Citigroup Center
153 East 53rd Street
New York, NY 10022-4611
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
Richard M. Cieri (RC 6062)
Marc Kieselstein (admitted pro hac vice)
David R. Seligman (admitted pro hac vice)
Edward Sassower (ES 5823)
James J. Mazza, Jr. (admitted pro hac vice)
Alexandra S. Kelly (AK 2021)
Counsel for the Debtors and Debtors in Possession
UNITED STATES BANKRUPTCY COURT | ||||||
SOUTHERN DISTRICT OF NEW YORK | ||||||
) | ||||||
In re: | ) | Chapter 11 | ||||
) | ||||||
Calpine Corporation, et al., | ) | Case No. 05-60200 (BRL) | ||||
) | Jointly Administered | |||||
Debtors. | ) | |||||
) | ||||||
THIRD AMENDED JOINT PLAN OF REORGANIZATION PURSUANT
TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
• | Record Date: [___], 2007 | ||
• | Voting Deadline: [___], 2007 at [___] p.m. prevailing Eastern time | ||
• | Date by which objections to Confirmation of the Plan must be filed and served: [___], 2007 at [___] p.m. prevailing Eastern time | ||
• | Hearing on Confirmation of the Plan: [___], 2007 at [___] a.m. prevailing Eastern time |
Page | ||||
ARTICLE I. SUMMARY | 1 | |||
A. Rules of Interpretation | 1 | |||
B. The Purpose of the Plan | 2 | |||
C. Treatment of Claims and Interests | 2 | |||
D. Substantive Consolidation | 2 | |||
E. Claims Estimates | 6 | |||
F. Reorganized Debtors and the Post-Confirmation Estate | 10 | |||
G. Restructuring Transactions Contemplated by the Plan | 11 | |||
H. Permanent Injunction | 11 | |||
I. Consummation | 12 | |||
J. Liquidation and Valuation Analyses | 12 | |||
K. Certain Factors to Be Considered Prior to Voting | 13 | |||
L. Voting and Confirmation | 14 | |||
ARTICLE II. GENERAL INFORMATION | 16 | |||
A. Description of Calpine’s Business and Assets | 17 | |||
B. The Debtors’ Prepetition Capital Structure | 44 | |||
C. Management of the Debtors | 54 | |||
ARTICLE III. THE CHAPTER 11 CASES | 56 | |||
A. Events Leading to the Chapter 11 Cases and Related Postpetition Events | 56 | |||
B. Stabilization of Operations | 57 | |||
C. Appointment of the Committees | 64 | |||
D. Debtors’ Restructuring Initiatives | 65 | |||
ARTICLE IV. SUMMARY OF THE PLAN OF REORGANIZATION | 104 | |||
A. Overview of Chapter 11 | 104 | |||
B. Overall Structure of the Plan | 105 | |||
C. Substantive Consolidation | 106 | |||
D. Assumptions Regarding Claims Estimates | 106 | |||
E. DIP Facility, Administrative and Priority Tax Claims Against All of the Debtors | 107 | |||
F. Classification and Treatment of Claims and Interests Against the Debtors | 109 | |||
G. Implementation of the Plan | 120 | |||
H. Treatment Of Executory Contracts And Unexpired Leases | 134 | |||
I. Procedures for Treatment of Disputed, Contingent, and Unliquidated Claims Pursuant to the Plan | 138 | |||
J. Provisions Governing Distributions | 140 | |||
K. Effect of Confirmation of the Plan | 148 | |||
L. Allowance and Payment of Certain Administrative Claims | 153 | |||
M. Conditions Precedent to Confirmation and Consummation | 155 | |||
N. Modification, Revocation Or Withdrawal Of The Plan | 157 | |||
O. Retention Of Jurisdiction | 157 | |||
P. Miscellaneous Provisions | 159 |
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Page | ||||
ARTICLE V. STATUTORY REQUIREMENTS FOR CONFIRMATION OF THE PLAN | 165 | |||
A. The Confirmation Hearing | 165 | |||
B. Confirmation Standards | 165 | |||
C. Best Interests of Creditors Test/Liquidation Analysis and Valuation Analysis | 166 | |||
D. Financial Feasibility | 175 | |||
E. Acceptance By Impaired Classes | 177 | |||
F. Confirmation Without Acceptance By All Impaired Classes | 177 | |||
ARTICLE VI. CERTAIN FACTORS TO BE CONSIDERED PRIOR TO VOTING | 178 | |||
A. Certain Bankruptcy Considerations | 179 | |||
B. Factors Affecting the Value of the Securities to be Issued Under the Plan | 180 | |||
C. Risks Related to the Reorganized Debtors’ Business and Financial Condition | 183 | |||
ARTICLE VII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES | 194 | |||
A. Certain U.S. Federal Income Tax Consequences to the Holders of Allowed Claims and Interests | 195 | |||
B. Certain U.S. Federal Income Tax Consequences to Reorganized Debtors | 199 | |||
ARTICLE VIII. VOTING PROCEDURES | 202 | |||
A. Confirmation Generally | 202 | |||
B. Who Can Vote | 204 | |||
C. Classes Impaired Under the Plan | 205 | |||
D. Contents of Solicitation Package | 205 | |||
E. Distribution of Solicitation Package | 206 | |||
F. Temporary Allowance of Disputed Claims for Voting Purposes | 206 | |||
G. Voting | 206 | |||
H. Releases Under the Plan | 207 | |||
ARTICLE IX. PLAN SUPPLEMENT | 208 | |||
ARTICLE X. RECOMMENDATION | 209 |
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SUMMARY
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Class | Claim or Interest Type | |
A-1 | First Lien Debt Claims | |
A-2 | Second Lien Debt Claims | |
A-3 | Other Secured Claims | |
B | Other Priority Claims | |
C-1 | Senior Note Claims | |
C-2 | General Note Claims | |
C-3 | Subordinated Note Claims | |
C-4 | ULC1 Settlement Claims | |
C-5 | Canadian Guarantee Claims | |
C-6 | Canadian Intercompany Claims | |
C-7 | Rejection Damages Claims | |
C-8 | General Unsecured Claims | |
C-9 | Unsecured Makewhole Claims | |
C-10 | Unsecured Convenience Class Claims | |
C-11 | Intercompany Claims | |
D | Subordinated Debt Securities Claims | |
E-1 | Interests | |
E-2 | Subordinated Equity Securities Claims | |
E-3 | Intercompany Interests |
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Projected | ||||||||
Recovery | ||||||||
Claim | Plan Treatment | Estimated Range of Claims | Under the Plan | |||||
DIP Facility Claims | Paid in full in Cash. | $3.97 billion | 100.0 | % | ||||
Administrative Claims | Paid in full in Cash. | $5.94 million (does not include Professionals’ Claims) | 100.0 | % | ||||
Priority Tax Claims | Paid in full in Cash. | $69.88 million - $75.21 million | 100.0 | % |
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Projected | ||||||||||||||||
Estimated | Recovery | |||||||||||||||
Plan Treatment of | Range of | Under | Voting | |||||||||||||
Classes | Claim | Class | Claims | the Plan | Status | Rights | ||||||||||
A-1 | First Lien Debt Claims | Paid in full in Cash. | $0 - $124.80 million | 100.0% | Unimpaired | Deemed to Accept | ||||||||||
A-2 | Second Lien Debt Claims | Paid in full in Cash. | $3.96 billion - $4.00 billion | 100.0% | Unimpaired | Deemed to Accept | ||||||||||
A-3 | Other Secured Claims | Reinstated; paid in full in Cash; or satisfied in full by a return of the collateral. | $132.22 million - $572.87 million | 100.0% | Unimpaired | Deemed to Accept | ||||||||||
B | Other Priority Claims | Paid in full in Cash. | $0.80 million | 100.0% | Unimpaired | Deemed to Accept | ||||||||||
C-1 | Senior Note Claims | Pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full. | $953.13 million | 100.0% | Impaired | Entitled to Vote | ||||||||||
C-2 | General Note Claims | Pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full. | $2.70 billion- $2.73 billion | 95.1 100.0% | Impaired | Entitled to Vote | ||||||||||
C-3 | Subordinated Note Claims | Pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full. | $761.75 million - $776.77 million | 89.1% - 100.0%1 | Impaired | Entitled to Vote | ||||||||||
C-4 | ULC1 Settlement Claims | Pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full. | $3.51 billion | 100.0% (subject to cap) | Impaired | Entitled to Vote | ||||||||||
C-5 | Canadian Guarantee Claims | Pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full. | $0 - $133.71 million | 95.1% - 100.0% | Impaired | Entitled to Vote | ||||||||||
C-6 | Canadian Intercompany Claims | Pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full. | $335.04 million | 100.0% (subject to cap) | Impaired | Entitled to Vote |
1 | The 7.75% Convertible Noteholders believe that the 7.75% Convertible Noteholders are not subordinate in right of payment to the payment of postpetition interest, makewhole or breach of contract damage claims that may be due under the Senior Debt (as defined in the indenture for the 7.75% Contingent Convertible Notes due 2015). Accordingly, the 7.75% Convertible Noteholders believe that the low-end recovery for the Holders of Allowed Subordinated Note Claims may be higher than projected in the Disclosure Statement. |
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Projected | ||||||||||||||||
Estimated | Recovery | |||||||||||||||
Plan Treatment of | Range of | Under | Voting | |||||||||||||
Classes | Claim | Class | Claims | the Plan | Status | Rights | ||||||||||
C-7 | Rejection Damages Claims | Pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full. | $709.75 million - $1.40 billion | 95.1% - 100.0% | Impaired | Entitled to Vote | ||||||||||
C-8 | General Unsecured Claims | Pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full. | $195.11 million - $479.90 million | 95.1% -100.0% | Impaired | Entitled to Vote | ||||||||||
C-9 | Unsecured Makewhole Claims | Pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full. | $40.00 - $538.65 million | 95.1% - 100.0% | Impaired | Entitled to Vote | ||||||||||
C-10 | Unsecured Convenience Class Claims | Paid in full (without postpetition interest) in Cash. | $22.33 million | 100.0% | Impaired | Entitled to Vote | ||||||||||
C-11 | Intercompany Claims | Reinstated or receive no distribution. | N/A | 100.0% | Unimpaired | Deemed to Accept | ||||||||||
D | Subordinated Debt Securities Claims | Pro rata distribution of the New Calpine Common Stock Pool For Subordinated Debt Securities Claimants until paid in full. | $ | 0 | N/A | Impaired | Entitled to Vote | |||||||||
E-1 | Interests | Pro rata share of the New Calpine Common Stock Pool For Shareholders. | N/A | $0.00 - $3.01 per share | Impaired | Entitled to Vote | ||||||||||
E-2 | Subordinated Equity Securities Claims | Pro rata share of the New Calpine Common Stock Pool For Shareholders until paid in full. | $ | 0 | N/A | Impaired | Entitled to Vote | |||||||||
E-3 | Intercompany Interests | Reinstated. | N/A | 100.0% | Unimpaired | Deemed to Accept |
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Low Case | ||||||||||||||||||
Claim Amount | ||||||||||||||||||
Principal | ||||||||||||||||||
(and accrued | ||||||||||||||||||
prepetition | Postpetition | |||||||||||||||||
Class | Name | interest) | Makewhole | Interest | TOTAL | |||||||||||||
DIP Facility Claims | $ | 3,970,000,000 | $ | 0 | $ | 0 | $ | 3,970,000,000 | ||||||||||
A-1 | 1st Lien Debt Claims | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||
A-2 | 2nd Lien Debt Claims | $ | 3,772,528,200 | $ | 60,000,000 | $ | 125,727,251 | $ | 3,958,255,450 | |||||||||
A-3 | Other Secured Claims | $ | 129,893,107 | $ | 0 | $ | 2,329,587 | $ | 132,222,694 | |||||||||
B | Other Priority Claims | $ | 735,704 | $ | 0 | $ | 64,821 | $ | 800,525 | |||||||||
C-1 | Senior Note Claims | $ | 801,773,614 | $ | 3,650,000 | $ | 147,701,400 | $ | 953,125,014 | |||||||||
C-2 | General Note Claims | $ | 2,311,810,616 | $ | 50,700,000 | $ | 342,485,196 | $ | 2,704,995,812 | |||||||||
C-3 | Subordinated Note Claims | $ | 652,798,611 | $ | 0 | $ | 108,956,372 | $ | 761,754,983 | |||||||||
C-4 | ULC I Settlement Claims | $ | 2,547,684,038 | $ | 0 | $ | 0 | $ | 2,547,684,038 | |||||||||
C-5 | Canadian Guarantee Claims | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||
C-6 | Canadian Intercompany Claims | $ | 258,605,367 | $ | 0 | $ | 0 | $ | 258,605,367 | |||||||||
C-7 | Rejection Damages Claims | $ | 652,283,375 | $ | 0 | $ | 57,471,348 | $ | 709,754,723 | |||||||||
C-8 | General Unsecured Claims | $ | 179,310,173 | $ | 0 | $ | 15,798,651 | $ | 195,108,824 | |||||||||
C-9 | Unsecured Makewhole Claims | $ | 0 | $ | 40,000,000 | $ | 0 | $ | 40,000,000 | |||||||||
C-10 | Unsecured Convenience Claims | $ | 22,329,160 | $ | 0 | $ | 0 | $ | 22,329,160 | |||||||||
C-11 | Intercompany Claims | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||
D | Subordinated Debt Securities Claims | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||
E-1 | Interests | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||
E-2 | Subordinated Equity Securities Claims | $ | 0 | $ | 0 | $ | 0 | $ | 0 |
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Low Case | ||||||||||||||||||
Claim Amount | ||||||||||||||||||
Principal | ||||||||||||||||||
(and accrued | ||||||||||||||||||
prepetition | Postpetition | |||||||||||||||||
Class | Name | interest) | Makewhole | Interest | TOTAL | |||||||||||||
E-3 | Intercompany Interests | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||
Unclassified Administrative Claims | $ | 5,942,011 | $ | 0 | $ | 0 | $ | 5,942,011 | ||||||||||
Priority Tax Claims | $ | 62,295,998 | $ | 0 | $ | 7,588,165 | $ | 69,884,163 | ||||||||||
Non-Debtor Net Project Debt | $ | 3,924,020,000 | $ | 0 | $ | 0 | $ | 3,924,020,000 | ||||||||||
Total Projected Enterprise Debt Range As of 12/31/2007: | $ | 19,292,009,974 | $ | 154,350,000 | $ | 808,122,790 | $ | 20,254,482,764 | ||||||||||
High Case | ||||||||||||||||||
Claim Amount | ||||||||||||||||||
Principal | ||||||||||||||||||
(and accrued | ||||||||||||||||||
prepetition | Postpetition | |||||||||||||||||
Class | Name | interest) | Makewhole | Interest | TOTAL | |||||||||||||
DIP Facility Claims | $ | 3,970,000,000 | $ | 0 | $ | 0 | $ | 3,970,000,000 | ||||||||||
A-1 | 1st Lien Debt Claims | $ | 0 | $ | 118,558,261 | $ | 6,239,800 | $ | 124,798,061 | |||||||||
A-2 | 2nd Lien Debt Claims | $ | 3,772,528,200 | $ | 60,000,000 | $ | 168,976,800 | $ | 4,001,505,000 | |||||||||
A-3 | Other Secured Claims | $ | 129,893,107 | $ | 345,758,000 | $ | 97,216,157 | $ | 572,867,264 | |||||||||
B | Other Priority Claims | $ | 735,704 | $ | 64,821 | $ | 800,525 | |||||||||||
C-1 | Senior Note Claims | $ | 801,773,614 | $ | 3,650,000 | $ | 147,701,400 | $ | 953,125,014 | |||||||||
C-2 | General Note Claims | $ | 2,311,810,616 | $ | 50,700,000 | $ | 368,799,978 | $ | 2,731,310,594 | |||||||||
C-3 | Subordinated Note Claims | $ | 652,798,611 | $ | 0 | $ | 123,972,436 | $ | 776,771,047 | |||||||||
C-4 | ULC I Settlement Claims | $ | 2,547,684,038 | $ | 0 | $ | 0 | $ | 2,547,684,038 | |||||||||
C-5 | Canadian Guarantee Claims | $ | 133,714,819 | $ | 0 | $ | 0 | $ | 133,714,819 | |||||||||
C-6 | Canadian Intercompany Claims | $ | 258,605,367 | $ | 0 | $ | 0 | $ | 258,605,367 | |||||||||
C-7 | Rejection Damages Claims | $ | 1,285,327,595 | $ | 0 | $ | 113,247,573 | $ | 1,398,575,169 | |||||||||
C-8 | General Unsecured Claims | $ | 441,041,663 | $ | 0 | $ | 38,859,275 | $ | 479,900,938 | |||||||||
C-9 | Unsecured Makewhole Claims | $ | 0 | $ | 40,000,000 | $ | 0 | $ | 40,000,000 | |||||||||
C-10 | Unsecured Convenience Claims | $ | 22,329,160 | $ | 0 | $ | 0 | $ | 22,329,160 |
