SUCH CLAIMS AGAINST, AND EQUITY INTERESTS IN, ANY DEBTOR SHALL BE SATISFIED,
DISCHARGED AND RELEASED IN FULL AND (3) ALL PERSONS AND ENTITIES SHALL BE
PRECLUDED FROM ASSERTING AGAINST ANY REORGANIZED DEBTOR, ITS SUCCESSORS OR ITS
ASSETS OR PROPERTIES ANY OTHER OR FURTHER CLAIMS OR EQUITY INTERESTS BASED UPON
ANY ACT OR OMISSION, TRANSACTION OR OTHER ACTIVITY OF ANY KIND OR NATURE THAT
OCCURRED PRIOR TO THE CONFIRMATION DATE.

7. INJUNCTION

EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THE PLAN, ALL
HOLDERS OF CLAIMS AND EQUITY INTERESTS ARE PERMANENTLY ENJOINED, FROM AND AFTER
THE EFFECTIVE DATE, FROM (a) COMMENCING OR CONTINUING IN ANY MANNER ANY ACTION
OR OTHER PROCEEDING OF ANY KIND ON ANY SUCH CLAIM OR INTEREST AGAINST THE
DEBTORS, THEIR ESTATES, CORE-MARK NEWCO OR THE REORGANIZED DEBTORS; (b) THE
ENFORCEMENT, ATTACHMENT, COLLECTION OR RECOVERY BY ANY MANNER OR MEANS OF ANY
JUDGMENT, AWARD, DECREE OR ORDER AGAINST THE DEBTORS, THEIR ESTATES, CORE-MARK
NEWCO OR THE REORGANIZED DEBTORS; (c) CREATING, PERFECTING, OR ENFORCING ANY
ENCUMBRANCE OF ANY KIND AGAINST THE PROPERTY OR INTERESTS IN PROPERTY OF THE
DEBTORS, THEIR ESTATES, CORE-MARK NEWCO OR THE REORGANIZED DEBTORS; AND (d)
ASSERTING ANY RIGHT OF SETOFF, SUBROGATION OR RECOUPMENT OF ANY KIND AGAINST ANY
OBLIGATION DUE FROM THE DEBTORS OR AGAINST THE PROPERTY OF THE DEBTORS, THEIR
ESTATES, CORE-MARK NEWCO OR THE REORGANIZED DEBTORS WITH RESPECT TO ANY SUCH
CLAIM OR EQUITY INTEREST.

WITH RESPECT TO THE MATTERS WITHIN THE SCOPE OF ARTICLE XIII
OF THE PLAN, ALL PERSONS AND ENTITIES SHALL BE AND ARE PERMANENTLY ENJOINED FROM
COMMENCING OR CONTINUING ANY ACTION WITH RESPECT THERETO EXCEPT IN THE
BANKRUPTCY COURT AND THE BANKRUPTCY COURT SHALL RETAIN EXCLUSIVE JURISDICTION
OVER SUCH MATTERS.

N. Conditions Precedent to Plan Consummation

It shall be a condition to Confirmation of the Plan that all
provisions, terms and conditions of the Plan are approved in the Confirmation
Order.

O. Conditions Precedent to Occurrence of the Effective Date

It shall be a condition to occurrence of the Effective Date of the Plan
that the following conditions shall have been satisfied or waived pursuant to
the provisions of Section XI.C. thereof:

1. The Confirmation Order confirming the Plan, as the
Plan may have been modified, shall have been entered
and become a Final Order in form and substance
satisfactory to the Debtors and the Committee and
shall provide that, among other things:

a. the Debtors and Reorganized Debtors are
authorized and directed to take all actions
necessary or appropriate to enter into,
implement and consummate the contracts,
instruments, releases, leases, indentures
and other agreements or documents created in
connection with the Plan;

b. the provisions of the Confirmation Order are
nonseverable and mutually dependent;

c. Core-Mark Newco is authorized to issue the
New Common Stock, Preferred Stock and
Management Options; and

d. the New Common Stock, the Preferred Stock
and the Equity Subscription Rights issued
under the Plan are exempt from registration
under the Securities Act pursuant to section
1145 of the Bankruptcy Code, except to the
extent that Holders of the New Common Stock
or Preferred Stock are "underwriters," as
that term is defined in section 1145 of the
Bankruptcy Code or the offer and sale of the
Preferred Stock to the Equity Investor shall
be qualified under the section 4(2) private
placement exemption contained in the
Securities Act.

2. The following agreements, in form and substance
satisfactory to the Reorganized Debtors and the
Committee shall have been tendered for delivery and
all conditions precedent thereto shall have been
satisfied:

a. Exit Financing Agreement;

b. Registration Rights Agreements, if any; and

c. Management Incentive Plan.

3. The Certificate of Incorporation of Core-Mark Newco
shall have been filed with the Secretary of State of
the State of Delaware.

4. All actions, documents and agreements necessary to
implement the Plan shall have been effected or
executed.

5. The new board of directors of Core-Mark Newco shall
have been appointed.

6. The Reorganized Debtors shall have established and
funded the Professional Fee Escrow Account.

7. The appropriate Final Orders recognizing and
implementing the Plan in Canada shall have been
obtained from the Canadian CCAA Court.

8. The Post Confirmation Trust shall be established and
all actions, documents and agreements necessary to
implement the Post Confirmation Trust shall have been
effected or executed.

9. The granting of the Equity Subscription Rights and
the issuance of the New Common Stock and Preferred
Stock issuable upon the exercise of the Equity
Subscription Rights under the Plan shall be exempt
from the prospectus and registration requirements and
the first trade thereof shall be exempt from the
prospectus requirements of the securities laws of
each of the provinces of Canada (including, to the
extent necessary, pursuant to an order or orders
issued by the applicable Canadian securities
regulators granting relief from any such prospectus
and registration requirements that would otherwise be
applicable).

P. Waiver of Conditions

Except as otherwise required by the terms of the Plan, the Debtors,
with the consent of the Committee, may waive any of the conditions to
Confirmation of the Plan and/or to occurrence of the Effective Date of the Plan
set forth in Article XI of the Plan at any time, without notice, without leave
or order of the Bankruptcy Court, and without any formal action other than
proceeding to confirm and/or consummate the Plan.

Q. Effect of Non-occurrence of Conditions to Occurrence of the
Effective Date

If the occurrence of the Effective Date of the Plan does not occur by
___________ , 2004, the Plan shall be null and void in all respects and nothing
contained in the Plan or the Disclosure Statement shall: (1) constitute a waiver
or release of any Claims by or against, the Debtors; (2) prejudice in any manner
the rights of the Debtors; or (3) constitute an admission, acknowledgment, offer
or undertaking by the Debtors in any respect.

R. Severability Of Plan Provisions

The provisions of the Plan shall not be severable unless such severance
is agreed to by the Debtors and the Committee, if applicable, or, if after the
Effective Date, by Core-Mark Newco and the Post Confirmation Advisory Committee
on behalf of the Post Confirmation Estates, and such severance would constitute
a permissible modification of the Plan pursuant to section 1127 of the
Bankruptcy Code.

S. Miscellaneous Provisions

1. Effectuating Documents, Further Transactions and
Corporation Action

Each of the Debtors and Reorganized Debtors is authorized to
execute, deliver, file or record such contracts, instruments, releases and other
agreements or documents and take such actions as may be necessary or appropriate
to effectuate, implement and further evidence the terms and conditions hereof
and the notes and securities issued pursuant to the Plan.

Prior to, on or after the Effective Date (as appropriate), all
matters provided for hereunder that would otherwise require approval of the
shareholders or directors of the Debtors or Reorganized Debtors shall be deemed
to have occurred and shall be in effect prior to, on or after the Effective Date
(as appropriate) pursuant to the applicable general corporation law of the
states where each of the Debtors is organized without any requirement of further
action by the shareholders or directors of any Debtor or Reorganized Debtor.

2. Dissolution of Committee

The Creditors' Committee shall be dissolved on the Effective
Date, and members shall be released and discharged from all rights and duties
arising from, or related to, the Chapter 11 Cases.

3. Payment of Statutory Fees

All fees payable pursuant to section 1930(a) of Title 28 of
the United States Code, as determined by the Bankruptcy Court at the hearing
pursuant to section 1128 of the Bankruptcy Code, shall be paid for each

quarter (including any fraction thereof) until the Chapter 11 Case is converted,
dismissed or closed, whichever occurs first.

4. Modification of Plan

Subject to the limitations contained in the Plan, (1) the
Debtors, with the consent of the Committee, reserve the right, in accordance
with the Bankruptcy Code and the Bankruptcy Rules, to amend or modify the Plan
prior to the entry of the Confirmation Order and (2) after the entry of the
Confirmation Order, the Debtors or the Reorganized Debtors, as the case may be,
with the consent of the Committee or the Post Confirmation Trust Advisory Board,
may upon order of the Bankruptcy Court, amend or modify the Plan, in accordance
with section 1127(b) of the Bankruptcy Code, or remedy any defect or omission or
reconcile any inconsistency in the Plan in such manner as may be necessary to
carry out the purpose and intent of the Plan.

5. Revocation of Plan

The Debtors reserve the right to revoke or withdraw the Plan
prior to the Confirmation Date and to file subsequent plans of reorganization.
If the Debtors revoke or withdraw the Plan, or if Confirmation or occurrence of
the Effective Date does not occur, then (a) the Plan shall be null and void in
all respects, (b) any settlement or compromise embodied in the Plan (including
the fixing or limiting to an amount certain any Claim or Equity Interest or
Class of Claims or Equity Interests), assumption or rejection of executory
contracts or leases affected by the Plan, and any document or agreement executed
pursuant to the Plan, shall be deemed null and void, and (c) nothing contained
in the Plan shall (i) constitute a waiver or release of any Claims by or
against, or any Equity Interests in, such Debtors or any other Person, (ii)
prejudice in any manner the rights of such Debtors or any other Person or (iii)
constitute an admission of any sort by the Debtors or any other Person.

6. Successors and Assigns

The rights, benefits and obligations of any Person or Entity
named or referred to in the Plan shall be binding on, and shall inure to the
benefit of, any heir, executor, administrator, successor or assign of such
Person or Entity.

7. Reservation of Rights

Except as expressly set forth herein, the Plan shall have no
force or effect unless the Bankruptcy Court shall enter the Confirmation Order.
None of the filing of the Plan, any statement or provision contained in the
Plan, or the taking of any action by the Debtors with respect to the Plan shall
be or shall be deemed to be an admission or waiver of any rights of the Debtors
with respect to the Holders of Claims or Equity Interests prior to the Effective
Date.

8. Section 1146 Exemption

Pursuant to section 1146(c) of the Bankruptcy Code, any
transfers of property pursuant to the Plan shall not be subject to any document
recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage
tax, stamp act, real estate transfer tax, mortgage recording tax or other
similar tax or governmental assessment in the United States, and the
Confirmation Order shall direct the appropriate state or local governmental
officials or agents to forgo the collection of any such tax or governmental
assessment and to accept for filing and recordation any of the foregoing
instruments or other documents without the payment of any such tax or
governmental assessment.

9. Further Assurances

The Debtors, Reorganized Debtors, Core-Mark Newco and all
Holders of Claims receiving distributions hereunder and all other parties in
interest shall, from time to time, prepare, execute and deliver any agreements
or documents and take any other actions as may be necessary or advisable to
effectuate the provisions and intent of the Plan.

10. Service of Documents

Any pleading, notice or other document required by the Plan to
be served on or delivered to any Reorganized Debtor or the Committee shall be
sent by first class U.S. mail, postage prepaid to:

Kirkland & Ellis LLP Milbank Tweed Hadley & McCloy LLP
200 E. Randolph Drive One Chase Manhattan Plaza
Chicago, Illinois 60601 New York, New York 10005
Attn: Janet S. Baer Attn: Dennis Dunne, Esq.

and and

Pachulski, Stang, Ziehl, Young, Jones & Pepper Hamilton LLP
Weintraub P.C. 100 Renaissance Center
919 North Market Street Suite 3600
Sixteenth Floor Detroit, Michigan 48243-1157
P.O. Box 8705 Attn: I. William Cohen, Esq.
Wilmington, Delaware 19899-8705
Attn: Laura Davis Jones

11. Filing of Additional Documents

On or before the Effective Date, the Debtors with the consent
of the Creditors' Committee may file with the Bankruptcy Court such agreements
and other documents as may be necessary or appropriate to effectuate and further
evidence the terms and conditions hereof.

12. Transactions on Business Days

If the date on which a transaction may occur under the Plan
shall occur on a day that is not a Business Day, then such transaction shall
instead occur on the next succeeding Business Day.

