UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF VIRGINIA
Richmond Division
)
In re: ) Chapter 11 Cases
)
HEILIG-MEYERS COMPANY, et al., ) Case Nos. 00-34533
)
)
Debtors. ) Jointly Administered
)
JOINT PLAN OF REORGANIZATION
PROPOSED BY HEILIG-MEYERS COMPANY, ET AL., AND
THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS
---------------------------------------------
- ---------------------------------------
Bruce H. Matson (Va. Bar No. 22874) Michael S. Stamer (admitted pro hac vice)
Katherine M. Mueller (Va. Bar No. 44302) Shuba Satyaprasad (admitted pro hac vice)
LECLAIR RYAN, a professional corporation AKIN GUMP STRAUSS HAUER & FELD LLP
707 East Main Street 590 Madison Avenue
11th Floor New York, New York 10022
Richmond, Virginia 23219 (212) 872-1000
(804) 783-2003
- and -
Counsel to Debtors
Robert S. Strauss Building
AKIN GUMP STRAUSS HAUER & FELD LLP
1333 New Hampshire Avenue, N.W.
Washington, D.C. 20036
(202) 887-4000
Counsel to the Official Committee Of Unsecured Creditors
TABLE OF CONTENTS
ARTICLE I DEFINITIONS, RULES OF INTERPRETATION, AND COMPUTATION OF TIME...........................................4
1.1 "503 Deadline"..............................................................................4
1.2 "7.40% Notes"...............................................................................4
1.3 "7.40% Notes Indenture".....................................................................4
1.4 "7.60% Notes"...............................................................................4
1.5 "7.60% Notes Indenture".....................................................................4
1.6 "7.88% Notes"...............................................................................4
1.7 "7.88% Notes Indenture".....................................................................4
1.8 "Administrative Claims Bar Date"............................................................5
1.9 "Administrative Bar Date Order".............................................................5
1.10 "Administrative Claim"......................................................................5
1.11 "Administrative Claims Reserve".............................................................5
1.12 "Affiliates"................................................................................5
1.13 "Allowed Claim".............................................................................5
1.14 "Available Cash"............................................................................5
1.15 "Available New RoomStore Common Stock"......................................................6
1.16 "Ballot"....................................................................................6
1.17 "Bank Group Secured Notes"..................................................................6
1.18 "Bankruptcy Code"...........................................................................6
1.19 "Bankruptcy Court"..........................................................................6
1.20 "Bankruptcy Rules"..........................................................................6
1.21 "Bar Date"..................................................................................6
1.22 "Bar Date Order"............................................................................6
1.23 "Beneficiaries".............................................................................6
1.24 "Bondholder Secured Claims".................................................................6
1.25 "Business Day"..............................................................................6
1.26 "Cash"......................................................................................6
1.27 "Certificate"...............................................................................6
1.28 "Chapter 11 Case(s)"........................................................................7
1.29 "Claim".....................................................................................7
1.30 "Claimholder"...............................................................................7
1.31 "Claims Agent"..............................................................................7
1.32 "Claims Objection Deadline".................................................................7
1.33 "Class".....................................................................................7
1.34 "Class 5(b) Reallocation Amount"............................................................7
1.35 "Class 5(b) Reallocation Amount Formula"....................................................7
1.36 "Class 5(b) Trust Allocation"...............................................................7
1.37 "Class 5(c) Litigation Recovery Reallocation"...............................................7
1.38 "Class 5(c) Reallocation Amount"............................................................7
1.39 "Class 5(c) Reallocation Amount Formula"....................................................7
1.40 "Class 5(c) Trust Allocation"...............................................................7
1.41 "Confirmation Date".........................................................................7
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1.42 "Confirmation Hearing"......................................................................8
1.43 "Confirmation Order"........................................................................8
1.44 "Creditors' Committee"......................................................................8
1.45 "Cure"......................................................................................8
1.46 "Cure Claim"................................................................................8
1.47 "Cure Claim Submission Deadline"............................................................8
1.48 "Cure Claim Objection Deadline".............................................................8
1.49 "Debtor Subsidiaries".......................................................................8
1.50 "Debtors"...................................................................................8
1.51 "Debtors-in-Possession".....................................................................8
1.52 "Disallowed Claim"..........................................................................8
1.53 "Disclosure Statement"......................................................................8
1.54 "Disputed Administrative Claim".............................................................9
1.55 "Disputed Claim"............................................................................9
1.56 "Disputed Funded Debt Unsecured Claim"......................................................9
1.57 "Disputed Heilig Unsecured Claim"...........................................................9
1.58 "Disputed Other Priority Claim".............................................................9
1.59 "Disputed Other Secured Claim"..............................................................9
1.60 "Disputed RoomStore Unsecured Claim"........................................................9
1.61 "Distributions".............................................................................9
1.62 "Effective Date"............................................................................9
1.63 "Entity"....................................................................................9
1.64 "Estates"...................................................................................9
1.65 "Estate Action".............................................................................9
1.66 "Exchange Act".............................................................................10
1.67 "Exhibit"..................................................................................10
1.68 "Existing Securities"......................................................................10
1.69 "Final Order"..............................................................................10
1.70 "Funded Debt Unsecured Claim"..............................................................10
1.71 "Funded Debt Unsecured Claims Reserve".....................................................10
1.72 "Furniture Company"........................................................................10
1.73 "Heilig-Meyers"............................................................................10
1.74 "Heilig Unsecured Claim"...................................................................10
1.75 "Heilig Unsecured Claims Reserve"..........................................................10
1.76 "Impaired".................................................................................10
1.77 "Indentures"...............................................................................11
1.78 "Indenture Trustee"........................................................................11
1.79 "Indenture Trustee Fees"...................................................................11
1.80 "Initial Distribution Date"................................................................11
1.81 "Intercompany Claim".......................................................................11
1.82 "Interest".................................................................................11
1.83 "Interestholder"...........................................................................11
1.84 "Lender Avoidance Action"..................................................................11
1.85 "Liquidation Trust"........................................................................11
1.86 "Liquidation Trust Committee"..............................................................11
1.87 "Liquidation Trustee"......................................................................11
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1.88 "MacSaver".................................................................................12
1.89 "MacSaver Unsecured Claim".................................................................12
1.90 "New RoomStore Common Stock"...............................................................12
1.91 "New Credit Facility"......................................................................12
1.92 "Old Common Stock".........................................................................12
1.93 "Other Priority Claim".....................................................................12
1.94 "Other Priority Claims Reserve"............................................................12
1.95 "Other Secured Claim"......................................................................12
1.96 "Other Secured Claim Reserve"..............................................................12
1.97 "Periodic Distribution Date"...............................................................12
1.98 "Person"...................................................................................12
1.99 "Petition Date"............................................................................13
1.100 "Plan".....................................................................................13
1.101 "Plan Schedules"...........................................................................13
1.102 "Plan Supplement"..........................................................................13
1.103 "Plan Supplement Filing Date"..............................................................13
1.104 "Post-Petition Interest"...................................................................13
1.105 "Pre-Petition Lenders".....................................................................13
1.106 "Priority Tax Claim".......................................................................13
1.107 "Pro Rata".................................................................................13
1.108 "Professional".............................................................................13
1.109 "Professional Claim".......................................................................13
1.110 "Professional Fee Order"...................................................................13
1.111 "Prudential Notes".........................................................................14
1.112 "Prudential Notes Agreement"...............................................................14
1.113 "Prudential Notes Secured Claim"...........................................................14
1.114 "Quarterly Distribution Date"..............................................................14
1.115 "Record Date"..............................................................................14
1.116 "Reinstated" or "Reinstatement"............................................................14
1.117 "Released Parties".........................................................................14
1.118 "Released Directors and Officers" means, collectively, [o].................................14
1.119 "Reorganized RoomStore"....................................................................14
1.120 "Reserve"..................................................................................14
1.121 "Rhodes"...................................................................................15
1.122 "RoomStore"................................................................................15
1.123 "RoomStore Assets".........................................................................15
1.124 "RoomStore Unsecured Claim"................................................................15
1.125 "RoomStore Unsecured Claims Reserve".......................................................15
1.126 "SEC"......................................................................................15
1.127 "Scheduled"................................................................................15
1.128 "Schedules"................................................................................15
1.129 "Secured Claim"............................................................................15
1.130 "Security".................................................................................15
1.131 "Securities Act"...........................................................................15
1.132 "Solicitation Procedures Order"............................................................15
1.133 "Subordinated Debt Securities Claim".......................................................16
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1.134 "Subordinated Equity Securities Claim".....................................................16
1.135 "Synthetic Lease(s)".......................................................................16
1.136 "Synthetic Lease Secured Claim"............................................................16
1.137 "Trust Agreement"..........................................................................16
1.138 "Trust Assets".............................................................................16
1.139 "Trust Interest"...........................................................................17
1.140 "Trustee Professional(s)"..................................................................17
1.141 "Unimpaired"...............................................................................17
1.142 "Unsecured Bondholder".....................................................................17
1.143 "Unsecured Bondholder Claim"...............................................................17
1.144 "Unsecured Claim"..........................................................................17
1.145 "Unsecured Notes"..........................................................................17
1.146 "Voting Deadline"..........................................................................17
1.147 "Wachovia Credit Agreement"................................................................17
1.148 "Wachovia Secured Claim"...................................................................17
ARTICLE II ADMINISTRATIVE CLAIMS AND PRIORITY TAX CLAIMS.........................................................19
2.1 Administrative Claims......................................................................19
2.2 Priority Tax Claims........................................................................19
ARTICLE III CLASSIFICATION OF CLAIMS AND INTERESTS...............................................................21
3.1 Introduction...............................................................................21
ARTICLE IV PROVISIONS FOR TREATMENT OF CLAIMS AND INTERESTS......................................................22
4.1 Class 1 (Other Priority Claims)............................................................22
4.2 Class 2(a) (Wachovia Secured Claim)........................................................22
4.3 Class 2(b) (Prudential Notes Secured Claim)................................................23
4.4 Class 2(c) (Synthetic Lease Secured Claims)................................................23
4.5 Class 3 (Bondholder Secured Claim).........................................................23
4.6 Class 4 (Other Secured Claims).............................................................23
4.7 Class 5(a) (RoomStore Unsecured Claims)....................................................24
4.8 Class 5(b) (Funded Debt Unsecured Claims)..................................................25
4.9 Class 5(c) (Heilig Unsecured Claims).......................................................26
4.10 Class 6(a) (Subordinated Debt Securities Claims)...........................................26
4.11 Class 6(b) (Subordinated Equity Securities Claims).........................................27
4.12 Class 7 (Old Common Stock).................................................................27
4.13 Reservation of Rights......................................................................27
4.14 Estimation of Claims.......................................................................27
ARTICLE V ACCEPTANCE OR REJECTION OF THE PLAN; EFFECT OF REJECTION BY ONE OR MORE IMPAIRED CLASSES OF
CLAIMS OR INTERESTS........................................................................28
5.1 Impaired Classes of Claims and Interests Entitled to Vote..................................28
5.2 Presumed Acceptances by Unimpaired Classes.................................................28
5.3 Classes Deemed to Reject Plan..............................................................28
5.4 Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code............................28
5.5 Confirmability and Severability of a Plan..................................................28
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ARTICLE VI MEANS FOR IMPLEMENTATION OF THE PLAN..................................................................29
6.1 Substantive Consolidation..................................................................29
6.2 Debtor Intercompany Claims.................................................................29
6.3 Compromise and Settlement..................................................................29
6.4 Cancellation of Existing Securities and Agreements.........................................29
6.5 Liquidation and Dissolution................................................................30
6.6 New RoomStore Common Stock.................................................................31
6.7 The Liquidation Trust; Organizational Matters..............................................31
6.8 Intended Tax Treatment of the Liquidation Trust............................................32
6.9 The Liquidation Trustee....................................................................32
6.10 The Liquidation Trust Committee............................................................33
6.11 Conversion of New RoomStore Common Stock into Cash or Other Marketable Securities..........34
6.12 Reorganized RoomStore; Organizational Matters..............................................35
6.13 Reorganized RoomStore: Directors and Officers..............................................35
6.14 Reorganized RoomStore: Issuance of New Securities..........................................36
6.15 Reorganized RoomStore: Post-Effective Date Financing.......................................37
6.16 Fractional Shares..........................................................................37
6.17 Funding of the Liquidation Trust...........................................................37
ARTICLE VII UNEXPIRED LEASES AND EXECUTORY CONTRACTS.............................................................39
7.1 Assumption/Rejection of Contracts and Leases...............................................39
7.2 Payments Related to Assumption of Executory Contracts and Unexpired Leases.................39
7.3 Rejection Damages Bar Date.................................................................39
ARTICLE VIII PROVISIONS GOVERNING DISTRIBUTIONS..................................................................41
8.1 Time of Distributions......................................................................41
8.2 No Interest on Claims......................................................................41
8.3 Liquidation Trustee........................................................................41
8.4 Surrender of Securities or Instruments.....................................................41
8.5 Distribution Instructions..................................................................42
8.6 Services of Indenture Trustee..............................................................42
8.7 Record Date for Distributions to Holders of Claims.........................................42
8.8 Claims Administration Responsibility.......................................................42
8.9 Delivery of Distributions..................................................................42
8.10 Procedures for Treating and Resolving Disputed and Contingent Claims.......................43
8.11 Minimum Distributions......................................................................44
8.12 Lost, Stolen, Mutilated or Destroyed Instrument or Security................................44
ARTICLE IX ALLOWANCE AND PAYMENT OF CERTAIN ADMINISTRATIVE CLAIMS................................................45
9.1 Professional Claims........................................................................45
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9.2 Substantial Contribution Compensation and Expenses Bar Date................................45
9.3 Other Administrative Claims................................................................45
ARTICLE X EFFECT OF THE PLAN ON CLAIMS AND INTERESTS.............................................................46
10.1 Vesting of Assets..........................................................................46
10.2 Discharge of the Liquidation Trust and RoomStore...........................................46
10.3 Compromises and Settlements................................................................46
10.4 Release of Certain Parties.................................................................46
10.5 Setoffs....................................................................................47
10.6 Exculpation and Limitation of Liability....................................................47
10.7 Injunction.................................................................................47
10.8 Release by Holders of Claims or Interests..................................................47
10.9 Release by Debtors.........................................................................48
10.10 Release of Directors and Officers..........................................................48
ARTICLE XI CONDITIONS PRECEDENT..................................................................................49
11.1 Conditions to Confirmation.................................................................49
11.2 Conditions to Consummation.................................................................49
11.3 Waiver of Conditions to Confirmation or Consummation.......................................51
ARTICLE XII RETENTION OF JURISDICTION............................................................................52
ARTICLE XIII MISCELLANEOUS PROVISIONS............................................................................54
13.1 Binding Effect.............................................................................54
13.2 Modification and Amendments................................................................54
13.3 Allocation of Plan Distributions Between Principal and Interest............................54
13.4 The Creditors' Committee...................................................................54
13.5 Revocation, Withdrawal, or Non-Consummation................................................54
13.6 Term of Injunctions or Stays...............................................................55
13.7 Governing Law..............................................................................55
13.8 No Waiver or Estoppel......................................................................56
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INTRODUCTION
Heilig-Meyers Company, its Debtor Subsidiaries, and the Creditors'
Committee jointly propose this joint plan of reorganization pursuant to the
provisions of Chapter 11 of the Bankruptcy Code. Exhibit A attached hereto lists
all of the Debtor entities. Capitalized terms used in this Introduction and the
remainder of the Plan have the meanings ascribed to them in Article I of the
Plan. This Introduction and overview of the Plan provided here is qualified in
all respects by the specific provisions of the Plan itself.