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High Case | ||||||||||||||||||
Claim Amount | ||||||||||||||||||
Principal | ||||||||||||||||||
(and accrued | ||||||||||||||||||
prepetition | Postpetition | |||||||||||||||||
Class | Name | interest) | Makewhole | Interest | TOTAL | |||||||||||||
C-11 | Intercompany Claims | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||
D | Subordinated Debt Securities Claims | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||
E-1 | Interests | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||
E-2 | Subordinated Equity Securities Claims | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||
E-3 | Intercompany Interest | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||
Unclassified Administrative Claims | $ | 5,942,011 | $ | 0 | $ | 0 | $ | 5,942,011 | ||||||||||
Priority Tax Claims | $ | 67,049,043 | $ | 0 | $ | 8,167,125 | $ | 75,216,168 | ||||||||||
Non-Debtor Net Project Debt | $ | 3,924,020,000 | $ | 0 | $ | 0 | $ | 3,924,020,000 | ||||||||||
Total Projected Enterprise Debt Range As of 12/31/2007: | $ | 20,325,253,549 | $ | 618,666,261 | $ | 1,073,245,365 | $ | 22,017,165,174 | ||||||||||
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1. | Unless otherwise specifically indicated, the financial information contained in the Disclosure Statement has not been audited and is based on an analysis of data available at the time of the preparation of the Plan and Disclosure Statement. | ||
2. | Article VII describes certain significant federal tax consequences of the transactions contemplated by the Plan that may affect the Debtors, including the realization of cancellation of indebtedness income and the reduction of net operating loss (“NOL”) carryforwards and unrealized built-in losses. Article VII also describes the federal tax consequences of the transactions contemplated by the Plan that may affect Holders of Claims and Interests, including the recognition of taxable income by such Holders. The Valuation Analysis concludes that a material portion of the Debtors’ value is derived from the Debtors’ NOLs. Article VII discusses the limitations that may apply to the Debtors’ usage of those NOLs, as well as certain restrictions under the Plan and under Calpine Corporation’s restated certificate of incorporation on the transfer of New Calpine Common Stock to preserve the Debtors’ NOLs. Holders of Claims and Interests are urged to consult with their own tax advisors regarding the federal, state, local, and foreign tax consequences of the Plan. | ||
3. | Although the Debtors believe that the Plan complies with all applicable provisions of the Bankruptcy Code, the Debtors cannot assure such compliance or that the Bankruptcy Court will confirm the Plan. | ||
4. | The Debtors may be required to request Confirmation without the acceptance of all Impaired Classes entitled to vote in accordance with section 1129(b) of the Bankruptcy Code. | ||
5. | Any delays of either Confirmation or Consummation could result in, among other things, increased Professional Claims and the expiration of the New Credit Facility financing commitments. | ||
6. | The Plan provides for substantive consolidation of the Estates into a single Estate for purposes of Confirmation and Consummation. Confirmation and Consummation of the |
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Plan are specifically contingent on the Bankruptcy Court authorizing the Debtors to substantively consolidate all of the Estates. The Debtors, however, can provide no assurance that the Bankruptcy Court will authorize the Debtors to substantively consolidate all of the Estates. |
Classes | ||||
C-1 | ||||
C-2 | ||||
C-3 | ||||
C-4 | ||||
C-5 | ||||
C-6 | ||||
C-7 | ||||
C-8 | ||||
C-9 | ||||
C-10 | ||||
D | ||||
E-1 | ||||
E-2 |
Classes | ||||
A-1 | ||||
A-2 | ||||
A-3 | ||||
B | ||||
C-11 | ||||
E-3 |
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GENERAL INFORMATION
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2 | The figures for number of operating facilities and capacity in this Article II are based on modeled average annual operating capacity and generally exclude plants that are mothballed, in development, or expected to be divested. |
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• | Regulation of sulfur dioxide (“SO2”) and nitrogen oxides (“NOx”) emissions under the Clean Air Interstate Rule (“CAIR”). When they become effective, CAIR regulations will affect Calpine’s Texas, Southeast, and Northeast assets. CAIR will cap NOx and SO2 emissions in twenty-nine of the easternmost states starting in 2009. With the exception of the Oneta facility in the Southwest Power Pool region of the Southeast, all Calpine Southeast and Northeast plants will be subject to CAIR. Calpine’s assets in California, Oregon, Arizona, and Colorado will not be regulated under the CAIR program. | ||
• | Regulation of mercury emissions under the Clean Air Mercury Rule (“CAMR”). CAMR regulations primarily penalize coal-fired generators. CAMR will tighten mercury emissions limits in 2010 and again in 2018, ultimately requiring the reduction of coal plant mercury emissions by almost 70%. CAMR could benefit Calpine by reducing the attractiveness of coal generation investments, and outdated existing coal-fired plants may ultimately be forced to make costly capital improvements or retire. When they become effective, CAMR regulations likely will affect Calpine’s assets in the Midwest and eastern United States. Calpine’s assets in Texas, California, Oregon, and Arizona are not expected to be affected by CAMR regulations because, as discussed below, natural gas tends to be “on the margin” in these regions. | ||
• | Renewable Portfolio Standards. Renewable Portfolio Standards (“RPS”) mandate that utilities and other load-serving entities (“LSEs”) purchase a portion of their electricity from renewable sources. This creates a premium for power sold from The Geysers. | ||
• | Carbon (greenhouse gas) regulations. Carbon regulations are still pending in the United States and may come into effect in the Northeast in 2009 and California in 2012. The United States Supreme Court recently issued a decision holding that the Federal Clear Air Act of 1970 requires the Environmental Protection Agency to regulate greenhouse gases from new motor vehicle once it concludes that such emissions contribute to climate change. Calpine believes the Supreme Court’s ruling could effectively determine the Environmental Protection Agency’s authority to regulate air pollution associated with climate change from all sources, including power plants. In addition, carbon regulation could affect all fossil-fired generators depending on the means by which carbon emissions allowance credits are allocated. Several national carbon regulation programs have been proposed, and the approaches to allowance allocations vary widely. California recently passed legislation to reduce carbon emissions levels. |
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(i) | Clean Air Act. The Clean Air Act provides for the regulation of emissions of air pollutants from certain facilities and operations. As originally enacted, the Clean Air Act sets guidelines for emissions standards for major pollutants (i.e., SO2 and NOx) from newly built sources. In late 1990, Congress passed the Clean Air Act Amendments, which attempt to reduce emissions from existing sources, particularly previously exempted older power plants. | ||
(ii) | Clean Water Act. The Federal Clean Water Act establishes rules regulating the discharge of pollutants into waters of the United States. Calpine is required to obtain discharge permits for wastewater and runoff from certain of its facilities. It is Calpine’s view that, with respect to its geothermal operations, it is exempt from newly promulgated federal storm water requirements. Calpine is required to maintain a spill prevention control and countermeasure plan with respect to certain of its oil and natural gas facilities. | ||
(iii) | Safe Drinking Water Act. Part C of the Safe Drinking Water Act mandates an underground injection control program that regulates the disposal of wastes, which is used for oil, natural gas, and geothermal production activities by means of deep well injection. Deep well injection is a common method of disposing of saltwater, produced water, and other oil and natural gas wastes. With the passage of EPAct 2005, oil, natural gas, and geothermal production activities are exempt from the underground injection control program under the Safe Drinking Water Act. |
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(i) | the $500,000,000 (original principal amount) Second Priority Senior Secured Floating Rate Notes due 2007; | ||
(ii) | the $1,150,000,000 (original principal amount) 8.50% Second Priority Senior Secured Notes due 2010; | ||
(iii) | the $900,000,000 (original principal amount) 8.75% Second Priority Senior Secured Notes due 2013; | ||
(iv) | the $400,000,000 (original principal amount) 9.875% Second Priority Senior Secured Notes due 2011; and | ||
(v) | the $750,000,000 Second Priority Senior Secured Term Loan due 2007. |
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(i) | the $180,000,000 (original principal amount) 10.5% Senior Notes due 2006; | ||
(ii) | the $275,000,000 (original principal amount) 8.75% Senior Notes due 2007; | ||
(iii) | the $400,000,000 (original principal amount) 7.875% Senior Notes due 2008; | ||
(iv) | the $250,000,000 (original principal amount) 7.625% Senior Notes due 2006; and | ||
(v) | the $350,000,000 (original principal amount) 7.75% Senior Notes due 2009. |
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(i) | the $750 million (original principal amount) 8.625% Senior Notes due 2010; | ||
(ii) | the $736 million (original principal amount) 6.00% Contingent Convertible Notes due 2014; | ||
(iii) | the $650 million (original principal amount) 7.75% Contingent Convertible Notes due 2015; | ||
(iv) | the $900 million (original principal amount) 4.75% Contingent Convertible Senior Notes due 2023; | ||
(v) | the $2.0 billion (original principal amount) 8.5% Senior Notes due 2011; and | ||
(vi) | the $1.2 billion (original principal amount) 4% Convertible Senior Notes due 2006. |
(i) | Calpine allegedly guaranteed $2,030 million 8.5% Senior Notes due May 1, 2008 (original principal amount), of which $1,500 million were issued on April 25, 2001 and $530 million were issued on October 16, 2001. Between 2003 and 2005, Calpine repurchased certain of these 8.5% Senior Notes. As of the Petition Date, (A) approximately $134 million principal amount of these repurchased Senior Notes were held by Calpine, (B) approximately $10 million principal amount of these repurchased Senior Notes were held by Quintana Canada Holdings, LLC (“QCH”), a Debtor, (C) approximately $360 million principal amount of these repurchased Senior Notes were held by CCRC, and (D) approximately $103.3 million of these repurchased Senior Notes were |
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formally cancelled by Calpine pursuant to the terms of the relevant trust indenture. |
(ii) | The entire principal amount of the C$200 million 8.75% Senior Notes due October 15, 2007 was outstanding as of the Petition Date and was held in its entirety by the public. | ||
(iii) | Calpine allegedly guaranteed the £200 million 8.875% Senior Notes due 2011, most of which are publicly held. However, approximately £78.6 million principal amount of these 8.875% Senior Notes were repurchased by Calpine in 2003, and, as of the Petition Date, were held by Saltend, L.P., one of Calpine’s Canadian subsidiaries. | ||
(iv) | Calpine allegedly guaranteed the €175 million 8.375% Senior Notes due 2008, most of which are publicly held. However, approximately €57.6 million principal amount of these 8.375% Senior Notes were repurchased by Calpine in 2003 and 2004 and as of the Petition Date were held by Saltend, L.P., one of Calpine’s Canadian subsidiaries. |
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(i) | The CalGen Secured Debt |
(a) | The CalGen First Lien Debt. CalGen’s first lien debt was composed of (1) the $235,000,000 First Priority Secured Floating Rate Notes due 2009, (2) the $600,000,000 First Priority Secured Institutional Term Loans due 2009, and (3) the $200,000,000 First Priority Revolving Loans, dated as of March 23, 2004. The CalGen first lien debt was secured by a first Lien on substantially all of the assets of CalGen and its domestic subsidiaries. | ||
(b) | The CalGen Second Lien Debt. CalGen’s second lien debt was composed of (1) the $640,000,000 Second Priority Secured Floating Rate Notes due 2010 and (2) the $100,000,000 Second Priority Secured Institutional Term Loans due 2010, issued by CalGen pursuant to that certain Credit and Guarantee Agreement, dated as of March 23, 2004. The CalGen second lien debt was secured by a second Lien on substantially all of the assets of CalGen and its domestic subsidiaries. | ||
(c) | The CalGen Third Lien Debt. CalGen’s third lien debt was composed of (1) the $680,000,000 Third Priority Secured Floating Rate Notes due 2011 and (2) the $150,000,000 11.5% Third Priority Secured Notes due 2011. The CalGen third lien debt was secured by a third Lien on substantially all of the assets of CalGen and its domestic subsidiaries. |
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(ii) | The Bethpage Project Debt |
(iii) | The Aries Project Debt |
(i) | Summary of Project Leases and Related Obligations |
(ii) | The KIAC Project |
(iii) | The Nissequogue Cogen Project |
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(iv) | The Watsonville Project |
(v) | The Greenleaf Project |
(vi) | The Gilroy Cogen Project |
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(vii) | The Geysers |
(viii) | The Agnews Project |
(ix) | The Hidalgo Project |
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(x) | The Rumford-Tiverton Projects |
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(xi) | The South Point Project |
(xii) | The Broad River Project |
(xiii) | The RockGen Project |
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Name | Age | Position | ||
Robert P. May | 58 | Chief Executive Officer | ||
Charles B. Clark, Jr. | 59 | Senior Vice President and Chief Accounting Officer | ||
Lisa Donahue | 42 | Senior Vice President and Chief Financial Officer | ||
Gregory L. Doody | 42 | Executive Vice President, General Counsel, and Secretary | ||
Gary Germeroth | 49 | Executive Vice President, Chief Risk Officer |
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55
THE CHAPTER 11 CASES