13. Post-Effective Date Fees and Expenses

From and after the Effective Date, Core-Mark Newco shall, in
the ordinary course of business and without the necessity for any approval by
the Bankruptcy Court, pay the reasonable professional fees and expenses incurred
by Core-Mark Newco and the Committee, if applicable, related to the Consummation
and implementation of the Plan.

14. Conflicts

To the extent any provision of this Disclosure Statement or
any document executed in connection therewith or any documents executed in
connection with the Confirmation Order (or any exhibits, schedules, appendices,
supplements or amendments to any of the foregoing) conflicts with, or is in any
way inconsistent with, the terms of the Plan, the terms and provisions of the
Plan shall govern and control.

15. Term of Injunctions or Stays

Unless otherwise provided in the Plan or in the Confirmation
Order, all injunctions or stays in effect in the Chapter 11 Cases under sections
105 or 362 of the Bankruptcy Code or any order of the Bankruptcy Court, and
still extant on the Confirmation Date (excluding any injunctions or stays
contained in the Plan or the Confirmation Order), shall remain in full force and
effect until the Effective Date. All injunctions or stays contained in the Plan
or the Confirmation Order shall remain in full force and effect in accordance
with their terms.

16. Entire Agreement

The Plan and the Plan Supplement (as amended) supersede all
previous and contemporaneous negotiations, promises, covenants, agreements,
understandings and representations on such subjects, all of which have become
merged and integrated into the Plan.

17. Closing of the Chapter 11 Cases

The Post-Consummation Estate shall promptly, upon the full
administration of the Chapter 11 Cases, file with the Bankruptcy Court all
documents required by Fed. R. Bankr. P. 3022 and any applicable order of the
Bankruptcy Court to close the Chapter 11 Cases.

VII. DEBTORS' RETAINED CAUSES OF ACTION

A. Maintenance of Causes of Action

Except as otherwise provided in the Plan, Core-Mark Newco and the
Reorganized Debtors shall retain all rights on behalf of the Debtors, Core-Mark
Newco and the Reorganized Debtors to commence and pursue, as appropriate, any
and all Causes of Action, whether such Causes of Action accrued before or after
the Petition Date, including, but not limited to the actions specified in
Section VI.B. of the Plan, as well as those Causes of Action listed on Exhibit D
to the Plan, in any court or other tribunal including, without limitation, in an
adversary proceeding filed in one or more of the Debtors' Chapter 11 Cases.

Except as otherwise provided in the Plan, in accordance with section
1123(b)(3) of the Bankruptcy Code, any Claims, rights and Causes of Action that
the respective Debtors, Core-Mark Newco and the Reorganized Debtors may hold
against any Person shall vest in Core-Mark Newco. Core-Mark Newco shall retain
and may exclusively enforce any and all such Claims, rights or Causes of Action
and commence, pursue and settle the Causes of Action in accordance with the
Plan, provided the Post Confirmation Trust may commence, pursue and settle
certain Causes of Action, including, but not necessarily limited to, the
Litigation Claims as outlined more fully in the Post Confirmation Trust
Agreement. Core-Mark Newco and/or the Post Confirmation Trust, if applicable,
shall have the exclusive right, authority and discretion to institute,
prosecute, abandon, settle or compromise any and all such claims, rights and
Causes of Action without the consent or approval of any third party and without
any further order of court.

B. Preservation of Causes of Action

The Debtors are currently investigating whether to pursue potential
Causes of Action against any Creditors or other Persons. The investigation has
not been completed to date, and under the Plan, Core-Mark Newco and/or the Post
Confirmation Trust, as applicable, retain the right on behalf of the Debtors and
Reorganized Debtors to commence and pursue any and all Causes of Action.
Potential Causes of Action currently being investigated by the Debtors, which
may, but need not, be pursued by the Debtors before the Effective Date or by
Core-Mark Newco and/or the Post Confirmation Trust, as applicable, after the
Effective Date include, without limitation, the causes of action identified on
Exhibit D to the Plan, and the following Causes of Action set forth below:

- All actual or potential avoidance actions pursuant to any
applicable section of the Bankruptcy Code, including, without
limitation, sections 544, 545, 547, 548, 549, 550, 551, 553(b)
and/or 724(a) of the Bankruptcy Code, arising from any
transaction involving or concerning the Debtors;

- Any lawsuits for, or in any way involving, the collection of
accounts receivable or any matter related to the Plan;

- Any actions against landlords, lessees, sublessees, or
assignees arising from various leases, subleases and
assignment agreements relating thereto, including, without
limitation, actions for overcharges relating to taxes, common
area maintenance and other similar charges;

- Any litigation or lawsuit initiated by any of the Debtors that
is currently pending, whether in the Bankruptcy Court, before
the American Arbitration Association or any other court or
tribunal;

- Potential actions for breaches of fiduciary duty, negligent
mismanagement and wasting of corporate assets and corporate
opportunity and/or arising under any of the Debtors' directors
and officers insurance policies against any of the Debtors'
prepetition directors and officers except the D&O Releasees;

- Any and all actions against all Persons except the D&O
Releasees arising out of, or in connection with, the
prepetition management, operation and/or reporting of
financial or other information except as may be prohibited by
the Plan;

- Actions to recover amounts improperly awarded to employees
under the terms of any prepetition employment or
change-in-control agreement;

- All actions against third parties with respect to prepetition
violations of applicable federal or state securities laws;

- Any and all actual or potential breach of contract claims
against any customers or Entities who improperly exited the
Debtors' system or who violated the automatic stay after the
Petition Date;

- Any and all potential Causes of Action against any customer or
vendor who has improperly asserted or taken action through
setoff or recoupment; and

- Any and all actions, whether legal, equitable or statutory in
nature, arising out of, or in connection with, the Debtors'
business or operations.

In addition, there may be numerous other Causes of Action which
currently exist or may subsequently arise that are not set forth in the Plan,
because the facts upon which such Causes of Action are based are not fully or
currently known by the Debtors and, as a result, cannot be raised during the
pending of the Chapter 11 Cases (collectively, the "Unknown Causes of Action").
The failure to list any such Unknown Cause of Action in the Plan, or on Exhibit
D to the Plan is not intended to limit the rights of Core-Mark Newco to pursue
any Unknown Cause of Action to the extent the facts underlying such Unknown
Cause of Action become fully known to the Debtors.

C. Preservation of All Causes of Action Not Expressly Settled or
Released

Unless a Claim or Cause of Action against a Creditor or other Person is
expressly waived, relinquished, released, compromised or settled in the Plan or
any Final Order, the Debtors expressly reserve such Claim or Cause of Action for
later adjudication by Core-Mark Newco or the Post Confirmation Trust, as
applicable, (including, without limitation, Unknown Causes of Action) and,
therefore, no preclusion doctrine, including, without, limitation, the doctrines
of res judicata, collateral estoppel, issue preclusion, claim preclusion,
waiver, estoppel (judicial, equitable, or otherwise) or laches shall apply to
such Claims or Causes of Action upon or after the Confirmation or Effective Date
of the Plan based on the Disclosure Statement, the Plan or the Confirmation
Order, except where such Claims or Causes of Action have been released in the
Plan or other Final Order. In addition, the Debtors, Core-Mark Newco, the
Reorganized Debtors, the Post Confirmation Trust, as applicable, and the
successor entities under the Plan expressly reserve the right to pursue or adopt
any Claim alleged in any lawsuit in which the Debtors are defendants or an
interested party, against any Person or Entity, including, without limitation,
the plaintiffs or co-defendants such lawsuits.

Any Person to whom the Debtors have incurred an obligation (whether on
account of services, purchase or sale of goods or otherwise), or who has
received services from Debtors or a transfer of money or property of the
Debtors, or who has transacted business with the Debtors, or leased equipment or
property from the Debtors should assume that such obligation, transfer, or
transaction may be reviewed by the Debtors subsequent to the Effective Date and
may, if appropriate, be the subject of an action after the Effective Date,
whether or not (i) such Entity has filed a proof of claim against the Debtors in
these Bankruptcy Cases; (ii) such Creditor's proof of claim has been objected
to; (iii) such Creditor's Claim was included in the Debtors' Schedules; or (iv)
such Creditor's scheduled claim has been objected to by the Debtors or has been
identified by the Debtors as disputed, contingent, or unliquidated.

VIII. FEASIBILITY OF THE PLAN AND THE BEST INTERESTS TEST

At the Confirmation Hearing, the Bankruptcy Court shall determine
whether the requirements of section 1129 of the Bankruptcy Court have been
satisfied. If so, the Bankruptcy Court shall enter the Confirmation Order.
Debtors believe that the Plan satisfies or will satisfy the applicable
requirements, as follows:

- The Plan complies with the applicable provisions of the
Bankruptcy Code.

- The Debtors and the Creditors' Committee, as Plan proponents,
will have complied with the applicable provisions of the
Bankruptcy Code.

- The Plan has been proposed in good faith and not by any means
forbidden by law.

- Any payment made or promised under the Plan for services or
for costs and expenses in, or in connection with, the Chapter
11 Cases, or in connection with the Plan and incident to the
case, has been disclosed to the Bankruptcy Court, and any such
payment made before the confirmation of the Plan is
reasonable, or if such payment is to be fixed after the
confirmation of the Plan, such payment is subject to the
approval of the Bankruptcy Court as reasonable.

- With respect to each Class of Impaired Claims or Equity
Interests, either each Holder of a Claim or Equity Interest of
such Class has accepted the Plan or will receive or retain
under the Plan on account of such Claim or Equity Interest
property of a value, as of the Effective Date, that is not
less than the amount that such Holder would receive or retain
if the Debtors were liquidated on such date under Chapter 7 of
the Bankruptcy Code.

- Each Class of Claims or Equity Interests that is entitled to
vote on the Plan will either have accepted the Plan or will
not be impaired under the Plan, or the Plan may be confirmed
without the approval of each voting Class pursuant to section
1129(b) of the Bankruptcy Code.

- Except to the extent that the Holder of a particular Claim
will agree to a different treatment of such Claim, the Plan
provides that Allowed Administrative, Allowed Priority Tax
Claims and Allowed Other Priority Claims will be paid in full
on the Effective Date, or as soon thereafter as practicable.

- At least one Class of Impaired Claims or Equity Interests will
have accepted the Plan, determined without including any
acceptance of the Plan by any insider holding a Claim of such
Class.

- Confirmation of the Plan is not likely to be followed by the
liquidation, or the need for further financial reorganization,
of the Debtors or any successor to the Debtors under the Plan,
unless such liquidation or reorganization is proposed in the
Plan.

- All fees of the type described in 28 U.S.C. Section 1930,
including the fees of the United States Trustee, will be paid
as of the Effective Date.

Debtors believe that (a) the Plan satisfies or will satisfy all of the
statutory requirements of Chapter 11 of the Bankruptcy Code, (b) it has
complied, or will have complied, with all of the requirements of Chapter 11 and
(c) the Plan has been proposed in good faith.

A. Feasibility of the Plan

To confirm the Plan, the Bankruptcy Court must find that confirmation
of the Plan is not likely to be followed by the liquidation or the need for
further financial reorganization of the Debtors. This requirement is imposed by
section 1129(a)(11) of the Bankruptcy Code and is referred to as the
"feasibility" requirement. The Debtors believe that they will be able to timely
perform all obligations described in the Plan and, therefore, that the Plan is
feasible.

To demonstrate the feasibility of the Plan, the Debtors have prepared
financial projections for Fiscal Years 2003 through 2007, as set forth in the
Disclosure Statement Supplement. The projections indicate that Core-Mark Newco
and the Post-Confirmation Trust, if applicable, should have sufficient cash flow
to pay and service their debt obligations and to fund their operations.
Accordingly, the Debtors believe that the Plan satisfies the feasibility
requirement of section 1129(a)(II) of the Bankruptcy Code. As noted in the
projections, however, the Debtors caution that no representations can be made as
to the accuracy of the projections or as to the Reorganized Debtors' ability to
achieve the projected results. Many of the assumptions upon which the
projections are based are subject to uncertainties outside the control of the
Debtors. Some assumptions inevitably will not materialize, and events and
circumstances occurring after the date on which the projections were prepared
may be different from those assumed or may be unanticipated, and may adversely
affect the Debtors' financial results. Therefore, the actual results can be
expected to vary from the projected results and the variations may be material
and adverse.