For a discussion of the Debtors' history, businesses, properties, and
future business plans, and a summary and analysis of the Plan and certain
related matters, Claimholders and Interestholders should consult the Disclosure
Statement to which the Plan is attached. ALL CLAIMHOLDERS ARE ENCOURAGED TO
CAREFULLY READ THE DISCLOSURE STATEMENT AND THE PLAN BEFORE VOTING TO ACCEPT OR
REJECT THE PLAN. NO SOLICITATION MATERIALS, OTHER THAN THE DISCLOSURE STATEMENT
AND RELATED MATERIALS TRANSMITTED HEREWITH AND APPROVED BY THE BANKRUPTCY COURT,
HAVE BEEN AUTHORIZED BY THE BANKRUPTCY COURT FOR USE IN SOLICITING ACCEPTANCE OR
REJECTION OF THE PLAN.
The Plan contemplates that only one of the Debtors, HMY Roomstore, Inc.
(defined under Section 1.22 as "RoomStore" and, on and after the Effective Date,
defined in Section 1.119 as "Reorganized RoomStore"), will emerge as a new,
reorganized business enterprise after consummation of the Plan. On the Effective
Date, the Debtors' assets and liabilities will be substantively consolidated and
all assets held by RoomStore and the other Debtors necessary to the operation of
the RoomStore business will be transferred to Reorganized RoomStore. All other
assets of the Debtors will be transferred to a Liquidation Trust to be converted
to Cash over time for distribution to the beneficiaries of the Liquidation
Trust. Among the Estate assets to be transferred to the Liquidation Trust, the
Plan vests the Liquidation Trust with all Estate Actions, including the Estate
Action against the Pre-Petition Lenders being asserted by the Debtors in the
Lender Avoidance Action.
On the Effective Date, each of the Debtors, other than RoomStore, will
be dissolved, all of the shares of capital stock of the Debtors will be
cancelled, released and extinguished, and the holders of Old Common Stock
Interests in Heilig-Meyers will not receive any Distributions under the Plan.
On the Effective Date, Reorganized RoomStore will issue 1,000 shares of
its common stock (defined under Section 1.90 as the "New RoomStore Common
Stock"), to the Liquidation Trust. Such shares of New RoomStore Common Stock
will represent 100% of the shares of the New RoomStore Common Stock issued and
outstanding on the Effective Date.
The shares of New RoomStore Common Stock issued to the Liquidation
Trust will be held by the Liquidation Trust for the benefit of holders of
Allowed Unsecured Claims under the Plan. Unless the Liquidation Trust Committee
contemplated by the Trust Agreement directs the Liquidation Trustee to convert
the New RoomStore Common Stock to Cash or marketable securities and to
distribute the proceeds thereof or any such marketable securities to such
holders, it is anticipated that, after the payment of all Allowed Claims that
are senior to the Allowed Unsecured Claims, the Liquidation Trust shall
distribute: (i) approximately .008065% of the shares of New RoomStore Common
Stock for every $10,000 of RoomStore Unsecured Claims to the RoomStore Unsecured
Claims Reserve on behalf of holders of Allowed RoomStore Unsecured Claims, which
shall be distributed as set forth in the Plan; and (ii) the Available New
RoomStore Common Stock along with any Available Cash and other properties that
may remain in the Liquidation Trust to the Heilig Unsecured Claims Reserve and
Funded Debt Unsecured Claims Reserve on behalf of holders of Funded Debt
Unsecured Claims and Heilig Unsecured Claims, respectively, which shall be
distributed as set forth in the Plan (subject to adjustment to the extent
additional cash or notes are required to be paid or issued to fully satisfy the
Wachovia Secured Claims, Prudential Notes Secured Claims, or Synthetic Lease
Secured Claims).
The Plan provides for Cash satisfaction in full, except to the extent
otherwise agreed, of:
(a) Allowed Administrative Claims on, or as soon thereafter as is
reasonably practicable, the later of (i) the Effective Date and (ii)
the first Periodic Distribution Date occurring after the later of (x)
the date a Disputed Administrative Claim becomes an Allowed
Administrative Claim or (y) the date a Disputed Administrative Claim
becomes payable pursuant to an agreement between the Liquidation
Trustee and the holder of such Disputed Administrative Claim;
(b) Allowed Priority Tax Claims through (i) equal Cash payments made on
the last Business Day of every three month period following the
Effective Date, over a period not exceeding six years after the
assessment of the tax on which such Claim is based, totaling the
principal amount of such Claim plus simple interest on any outstanding
balance from the Effective Date calculated at the interest rate
available on 90 day United States Treasuries on the Effective Date,
(ii) such other treatment agreed to by the Allowed Priority Tax
Claimholder and the Liquidation Trustee, or (iii) payment in full in
Cash;
(c) Allowed Other Priority Claims on the later of (i) the Effective
Date and (ii) the first Periodic Distribution Date occurring after the
later of (x) the date a Disputed Other Priority Claim becomes an
Allowed Other Priority Claim or (y) the date a Disputed Other Priority
Claim becomes payable pursuant to any agreement between the Liquidation
Trustee and the holder of such Other Priority Claim; and
(d) Allowed Other Secured Claims on the later of (i) the Effective Date
and (ii) first Periodic Distribution Date occurring after the later of
(x) the date a Disputed Other Secured Claim becomes an Allowed Other
Secured Claim or (y) the date a Disputed Other Secured Claim becomes
payable pursuant to any agreement between the Liquidation Trustee and
the holder of such Other Secured Claim.
On or before the Effective Date, the holders of the Allowed Wachovia
Secured Claim, the Allowed Prudential Notes Secured Claim, and the Allowed
Synthetic Lease Secured Claim shall have received Cash equal to the amount of
such Allowed Claims and, to the extent the holders of such Allowed Claims shall
not have received Cash equal to the total amount of such Allowed Claims, such
2
holders shall receive the Bank Group Secured Notes in the amount of their
Allowed Claims, less any cash received on account of such Allowed Claims.
Holders of Allowed Bondholder Secured Claims, if any, will receive in full
satisfaction of such Allowed Claims an equal and ratable distribution of the
proceeds received by the Pre-Petition Lenders on account of their Allowed Claims
in Classes 2(a), 2(b) and 2(c). Holders of Subordinated Debt Securities Claims,
Subordinated Equity Securities Claims, and Interests will not receive any
distributions under the Plan.
Subject to the restrictions on modifications set forth in Bankruptcy
Code Section 1127, Bankruptcy Rule 3019, and in this Plan, the Debtors and the
Creditors' Committee each reserve their right to alter, amend or modify this
Plan one or more times, before the Plan's substantial consummation. Either of
the Debtors or the Creditors' Committee may at any time, with or without cause,
withdraw as a proponent of this Plan and such withdrawal by either the Debtors
or the Creditors' Committee shall constitute a revocation and withdrawal of the
Plan by both the Debtors and the Creditors' Committee.
3
ARTICLE I
DEFINITIONS, RULES OF INTERPRETATION,
AND COMPUTATION OF TIME
A. Scope of Definitions
For purposes of this Plan, except as expressly provided or unless the
context otherwise requires, all capitalized terms not otherwise defined shall
have the meanings ascribed to them in this Article I of this Plan. Any term used
in this Plan that is not defined herein, but is defined in the Bankruptcy Code
or the Bankruptcy Rules, shall have the meaning ascribed to that term in the
Bankruptcy Code or the Bankruptcy Rules. Whenever it appears appropriate from
the context, each term stated in the singular or the plural includes the
singular and the plural, and each pronoun stated in the masculine, feminine or
neuter includes the masculine, feminine and neuter.
B. Definitions
1.1 "503 Deadline" shall have the meaning ascribed to it in Section 9.2
hereof.
1.2 "7.40% Notes" means the 7.40% Notes due February 15, 2002 in the
aggregate principal amount of $100 million, issued by MacSaver pursuant to the
7.40% Notes Indenture and guaranteed by Heilig-Meyers.
1.3 "7.40% Notes Indenture" means that certain indenture dated as of
August 1, 1996, as amended, supplemented or otherwise modified prior to the
Petition Date, by and between MacSaver and First Union National Bank, f/k/a
First Union National Bank of Virginia, as indenture trustee, pursuant to which
MacSaver issued and Heilig-Meyers guaranteed the 7.40% Notes.
1.4 "7.60% Notes" means the 7.60% Notes due August 1, 2007 in the
aggregate principal amount of $175 million, issued by MacSaver pursuant to the
7.60% Notes Indenture and guaranteed by Heilig-Meyers.
1.5 "7.60% Notes Indenture" means that certain indenture dated as of
August 1, 1996, as amended, supplemented or otherwise modified prior to the
Petition Date, by and between MacSaver and First Union National Bank, f/k/a
First Union National Bank of Virginia, as indenture trustee, pursuant to which
MacSaver issued and Heilig-Meyers guaranteed the 7.60% Notes.
1.6 "7.88% Notes" means the 7.88% Notes due August 1, 2003 in the
aggregate principal amount of $200 million, issued by MacSaver pursuant to the
7.88% Notes Indenture and guaranteed by Heilig-Meyers.
1.7 "7.88% Notes Indenture" means that certain indenture dated as of
August 1, 1996, as amended, supplemented or otherwise modified prior to the
Petition Date, by and between MacSaver and First Union National Bank, f/k/a
4
First Union National Bank of Virginia, as indenture trustee, pursuant to which
MacSaver issued and Heilig-Meyers guaranteed the 7.88% Notes.
1.8 "Administrative Claims Bar Date" means the deadline for filing all
proofs of claims or interest established by the Bankruptcy Court as August 29,
2003.
1.9 "Administrative Bar Date Order" means that order entered by the
Bankruptcy Court on June 23, 2003, which, among other things, established the
Administrative Bar Date.
1.10 "Administrative Claim" means any Claim constituting a cost or
expense of administration of the Chapter 11 Cases allowed under Sections 503(b)
and 507(a)(1) including, but not limited to, any actual and necessary costs and
expenses of preserving the Debtors' estates, any actual and necessary costs and
expenses of operating the Debtors' businesses, any indebtedness or obligations
incurred or assumed by the Debtors, as Debtors in Possession, during the Chapter
11 Cases, including, without limitation, for the acquisition or lease of
property or an interest in property or the rendition of services, any allowances
of compensation and reimbursement of expenses to the extent allowed by Final
Order under Section 330 or 503 of the Bankruptcy Code, the Indenture Trustee
Fees and any fees or charges assessed against the Debtors' estates under section
1930 of chapter 123 of title 28 of the United States Code.
1.11 "Administrative Claims Reserve" means the reserve to be
established and maintained by the Liquidation Trustee pursuant to the terms
hereof containing all distributions that may be made on grounds of any Disputed
Administrative Claims pending entry of a Final Order allowing or disallowing
such Disputed Administrative Claims.
1.12 "Affiliates" shall have the meaning ascribed to such term by
Section 101(2) of the Bankruptcy Code.