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1. | Motion for Authority to Obtain Postpetition Financing |
a. | The Geysers Transaction |
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b. | Terms of the Original DIP Facility |
2. | Motion for Authority to Use Cash Collateral |
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a. | Adequate Protection Terms for the Debtors’ Use of the First Lien Debt Noteholders’ Cash Collateral |
b. | Adequate Protection Terms for the Debtors’ Use of the Second Lien Debtholders’ Cash Collateral |
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c. | Adequate Protection Terms for the Debtors’ Use of the Project Lenders’ Cash Collateral |
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3. | Motion to Continue Using Existing Cash Management System, Bank Accounts, Business Forms, and Investment Practices and to Continue Intercompany Transactions |
4. | Motion to Pay Employee Wages and Associated Compensation |
5. | Motion to Continue to Honor Prepetition Trading Contracts and Enter into New Postpetition Trading Contracts |
6. | Motion to Pay Critical Trade Vendors |
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7. | Motion to Establish Notification and Hearing Procedures for Trading in Equity Securities |
8. | Motion to Prohibit Utilities from Terminating Service |
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9. | Motion to Continue Insurance Programs |
10. | Motion to Pay Prepetition Sales, Use and Franchise Taxes |
11. | Motion to Pay Prepetition Property Taxes |
12. | Applications for Retention of Debtors’ Professionals |
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Amount of | ||||||||||||
Debt Retired, | ||||||||||||
Estimated or | including | |||||||||||
Transaction | Actual Closing | Net Proceeds | Leases | |||||||||
Asset (Location) | Description | Date | (millions) | (millions) | ||||||||
Valladolid Project (Mexico) | Sale of 45% indirect equity interest | April 18, 2006 | $ | 43 | $ | 88 | ||||||
Rumford/Tiverton Projects (ME/RI) | Turnover of projects to lenders | June 23, 2006 | N/A | (see below) | ||||||||
Thomassen Turbine Systems, B.V. (Netherlands) | Sale of entire equity interest | September 28, 2006 | € | 18 | N/A | |||||||
Dighton Project (MA) | Sale of assets | October 1, 2006 | $ | 89 | N/A | |||||||
Fox Project (WI) | Sale of leasehold interest | October 11, 2006 | $ | 16 | $ | 352 | ||||||
GE Model PG7241 FA Turbine (various) | Sale of asset | October 17, 2006 | $ | 16 | N/A | |||||||
SPG 501F Turbines (various) | Sale of assets | November 15, 2006 | $ | 48 | N/A | |||||||
Hilco Auction (various) | Sale of assets | November 16, 2006 | $ | 48 | N/A | |||||||
Aries Project (MO) | Sale of assets | January 16, 2007 | $ | 30 | $ | 159 | ||||||
Goldendale Project (WA) | Sale of assets | February 21, 2007 | $ | 120 | N/A | |||||||
Power Systems Mfg. (FL) | Sale of assets | March 22, 2007 | $ | 238 | N/A | |||||||
Parlin Project (NJ) | Sale of assets | July 6, 2007 | $ | 3 | N/A | |||||||
Acadia Project (LA) | 363 Sale of 50% indirect equity interest | September 13, 2007 | $ | 104 | $ | 85 (as further described below) | ||||||
RockGen Project (WI) | Forbearance/Potential sale of assets | (Unknown) | (Unknown) | (Unknown) | ||||||||
Fremont Project (OH) | Sale of assets | (Estimated) Early 2008 | (Unknown) | N/A | ||||||||
Hillabee Project (AL) | Sale of assets | (Estimated) Early 2008 | (Unknown) | N/A |
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a. | The Designated Projects |
(i) | Dispositions of Designated Projects |
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(ii) | Designated Project Restructurings |
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b. | Other Plant or Non-Core Sales |
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c. | Turbine and Industrial Equipment Sales |
d. | Post-Confirmation Sales |
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e. | De Minimis/Non-Debtor Asset Transfers |
(i) | General |
(ii) | The Towantic Sale |
2. | Debt Restructuring Initiatives |
a. | Repayment of First Lien Debt |
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b. | Lien Challenges |
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c. | Second Lien Settlement |
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3. | The Global Refinancing |
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4. | Executory Contracts and Unexpired Leases |
a. | Executory Contracts |
(i) | Power Purchase and Sale Agreement Rejections and Assumption of the CDWR 2 Contract |
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(ii) | Natural Gas Transportation and Power Transmission Contract Repudiations |
(iii) | Assumption of PPA with CCFC |
b. | Unexpired Leases |
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(i) | Plant-Related Ground and Facility Leases |
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(ii) | Office Leases |
(iii) | Geothermal Leases |
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(iv) | Pipeline Leases |
(v) | Oil and Gas Leases |
5. | Entity Simplification Process |
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6. | The CCAA Proceedings |
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a. | The Canadian Claims |
(i) | ULC1 Note Claims |
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(ii) | ULC2 Claims |
(iii) | Claims of Calpine Power, L.P. |
(iv) | Intercompany Claims and Resolution Process |
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(v) | Resolution of Other Canadian Claims |
b. | Sale of Interest in the Income Fund |
c. | Repatriation of the Saltend Proceeds and the Debtors’ Potential Saltend Avoidance Action |
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d. | The Greenfield Energy Centre and the Greenfield Avoidance Action |
e. | Negotiation of Global Resolution |
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(i) | All cross-border intercompany claims based on the books and records of the Canadian Debtors and the Debtors will be resolved and the amounts fixed – this will eliminate more than $841 million of Unsecured Claims from the Claims Register. | ||
(ii) | The Greenfield Avoidance Action against the Debtors was dismissed with prejudice. | ||
(iii) | Calpine’s objection with respect to the ULC1 Notes was withdrawn with prejudice, such that the ULC1 Notes held by CCRC could be sold and the proceeds distributed by the Canadian Debtors in accordance with the CCAA Settlement, thereby allowing the CCAA Proceedings to move forward. | ||
(iv) | The Canadian Debtors and the Debtors have agreed on a procedure by which certain third-party claims filed in the CCAA Proceedings and the related guarantee Claims Filed in the Chapter 11 Cases will be resolved. The interests of the Debtors and their Estates will be protected by allowing the Debtors, the Creditors’ Committee, and the Equity Committee the right to fully participate in any settlement or adjudication of these claims in the CCAA Proceedings. | ||
(v) | Over $10.5 billion in claims filed by third parties in both the CCAA Proceedings and the Chapter 11 Cases will be withdrawn or deemed to have no value. | ||
(vi) | Approximately $15 million in proceeds from the 2006 sale of TTS which have resided in an escrow account since the sale, will be split evenly among the Canadian Debtors and the Debtors, thereby avoiding lengthy separate negotiations or possible litigation. |
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(vii) | The CCAA Settlement calls for the withdrawal of 3,547 contingent, unliquidated Claims Filed by each of the Canadian Debtors against each of the Debtors, based on,inter alia, an “oppression” theory under Canadian law, and various theories of recovery under U.S. law. |
7. | Employee Matters |
a. | Headcount Reductions |
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b. | Calpine Incentive Plan |
(i) | The Emergence Incentive Plan |
(ii) | The Management Incentive Plan |
(iii) | The Supplemental Bonus Plan |
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(iv) | The Discretionary Bonus Plan |
c. | Severance Program |
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d. | Executive Employment Agreements |
e. | ERISA Plans |
(i) | Retirement Plans |
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(ii) | Welfare Plans |
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f. | ERISA Litigation Settlement |
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g. | Labor Relations |
h. | Stock Incentive Plan |
8. | Automatic Stay |
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9. | Avoidance Actions |
a. | Possible Actions Arising out of the Rosetta Transaction |
(i) | The Rosetta Sale |
(ii) | Investigation of the Rosetta Sale |
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b. | Other Avoidance Actions |
10. | Claims |
a. | Bar Date Orders |
b. | De Minimis Settlement Procedures |
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c. | Convertible Notes Claims |
d. | The Steel Los III, LP Litigation Proceedings |
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e. | Claims Estimates |
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11. | Exclusivity |
12. | Plan Sponsorship Proposal Process |
13. | Equity Committee Rights Offering Proposal |
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SUMMARY OF THE PLAN OF REORGANIZATION
A. | Overview of Chapter 11 |
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B. | Overall Structure of the Plan |
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C. | Substantive Consolidation |
D. | Assumptions Regarding Claims Estimates |
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E. | Certain Creditors’ Views Regarding Treatment of Claims Under the Plan and Other Plan Provisions |
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F. | DIP Facility, Administrative and Priority Tax Claims Against All of the Debtors |
1. | DIP Facility Claims. In full satisfaction, settlement, release, and discharge of and in exchange for each Allowed DIP Facility Claim, the Debtors shall either convert the DIP Facility into the New Credit Facility or pay the DIP Facility Claims in full in Cash. |
Estimated Amount of Claims: | $3.97 billion | |||
Projected Percentage Recovery: | 100.0% |
2. | Administrative Claims. Subject to the provisions of sections 328, 330(a), and 331 of the Bankruptcy Code, in full satisfaction, settlement, release, and discharge of and in exchange for each Allowed Administrative Claim, each Holder thereof shall be paid in full in Cash in accordance with the terms of the applicable contract, if any. |
Estimated Amount of Claims: | $5.94 million (does not include Professionals’ Claims) | |||
Projected Percentage Recovery: | 100.0% |
3. | Priority Tax Claims. In full satisfaction, settlement, release, and discharge of and in exchange for each Allowed Priority Tax Claim, unless otherwise agreed (with the consent of the Creditors’ Committee), each Holder thereof shall be paid in full in Cash pursuant to section 1129(a)(9)(C) of the Bankruptcy Code. |
Estimated Amount of Claims: | $69.88 million - $75.21 million | |||
Projected Percentage Recovery: | 100.0% |
a. | Class A-1—First Lien Debt Claims |
(i) | Classification: Class A-1 consists of all First Lien Debt Claims. | ||
(ii) | Treatment: Each Allowed First Lien Debt Claim (not including any First Lien Secured Makewhole Claims), already has been paid in full in Cash pursuant to the First Lien Repayment Order. In satisfaction of each |
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Allowed First Lien Secured Makewhole Claim, each Holder thereof shall be paid in full in Cash. | |||
(iii) | Interest Accrued After the Petition Date: Allowed Claims in Class A-1 shall not include interest;provided,however, that any Allowed First Lien Secured Makewhole Claim shall include interest accrued after the date of repayment of principal through the Interest Accrual Limitation Date at the rate determined by the Bankruptcy Court. |
Estimated Amount of Claims: | $0 - $124.80 million | |||
Projected Percentage Recovery: | 100.0% |
b. | Class A-2—Second Lien Debt Claims |
(i) | Classification: Class A-2 consists of all Second Lien Debt Claims. | ||
(ii) | Treatment: In full satisfaction, settlement, release, and discharge of and in exchange for each and every Allowed Claim in Class A-2, each Allowed Second Lien Debt Claim shall be paid in full in Cash. | ||
(iii) | Interest Accrued After the Petition Date: Allowed Claims in Class A-2 shall include interest accrued after the Petition Date through the Interest Accrual Limitation Date at the contract rate determined by the Bankruptcy Court to the extent not already paid or waived pursuant to the Cash Collateral Order;provided,however, that any portion of the Claims in Class A-2 consisting of Allowed Second Lien Secured Makewhole Claims shall include interest accrued after the date of repayment of principal through the Interest Accrual Limitation Date at the rate determined by the Bankruptcy Court to the extent not already paid or waived pursuant to the Cash Collateral Order. With respect to the Second Priority Senior Secured Term Loan, the contract rate is no less than the base rate. |
Estimated Amount of Claims: | $3.96 billion - $4.00 billion | |||
Projected Percentage Recovery: | 100.0% |
c. | Class A-3—Other Secured Claims |
(i) | Classification: Class A-3 consists of all Other Secured Claims. | ||
(ii) | Treatment: In full satisfaction, settlement, release, and discharge of and in exchange for each and every Allowed Claim in Class A-3, each such Allowed Claim shall be: (i) Reinstated; (ii) paid in full in Cash; or (iii) satisfied in full by a return to such Holder of the collateral securing such Allowed Claim. | ||
(iii) | Interest Accrued After the Petition Date: Allowed Claims in Class A-3 shall include interest accrued after the Petition Date through the Interest Accrual Limitation Date at the contract rate determined by the |
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Bankruptcy Court or, if there is no contract, then at the Federal Judgment Rate;provided,however, that Allowed CalGen Secured Makewhole Claims shall include interest accrued after the date of repayment of principal through the Interest Accrual Limitation Date at the rate determined by the Bankruptcy Court. |
Estimated Amount of Claims: | $132.22 million - $572.87 million | |||
Projected Percentage Recovery: | 100.0% |
d. | Class B—Other Priority Claims |
(i) | Classification: Class B consists of all Other Priority Claims. | ||
(ii) | Treatment: In full satisfaction, settlement, release, and discharge of and in exchange for each and every Allowed Claim in Class B, each Holder thereof shall be paid in full in Cash. | ||
