Exhibit 2.1
UNITED STATES BANKRUPTCY COURT
MIDDLE DISTRICT OF LOUISIANA
IN RE:
CASE NO. 94-11474
CAJUN ELECTRIC POWER
COOPERATIVE, INC.,
Chapter 11
DEBTOR.
USDC NO. 94-CV-2763-B2
SECOND AMENDED AND RESTATED JOINT PLAN OF REORGANIZATION FOR
CAJUN ELECTRIC POWER COOPERATIVE, INC.
SUBMITTED JOINTLY BY THE COMMITTEE OF CERTAIN MEMBERS,
WASHINGTON - ST. TAMMANY ELECTRIC COOPERATIVE, INC.
AND SOUTHWESTERN ELECTRIC POWER COMPANY DATED APRIL 19,1999
The Committee of Certain Members of Cajun Electric Power Cooperative Inc.
("Committee of Certain Members"), Washington - St. Tammany Electric Cooperative,
Inc., and Southwestern Electric Power Company (" SWEPCO ")(collectively the
"Proponents") hereby propose the following plan of reorganization ("Plan") which
provides for the liquidation of Cajun Electric Power Cooperative, Inc., the
debtor herein ("Debtor" or "Cajun"):
SUMMARY OF THE PLAN
The Proponents have joined together to present to the creditors of Cajun
and the Court a Plan that will resolve Cajun's bankruptcy through the sale of
Cajun's non-nuclear assets to a SWEPCO affiliate, and the voluntary initiation
of new power supply arrangements by and between a SWEPCO affiliate and Cajun's
former members. The Plan has the goal of offering competitive wholesale rates to
the Cajun member cooperatives ("Members"), while maximizing value to the Cajun
estate.
The Plan provides for the acquisition of Cajun's non-nuclear assets by a
subsidiary or affiliate of SWEPCO. The consideration paid under the Plan will be
$1.02 billion (subject to adjustments as provided in the Asset Purchase
Agreement and this Plan) at current treasury yields. The Plan, in addition,
includes a settlement of a variety of pending litigation involving the lien
claims of the Rural Utilities Service ("RUS"). This Plan relies on the execution
of consensual agreements with the Members for the purchase of wholesale power.
In addition, the Plan incorporates the River Bend Settlement negotiated among
the Proponents and Entergy Gulf States, Inc. ("GSU"). The Plan is the only plan
that has the potential to harmonize the distinct perspectives of the Members,
the LPSC and the RUS. In short, the Proponents' Plan is the only feasible plan
that can be confirmed without years of litigation.
The distinguishing attribute of the Plan is that it produces competitive
wholesale rates to cooperatives serving over one million Louisiana residents and
maximizes the value of the Cajun estate. The cooperatives cannot and will not
remain viable at non-competitive rates, as evidenced by the bankruptcy of
Washington St. Tammany Electric Cooperative, Inc., the insolvency and
SWEPCO/Members Page 2
Second Amended and Restated Joint Plan of Reorganization
acquisition of Bossier Rural Electric Membership Corporation, the sale of Teche
Electric Cooperative. Inc. to Central Louisiana Electric Company. Inc., and the
financial difficulties currently experienced by other cooperatives.
The Plan includes consensually negotiated average wholesale rates at a
competitive level, which would immediately provide significant rate relief to
Louisiana ratepayers while also maximizing the value of the estate. Any plan
that unilaterally proposes higher, non-competitive and non-consensual rates in
an effort to extract excessive value from Louisiana ratepayers would not provide
a permanent solution to the substantial rate disparity between cooperatives on
the one hand, and investor-owned and municipal utilities on the other hand.
The Plan provides for an enterprise (hereinafter "SWECO") to be formed by
SWEPCO as a wholly owned subsidiary or affiliate to acquire Cajun's non-nuclear
assets more specifically defined in the Asset Purchase Agreement (hereinafter
the "Acquired Assets"). Under the Plan, SWECO will purchase the Acquired Assets
for a price of $1.02 billion (subject to adjustments as set forth in the Asset
Purchase Agreement and this Plan) payable in cash (the "Purchase Price")
pursuant to the terms and conditions proposed in an Asset Purchase Agreement at
current treasury yields.
The Asset Purchase Agreement that will be executed by SWECO shall be
substantially in the form of the Asset Purchase Agreement which is attached as
Exhibit 1 to the Plan. On the Effective Date of the Plan, the Members and SWECO
shall voluntarily enter into new Power Supply Agreements substantially in the
form of Exhibit 2 attached to the Plan, whereby pursuant to the terms and
conditions of the Power Supply Agreements, SWECO shall be obligated to supply
the Members, and the Members electing to enter into the Power Supply Agreements
shall be obligated to purchase their power requirements from SWECO. To the
extent that there are any conflicts between the terms of the Plan and the Asset
Purchase Agreement, the provisions of the Asset Purchase Agreement shall
control. Unless specifically provided otherwise in the Plan, the Plan generally
contemplates that any assets remaining in Cajun after the consummation of the
Asset Purchase Agreement and the River Bend Settlement will be (i) liquidated by
the Trustee with the proceeds of such liquidation distributed in accordance with
the Plan; or (ii) conveyed by the Trustee to the holder of the lien on such
assets. The Purchase Price, liquid assets and any proceeds of other assets
liquidated by the Trustee shall be distributed in accordance with the terms of
this Plan.
On August 26, 1996, Judge Frank J. Polozola signed an Order and Judgment
Approving Settlement by and among Cajun Electric Power Cooperative, Inc.,
Entergy Gulf States, Inc., Entergy Corporation, and the Rural Utilities Service
of the Department of Agriculture (the "Order"). The settlement approved by the
Order (hereinafter the "River Bend Settlement"), among other things: puts an end
to years of expensive litigation among Cajun, GSU, and the RUS; provides for the
transfer of Cajun's River Bend Interest at the discretion of the RUS to a
bidder, the RUS or GSU; provides for the establishment of a Decommissioning
Trust Fund; and settles the claims of GSU that put at issue the Trustee's
ability to transfer Cajun's non-River Bend assets apart from the River Bend
assets and obligations and free and clear of all liens and encumbrances. The
Order provides that the settlement could be consummated independent of any plan
of reorganization. The Order has been affirmed by the United States Court of
Appeals for the Fifth Circuit and GSU has acquired Cajun's River Bend Interest
pursuant to the terms of the River Bend Settlement.
SWEPCO/Members Page 3
Second Amended and Restated Joint Plan of Reorganization
The Committee of Certain Members. SWEPCO and the RUS reached a settlement
of certain issues concerning the validity of the liens and security interests of
the RUS against the estate. The Amended and Restated Settlement Agreement (which
was approved by the Bankruptcy Court per Order docketed on February 11, 1999) is
attached as Exhibit 3 and incorporated in this Plan. Certain terms of the
Amended and Restated Settlement Agreement are effective without court approval.
The terms of paragraph 4 and 7 required court approval.
TERMS OF THE PLAN
Article 1: Definitions
1.1 "Acquired Assets"" is defined in the Asset Purchase Agreement.
1.2 "Administrative Expense Claim" means any Claim constituting a cost or
expense of administration of Cajun's Chapter 11 case incurred on or after the
Petition Date of the kind described in Section 503(b) of the Bankruptcy Code,
including, without limitation, any fees or charges assessed against Cajun's
estate under Chapter 123 of title 28, United States Code, fees and expenses of
the Trustee and professionals employed by the Estate, costs and expenses of
preserving the Estate, taxes described in Section 503(b)(1)(B) of the Bankruptcy
Code, certain employee claims arising after the Petition Date, cure amounts for
executory contracts and unexpired leases assumed or assumed and assigned by the
Trustee under the Plan.
1.3 "Allowed Administrative Expense Claim" means any Administrative
Expense Claim which, after notice and hearing, is determined by Final Order of
the Court to be an Administrative Expense Claim entitled to payment in
accordance the Bankruptcy Code.