1.13 "Allowed Claim" means, with respect to a Claim or any portion
thereof, a Claim (a) that has been allowed by a Final Order of the Bankruptcy
Court (or such other court as the Liquidation Trustee and the holder of such
Claim agrees may adjudicate such Claim and objections thereto) or (b) as to
which, on or by the Effective Date, (i) no proof of claim has been filed with
the Bankruptcy Court and (ii) the liquidated and noncontingent amount of which
is Scheduled, other than a Claim that is Scheduled at zero, in an unknown
amount, or as disputed, or (c) for which a proof of claim in a liquidated amount
has been timely filed with the Bankruptcy Court pursuant to the Bankruptcy Code,
any Final Order of the Bankruptcy Court or other applicable bankruptcy law, and
as to which either (i) no objection to its allowance has been filed within the
periods of limitation fixed by the Plan, the Bankruptcy Code or by any order of
the Bankruptcy Court or (ii) any objection to its allowance has been settled or
withdrawn, or has been denied by a Final Order, or (d) that is expressly allowed
in a liquidated amount in the Plan.
1.14 "Available Cash" means all Cash held by the Liquidation Trustee
after paying (or reserving or otherwise providing for the payment of ): (a) all
Administrative Claims, Priority Tax Claims, Other Priority Claims and Other
5
Secured Claims; and (b) all liabilities, costs and expenses of the Liquidation
Trust, including without limitation, the liabilities, costs and expenses
incurred (or that are reasonably likely to be incurred) by the Liquidation
Trustee and the members of the Liquidation Trust Committee in the performance of
their respective duties under the Trust Agreement, in such amounts as the
Liquidation Trustee shall determine, in his sole discretion, to be appropriate.
1.15 "Available New RoomStore Common Stock" means all New RoomStore
Common Stock held by the Liquidation Trustee after distributing or reserving
approximately 21% of the New RoomStore Common Stock to or on behalf of the
RoomStore Unsecured Claims.
1.16 "Ballot" means each of the ballot forms that are distributed to
holders of Claims who are included in Classes that are entitled to vote to
accept or reject the Plan.
1.17 "Bank Group Secured Notes" means the senior secured notes issued
by the Liquidation Trust in the aggregate face amount of $128.5 million, less
the aggregate amount of Cash paid to holders of Allowed Claims in Classes 2(a),
2(b) and 2(c), which notes shall bear interest at a rate of 7% per annum and be
secured by the assets of the Liquidation Trust.
1.18 "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
amended and codified in Title 11 of the United States Code, 11 U.S.C.ss.ss.
101-1330, as in effect on the date hereof.
1.19 "Bankruptcy Court" means the United States Bankruptcy Court for
the Eastern District of Virginia.
1.20 "Bankruptcy Rules" means the Federal Rules of Bankruptcy Procedure
and the Official Bankruptcy Forms, as amended, the Federal Rules of Civil
Procedure, as amended, as applicable to the Chapter 11 Cases or proceedings
therein, and the Local Rules of the Bankruptcy Court, as applicable to the
Chapter 11 Cases or proceedings therein, as the case may be.
1.21 "Bar Date" means the deadline for filing all proofs of claim or
interest established by the Bankruptcy Court as July 16, 2001, including Claims
of governmental units in accordance with Section 502(b)(9) of the Bankruptcy
Code, except Administrative Claims.
1.22 "Bar Date Order" means that order entered by the Bankruptcy Court
on May 30, 2001, which, among other things, established the Bar Date.
1.23 "Beneficiaries" means the holders of Allowed Claims, irrespective
of whether such Claims are Allowed on or after the Effective Date.
1.24 "Bondholder Secured Claims" means a Claim asserted by the
Indenture Trustee arising from Section 1008 of the Indenture.
1.25 "Business Day" means any day, excluding Saturdays, Sundays and
legal holidays, on which commercial banks are open for business in New York
City.
1.26 "Cash" means legal tender of the United States.
1.27 "Certificate" shall have the meaning ascribed to it in Section 8.4
hereof.
6
1.28 "Chapter 11 Case(s)" means the Chapter 11 Cases of the Debtors
pending in the Bankruptcy Court.
1.29 "Claim" means a claim against the Debtors (or any of them),
whether or not asserted, as defined in Section 101(5) of the Bankruptcy Code.
1.30 "Claimholder" means a holder of a Claim.
1.31 "Claims Agent" means Bankruptcy Services, LLC, the Claims,
Noticing and Balloting Agent to the Debtors as approved by Bankruptcy Court on
August 16, 2000.
1.32 "Claims Objection Deadline" means that day which is one hundred
eighty (180) days after the Effective Date, as the same may be from time to time
extended by the Bankruptcy Court, without further notice to parties in interest.
1.33 "Class" means a category of Claimholders or Interestholders
described in Article III of the Plan.
1.34 "Class 5(b) Reallocation Amount" means the amount of zero if
Allowed Class 5(c) Claims are more than $624 million. If Allowed Class 5(c)
Claims are less than $624 million, then the Class 5(b) Reallocation Amount shall
be the number of Trust Interests determined according to the Class 5(b)
Reallocation Amount Formula.
1.35 "Class 5(b) Reallocation Amount Formula" means (624,000,000 - C) *
..0391, where "C" is equal to the Allowed Class 5(c) Claims.
1.36 "Class 5(b) Trust Allocation" means (a) 59,350,000 Trust
Interests, minus (b) Class 5(c) Reallocation Amount, minus (c) Class 5(c)
Litigation Recovery Reallocation, plus (d) Class 5(b) Reallocation Amount.
1.37 "Class 5(c) Litigation Recovery Reallocation" means the number of
Trust Interests derived from the following formula: (B / 128,500,000) *
5,400,000, where "B" is equal to the aggregate cash payment made to the
Liquidation Trust by the Pre-Petition Lenders.
1.38 "Class 5(c) Reallocation Amount" means the amount zero if Allowed
Class 5(c) Claims are less than $624 million. If Allowed Class 5(c) Claims are
more than $624 million, then the Class 5(c) Reallocation Amount is equal to the
product derived from the Class 5(c) Reallocation Amount Formula.
1.39 "Class 5(c) Reallocation Amount Formula" means (A-624,000,000) *
..0391, where "A" is equal to the Allowed Class 5(c) Claims.
1.40 "Class 5(c) Trust Allocation" means (a) 40,650,000, plus (b) Class
5(c) Reallocation Amount, plus (c) Class 5(c) Litigation Recovery Reallocation,
minus (d) Class 5(b) Reallocation Amount.
1.41 "Confirmation Date" means the date of entry of the Confirmation
Order.
7
1.42 "Confirmation Hearing" means the hearing before the Bankruptcy
Court on confirmation of the Plan and related matters under Section 1128 of the
Bankruptcy Code.
1.43 "Confirmation Order" means the order entered by the Bankruptcy
Court confirming the Plan.
1.44 "Creditors' Committee" means the Official Committee of Unsecured
Creditors appointed pursuant to Section 1102(a) of the Bankruptcy Code in the
Chapter 11 Cases.
1.45 "Cure" means the distribution of Cash, or such other property as
may be agreed upon by the parties or ordered by the Bankruptcy Court, with
respect to the assumption of an executory contract or unexpired lease, pursuant
to Section 365(b) of the Bankruptcy Code, in an amount equal to all unpaid
monetary obligations, without interest, or such other amount as may be agreed
upon by the parties, under such executory contract or unexpired lease, to the
extent such obligations are enforceable under the Bankruptcy Code and applicable
non-bankruptcy law.
1.46 "Cure Claim" shall have the meaning ascribed to it in Section 7.2
hereof.
1.47 "Cure Claim Submission Deadline" shall have the meaning ascribed
to it in Section 7.2 hereof.
1.48 "Cure Claim Objection Deadline" shall have the meaning ascribed to
it in Section 7.2 hereof.
1.49 "Debtor Subsidiaries" means, collectively, Heilig-Meyers Furniture
Company, Heilig-Meyers Furniture West, Inc., HMY Star, Inc., HMY RoomStore, Inc.
and MacSaver Financial Services, Inc., each of which is a direct or indirect
subsidiary of Heilig-Meyers and is a Debtor and Debtor-in-Possession in the
Chapter 11 Cases.
1.50 "Debtors" means, collectively, Heilig-Meyers and the Debtor
Subsidiaries.
1.51 "Debtors-in-Possession" means the Debtors in their capacity as
debtors in possession in the Chapter 11 Cases under Sections 1107(a) and 1108 of
the Bankruptcy Code.
1.52 "Disallowed Claim" means a Claim or any portion thereof, that (a)
has been disallowed by a Final Order, (b) is Scheduled at zero or as contingent,
disputed or unliquidated and as to which a proof of claim bar date has been
established but no proof of claim has been timely filed or deemed timely filed
with the Bankruptcy Court pursuant to either the Bankruptcy Code or any Final
Order of the Bankruptcy Court or otherwise deemed timely filed under applicable
law, or (c) is not Scheduled and as to which a proof of claim bar date has been
set but no proof of claim has been timely filed or deemed timely filed with the
Bankruptcy Court pursuant to either the Bankruptcy Code or any Final Order of
the Bankruptcy Court or otherwise deemed timely filed under applicable law.
1.53 "Disclosure Statement" means the written disclosure statement that
relates to this Plan, as approved by the Bankruptcy Court pursuant to Section
1125 of the Bankruptcy Code and Bankruptcy Rule 3017, as such disclosure
statement may be amended, modified or supplemented from time to time.
8
1.54 "Disputed Administrative Claim" means an Administrative Claim that
is a Disputed Claim.
1.55 "Disputed Claim" means a Claim or any portion thereof, that is
neither an Allowed Claim nor a Disallowed Claim and includes, without
limitation, Claims that (a) (i) have not been Scheduled by the Debtors or have
been Scheduled at zero, as unknown or as contingent, unliquidated or disputed
and (ii) are not the subject of an objection in the Bankruptcy Court, (b) are
the subject of a proof of claim that differs in nature, amount or priority from
the Schedules, or (c) are the subject of an objection with the Bankruptcy Court
and which objection has not been withdrawn, settled or overruled by a Final
Order of the Bankruptcy Court.
1.56 "Disputed Funded Debt Unsecured Claim" means a Funded Debt
Unsecured Claim that is a Disputed Claim.
1.57 "Disputed Heilig Unsecured Claim" means a Heilig Unsecured Claim
that is a Disputed Claim.
1.58 "Disputed Other Priority Claim" means an Other Priority Claim that
is a Disputed Claim.
1.59 "Disputed Other Secured Claim" means an Other Secured Claim that
is a Disputed Claim.
1.60 "Disputed RoomStore Unsecured Claim" means a RoomStore Unsecured
Claim that is a Disputed Claim.
1.61 "Distributions" means the distributions of Cash, shares of New
RoomStore Common Stock and other property, if any, held in the Liquidation Trust
to be made in accordance with the Plan and/or the Trust Agreement.
1.62 "Effective Date" means the Business Day on which all conditions to
the consummation of the Plan set forth in Section 11.2 hereof have been either
satisfied or waived as provided in Section 11.3 hereof and is the day upon which
this Plan is substantially consummated.
1.63 "Entity" means as defined in Section 101(15) of the Bankruptcy
Code.
1.64 "Estates" means the bankruptcy estates of the Debtors created
pursuant to Section 541 of the Bankruptcy Code.
1.65 "Estate Action" means any and all actions, proceedings, causes of
action, suits, accounts, controversies, agreements, promises, rights to legal
remedies, rights to equitable remedies, rights to payment and claims that may be
asserted by any Debtor's Chapter 11 estate, whether known, unknown, reduced to
judgment, not reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, secured or unsecured and whether
asserted or assertable directly or derivatively, in law, equity or otherwise,
including, without limitation, actions against Persons arising under Sections
9
502, 510, 541, 542, 543, 544, 547 through 551 and 553 of the Bankruptcy Code, or
under related state or federal statutes and common law, including fraudulent
transfer laws, whether or not litigation is commenced to prosecute such actions.
1.66 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
1.67 "Exhibit" means an exhibit annexed to either this Plan or the
Disclosure Statement.
1.68 "Existing Securities" means, collectively, the Unsecured Notes,
the Prudential Notes, the Old Common Stock, and all options, warrants and rights
(whether fixed or contingent, matured or unmatured, disputed or undisputed),
contractual, legal, equitable or otherwise, to acquire any of the foregoing.
1.69 "Final Order" means an order or judgment, the operation or effect
of which has not been stayed, reversed or amended and as to which order or
judgment (or any revision, modification or amendment thereof) the time to appeal
or seek review or rehearing has expired and as to which no appeal or petition
for review or rehearing was filed or, if filed, remains pending.
1.70 "Funded Debt Unsecured Claim" means any Unsecured Claim arising
from the Synthetic Leases, Wachovia Credit Agreement, Prudential Notes
Agreement, and/or Indentures.
1.71 "Funded Debt Unsecured Claims Reserve" means the reserve
established and maintained by the Liquidation Trustee pursuant to the terms
hereof containing all Distributions that may be made on account of any Disputed
Funded Debt Unsecured Claims to be reserved pending the entry of a Final Order
allowing or disallowing such Disputed Funded Debt Unsecured Claims.
1.72 "Furniture Company" means Heilig-Meyers Furniture Company, a North
Carolina corporation, and a Debtor-in-Possession in the above-captioned Chapter
11 Case No. 00-34534-DOT pending in the Bankruptcy Court.
1.73 "Heilig-Meyers" means Heilig-Meyers Company, a Virginia
corporation, and a Debtor-in-Possession in the above-captioned Chapter 11 Case
No. 00-34533-DOT pending in the Bankruptcy Court.