(iii) | Interest Accrued After the Petition Date: Allowed Claims in Class B shall include interest accrued after the Petition Date through the Interest Accrual Limitation Date at the Federal Judgment Rate. |
Estimated Amount of Claims: | $0.80 million | |||
Projected Percentage Recovery: | 100.0% |
e. | Class C-1—Senior Note Claims |
(i) | Classification: Class C-1 consists of all Senior Note Claims. | ||
(ii) | Treatment: In full satisfaction, settlement, release, and discharge of and in exchange for each and every Allowed Claim in Class C-1 (including any Allowed Senior Note Makewhole Claims), each Holder thereof shall receive a pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full. | ||
(iii) | Interest Accrued After the Petition Date: Allowed Claims in Class C-1 shall include interest accrued after the Petition Date through the Interest Accrual Limitation Date at the contract rate determined by the Bankruptcy Court;provided,however, that the Allowed Senior Note Makewhole Claims shall include interest accrued after the date of repayment of principal through the Interest Accrual Limitation Date at the rate determined by the Bankruptcy Court. |
Estimated Amount of Claims: | $953.13 million |
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f. | Class C-2—General Note Claims |
(i) | Classification: Class C-2 consists of all General Note Claims. | ||
(ii) | Treatment: In full satisfaction, settlement, release, and discharge of and in exchange for each and every Allowed Claim in Class C-2 (including any Allowed General Note Makewhole Claims), each Holder thereof shall receive a pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full. | ||
(iii) | Interest Accrued After the Petition Date: Allowed Claims in Class C-2 shall include unpaid interest accrued after the Petition Date through the Interest Accrual Limitation Date at the contract rate determined by the Bankruptcy Court;provided,however, that Allowed General Note Makewhole Claims shall include interest accrued after the date of repayment of principal through the Interest Accrual Limitation Date at the rate determined by the Bankruptcy Court. |
Estimated Amount of Claims: | $2.70 billion- $2.73 billion | |||
Projected Percentage Recovery: | 95.1% to 100.0% |
g. | Class C-3—Subordinated Note Claims |
(i) | Classification: Class C-3 consists of all Subordinated Note Claims. | ||
(ii) | Treatment: In full satisfaction, settlement, release, and discharge of and in exchange for each and every Allowed Claim in Class C-3 (including any Allowed Subordinated Note Makewhole Claims), each Holder thereof shall receive a pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full;provided,however, that the Holders of Allowed Subordinated Note Claims shall be deemed to consent to the distribution of any portion of their pro rata share of the New Calpine Common Stock to Holders of Allowed Senior Note Claims necessary to satisfy in full any portion of such Allowed Senior Note Claims attributable to principal and interest accrued as of the Petition Date;providedfurther,however, that any obligation of the Holders of Allowed Subordinated Note Claims to consent to the distribution of any portion of their pro rata share of the New Calpine Common Stock to Holders of Allowed Senior Note Claims necessary to satisfy any amounts other than principal and interest accrued as of the Petition Date to Holders of Allowed Senior Note Claims shall be determined by a court of competent jurisdiction. | ||
(iii) | Interest Accrued After the Petition Date: Allowed Claims in Class C-3 shall include interest accrued after the Petition Date through the Interest Accrual Limitation Date at the contract rate determined by the Bankruptcy Court;provided,however, that Allowed Subordinated Note Makewhole Claims shall include interest accrued after the date of repayment of principal through the Interest Accrual Limitation Date at the rate determined by the Bankruptcy Court. |
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Estimated Amount of Claims: | $761.75 million - $776.77 million |
h. | Class C-4—ULC1 Settlement Claims |
(i) | Classification: Class C-4 consists of all ULC1 Settlement Claims. | ||
(ii) | Treatment: In full satisfaction, settlement, release, and discharge of and in exchange for each and every Allowed ULC1 Settlement Claim in Class C-4, each Holder thereof shall receive a pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full. The aggregate amount of the distribution of the New Calpine Common Stock Pool For Creditors to be made hereunder on account of Allowed ULC1 Settlement Claims in Class C-4 shall be calculated based upon the total amount of the ULC1 Settlement Claims being equal to U.S. $3,505,187,751.63;provided,however, that the aggregate amount of such distribution to be made hereunder on account of all Allowed ULC1 Settlement Claims shall not exceed an amount equal to the aggregate of (i) the outstanding principal balance of the ULC1 Notes (together with any accrued and unpaid interest thereon as of the Petition Date), as set forth in section 3.2(a)(ii)(A) of the CCAA Settlement, plus (ii) accrued and unpaid interest on the ULC1 Filed Amount from the Petition Date up to and including the date set forth in section 3.2(a)(ii)(B) of the CCAA Settlement at the contract rate (including interest compounded semi-annually, as set forth in section 3.2(a)(ii)(B) of the CCAA Settlement), plus (iii) the ULC1 Noteholders Ad Hoc Committee Fees, plus (iv) the ULC1 Indenture Trustee Fees, in each of the foregoing instances, subject to the foreign exchange adjustment described in Article III.B.8.d of the Plan;provided,however, that the aggregate amount of such distribution to be made hereunder on account of all Allowed ULC1 Settlement Claims shall not include the ULC1 Noteholders Ad Hoc Committee Fees or the ULC1 Indenture Trustee Fees to the extent such fees are paid pursuant to Articles IX.A.7 and 8 of the Plan. | ||
(iii) | Interest Accrued After the Petition Date: Allowed ULC1 Settlement Claims shall include interest accrued at the contract rate (including interest compounded semi-annually, as set forth in section 3.2(a)(ii)(B) of the CCAA Settlement) from the Petition Date up to and including the date set forth in section 3.2(a)(ii)(B) of the CCAA Settlement, all as set forth in the CCAA Settlement;provided,however, that such inclusion of interest shall not increase the total distribution limitation contained in section 3.2(b)(ii) of the CCAA Settlement. | ||
(iv) | Foreign Currency Exchange Rate: Certain components of the ULC1 Settlement Claims are denominated in Canadian dollars. Without limitation, the indebtedness evidenced by the ULC1 8.75% Senior Notes Due 2007, including principal, and accrued and unpaid interest thereon, |
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and portions of the ULC1 Noteholders Ad Hoc Committee Fees and the ULC1 Indenture Trustee Fees relating to the services of Canadian professionals are and will be denominated in Canadian dollars. The respective amounts of such components shall be Allowed in the Chapter 11 Cases and distributions in respect thereof under the Plan shall be calculated in U.S. dollars in an amount yielded by the conversion from Canadian dollars at the noon spot rate effective on the fifth Business Day prior to the Distribution Date for U.S. currency of Scotiabank, and such conversion shall be performed by Calpine and subject to the approval of the ULC1 Indenture Trustee. | |||
(v) | Application of Distributions Under the Plan: Any distribution received by the ULC1 Indenture Trustee under the Plan shall be applied as follows: first, to the ULC1 Indenture Trustee Fees and the ULC1 Noteholders Ad Hoc Committee Fees; second, to interest accrued after the Petition Date; and third, to the ULC1 Filed Amount. The portion of any such distribution that is allocable to the ULC1 Ad Hoc Committee Fees shall be remitted by the ULC1 Indenture Trustee to those ULC1 Noteholders who paid such fees in the first instance in accordance with written instructions to be delivered to the ULC1 Indenture Trustee by counsel to the ULC1 Noteholders Ad Hoc Committee. The ULC1 Indenture Trustee may conclusively rely on such instructions delivered by counsel to the ULC1 Noteholders Ad Hoc Committee and shall have no liability for remitting to such ULC1 Noteholders in accordance with such instructions the portion of such distribution that is allocable to the ULC1 Noteholders Ad Hoc Committee Fees. |
Estimated Amount of Claims: | $3.51 billion |
i. | Class C-5—Canadian Guarantee Claims |
(i) | Classification: Class C-5 consists of all Canadian Guarantee Claims. | ||
(ii) | Treatment: In full satisfaction, settlement, release, and discharge of and in exchange for each and every Allowed Claim in Class C-5, each Holder thereof shall receive a pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full after subtracting any payments received on account of the underlying obligation in the CCAA Proceedings. | ||
(iii) | Interest Accrued After the Petition Date: Allowed Claims in Class C-5 shall include interest accrued after the Petition Date through the Interest Accrual Limitation Date at the default rate provided in the applicable indenture or, if there is no indenture, then at the Federal Judgment Rate. |
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Estimated Amount of Claims: | $0 - $133.71 million |
j. | Class C-6—Canadian Intercompany Claims |
(i) | Classification: Class C-6 consists of all Canadian Intercompany Claims. | ||
(ii) | Treatment: In full satisfaction, settlement, release, and discharge of and in exchange for each and every Allowed Claim in Class C-6, each Holder thereof shall receive a pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full, subject to the cap contained in the CCAA Settlement. | ||
(iii) | Interest Accrued After the Petition Date: Allowed Claims in Class C-6 shall not include interest pursuant to the terms of the CCAA Settlement. |
Estimated Amount of Claims: | $335.04 million |
k. | Class C-7—Rejection Damages Claims |
(i) | Classification: Class C-7 consists of all Rejection Damages Claims. | ||
(ii) | Treatment: In full satisfaction, settlement, release, and discharge of and in exchange for each and every Allowed Claim in Class C-7, each Holder thereof shall receive a pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full. | ||
(iii) | Interest Accrued After the Petition Date: Allowed Claims in Class C-7 shall include interest accrued after the Petition Date through the Interest Accrual Limitation Date at the Federal Judgment Rate unless, upon application by the Holder of such Claim Filed before the Voting Deadline, the Bankruptcy Court orders otherwise prior to or in connection with the Confirmation Hearing. |
Estimated Amount of Claims: | $709.75 million - $1.40 billion | |||
Projected Percentage Recovery: | 95.1% to 100.0% |
l. | Class C-8—General Unsecured Claims |
(i) | Classification: Class C-8 consists of all General Unsecured Claims. |
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(ii) | Treatment: In full satisfaction, settlement, release, and discharge of and in exchange for each and every Allowed Claim in Class C-8, each Holder thereof shall receive a pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full. | ||
(iii) | Interest Accrued After the Petition Date: Unless otherwise agreed, Allowed Claims in Class C-8 shall include interest accrued after the Petition Date through the Interest Accrual Limitation Date at the Federal Judgment Rate unless upon application by the Holder of such Claim Filed before the Voting Deadline, the Bankruptcy Court orders otherwise prior to or in connection with the Confirmation Hearing. | ||
(iv) | Election Rights: Each Holder of an Allowed Claim in Class C-8 may elect to be treated as a Holder of an Allowed Unsecured Convenience Class Claim in Class C-10, as applicable, by electing to reduce its Allowed Claim to $50,000 in complete satisfaction of such Allowed Claim. Any such election must be made on the Ballot, and except as may be agreed to by the Debtors, with the consent of the Creditors’ Committee, or Reorganized Debtors, no Holder of a Claim can elect the treatment described below after the Voting Deadline. Upon such election, the Claim of such Holder shall be automatically reduced to $50,000. |
Estimated Amount of Claims: | $195.11 million - $479.90 million | |||
Projected Percentage Recovery: | 95.1% to 100.0% |
m. | Class C-9—Unsecured Makewhole Claims |
(i) | Classification: Class C-9 consists of all Unsecured Makewhole Claims. | ||
(ii) | Treatment: In full satisfaction, settlement, release, and discharge of and in exchange for each and every Allowed Claim in Class C-9, each Holder thereof shall receive a pro rata share of the New Calpine Common Stock Pool For Creditors until paid in full. | ||
(iii) | Interest Accrued After the Petition Date: Allowed First Lien Unsecured Makewhole Claims shall include interest accrued after the date of repayment of principal through the Interest Accrual Limitation Date at the rate determined by the Bankruptcy Court. Allowed Second Lien Unsecured Makewhole Claims shall include interest accrued after the date of repayment of principal through the Interest Accrual Limitation Date at the rate determined by the Bankruptcy Court. Allowed CalGen Unsecured Makewhole Claims shall include interest accrued after the date of repayment of principal through the Interest Accrual Limitation Date at the rate determined by the Bankruptcy Court. |
Estimated Amount of Claims: | $40.00 million - $538.65 million | |||
Projected Percentage Recovery: | 95.1% to 100.0% |
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n. | Class C-10—Unsecured Convenience Class Claims |
(i) | Classification: Class C-10 consists of all Unsecured Convenience Class Claims. | ||
(ii) | Treatment: In full satisfaction, settlement, release, and discharge of and in exchange for each and every Allowed Claim in Class C-10, each Holder thereof shall be paid in full in Cash. | ||
(iii) | Interest Accrued After the Petition Date: Allowed Claims in Class C-10 shall not include any interest accrued after the Petition Date. |
Estimated Amount of Claims: | $22.33 million | |||
Projected Percentage Recovery: | 100.0% |
o. | Class C-11—Intercompany Claims |
(i) | Classification: Class C-11 consists of all Intercompany Claims. | ||
(ii) | Treatment: At the Debtors’ or Reorganized Debtors’ option, in consultation with the Creditors’ Committee, and except as otherwise provided in the Plan, Holders of Claims in Class C-11 shall have such Claims Reinstated or receive no distribution on account of such Claims. |