THE PROJECTIONS WERE NOT PREPARED WITH A VIEW TOWARD COMPLIANCE WITH
THE GUIDELINES ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC
ACCOUNTANTS, THE PRACTICES RECOGNIZED TO BE IN ACCORDANCE WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES, OR THE RULES AND REGULATIONS OF THE SEC
REGARDING PROJECTIONS. FURTHERMORE, THE PROJECTIONS HAVE NOT BEEN AUDITED BY THE
DEBTORS' INDEPENDENT ACCOUNTANTS. ALTHOUGH PRESENTED WITH NUMERICAL SPECIFICITY,
THE PROJECTIONS ARE BASED UPON A VARIETY OF ASSUMPTIONS, SOME OF WHICH IN THE
PAST HAVE NOT BEEN ACHIEVED AND WHICH MAY NOT BE REALIZED IN THE FUTURE, AND ARE
SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE UNCERTAINTIES AND
CONTINGENCIES, MANY OF WHICH ARE BEYOND THE CONTROL OF THE DEBTORS.
CONSEQUENTLY, THE PROJECTIONS SHOULD NOT BE REGARDED AS A REPRESENTATION OR
WARRANTY BY THE DEBTORS, OR ANY OTHER PERSON, THAT THE PROJECTIONS WILL BE
REALIZED. ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE PRESENTED IN THE
PROJECTIONS.

B. Best Interests Test

1. Generally

Even if a plan is accepted by each class of holders of claims
and interests, the Bankruptcy Code requires the bankruptcy court to determine
that the plan is in the "best interests" of all holders of claims and interests
that are impaired by the plan and that have not accepted the plan. The "best
interests" test, as set forth in section 1129(a)(7) of the Bankruptcy Code,
requires a bankruptcy court find either that (i) all members of an impaired
class of claims or interests have accepted the plan or (ii) the plan will
provide a member who has not accepted the plan with a recovery of property of a
value, as of the effective date of the plan, that is not less than the amount
that such holder would recover if the debtor were liquidated under Chapter 7 of
the Bankruptcy Code.

To calculate the probable distribution to members of each
impaired class of holders of claims and interests if the debtor were liquidated
under Chapter 7, a bankruptcy court must first determine the aggregate dollar
amount that would be generated from the debtor's assets if its Chapter 11 case
were converted to a Chapter 7 case under the Bankruptcy Code. This "liquidation
value" would consist primarily of the proceeds from a forced sale of the
debtor's assets by a Chapter 7 trustee.

The amount of liquidation value available to unsecured
creditors would be reduced by, first, the claims of secured creditors to the
extent of the value of their collateral, and, second, by the costs and expenses
of liquidation, as well as by other administrative expenses and costs of both
the Chapter 7 case and the Chapter 11 case. A liquidation under Chapter 7 does
not affect the priority of several holders of claims to be paid first. Costs of
liquidation under Chapter 7 of the Bankruptcy Code would include the
compensation of a trustee, as well as of counsel and other professionals
retained by the trustee, asset disposition expenses, all unpaid expenses
incurred by the debtor in its bankruptcy case (such as compensation of
attorneys, financial advisors, and restructuring consultants) that are allowed
in the Chapter 7 case, litigation costs, and claims arising from the operations
of the debtor during the pendency of the bankruptcy case. The liquidation itself
would trigger certain priority payments that otherwise would be due in the
ordinary course of business. Those priority claims would be paid in full from
the liquidation proceeds before the balance would be made available to pay
general unsecured claims or to make any

distribution in respect of equity interests. The liquidation also would prompt
the rejection of a large number of executory contracts and unexpired leases and
thereby create a significantly higher number of unsecured claims. As a general
matter, a liquidation under Chapter 7 will not affect the rights of letter of
credit beneficiaries, including certain sureties who posted bonds that the
Debtors purchased for various business, litigation and other reasons.

Once the court ascertains the recoveries in liquidation of
secured creditors and priority claimants, it must determine the probable
distribution to general unsecured creditors and equity security holders from the
remaining available proceeds in liquidation. If such probable distribution has a
value greater than the distributions to be received by such creditors and equity
security holders under a debtor's plan, then such plan is not in the best
interests of creditors and equity security holders.

2. Debtors' Best Interest Test

The Debtors' liquidation analysis (the "Liquidation Analysis")
is attached to the Disclosure Statement Supplement. The Debtors believe that any
liquidation analysis is speculative. For example, the Liquidation Analysis
necessarily contains an estimate of the amount of Claims which will ultimately
become Allowed Claims. In preparing the Liquidation Analysis, the Debtors have
projected the amount of Allowed Claims based upon a review of their scheduled
and filed proofs of claim. No order or finding has been entered by the
Bankruptcy Court estimating or otherwise fixing the amount of Claims at the
projected amounts of Allowed Claims set forth in the Liquidation Analysis.
Although the analysis was prepared after the deadline for filing Claims against
the Debtors' estates, those Claims have not been fully evaluated by the Debtors.
In preparing the Liquidation Analysis, the Debtors have projected a range for
the amount of Allowed Claims with the low end of the range the lowest reasonable
amount of Claims and the high end of the range the highest reasonable amount of
the Claims, thus allowing assessment of the most likely range of Chapter 7
liquidation dividends to the holders of the Allowed Claims. The estimate of the
amount of Allowed Claims set forth in the Liquidation Analysis should not be
relied on for any other purpose, including, without limitation, any
determination of the value of any distribution to be made on account of Allowed
Claims and Interests under the Plan. In addition, as noted above, the valuation
analysis of the Reorganized Debtors also contains numerous estimates and
assumptions. For example, the value of the New Common Stock cannot be determined
with precision due to the absence of a public market for the New Common Stock.

Notwithstanding the difficulties in quantifying recoveries to
creditors with precision, the Debtors believe that, taking into account the
Liquidation Analysis and the valuation analysis of the Reorganized Debtors (both
of which are attached to the Disclosure Statement Supplement), the Plan meets
the "best interests" test of section 1129(a)(7) of the Bankruptcy Code. The
Debtors believe that the members of each Impaired Class will receive at least as
much under the Plan as they would in a liquidation in a hypothetical chapter 7
case. Claim Holders will receive a better recovery through the distributions
contemplated by the Plan because the continued operation of the Debtors as going
concerns rather than a forced liquidation will allow the realization of more
value for the Debtors' assets. Although the Analysis was prepared after the
deadline for filing Claims against the estates of the Debtors, those Claims have
not been fully evaluated by the Debtors or adjudicated by the Bankruptcy Court
and, accordingly, the amount of the final Allowed Claims against the Estates may
differ from the Claim amounts used in this Analysis. Finally, the Analysis is
based on the Debtors' projected balance sheet as of March 31, 2004 (except as
indicated), and the actual amount of assets available to the Estates as of the
date of liquidation may differ from the amount of assets used in this Analysis.
Conversion of these Chapter 11 Cases to Chapter 7 would likely result in
additional costs to the Estates. Costs of liquidation under Chapter 7 of the
Bankruptcy Code would include the compensation of a trustee, as well as of
counsel and other professionals retained by the trustee, asset dispositions
expenses, all unpaid expenses incurred by the Debtors in the Chapter 11 Cases
(such as compensation of attorneys, financial advisors and restructuring
consultants) that are allowed in the Chapter 7 case, litigation costs, and
Claims arising from the operations of the Debtors during the pendency of the
bankruptcy cases. Lastly, in the event of liquidation, the aggregate amount of
General Unsecured Claims will no doubt increase significantly (as reflected in
the high range estimate), and such Claims will be subordinated to priority
claims that will be created. For example, employees will file Claims for wages,
pensions and other benefits, some of which will be entitled to priority.
Landlords will no doubt file large Claims for both unsecured and priority
amounts. The resulting increase in both general unsecured and priority Claims
will decrease percentage recoveries to Holders of General Unsecured Claims of
the Debtors. All of these factors lead to the conclusion that recoveries under
the Plan would be at least as much, and in many cases significantly greater,
than the recoveries available in a Chapter 7 liquidation.

C. Estimated Valuation of the Reorganized Debtors

The Debtors have been advised by The Blackstone Group ("Blackstone"),
their financial advisors, with respect to the aggregate reorganization value on
a going-concern basis of Core-Mark Newco. Blackstone has undertaken this
valuation analysis for the purpose of determining value available for
distribution to creditors pursuant to the Plan and to analyze recoveries to
Creditors thereunder. A copy of the valuation analysis is in the Disclosure
Statement Supplement.

D. Confirmation Without Acceptance by All Impaired Classes: The
'Cramdown' Alternative

Section 1129(b) of the Bankruptcy Code provides that a plan may be
confirmed even if it has not been accepted by all impaired classes as long as at
least one impaired class of claims has accepted it. The Bankruptcy Court may
confirm the plan at the request of the debtors notwithstanding the plan's
rejection (or deemed rejection) by impaired classes as long as the plan "does
not discriminate unfairly" and is "fair and equitable" as to each impaired class
that has not accepted it. A plan does not discriminate unfairly within the
meaning of the Bankruptcy Code if a dissenting class is treated equally with
respect to other classes of equal rank.

A plan is fair and equitable as to a class of secured claims that
rejects such plan if the plan provides (1) (a) that the holders of claims
included in the rejecting class retain the lien securing those claims, whether
the property subject to those liens is retained by the debtor or transferred to
another entity, to the extent of the allowed amount of such claims, and (b) that
each holder of a claim of such class receives on account of that claim deferred
cash payments totaling at least the allowed amount of that claim of a value, as
of the effective date of the plan, of at least the value of the holder's
interest in the estate's interest in such property; (2) for the sale, subject to
section 363(k) of the Bankruptcy Code, of any property that is subject to the
liens securing the claims included in the rejecting class, free and clear of the
liens, with the liens to attach to the proceeds of the sale, and the treatment
of the liens on proceeds under clause (1) or (2) of this paragraph; or (3) for
the realization by such holders of the indubitable equivalent of such claims.

A plan is fair and equitable as to a class of unsecured claims which
rejects a plan if the plan provides (1) for each holder of a claim included in
the rejecting class to receive or retain on account of that claim property that
has a value, as of the effective date of the plan, equal to the allowed amount
of such claim; or (2) that the holder of any claim or interest that is junior to
the claims of such rejecting class will not receive or retain on account of such
junior claim or interest any property at all.

A plan is fair and equitable as to a class of equity interests that
rejects a plan if the plan provides (1) that each holder of an interest included
in the rejecting class receive or retain on account of that interest property
that has a value, as of the effective date of the plan, equal to the greatest of
the allowed amount of any fixed liquidation preference to which such holder is
entitled, any fixed redemption price to which such holder is entitled, or the
value of such interest; or (2) that the holder of any interest that is junior to
the interest of such rejecting class will not receive or retain under the plan
on account of such junior interest any property at all.

The votes of holders of Claims and Equity Interests under Classes 8 and
9 are not being solicited because such holders are not entitled to receive or
retain under the Plan any interest in property on account of their Claims and
Equity Interests. Such Classes therefore are deemed to have rejected the Plan
pursuant to section 1126(g) of the Bankruptcy Code. Accordingly, the Debtors are
seeking confirmation of the Plan pursuant to section 1129(b) of the Bankruptcy
Code with respect to such Classes and may seek confirmation pursuant to the Plan
as to other Classes if such Classes vote to reject the Plan. Notwithstanding the
deemed rejection by such Classes, the Debtors believe that Classes 8 and 9 are
being treated fairly and equitably under the Bankruptcy Code. The Debtors
therefore believe the Plan may be confirmed despite its deemed rejection by
these Classes.

IX. IMPORTANT CONSIDERATIONS AND RISK FACTORS

A. The Debtors Have No Duty To Update

The statements contained in this Disclosure Statement are made by the
Debtors as of the date hereof, unless otherwise specified herein, and the
delivery of this Disclosure Statement after that date does not imply that there
has been no change in the information set forth herein since that date. The
Debtors have no duty to update this Disclosure Statement.

B. No Representations Outside The Disclosure Statement Are
Authorized

No representations concerning or related to the Debtors, the Chapter 11
Cases or the Plan are authorized by the Bankruptcy Court or the Bankruptcy Code,
other than as set forth in this Disclosure Statement. Any representations or
inducements made to secure your acceptance, or rejection, of the Plan that are
other than as contained in, or included with, this Disclosure Statement should
not be relied upon by you in arriving at your decision. You should promptly
report unauthorized representations or inducements to Debtors' counsel,
Creditors' Committee counsel, and the Office of the United States Trustee.

C. Information Presented Is Based On The Debtors' Books And
Records, And No Audit Was Performed

While the Debtors have endeavored to present information fairly in this
Disclosure Statement, because of Debtors' financial difficulties, as well as the
complexity of Debtors' financial matters, the Debtors' books and records upon
which this Disclosure Statement is based might be incomplete or inaccurate. The
financial information contained herein, unless otherwise expressly indicated, is
unaudited.