1.74 "Heilig Unsecured Claim" means any Unsecured Claim against
Heilig-Meyers, Furniture Company, Heilig-Meyers Furniture West, Inc., MacSaver,
and HMY Star, Inc.
1.75 "Heilig Unsecured Claims Reserve" means the reserve established
and maintained by the Liquidation Trustee pursuant to the terms hereof
containing all Distributions that may be made on account of any Disputed Heilig
Unsecured Claims to be reserved pending the entry of a Final Order allowing or
disallowing such Disputed Heilig Unsecured Claims.
1.76 "Impaired" refers to any Claim or Interest that is impaired within
the meaning of Section 1124 of the Bankruptcy Code.
10
1.77 "Indentures" means collectively, the 7.40% Notes Indenture, the
7.60% Notes Indentures and the 7.88% Notes Indenture.
1.78 "Indenture Trustee" means Wells Fargo Bank Minnesota, N.A., as
successor Indenture trustee pursuant to the Indentures.
1.79 "Indenture Trustee Fees" means the reasonable fees and expenses,
including, without limitation, reasonable attorneys' fees and disbursements,
incurred by the Indenture Trustee, whether prior to or after the Petition Date
and through the Effective Date; provided, however, that the Indenture Trustee
Fees shall not include any fees incurred by the Indenture Trustee in seeking to
enforce any of the rights that the holder(s) of the Bondholder Secured Claims
may have against the Pre-Petition Lenders in respect of such holders' claims
that they have lien rights in and/or to the collateral proceeds received (or to
be received) by the Pre-Petition Lenders on an equal and ratable basis with the
Pre-Petition Lenders pursuant to Section 1008 of the Indentures and/or other
applicable law.
1.80 "Initial Distribution Date" means, with respect to Distributions
made to holders of Allowed Claims, other than holders of Allowed Unsecured
Claims, a date selected by the Liquidation Trustee, which date shall not be more
than 90 Business Days after the Effective Date, and, with respect to
Distributions made to holders of Allowed Unsecured Claims, a date selected by
the Liquidation Trustee, which date must not be less than 60 days prior to the
termination of the Liquidation Trust.
1.81 "Intercompany Claim" means a Claim by a Debtor against another
Debtor.
1.82 "Interest" means (a) the legal, equitable, contractual and other
rights (whether fixed or contingent, matured or unmatured, disputed or
undisputed) of any Person with respect to the Old Common Stock or any other
equity securities of the Debtors and (b) the legal, equitable, contractual and
other rights, whether fixed or contingent, matured or unmatured, disputed or
undisputed, of any Person to purchase, sell, subscribe to, or otherwise acquire
or receive (directly or indirectly) any of the foregoing.
1.83 "Interestholder" means a holder of an Interest.
1.84 "Lender Avoidance Action" means the adversary proceeding filed in
the Debtors' Chapter 11 Cases styled Heilig-Meyers Company, et al. v. Wachovia
Bank, N.A., et al., Adv. Proc. No. 02-06158.
1.85 "Liquidation Trust" means the trust which is created pursuant to
this Plan to be administered by the Liquidation Trustee subject to the direction
of the Liquidation Trust Committee, all as more specifically set forth in this
Plan.
1.86 "Liquidation Trust Committee" means the three-member committee as
contemplated by the Trust Agreement.
1.87 "Liquidation Trustee" means the trustee of the Liquidation Trust
as contemplated by the Trust Agreement.
11
1.88 "MacSaver" means MacSaver Financial Services, Inc., a Delaware
corporation, and a Debtor-in-Possession in the above-captioned Chapter 11 Case
No. 00-34538 pending in the Bankruptcy Court.
1.89 "MacSaver Unsecured Claim" means an Unsecured Claim against
MacSaver.
1.90 "New RoomStore Common Stock" means the common stock, one cent par
value per share, of Reorganized RoomStore to be issued pursuant to Section 6.14
of the Plan on the Effective Date.
1.91 "New Credit Facility" means the post-Effective Date revolving
credit and/or term loan facilities and, potentially, a high yield or similar
securities offering, to be extended to Reorganized RoomStore as described in the
Plan Supplement.
1.92 "Old Common Stock" means shares of Heilig-Meyers common stock that
were authorized, issued and outstanding prior to the Effective Date.
1.93 "Other Priority Claim" means a Claim entitled to priority pursuant
to Section 507(a) of the Bankruptcy Code other than a Priority Tax Claim or an
Administrative Claim.
1.94 "Other Priority Claims Reserve" means the reserve to be
established and maintained by the Liquidation Trustee pursuant to the terms
hereof containing all Distributions that may be made on account of any Disputed
Other Priority Claims pending the entry of a Final Order allowing or disallowing
such Disputed Other Priority Claims.
1.95 "Other Secured Claim" means any Secured Claim other than a
Wachovia Secured Claim, Prudential Notes Secured Claim, Bondholder Secured Claim
or Synthetic Lease Secured Claim. Other Secured Claims include Claims secured by
liens junior in priority to existing liens, whether by operation of law,
contract or otherwise, but solely to the extent of the value, as of the
Effective Date, or such other date as is established by the Bankruptcy Court, of
such Claimholder's interest in the Estates' interest in property of the Estates
after giving effect to all security interests or liens senior in priority.
1.96 "Other Secured Claim Reserve" means the reserve to be established
and maintained by the Liquidation Trustee pursuant to the terms hereof
containing all distributions that may be made on account of Disputed Other
Secured Claims pending the entry of a Final Order allowing or disallowing such
Disputed Other Secured Claims.
1.97 "Periodic Distribution Date" means (a) the Initial Distribution
Date, as to the first distribution made by the Liquidation Trustee, and (b)
thereafter, each Quarterly Distribution Date, as to each subsequent distribution
made by the Liquidation Trustee.
1.98 "Person" means an individual, corporation, partnership, joint
venture, association, joint stock company, limited liability company, limited
liability partnership, trust, estate, unincorporated organization, governmental
unit (as defined in Section 101(27) of the Bankruptcy Code), or other Entity.
12
1.99 "Petition Date" means August 16, 2000, the date on which the
Debtors filed their voluntary petitions commencing the Chapter 11 Cases.
1.100 "Plan" means this joint plan of reorganization, which is jointly
proposed by the Debtors and the Creditors' Committee for resolution of
outstanding Claims and Interests in the Chapter 11 Cases, as such plan may be
further amended from time to time in accordance with the Bankruptcy Code, the
Bankruptcy Rules, and the provisions hereof.
1.101 "Plan Schedules" means a schedule annexed to either this Plan or
as an appendix to the Disclosure Statement.
1.102 "Plan Supplement" means those Exhibits to the Plan that shall be
filed with the Bankruptcy Court by the Plan Supplement Filing Date.
1.103 "Plan Supplement Filing Date" means the date on which Exhibits to
the Plan shall be filed with the Bankruptcy Court, which date shall be at least
ten (10) days prior to the Voting Deadline or such later date as may be approved
by the Bankruptcy Court.
1.104 "Post-Petition Interest" means, collectively, such interest,
reasonable fees, costs, or charges provided for under the agreements between a
Debtor and a holder of a Secured Claim.
1.105 "Pre-Petition Lenders" means holders of Claims in Classes 2(a)
and 2(b) and 2(c).
1.106 "Priority Tax Claim" means a Claim entitled to priority pursuant
to Section 507(a)(8) of the Bankruptcy Code.
1.107 "Pro Rata" means, from time to time, unless the Plan specifically
provides otherwise, with respect to Allowed Claims, the same proportion that the
amount of an Allowed Claim in a particular Class of a Debtor bears to the sum of
the aggregate amounts of all Claims (including Disputed Claims, but excluding
Disallowed Claims) of that particular Class of Claims for all Debtors.
1.108 "Professional" means those Persons employed in the Chapter 11
Cases pursuant to Sections 327 and 1103 of the Bankruptcy Code or otherwise.
1.109 "Professional Claim" means a Claim of a professional retained in
the Chapter 11 Cases pursuant to Sections 327 and 1103 of the Bankruptcy Code or
otherwise, including Bilzin Sumberg Baena Price & Axelrod LLP as special counsel
to the Debtors, for compensation or reimbursement of costs and expenses relating
to services rendered or expenses incurred after the Petition Date and prior to
and including the Effective Date.
1.110 "Professional Fee Order" means the order entered by the
Bankruptcy Court on August 16, 2000, authorizing the interim payment of
Professional Claims subject to the Holdback Amount.
13
1.111 "Prudential Notes" means the 11.99% Series B Guaranteed Senior
Notes due January 13, 2002 in the aggregate principal amount of $60 million,
issued by MacSaver pursuant to the Prudential Notes Agreement and guaranteed by
Heilig-Meyers.
1.112 "Prudential Notes Agreement" means that certain Note Agreement
dated as of January 13, 1995, as amended, supplemented or otherwise modified
prior to the Petition Date, by and between MacSaver, The Prudential Insurance
Company of America and Pruco Life Insurance Company, pursuant to which MacSaver
issued and Heilig-Meyers guaranteed the Prudential Notes.
1.113 "Prudential Notes Secured Claim" means a Secured Claim arising
under the Prudential Notes Agreement.
1.114 "Quarterly Distribution Date" means the first Business Day after
the end of each quarterly calendar period (i.e., March 31, June 30, September 30
and December 31) of each calendar year following the Initial Distribution Date.
1.115 "Record Date" means the record date for purposes of making
Distributions under the Plan on account of Allowed Claims, which date shall be
[o].
1.116 "Reinstated" or "Reinstatement" means (a) leaving unaltered the
legal, equitable and contractual rights to which a Claim entitles the
Claimholder so as to leave such Claim Unimpaired in accordance with Section 1124
of the Bankruptcy Code, or (b) notwithstanding any contractual provision or
applicable law that entitles the Claimholder to demand or receive accelerated
payment of such Claim after the occurrence of a default (i) curing any such
default that occurred before or after the Petition Date, other than a default of
a kind specified in Section 365(b)(2) of the Bankruptcy Code; (ii) reinstating
the maturity of such Claim as such maturity existed before such default; (iii)
compensating the Claimholder for any damages incurred as a result of any
reasonable reliance by such Claimholder on such contractual provision or such
applicable law; and (iv) not otherwise altering the legal, equitable or
contractual rights to which such Claim entitles the Claimholder; provided,
however, that any contractual right that does not pertain to the payment when
due of principal and interest on the obligation on which such Claim is based,
including, but not limited to, financial covenant ratios, negative pledge
covenants, covenants or restrictions on merger or consolidation, "going dark"
provisions, and affirmative covenants regarding corporate existence prohibiting
certain transactions or actions contemplated by the Plan, or conditioning such
transactions or actions on certain factors, shall not be required to be cured or
reinstated in order to accomplish Reinstatement.
1.117 "Released Parties" means, collectively, [o].
1.118 "Released Directors and Officers" means, collectively, [o].
1.119 "Reorganized RoomStore" means, after the Effective Date,
RoomStore and any successor thereto by merger, consolidation or otherwise.
1.120 "Reserve" means any of, or collectively, the Administrative
Claims Reserve, the Other Priority Claims Reserve, the Other Secured Claims
Reserve, the RoomStore Unsecured Claims Reserve, the Funded Debt Unsecured
Claims Reserve, and the Heilig Unsecured Claims Reserve.
14
1.121 "Rhodes" means Rhodes Holdings, Inc. and Rhodes Holdings II, Inc.
1.122 "RoomStore" means HMY Roomstore, Inc., a Virginia corporation,
and a Debtor-in-Possession in the above-captioned Case No. 00-34537 pending in
the Bankruptcy Court.
1.123 "RoomStore Assets" means the Assets of RoomStore, and the other
Debtors that are necessary to the operation of the RoomStore business and are
identified in the Plan Supplement.
1.124 "RoomStore Unsecured Claim" means an Unsecured Claim against
RoomStore.
1.125 "RoomStore Unsecured Claims Reserve" means the reserve to be
established and maintained by the Liquidation Trustee pursuant to the terms
hereof containing all Distributions that may be made on account of any Disputed
RoomStore Unsecured Claims pending the entry of a Final Order allowing or
disallowing such Disputed RoomStore Unsecured Claims.
1.126 "SEC" means the United States Securities and Exchange Commission.
1.127 "Scheduled" means, with respect to any Claim or Interest, the
status, priority and amount, if any, of such Claim or Interest as set forth in
the Schedules.
1.128 "Schedules" means the schedules of assets and liabilities and the
statements of financial affairs filed in the Chapter 11 Cases by the Debtors, as
such schedules or statements have been or may be amended or supplemented from
time to time in accordance with Bankruptcy Rule 1009 or orders of the Bankruptcy
Court.
1.129 "Secured Claim" means a Claim (to include Postpetition Interest
to the extent permitted by applicable law) held by a Claimholder and secured by
a security interest in or lien on property of the Estates to the extent of the
value, as of the Effective Date or such other date as is established by the
Bankruptcy Court, of such Claimholder's interest in the Estates' interest in
property of the Estates as determined by a Final Order of the Bankruptcy Court
pursuant to Section 506 of the Bankruptcy Code or as otherwise agreed upon in
writing by the Debtors and the Claimholder.
1.130 "Security" shall have the meaning ascribed to it in Section
101(49) of the Bankruptcy Code.