1.4 "Allowed Claim" means any Claim against the Debtor, (i) the proof of
which was filed on or before the Bar Date; or (ii) that was scheduled by the
Debtor as liquidated in amount and not disputed or contingent; and (iii) in
either case, a Claim to which no objection is timely filed or that is allowed by
a Final Order of the Court.
1.5 "Allowed Convenience Claim" means any Allowed Claim originally
scheduled by the Debtor in the amount of $20,000 or less.
1.6 "Allowed Secured Claim" means any Allowed Claim to the extent of the
value of (i) a lien on the assets which are property of the estate, or (ii) a
right of set-off under Code Section 553.
1.7 "Allowed Unsecured Claim" means any Allowed Claim to the extent it is
not secured either by a valid, enforceable and unavoidable lien on the Debtor's
assets or a right of set-off under Code Section 553.
1.8 "Asset Purchase Agreement" means the agreement by and between the
Trustee and SWEC0 providing for the sale of the Acquired Assets to SWECO
substantially in the form as attached hereto as Exhibit 1.
SWEPCO/Members Page 4
Second Amended and Restated Joint Plan of Reorganization
1.9 "Avoidance Actions" means all direct or derivative rights, claims and
causes of action which constitute property of the Estate, including but not
limited to claims under Code Sections 506, 510, 542, 543, 544, 545, 546, 547,
548, 549, 550, 551 and 553 and any state laws corresponding thereto.
1.10 "Bar Date" means October 1, 1995, the date designated by the Court in
its Order dated August 21, 1995 as the last day for filing a proof of Claim.
1.11 "Big Cajun II, Unit 3 JOPOA" means that Joint Ownership Participation
and Operating Agreement by and between Debtor and GSU, dated as of November 14,
1980.
1.12 "Cajun" means Cajun Electric Power Cooperative, Inc., the debtor in
this Chapter 11 Case.
1.13 "Chapter 11 Case" means this Chapter 11 case of Cajun (Case No.
94-11474; USDC No. 94CV-2763-B2).
1.14 "Claim" means a claim as defined in Code Section 101(5) against
Cajun.
1.15 "Claimant" means a person or entity who holds or asserts a Claim.
1.16 "Class 6 Fund" means a fund to be established by the Trustee for
distribution to holders of Class 6 Claims under section 6.3 hereof.
1.17 "CLECO" means Central Louisiana Electric Company, Inc., as successor
in interest to Teche Electric Cooperative, Inc.
1.18 "CoBank" means CoBank, N.A., formerly National Bank for Cooperatives.
1.19 "CoBank Class E Stock" means the Class E stock of CoBank owned by
Cajun.
1.20 "Code Section" means a section of the United States Bankruptcy Code,
11 U.S.C. ss. 101 et seq., as in effect with respect to the Reorganization Case.
1.21 "Committee of Certain Members" means the Committee of Certain Members
of Cajun Electric Power Cooperative, Inc., an unofficial committee currently
composed of the following seven Members: Beauregard Electric Cooperative, Inc.,
Dixie Electric Membership Corporation, Jefferson Davis Electric Cooperative,
Inc., Northeast Louisiana Power Cooperative, Inc., South Louisiana Electric
Cooperative Association and Valley Electric Membership Corporation.
1.22 "Confirmation Date" means the date of entry by the Court or other
court of competent jurisdiction of the Confirmation Order.
1.23 "Confirmation Order" means the order of the Court confirming this
Plan.
SWEPCO/Members Page 5
Second Amended and Restated Joint Plan of Reorganization
1.24 "Court" means the United States District Court for the Middle
District of Louisiana exercising its original bankruptcy jurisdiction pursuant
to 28 U.S.C. ss.1334, or the United State Bankruptcy Court for the Middle
District of Louisiana to the extent any proceeding was referred to it by said
Court.
1.25 "Debtor" means Cajun Electric Power Cooperative, Inc., the debtor in
this Chapter 11 Case.
1.26 "Decommissioning Trust Fund" means a segregated trust fund to be
established to satisfy obligations for Decommissioning Costs (as defined in the
River Bend Settlement).
1.27 "Disbursement Accounts" means that certain interest bearing accounts
to be established under the supervision of the Trustee pursuant to section 6.4
hereof, into which the Purchase Price, Net Proceeds of Excluded Assets, Net
Proceeds of Avoidance Actions and the Class 6 Fund are deposited.
1.28 "Disputed Claim" means a Claim which is not an Allowed Claim.
1.29 "Effective Date" means a date selected by the Proponents for this
Plan to become effective, for documents to be executed to implement the
provisions of the Plan, and for the Acquired Assets to be transferred to SWECO
pursuant to the terms of the Asset Purchase Agreement which date shall be not
later than 90 days after the Confirmation Order becomes a Final Order and all
required conditions to closing set forth in the Asset Purchase Agreement and all
conditions to effectiveness specified herein are satisfied. As set forth in the
Asset Purchase Agreement, the Effective Date of the Plan shall be the same date
as the "Closing Date" of the Asset Purchase Agreement (as that term is defined
in the Asset Purchase Agreement), on which date the closing of the sale of the
Acquired Assets to SWECO and related transactions shall occur. The Effective
Date of the Plan shall occur on the same date as the Closing Date, but the
Effective Date of the Plan shall occur at the close of business on such date and
immediately after the closing of the sale of assets pursuant to the Plan.
1.30 "Estate" means the bankruptcy estate of the Debtor created by
Bankruptcy Code Section 541.
1.31 "Excess Funds" means (a) the funds contained in a certain segregated
account that are collected by Debtor pursuant to the Order Concerning Use of
Cash Collateral and Adequate Protection approved by the Court on February 13,
1995; (b) the funds contained in a certain segregated account (variously
referred to in Debtor's bankruptcy proceedings as the "Interest Escrow Account,"
the "Ratepayer Trust Fund," the "Debt Service Escrow Account," and the "LPSC
Escrow Account") that are collected pursuant to LPSC Order No. U-17735-F, as
amended by LPSC Order No. U-17735-H; and (c) all interest on the funds described
in (a) and (b) immediately preceding, less any sums necessary to fund the
Decommissioning Trust Fund as provided in the River Bend Settlement.
1.32 "Excluded Assets" is defined in the Asset Purchase Agreement.
1.33 "Final Order" means an order or judgment (a) as to which the time has
expired within which a proceeding for review (whether by way of rehearing,
appeal, certiorari or otherwise) may be commenced, without any such proceeding
having been commenced, or (b) which, if such a review proceeding was timely
SWEPCO/Members Page 6
Second Amended and Restated Joint Plan of Reorganization
commenced, has been affirmed by the highest tribunal in which review was sought
or remains in effect without modification following termination of such
proceeding for review, and the time has expired within which any further
proceeding for review may be commenced.
1.34 "GSU" means Entergy Gulf States, Inc., a Texas corporation formerly
known as Gulf States Utilities Company.
1.35 "Hibernia" means Hibernia National Bank, acting as indenture trustee
for the Industrial Revenue Bonds (Cajun Electric Power Cooperative, Inc.
Project), Series 1982.
1.36 "Initial Distribution Date" shall mean a date no later than 30 days
after the Effective Date when the initial payments on account of Allowed Claims,
as set forth in this Plan, shall be made.
1.37 "LPSC " means the Louisiana Public Service Commission.
1.38 "Member Interests" means the Members' interests in Cajun as evidenced
by a Membership Certificate issued by Cajun to each Member pursuant to Section 2
of Cajun's Bylaws.
1.39 "Members" means Beauregard Electric Cooperative, Inc., Claiborne
Electric Cooperative, Inc., CLECO, Concordia Electric Cooperative, Inc., Dixie
Electric Membership Corporation, Jefferson Davis Electric Cooperative, Inc.,
Northeast Louisiana Power Cooperative, Inc., Pointe Coupee Electric Membership
Corporation, South Louisiana Electric Cooperative Association, Southwest
Louisiana Electric Membership Corporation, Valley Electric Membership
Corporation and Washington-St. Tammany Electric Cooperative, Inc.