Estimated Amount of Claims: | N/A | |||
Projected Percentage Recovery: | 100.0% |
p. | Class D—Subordinated Debt Securities Claims |
(i) | Classification: Class D consists of all Subordinated Debt Securities Claims. | ||
(ii) | Treatment: In full satisfaction, settlement, release, and discharge of and in exchange for each and every Allowed Claim in Class D, to the extent all Holders of Allowed Claims (other than Subordinated Debt Securities Claims and Subordinated Equity Securities Claims) have been paid in full, each Holder of an Allowed Class D Claim shall receive a pro rata distribution of the New Calpine Common Stock Pool For Subordinated Debt Securities Claimants until paid in full. | ||
(iii) | Interest Accrued After the Petition Date: Allowed Claims in Class D shall include interest accrued after the Petition Date through the Interest Accrual Limitation Date at the Federal Judgment Rate. |
Estimated Amount of Claims: | $0 | |||
Projected Percentage Recovery: | N/A |
q. | Class E-1—Interests |
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(i) | Classification: Class E-1 consists of all Interests in Calpine. | ||
(ii) | Treatment: In full satisfaction, settlement, release, and discharge of and in exchange for each and every Interest in Class E-1, to the extent all Holders of Allowed Claims (other than Subordinated Equity Securities Claims) have been paid in full, the Holders of Interests in Class E-1 shall receive a pro rata share of the New Calpine Common Stock Pool For Shareholders. |
Estimated Amount of Claims: | N/A | |||
Projected Percentage Recovery: | $0.00 to $3.01 per share |
r. | Class E-2—Subordinated Equity Securities Claims |
(i) | Classification: Class E-2 consists of all Subordinated Equity Securities Claims. | ||
(ii) | Treatment: In full satisfaction, settlement, release, and discharge of and in exchange for each and every Claim in Class E-2, to the extent all Holders of Allowed Claims (other than Subordinated Equity Securities Claims) have been paid in full, the Holders of Claims in Class E-2 shall receive a pro rata share of the New Calpine Common Stock Pool For Shareholders until paid in full. | ||
(iii) | Interest Accrued After the Petition Date: Allowed Claims in Class E-2 shall include interest accrued after the Petition Date through the Interest Accrual Limitation Date at the Federal Judgment Rate. |
Estimated Amount of Claims: | $0 | |||
Projected Percentage Recovery: | N/A |
s. | Classes E-3—Intercompany Interests |
(i) | Classification: Class E-3 consists of all Intercompany Interests. | ||
(ii) | Treatment: In full satisfaction, settlement, release, and discharge of and in exchange for each and every Interest in Class E-3, Interests in Class E-3 shall be Reinstated for the benefit of the Holders thereof in exchange for Reorganized Debtors’ agreement to make certain distributions to the Holders of Allowed Unsecured Claims and Interests under the Plan, to provide management services to certain other Reorganized Debtors, and to use certain funds and assets, to the extent authorized in the Plan, to satisfy certain obligations between and among such Reorganized Debtors. |
Estimated Amount of Claims: | N/A | |||
Projected Percentage Recovery: | 100.0% |
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2. | Classification and Voting of Consolidated Classes. The Plan contemplates approval of the Debtors’ request to substantively consolidate the Debtors into a consolidated Estate. The provisions related to substantive consolidation are described in the Disclosure Statement and in the Plan. The categories of Claims and Interests listed below classify Claims and Interests for voting purposes if the Bankruptcy Court authorizes the Debtors to substantively consolidate of the Debtors is ordered. If the Bankruptcy Court does not authorize the Debtors to substantively consolidate any or all of the Estates pursuant to the Plan, then the Claims and Interests in or against those Debtors that are not substantively consolidated shall be classified, treated, and vote as classified in the Plan. |
Class | Claim or Interest Type | |
A-1 | First Lien Debt Claims | |
A-2 | Second Lien Debt Claims | |
A-3 | Other Secured Claims | |
B | Other Priority Claims | |
C-1 | Senior Note Claims | |
C-2 | General Note Claims | |
C-3 | Subordinated Note Claims | |
C-4 | ULC1 Settlement Claims | |
C-5 | Canadian Guarantee Claims | |
C-6 | Canadian Intercompany Claims | |
C-7 | Rejection Damages Claims | |
C-8 | General Unsecured Claims | |
C-9 | Unsecured Makewhole Claims | |
C-10 | Unsecured Convenience Class Claims | |
C-11 | Intercompany Claims | |
D | Subordinated Debt Securities Claims | |
E-1 | Interests | |
E-2 | Subordinated Equity Securities Claims | |
E-3 | Intercompany Interests |
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3. | Acceptance or Rejection of the Plan |
a. | Acceptance by Impaired Classes of Claims. Pursuant to section 1126(c) of the Bankruptcy Code and except as otherwise provided in section 1126(e) of the Bankruptcy Code, an Impaired Class of Claims has accepted the Plan if the Holders of at least two-thirds in dollar amount and more than one-half in number of the Allowed Claims in such Class actually voting have voted to accept the Plan. | ||
b. | Acceptance by Impaired Classes of Interests. Pursuant to section 1126(d) of the Bankruptcy Code and except as otherwise provided in section 1126(e) of the Bankruptcy Code, an Impaired Class of Interests has accepted the Plan if the Holders of at least two-thirds in amount of the Allowed Interests of such Class actually voting have voted to accept the Plan. | ||
c. | Tabulation of Votes. The Debtors will tabulate all votes on the Plan on a consolidated basis for the purpose of determining whether the Plan satisfies sections 1129(a)(8) and (10) of the Bankruptcy Code. All votes on account of Allowed Claims and Interests shall be counted as if Filed against a single consolidated Estate. | ||
d. | Confirmation Pursuant to Sections 1129(a)(10) and 1129(b) of the Bankruptcy Code. Section 1129(a)(10) of the Bankruptcy Code shall be satisfied for purposes of Confirmation by acceptance of the Plan by an Impaired Class of Claims. The Debtors shall seek Confirmation of the Plan pursuant to section 1129(b) of the Bankruptcy Code with respect to any rejecting Class of Claims or Interests. | ||
e. | Controversy Concerning Impairment. If a controversy arises as to whether any Claims or Interests, or any Class of Claims or Interests, are Impaired, the Bankruptcy Court shall, after notice and a hearing, determine such controversy on or before the Confirmation Date. |
H. | Implementation of the Plan |
1. | Substantive Consolidation |
a. | Discussion of Substantive Consolidation Generally |
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b. | Analysis and Investigation of Calpine’s Affairs |
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c. | Issues Associated With Substantive Consolidation |
(i) | Calpine’s Highly Integrated Business |
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(ii) | Hopeless Entanglement |
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(iii) | Creditor Reliance |
d. | Conclusion |
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e. | Effect of Substantive Consolidation |
(i) | the assets and liabilities of all consolidated Debtors will be pooled; | ||
(ii) | for all purposes associated with Confirmation and Consummation, Intercompany Claims and Interests will be ignored; | ||
(iii) | for all purposes associated with Confirmation and Consummation, the Estates of the consolidated Debtors will be deemed to be one consolidated Estate; | ||
(iv) | all guarantees of any consolidated Debtor of the obligations of any other consolidated Debtor will be eliminated for all purposes associated with Confirmation and Consummation, so that any Claim against a consolidated Debtor and any guarantee thereof will be a Claim against the consolidated Estate; and | ||
(v) | each and every Claim will be deemed Filed against the consolidated Estate. |
f. | The Creditors’ Committee’s Substantive Consolidation Analysis |
g. | Claims of the CalGen Lenders |
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2. | Sources of Consideration for the Plan |
a. | New Credit Facility |
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b. | New Calpine Common Stock |
(i) | Section 1145 Exemption |
(ii) | Listing Rights |
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(iii) | Restrictions on Resale of Securities to Protect Net Operating Losses |
(iv) | Issuance and Distribution of the New Calpine Common Stock |
3. | Corporate Existence |
4. | Vesting of Assets in the Reorganized Debtors |
5. | Cancellation of Debt and Equity Securities and Related Obligations |
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6. | Restructuring Transactions |
7. | Post-Confirmation Property Sales |
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8. | Corporate Action |
9. | Certificate of Incorporation, Charter, and Bylaws |
10. | Annual Meeting |
11. | Effectuating Documents, Further Transactions |
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12. | Exemption from Certain Transfer Taxes and Recording Fees |
13. | Directors and Officers of Reorganized Calpine |
14. | Directors and Officers of Reorganized Debtors Other Than Calpine |
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15. | Employee and Retiree Benefits |
16. | Management and Director Equity Incentive Plans |
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17. | Creation of Professional Fee Escrow Account |
18. | Preservation of Rights of Action |
I. | Treatment Of Executory Contracts And Unexpired Leases |
1. | Assumption and Rejection of Executory Contracts and Unexpired Leases |
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2. | Indemnification Obligations |
3. | Repudiation of FERC Jurisdictional Contracts |
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4. | Cure of Defaults for Assumed Executory Contracts and Unexpired Leases |
5. | Executory Contracts and Unexpired Leases Relating to Projects to be Sold or Surrendered |
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6. | Preexisting Obligations to the Debtors Under Executory Contracts and Unexpired Leases |
7. | Claims Based on Rejection or Repudiation of Executory Contracts and Unexpired Leases |
8. | Intercompany Contracts, Contracts, and Leases Entered Into After the Petition Date |
9. | Guarantees Issued or Reinstated After the Petition Date |
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10. | Modification of Executory Contracts and Unexpired Leases Containing Equity Ownership Restrictions |
11. | Modifications, Amendments, Supplements, Restatements, or Other Agreements |
12. | Reservation of Rights |
13. | Nonoccurrence of Effective Date |
J. | Procedures for Treatment of Disputed, Contingent, and Unliquidated Claims Pursuant to the Plan |
1. | Allowance of Claims and Interests |
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2. | Claims and Interests Administration Responsibilities |
3. | Estimation of Claims and Interests |
4. | Adjustment to Claims Without Objection |
5. | Time to File Objections to Claims |
6. | Disallowance of Claims |
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7. | Offer of Judgment |
8. | Amendments to Claims |
K. | Provisions Governing Distributions |
1. | Total Enterprise Value for Purposes of Distributions Under the Plan and the New Calpine Stock Reserve |
2. | Distributions on Account of Claims and Interests Allowed as of the Effective Date |
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3. | Distributions on Account of Claims and Interests Allowed After the Effective Date |
a. | Payments and Distributions on Disputed Claims and Interests: Except as otherwise provided in the Plan, a Final Order, or as agreed to by the relevant parties, and subject to the establishment of the New Calpine Stock Reserve, distributions under the Plan on account of Disputed Claims and Interests that become Allowed after the Effective Date shall be made on the Periodic Distribution Date that is at least thirty days after the Disputed Claim or Interest becomes an Allowed Claim or Interest;provided,however, that (i) Disputed Administrative Claims with respect to liabilities incurred by the Debtors in the ordinary course of business during the Chapter 11 Cases or assumed by the Debtors on or before the Effective Date that become Allowed after the Effective Date shall be paid or performed in the ordinary course of business in accordance with the terms and conditions of any controlling agreements, course of dealing, course of business, or industry practice and (ii) Disputed Priority Tax Claims that become Allowed Priority Tax Claims after the Effective Date, unless otherwise agreed, shall be paid in full in Cash on the Periodic Distribution Date that is at least thirty days after the Disputed Claim becomes an Allowed Claim or over a five-year period as provided in section 1129(a)(9)(C) of the Bankruptcy Code with annual interest provided by applicable non-bankruptcy law. | ||
b. | Special Rules for Distributions to Holders of Disputed Claims and Interests:Notwithstanding any provision otherwise in the Plan and except as otherwise agreed by the relevant parties: (i) no partial payments and no partial distributions shall be made with respect to a Disputed Claim or Interest until all such disputes in connection with such Disputed Claim or Interest have been resolved by settlement or Final Order and (ii) any Entity that holds both an Allowed Claim or Interest and a Disputed Claim or Interest shall not receive any distribution on the Allowed Claim or Interest unless and until all objections to the Disputed Claim or Interest have been resolved by settlement or Final Order and the Claims or Interests have been Allowed; provided, however, that the Reorganized Debtors shall make distributions to Holders of Allowed First Lien Debt Claims, Allowed Second Lien Debt Claims, Allowed Other Secured Claims, Allowed General Note Claims, Allowed Senior Note Claims, and Allowed Subordinated Note Claims on account of the Allowed portion of such Holders’ Claims. In the event that there are Disputed Claims or Interests requiring adjudication and resolution, the Reorganized Debtors shall establish appropriate reserves for potential payment of such Claims or Interests. Subject to Article IX.A.6 of the Plan, all distributions made pursuant to the Plan on account of an Allowed Claim or Interest shall be made together with any dividends, payments, or other distributions made on account of, as well as any obligations arising from, the |