1.131 "Securities Act" means the Securities Act of 1933, as amended.
1.132 "Solicitation Procedures Order" means the order of the Bankruptcy
Court approved on [o], pursuant to which the Bankruptcy Court, inter alia,
approved the Disclosure Statement and set various procedures for soliciting and
tabulating votes on the Plan, as the same may have been amended or modified from
time to time thereafter.
15
1.133 "Subordinated Debt Securities Claim" means a Claim subject to
subordination under Section 510(b) of the Bankruptcy Code that arises from the
rescission of a purchase or sale of a debt Security of any Debtor (including,
but not limited to, the Unsecured Notes and the Prudential Notes), or for
damages arising from the purchase or sale of such a debt Security, or for
reimbursement, indemnification, or contribution allowed under Section 502 of the
Bankruptcy Code on account of such Claim.
1.134 "Subordinated Equity Securities Claim" means a Claim subject to
subordination under Section 510(b) of the Bankruptcy Code that arises from the
rescission of a purchase or sale of an equity Security of any Debtor (including,
but not limited to, Old Common Stock), or for damages arising from the purchase
or sale of such an equity Security, or for reimbursement, indemnification, or
contribution allowed under Section 502 of the Bankruptcy Code on account of such
Claim.
1.135 "Synthetic Lease(s)" means (a) that certain $12 million Tax
Ownership Operating Lease in respect of certain properties located in Mount
Sterling, Kentucky and Athens, Texas pursuant to the terms of, among other
documents: (i) that certain Lease Agreement dated January 31, 1996, among State
Street Bank and Trust Company, as owner-trustee and lessor, Arthur J. MacDonald,
as trustee, and Furniture Company, as lessee, and (ii) that certain
Participation and Credit Agreement dated as of January 31, 1996, among Furniture
Company, State Street Bank and Trust Company, as owner-trustee, Wachovia Bank,
N.A., as note holder and agent, and Wachovia Securities, Inc. as certificate
holder, in each case as amended and modified; (b) that certain $40 million Tax
Ownership Operating Lease in respect of certain properties in Hesperia,
California and Richmond, Virginia pursuant to the terms of, among other
documents: (i) that certain Lease Agreement dated as of August 1, 1996 among
State Street Bank and Trust Company, as owner-trustee and lessor, and Furniture
Company as lessee, and (ii) that certain Participation and Credit Agreement
dated as of August 1, 1996, among Furniture Store, State Street Bank and Trust
Company, as owner-trustee, Wachovia Bank, N.A. as note holder and agent, and
Wachovia Securities, Inc. as certificate holder, in each case as amended and
modified; and (c) that certain $46.6 million lease arrangement pursuant to the
terms of, among other documents, that certain Lease Agreement dated as of August
5, 1998, between First Security Bank, National Association, as owner-trustee
under the HM Realty Trust 1998-1, as lessor, and Furniture Company, as lessee,
as amended and modified.
1.136 "Synthetic Lease Secured Claim" means a Secured Claim against
Furniture Company and Heilig-Meyers arising under the Wachovia Credit Agreement.
1.137 "Trust Agreement" means that certain Liquidation Trust Agreement
which is to govern the Liquidation Trust, substantially in the form attached in
the Plan Supplement, pursuant to which, among other things, the Trust Assets
shall be liquidated and distributed to the Claimholders in a manner consistent
with the terms of this Plan.
1.138 "Trust Assets" means all assets of all of the Estates, which are
to be transferred to the Liquidation Trust upon the Effective Date pursuant to
16
Section 6.7 of the Plan, except for the RoomStore Assets to be vested in
Reorganized RoomStore pursuant to Section 6.5 of this Plan.
1.139 "Trust Interest" means one (1) interest out of the one hundred
(100) million beneficial interests in the Liquidation Trust.
1.140 "Trustee Professional(s)" shall have the meaning ascribed to it
in Section 6.9 of this Plan.
1.141 "Unimpaired" refers to any Claim that is not Impaired.
1.142 "Unsecured Bondholder" refers to a holder of an Unsecured Claim
arising from the Indenture.
1.143 "Unsecured Bondholder Claim" refers to any Unsecured Claim
arising from the Indenture.
1.144 "Unsecured Claim" means a Claim that is not an Administrative
Claim or a Priority Tax Claim and is not classified as a Claim included within
any of Classes 1, 2, 3, 4, 6 or 7.
1.145 "Unsecured Notes" means, collectively, the 7.40% Notes, the 7.60%
Notes, and the 7.88% Notes.
1.146 "Voting Deadline" means the deadline for voting on the Plan, as
the same may from time to time be modified, set forth in the Solicitation
Procedures Order.
1.147 "Wachovia Credit Agreement" means that certain Credit Agreement dated as
of July 18, 1995, as amended, supplemented or otherwise modified prior to the
Petition Date, by and between MacSaver, as borrower, Heilig-Meyers, as
guarantor, Wachovia Bank, N.A., as administrative agent, Bank of America, N.A.,
as documentation agent, Crestar Bank, as co-agent, First Union National Bank, as
co-agent, and the other lenders identified therein.
1.148 "Wachovia Secured Claim" means a Claim arising under the Wachovia
Credit Agreement.
C. Rules of Interpretation
For purposes of the Plan (a) any reference in the Plan to a contract,
instrument, release, indenture or other agreement or document being in a
particular form or on particular terms and conditions means that such document
shall be substantially in such form or substantially on such terms and
conditions, (b) any reference in the Plan to an existing document or Exhibit
filed or to be filed means such document or Exhibit as it may have been or may
be amended, modified or supplemented, (c) unless otherwise specified, all
references in the Plan to Sections, Articles, Schedules and Exhibits are
references to Sections, Articles, Schedules and Exhibits of or to the Plan, (d)
the words "herein" and "hereto" refer to the Plan in its entirety rather than to
a particular portion of the Plan, (e) captions and headings to Articles and
Sections are inserted for convenience of reference only and are not intended to
17
be a part of or to affect the interpretation of the Plan, and (f) the rules of
construction set forth in Bankruptcy Code Section 102 and in the Bankruptcy
Rules shall apply. In the event there are any inconsistencies between the Plan,
the Plan Schedules or any other document contemplated herein to be created,
executed or implemented pursuant to the Plan, the provisions of the Plan shall
control. To the extent there is a conflict between the contents of the
Disclosure Statement and the terms of the Plan, the terms of the Plan shall
control.
D. Computation of Time
In computing any period of time prescribed or allowed by the Plan,
unless otherwise expressly provided, the provisions of Bankruptcy Rule 9006(a)
shall apply.
E. Exhibits
All Exhibits are incorporated into and are a part of the Plan as if set
forth in full herein and, to the extent not annexed hereto, such Exhibits shall
be filed with the Bankruptcy Court on or before the Plan Supplement Filing Date.
After the Plan Supplement Filing Date, copies of Exhibits can be obtained upon
written request to LeClair Ryan, A Professional Corporation, 707 East Main
Street, 11th Floor, Richmond, Virginia 23219, Attn: Bruce H. Matson, Esq., or by
downloading such exhibits from the Bankruptcy Court's website at
www.vaeb.uscourts.gov. To the extent any Exhibit is inconsistent with the terms
of the Plan, unless otherwise ordered by the Bankruptcy Court, the Plan shall
control.
18
ARTICLE II
ADMINISTRATIVE CLAIMS
AND PRIORITY TAX CLAIMS
2.1 Administrative Claims(a) . (a) Except to the extent that a holder of an
Allowed Administrative Claim agrees to different treatment, the Debtors or the
Liquidation Trust, as the case may be, shall pay to each holder of an Allowed
Administrative Claim Cash in an amount equal to such Allowed Administrative
Claim on, or as soon thereafter as is reasonably practicable, the later of (i)
the Effective Date or (ii) the first Periodic Distribution Date occurring after
the later of (x) the date a Disputed Administrative Claim becomes an Allowed
Administrative Claim or (y) the date a Disputed Administrative Claim becomes
payable pursuant to any agreement between the Liquidation Trustee and the holder
of such Disputed Administrative Claim; provided, however, that Allowed
Administrative Claims with respect to liabilities incurred by RoomStore in the
ordinary course of business during the Chapter 11 Cases shall be paid in the
ordinary course of business in accordance with the terms and conditions of any
agreements relating thereto. Notwithstanding any provision contained in this
Plan to the contrary, all Indenture Trustee Fees shall be paid in Cash on the
Effective Date by the Debtors or the Liquidation Trust, as the case may be, as
Administrative Claims, without the need for application to, or approval of, any
court.
(b) On the Effective Date, the Liquidation Trustee shall apply Cash held by the
Liquidation Trust to establish the Administrative Claims Reserve. The
Administrative Claims Reserve will be funded in the full amount asserted (or
such lesser amount as may be estimated by the Bankruptcy Court in accordance
with Section 4.14 of the Plan) with respect to each of the Disputed
Administrative Claims, if any. From and after the Effective Date, the
Liquidation Trustee shall maintain and distribute the Administrative Claims
Reserve in accordance with the terms and subject to the conditions set forth
herein and in the Trust Agreement.
(c) Any Cash held in the Administrative Claims Reserve with respect to any
Disputed Administrative Claim that shall become an Allowed Administrative Claim,
after the payment or other discharge and satisfaction of any such Allowed
Administrative Claim (or any Cash held in the Administrative Claims Reserve with
respect to any Disputed Administrative Claim that shall become a Disallowed
Administrative Claim), shall revest in the Liquidation Trust for the benefit of
holders of Funded Debt Unsecured Claims and Heilig Unsecured Claims and
thereafter shall be administered by the Liquidation Trustee in accordance with
the terms and subject to the conditions set forth herein and in the Trust
Agreement.
2.2 Priority Tax Claims(a) . Except to the extent that a holder of an Allowed
Priority Tax Claim agrees to different treatment, each holder of an Allowed
Priority Tax Claim shall receive, at the sole option of the Debtors or the
Liquidation Trust, as the case may be, (i) deferred, periodic Cash payments made
quarterly on the first Business Day of the first month following the Effective
Date that is at least ninety (90) days subsequent to the Effective Date, over a
period not exceeding six years after the assessment of the tax on which such
19
Claim is based, totaling the principal amount of such Claim plus simple interest
on any outstanding balance from the Effective Date calculated at the interest
rate available on 90 day United States Treasuries on the Effective Date, (ii)
such other treatment agreed to by the Allowed Priority Tax Claimholder and the
Liquidation Trustee, or (iii) payment in full in Cash.
20
ARTICLE III
CLASSIFICATION OF CLAIMS AND INTERESTS
3.1 Introduction. Pursuant to Section 1122 of the Bankruptcy Code, set forth
below is a designation of classes of Claims against and Interests in the
Debtors. A Claim or Interest is placed in a particular Class for purposes of
voting on the Plan and of receiving distributions pursuant to the Plan only to
the extent that such Claim or Interest is an Allowed Claim or an Allowed
Interest in that Class and such Claim or Interest has not been paid, released or
otherwise settled prior to the Effective Date. Pursuant to Section 4.14 of the
Plan, the Debtors may ask the Bankruptcy Court to estimate certain disputed
claims. In accordance with Section 1123(a)(1) of the Bankruptcy Code,
Administrative Claims and Priority Tax Claims of the kinds specified in Sections
507(a)(1) and 507(a)(8) of the Bankruptcy Code have not been classified, and
their treatment is set forth in Article II herein.
Class Designation Impairment Entitled to Vote
- ----- ----------- ---------- ----------------
1 Other Priority Claims Unimpaired No (deemed to accept)
2(a) Wachovia Secured Claims Unimpaired No (deemed to accept)
2(b) Prudential Notes Secured Claims Unimpaired No (deemed to accept)
2(c) Synthetic Lease Secured Claims Unimpaired No (deemed to accept)
3 Bondholder Secured Claims Unimpaired No (deemed to accept)
4 Other Secured Claims Unimpaired No (deemed to accept)
5(a) RoomStore Unsecured Claims Impaired Yes
5(b) Funded Debt Unsecured Claims Impaired Yes
5(c) Heilig Unsecured Claims Impaired Yes
6(a) Subordinated Debt Securities Claims Impaired No (deemed to reject)
6(b) Subordinated Equity Securities Claims Impaired No (deemed to reject)
7 Old Common Stock Interests Impaired No (deemed to reject)
21
ARTICLE IV
PROVISIONS FOR TREATMENT OF
CLAIMS AND INTERESTS
4.1 Class 1 (Other Priority Claims)(a) . (a) Except to the extent that
a holder of an Allowed Other Priority Claim agrees to different treatment, the
Debtors or the Liquidation Trust, as the case may be, shall pay to each holder
of an Allowed Other Priority Claim Cash in an amount equal to such Allowed Other
Priority Claim on the later of (i) the Effective Date and (ii) the first
Periodic Distribution Date occurring after the later of (x) the date a Disputed
Other Priority Claim becomes an Allowed Other Priority Claim or (y) the date a
Disputed Other Priority Claim becomes payable pursuant to any agreement between
the Liquidation Trustee and the holder of such Other Priority Claim.
(b) On the Effective Date, the Liquidation Trustee shall apply Cash held by the
Liquidation Trust to establish the Other Priority Claims Reserve. The Other
Priority Claims Reserve will be funded in the full amount asserted (or such
lesser amount as may be estimated by the Bankruptcy Court in accordance with
Section 4.14 of the Plan) with respect to each of the Disputed Other Priority
Claims, if any. From and after the Effective Date, the Liquidation Trustee shall
maintain and distribute the Other Priority Claims Reserve in accordance with the
terms and subject to the conditions set forth herein and in the Trust Agreement.