1.40 "Net Proceeds" means as to any Excluded Asset or Avoidance Action the
total gross proceeds less all reasonable and necessary costs associated with the
liquidation of such Excluded Asset or prosecution of such Avoidance Action.
1.41 "Ordinary Course Administrative Expense Claims" shall be limited to
Administrative Expense Claims incurred in the ordinary course of Cajun's
business and shall not include: (i) any post-petition obligations which are past
due or cure payments; (ii) any fees or expenses of the Trustee or "professional
persons" (as that term is used in Section 327 of the Bankruptcy Code) and any
expenses, compensation, or reimbursement requested pursuant to subsections
503(b)(2), (3), (4) or (5) of the Bankruptcy Code; (iii) any Taxes (including
income, sales, use, property or other Taxes) except for sales and use Taxes
incurred other than in the sale of Cajun's assets pursuant to the Asset Purchase
Agreement or the River Bend Settlement; (iv) any claims for breach of contract
tort, or other actionable conduct; and (v) any post-petition obligations
incurred under executory contracts or unexpired leases which are rejected in
this Plan or prior to the Effective Date of the Plan.
1.42 "Petition Date" means December 21, 1994.
1.43 "Proponents" means the Committee of Certain Members, Washington - St.
Tammany Electric Cooperative, Inc., and SWEPCO.
SWEPCO/Members Page 7
Second Amended and Restated Joint Plan of Reorganization
1.44 "Pro Rata" means the factor of the amount of the Allowed Claim
multiplied by the fraction of the funds available for distribution to a class
divided by total Allowed Claims in a class plus reserves determined in
accordance with section 6.6 of the Plan for all Disputed Claims in a class.
1.45 "Purchase Price" is defined in the Asset Purchase Agreement.
1.46 "Representative" means, with respect to any specified entity, the
officers, directors (or functional equivalent, if any), employees, agents,
attorneys, accountants, financial advisors, other representatives, subsidiaries,
affiliates or any person who controls any of these within the meaning of the
Securities Act of 1933, as amended or the Securities Exchange Act of 1934, as
amended.
1.47 "River Bend" means River Bend Nuclear Station Unit 1, a 936MW nuclear
generating facility located in St. Francisville, Louisiana, which was co-owned
by Cajun and GSU and which is now owned and operated by GSU.
1.48 "River Bend JOA" means the River Bend Joint Operating Agreement
between GSU and Cajun.
1.49 "River Bend Settlement" means the settlement between Cajun, GSU and
the RUS as currently defined in the Order and Judgment Approving Settlement by
and among Cajun Electric Power Cooperative, Inc., Entergy Gulf States, Inc.,
Entergy Corporation, and the Rural Utilities Service of the Department of
Agriculture, signed by the Honorable Frank J. Polozola on August 26, 1996, in
Civil Action No. 94 2763-B2 in the United States District Court for the Middle
District of Louisiana.
1.50 "RUS" means the United States of America, acting through the Rural
Utilities Service (formerly the Rural Electrification Administration), an agency
within the United States Department of Agriculture.
1.51 "RUS Settlement" means the settlement terms described in paragraphs 4
and 7 of the Amended and Restated Settlement Agreement by and among SWEPCO, the
Committee of Certain members and the RUS, dated March 18, 1998, attached as
Exhibit 3 to the Plan and incorporated herein.
1.52 "Settlement Amount" means the amount of $20.24 million payable to
the Class 6 Fund pursuant to the RUS Settlement.
1.53 "Supply Contracts" means the long term all-requirements contracts
between the Debtor and each of its Members.
1.54 "SWECO" means Southwestern Wholesale Electric Company, an entity to
be formed as a wholly owned subsidiary or affiliate by SWEPCO to acquire the
Acquired Assets.
1.55 "SWEPCO" means Southwestern Electric Power Company, a Louisiana-based
investor owned utility.
SWEPCO/Members Page 8
Second Amended and Restated Joint Plan of Reorganization
1.56 "'Taxes" means all taxes, charges, fees. imposts. levies or other
assessments. including, without limitation, all net income, gross receipts,
sales, use, ad valorem, value added, transfer, franchise, profits. inventory,
capital stock, license, withholding, payroll, employment, social security,
unemployment, excise, severance, stamp, occupation and property taxes, customs
duties, fees, assessments and charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts imposed by
any taxing authority (domestic or foreign) and any interest and penalties
imposed with respect to the filing, obligation to file or failure to file any
return for such tax, and shall include any transferee liability in respect to
Taxes.
1.57 "Trustee" means the Chapter 11 trustee appointed herein by the Court,
or any successor Trustee that may be subsequently appointed by the Court.
Article 11: Treatment of Unclassified Claims.
2.1 Treatment of Administrative Claims.
(a) Each holder of an Allowed Administrative Expense Claim shall receive,
on account of such Administrative Expense Claim, cash in the amount of such
Allowed Administrative Expense Claim on the later of the Effective Date or
within ten days after the date the Administrative Expense Claim becomes an
Allowed Administrative Expense Claim, except to the extent any holder agrees to
a different treatment. An Administrative Expense Claim which is subject to the
Administrative Expense Claim Bar Date and the Supplemental Administrative Claim
Bar Date shall be paid only to the extent such claim is timely filed and allowed
as Administrative Expense Claim by the Court by Final Order. Notwithstanding the
foregoing, the Trustee and professionals employed at the expense of the Estate
and entities which may be entitled to reimbursement or the allowance of fees and
expenses from the Estate pursuant to subparagraphs (2) through (6) of Code
Section 503 (b) shall receive cash in the amount awarded to such professionals
and entities at such times and only in accordance with a Final Order entered
pursuant to Code Sections 330, 331 or Code Sections 503 (b) (2) through (6).
(b) (1) On the Effective Date, all real (immovable) property and
personal (movable) property Taxes with respect to the Acquired Assets
for the tax years occurring prior to the Effective Date, which are
Ordinary Course Administrative Expense Claims and which have not
already been paid in the ordinary course of business, shall be paid
in full in cash by the Trustee, except to the extent that the holder
agrees to a different treatment. All immovable property and movable
property Taxes with respect to the Acquired Assets for the tax year
in which the Effective Date occurs, which are Ordinary Course
Administrative Expense Claims, shall be prorated through the
Effective Date based on the most current assessment information
available from the offices of the assessor and sheriff of the
respective parishes in which the Acquired Assets are located. Cajun's
share of such prorated Taxes shall be paid in cash on the Effective
Date by the Trustee, except to the extent the holder agrees to a
different treatment. All special assessments against the Acquired
Assets for utilities or otherwise, which are Ordinary Course
Administrative Expense Claims, shall be paid
SWEPCO/Members Page 9
Second Amended and Restated Joint Plan of Reorganization
in full by the Trustee in cash prior to or on the Effective Date,
except to the extent a holder agrees to a different treatment.
(2) All real (immovable) property and personal (movable) property
Taxes with respect to Excluded Assets, which are Ordinary Course
Administrative Expense Claims shall be paid when due in cash in the
ordinary course of business.
(3) All Taxes with respect to Acquired Assets or Excluded Assets,
which are Administrative Expense Claims, but which are not Ordinary
Course Administrative Expense Claims, and all other Allowed
Administrative Expense Claims which are not Ordinary Course
Administrative Expense Claims, and which are therefore subject to
the Administrative Expense Claim Bar Date will be paid in cash only
to the extent such claims are timely filed and are Allowed as
Administrative Expense Claims by the Court by Final Order. Such
Allowed Administrative Expense Claims will be paid on the later of
the Effective Date or ten (10) days after the date such claims are
Allowed by the Court by Final Order, except to the extent a holder
agrees to a different treatment.