D. All Information Was Provided by Debtors And Was Relied Upon By
Professionals

Each of Kirkland & Ellis LLP and Pachulski, Stang, Ziehl, Young, Jones
& Weintraub P.C. were approved by the Bankruptcy Court to represent the Debtors
effective as of the Petition Date as general insolvency co-counsel. All counsel
and other professionals for the Debtors have relied upon information provided by
the Debtors in connection with preparation of this Disclosure Statement.
Although counsel for the Debtors have performed certain limited due diligence in
connection with the preparation of this Disclosure Statement, counsel have not
verified independently the information contained herein.

E. Projections And Other Forward Looking Statements Are Not
Assured, And Actual Results Will Vary

Certain of the information contained in this Disclosure Statement is,
by nature, forward looking, and contains estimates and assumptions which might
ultimately prove to be incorrect, and contains projections which may be
materially different from actual future experiences. There are uncertainties
associated with any projections and estimates, and they should not be considered
assurances or guarantees of the amount of funds or the amount of Claims in the
various classes that might be allowed.

1. Claims Could Be More Than Projected

The allowed amount of Claims in each Class could be
significantly more than projected, which in turn, could cause the value of
distributions to be reduced substantially. If Administrative Claims and/or Other
Priority Claims exceed projections, fewer estate assets would be available for
distribution to the Holders of General Unsecured Claims.

2. Projections

While the Debtors believe that their projections are reasonable, there
can be no assurance that they will be realized, resulting in recoveries that
could be significantly less than projected.

F. This Disclosure Statement Was Not Approved By The Securities
And Exchange Commission

Although a copy of this Disclosure Statement was served on the SEC and
the SEC was given an opportunity to object to the adequacy of this Disclosure
Statement before the Bankruptcy Court approved it, this Disclosure Statement was
not registered under the Securities Act or applicable state securities laws.
Neither the SEC nor any state regulatory authority or Canadian Securities
Administrator has passed upon the accuracy or adequacy of this Disclosure
Statement, the exhibits to the Plan or the statements contained herein, and any
representation to the contrary is unlawful.

G. No Legal Or Tax Advice Is Provided To You By This Disclosure
Statement

The contents of this Disclosure Statement should not be construed as
legal, business or tax advice. Each creditor or Holder of Equity Interest should
consult his, her or its own legal counsel and accountant as to legal, tax and
other matters concerning his, her, or its Claim or equity interest.

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 or object to confirmation of the Plan.

H. No Admissions Made

Nothing contained herein shall constitute an admission of any fact or
liability by any party (including, without limitation, the Debtors) or to be
deemed evidence of the tax or other legal effects of the Plan on the Debtors or
on Holders of Claims or Equity Interests.

I. No Waiver Of Right To Object Or Right To Recover Transfers And
Estate Assets

A creditor's vote for or against the Plan does not constitute a waiver
or release of any Claims or rights of the Debtors (or any party in interest, as
the case may be) to object to that creditor's Claim, or recover any
preferential, fraudulent or other voidable transfer or estate assets, regardless
of whether any Claims of the Debtors or their respective estates are
specifically or generally identified herein.

1. Business Factors and Competitive Conditions

a. General Economic Conditions

In their financial projections, the Debtors have
assumed that the general economic conditions of the United States economy will
improve over the next several years. An improvement of economic conditions is
subject to many factors outside the Debtors' control, including interest rates,
inflation, unemployment rates, consumer spending, war, terrorism and other such
factors. Any one of these or other economic factors could have a significant
impact on the operating performance of Core-Mark Newco. There is no guarantee
that economic conditions will improve in the near term.

b. Business Factors

The Debtors believe that they will succeed in
implementing and executing their operational restructuring for the benefit of
all constituencies. However, there are risks that the goals of the Debtors'
going-forward business plan and operational restructuring strategy will not be
achieved. In such event, the Debtors may be forced to sell all or parts of their
business, develop and implement further restructuring plans not contemplated
herein or become subject to further insolvency proceedings. Because the Claims
of substantially all creditors will be converted into equity in Core-Mark Newco
under the Plan, in the event of further restructurings or insolvency proceedings
of Core-Mark Newco, the equity interests of such persons could be substantially
diluted or even cancelled.

c. Competitive Conditions

In addition to uncertain economic and business
conditions, Core-Mark Newco will likely face competitive pressures and other
third party actions, including pressures from pricing and other promotional
activities of competitors as well as new competition. Core-Mark Newco's
anticipated operating performance will be impacted by these and other
unpredictable activities by competitors.

d. Other Factors

Other factors that Holders of Claims should consider
are potential regulatory and legal developments that may impact Core-Mark
Newco's business. Although these and other such factors are beyond the Debtors'
control and cannot be determined in advance, they could have a significant
impact on Core-Mark Newco's operating performance.

2. Access to Financing and Trade Terms

The Debtors' operations are dependent on the availability and
cost of working capital financing and trade terms provided by vendors and may be
adversely affected by any shortage or increased cost of such financing and trade
vendor support. The Debtors' postpetition operations have been financed from
operating cash flow and borrowings pursuant to the DIP Credit Facility. The
Debtors believe that substantially all of their needs for funds necessary to
consummate the Plan and for post-Effective Date working capital financing will
be met by projected operating cash flow, the Exit Financing Facility and trade
terms supplied by vendors, collection of Causes of Action and the Rights
Offering. However, if the Debtors or Core-Mark Newco require working capital and
trade financing greater than that provided by such sources, they may be required
either to (a) obtain other sources of financing or (b) curtail their operations.

No assurance can be given, however, that any additional
financing will be available, if at all, on terms that are favorable or
acceptable to the Debtors or Core-Mark Newco. The Debtors believe that it is
important to their going-forward business plan that their performance meet
projected results in order to ensure continued support from vendors and factors.
There are risks to the Reorganized Debtors in the event such support erodes
after emergence from Chapter 11 that could be alleviated by remaining in Chapter
11. Chapter 11 affords a debtor such as Fleming the opportunity to close
facilities and liquidate assets relatively expeditiously, tools that will not be
available to the Reorganized Debtors upon emergence. However, the Debtors
believe that the benefits of emergence from Chapter 11 at this time outweigh the
potential costs of remaining in Chapter 11, and that emergence at this time is
in the long-term operational best interests of the Debtors and their creditors.

3. Market for New Securities

There can be no assurance that an active market for any of the
securities to be distributed pursuant to the Plan, including the New Common
Stock or Preferred Stock as applicable, will develop, and no assurance can be
given as to the prices at which such securities might be traded. Moreover, there
can be no assurances that Core-Mark Newco will be successful in its attempt to
have the New Common Stock listed on a national securities exchange, a foreign
securities exchange or a national quotation system such as the Nasdaq National
Market.

The ultimate value of Reorganized Debtors will not be
determined until such time as an active market for the New Common Stock develops
and the securities begin to trade. The valuation of Core-Mark Newco could be
substantially lower than that estimated by the Debtors in the Disclosure
Statement Supplement and could be adversely impacted over time if Core-Mark
Newco's business plan does not meet expectations or if factors beyond Core-Mark
Newco's control materialize, including war, terrorist attacks, recession or
further weakening of the economy.

4. Impact of Interest Rates

Changes in interest rates and foreign exchange rates may
affect the fair market value of the Debtors' assets. Specifically, decreases in
interest rates will positively impact the value of the Debtors' assets and the

strengthening of the dollar will negatively impact the value of their net
foreign assets, although the value of such foreign assets is very small in
relation to the value of the Debtors' operations as a whole.

J. Bankruptcy Law Risks and Considerations

1. Confirmation of the Plan is Not Assured

Although the Debtors believe that the Plan will satisfy all
requirements necessary for Confirmation by the Bankruptcy Court, there can be no
assurance that the Bankruptcy Court will reach the same conclusion. There can
also be no assurance that modifications to the Plan will not be required for
Confirmation or that such modifications would not necessitate resolicitation of
votes.

2. The Plan May Be Confirmed Without the Approval of All
Creditors Through So-Called "Cramdown"

If one or more Impaired Classes of Claims does not accept the
Plan, the Bankruptcy Court may nonetheless confirm the Plan at the Debtors'
request, if all other conditions for Confirmation have been met and at least one
Impaired Class of Claims has accepted the Plan (without including the vote of
any insider in that Class) and, as to each Impaired Class that has not accepted
the Plan, the Bankruptcy Court determines that the Plan does not discriminate
unfairly and is fair and equitable. The Debtors believe that the Plan satisfies
these requirements.

3. The Effective Date Might Be Delayed or Never Occur

There can be no assurance as to the timing of the Effective
Date or that it will occur. If the conditions precedent to the Effective Date
set forth in the Plan have not occurred or been waived, the Confirmation Order
shall be vacated in accordance with the Plan and such Confirmation Order. In
that event, no Distributions would be made, and the Holders of Claims and Equity
Interests would be restored to their previous same position as of the moment
before Confirmation, and the Debtors' obligations for Claims and the Equity
Interests would remain unchanged.

4. The Projected Value of Estate Assets Might Not Be
Realized

In the Liquidation Analysis, the Debtors project the value of
the Estates' Assets which would be available for payment of expenses and
distributions to Holders of Allowed Claims, as set forth in the Plan. The
Debtors have made certain assumptions, as described in the notes to the
Liquidation Analysis contained in the Disclosure Statement Supplement, and which
should be read carefully.

5. Allowed Claims in the Various Classes May Exceed
Projections

The Debtors have also projected the allowed amount of Claims
in each Class in the Liquidation Analysis. Certain Classes, and the Classes
below them in priority, could be significantly affected by the allowance of
Claims in an amount that is greater than projected.

K. Tax Considerations

There are significant tax consequences to Holders of Claims and Equity
Interest. These are discussed below in the Sections entitled "Certain U.S.
Federal Income Tax Consequences of the Plan" and "Certain Canadian Federal
Income Tax Consequences of the Plan." You should consult your own tax advisor
about your particular circumstances.

X. EFFECT OF CONFIRMATION

A. Binding Effect of Confirmation

Confirmation will legally bind the Debtors, all creditors, Equity
Interest Holders and other parties in interest to the provisions of the Plan,
whether or not the Claim or Equity Interest Holder is impaired under the Plan,
and whether or not such creditor or Equity Interest Holder has accepted the
Plan.

B. Vesting Of Assets Free And Clear Of Liens, Claims And
Interests

Except as otherwise provided in the Plan or in the Confirmation Order,
upon the Effective Date, title to all assets and property of the Debtors, and
all property of the Estates, including, pursuant to section 1123(b)(3)(b) of the
Bankruptcy Code, each and every Claim, demand or Cause of Action which the
Debtors have or have power to assert immediately prior to Confirmation, will
vest in Core-Mark Newco or the Post Confirmation Trust as provided in the Plan,
free and clear of all Liens, Claims and Interests. Thereafter, Core-Mark Newco
or the Post Confirmation Trust will hold these assets without further
jurisdiction, restriction or supervision of the Bankruptcy Court, except as may
be provided in this Disclosure Statement.

C. Good Faith

Confirmation of the Plan shall constitute a finding that the Plan has
been proposed in good faith and in compliance with applicable provisions of the
Bankruptcy Code.

D. Discharge of Claims

The rights afforded in the Plan and the treatment of all Claims and
Equity Interests in the Plan, shall be in exchange for and in complete
satisfaction, discharge and release of Claims and Equity Interests of any nature
whatsoever, including any interest accrued on Claims from and after the Petition
Date, against any Debtor or any of its respective assets or properties. On the
Effective Date, all such Claims against, and Equity Interests in, any Debtor
shall be satisfied, discharged and released in full and all Persons and Entities
shall be precluded from asserting against any Reorganized Debtor, its successors
or its assets or properties any other or further Claims or Equity Interests
based upon any act or omission, transaction or other activity of any kind or
nature that occurred prior to the Confirmation Date.

E. Judicial Determination of Discharge

All Holders of Claims and Equity Interests are permanently enjoined,
from and after the Effective Date, from (a) commencing or continuing in any
manner any action or other proceeding of any kind on any such Claim or Interest
against the Debtors, their estates, Core-Mark Newco or the Reorganized Debtors;
(b) the enforcement, attachment, collection or recovery by any manner or means
of any judgment, award, decree or order against the Debtors, their estates,
Core-Mark Newco or the Reorganized Debtors; (c) creating, perfecting, or
enforcing any encumbrance of any kind against the property or interests in
property of the Debtors, their estates, Core-Mark Newco or the Reorganized
Debtors; and (d) asserting any right of setoff, subrogation or recoupment of any
kind against any obligation due from the Debtors or against the property of the
Debtors, their estates, Core-Mark Newco or the Reorganized Debtors with respect
to any such Claim or Equity Interest. The Confirmation Order shall be a judicial
determination of discharge of all Claims against the Debtors pursuant to
sections 524 and 1141 of the Bankruptcy Code, and shall void any judgment
obtained or entered against Debtors at any time, to the extent the judgment
relates to a discharged Claim.