(c) Any Cash held in the Other Priority Claims Reserve with respect to any
Disputed Other Priority Claim that shall become an Allowed Other Priority Claim,
after the payment or other discharge and satisfaction of any such Allowed Other
Priority Claim (or any Cash held in the Other Priority Claims Reserve with
respect to any Disputed Other Priority Claim that shall become a Disallowed
Other Priority Claim), shall revest in the Liquidation Trust for the benefit of
Funded Debt Unsecured Claims and Heilig Unsecured Claims and thereafter shall be
administered by the Liquidation Trustee in accordance with the terms and subject
to the conditions set forth herein and in the Trust Agreement.
4.2 Class 2(a) (Wachovia Secured Claim)(a) . (a) On or before the
Effective Date, the Debtors will have provided to Wachovia Bank, N.A., as
administrative or collateral agent for the holders of the Wachovia Secured
Claim, in full satisfaction, settlement, release and discharge of and in
exchange for such Wachovia Secured Claim (i) Cash equal to the amount of the
Allowed Wachovia Secured Claim, provided, however, to the extent the holders of
the Allowed Wachovia Secured Claims shall not have received Cash equal to the
total amount of such Allowed Wachovia Secured Claim, such holders shall also
receive their Pro Rata share of the Bank Group Secured Notes, or (ii) such less
favorable treatment as to which the Debtors, the Creditors' Committee and
Wachovia Bank, N.A., as administrative or collateral agent for the holders of
the Wachovia Secured Claim, shall have agreed in writing. To the extent the
Bankruptcy Court finds that the Allowed Wachovia Secured Claims have been
satisfied in full on or before the Effective Date, holders of Allowed Wachovia
Secured Claims shall not receive any additional distribution on account of such
Allowed Wachovia Secured Claim pursuant to the Plan.
(b) Class 2(a) is not impaired and is deemed to have accepted the
Plan and, therefore, is not entitled to vote.
22
4.3 Class 2(b) (Prudential Notes Secured Claim)(a) . (a) On or before
the Effective Date, the Debtors will have paid to the holders of (or the
collateral agent for) the Prudential Notes Secured Claim, in full satisfaction,
settlement, release and discharge of and in exchange for such Prudential Notes
Secured Claim (i) Cash equal to the amount of the Allowed Prudential Notes
Secured Claim, provided, however, to the extent the holders of the Allowed
Prudential Notes Secured Claims shall not have received Cash equal to the total
amount of such Allowed Prudential Notes Secured Claims, such holders shall also
receive their Pro Rata share of the Bank Group Secured Notes, or (ii) such less
favorable treatment as to which the Debtors, the Creditors' Committee and the
holders of (or the collateral agent for) the Prudential Notes Secured Claim,
shall have agreed in writing. To the extent the Bankruptcy Court finds that the
Allowed Prudential Notes Secured Claims have been satisfied in full on or before
the Effective Date, holders of Allowed Prudential Notes Secured Claims shall not
receive any additional distribution on account of such Allowed Prudential Notes
Secured Claim pursuant to the Plan.
(b) Class 2(b) is not impaired and is deemed to have accepted the
Plan and, therefore, is not entitled to vote.
4.4 Class 2(c) (Synthetic Lease Secured Claims)(a) . (a) On or before
the Effective Date, the Debtors will have paid to the holders of (or the
collateral agent for) the Synthetic Lease Secured Claim, in full satisfaction,
settlement, release and discharge of and in exchange for such Synthetic Lease
Secured Claim (i) Cash equal to the amount of the Allowed Synthetic Lease
Secured Claim, provided, however, to the extent the holders of the Allowed
Synthetic Lease Secured Claims shall not have received Cash equal to the total
amount of such Allowed Synthetic Lease Secured Claims, such holders shall also
receive their Pro Rata share of the Bank Group Secured Notes, or (ii) such less
favorable treatment as to which the Debtors, the Creditors' Committee and the
holders of (or the collateral agent for ) the Synthetic Lease Secured Claim,
shall have agreed in writing. To the extent the Bankruptcy Court finds that the
Allowed Synthetic Lease Secured Claims have been satisfied in full on or before
the Effective Date, holders of Allowed Synthetic Lease Secured Claims shall not
receive any additional distribution on account of such Allowed Synthetic Lease
Secured Claim pursuant to the Plan.
(b) Class 2(c) is not impaired and is deemed to have accepted the
Plan and, therefore, is not entitled to vote.
4.5 Class 3 (Bondholder Secured Claim). Nothing about the terms or
implementation of this Plan shall modify or adversely affect any of the rights
that the holder(s) of the Bondholder Secured Claims may have against the
Pre-Petition Lenders in respect of such holders' claims that they have lien
rights in and/or to the collateral proceeds received (or to be received) by the
Pre-Petition Lenders on an equal and ratable basis with the Pre-Petition Lenders
pursuant to section 1008 of the Indentures, and/or other applicable law.
4.6 Class 4 (Other Secured Claims)(a) . (a) Except to the extent that
the holder of an Allowed Other Secured Claim agrees to different treatment, the
Debtors or the Liquidation Trust, as the case may be, shall pay to each holder
of an Allowed Other Secured Claim Cash in an amount equal to such Allowed Other
Secured Claim on the later of (i) the Effective Date and (ii) first Periodic
Distribution Date occurring after the later of (x) the date a Disputed Other
23
Secured Claim becomes an Allowed Other Secured Claim or (y) the date a Disputed
Other Secured Claim becomes payable pursuant to any agreement between the
Liquidation Trustee and the holder of such Other Secured Claim.
(b) On the Effective Date, the Liquidation Trustee shall use Cash
held by the Liquidation Trust to establish the Other Secured Claims Reserve. The
Other Secured Claims Reserve will be funded in the full amount asserted (or such
lesser amount as may be estimated by the Bankruptcy Court in accordance with
Section 4.14 of the Plan) with respect to each of the Disputed Other Secured
Claims, if any. From and after the Effective Date, the Liquidation Trustee shall
maintain and distribute the Other Secured Claims Reserve in accordance with the
terms and subject to the conditions set forth herein and in the Trust Agreement.
(c) Any Cash held in the Other Secured Claims Reserve with respect
to any Disputed Other Secured Claim that shall become an Allowed Other Secured
Claim, after the payment or other discharge and satisfaction of any such Allowed
Other Secured Claim (or any Cash held in the Other Secured Claims Reserve with
respect to any Disputed Other Secured Claim that shall become a Disallowed Other
Secured Claim), shall revest in the Liquidation Trust for the benefit of Funded
Debt Unsecured Claims and Heilig Unsecured Claims and thereafter shall be
administered by the Liquidation Trustee in accordance with the terms and subject
to the conditions set forth herein and in the Trust Agreement.
4.7 Class 5(a) (RoomStore Unsecured Claims)(a) . (a) On the Effective
Date, the Liquidation Trustee shall apply such portion of the shares of New
RoomStore Common Stock as shall be necessary to establish the RoomStore
Unsecured Claims Reserve. The RoomStore Unsecured Claims Reserve will be funded
in the full amount asserted (or such lesser amount as may be estimated by the
Bankruptcy Court in accordance with Section 4.14 of the Plan) with respect to
each of the Disputed RoomStore Unsecured Claims. From and after the Effective
Date, the Liquidation Trustee shall maintain and distribute the RoomStore
Unsecured Claims Reserve in accordance with the terms and subject to the
conditions set forth herein and in the Trust Agreement.
(b) With respect to all Allowed RoomStore Unsecured Claims, on the
Initial Distribution Date and, with respect to all Disputed RoomStore Unsecured
Claims that shall become Allowed RoomStore Unsecured Claims, on the first
Periodic Distribution Date occurring after the later of (i) the date any such
Disputed RoomStore Unsecured Claim becomes an Allowed RoomStore Unsecured Claim
or (ii) the date a Disputed RoomStore Unsecured Claim becomes payable pursuant
to any agreement between the Liquidation Trustee and the holder of such
RoomStore Unsecured Claim, such Claimholder shall receive, in full satisfaction,
settlement, release, and discharge of and in exchange for such Allowed RoomStore
Unsecured Claim, (x) a Distribution of such Claimholder's Pro Rata share of
..008065% of the shares of New RoomStore Common Stock for every $10,000 of
RoomStore Unsecured Claims held in the Liquidation Trust, or (y) such less
favorable treatment as to which the Liquidation Trustee and such Claimholder
shall have agreed in writing.
(c) Any New RoomStore Common Stock held in the RoomStore Unsecured
Claims Reserve with respect to any Disputed RoomStore Unsecured Claim that shall
become an Allowed RoomStore Unsecured Claim, after the payment or other
discharge and satisfaction of any such Allowed RoomStore Unsecured Claim (or any
shares of New RoomStore Common Stock held in the RoomStore Unsecured Claims
24
Reserve with respect to any Disputed RoomStore Unsecured Claim that shall become
a Disallowed RoomStore Unsecured Claim), shall be distributed Pro Rata to the
holders of Allowed RoomStore Unsecured Claims.
4.8 Class 5(b) (Funded Debt Unsecured Claims).(a) On the Effective
Date, the Liquidation Trustee shall apply such portion of (i) the Available Cash
and (ii) the shares of Available New RoomStore Common Stock as shall be
necessary to establish the Funded Debt Unsecured Claims Reserve. The Funded Debt
Unsecured Claims Reserve will be funded in the full amount asserted (or such
lesser amount as may be estimated by the Bankruptcy Court in accordance with
Section 4.14 of the Plan) with respect to each of the Disputed Funded Debt
Unsecured Claims. From and after the Effective Date, the Liquidation Trustee
shall maintain and distribute the Funded Debt Unsecured Claims Reserve in
accordance with the terms and subject to the conditions set forth herein and in
the Trust Agreement.
(b) With respect to all Allowed Funded Debt Unsecured Claims, on the
Initial Distribution Date and, with respect to all Disputed Funded Debt
Unsecured Claims that shall become Allowed Funded Debt Unsecured Claims, on the
first Periodic Distribution Date occurring after the later of (i) the date any
such Disputed Funded Debt Unsecured Claim becomes an Allowed Funded Debt
Unsecured Claim or (ii) the date a Disputed Funded Debt Unsecured Claim becomes
payable pursuant to any agreement between the Liquidation Trustee and the holder
of such Funded Debt Unsecured Claim, such Claimholder shall receive, in full
satisfaction, settlement, release, and discharge of and in exchange for such
Allowed Funded Debt Unsecured Claim, (x) a Distribution of such Claimholder's
Pro Rata share of the Class 5(b) Trust Allocation (subject to adjustment to the
extent additional cash or notes are required to be paid or issued to fully
satisfy the Wachovia Secured Claims, Prudential Notes Secured Claims, or
Synthetic Lease Secured Claims), or (y) such less favorable treatment as to
which the Liquidation Trustee and such Claimholder shall have agreed in writing.
(c) Upon the revesting of any Cash in the Liquidation Trust to the
Funded Debt Unsecured Claims Reserve for the benefit of Funded Debt Unsecured
Creditors pursuant to Sections 2.1, 4.1, and/or 4.6 of the Plan, the Liquidation
Trustee shall distribute such Cash, less (i) any Cash reserved by the
Liquidation Trustee in accordance with the terms and subject to the conditions
set forth herein and in the Trust Agreement, (ii) Cash reserved to pay the
liabilities, costs and expenses of the Liquidation Trust, as set forth in the
Trust Agreement, and (iii) Cash reserved for the Funded Debt Unsecured Claims,
Pro Rata to the holders of Allowed Funded Debt Unsecured Claims. Any such
Distribution shall be made on the first Periodic Distribution Date following the
date of any such revesting.
(d) Any Available Cash and shares of Available New RoomStore Common
Stock held in the Funded Debt Unsecured Claims Reserve with respect to any
Disputed Funded Debt Unsecured Claim that shall become an Allowed Funded Debt
Unsecured Claim, after the payment or other discharge and satisfaction of any
such Allowed Funded Debt Unsecured Claim (or any Available Cash and shares of
New RoomStore Common Stock held in the Unsecured Funded Debt Claims Reserve with
respect to any Disputed Funded Debt Unsecured Claim that shall become a
Disallowed Funded Debt Unsecured Claim), shall be distributed Pro Rata to the
holders of Allowed Funded Debt Unsecured Claims.
25
4.9 Class 5(c) (Heilig Unsecured Claims). (a) On the Effective Date,
the Liquidation Trustee shall apply such portion of (i) the Available Cash and
(ii) the shares of Available New RoomStore Common Stock as shall be necessary to
establish the Heilig Unsecured Claims Reserve. The Heilig Unsecured Claims
Reserve will be funded in the full amount asserted (or such lesser amount as may
be estimated by the Bankruptcy Court in accordance with Section 4.14 of the
Plan) with respect to each of the Disputed Heilig Unsecured Claims. From and
after the Effective Date, the Liquidation Trustee shall maintain and distribute
the Funded Unsecured Claims Reserve in accordance with the terms and subject to
the conditions set forth herein and in the Trust Agreement.