(4) For the tax year in which the Effective Date occurs, any income
Taxes which may be owing for that tax year shall be deemed to be
incurred by the Estate, for purposes of the application of Code
Section 503(b)(1)(B), to the extent that such Taxes would be owed if
the Effective Date was the date on which the tax year closed for
Cajun (the "Effective Date Tax Year"). For the tax year in which the
Petition Date occurred, any income Tax which may be owing for that
tax year shall be deemed to be incurred by the Estate, for the
purpose of Code Section 503(b)(1)(B), to the extent such Taxes would
be owed if the Petition Date was the date on which the tax year
began for Cajun (the "Petition Date Tax Year"). Any unpaid Allowed
Administrative Expense Claim for income Taxes through and including
the Effective Date Tax Year shall be paid from the Purchase Price.
(c) Ordinary Course Administrative Expense Claims shall be paid in the
ordinary course of business of Cajun as and when incurred and due. Any such
Ordinary Course Administrative Expense Claims incurred prior to the Effective
Date, and for which consideration has been provided to Cajun prior to the
Effective Date, but which are not yet due in the ordinary course of business on
the Effective Date, shall be paid by Cajun when due.
2.2 Administrative Expense Claim Bar Dates
(a) The Confirmation Order or a separate Court Order shall set a bar date
for the filing of Administrative Expense Claims arising prior to the
Confirmation Date (the "Administrative Expense Claim Bar Date"). Any
Administrative Expense Claims which are subject to the Administrative Expense
Claim Bar Date that are not filed on or prior to such bar date shall be
discharged under the Plan, but shall not be treated as an Administrative Expense
Claim or any other Claim for purposes of distribution under the Plan, whether or
not an objection is initiated.
SWEPCO/Members Page 10
Second Amended and Restated Joint Plan of Reorganization
(b) The Confirmation Order or a separate Court Order shall set a bar date
for the filing of Administrative Expense Claims arising subsequent to the
Confirmation Date, but prior to the Effective Date (the "Supplemental
Administrative Expense Claim Bar Date"). Such Administrative Expense Claims
filed pursuant to the Supplemental Administrative Expense Claim Bar Date may
only include Claims for the period between the Confirmation Date and the
Effective Date, and may not allege any Claims arising out of or from the period
prior to the Confirmation Date. Any Administrative Expense Claims which are
subject to the Supplemental Administrative Expense Claim Bar Date that are not
filed on or prior to such bar date shall be discharged under the Plan, but shall
not be treated as an Administrative Expense Claim or any other Claim for
purposes of distribution under the Plan, whether or not an objection is
initiated.
(c) This subsection and not subsections 2.2(a) and (b) shall apply to
income Taxes described in Code Section 503(b)(1)(B). The Confirmation Order or a
separate Court Order will set a bar date for the filing of Administrative
Expense Claims arising from income Taxes for the period beginning on the
Petition Date and ending on the Effective Date (the "Tax Administrative Expense
Claim Bar Date"). The Tax Administrative Expense Claim Bar Date shall be ninety
(90) days after the Effective Date, provided that such ninety (90) day period
shall not begin to run until Cajun shall file an appropriate tax return or, in
the case of the Petition Date Tax Year or the Effective Date Tax Year, until
Cajun shall provide the equivalent tax return information for such tax years.
The tax return for information for the purpose of determining federal income
Taxes shall be signed under penalty of perjury, shall include all information
that a corporate income tax return would contain, and shall be provided to the
Internal Revenue Service within a reasonable time after the Effective Date. Any
Administrative Expense Claim arising out of an income Tax claim described in
Code Section 503(b)(1)(B) subject to the Tax Administrative Expense Claim Bar
Date that is not filed on or prior to such bar date shall be discharged under
the Plan, but shall not be treated as an Administrative Expense Claim or any
other Claim for purposes of distribution under the Plan, whether or not an
objection is initiated. Any Administrative Expense Claim timely filed pursuant
to this subsection 2.2(c) on or prior to the Tax Administrative Expense Claim
Bar Date shall be allowed as filed unless an objection to such Administrative
Expense Claim is filed and served not later than 180 days after the filing of
the Administrative Expense Claim, and, after notice and a hearing conducted
pursuant to the Bankruptcy Code and Rules, the Court allows such claim in a
lesser amount.
2.3 Treatment of Pre-Petition, Priority Tax Claims. The Trustee shall pay
in cash on the Initial Distribution Date the full amount of each Allowed
Unsecured Claim entitled to priority under Code Section 507(a)(8) from the
Disbursement Accounts either, at the option of the Trustee: (a) on the latest of
(i) the Effective Date; (ii) within 60 days after the date on which such Claim
becomes an Allowed Claim; or (iii) such other time as is agreed upon by the
holder of such Claim and the Trustee; or (b) through deferred cash payments over
a period to not exceed six (6) years after the date of assessment of such Claim,
of a value as of the date such Claim becomes an Allowed Claim or such other time
as is agreed upon by the holder of such Claim and the Trustee. If the Trustee
opts to make deferred cash payments, such payments shall be made in equal annual
installments of principal, plus simple interest accruing from the date such
Claim becomes an allowed Claim at 6% per annum. on the unpaid portion of the
Allowed Claim or such other rate as the Court may approve. The first such
payment shall be payable at the latest of (a) the Effective Date; (b) within 60
days after the date on which such Claim becomes an Allowed Claim; or (c) such
other time as is agreed upon by the holder of such Claim and the Trustee;
provided, however, that the Trustee shall have the right to prepay any such
Allowed Claim or any remaining balance of such Claim, in full or in part, at any
SWEPCO/Members Page 11
Second Amended and Restated Joint Plan of Reorganization
time on or after the Effective Date without premium or penalty. The foregoing
treatment is consistent with the requirements of Code Section 1129(a)(9)(C). In
no event shall SWECO or SWEPCO be liable for the payment of any Tax claim
allowed under Code Section 507(a)(8) whether such claims are payable in cash or
through deferred cash payments.
Article III: Classification of Claims and Interests.
Claims required to be classified under Code Section 1123(a)(1) and Member
Interests are classified as follows:
3.1 Class 1. All Other Priority Claims. All Allowed Unsecured Claims
entitled to priority under Code Section 507(a) (other than 507(a)(1) and (8))
shall be treated in Class 1. Class 1 is unimpaired.
3.2 Class 2. Allowed Secured Claim of RUS. Class 2 consists of the Allowed
Secured Claim of the RUS. Class 2 is impaired.
3.3 Class 3. Allowed Secured Claim of CoBank. Class 3 consists of the
Allowed Secured Claim of CoBank. Class 3 is impaired.
3.4 Class 4. Allowed Secured Claim of Hibernia. Class 4 consists of the
Allowed Secured Claim of Hibernia. Class 4 is impaired.
3.5 Class 5. Allowed Other Secured Claims. Class 5 consists of all Allowed
Secured Claims not otherwise classified above, if any. Each secured claim will
be treated as a separate class for purposes of voting and treatment under the
Plan. Class 5 is impaired.
3.6.1 Class 6(a). Allowed Convenience Claims. The Allowed Convenience
Claims consist of all Claims listed by the Debtor's schedules as being in an
amount of $20,000 or less.
3.6.2 Class 6(b). Allowed Unsecured Claims. Class 6(b) consists of all
Allowed Unsecured Claims, not otherwise classified, including but not limited to
Members' claims,1 deficiency claims and claims arising from the rejection of
executory contracts. Class 6(b) is impaired.
3.7 Class 7. Member Interests. Class 7 consists of the interests of the
Members in the Debtor. Class 7 is impaired.
- -------------------------
1 The Trustee or other parties may contend that a portion or all of
the Members' Allowed Unsecured Claims are subordinated to other
Allowed Unsecured Claims. If the subordination is established by
Final Order, some or all of the Members' Allowed Unsecured Claims
will be treated as subordinate to Allowed Unsecured Claims not
otherwise subject to subordination.