With respect to the matters within the scope of Article XIII of the
Plan, all Persons and Entities shall be and are permanently enjoined from
commencing or continuing any action with respect thereto except in the
Bankruptcy Court and the Bankruptcy Court shall retain exclusive jurisdiction
over such matters.

XI. CERTAIN SECURITIES LAW CONSIDERATIONS

A. Exemptions from Registration under Securities Act

Section 1145(a)(1) of the Bankruptcy Code exempts the offer and sale of
securities under a plan of reorganization from registration under section 5 of
the Securities Act and state laws if three principal requirements are satisfied:
(i) the securities must be offered and sold under a plan of reorganization and
must be securities of the debtor, of an affiliate participating in a joint plan
with the debtor, or of a successor to the debtor under the plan; (ii) the
recipients of the securities must hold Claims against or interests in the
debtor; and (iii) the securities must be issued in exchange (or principally in
exchange) for the recipient's Claims against or interests in the debtor. The
Debtors believe that, other than with respect to the purchase of Preferred Stock
by the Equity Investor, the offer and sale of the New Common Stock, the Equity
Subscription Rights and the Preferred Stock issuable upon exercise of the Equity
Subscription Rights (collectively, the "Core-Mark Newco Securities") under the
Plan satisfy the requirements of section 1145(a)(1) of the Bankruptcy Code and
are, therefore, exempt from registration under the Securities Act and state
securities laws. In the case of the Preferred Stock to be issued upon the
exercise of the Equity Subscription Rights in exchange for payment of the
Subscription Purchase Price, the Debtors believe that such issuance is exempt
under section 1145(a)(1) from registration under Section 5 of the Securities Act
because (1) such Preferred Stock is being offered and sold under the Plan, and
such Stock constitutes securities of Core-Mark Newco, a successor to the Debtors
under the Plan, (2) only Claim Holders (except for the Equity Investor, the
exemption from registration for which is separately discussed below) will
receive the Equity Subscription Rights and will have the right to exercise such
Rights to purchase the underlying Preferred Stock, and (3) the Core-Mark Newco
Securities (other than any Preferred Stock to be purchased by the Equity
Investor) are being issued principally in exchange for the Claims of recipients
against the Debtors. With respect to the principally in exchange requirement,
the Debtors believe that the aggregate fair market value of the Core-Mark Newco
Securities distributable to any recipient in exchange for the Claims of such
recipient exceeds the total Purchase Price which would be payable by such
recipient upon exercise of all Equity Subscription Rights received by such
recipient.

To the extent that the Core-Mark Newco Securities are issued under the
Plan and are covered by section 1145(a)(1) of the Bankruptcy Code, they may be
resold by the holders thereof without registration unless, as more fully
described below, the holder is an "underwriter" with respect to such securities.
Generally, section 1145(b)(1) of the Bankruptcy Code defines an "underwriter" as
any Person who: (i) purchases a Claim against, an interest in, or a Claim for an
administrative expense against the debtor, if such purchase is with a view to
distributing any security received in exchange for such a Claim or interest;
(ii) offers to sell securities offered under a plan for the holders of such
securities; (iii) offers to buy such securities from the holders of such
securities, if the offer to buy is: (A) with a view to distributing such
securities; and (B) under an agreement made in connection with the plan, the
consummation of the plan, or with the offer or sale of securities under the
plan; or (iv) is an "issuer" with respect to the securities, as the term
"issuer" is defined in section 2(a)(11) of the Securities Act.

Under section 2(a)(11) of the Securities Act, an "issuer" includes any
Person directly or indirectly controlling or controlled by the issuer, or any
Person under direct or indirect common control of the issuer. To the extent that
Persons who receive Core-Mark Newco Securities pursuant to the Plan are deemed
to be "underwriters" as defined in section 1145(b) of the Bankruptcy Code,
resales by such Persons would not be exempted by section 1145 of the Bankruptcy
Code from registration under the Securities Act or other applicable law. Such
Persons would, however, be permitted to sell such Core-Mark Newco Securities or
other securities without registration if they are able to comply with the
provisions of Rule 144 under the Securities Act. These rules permit the public
sale of securities received by such Person if current information regarding the
issuer is publicly available and if volume limitations and certain other
conditions are met. Any Person who is an "underwriter" but not an "issuer" with
respect to an issue of securities is, however, entitled to engage in exempt
"ordinary trading transactions" within the meaning of section 1145(b) of the
Bankruptcy Code.

Whether or not any particular Person would be deemed to be an
"underwriter" with respect to the Core-Mark Newco Securities to be issued
pursuant to the Plan would depend upon various facts and circumstances
applicable to that Person. Accordingly, the Debtors express no view as to
whether any particular Person receiving Core-Mark Newco Securities under the
Plan would be an "underwriter" with respect to such Core-Mark Newco Securities.

GIVEN THE COMPLEX AND SUBJECTIVE NATURE OF THE QUESTION OF WHETHER A
PARTICULAR HOLDER MAY BE AN UNDERWRITER, THE DEBTORS MAKE NO REPRESENTATION
CONCERNING THE RIGHT OF ANY PERSON TO TRADE IN THE CORE-MARK NEWCO SECURITIES.
THE DEBTORS RECOMMEND THAT POTENTIAL RECIPIENTS OF THE CORE-MARK NEWCO
SECURITIES CONSULT THEIR OWN COUNSEL CONCERNING WHETHER THEY MAY FREELY TRADE
CORE-MARK NEWCO SECURITIES WITHOUT COMPLIANCE WITH THE SECURITIES ACT, THE
EXCHANGE ACT OR SIMILAR STATE AND FEDERAL LAWS.

Under the terms of the Equity Commitment Letter, all unexercised Equity
Subscription Rights will be deemed to be transferred to the Equity Investor,
which has committed, subject to the satisfaction or waiver of certain
conditions, to purchase all Preferred Stock underlying such unexercised Equity
Subscription Rights. The Equity Investor has the right, at its option, to
purchase a minimum of $25 million of Preferred Stock at the Subscription
Purchase Price. (See Section VI F.1.f. for a description of this arrangement.)
The offer and sale of the Preferred Stock to the Equity Investor will be
qualified under the Section 4(2) private placement exemption from registration
under the Securities Act, and, under the terms of the Equity Commitment Letter,
the Equity Investor will be subject to restrictions on the transfer of such
Stock. Core-Mark Newco will enter into a Registration Rights Agreement
containing the terms set forth in the Plan Supplement, pursuant to which it will
undertake to use reasonable best efforts to register Preferred Stock issued to
the Equity Investor.

B. Applicability Of Certain Canadian Securities Laws

The following trades of securities contemplated under the Plan will be
subject to the securities laws of the provinces and territories of Canada in
which Persons entitled to receive such securities reside:

- the issuance of New Common Stock by Core-Mark Newco;

- the distribution of New Common Stock by the Reorganized
Debtors;

- the issuance of Equity Subscription Rights by Core-Mark Newco
and the issuance of Preferred Stock by Core-Mark Newco upon
the exercise of such rights; and

- subsequent transfers made by the recipients of such
securities.

Such trades will be made pursuant to exemptions from the applicable
dealer registration and prospectus requirements of Canadian securities laws or
pursuant to discretionary orders from applicable Canadian provincial securities
regulatory authorities. Although there can be no assurance that any required
discretionary orders will be obtained, based on relief granted in similar
circumstances to other public companies, the Reorganized Debtors believe that
such discretionary relief or rulings are obtainable. Obtaining such
discretionary orders (to the extent required) is a condition to the occurrence
of the Effective Date of the Plan.

Persons resident in Canada who are entitled to receive such securities
pursuant to such exemptions or orders are advised that they will not be entitled
to the statutory rights that would have been available to them had such
securities been distributed pursuant to a prospectus, including rights of
rescission and damages.

If at the time of any subsequent transfer in Canada of the Core-Mark
Newco Securities, the seller holds a sufficient number of any Core-Mark Newco
Securities to materially affect control of Core-Mark Newco, a prospectus will be
required to be delivered to the purchaser(s) unless a prospectus exemption is
then available for such transfer. For these purposes, and in the absence of
evidence to the contrary, any Person or combination of Persons who hold more
than 20% of the voting securities of Core-Mark Newco shall be deemed to
materially affect its control.

XII. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN

The following is a summary of certain U.S. federal income tax
consequences of the Plan to Debtors and Holders of Claims and Equity Interests.
Unless otherwise indicated, this discussion addresses the treatment of Claims
and Equity Interests against both the Company and the Filing Subsidiaries. This
summary is based on the Internal Revenue Code of 1986, as amended (the "Code"),
Treasury Regulations thereunder, and administrative and judicial interpretations
and practice, all as in effect on the date hereof and all of which are subject
to change, with possible retroactive effect. Due to the lack of definitive
judicial and administrative authority in a number of areas, substantial
uncertainty may exist with respect to some of the tax consequences described
below. No opinion of counsel has been obtained, and Debtors do not intend to
seek a ruling from the Internal Revenue Service (the "IRS") as to any of such
tax consequences, and there can be no assurance that the IRS will not challenge
one or more of the tax consequences of the Plan described below.

Unless otherwise indicated, this summary does not apply to Holders of
Claims and Equity Interests that are non-U.S. Holders (as defined below) or that
are otherwise subject to special treatment under U.S. federal income tax law
(including, for example, banks, governmental authorities or agencies, financial
institutions, insurance companies, pass-through entities, tax-exempt
organizations, brokers and dealers in securities, mutual funds, small business
investment companies, regulated investment companies, investors that hold the
instruments as part of a straddle or hedging, constructive sale, integrated or
conversion transactions for U.S. federal income tax purposes or investors whose
functional currency is not the U.S. dollar). The following discussion assumes
that Holders of Claims and Equity Interests hold their instruments as "capital
assets" within the meaning of Code Section 1221. Moreover, this summary does not
purport to cover all aspects of U.S. federal income taxation that may apply to
Debtors and Holders of Claims and Equity Interests based upon their particular
circumstances. Additionally, this summary does not discuss any tax consequences
that may arise under state, local, or foreign tax law.

For purposes of this discussion, a "U.S. Holder" means a Holder of
Claims and Equity Interests that is either: (i) an individual citizen or
resident of the United States; (ii) a corporation, partnership, or other entity
created or organized in the United States or under the laws of the United States
or of any political subdivision of the United States; (iii) an estate, the
income of which is includible in gross income for U.S. federal income tax
purposes regardless of its source, or (iv) a trust, the administration of which
is subject to the primary supervision of the U.S. courts and that has one or
more U.S. Persons who have the authority to control all substantial decisions of
the trust. A "Non-U.S. Holder" is a holder of Claims and Equity Interests other
than a "U.S. Holder."

If a partnership holds Claims or Equity Interests, the tax treatment of
a partner will generally depend upon the status of the partner and the
activities of the partnership. Partners in partnerships that hold Claims or
Equity Interests should consult their tax advisors.

THE FOLLOWING SUMMARY IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING AND
ADVICE BASED ON THE PARTICULAR CIRCUMSTANCES OF EACH HOLDER OF CLAIMS AND EQUITY
INTERESTS. ALL HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE
U.S. FEDERAL INCOME TAX CONSEQUENCES, AS WELL AS ANY APPLICABLE STATE, LOCAL,
AND FOREIGN TAX CONSEQUENCES OF THE PLAN.

A. Certain U.S. Federal Income Tax Consequences To U.S. Holders
Of Claims And Equity Interests

Debtors intend to take the position that the reorganization undertaken
pursuant to the Plan constitutes a taxable sale of Fleming's assets to Core-Mark
Holdings III. As a consequence, Holders of Claims will be treated as exchanging
such Claims for Core-Mark Newco's common stock, a promissory note issued in
favor of certain Holders of Claims and cash, if any, in a taxable exchange.

However, there is no assurance that the exchange pursuant to the plan
will be treated as a taxable sale by the IRS. Instead, the IRS may take the
position that the exchange constitutes a tax-free reorganization. If the IRS
were to succeed in asserting that the exchange qualifies as a tax-free
reorganization, the tax consequences to Holders of Claims may differ from the
consequences described below.

1. Consequences to Holders of Prepetition Lenders'
Secured Claims

Holders of Allowed Prepetition Lenders' Secured Claims will
receive, in exchange for and in full and final satisfaction of their Prepetition
Lenders' Secured Claims, payment in full in cash on account of the Allowed
Pre-Petition Lenders' Secured Claim.