(b) With respect to all Allowed Heilig Unsecured Claims, on the
Initial Distribution Date and, with respect to all Disputed Heilig Unsecured
Claims that shall become Allowed Heilig Unsecured Claims, on the first Periodic
Distribution Date occurring after the later of (i) the date any such Disputed
Heilig Unsecured Claim becomes an Allowed Heilig Unsecured Claim or (ii) the
date a Disputed Heilig Unsecured Claim becomes payable pursuant to any agreement
between the Liquidation Trustee and the holder of such Heilig Unsecured Claim,
such Claimholder shall receive, in full satisfaction, settlement, release, and
discharge of and in exchange for such Allowed Heilig Unsecured Claim, (x) a
Distribution of such Claimholder's Pro Rata share of the Class 5(c) Trust
Allocation (subject to adjustment to the extent additional cash or notes are
required to be paid or issued to fully satisfy the Wachovia Secured Claims,
Prudential Notes Secured Claims, or Synthetic Lease Secured Claims), or (y) such
less favorable treatment as to which the Liquidation Trustee and such
Claimholder shall have agreed in writing.
(c) Upon the revesting of any Cash in the Liquidation Trust in the
Heilig Unsecured Claims Reserve for the benefit of the holder of Heilig
Unsecured Claims pursuant to Sections 2.1, 4.1, and/or 4.6 of the Plan, the
Liquidation Trustee shall distribute such Cash, less (i) any Cash reserved by
the Liquidation Trustee in accordance with the terms and subject to the
conditions set forth herein and in the Trust Agreement, (ii) Cash reserved to
pay the liabilities, costs and expenses of the Liquidation Trust, as set forth
in the Trust Agreement, and (iii) Cash reserved for the Heilig Unsecured Claims,
Pro Rata to the holders of Allowed Heilig Unsecured Claims. Any such
Distribution shall be made on the first Periodic Distribution Date following the
date of any such revesting.
(d) Any Available Cash and shares of New RoomStore Common Stock held
in the Heilig Unsecured Claims Reserve with respect to any Disputed Heilig
Unsecured Claim that shall become an Allowed Heilig Unsecured Claim, after the
payment or other discharge and satisfaction of any such Allowed Heilig Unsecured
Claim (or any Available Cash and shares of New RoomStore Common Stock held in
the Unsecured Heilig Claims Reserve with respect to any Disputed Heilig
Unsecured Claim that shall become a Disallowed Heilig Unsecured Claim), shall be
distributed Pro Rata to the holders of Allowed Heilig Unsecured Claims.
4.10 Class 6(a) (Subordinated Debt Securities Claims). Subordinated
Debt Securities Claims shall be cancelled, released, and extinguished and
holders of such Claims will not receive any distributions under the Plan.
26
4.11 Class 6(b) (Subordinated Equity Securities Claims). Subordinated
Equity Securities Claims shall be cancelled, released, and extinguished and
holders of such Claims will not receive any distributions under the Plan.
4.12 Class 7 (Old Common Stock). Old Common Stock Interests shall be
cancelled, released, and extinguished and holders of such Interests will not
receive any distributions under the Plan.
4.13 Reservation of Rights. Except as otherwise explicitly provided in
the Plan, nothing will affect the rights and defenses, both legal and equitable,
of the Debtors, any one of the Debtors, or the Liquidation Trustee with respect
to any Unimpaired Claims, including, but not limited to, all rights with respect
to legal and equitable defenses to alleged rights of setoff or recoupment of
Unimpaired Claims. Except to the extent Reorganized RoomStore expressly assumes
an obligation or liability of any other Debtor, the Plan will not operate to
impose liability on Reorganized RoomStore for the Claims against any other
Debtor or the debts and obligations of any other Debtor, provided that
Reorganized RoomStore shall remain liable for any Allowed Administrative Claims
arising out of the post-petition business operations of RoomStore.
4.14 Estimation of Claims. At any time, the Debtors or the Liquidation
Trustee may request that the Bankruptcy Court estimate any contingent or
unliquidated Claim to the extent permitted by Bankruptcy Code Section 502(c),
regardless of whether the Debtors or the Liquidation Trust shall have previously
objected to such Claim or whether the Bankruptcy Court shall have ruled on any
such objection, and the Bankruptcy Court shall have jurisdiction to estimate any
Claim at any time during litigation concerning any objection to such Claim,
including during the pendency of any appeal relating to any such objection. If
the Bankruptcy Court estimates any contingent or unliquidated Claim, that
estimated amount shall constitute either the Allowed amount of such Claim or a
maximum limitation on the Claim, as determined by the Bankruptcy Court. If the
estimated amount constitutes a maximum limitation on the Claim, the Liquidation
Trust may elect to pursue supplemental proceedings to object to the ultimate
Allowance of the Claim. All of the foregoing Claims objection, estimation, and
resolution procedures are cumulative and not exclusive of one another. Claims
may be estimated and subsequently compromised, settled, withdrawn, or resolved
by any mechanism approved by the Bankruptcy Court.
27
ARTICLE V
ACCEPTANCE OR REJECTION OF THE PLAN;
EFFECT OF REJECTION BY ONE OR MORE
IMPAIRED CLASSES OF CLAIMS OR INTERESTS
5.1 Impaired Classes of Claims and Interests Entitled to Vote. Except
as otherwise provided in the Solicitation Procedures Order and the Plan, each
Impaired Class of Claims that will receive or retain property or any interest in
property under the Plan shall be entitled to vote to accept or reject the Plan.
Pursuant to Bankruptcy Code Section 1126(c) and except as provided in Bankruptcy
Code Section 1126(e), an Impaired Class of Claims has accepted the Plan if the
holders of at least two-thirds (2/3) in dollar amount and more than one-half
(1/2) in number of the holders of Allowed Claims of such Class actually voting
on the Plan have voted to accept the Plan.
5.2 Presumed Acceptances by Unimpaired Classes. Class 1 (Other Priority
Claims) and Class 2(a) (Wachovia Secured Claims), Class 2(b) (Prudential Notes
Secured Claims), Class 2(c) (Synthetic Lease Secured Claims), Class 3
(Bondholder Secured Claims), and Class 4 (Other Secured Claims) are Unimpaired
by the Plan. Under Section 1126(f) of the Bankruptcy Code and/or the
Solicitation Procedures Order, such Claimholders are conclusively presumed to
have accepted the Plan, and the votes of such Claimholders will not be
solicited.
5.3 Classes Deemed to Reject Plan. Because holders of Class 6
Subordinated Securities Claims and Class 7 Old Common Stock Interests are not
receiving a distribution on account of such Claims and Interests under the Plan,
they are conclusively presumed to have rejected the Plan, and the votes of such
holders will not be solicited.
5.4 Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code. To
the extent that any Impaired Class entitled to vote rejects the Plan or is
deemed to have rejected it, the Debtors and the Creditors' Committee may request
confirmation of the Plan, as it may be modified from time to time, under
Bankruptcy Code Section 1129(b).
5.5 Confirmability and Severability of a Plan. The Debtors and the
Creditors' Committee reserve the right to alter, amend, modify, revoke or
withdraw the Plan as it applies to any particular Debtor; provided, however,
that neither the Debtors nor the Creditors' Committee may alter, amend, or
modify the Plan without the written consent of the other; provided further,
however, that revocation or withdrawal of the Plan by either the Debtors or the
Creditors' Committee shall constitute a revocation and withdrawal of the Plan by
both the Debtors and the Creditors' Committee. A determination by the Bankruptcy
Court that the Plan, as it applies to any particular Debtor, is not confirmable
pursuant to Section 1129 of the Bankruptcy Code shall not limit or affect (a)
the confirmability of the Plan as it applies to any other Debtor or (b) the
ability of the Debtors and the Creditors' Committee to modify the Plan, as it
applies to any particular Debtor, to satisfy the confirmation requirements of
Section 1129 of the Bankruptcy Code.
28
ARTICLE VI
MEANS FOR IMPLEMENTATION OF THE PLAN
6.1 Substantive Consolidation. Entry of the Confirmation Order shall
constitute the approval, pursuant to Bankruptcy Code Section 105(a), as of the
Effective Date, of the substantive consolidation of the Debtors' Chapter 11
Estates for all purposes related to the Plan, including voting, confirmation,
distributions, and Claim determinations. The substantive consolidation of the
Debtors' Chapter 11 Estates shall have the following effects: (a) all assets of
the Debtors' Chapter 11 Estates shall be treated as though they were assets of a
consolidated Chapter 11 Estate; (b) no distributions shall be made under the
Plan on account of Claims held by any Debtor against another Debtor; (c) no
distributions shall be made under the Plan on account of any Interests held by
any Debtor in another Debtor; (d) all guaranties by any Debtor of the
obligations of any other Debtor and any liability (whether primary or secondary,
or individual or joint and several) of the Debtors shall be deemed to be one
obligation of the consolidated Estate; and (e) each and every Claim filed, to be
filed, or deemed to have been filed in the Cases against any Debtor shall be
deemed filed against the consolidated Estate, and shall be deemed to be one
Claim against, and the liability of, the consolidated Estate. Any provision
contained in this Plan to the contrary notwithstanding, on the Effective Date,
Reorganized RoomStore shall be the sole and exclusive owner of the RoomStore
Assets and of all rights, titles and interests therein and thereto. A separate
motion for an order approving the substantive consolidation of the Debtors'
Chapter 11 Estates into the consolidated Estate as provided herein shall be
filed, and the Confirmation Order shall constitute the Bankruptcy Court's
approval of the substantive consolidation of the Debtors' Chapter 11 Estates as
provided herein.
6.2 Debtor Intercompany Claims. On the Effective Date, all Intercompany
Claims between and among the Debtors shall be eliminated by either offset, the
contribution or distribution of such Claims, or otherwise (as determined by the
Debtors).
6.3 Compromise and Settlement. Pursuant to Bankruptcy Rule 9019, the
Plan is based upon a proposed compromise and settlement of all issues relating
to the substantive consolidation of the Debtors, which will be resolved pursuant
to a separate motion filed with the Bankruptcy Court. The Debtors and holders of
the Heilig Unsecured Claims alleged that substantive consolidation of the
Debtors is appropriate. This allegation was disputed by the holders of RoomStore
Unsecured Claims and Funded Debt Unsecured Claims. Pursuant to the Plan, and in
consideration for the distribution premium provided to the holders of the
RoomStore Unsecured Claims and Funded Debt Unsecured Claims, the dispute among
the different holders of claims is compromised, and the Debtors shall be
substantively consolidated.
6.4 Cancellation of Existing Securities and Agreements. On the
Effective Date, except as otherwise specifically provided for herein, (a) the
Existing Securities and any other note, bond, indenture, or other instrument or
document evidencing or creating any indebtedness or obligation of the Debtors
(or any Debtor) or ownership Interest in the Debtors, and all options, warrants
and rights (whether fixed or contingent, matured or unmatured, disputed or
undisputed, contractual, legal, equitable or otherwise) to acquire any of the
foregoing that shall be authorized, issued and outstanding immediately prior to
the Effective Date shall be cancelled without any further action on the part of
the Bankruptcy Court or any other Person, and (b) the obligations of or Claims
against the Debtors and Interests in the Debtors under, relating, or pertaining
to any agreements, indenture, certificates of designation, bylaws, or
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certificate or articles of incorporation or similar document governing the
Existing Securities and any other note, bond, indenture, or other instrument or
document evidencing or creating any indebtedness or obligation of or ownership
Interest in the Debtors, as the case may be, that shall be authorized, issued
and outstanding immediately prior to the Effective Date shall be released and
discharged without any further action on the part of the Bankruptcy Court or any
other Person; provided, however, that the Indentures shall continue in effect
solely for purposes of: (i) allowing the Indenture Trustee to make distributions
on account of such Claims under the Plan as provided in Article VIII of the
Plan; (ii) preserving for the Indenture Trustee any rights, including
indemnification rights, it may have with respect to the Claimholders under such
Indentures; (iii) permitting the Indenture Trustee to maintain any rights or
liens it may have for fees, costs, and expenses under such Indentures; provided,
further, that the preceding provision shall not affect the discharge of Claims
against or Interests in the Debtors under the Bankruptcy Code, the Confirmation
Order, or this Plan, or result in any expense or liability to the Liquidation
Trustee or Reorganized RoomStore; and (iv) preserving for the Indenture Trustee
any rights it may have against the Pre-Petition Lenders with respect to Section
1008 of the Indentures. The Debtors shall not have any obligations to the
Indenture Trustee (or to any Liquidation Trustee that may replace the Indenture
Trustee) for any fees, costs, or expenses except as expressly provided in
Sections 2.1 and 8.6 hereof; provided, however, that nothing herein shall
preclude the Indenture Trustee (or any Liquidation Trustee that may replace the
Indenture Trustee) from being paid or reimbursed for prepetition or postpetition
fees, costs, and expenses from the distributions being made by the Indenture
Trustee (or any Liquidation Trustee that may replace the Indenture Trustee)
pursuant to such Indentures in accordance with the provisions set forth therein,
all without application to or approval by the Bankruptcy Court.
6.5 Liquidation and Dissolution. (a)
(a) With the exception of RoomStore, each of the Debtors shall be
deemed to have been liquidated as of the Effective Date. All Interests in each
Debtor shall automatically be canceled and extinguished as of the Effective Date
without the need for any further action by the Bankruptcy Court or any Entity.