SWEPCO/Members Page 12
Second Amended and Restated Joint Plan of Reorganization
Article IV: Classes Impaired by the Plan.
Claimants in Class 1 are UNIMPAIRED under the Plan and, therefore, are not
being solicited to vote on the Plan pursuant to 11 U.S.C. ss. 1126(f). Claimants
and holders of Member Interests in Classes 2, 3, 4, 5, 6 and 7 are IMPAIRED
under the Plan and are being solicited to accept or reject the Plan.
The Proponents, however, specifically reserve the right to contest (1) the
impaired or unimpaired status of a class under the Plan; and (2) whether any
ballots cast by holders of claims or interests in of such class should be
allowed to be counted for purposes of confirmation of the Plan.
Article V: Treatment of Classified Claims.
5.1 Class 1. All Other Priority Claims. All Allowed Priority Claims
entitled to priority treatment under Code Section 507(a) (except Administrative
Expense Claims in ss. 2.1) shall be paid in cash on the Initial Distribution
Date.
5.2 Class 2. Allowed Secured Claim of the RUS. The claims of the RUS
include its contingent liability arising out of its guarantees of Cajun's
obligations arising from eight (8) promissory notes payable to First Interstate
Bank of Arizona, N.A., Trustee of Cooperative Utility Trust (Cajun Series)
("FIB"). FIB has filed proofs of claim totaling $982,648.00 constituting
non-priority, general unsecured claims (the "FIB Claims"). The RUS has made
payments to FIB pursuant to its guarantees of the FIB Claims and to the extent
that RUS has made payments pursuant to its guarantees, it is subrogated to the
FIB Claims. To the extent FIB has Claims which are not subrogated to RUS, unless
FIB and RUS agree otherwise, FIB will vote its unsubrogated Claim as a Unsecured
Claim in Class 6 and the amount of the RUS's Unsecured Claim will be reduced by
the amount of the unsubrogated FIB Claims. The Allowed Secured Claim of the RUS
shall be treated as follows:
(a) If the RUS Settlement is approved by separate order of the Court or as
part of the Confirmation Order, then in complete and full satisfaction of
the Allowed Secured Claim of the RUS, on the Initial Distribution Date,
the RUS will receive
(1) the Purchase Price less amounts necessary to pay all Allowed
Administrative Expense Claims, Allowed Ordinary Course
Administrative Expense Claims, Allowed Priority Tax Claims, Allowed
Other Priority Claims, the Allowed Secured Claim of Hibernia,
Allowed Other Secured Claims to the extent secured by the Acquired
Assets; and the Settlement Amount payable to the Class 6 Fund;
(2) all Excluded Assets (or the Net Proceeds thereof) not otherwise
subject to liens or interests securing Allowed Other Secured Claims;
and
(3) the RUS and the Committee of Certain Members have asserted
claims to Excess Funds. If a Final Order is entered in favor of the
Members, the funds, or a portion thereof, in accordance with the
terms of the Final Order will be disbursed to Members or to the
Members' constituents subject to the approval of the LPSC.
SWEPCO/Members Page 13
Second Amended and Restated Joint Plan of Reorganization
Alternatively, if a Final Order is entered in favor of the RUS, the
funds or a portion thereof, in accordance with the Final Order will
be disbursed to the RUS as part of its Allowed Secured Claim.
5.3 Class 3. Allowed Secured Claim of CoBank. CoBank filed a proof of
claim asserting a secured claim in the amount of $25,486,702.50 plus interest,
renewal fees, and expenses. In June 1983, pursuant to a Tax Benefit Transfer
Agreement, Cajun transferred federal income tax ownership of certain property to
the Clorox Company ("Clorox"). In July 1983, Cajun entered into a similar
transaction with Eastman Kodak Company ("Kodak"). These Tax Benefit Transfer
Agreements (the "TBT Agreements") require Cajun to issue and maintain for the
benefit of Clorox and Kodak, respectively, letters of credit in scheduled
amounts which were expected to be sufficient to reimburse Clorox and Kodak for
any losses of tax benefits caused by Cajun.
In connection with each TBT Agreement, Cajun and New Orleans Bank for
Cooperatives ("NOBC"), CoBank's predecessor, executed a Letter of Credit and
Reimbursement Agreement (collectively the "Letter of Credit Agreements") for
Cajun to reimburse CoBank if draws were made under the letter of credit issued
for the benefit of Clorox and Kodak. CoBank and its predecessor have twice
renewed the letter of credit. The amounts available as of November 1996 to be
drawn by Clorox and Kodak are $10,632,750.00 and $11,309,847.50, respectively
(the "LC Debt").
The LC Debt is purportedly secured by a Supplemental Mortgage, a
Subordinated Mortgage, Security Agreement and Financing Statements as amended
and supplemented from time to time, an Act of Collateral Pledge dated January
23, 1988 and certain statutory liens. It is believed that this claim of CoBank
is largely contingent and matures only if a disqualifying event occurs under the
TBT Agreements or if the letter of credit is not renewed prior to its
expiration.
In a proof of claim, filed September 27, 1995 with the Court, CoBank made
a Claim for certain loan obligations owed it by Cajun, which Claim is
represented by the outstanding principal balances on four separate promissory
notes made by Cajun to CoBank, which notes were guaranteed by RUS. These notes
(collectively the "Incorporated Indebtedness") were incorporated into the
indebtedness owed RUS by Cajun pursuant to a certain Debt Restructure Agreement,
dated May 31, 1990, between RUS and Cajun. No distribution under the Plan shall
be made to CoBank, on account of the Incorporated Indebtedness, but all such
distributions shall be made to RUS. In addition, RUS shall have the sole right
to vote the Claims represented by the Incorporated Indebtedness as part of its
Class 2(a)(1) Allowed Secured Claim.
Under the Plan, liability for the contingent claims of CoBank shall be
assumed by SWECO on the Effective Date as and to the extent provided in the
Asset Purchase Agreement, and SWECO will execute with CoBank new Letter of
Credit Agreements to further evidence the purchaser's assumption. SWECO will
seek to structure the Asset Purchase Agreement in such a way as to avoid a
disqualifying event occurring under the TBT Agreements. However, in the event
that the sale of Cajun's assets to SWECO pursuant to the acquisition or the
implementation of the acquisition or the action or structure of the purchaser on
the Effective Date causes the indemnity obligation of Cajun to Kodak and/or
Clorox to mature and a subsequent draw on a letter of credit, SWECO will assume
the reimbursement obligation of the Estate to CoBank arising solely as a result
of an act or omission by SWECO (net of the existing cash collateral held by
SWEPCO/Members Page 14
Second Amended and Restated Joint Plan of Reorganization
CoBank). If such indemnity obligation so matures, CoBank shall apply all cash
collateral it then holds against the reimbursement obligation, and SWECO shall
immediately pay the balance of the reimbursement obligation to CoBank, and SWECO
shall be entitled to Cajun's rights to the future retirement payments made by
CoBank to retire the Class E Stock from time to time, together with any CoBank
patronage dividends, etc. until such time as SWECO has been paid in full its
reimbursement obligation with interest. Following payment to SWECO of any
reimbursement obligation, all future retirement payments and patronage dividends
shall be paid by CoBank directly to the RUS.
If it is determined that a triggering event occurred such that Cajun's
indemnity obligation to CoBank matures and constitutes an Administrative Expense
Claim of the Estate, then CoBank shall apply all cash collateral it then holds
against the indemnity obligation, and the Estate shall immediately pay the
balance of the indemnity obligation to CoBank. The Estate shall then be entitled
to Cajun's rights in the future retirement payments made by CoBank to retire the
Class E Stock from time to time, together with future patronage dividends,
proceeds, etc., and SWECO shall not assume Cajun's indemnity obligation.