Holders of Allowed Prepetition Lenders' Secured Claims will be
treated as exchanging their Prepetition Lenders' Secured Claims for Cash in a
taxable exchange under Section 1001 of the Code. In such case, a Holder of
Prepetition Lenders' Secured Claims should recognize gain (or loss) equal to the
amount by which (i) the amount of Cash received (to the extent such Cash is not
allocable to accrued but untaxed interest) exceeds (or, in the case of loss, is
less than) (ii) such Holder's tax basis in the existing Prepetition Lenders'
Secured Claims. Any gain or loss recognized in a taxable exchange by a Holder of
Prepetition Lenders' Secured Claims that constitute capital assets in the hands
of the Holder should be capital in nature (subject to the market discount rules
discussed below), and should be long term capital gain or loss if the
Prepetition Lenders' Secured Claims were held for more than one year. To the
extent that Cash received in exchange for Prepetition Lenders' Secured Claims is
treated as received in satisfaction of accrued but untaxed interest on such
Claims, a Holder should recognize ordinary income. See "Accrued But Untaxed
Interest" below.

2. Consequences to Holders of Other Secured Claims,
Approved Trade Creditor Lien Claims, DSD Trust Claims
and PACA/PASA Claims

Holders of Allowed Other Secured Claims, Approved Trade
Creditor Reclamation Lien Claims, DSD Trust Claims (provided Holders of DSD
Trust Claims prevail in their litigation), PACA/PASA Claims and Convenience
Claims will receive a distribution of Cash and/or property on account of such
Claims, as specified in the Plan Accordingly, a Holder of Other Secured Claims,
Approved Trade Creditor Reclamation Lien Claims, DSD Trust Claims, PACA/PASA
Claims, and Convenience Claims should recognize gain or loss equal to the
difference between (i) the amount of Cash and the fair market value of other
property received in exchange for such claims and (ii) the Holder's adjusted
basis in such claims. Such gain or loss should be capital in nature if such
Other Secured Claims, Approved Trade Creditor Reclamation Lien Claims, DSD Trust
Claims, PACA/PASA Claims and Convenience Claims are held as capital assets
(subject to the "market discount" rules described below) and should be long-term
capital gain or loss if such Claims were held for more than one year. To the
extent that a portion of cash received in exchange for such Claims is allocable
to accrued but untaxed interest, the Holder should recognize ordinary income.
See "Accrued But Untaxed Interest" below.

3. Consequences to Holders of Allowed Valid Reclamation
Claims

To the extent it is determined that the Debtors' Inventory in
which the Holders of Allowed Valid Reclamation Claims have asserted an interest
had Residual Inventory Value as of the Petition Date, Holders of Allowed Valid
Reclamation Claims will receive a promissory note from Core-Mark Newco
("Promissory Note"), entitling each such Holder to its Ratable Proportion of net
Cash recoveries from Litigation Claims after payment in full of all Allowed
Approved Trade Creditor Reclamation Claims. In the event it is determined that
the Residual Inventory Value is less than the Allowed Amount of the Valid
Reclamation Claims, the remainder of the Valid Reclamation Claims in excess of
the Residual Inventory Value will be treated as General Unsecured Claims with
the tax consequences to the Holders as described below.

Holders of Allowed Valid Reclamation Claims will be treated as
exchanging their Allowed Valid Reclamation Claims for Promissory Notes in a
taxable exchange under Section 1001 of the Code. Accordingly, a Holder of
Allowed Valid Reclamation Claims should recognize gain or loss equal to the
difference between (i) the "issue price" of the Promissory Note and (ii) the
Holder's adjusted basis in Allowed Valid Reclamation Claims. Such gain or loss
should be capital in nature so long as Allowed Valid Reclamation Claims were
held as capital assets (subject to the "market discount" rules described below)
and should be long-term capital gain or loss if Allowed Valid Reclamation Claims
were held for more than one year. To the extent that a portion of the Promissory
Note received in exchange for Allowed Valid Reclamation Claims is allocable to
accrued but untaxed interest, the Holder should recognize ordinary income. See
"Accrued But Untaxed Interest" below. Holders should consult their tax advisers
about the possibility of reporting gain on the installment method.

4. Consequences to Holders of General Unsecured Claims

Holders of Allowed General Unsecured Claims (which includes
Holders of all Allowed General Unsecured Claims other than Convenience Claims)
will receive, in full and final satisfaction of their Claims, at the Debtors'
option, one or a combination of the following: (i) a Ratable Proportion of the
common stock of Core-Mark Newco ("New Common Stock"), subject to dilution from
the shares issued pursuant to the Rights Offering and the Management Incentive
Plan; (ii) a promissory note issued in favor of the Holders entitling such
Holders to receive excess Cash from preference recoveries, vendor recoveries and
other reserved funds, after the payment of all senior Claims as outlined in the
Plan, unless such Holder agrees to other treatment ("Promissory Note"), and/or
(iii) a pro rata share of Cash remaining from the sale of any of the Debtors'
assets after all of the Allowed Unclassified Claims and Claims of Holders in
Classes 1 through 5 have been satisfied and Equity Subscription Rights for
shares of New Common Stock. As additional consideration, each Holder of a
General Unsecured Claim that is listed on the Rights Participation Schedule
shall be entitled to exercise their Equity Subscription Rights for shares of
Preferred Stock as outlined in the Plan.

Holders of Allowed General Unsecured Claims will be treated as
exchanging their General Unsecured Claims for New Common Stock, Equity
Subscription Rights and/or Cash in a taxable exchange under Section 1001 of the
Code. Accordingly, a Holder of an Allowed General Unsecured Claim should
recognize gain or loss equal to the difference between (i) the sum of (a) the
fair market value of Equity Subscription Rights (if any) and of the New Common
Stock (as of the Effective Date) received in exchange for the General Unsecured
Claims and (b) an amount of Cash received (to the extent such New Common Stock
and Cash are not allocable to accrued but unpaid interest) and (ii) the Holder's
adjusted basis in the General Unsecured Claims. Such gain or loss should be
capital in nature so long as the General Unsecured Claims are held as capital
assets (subject to the "market discount" rules described below) and should be
long-term capital gain or loss if the General Unsecured Claims were held for
more than one year. To the extent that a portion of the New Common Stock, Equity
Subscription Rights, and Cash received in exchange for General Unsecured Claims
is allocable to accrued but untaxed interest, the Holder should recognize
ordinary income. See "Accrued But Untaxed Interest" below. A Holder's tax basis
in the New Common Stock and the Equity Subscription Rights received in exchange
for the General Unsecured Claims should equal the fair market value of the New
Common Stock and the Equity Subscription Rights as of the Effective Date. A
Holder's holding period for the New Common Stock and the Equity Subscription
Rights should begin on the day following the Effective Date.

5. Consequences to Holders of Equity Interests

Holders of Equity Interests that are cancelled under the Plan
will be allowed a "worthless stock deduction" (unless such Holder had previously
claimed a worthless stock deduction with respect to the Equity Interest) in the
tax year in which such Equity Interest becomes worthless (which could be a tax
year prior to the year the Plan becomes effective) in an amount equal to the
Holder's adjusted basis in its Equity Interest. If the Holder held an Equity
Interest as a capital asset, the loss will be treated as a loss from the sale or
exchange of such capital asset.

6. Receipt of Interests in Post Confirmation Trust

On the Effective Date, the Post Confirmation Trust shall be
settled and is anticipated to exist as a grantor trust for the benefit of
certain creditors. Subject to definitive guidance from the IRS or a court of
competent jurisdiction to the contrary (including the receipt of an adverse
determination by the IRS upon audit if not contested by the Post Confirmation
Trustee), pursuant to Treasury Regulation Section 1.671-1(a) and/or Treasury
Regulation Section 301.7701-4(d) and related regulations, the Post Confirmation
Trustee may designate and file returns for the Post Confirmation Trust as a
"grantor trust" and/or "liquidating trust" and therefore, for federal income tax
purposes, the Post Confirmation Trust's taxable income (or loss) should be
allocated pro rata to its beneficiaries.

The tax consequences of the right to receive and of the
receipt (if any) of property from the Post Confirmation Trust are uncertain, and
may depend, among other things, on the timing of the distribution and the nature
of the property received. It is possible that the receipt of property from the
Post Confirmation Trust would be a taxable event to the Holders of Claims at the
time the property is received; however, it is also possible that the IRS could
seek to treat the right to receive property from the Post Confirmation Trust as
property received on the

Effective Date, and tax it in the same manner as cash or other property received
on the Effective Date. Alternatively, the Holders of Claims could be treated as
exchanging the right to receive property from the Post Confirmation Trust for a
portion of their Claims. Finally, a portion of any amount of property received
from the Post Confirmation Trust may be treated in respect of accrued but unpaid
interest to the Holders of Claims. In light of these substantial uncertainties,
Holders of Claims are urged to consult their tax advisors regarding the tax
consequences of the right to receive and of the receipt (if any) of property
from the Post Confirmation Trust.

7. Treatment of Subsequent Distributions on Preferred
Stock and New Common Stock

a. Distributions--In General

The amount of distributions (other than any
constructive distributions on the Preferred Stock (see discussion below)), if
any, by Core-Mark Newco in respect of New Common Stock and Preferred Stock will
be equal to the amount of cash and the fair market value as of the date of
distribution of any property distributed. Subject to the discussion in paragraph
(D) immediately below, regarding redemption of Preferred Stock, distributions
generally will be treated for federal income tax purposes first as a taxable
dividend to the extent of Core-Mark Newco's current and accumulated earnings and
profits (as determined for federal income tax purposes) and then as a tax-free
return of capital to the extent of the Holder's tax basis in its stock, with any
excess treated as capital gain from the sale or exchange of the stock.

b. PIK Distributions

Distributions on Preferred Stock are anticipated to
be paid in kind with additional shares of Preferred Stock. Any such distribution
of additional shares of Preferred Stock generally will be taxed under the
general distribution rules described above. Under these rules, the amount of any
such distribution generally will equal the fair market value of Preferred Stock
so received on the distribution date and be treated for federal income tax
purposes first as a taxable dividend to the extent of Core-Mark Newco's current
and accumulated earnings and profits (as determined for federal income tax
purposes) and then as a tax-free return of capital to the extent of the Holder's
tax basis in its stock, with any excess treated as capital gain from the sale or
exchange of the stock. In addition, a Holder's tax basis in Preferred Stock so
received will equal the fair market value of such stock on the distribution
date, and such Holder's holding period for such stock will commence on the date
following the distribution date.

c. Constructive Distributions on Preferred Stock

If Preferred Stock (including any Preferred Stock
paid in kind as described in paragraph (B) above) is treated as having more than
a de minimis "redemption premium" (i.e., an excess of the redemption price of
Preferred Stock over its "issue price"), Holders may be treated as receiving
constructive distributions of additional shares of Preferred Stock totaling the
amount of such "redemption premium" over the period of time during which
Preferred Stock is outstanding, based on a constant yield-to-maturity method
that reflects compounding. These constructive distributions would be in addition
to the distributions described in paragraph (B) above and would generally be
taxed in the same manner.

d. Subsequent Sale, Redemption, or other disposition of
New Common Stock or Preferred Stock

The federal income tax treatment to a Holder of New
Common Stock and/or Preferred Stock upon sale, redemption, or other disposition
of such stock will depend on the particular facts relating to such Holder at the
time of such sale, redemption, or other disposition. Generally, any gain
recognized by a Holder may be treated as ordinary income to the extent of (i)
any bad debt deductions (or additions to a bad debt reserve) Claimed with
respect to such Holder's Claim and any ordinary loss deductions incurred upon
satisfaction of its Claim, less any income (other than interest income)
recognized by the Holder upon satisfaction of its Claim, and (ii) any amounts
received by cash-basis Holder which would have been included in its gross income
if the Holder's Claim had been satisfied in full but which was not included by
reason of the cash method of accounting.

THE RULES APPLICABLE TO THE TREATMENT OF THE RECEIPT
OF CONSTRUCTIVE DISTRIBUTIONS, AND THE SALE, REDEMPTION, OR OTHER DISPOSITION OF
NEW COMMON STOCK AND/OR PREFERRED STOCK ARE COMPLEX AND IN SOME CASES UNCERTAIN.
THUS, HOLDERS OF NEW COMMON STOCK AND/OR PREFERRED STOCK ARE URGED TO CONSULT
THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OF THE RULES TO THEIR
PARTICULAR SITUATIONS.