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distributed property as if such Allowed Claim or Interest had been an Allowed Claim or Interest on the dates distributions were previously made to Holders of Allowed Claims or Interests included in the applicable Class. | |||
c. | Reserve of New Calpine Common Stock: On the Effective Date, the Reorganized Debtors shall maintain in reserve shares of New Calpine Common Stock as the New Calpine Stock Reserve to pay Holders of Allowed Claims and Interests pursuant to the terms of the Plan. The amount of New Calpine Common Stock withheld as a part of the New Calpine Stock Reserve for the benefit of a Holder of a Disputed Claim or Interest shall be equal to the lesser of: (a) the number of shares necessary to satisfy the distributions required to be made pursuant to the Plan based on the asserted amount of the Disputed Claim or Interest or, if the Claim is denominated as contingent or unliquidated as of the Distribution Record Date, the amount that the Debtors, in consultation with the Creditors’ Committee, elect to withhold on account of such Claim in the New Calpine Stock Reserve; (b) the number of shares necessary to satisfy the distributions required to be made pursuant to the Plan for such Disputed Claim or Interest based on an amount as estimated by the Bankruptcy Court pursuant to section 502(c) of the Bankruptcy Code for purposes of allowance; or (c) the number of shares necessary to satisfy the distributions required to be made pursuant to the Plan based on an amount as may be agreed upon by the Holder of such Disputed Claim or Interest and the Reorganized Debtors. As Disputed Claims and Interests are Allowed, the Distribution Agent shall distribute, in accordance with the terms of the Plan, New Calpine Common Stock to Holders of Allowed Claims and Interests, and the New Calpine Stock Reserve shall be adjusted. The Distribution Agent shall withhold in the New Calpine Stock Reserve any dividends, payments, or other distributions made on account of, as well as any obligations arising from, the New Calpine Common Stock initially withheld in the New Calpine Stock Reserve, to the extent that such New Calpine Common Stock continues to be withheld in the New Calpine Stock Reserve at the time such distributions are made or such obligations arise, and such dividends, payments, or other distributions shall be held for the benefit of Holders of Disputed Claims and Interests whose Claims and Interests, if Allowed, are entitled to distributions under the Plan. Nothing in the Plan shall require the Reorganized Debtors to reserve New Calpine Common Stock on account of agreements, programs, and plans the Debtors may continue to honor after the Effective Date pursuant to Article IV.N of the Plan and no such New Calpine Common Stock shall be so reserved. The Reorganized Debtors may (but are not required to) request estimation for any Disputed Claim or Interest that is contingent or unliquidated, as set forth in Article VI.C of the Plan. | ||
Notwithstanding anything in the applicable Holder’s Proof of Claim or otherwise to the contrary, the Holder of a Claim shall not be entitled to receive or recover a distribution under the Plan on account of a Claim in excess of the lesser of the amount: (i) stated in the Holder’s Proof of Claim, if any, as of the Distribution Record Date, plus interest thereon to the extent provided for by the Plan; (ii) if the Claim is denominated as contingent or unliquidated as of the Distribution Record Date, the amount that the Debtors, in consultation with the Creditors’ Committee, elect to withhold on account of such Claim in the New Calpine Stock Reserve and set forth in the Plan Supplement, or such other amount as may be estimated by the |
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Bankruptcy Court prior to the Confirmation Hearing; or (iii) if a Claim has been estimated, the amount deposited in the New Calpine Stock Reserve to satisfy such Claim after such estimation. | |||
For purposes of any shareholder vote occurring after the Effective Date, the Distribution Agent or Servicer, as applicable, shall be deemed to have voted any New Calpine Common Stock held in the New Calpine Stock Reserve in the same proportion as all outstanding shares properly cast in such shareholder vote. | |||
d. | Tax Reporting Matters: Subject to definitive guidance from the Internal Revenue Service or an applicable court to the contrary (including the receipt by the Reorganized Debtors of a private letter ruling or the receipt of an adverse determination by the Internal Revenue Service upon audit, if not contested by the Reorganized Debtors), the Reorganized Debtors shall treat the New Calpine Stock Reserve as a single trust, consisting of separate and independent shares to be established with respect to each Disputed Claim or Interest, in accordance with the trust provisions of the Internal Revenue Code, and, to the extent permitted by law, shall report consistently with the foregoing for federal, state, and local tax purposes. All Holders of Claims and Interests shall report, for federal, state, and local tax purposes, consistently with the foregoing. |
4. | Delivery of Distributions |
a. | Record Date for Distributions: On the Distribution Record Date, the Claims Register shall be closed and any party responsible for making distributions pursuant to Article VII of the Plan shall instead be authorized and entitled to recognize only those record Holders listed on the Claims Register as of the close of business on the Distribution Record Date. Notwithstanding the foregoing, if a Claim or Interest, other than one based on a publicly traded Certificate is transferred twenty or fewer days before the Distribution Record Date, the Distribution Agent shall make distributions to the transferee only to the extent practical and in any event only if the relevant transfer form contains an unconditional and explicit certification and waiver of any objection to the transfer by the transferor. | ||
b. | Distribution Agent: The Distribution Agent shall make all distributions required under the Plan, except that distributions to Holders of Allowed Claims and Interests governed by a separate agreement and administered by a Servicer shall be deposited with the appropriate Servicer, at which time such distributions shall be deemed complete, and the Servicer shall deliver such distributions in accordance with the Plan and the terms of the governing agreement. | ||
c. | Delivery of Distributions in General: Except as otherwise provided in the Plan, and notwithstanding any authority to the contrary, distributions to Holders of Allowed Claims and Interests shall be made to Holders of record as of the Distribution Record Date by the Distribution Agent or a Servicer, as appropriate: (i) in accordance with Federal Rule of Civil Procedure 4, as modified and made applicable by Bankruptcy Rule 7004; (ii) to the signatory set forth on any of the Proofs of Claim or Interest Filed by such Holder or other representative identified therein (or at the last known addresses of such Holder if no Proof of Claim or Interest is Filed or if the Debtors have been notified in writing of a change of |
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address); (iii) at the addresses set forth in any written notices of address changes delivered to the Distribution Agent after the date of any related Proof of Claim or Interest; (iv) at the addresses reflected in the Schedules if no Proof of Claim or Interest has been Filed and the Distribution Agent has not received a written notice of a change of address; or (v) on any counsel that has appeared in the Chapter 11 Cases on the Holder’s behalf. Except as provided in Articles IV.E and IX.A.7 of the Plan, distributions under the Plan on account of Allowed Claims and Interests shall not be subject to levy, garnishment, attachment, or like legal process, so that each Holder of an Allowed Claim or Interest shall have and receive the benefit of the distributions in the manner set forth in the Plan. The Debtors, the Reorganized Debtors, and the Distribution Agent, as applicable, shall not incur any liability whatsoever on account of any distributions under the Plan. Distributions to holders of publicly traded Certificates will be made in accordance with Article VII.D.10 of the Plan. | |||
d. | Accrual of Dividends and Other Rights: For purposes of determining the accrual of dividends or other rights after the Effective Date, the New Calpine Common Stock shall be deemed distributed as of the Effective Date regardless of the date on which it is actually issued, dated, authenticated, or distributed even though the Reorganized Debtors shall not pay any such dividends or distribute such other rights until distributions of the New Calpine Common Stock actually take place. Except as specifically otherwise provided in the Plan, in no event shall interest accrue after the Interest Accrual Limitation Date on account of any satisfied portion of an Allowed Claim or Interest. | ||
e. | Allocation Between Principal and Accrued Interest: Except as otherwise provided in the Plan, distributions on account of Allowed Claims and Interests shall be treated as allocated first to principal and interest accrued as of the Petition Date and thereafter, to the extent the New Calpine Total Enterprise Value is sufficient to satisfy such principal and interest accrued as of the Petition Date, any interest accrued from the Petition Date through the Interest Accrual Limitation Date. | ||
f. | Compliance Matters: In connection with the Plan, to the extent applicable, the Reorganized Debtors and the Distribution Agent shall comply with all tax withholding and reporting requirements imposed on them by any Governmental Unit, and all distributions pursuant to the Plan shall be subject to such withholding and reporting requirements. Notwithstanding any provision in the Plan to the contrary, the Reorganized Debtors and the Distribution Agent shall be authorized to take all actions necessary or appropriate to comply with such withholding and reporting requirements, including liquidating a portion of the distribution to be made under the Plan to generate sufficient funds to pay applicable withholding taxes, withholding distributions pending receipt of information necessary to facilitate such distributions, or establishing any other mechanisms they believe are reasonable and appropriate. The Reorganized Debtors reserve the right to allocate all distributions made under the Plan in compliance with all applicable wage garnishments, alimony, child support, and other spousal awards, liens, and encumbrances. | ||
g. | Foreign Currency Exchange Rate: Except as otherwise provided in the Plan or a Bankruptcy Court order, as of the Effective Date, any Unsecured Claim asserted |
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in currency(ies) other than U.S. dollars shall be automatically deemed converted to the equivalent U.S. dollar value using the exchange rate as of Tuesday, December 20, 2005, as quoted at 4:00 p.m. (EDT), mid-range spot rate of exchange for the applicable currency as published inThe Wall Street Journal, National Edition, on December 21, 2005. | |||
h. | Fractional, De Minimis, Undeliverable, and Unclaimed Distributions. |
(i) | Fractional Distributions: Notwithstanding any other provision of the Plan to the contrary, payments of fractions of shares of New Calpine Common Stock shall not be made and shall be deemed to be zero, and the Distribution Agent shall not be required to make distributions or payments of fractions of dollars. Whenever any payment of Cash of a fraction of a dollar pursuant to the Plan would otherwise be required, the actual payment shall reflect a rounding of such fraction to the nearest whole dollar (up or down), with half dollars or less being rounded down. | ||
(ii) | De Minimis Distributions: Neither the Distribution Agent nor any Servicer shall have any obligation to make a distribution on account of an Allowed Claim or Interest from the New Calpine Stock Reserve or otherwise if: (i) the aggregate amount of all distributions authorized to be made from such New Calpine Stock Reserve or otherwise on the Periodic Distribution Date in question is or has an economic value less than $10,000,000, based on Calpine’s Total Enterprise Value, unless such distribution is a final distribution or (ii) the amount to be distributed to the specific Holder of an Allowed Claim or Interest on the particular Periodic Distribution Date does not constitute a final distribution to such Holder and is or has an economic value less than $500. | ||
(iii) | Undeliverable Distributions: If any distribution to a Holder of an Allowed Claim or Interest is returned to a Distribution Agent as undeliverable, no further distributions shall be made to such Holder unless and until such Distribution Agent is notified in writing of such Holder’s then-current address, at which time all currently due missed distributions shall be made to such Holder on the next Periodic Distribution Date. Undeliverable distributions shall remain in the possession of the Reorganized Debtors until such time as a distribution becomes deliverable, or such distribution reverts to the Reorganized Debtors pursuant to Article VII.D.8.d of the Plan, and shall not be supplemented with any interest, dividends, or other accruals of any kind. | ||
(iv) | Reversion: Any distribution under the Plan that is an Unclaimed Distribution for a period of six months after distribution shall be deemed unclaimed property under section 347(b) of the Bankruptcy Code and such Unclaimed Distribution shall revest in the Reorganized Debtors and, to the extent such Unclaimed Distribution is New Calpine Common Stock, shall be deemed cancelled. Upon such revesting, the Claim or Interest of any Holder or its successors with respect to such property shall be cancelled, discharged, and forever barred notwithstanding any applicable federal or state escheat, abandoned, or unclaimed property laws to the contrary. The provisions of the Plan regarding undeliverable |
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distributions and Unclaimed Distributions shall apply with equal force to distributions that are issued by the Debtors, made pursuant to any indenture or Certificate (but only with respect to the initial distribution by the Servicer to Holders that are entitled to be recognized under the relevant indenture or Certificate and not with respect to Entities to whom those recognized Holders distribute), notwithstanding any provision in such indenture or Certificate to the contrary and notwithstanding any otherwise applicable federal or state escheat, abandoned, or unclaimed property law. |