Subsequent to the Effective Date, if no disqualifying event has occurred
under the tax benefit transfer agreements on or prior to the Effective Date, the
contingent claims of CoBank shall continue to be secured by existing and future
CoBank Class E Stock, proceeds thereof and related collateral (including
patronage dividends, accumulated cash accounts, CoBank Class E Stock,
retirements and the proceeds thereof) ("CoBank Collateral") as more fully
described in the Pledge Agreement to be entered into between CoBank and the
owners and beneficial owners of such collateral, and CoBank's liens on CoBank
Collateral and its proceeds shall not be discharged or otherwise released or
extinguished by confirmation of the Plan, but shall be retained by CoBank
following the Effective Date. In addition, on the Effective Date, CoBank shall
be entitled to charge the existing cash collateral account it holds for all
unpaid letter of credit fees from the Petition Date through the Effective Date,
and SWECO shall pay all letter of credit fees thereafter. CoBank shall also be
entitled to charge the existing cash collateral account $250,000 for
reimbursement of a portion of its legal fees and expenses incurred since the
inception of the chapter 11 case. On the Effective Date, however, CoBank shall
be deemed to have released any other mortgage or lien on Cajun or reorganized
Cajun's assets securing CoBank's claims, except for the CoBank Collateral.
Accordingly, on and after the Effective Date, CoBank shall have no interest in
any other assets, including, but not limited to, the Acquired Assets and the
sales proceeds thereof.
In addition, on and after the Effective Date of the Plan, to the extent
that the sum of 75% of the face amount of the Class E Stock and the amount of
all funds accumulated in the cash account held by CoBank from time to time
(calculated quarterly) exceeds 110% of the then aggregate amount of the
indemnity obligation assumed by SWECO, the excess shall be paid by CoBank to the
RUS.
If, the RUS, the holder of the CoBank Class E Stock designated by the Plan
is not an "eligible borrower" of CoBank, then CoBank shall issue replacement
Participation Certificates with the only difference from the CoBank Class E
Stock being the right to vote. Nothing contained in the Plan is intended to
extinguish or reduce any rights of CoBank against RUS on any RUS guarantee, nor
any continuing obligations of RUS to make timely payments on such guarantees,
and such claims and obligations as between RUS and CoBank shall survive
confirmation of the Plan.
SWEPCO/Members Page 15
Second Amended and Restated Joint Plan of Reorganization
To the extent any inconsistencies exist between (a) ss.3.11 of the Asset
Purchase Agreement and/or any other provisions of the Asset Purchase Agreement
and (b) this ss.5.3, ss.5.3 of this Plan shall control the treatment of CoBank's
Allowed Secured Claim.
5.4 Class 4. Allowed Secured Claim of Hibernia. The Allowed Secured Claim
of Hibernia representing the Industrial Development bonds, secured by the
Debtor's current headquarters, building and land, shall, unless Hibernia Bank
agrees otherwise, be paid in full in cash totaling the amount of its Allowed
Secured Claim on the later of (a) the Effective Date or (b) if an objection to
such claim has been filed, within ten days of the date on which an order
allowing such Claim becomes a Final Order. Hibernia shall retain its rights,
liens and security interests until its Allowed Secured Claim is paid in full.
The contingencies contained in previous orders of the Court, upon the occurrence
of which Hibernia would be required to return the funds previously paid to it
are eliminated. Therefore, Hibernia will unconditionally retain the funds that
have been paid to it and its claim will be $900,000 (minus any amounts applied
to principal when Hibernia received the payment pursuant to the June 19, 1997
Order, and any future principal payments received) plus, as allowed, interest,
fees, expenses and premiums and other amounts to Hibernia pursuant to the terms
of the agreements governing these obligations.
5.5 Class 5. Allowed Other Secured Claims. Each holder of an Allowed Other
Secured Claim shall, at the Trustee's option: (a) be paid, on the Initial
Distribution Date, on account of its Allowed Secured Claim, cash totaling the
amount of such Allowed Secured Claim; (b) be paid, on account of its Allowed
Secured Claim, the Net Proceeds of the sale of any property which is subject to
the lien or interest securing said Allowed Claim, which sales shall be made in
accordance with Code Section 1129(a)(2)(A)(ii); or (c) receive the property
which is subject to the lien or interest securing said Allowed Claim in full
satisfaction of the Allowed Claim of such holder. In the event of option (b)
above, such amount shall be paid on the last to occur of (1) the Effective Date,
(2) within ten (10) days after the date on which an order allowing such Allowed
Other Secured Claim becomes a Final Order, or (3) within ten (10) days after
closing of a sale of the property which is subject to the liens securing said
Allowed Claim. In the event of option (c) above, the property which is subject
to the liens securing said Allowed Other Secured Claim shall be transferred on
the later of (1) the Effective Date, or (2) as soon as practicable after the
date on which an order allowing such Secured Claim becomes a Final Order. Any
such property transferred to holders of Allowed Other Secured Claims under this
paragraph shall be transferred either by abandonment of such property by the
Trustee under Code Section 554 or by transfer of such property "as-is,
where-is," without representation or warranty by Debtor or the Trustee, at the
Trustee's sole option and discretion.
5.6 Class 6(a) and 6(b). Allowed Unsecured Claims and Allowed Convenience
Claims. In full and complete satisfaction of all Allowed Convenience Claims and
Allowed Unsecured Claims, holders of such Claims will be paid a Pro Rata share
of the Class 6 Fund. If the RUS Settlement is approved by Final Order or as part
of the Confirmation Order, the RUS shall waive its right to distribution from
the Class 6 Fund on account of its Allowed Unsecured Claim, and the members of
the Committee of Certain Members shall waive their right to distribution on
account of their Allowed Unsecured Claims. If, after payment in full of Allowed
Unsecured Claims and Allowed Convenience Claims under the Plan (other than the
deficiency claim of the RUS), funds remain from the liquidation of assets and
from successful avoidance actions, the RUS, as the sole remaining holder of an
Allowed Unsecured Claim, will receive such remaining funds until its unsecured
claim is paid in full.
SWEPCO/Members Page 16
Second Amended and Restated Joint Plan of Reorganization
As a result of the Bankruptcy Court's Reasons for Decision entered on
February 11, 1999, no unsecured claims will be purchased or paid by SWEPCO or by
the RUS outside the Plan. The only consideration that unsecured claims will
receive is a pro rata share of the Class 6 Fund as set forth herein.
5.7 Class 7. Member Interests. The interests of the Members in the Debtor
shall be canceled as of the Effective Date.
Article VI: Means for Implementing Plan.
6.1 Consummation of the River Bend Settlement. The River Bend Settlement
shall be consummated pursuant to the Order and Judgment Approving Settlement by
and among Cajun Electric Power Cooperative, Inc., Entergy Gulf States, Inc.,
Entergy Corporation and the Rural Utilities Service of the Department of
Agriculture dated August 26, 1996 (the "Order"). The Order provides that the
River Bend Settlement may be consummated independent of any plan of
reorganization.
6.2 Sale of Acquired Assets to SWECO. On the Effective Date, SWECO shall
purchase the Acquired Assets and the Acquired Assets shall be transferred to
SWECO pursuant to the terms and conditions of the Asset Purchase Agreement, a
copy of which is attached hereto as Exhibit 1 and incorporated herein, for all
purposes. The Purchase Price shall be deposited in the Disbursement Accounts. On
the Effective Date, unless otherwise specifically provided in this Plan, the
Acquired Assets shall be transferred by the Trustee to SWECO free and clear of
all liens, claims and interests. The Trustee shall be deemed to have entered
into the Asset Purchase Agreement as of the date of the Confirmation Order.
6.3 Class 6 Fund. The Class 6 Fund shall be established and deposited in
one of the Disbursement Accounts for purposes of establishing a fund available
for Pro Rata distribution to Class 6. The amount of the Class 6 Fund shall be
the Settlement Amount of $20,240,000 plus all Net Proceeds from Avoidance
Actions.