B. Certain U.S. Federal Income Tax Consequences to Non-U.S.
Holders of Claims

Except as provided below or in the following paragraph, Non-U.S.
Holders of Claims exchanging such Claims for New Common Stock, and Cash (if any)
should not be subject to the U.S. federal income or withholding tax on gain
realized on the exchange of their Claims for New Common Stock, and Cash (if
any), unless (a) that Non-U.S. Holder is an individual who is present in the
U.S. for 183 days or more during the taxable year and certain other requirements
are met, (b) the gain is effectively connected with the conduct of a U.S. trade
or business of the Non-U.S. Holder, or (c) the Non-U.S. Holder is subject to tax
pursuant to the provisions of U.S. federal income tax law applicable to certain
U.S. expatriates. Gain that is effectively connected with the conduct of a trade
or business in the United States by a Non-U.S. Holder will be subject to the
U.S. federal income tax imposed on net income on the same basis that applies to
U.S. Persons generally (as described above) and, for corporate holders and under
certain circumstances, also the branch profits tax, but will generally not be
subject to withholding. Non-U.S. Holders should consult any applicable income
tax treaties that may provide for different rules.

In addition, Non-U.S. Holders should not be subject to U.S. federal
income or withholding tax on any amounts of New Common Stock, or Cash (if any)
that are treated as received in satisfaction of accrued but untaxed interest
with respect to their Claims, provided that (a) the Non-U.S. Holder does not
actually or constructively own 10% or more of the total combined voting power of
all classes of the Debtors' stock entitled to vote, (b) the Non-U.S. Holder is
not (i) a bank receiving interest pursuant to a loan agreement entered into in
the ordinary course of its trade or business or (ii) a controlled foreign
corporation that is related to the Debtors through the stock ownership, (c) the
interest payments are not effectively connected with the conduct of a U.S. trade
or business of the Non-U.S. Holder, and (d) the beneficial owner of the Claim
certifies (generally on an IRS Form W-8BEN or a permissible substitute or
successor form) to the Person otherwise required to withhold U.S. federal income
tax from such interest, under penalties of perjury, that it is not a United
States Person and provides its name and address and such other information as
the form may require.

1. Accrued Interest, Market Discount and Original Issue
Discount

a. Accrued But Untaxed Interest.

To the extent that any amount received by a Holder of
Claims under the Plan is attributable to accrued but untaxed interest, such
amount should be taxable to the Holder as interest income, if such accrued
interest has not been previously included in the Holder's gross income for U.S.
federal income tax purposes. Conversely, a Holder of Claims may be able to
recognize a deductible loss (or, possibly, a write-off against a reserve for bad
debts) for such purposes to the extent that any accrued interest was previously
included in the Holder's gross income but was not paid in full by the Debtors.

The extent to which any consideration received by a
Holder of Claims under the Plan will be attributable to accrued but untaxed
interest is unclear. Under the Plan, the aggregate consideration to be
distributed to Holders of Allowed Claims in each Class will be treated as first
satisfying the stated principal amount of the Claims with any excess allocated
to accrued, but unpaid, interest, if any. Certain legislative history indicates
that an allocation of consideration as between principal and interest provided
in a bankruptcy plan is binding for federal income tax purposes. However, the
IRS could take the position that the consideration received by a Holder should
be allocated in some way other than as provided in the Plan. Holders of Claims
should consult their own tax advisors regarding the proper allocation of the
consideration received by them under the Plan.

b. Market Discount.

Holders of Claims who realize gain as a result of
receipt of consideration under the Plan may be affected by the "market discount"
provisions of Code Sections 1276 through 1278. Under these rules, some

or all of the gain realized by Holders of Claims may be treated as ordinary
income (instead of capital gain), to the extent of the amount of "market
discount" on such Claims.

In general, a debt obligation with a fixed maturity
of more than one year that is acquired by a holder on the secondary market (or,
in certain circumstances, upon original issuance) is considered to be a acquired
with "market discount" as to that holder if the debt obligation's stated
redemption price at maturity (or revised issue price, in the case of a debt
obligation issued with original issue discount) exceeds the tax basis of the
debt obligation in the holder's hands immediately after its acquisition.
However, a debt obligation will not be a "market discount bond" if such excess
is less than a statutory de minimis amount (equal to 0.25 percent of the debt
obligation's stated redemption price at maturity or revised issue price, in the
case of a debt obligation issued with original issue discount, multiplied by the
number of remaining whole years to maturity).

Any gain recognized by a Holder on the taxable
disposition of Claims (determined as described above) that had been acquired
with market discount should be treated as ordinary income to the extent of the
market discount that accrued thereon while the Claims were considered to be held
by a Holder (unless the Holder elected to include market discount in income as
it accrued). To the extent that any Claims that had been acquired with market
discount are exchanged in a tax-free transaction for other property, any market
discount that accrued on such Claims but was not recognized by the Holder is
carried over to the property received therefor and any gain recognized on the
subsequent sale, exchange, redemption or other disposition of such property is
treated as ordinary income to the extent of such accrued market discount.

c. Limitation on Use of Capital Losses.

Holders of Claims and Equity Interests who recognize
capital losses as a result of the exchange under the Plan will be subject to
limits on their use of such losses. For noncorporate Holders, capital losses may
be used to offset any capital gains (without regard to holding periods) plus the
lesser of (1) $3,000 ($1,500 for married individuals filing separate returns) or
(2) the excess of the capital losses over the capital gains. For corporate
Holders, losses from the sale or exchange of capital assets may only be used to
offset capital gains. Holders who have more capital losses than can be used in a
tax year may be allowed to carry over the excess capital losses for use in
succeeding tax years. Noncorporate Holders may carry over unused capital losses
and apply them to capital gains and a portion of their ordinary income (see
described immediately above) for an unlimited number of years. Corporate Holders
may generally only carry over unused capital losses for the five years following
the capital loss year, but are allowed to carry back unused capital losses to
the three years preceding the capital loss year.

C. Certain U.S. Federal Income Tax Consequences To Reorganized
Debtors

1. Transfer of Business Assets

As described above, Debtors intend to take the position that
the reorganization undertaken pursuant to the Plan constitutes a taxable sale of
Fleming's assets to Core-Mark Holdings III. As a consequence, Core-Mark Holdings
III should obtain a tax basis in assets received from Fleming equal to their
cost to Core-Mark Holdings III, which generally should equal the fair market
value of Core-Mark Newco's stock transferred to Fleming plus the amount of
liabilities assumed by Core-Mark Holdings III.

Provided the reorganization undertaken pursuant to the Plan
constitutes a taxable transfer, Fleming would recognize gain or loss upon the
transfer of assets to Core-Mark Holdings III in an amount equal to the
difference between the fair market value of its assets and its tax basis in such
assets. Fleming believes that no significant federal, state, or local tax
liability, if any, should be incurred upon the transfer.

There is no assurance, however, that the exchange will be
treated by the IRS as a taxable sale of assets by Fleming to Core-Mark Holdings
III. Instead, the IRS may take the position that the exchange constitutes a
tax-free reorganization. If the IRS were to succeed in asserting that the
exchange qualifies as a tax-free reorganization, Fleming would not recognize any
gain or loss on the exchange. Instead, Core-Mark Holdings III would succeed to
certain tax attributes of Fleming, including Fleming's tax basis in the assets
transferred to Core-Mark Holdings III, but only after taking into account the
reduction in such tax attributes and tax basis on account of

the discharge of indebtedness pursuant to the Plan. Thus, Core-Mark Holdings III
would generally have no NOL carryforwards (as described below) and would have a
significantly diminished tax basis in the assets received from Fleming, with the
result that future tax depreciation and amortization with respect to Core-Mark
Holdings III's real and personal property would be substantially reduced.

2. Cancellation of Indebtedness and Reduction of Tax
Attributes

As a result of the transactions undertaken pursuant to the
Plan, the amount of Debtors' aggregate outstanding indebtedness will be
substantially reduced. In general, absent an exception, a debtor will realize
and recognize cancellation of indebtedness income ("COD Income") upon
satisfaction of its outstanding indebtedness for an amount less than its
adjusted issue price. The amount of COD Income, in general, is the excess of (a)
the adjusted issue price of the indebtedness satisfied, over (b) the sum of the
issue price of any new indebtedness of the taxpayer issued, the amount of cash
paid and the fair market value of any new consideration (including stock of
debtor) given in satisfaction of such indebtedness at the time of the exchange.

A debtor will not, however, be required to include any amount
of COD Income in gross income if debtor is under the jurisdiction of a court in
a bankruptcy case and the discharge of debt occurs pursuant to that case.
Instead, a debtor must (as of the first day of the next taxable year) reduce its
tax attributes by the amount of COD Income which it excluded from gross income.
In general, tax attributes will be reduced in the following order: (a) net
operating losses ("NOLs"), (b) tax credits and capital loss carryovers, and (c)
tax basis in assets.

Because, under the Plan, Holders of certain Claims will
receive New Common Stock and Equity Subscription Rights, the amount of COD
Income, and accordingly the amount of tax attributes required to be reduced,
will depend on the fair market value of New Common Stock and of Equity
Subscription Rights. This value cannot be known with certainty until after the
Effective Date. Thus, although it is expected that a reduction of tax attributes
will be required, the exact amount of such reduction cannot be predicted.

The IRS recently released temporary regulations (the "New
Regulations") governing the reduction of tax attributes when a member of a
consolidated group realizes cancellation of debt income that is excluded from
gross income ("Excluded COD Income"). The New Regulations apply to discharges of
indebtedness that occur after August 29, 2003. In general, the New Regulations
require a member of a consolidated group that realizes Excluded COD Income to
reduce the tax attributes that are attributable to that member (and its direct
and indirect subsidiaries under various look-through rules when the tax basis of
stock of such subsidiaries is reduced as a result of the member realizing
Excluded COD Income). To the extent that Excluded COD Income is not applied to
reduce the tax attributes attributable to the member actually realizing Excluded
COD Income, after applying the look-through rules described in the paragraph
below, the remaining consolidated tax attributes attributable to the
consolidated group (but not basis in assets) are required to be reduced by such
amount. The Debtors anticipate that the amount of Excluded COD Income will
likely eliminate or substantially reduce the NOL carryforwards of Debtors'
consolidated group and may eliminate or substantially reduce the tax basis in
assets (including depreciable assets) of Debtors' consolidated group. Because
(i) any COD Income should be realized by Fleming prior to the transfer of assets
to Core-Mark Holdings III and (ii) Debtors intend to take the position that the
reorganization undertaken pursuant to the Plan constitutes a taxable transfer of
Fleming's assets to Core-Mark Holdings III, Core-Mark Holdings III should not
realize any COD Income as a result of the reorganization and should not suffer
any attribute reduction.

3. Limitation of Net Operating Loss Carryovers and Other
Tax Attributes

Code Section 382 generally limits a corporation's use of its
NOLs (and may limit a corporation's use of certain built-in losses if such
built-in losses are recognized within a five-year period following an ownership
change) if a corporation undergoes an "ownership change." This discussion
describes the limitation determined under Code Section 382 in the case of an
"ownership change" as the "Section 382 Limitation". The Section 382 Limitation
on the use of pre-change losses (the NOLs and built-in losses recognized within
the five year post-ownership change period) in any "post change year" is
generally equal to the product of the fair market value of the loss
corporation's outstanding stock immediately before the ownership change and the
long term tax-exempt rate (which is published monthly by the Treasury Department
and most recently was approximately 4.74% for ownership changes occurring in
December 2003) in effect for the month in which the ownership change occurs.
Code Section 383 applies a similar limitation to capital loss carryforward and
tax credits.

In general, an ownership change occurs when the percentage of
the corporation's stock owned by certain "5 percent shareholders" increases by
more than 50 percentage points over the lowest percentage owned at any time
during the applicable "testing period" (generally, the shorter of (a) the
three-year period preceding the testing date or (b) the period of time since the
most recent ownership change of the corporation). A "5 percent shareholder" for
these purposes includes, generally, an individual or entity that directly or
indirectly owns 5 percent or more of a corporation's stock during the relevant
period, and may include one or more groups of shareholders that in the aggregate
own less than 5 percent of the value of the corporation's stock. Under
applicable Treasury Regulations, an ownership change with respect to an
affiliated group of corporations filing a consolidated return that has
consolidated NOLs is generally measured by changes in stock ownership of the
parent corporation of the group.

Because (i) substantially all of the Debtors' NOLs will likely
be eliminated or substantially reduced and (ii) Debtors intend to take the
position that the reorganization undertaken pursuant to the Plan constitutes a
taxable sale of Fleming's assets to Core-Mark Holdings III, Core-Mark Holdings
III should not succeed to any of the NOLs of Fleming and hence Section 382
Limitation will not be relevant to the NOLs of Fleming.