i. | Manner of Payment Pursuant to the Plan. Any payment in Cash to be made pursuant to the Plan shall be made at the election of the Reorganized Debtors by check or by wire transfer. Checks issued by the Distribution Agent or applicable Servicer on account of Allowed Claims and Interests shall be null and void if not negotiated within ninety days after issuance, but may be requested to be reissued until the distribution revests in the Reorganized Debtors pursuant to Article VII.D.8.d of the Plan. The Debtors, with the consent of the Creditors’ Committee, or Reorganized Debtors, as applicable, may agree with any Holder of an Allowed Claim that is to receive New Calpine Common Stock under the Plan to satisfy such Allowed Claim with Cash generated from the sale of New Calpine Common Stock. The Reorganized Debtors, or one or more third-party brokers or dealers, may effectuate such sales of New Calpine Common Stock, and such New Calpine Common Stock sold shall be entitled to the exemption set forth in Article IV.B.2.a of the Plan. | ||
j. | Surrender of Cancelled Instruments or Securities. On the Effective Date or as soon as reasonably practicable thereafter, each Holder of a Certificate shall surrender such Certificate to the Distribution Agent or a Servicer (to the extent the relevant Claim or Interest is governed by an agreement and administered by a Servicer). Such Certificate shall be cancelled solely with respect to the Debtors, and such cancellation shall not alter the obligations or rights of any non-Debtor third parties vis-à-vis one another with respect to such Certificate. No distribution of property pursuant to the Plan shall be made to or on behalf of any such Holder unless and until such Certificate is received by the Distribution Agent or the Servicer or the unavailability of such Certificate is reasonably established to the satisfaction of the Distribution Agent or the Servicer pursuant to the provisions of Article VII.D.11 of the Plan. Any Holder who fails to surrender or cause to be surrendered such Certificate or fails to execute and deliver an affidavit of loss and indemnity acceptable to the Distribution Agent or the Servicer prior to the first anniversary of the Effective Date, shall have its Claim or Interest discharged with no further action, be forever barred from asserting any such Claim or Interest against the relevant Reorganized Debtor or its property, be deemed to have forfeited all rights, Claims, and Interests with respect to such Certificate, and not participate in any distribution under the Plan; furthermore, all property with respect to such forfeited distributions, including any dividends or interest attributable thereto, shall revert to the Reorganized Debtors, notwithstanding any federal or state escheat, abandoned, or unclaimed property law to the contrary. Notwithstanding the foregoing paragraph, Article VII.D.10 of the Plan shall not apply to any Claims Reinstated pursuant to the terms of the Plan. |
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k. | Lost, Stolen, Mutilated, or Destroyed Debt Securities. Any Holder of Allowed Claims or Interests evidenced by a Certificate that has been lost, stolen, mutilated, or destroyed shall, in lieu of surrendering such Certificate, deliver to the Distribution Agent or Servicer, if applicable, an affidavit of loss acceptable to the Distribution Agent or Servicer setting forth the unavailability of the Certificate, and such additional indemnity as may be required reasonably by the Distribution Agent or Servicer to hold the Distribution Agent or Servicer harmless from any damages, liabilities, or costs incurred in treating such Holder as a Holder of an Allowed Claim or Interest. Upon compliance with this procedure by a Holder of an Allowed Claim or Interest evidenced by such a lost, stolen, mutilated, or destroyed Certificate, such Holder shall, for all purposes pursuant to the Plan, be deemed to have surrendered such Certificate. |
5. | Claims Paid or Payable by Third Parties |
a. | Claims Paid by Third Parties. KCC shall reduce in full a Claim, and such Claim shall be disallowed without a Claims objection having to be Filed and without any further notice to or action, order, or approval of the Bankruptcy Court, to the extent that the Holder of such Claim receives payment in full on account of such Claim from a party that is not a Debtor or Reorganized Debtor. Subject to the following paragraph, to the extent a Holder of a Claim receives a distribution on account of such Claim and receives payment from a party that is not a Debtor or a Reorganized Debtor on account of such Claim, such Holder shall, within two weeks of receipt thereof, repay or return the distribution to the applicable Reorganized Debtor, to the extent the Holder’s total recovery on account of such Claim from the third party and under the Plan exceeds the amount of such Claim as of the date of any such distribution under the Plan. The failure of such Holder to timely repay or return such distribution shall result in the Holder owing the applicable Reorganized Debtor annualized interest at the Federal Judgment Rate on such amount owed for each Business Day after the two-week grace period specified above until the amount is repaid. Except to the extent set forth in the Second Lien Makewhole Settlement Order, nothing in the Plan shall affect the rights of the Holders of Second Lien Debt Claims to exercise the subordination rights granted to them in connection with the 6.00% Contingent Convertible Notes Due 2014 and the 7.75% Contingent Senior Convertible Notes Due 2015. | ||
b. | Claims Payable by Third Parties. No distributions under the Plan shall be made on account of an Allowed Claim that is payable pursuant to one of the Debtors’ insurance policies until the Holder of such Allowed Claim has exhausted all remedies with respect to such insurance policy. To the extent that one or more of the Debtors’ insurers agrees to satisfy in full a Claim (if and to the extent adjudicated by a court of competent jurisdiction), then immediately upon such insurers’ agreement, such Claim may be expunged to the extent of any agreed upon satisfaction on the Claims Register by KCC without a Claims objection having to be Filed and without any further notice to or action, order, or approval of the Bankruptcy Court. | ||
c. | Applicability of Insurance Policies. Except as otherwise provided in the Plan, distributions to Holders of Allowed Claims shall be in accordance with the provisions of any applicable insurance policy. Nothing contained in the Plan shall constitute or be deemed a waiver of any Cause of Action that the Debtors or |
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any Entity may hold against any other Entity, including insurers under any policies of insurance, nor shall anything contained herein constitute or be deemed a waiver by such insurers of any defenses, including coverage defenses, held by such insurers. |
6. | Treatment of Interests |
L. | Effect of Confirmation of the Plan |
1. | Discharge of Claims and Termination of Interests |
2. | Subordinated Claims |
3. | Compromise and Settlement of Claims and Controversies |
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M. | Allowance and Payment of Certain Administrative Claims |
1. | Professional Claims |
a. | Final Fee Applications |
b. | Payment of Interim Amounts |
c. | Professional Fee Escrow Account |
d. | Professional Fee Reserve Amount |
e. | Post-Effective Date Fees and Expenses |
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f. | Substantial Contribution Compensation and Expenses |
g. | Indenture Trustee, Administrative Agent, and Collateral Trustee Fees, and Indemnification Obligations |
h. | Payment of ULC1 Noteholders Ad Hoc Committee Fees and ULC1 Indenture Trustee Fees |
3 | The ULC1 Indenture Trustee believes that the ULC1 Indenture Trustee Fees should be paid through the conclusion of the CCAA Proceedings. The Debtors reserve their rights to dispute the ULC1 Indenture Trustee’s position on this point. |
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a. | The Bankruptcy Court shall have approved the Disclosure Statement, in a manner acceptable to the Debtors and the Creditors’ Committee, as containing adequate information with respect to the Plan within the meaning of section 1125 of the Bankruptcy Code. | ||
b. | The proposed Confirmation Order shall be in form and substance acceptable to the Debtors and the Creditors’ Committee. | ||
c. | The terms and conditions of employment or retention of any Persons proposed to serve as Named Executive Officers or directors of Reorganized Calpine, including, without limitation, as to compensation, shall be acceptable to the Debtors and the Creditors’ Committee and be set forth in the Plan Supplement to the extent such terms and conditions of employment or retention differ from those in existence on August 21, 2007. | ||
d. | The most current version of the Plan Supplement and all of the schedules, documents, and exhibits contained therein (including the Reorganized Calpine Bylaws and the Reorganized Calpine Charter) shall have been Filed in form and substance acceptable to the Debtors and the Creditors’ Committee. |
a. | The Bankruptcy Court shall have authorized the assumption and rejection of executory contracts and unexpired leases by the Debtors as contemplated by Article V of the Plan. | ||
b. | The New Credit Facility shall have been executed and delivered by all of the Entities that are parties thereto, and all conditions precedent to the consummation thereof shall have been waived, with the reasonable consent of the Creditors’ Committee, or satisfied in accordance with the terms thereof, and funding pursuant to the New Credit Facility shall have occurred. |
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c. | The Confirmation Order shall have become a Final Order in form and substance acceptable to the Debtors and the Creditors’ Committee. | ||
d. | The final version of the Plan Supplement and all of the schedules, documents, and exhibits contained therein (including the Reorganized Calpine Bylaws and the Reorganized Calpine Charter) shall have been Filed in form and substance acceptable to the Debtors and the Creditors’ Committee without prejudice to the Reorganized Debtors’ rights under the Plan to alter, amend, or modify certain of the schedules, documents, and exhibits contained in the Plan Supplement. | ||
e. | The Confirmation Date shall have occurred. | ||
f. | The New Calpine Common Stock shall have been accepted for listing on a national securities exchange or for quotation on a national automated interdealer quotation system. |
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1. | Allow, disallow, determine, liquidate, classify, estimate, or establish the priority, Secured or unsecured status, or amount of any Claim or Interest, including the resolution of any request for payment of any Administrative Claim and the resolution of any and all objections to the Secured or unsecured status, priority, amount, or allowance of Claims or Interests; | ||
2. | Decide and resolve all matters related to the granting and denying, in whole or in part, any applications for allowance of compensation or reimbursement of expenses to Professionals authorized pursuant to the Bankruptcy Code or the Plan; | ||
3. | Resolve any matters related to: (a) the assumption, assumption and assignment, or rejection of any executory contract or unexpired lease to which a Debtor is party or with respect to which a Debtor may be liable and to hear, determine, and, if necessary, liquidate, any Cure or Claims arising therefrom, including Cure or Claims pursuant to section 365 of the Bankruptcy Code; (b) any potential contractual obligation under any executory contract or unexpired lease that is assumed; (c) the Reorganized Debtors amending, modifying, or supplementing, after the Effective Date, pursuant to Article V of the Plan, any executory contracts or unexpired leases to the list of executory contracts and unexpired leases to be assumed or rejected or otherwise; and (d) any dispute regarding whether a contract or lease is or was executory or expired; | ||
4. | Ensure that distributions to Holders of Allowed Claims and Interests are accomplished pursuant to the provisions of the Plan; | ||
5. | Adjudicate, decide, or resolve any motions, adversary proceedings, contested or litigated matters, and any other matters, and grant or deny any applications involving a Debtor that may be pending on the Effective Date; | ||
6. | Adjudicate, decide, or resolve any and all matters related to Causes of Action; | ||
7. | Adjudicate, decide, or resolve any and all matters related to section 1141 of the Bankruptcy Code; | ||
8. | Enter and implement such orders as may be necessary or appropriate to execute, implement, or consummate the provisions of the Plan and all contracts, instruments, releases, indentures, and other agreements or documents created in connection with the Plan or the Disclosure Statement; | ||
9. | Enter and enforce any order for the sale of property pursuant to sections 363, 1123, or 1146(a) of the Bankruptcy Code; | ||
10. | Resolve any cases, controversies, suits, disputes, or Causes of Action that may arise in connection with the Consummation, interpretation, or enforcement of the Plan or any Entity’s obligations incurred in connection with the Plan; | ||
11. | Issue injunctions, enter and implement other orders, or take such other actions as may be necessary or appropriate to restrain interference by any Entity with Consummation or enforcement of the Plan; |
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12. | Resolve any cases, controversies, suits, disputes, or Causes of Action with respect to the releases, injunctions, and other provisions contained in Article VIII of the Plan and enter such orders as may be necessary or appropriate to implement such releases, injunctions, and other provisions; | ||
13. | Resolve any cases, controversies, suits, disputes, or Causes of Action with respect to the repayment or return of distributions and the recovery of additional amounts owed by the Holder of a Claim or Interest for amounts not timely repaid pursuant to Article VII.E.1 of the Plan; | ||
14. | Enter and implement such orders as are necessary or appropriate if the Confirmation Order is for any reason modified, stayed, reversed, revoked, or vacated; | ||
15. | Determine any other matters that may arise in connection with or relate to the Plan, the 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; | ||
16. | Enter an order or Final Decree concluding or closing the Chapter 11 Cases; | ||