6.4 Disbursement Accounts. On or prior to the Effective Date, the Trustee
shall set up one or more interest bearing accounts to be designated as the
Disbursement Accounts, which account or accounts, shall comply with Code Section
345 except as otherwise ordered by the Court. Except as otherwise provided in
the Plan, the Purchase Price and all Net Proceeds from the sale or other
disposition of Excluded Assets and Avoidance Actions shall be deposited in the
Disbursement Accounts with all valid liens and interests attaching to said Net
Proceeds.
6.5 Claims Objection Deadline. Each Claim as to which a proof of claim has
been filed prior to the Bar Date or that is listed as undisputed, liquidated and
non-contingent in the schedules filed by the Debtor shall be allowed without
order of the Court unless an objection thereto is filed and served in accordance
with Bankruptcy Rule 3007 no later than 180 days after the Confirmation Date or
180 days after such Claim is first filed, whichever is later.
SWEPCO/Members Page 17
Second Amended and Restated Joint Plan of Reorganization
6.6 Disputed or Undetermined Claims and Reserves Therefor.
(1) No payments or distributions shall be made with respect to all or
any portion of a Claim which does not constitute an Allowed Claim.
The Trustee shall reserve funds for the payment of those Claims
which are to receive distributions under the Plan and which, as of
the date of any distribution, do not constitute an Allowed Claim.
Such reserve shall be made by retaining an amount equal to the
distribution such claim would have received from such distribution
based on the lesser of (i) the amount of the Claim, or (ii) the
amount in which the Claim shall be estimated by the Court pursuant
to Code Section 502(c) for the purpose of allowance, which amount
shall be the maximum amount in which such Claim may ultimately
become an Allowed Claim.
(2) In order to pay any Administrative Expense Claim for federal income
Taxes that may be Allowed and payable under this Plan, the Trustee
shall reserve the amount of $20 million until the allowed
Administrative Expense Claim, if any, for the Estate's federal
income Tax(es) is paid in full (the "Income Tax Reserve Fund"). Upon
the establishment of the Income Tax Reserve Fund, the Trustee may
distribute the remainder of the Purchase Price, in accordance with
the provisions of this Plan and shall be absolved and released from
any personal liability for the Estate's federal income Taxes;
notwithstanding the foregoing, the Trustee shall be obligated under
this Plan to distribute to the United States of America through the
Internal Revenue Service (the "IRS" any amounts necessary from the
Income Tax Reserve Fund to satisfy any Allowed Administrative
Expense Claim for the Estate's federal income Taxes. In the event
the Allowed Administrative Expense Claim for the Estate's federal
income Taxes exceeds the Income Tax Reserve Fund, the governmental
entities, the RUS and the IRS, will resolve any issues regarding
disgorgement of funds between themselves, in accordance with the
terms of this paragraph. If the allowed Administrative Expense Claim
for the Estate's federal income Taxes is less than the Income Tax
Reserve Fund, then, after payment of the allowed Administrative
Expense Claim for federal income taxes in full, the remainder of the
Income Tax Reserve Fund shall be distributed in accordance with the
provisions of this Plan. In the event the Allowed Administrative
Expense Claim for the Estate's federal income Taxes exceeds the
Income Tax Reserve Fund, the RUS shall disgorge part of the funds
distributed to it pursuant to this Plan sufficient to pay any
remaining amounts due to the IRS in order to satisfy the allowed
Administrative Expense Claim for the Estate's federal income Taxes
in Full. In the event that this subsection 6.6(2) is complied with
and a $20 million reserve fund is established, then, in no event
shall the IRS be entitled to disgorgement of, nor shall the Trustee
be required to recover by disgorgement, any funds distributed to
creditors other than the RUS under this Plan in order to satisfy the
Allowed Administrative Expense Claim for the Estate's federal income
Taxes.
6.7 Implementation. Pursuant to Code Section 1142(b) and Bankruptcy Rule
7070, the Trustee shall execute or deliver any and all documents or instruments,
or to perform any other act necessary to implement or consummate this Plan. If
SWEPCO/Members Page 18
Second Amended and Restated Joint Plan of Reorganization
the Trustee refuses to comply with such direction, the Court may direct the
Trustee's compliance with the Plan, or direct the U.S. Trustee to appoint a new
trustee to implement and consummate this Plan.
Article VII: Executory Contracts.
7.1 Supply Contracts. With respect to Members Supply Contracts, Members
have the following options:
(a) Members who shall have agreed in writing by May 14, 1999, shall
execute new power supply agreements with SWECO substantially in the
form of Exhibit 2 or, alternatively, substantially in the form of
Louisiana Generating's consensual power supply agreement (excluding
Exhibits F and G to such agreement) filed March 18, 1998 which
agreement will supersede and replace such Member's Supply Contract;
(b) In the event a Member has not, on or before May 14, 1999, provided
SWEPCO with a written notice that it agrees to execute either power
supply agreement referenced in (a) above, then the Member's existing
Supply Contract will be rejected on the Effective Date;
(c) If a Member's Supply Contract is rejected per paragraph (b) above,
SWECO will provide power to the Member during a transition period
not to exceed sixty (60) months until the Member negotiates a power
supply agreement with another supplier. The power will be provided
on terms and conditions acceptable to SWECO and subject to
appropriate regulatory approval.
7.2 River Bend JOA. Cajun shall be deemed to have rejected the River Bend
JOA.
7.3 Big Cajun II, Unit 3 JOPOA. The Big Cajun II, Unit 3 JOPOA will be
assumed by the Trustee and assigned to SWECO on the Effective Date.
7.4 All Other Executory Contracts. On the Effective Date, the Trustee
shall be deemed to reject all other executory contracts of the Debtor, except as
may expressly be otherwise set forth in the Asset Purchase Agreement, and for
executory contracts identified on a list of assumed executory contracts which
has been filed by SWEPCO with the Court. The contracts so identified shall be
deemed assumed as of the Effective Date. All payments necessary to cure any
defaults on contracts to be assumed and assigned to SWECO, shall be paid as
Administrative Expense Claims under Section 2.1 on the Initial Distribution
Date.
Article VIII: Miscellaneous Provisions.
8.1 Voting. All of the classes (except Class 1) are eligible to vote on
the Plan.
8.2 Cramdown. In the event any class of creditors that is impaired does
not accept the Plan as provided in Code Section 1129(a)(8)(A), the Proponents
request that the Court confirm the Plan pursuant to Code Section 1129(b).
SWEPCO/Members Page 19
Second Amended and Restated Joint Plan of Reorganization
8.3 Modifications of the Plan. The Proponents may jointly modify the Plan
in accordance with Code Section 1127.
8.4 U.S. Trustee Fees. All fees payable by the Debtor pursuant to 28
U.S.C.ss. 1930 have been paid or shall be paid as of the Effective Date by the
Trustee.
8.5 Release. In consideration for agreements made by each of the parties
set forth herein in connection with the terms and conditions of the Plan, the
Trustee shall, on the Effective Date, release and discharge all direct or
derivative rights, claims and causes of action which constitute property of the
Estate, including but not limited to claims under Code Sections 506, 510, 542,
543, 544, 545, 546, 547, 548, 549, 550, 551 and 553, and any state laws
corresponding thereto, arising prior to the Effective Date, against (i) SWEPCO,
SWECO, Central and South West Corporation, and their respective current and
former Representatives, and, (ii) if the RUS Settlement is approved by Final
Order or as part of the Confirmation Order, the RUS and its respective current
and former Representatives.
8.6 Setoffs. Subject to the limitations provided in Code Section 553, all
parties retain their rights of setoff or recoupment pursuant to applicable law.
Neither the failure to set off the Estate's claim nor the allowance of any Claim
hereunder shall constitute a waiver or release by the Estate of any such claim
that the Estate may have against the holder, nor shall it constitute a bar by
res judicata and/or collateral estoppel to the assertions of Claims, either
prepetition or postpetition, by the Estate as the case may be.