The restructuring pursuant to the Plan will cause an ownership
change to occur with respect to subsidiaries of Fleming, if any, transferred to
Core-Mark Holdings III. As a result, such subsidiaries may be affected by the
Section 382 Limitation with respect to their NOLs and built-in losses (if any)
following the Effective Date. This limitation is independent of, and in addition
to, the reduction of tax attributes described in the preceding Section resulting
from the exclusion of COD Income. Similarly, the ability to use any remaining
capital loss carryforwards and tax credits by such subsidiaries will also be
limited. Special rules may apply in determining the Section 382 Limitation with
respect to a corporation which experiences an ownership change as the result of
a bankruptcy case. However, the Debtors believe that such subsidiaries have a
limited amount of NOLs and built-in losses, which may be eliminated in whole or
in part as a result of the attribute reduction described above and thus the
Section 382 Limitation will not materially affect the business of Core-Mark
Newco going forward.

D. Backup Withholding

Under the backup withholding rules, a Holder of Claims may be subject
to backup withholding with respect to distributions or payments made pursuant to
the Plan unless that holder (a) comes within certain exempt categories (which
generally include corporations) and, when required, demonstrates that fact or
(b) provides a correct taxpayer identification number and certifies under
penalty of perjury that the taxpayer identification number is correct and that
the holder is not subject to backup withholding because of a failure to report
all dividend and interest income. Backup withholding is not an additional tax,
but merely an advance payment that may be refunded to the extent it results in
an overpayment of tax.

Debtors will withhold all amounts required by law to be withheld from
payments of interest and dividends. Debtors will comply with all applicable
reporting requirements of the Code.

THE FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN ARE COMPLEX. THE
FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF FEDERAL INCOME TAXATION THAT
MAY BE RELEVANT TO A PARTICULAR HOLDER IN LIGHT OF SUCH HOLDER'S CIRCUMSTANCES
AND INCOME TAX SITUATION. ALL HOLDERS OF CLAIMS AND EQUITY INTERESTS SHOULD
CONSULT WITH THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF
THE TRANSACTION CONTEMPLATED BY THE RESTRUCTURING, INCLUDING THE APPLICABILITY
AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS, AND OF ANY CHANGE IN
APPLICABLE TAX LAWS.

XIII. CERTAIN CANADIAN FEDERAL INCOME TAX CONSEQUENCES OF CONSUMMATION OF
THE PLAN

A. General

A DESCRIPTION OF CERTAIN CANADIAN FEDERAL INCOME TAX CONSEQUENCES OF
THE CONSUMMATION OF THE PLAN IS PROVIDED BELOW. THE DESCRIPTION IS BASED ON THE
PROVISIONS OF THE INCOME TAX ACT (CANADA) AND THE REGULATIONS THERETO ("THE
ACT"), THE PUBLISHED ADMINISTRATIVE AND INTERPRETIVE POSITIONS OF THE CANADA
CUSTOMS AND REVENUE AGENCY, PROPOSED AMENDMENTS TO THE ACT AND CASE LAW
PUBLISHED OR REPORTED AS AT THE DATE OF THIS DISCLOSURE STATEMENT. CHANGES IN
ANY OF THESE AUTHORITIES OR CHANGES IN THE INTERPRETATIONS OF ANY OF THESE
AUTHORITIES, THAT MAY HAVE RETROACTIVE EFFECT, MAY CAUSE THE CANADIAN FEDERAL
INCOME TAX CONSEQUENCES OF THE PLAN TO DIFFER MATERIALLY FROM THE CONSEQUENCES
DESCRIBED BELOW. MOREOVER, NO ADVANCE INCOME TAX RULING HAS BEEN REQUESTED FROM
CANADA CUSTOMS & REVENUE AGENCY, NO LEGAL OPINION HAS BEEN REQUESTED FROM
COUNSEL CONCERNING ANY TAX CONSEQUENCE OF THE PLAN; AND NO TAX OPINION IS GIVEN
BY THIS DISCLOSURE STATEMENT.

THIS DESCRIPTION DOES NOT COVER ALL ASPECTS OF CANADIAN FEDERAL INCOME
TAXATION THAT MAY BE RELEVANT TO THE DEBTORS OR HOLDERS OF CLAIMS OR INTERESTS.

FOR THESE REASONS, THE DESCRIPTION THAT FOLLOWS IS NOT A SUBSTITUTE FOR
CAREFUL TAX PLANNING AND PROFESSIONAL TAX ADVICE BASED UPON THE INDIVIDUAL
CIRCUMSTANCES OF EACH HOLDER OF A CLAIM OR INTEREST. HOLDERS OF CLAIMS OR
INTERESTS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE
CANADIAN FEDERAL, PROVINCIAL AND NON-CANADIAN CONSEQUENCES OF THE PLAN.

B. Settlement of Debt

The settlement of Core-Mark International's commercial debt obligations
(as defined in the Act) for an amount (the "Settlement Amount") that may be less
than the full amount owed (the "Outstanding Indebtedness") by Core-Mark
International (the difference between the Settlement Amount and the Outstanding
Indebtedness being hereinafter referred to as the "Forgiven Amount") will result
in the application of the Canadian debt forgiveness rules. Under these rules,
the Forgiven Amount will reduce certain tax attributes of Core-Mark
International in the order prescribed by the Act, and may result in an amount
being included in Core-Mark International's taxable income earned in Canada if
the Forgiven Amount exceeds Core-Mark International's tax attributes.

Core-Mark International believes that the Forgiven Amount will exceed
its tax attributes and that, accordingly, Core-Mark International will be
required to include an amount (the "Excess Amount") in its taxable income earned
in Canada as a result of the settlement of its commercial debt obligations. It
is expected that Core-Mark International will be entitled to claim reserves so
that the Excess Amount will generally be included in its income over five
taxation years.

C. Resident Holders

The following is a summary of certain Canadian federal income tax
considerations generally applicable to a holder of indebtedness of a Debtor who,
at all relevant times, for purposes of the Act and any applicable tax treaty or
convention:

(a) is or is deemed to be a resident of Canada; and

(b) deals at arm's length and is not affiliated with the Debtors
(a "Resident Holder").

This summary does not address the considerations applicable to Resident
Holders that are "financial institutions" (as defined in the Act) and assumes
that no amount on account of interest is received by a Resident Holder of
indebtedness.

A Resident Holder of indebtedness who receives a promissory note, New
Common Stock, an Equity Subscription Right, cash, or any combination of the
foregoing (the "Consideration"), in full or partial satisfaction of the
outstanding principal amount of such holder's indebtedness will be treated as
having disposed of its indebtedness for proceeds of disposition equal to the
fair market value of the Consideration so received. If such indebtedness is held
by a holder as capital property, the disposition will give rise to a capital
gain (or capital loss) to the extent that the proceeds of disposition, net of
any reasonable costs of disposition related thereto, exceed (or are less than)
the adjusted cost base to the Resident Holder, immediately before the
disposition of the indebtedness. If the indebtedness represents trade debts of
the holder, the holder will be required to include in its income (or deduct in
computing its income) the amount by which the fair market value of the
Consideration exceeds (or is less than) the amount of the indebtedness and any
reasonable costs of disposition.

D. Non-Resident Holders

(a) is not and is not deemed to be a resident of Canada;

(b) deals at arm's length and is not affiliated with the Debtors;
and

(c) does not use or hold and is not deemed to use or hold the
indebtedness in carrying on a business in Canada (a
"Non-Resident Holder").

This summary does not address the considerations relevant to a
Non-Resident Holder that is an insurer carrying on business in Canada and
elsewhere or a Non-Resident Holder to whom the indebtedness of a Debtor is
taxable Canadian property (as defined in the Act). This summary assumes that no
amount on account of interest is received by a Non-Resident Holder of
indebtedness.

A Non-Resident Holder of indebtedness of a Debtor will not realize any
Canadian federal income tax consequences as a result of the Plan.

E. Expiry or Disposition of Equity Subscription Rights

1. Resident Holders

The following is a summary of certain Canadian federal income tax
considerations generally applicable to a Resident Holder who exercises an Equity
Subscription Right, and who holds the Equity Subscription Right and the
Preferred Stock as capital property. This summary does not address the
considerations applicable to Resident Holders that are "financial institutions"
(as defined in the Act).

No gain or loss will be realized by a Resident Holder upon the exercise
of an Equity Subscription Right. The cost to a Resident Holder of Preferred
Stock acquired upon the exercise of an Equity Subscription Right will be equal
to the aggregate of the Resident Holder's adjusted cost base of the Equity
Subscription Right immediately before such exercise and the amount paid upon the
exercise of the Subscription Right. Upon the expiry of an unexercised Equity
Subscription Right, the Resident Holder will realize a capital loss equal to the
adjusted cost base of the Equity Subscription Right to the Resident Holder.

On a disposition or deemed disposition of an Equity Subscription Right
(other than on the exercise or expiry of such Equity Subscription Right), a
Resident Holder will realize a capital gain (or capital loss) equal to the

amount by which the proceeds of disposition exceed (or are less than) the
aggregate of the Resident Holder's adjusted cost base of the Equity Subscription
Right and any reasonable cost of disposition.

2. Non-Resident Holders

A Non-Resident Holder, who is not an insurer carrying on business in
Canada and elsewhere or a Non-Resident Holder to whom an Equity Subscription
Right is taxable Canadian property (as defined in the Act), will not realize any
Canadian federal tax consequences as a result of the exercise or expiry of the
Equity Subscription Rights.

XIV. ALTERNATIVES TO PLAN

The Debtors believe that if the Plan is not confirmed, or is not
confirmable, the alternatives to the Plan include: (a) the conversion to a
chapter 7 case and concomitant liquidation of the Debtors' assets on a "forced
sale" basis; (b) dismissal of the case(s); or (c) an alternative plan of
reorganization.

A. Liquidation Under Chapter 7

If no plan can be confirmed, the Chapter 11 Cases may be converted to
Chapter 7 of the Bankruptcy Code, pursuant to which a trustee would be appointed
to liquidate the assets of the Debtors for distribution to creditors in
accordance with the priorities established by the Bankruptcy Code. For the
reasons previously discussed above, the Debtors believe that Confirmation of the
Plan will provide each Holder of an Unsecured Claim entitled to receive a
distribution under the Plan with a recovery that is expected to be substantially
more than it would receive in a liquidation under Chapter 7 of the Bankruptcy
Code.

B. Dismissal

Dismissal of the Chapter 11 Case(s) would leave the secured creditors
in a position to exercise their state law rights under their existing securities
interest, including foreclosure of such liens. The Debtors believe that in a
dismissal scenario the unsecured creditors would not receive any Distribution.

C. Alternative Plan

The Debtors believe that any alternative plan would not result in as
favorable of treatment of Claims as proposed under the Debtors' Plan.

XV. CONCLUSION

The Debtors and Creditors' Committee believe that the Plan maximizes
recoveries to all creditors and, thus, is in their best interests. The Plan as
structured, among other things, allows creditors to participate in distributions
in excess of those that would be available if the Debtors were liquidated under
chapter 7 of the Bankruptcy Code and minimizes delays in recoveries to all
creditors.

THE DEBTORS AND THE CREDITORS' COMMITTEE URGE CREDITORS TO ACCEPT THE
PLAN AND TO EVIDENCE SUCH ACCEPTANCE BY RETURNING THEIR PROPERLY COMPLETED
BALLOT(S) SO THAT THEY WILL BE ACTUALLY RECEIVED, AS INSTRUCTED ABOVE, BY THE
SOLICITATION AGENT IDENTIFIED HEREIN 5:00 P.M., PREVAILING EASTERN TIME, ON
___________ __ 2004.

/s/ Rebecca A. Roof
------------------------------------------------------------
Rebecca A. Roof, Interim Chief Financial Officer of FLEMING
COMPANIES, INC., et. al., Debtors and Debtors in Possession

KIRKLAND & ELLIS LLP
Richard L. Wynne, Esq. (CA Bar No. 120349)
Shirley S. Cho, Esq. (CA Bar No. 192616)
777 South Figueroa Street
Los Angeles, California 90017
Telephone: (213) 680-8400
Facsimile: (213) 680-8500

And

KIRKLAND & ELLIS LLP
James H. M. Sprayregen, P.C. (ARDC No. 6190206)
Janet Baer (ARDC No. 6182994)
Geoffrey A. Richards, Esq. (ARDC No. 6230120)
200 East Randolph Drive
Chicago, Illinois 60601-6636
Telephone: (312) 861-2000
Facsimile: (312) 861-2200

And

PACHULSKI, STANG, ZIEHL, YOUNG, JONES & WEINTRAUB P.C.
Laura Davis Jones, Esq. (Bar No. 2436)
Ira D. Kharasch, Esq. (CA Bar No. 109084)
919 North Market Street, Sixteenth Floor
Post Office Box 8705
Wilmington, Delaware 19899-8705 (Courier 19801)
Telephone: (302) 652-4100
Facsimile: (302) 652-4400
Counsel to Debtors and Debtors in Possession

EXHIBITS

Exhibit 1 Plan

Exhibit 2 Solicitation Order