17. | Adjudicate any and all disputes arising from or relating to distributions under the Plan; | ||
18. | Consider any modifications of the Plan, to cure any defect or omission, or to reconcile any inconsistency in any Bankruptcy Court order, including the Confirmation Order; | ||
19. | Determine requests for the payment of Claims and Interests entitled to priority pursuant to section 507 of the Bankruptcy Code; | ||
20. | Hear and determine disputes arising in connection with the interpretation, implementation, or enforcement of the Plan, or the Confirmation Order, including disputes arising under agreements, documents, or instruments executed in connection with the Plan; | ||
21. | Hear and determine matters concerning state, local, and federal taxes in accordance with sections 346, 505, and 1146 of the Bankruptcy Code; | ||
22. | Hear and determine all disputes involving the existence, nature, or scope of the Debtors’ discharge, including any dispute relating to any liability arising out of the termination of employment or the termination of any employee or retiree benefit program, regardless of whether such termination occurred prior to or after the Effective Date; | ||
23. | Enforce all orders previously entered by the Bankruptcy Court; and | ||
24. | Hear any other matter not inconsistent with the Bankruptcy Code. |
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7. | Service of Documents |
a. | After the Effective Date, any pleading, notice, or other document required by the Plan to be served on or delivered to the Reorganized Debtors shall be served on: |
Debtors | Counsel to Debtors | |||||
Calpine Corporation | Kirkland & Ellis LLP | |||||
717 Texas Avenue, Suite 1000 | 153 East 53rd Street | |||||
Houston, Texas 77002 | New York, New York 10022 | |||||
Attn.: | Gregory L. Doody, Esq. | Attn.: | Richard M. Cieri, Esq. | |||
and | ||||||
Kirkland & Ellis LLP | ||||||
200 East Randolph Street | ||||||
Chicago, Illinois 60601 | ||||||
Attn.: | Marc Kieselstein, P.C. | |||||
David R. Seligman, Esq. | ||||||
James J. Mazza, Jr., Esq. | ||||||
United States Trustee | Counsel to the DIP Lenders | |||||
Office of the United States Trustee | Simpson Thacher & Bartlett LLP | |||||
for the Southern District of New York | 425 Lexington Avenue | |||||
33 Whitehall Street, 21st Floor | New York, New York 10017 | |||||
New York, New York 10004 | Attn.: | Peter V. Pantaleo, Esq. | ||||
Attn.: | Paul K. Schwartzberg, Esq. | David J. Mack, Esq. | ||||
Counsel to the Creditors’ Committee | Counsel to the Equity Committee | |||||
Akin Gump Strauss Hauer & Feld LLP | Fried, Frank, Harris, Shriver & Jacobson LLP | |||||
590 Madison Avenue | One New York Plaza | |||||
New York, New York 10022-2524 | New York, New York 10004 | |||||
Attn.: | Michael S. Stamer, Esq. | Attn.: | Brad E. Scheler, Esq. | |||
Philip C. Dublin, Esq. | Gary L. Kaplan, Esq. | |||||
Counsel to Second Lien Ad Hoc Committee | Counsel to Lenders of New Credit Facility | |||||
Paul Weiss Rifkind Wharton & Garrison LLP | Simpson Thatcher & Bartlett LLP | |||||
1285 Avenue of the Americas | 425 Lexington Avenue | |||||
New York, New York 10019-6064 | New York, New York 10017 | |||||
Attn.: | Alan W. Kornberg, Esq. | Attn.: | Peter V. Pantaleo, Esq. | |||
Andrew N. Rosenberg, Esq. | David J. Mack, Esq. | |||||
Elizabeth R. McColm, Esq. |
b. | After the Effective Date, the Debtors have authority to send a notice to Entities that to continue to receive documents pursuant to Bankruptcy Rule 2002, they must file a renewed request to receive documents pursuant to Bankruptcy Rule 2002. After the Effective Date, the Debtors are authorized to limit the list of Entities receiving documents pursuant to Bankruptcy Rule 2002 to those Entities who have Filed such renewed requests. | ||
c. | In accordance with Bankruptcy Rules 2002 and 3020(c), within ten business days of the date of entry of the Confirmation Order, the Debtors shall serve the Notice of Confirmation by United States mail, first class postage prepaid, by hand, or by overnight courier service to all parties having been served with the Confirmation Hearing Notice; provided, however, that no notice or service of any kind shall be required to be mailed or made upon any Entity to whom the Debtors mailed a |
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Confirmation Hearing Notice, but received such notice returned marked “undeliverable as addressed,” “moved, left no forwarding address” or “forwarding order expired,” or similar reason, unless the Debtors have been informed in writing by such Entity, or are otherwise aware, of that Entity’s new address. To supplement the notice described in the preceding sentence, within twenty days of the date of the Confirmation Order the Debtors shall publish the Notice of Confirmation once in The Wall Street Journal (National Edition). Mailing and publication of the Notice of Confirmation in the time and manner set forth in the this paragraph shall be good and sufficient notice under the particular circumstances and in accordance with the requirements of Bankruptcy Rules 2002 and 3020(c), and no further notice is necessary. |
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STATUTORY REQUIREMENTS FOR CONFIRMATION OF THE PLAN
1. | The Plan complies with the applicable provisions of the Bankruptcy Code; | ||
2. | The Debtors, as Plan proponents, have complied with the applicable provisions of the Bankruptcy Code; | ||
3. | The Plan has been proposed in good faith and not by any means forbidden by law; | ||
4. | 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 Chapter 11 Cases, has been or will be disclosed to the Bankruptcy Court, and any such payment made before Confirmation is reasonable, or if such payment is to be fixed after Confirmation, such payment is subject to the approval of the Bankruptcy Court as reasonable; | ||
5. | With respect to each Impaired Class of Claims or Interests, either each Holder of a Claim or Interest in such Class has accepted the Plan or will receive or retain under the Plan on account of such Claim or 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; | ||
6. | Each Class of Claims or Interests that is entitled to vote on the Plan either has accepted the Plan or is not Impaired under the Plan, or the Plan can be confirmed without the approval of each voting Class pursuant to section 1129(b) of the Bankruptcy Code; | ||
7. | 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 and Allowed Other Priority Claims will be paid in full; | ||
8. | At least one Class of Impaired Claims or Interests will accept the Plan, determined without including any acceptance of the Plan by any Insider holding a Claim in such Class; |
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9. | Confirmation is not likely to be followed by the liquidation, or the need for further financial reorganization, of the Reorganized Debtors, unless such liquidation or reorganization is proposed in the Plan; | ||
10. | All fees of the type described in section 1930 of the Judicial Code, including the fees of the United States Trustee, will be paid as of the Effective Date; | ||
11. | The Plan addresses payment of retiree benefits in accordance with section 1114 of the Bankruptcy Code; and | ||
12. | All transfers of property under the Plan shall be made in accordance with any applicable provisions of nonbankruptcy law that govern the transfer of property by a corporation or trust that is not a moneyed, business, or commercial corporation or trust. |
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($million) | High Claims | Low Claims | ||||||
TEV Midpoint | $ | 20,268 | $ | 20,268 | ||||
Less: Funded Exit Facility | (7,154 | ) | (7,000 | ) | ||||
Less: Reinstated Net Project and Other Debt | (4,115 | ) | (4,109 | ) | ||||
Plus: Excess Cash | — | 455 | ||||||
Reorganized Equity Value | $ | 9,000 | $ | 9,614 |
($million) | High Claims | Low Claims | ||||||
Total Enterprise Value (midpoint) | $ | 20,268 | $ | 20,268 | ||||
Plus: Available Cash | 1,429 | 1,429 | ||||||
Reorganization Value (midpoint) | $ | 21,697 | $ | 21,697 | ||||
Non-Debtor Net Project Debt | (3,924 | ) | (3,924 | ) | ||||
DIP Facility Claims | (3,970 | ) | (3,970 | ) | ||||
Administrative Claims | (6 | ) | (6 | ) |
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($million) | High Claims | Low Claims | ||||||
Priority Tax Claims | (75 | ) | (70 | ) | ||||
First Lien Debt Claims | (125 | ) | — | |||||
Second Lien Debt Claims | (4,002 | ) | (3,958 | ) | ||||
Other Secured Claims | (573 | ) | (132 | ) | ||||
Other Priority Claims | (1 | ) | (1 | ) | ||||
Convenience Claims | (22 | ) | (22 | ) | ||||
Equity Value | $ | 9,000 | $ | 9,614 | ||||
Senior Note Claims | $ | 953 | $ | 953 | ||||
General Note Claims | 2,731 | 2,705 | ||||||
Subordinated Note Claims | 777 | 762 | ||||||
Canadian Settlement Claims | 2,548 | 2,548 | ||||||
Canadian Guarantee Claims | 134 | — | ||||||
Canadian Intercompany Claims | 259 | 259 | ||||||
Rejection Damage Claims | 1,399 | 710 | ||||||
General Unsecured Claims | 480 | 195 | ||||||
Unsecured Makewhole Claims | 40 | 40 | ||||||
Unsecured Claims | $ | 9,320 | $ | 8,171 | ||||
Unsecured Claims Recovery | <100 | % | 100.0 | % | ||||
Value Remaining for Equity | $ - $0.00 (per share) | $1,443 $3.01 (per share) |
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3. | Application of the Best Interests Test to the Liquidation Analysis and the Valuation Analysis |
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CERTAIN FACTORS TO BE CONSIDERED PRIOR TO VOTING
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C. | Risks Related to the Reorganized Debtors’ Business and Financial Condition |
1. | Indebtedness |
a. | The Reorganized Debtors’ Degree of Leverage May Limit Their Financial and Operating Activities |
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b. | The Covenants in the New Credit Facility Will Restrict the Reorganized Debtors’ Activities and Require Them to Meet or Maintain Various Financial Ratios |
c. | The Reorganized Debtors’ Financial Results May be Volatile and May Not Reflect Historical Trends |
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d. | Much of the Indebtedness of the Reorganized Debtors upon Emergence from the Chapter 11 Cases Will Bear Interest at Variable Rates, Which May Lead to Increased Debt Service Obligations |
2. | Operations |
a. | Expiration, Termination, or Entry into New Power Purchase Agreements |
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b. | Fuel Supply |
c. | Project Development and Acquisition |
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d. | Success of Operations |
e. | Terrorist Attacks, Future War, or Risk of War may Adversely Impact the Debtors’ Results of Operations, their Ability to Raise Capital, or their Future Growth |
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f. | Availability and Productivity of Geothermal Resources |
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
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VOTING PROCEDURES
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1. | Holders of Claims and Interests for which Proofs of Claims or Interests have been timely Filed, as reflected on the Claims Register, as of the Record Date,provided,however, that Holders of Disputed Claims or Disputed Interests shall not be entitled to vote unless they become eligible to vote through a Resolution Event (as defined below); | ||
2. | Holders of Claims or Interests that are listed in the Debtors’ Schedules, with the exception of those Claims or Interests that are scheduled as contingent, unliquidated, or disputed (excluding such scheduled Claims or Interests that have been superseded by a timely-Filed Proof of Claim or Interest); and | ||
3. | Holders whose Claims or Interests arise pursuant to an agreement or settlement with the Debtors executed prior to the Record Date, as reflected in a document Filed with the Bankruptcy Court, in an order of the Bankruptcy Court, or in a document executed by the Debtors pursuant to authority granted by the Bankruptcy Court, regardless of whether a Proof of Claim or Interest has been Filed. |
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1. | Voting Impaired Classes of Claims and Interests. The following Classes are Impaired under, and entitled to vote to accept or reject, the Plan: |
Classes | ||
C-1 | ||
C-2 | ||
C-3 | ||
C-4 | ||
C-5 | ||
C-6 | ||
C-7 | ||
C-8 | ||
C-9 | ||
C-10 | ||
D | ||
E-1 | ||
E-2 |
2. | Unimpaired Classes of Claims and Interests. The following Classes are Unimpaired under the Plan and are deemed to have accepted the Plan under section 1126(f) of the Bankruptcy Code. Thus, Holders in such Classes will not be solicited to vote to accept the Plan. Rather, acceptances of the Plan are being solicited only from those who hold Claims in an Impaired Class whose members will receive a distribution under the Plan. Pursuant to the Solicitation Procedures, these parties shall receive a notice, substantially in the form attached as an exhibit to the Solicitation Procedures Order, notifying them of their non-voting status. |
Classes | ||
A-1 | ||
A-2 | ||
A-3 | ||
B | ||
C-11 | ||
E-3 |
3. | Non-Voting Impaired Classes of Claims and Interests. There are no Classes of Claims or Interests that do not have the possibility of receiving or retaining any property under the Plan, and, thus, under section 1126(g) of the Bankruptcy Code, there are no Classes that are deemed to reject the Plan. |
1. | a cover letter describing the contents of the Solicitation Package and instructions for how hard copies of any materials that may be provided on CD-ROM can be obtained at no charge; | ||
2. | the Solicitation Procedures Order; |
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3. | the Confirmation Hearing Notice; | ||
4. | the approved form of the Disclosure Statement (together with all exhibits annexed thereto, including the Plan in either paper or CD-ROM format); | ||
5. | an applicable Ballot and/or Master Ballot and voting instructions; | ||
6. | a copy of the Solicitation Procedures | ||
7. | the letter to the Holders in each of the Voting Classes urging them to vote to accept the Plan; and | ||
8. | a pre-addressed, postage pre-paid return envelope. |
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PLAN SUPPLEMENT
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RECOMMENDATION
Dated: September 24, 2007
Respectfully submitted, | ||||||
CALPINE CORPORATION (for itself and all other Debtors) | ||||||
By: | /s/ Gregory L. Doody | |||||
Name: | ||||||
Title: | Executive Vice President, General Counsel, and Secretary |
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