8.7 Surrender of Instruments and Release of Liens. Each claimant who is to
receive distributions under the Plan in satisfaction of a Claim shall not
receive such distributions until such claimant executes a release of any lien(s)
(in recordable form if appropriate) and delivers the same to the Trustee. Any
such claimant that fails to surrender such instrument or satisfactorily explain
its non-availability or to execute such release of liens shall be deemed to have
no further Claim and shall not participate in any distribution under the Plan.
8.8 Conditions to Effectiveness. This Plan shall not become effective and
the Effective Date will not occur until the following conditions have been met
or shall have been waived in writing by SWEPCO:
(a) All conditions specified in Article VI: "Conditions to the
Acquisition" in the Asset Purchase Agreement;
(b) Judgment(s) that are Final Order(s) shall have been entered
determining that GSU has no liability to Burlington Northern and
Santa Fe Railway Co., American Commercial Marine Service Company,
Triton Coal Company or Western Fuels Association relating to any
obligations, contractual or otherwise, owed or contracted for by
Cajun to or with such entities;
(c) No order or judgment shall have been entered in favor of any
entity determining that GSU has liability to such entity relating
to any obligations, contractual or otherwise, owed or contracted
for by Cajun to or with such entity; and
SWEPCO/Members Page 20
Second Amended and Restated Joint Plan of Reorganization
(d) Court approval in the confirmation Order or by separate Order of
the RUS Settlement. Notwithstanding the first above sentence to
Section 8.8, this condition (d) may not be waived solely by
SWEPCO. without the written consent of the RUS.
8.9 Fees and Expenses. Pursuant to Code Section I 123(a)(4), fees for
services, costs and expenses incurred in connection with Cajun's bankruptcy case
or in connection with the Plan and incident to Cajun's bankruptcy case,
including, but not limited to the reasonable fees, costs and expenses of secured
creditors, parties to unexpired leases or executory contracts to be assumed, and
indenture trustees shall be subject to approval of the Court.
Article IX: Reservation of Rights and Property.
9.1 Causes of Action. Except for claims expressly settled or released
pursuant to this Plan, and claims set forth in the following sentence, the
Trustee shall retain all causes of action it may have under state or federal law
including the United States Bankruptcy Code, and the Trustee in his discretion
shall be authorized to prosecute (or not prosecute) any such actions as fully
and completely as if the same were being prosecuted by a trustee in bankruptcy.
The Trustee shall be provided with a litigation fund to pay fees and expenses in
pursuing such causes of action in the amount of $150,000 from the purchase
price, and such amount shall be reserved as an anticipated administrative
expense. Any reasonable fees and expenses incurred in pursuing avoidance actions
that exceed such $150,000, up to a maximum of $500,000, and that are allowed by
the Bankruptcy Court, may be paid as administrative expenses from the proceeds
of the avoidance actions and from the cash in the estate, other than the
purchase price cash. All claims and causes of action of the estate of any nature
or kind, known or unknown, asserted or unasserted which arise from or relate to
the assets purchased by and conveyed to SWECO, shall on the Effective Date be
deemed assigned and conveyed to SWECO.
9.2 Vesting of Property in Trustee and SWECO. On the Effective Date, all
of the property of the Estate that is not sold to SWECO, if any, or otherwise
liquidated shall be vested in the Trustee, free and clear of all Claims and
interests of creditors except as provided for in the Plan, and the Trustee at
his election shall be entitled to liquidate such assets without further order of
the Court pursuant to Code Section 114 1 (b) or transfer them to any lienholder
in full satisfaction of the secured claim on such assets. Upon the completion of
the liquidation of the assets or re-vesting in the Trustee, if any, the Trustee
shall cause and implement the dissolution of Cajun under Louisiana law. All
assets conveyed to SWECO (i.e. the Acquired Assets) shall be conveyed free and
clear of all liens, claims, interests and encumbrances, whether lien claims or
otherwise, unless otherwise specifically authorized by this Plan. The conveyance
to SWECO shall further be free and clear of any claims of successorship
liability, and SWECO shall have no successor liability as a result of its
purchase of the Acquired Assets, or as a result of any provisions of this Plan
or of the Asset Purchase Agreement.
Article X. Required Approvals.
The effectiveness of the Plan and the obligations of the Proponents
hereunder are subject to regulatory approvals by Final Order and all other
conditions as set forth in the Asset Purchase Agreement. The boards of directors
of the Proponents reserve the right to approve all final closing documents.
SWEPCO/Members Page 21
Second Amended and Restated Joint Plan of Reorganization
Article XI. Retention of Jurisdiction.
After confirmation of the Plan, the Court shall retain Jurisdiction for the
following purposes:
(1) For the classification of Claims and for the re-examination of any Claims
that have been allowed for purposes of voting, and the determination of
such objections as may be filed to Claims. The failure to object to or to
examine any Claim for the purpose of voting shall not be deemed to be a
waiver of the right to object to, or re-examine the Claim in whole or in
part;
(2) For determination of all questions and disputes regarding title to the
assets of the estate, determination of all causes of action,
controversies, disputes, or conflicts, whether or not subject to action
pending as of the date the Confirmation Order is entered, between the
Trustee and any other party, including but not limited to, any rights of
the Trustee to prosecute Avoidance Actions, and to recover money or assets
pursuant to the provisions of the Bankruptcy Code;
(3) For the correction of any defect, the curing of any omission, or the
reconciliation of any inconsistency in this Plan or the Confirmation Order
as may be necessary to carry out the purposes and intent of this Plan;
(4) To consider any matters brought before the Court by an interested party
necessary to carry out the terms, conditions and intent of this Plan;
(5) For the modification of this Plan after confirmation pursuant to the
Bankruptcy Rules and the Bankruptcy Code;
(6) To enforce and interpret the terms and conditions of this Plan;
(7) To enter any order, including injunctions, necessary to enforce the title,
rights and powers of the Debtor and to impose such limitations,
restrictions, terms and conditions of such title, rights, and powers as
this Court may deem necessary;
(8) To determine whether a default has occurred under the Plan or the Asset
Purchase Agreement, and make such orders as the Court deems necessary to
enforce the provisions of the Plan or the Asset Purchase Agreement; and
(9) To enter an order concluding and terminating this case.
Respectfully submitted on this 19th day of April, 1999.
COMMITTEE OF CERTAIN MEMBERS OF CAJUN
ELECTRIC POWER COOPERATIVE, INC.
By: /s/ John M. Sharp
John M. Sharp, One of its Counsel
Melanie Rovner Cohen
Benjamin D. Schwartz
Altheimer & Gray
10 South Wacker Drive, Suite 4000
Chicago, Illinois 60606-7482
312-715-4000
John M. Sharp (Bar No. 19149)
A Professional Law Corporation
14481 Old Hammond Highway, Suite 2
Baton Rouge, LA 70816
504-273-8510
SOUTHWESTERN ELECTRIC POWER
COMPANY, INC.
By: /s/ Bobby S. Gilliam
Bobby S. Gilliam, One of its Counsel
Bobby S. Gilliam (Bar No. 6227)
Wilkinson, Carmody & Gilliam
1700 Beck Building
Shreveport, La 71166
318-221-4196
Henry J. Kaim
Edward L. Ripley
Patricia B. Tomasco
Sheinfeld Maley & Kay, P.C.
100 1 Fannin, Suite 3700
Houston, TX 77002
713-658-8881 WASHINGTON-ST. TAMMANY ELECTRIC
COOPERATIVE, INC.
By: /s/ Charles M. Hughes, Jr.
Charles M. Hughes, Jr., One of its
Counsel
Charles M. Hughes, Jr.
Talley, Anthony, Hughes & Knight
4565 LaSalle Street
Suite 300 Acadian Bank Building
Mandeville, Louisiana 70448
504-624-5010