(b) Notwithstanding the foregoing, on the Effective Date or soon as
reasonably practicable thereafter, the Liquidation Trustee, on behalf of each of
the Debtors, other than RoomStore, shall: (i) file its certificate of
dissolution, together with all other necessary corporate documents, to effect
its dissolution under the applicable laws of its state of incorporation, and
(ii) complete and file its final federal, state, and local tax returns, and
pursuant to Section 505(b) of the Bankruptcy Code, request an expedited
determination of any unpaid tax liability of such Debtor or its Estate for any
tax incurred during the administration of such Debtor's Chapter 11 Case, as
determined under applicable tax laws. The filing by the Liquidation Trustee for
each such Debtor of its articles or certificate of dissolution shall be
authorized and approved in all respects without further action under applicable
law, regulation, order, or rule including, without limitation, any action by the
stockholders or the board of directors of such Debtor.
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(c) On the Effective Date, each Debtor, other than RoomStore, shall
assign, transfer, and distribute to (a) Reorganized RoomStore any RoomStore
Assets that it owns and (b) the Liquidation Trust (i) all other assets,
properties, or interests; and (ii) all of its books and records relating to
clause (b)(i) herein or this Section 6.5(c). For purposes of this section, books
and records include computer generated or computer maintained books and records
and computer data, as well as electronically generated or maintained books and
records or data, along with books and records of any Debtor, other than
RoomStore, maintained by or in the possession of third parties, wherever
located.
6.6 New RoomStore Common Stock.
(a) On the Effective Date, Reorganized RoomStore shall issue 1,000
shares of New RoomStore Common Stock to the Liquidation Trust. Such shares of
New RoomStore Common Stock shall represent 100% of the shares of New RoomStore
Common Stock issued and outstanding on the Effective Date.
(b) The shares of New RoomStore Common Stock issued to the
Liquidation Trust shall be held by the Liquidation Trustee for the benefit of
the holders of Allowed Unsecured Claims in accordance with the terms and subject
to the conditions set forth in the Trust Agreement.
6.7 The Liquidation Trust; Organizational Matters.
(a) Establishment of the Liquidation Trust. Without any further
action of the Debtors' directors or shareholders, on the Effective Date, the
Trust Agreement shall become effective. The Liquidation Trustee shall accept the
Liquidation Trust and sign the Trust Agreement on the Effective Date, and the
Liquidation Trust will then be deemed created and effective.
(b) Vesting of Trust Assets. On the Effective Date, the Debtors
shall transfer and shall be deemed to have transferred to the Liquidation Trust,
for and on behalf of the holders of beneficial interests in the Liquidation
Trust, the Trust Assets, including but not limited to the Estate Actions.
(c) Beneficial Interests. The beneficial interests in the
Liquidation Trust shall be uncertificated and shall be non-transferable except
upon death of the holder of beneficial interests or by operation of law. Holders
of beneficial interests shall have no voting rights with respect to such
beneficial interests. The Liquidation Trust shall have a term of 3 years from
the Effective Date, without prejudice to the rights of the Liquidation Trust
Committee to extend such term conditioned upon the Liquidation Trust not then
becoming subject to the Exchange Act. Subject to the consent of the Liquidation
Trust Committee, which consent shall not be unreasonably withheld, the terms of
the Liquidation Trust may be amended by the Debtors and the Creditors' Committee
prior to the Effective Date, or the Liquidation Trustee after the Effective Date
to the extent necessary to ensure that the Liquidation Trust will not become
subject to the Exchange Act. Any extension of the term of the Liquidation Trust
must be approved by the Bankruptcy Court, after notice and hearing, at least
three months prior to the beginning of any such extended term.
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6.8 Intended Tax Treatment of the Liquidation Trust. For federal income
tax purposes, it is intended that the Liquidation Trust be classified as a
liquidating trust under Section 301.7701-4 of the Treasury regulations and that
such trust is owned by its beneficiaries. Accordingly, for federal income tax
purposes, it is intended that the beneficiaries be treated as if they had
received a distribution of an undivided interest in each of the Trust Assets and
then contributed such interests to the Liquidation Trust.
6.9 The Liquidation Trustee.
(a) Appointment of the Liquidation Trustee. The Liquidation Trustee
shall be designated by the Creditors' Committee. The Person so designated by the
Creditors' Committee shall become the Liquidation Trustee upon the Bankruptcy
Court entering an order approving the Person designated by the Creditors'
Committee after consideration of the same and any objections thereto at the
Confirmation Hearing. The Liquidation Trustee shall have and perform all of the
duties, responsibilities, rights and obligations set forth in the Trust
Agreement, including the right to vote as holder of the stock of Reorganized
RoomStore, and shall be entitled to reasonable compensation, indemnification and
reimbursement of costs and expenses as set forth therein without further
application to or order of the Bankruptcy Court.
(b) Administration of Trust Assets by the Liquidation Trustee. The
Liquidation Trustee shall have the rights and obligations set forth in the Trust
Agreement, a copy which will be filed as part of the Plan Supplement.
(c) Establishment of the Reserves. On the Effective Date (if not
funded prior to such time), the Liquidation Trustee (a) shall use Cash held by
the Liquidation Trust to establish the Administrative Claims Reserve, Other
Priority Claims Reserve and the Other Secured Claims Reserve, which shall be
maintained by the Liquidation Trustee in accordance with Article VI of the Plan;
(b) shall use .008065% of the shares of New RoomStore Common Stock for every
$10,000 of RoomStore Unsecured Claims to establish the RoomStore Unsecured
Claims Reserve; and (c) shall use the Available Cash and the Available New
RoomStore Common Stock held by the Liquidation Trustee to establish the Heilig
Unsecured Claims Reserve and Funded Debt Unsecured Claims Reserve (subject to
adjustment to the extent additional cash or notes are required to be paid or
issued to fully satisfy the Wachovia Secured Claims, Prudential Notes Secured
Claims, or Synthetic Lease Secured Claims), as provided in the Trust Agreement,
which Reserves shall be maintained by the Liquidation Trustee in accordance with
Article VI of the Plan.
(d) Payment of the Expenses Incurred by the Liquidation Trustee. All
costs and expenses associated with the administration of the Liquidation Trust
shall be the responsibility of and paid by the Liquidation Trust.
Notwithstanding the foregoing, Reorganized RoomStore shall cooperate with the
Liquidation Trustee in administering the Trust Assets and shall afford
reasonable access during normal business hours, upon reasonable notice, to
personnel and books and records of Reorganized RoomStore to representatives of
the Liquidation Trust to enable the Liquidation Trustee to perform the
Liquidation Trustee's tasks under the Trust Agreement and this Plan. Reorganized
RoomStore shall not be entitled to compensation or reimbursement (including
reimbursement for professional fees) with respect to fulfilling its obligations
as set forth in this Section 6.9.
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(e) Retention of Professionals. The Liquidation Trustee may retain
such law firms, accounting firms, experts, advisors, financial advisors,
consultants, investigators, appraisers, auctioneers or other professionals as it
may deem necessary (collectively, the "Trustee Professionals"), in its sole
discretion, to aid in the performance of its responsibilities pursuant to the
terms of this Plan including, without limitation, the liquidation and
distribution of Trust Assets. The Trustee Professionals shall continue to
prepare monthly statements in the same manner and in the same detail as required
pursuant to the Professional Fee Order, and the Trustee Professionals shall
serve such statements on the Liquidation Trustee and each member of the
Liquidation Trust Committee. In the event two or more members of the Liquidation
Trust Committee object to the reasonableness of such fees and expenses, the
matter shall be submitted to the Bankruptcy Court for approval of the
reasonableness of such fees and expenses.
(f) Tax Administrative Matters. The Liquidation Trustee shall be
responsible for filing all federal, state and local tax returns for the
Liquidation Trust. The Liquidation Trustee shall comply with all withholding and
reporting requirements imposed by any federal, state, local or foreign taxing
authority, and all distributions made by the Liquidation Trustee shall be
subject to any such withholding and reporting requirements. The Liquidation
Trustee shall provide to holders of beneficial interests in the Liquidation
Trust copies of all annual, periodic and other reports and statements specified
in the Trust Agreement, with such copies to be made available on an internet
website to be maintained by the Liquidation Trustee and notice of which shall be
given by the Liquidation Trustee to such beneficial interest holders.
(g) Valuation of Trust Assets. The Liquidation Trustee shall be
responsible for obtaining a valuation of the assets held by the Liquidation
Trust within 90 days of the Effective Date and providing notice of such
valuation to the holders of Allowed Claims.
6.10 The Liquidation Trust Committee.
(a) Appointment of the Liquidation Trust Committee. The Liquidation
Trust Committee shall be composed of three (3) members, each of which shall be
designated by the Creditors' Committee. The Liquidation Trust Committee shall
adopt such bylaws as it may deem appropriate, provided, however, that any such
bylaws shall not contain terms inconsistent with the terms of the Plan or the
Trust Agreement. The Liquidation Trustee shall consult regularly with the
Liquidation Trust Committee when carrying out the purpose and intent of the
Liquidation Trust. Members of the Liquidation Trust Committee shall have and
perform all of the duties, responsibilities, rights and obligations and shall
have the oversight over the activities of the Liquidation Trustee set forth in
the Trust Agreement and shall be entitled to reasonable compensation,
indemnification and reimbursement of costs and expenses as set forth therein
without further application to or order of the Bankruptcy Court. In no event,
however, shall any member of the Liquidation Trust Committee or his or her
agents, representatives, professionals or employees exercise any management or
control over the business, assets, affairs or operations of Reorganized
RoomStore of any or its subsidiaries.
(b) Replacement of Members. In the case of an inability or
unwillingness of any member of the Liquidation Trust Committee to serve, such
member shall be replaced by designation of the remaining members of the
Liquidation Trust Committee. If any position on the Liquidation Trust Committee
remains vacant for more than thirty (30) days, such vacancy shall be filled
33
within fifteen (15) days thereafter by the designation of the Liquidation
Trustee without the requirement of a vote by the other members of the
Liquidation Trust Committee.
(c) Discharge. Upon the certification by the Liquidation Trustee
that all assets transferred into the Liquidation Trust have been distributed,
abandoned or otherwise disposed of, the members of the Liquidation Trust
Committee shall resign their positions, whereupon they shall be discharged from
further duties and responsibilities hereunder and the Trust Agreement.
(d) Removal and Replacement of the Liquidation Trustee. The
Liquidation Trust Committee may remove the Liquidation Trustee with or without
cause. In the event of the resignation or removal of the Liquidation Trustee,
the Liquidation Trust Committee shall, by majority vote, designate a person to
serve as successor Liquidation Trustee. In the event the Liquidation Trust
Committee is unwilling or unable to designate any such successor, the Bankruptcy
Court shall make such designation.
6.11 Conversion of New RoomStore Common Stock into Cash or Other
Marketable Securities. It is anticipated that the New RoomStore Common Stock
held by the Liquidation Trust will be distributed by the Liquidation Trust to
the holders of Allowed RoomStore Unsecured Claims, Allowed Funded Debt Unsecured
Claims and Allowed Heilig Unsecured Claims in accordance with the terms and
subject to the conditions set forth in the Plan and the Trust Agreement.
However, the Liquidation Trust Committee shall be authorized to instruct the
Liquidation Trustee:
(a) to convert the New RoomStore Common Stock, in full or in part, into
Cash or the marketable and freely-tradable securities of a successor
corporation (through: (i) the merger or consolidation of Reorganized
RoomStore with any such successor corporation; (ii) the sale or other
disposition of shares of New RoomStore Common Stock; (iii) the sale or
other disposition of all or substantially all of the assets of
Reorganized RoomStore and its subsidiaries and the subsequent
liquidation of Reorganized RoomStore and its subsidiaries; or (iv) the
consummation of one or more other transactions entered into for the
purpose of monetizing the New RoomStore Common Stock or the assets of
Reorganized RoomStore and its subsidiaries) in accordance with such
terms and conditions as the Liquidation Trust Committee, in the
exercise of its sole discretion, shall deem appropriate;
(b) to distribute the proceeds thereof such that holders of: (i)
Allowed RoomStore Unsecured Claims receive a Pro Rata share of the
proceeds derived from .008065% of the shares of New RoomStore Common
Stock for every $10,000 of RoomStore Unsecured Claims; (ii) Allowed
Funded Debt Unsecured Claims receive a Pro Rata share of the proceeds
resulting from the Class 5(b) Trust Allocation (subject to adjustment
to the extent additional Cash or notes are required to be paid or
issued to fully satisfy the Wachovia Secured Claims, Prudential Notes
Secured Claims, or Synthetic Lease Secured Claims); and (iii) Allowed
Heilig Unsecured Claims receive a Pro Rata share of the proceeds
34
resulting from the Class 5(c) Trust Allocation (subject to adjustment
to the extent additional Cash or notes are required to be paid or
issued to fully satisfy the Wachovia Secured Claims, Prudential Notes
Secured Claims, or Synthetic Lease Secured Claims); and
(c) to apply any such proceeds that shall remain after completing such
Distribution to the RoomStore Unsecured Claims Reserve, Funded Debt
Unsecured Claims Reserve and/or Heilig Unsecured Claims Reserve, as
appropriate, pursuant to the Trust Agreement.
6.12 Reorganized RoomStore; Organizational Matters.
(a) Continued Corporate Existence of Reorganized RoomStore.
RoomStore shall continue to exist after the Effective Date as Reorganized
RoomStore, a separate corporate entity with all the powers of a corporation
under the applicable law of the jurisdiction in which it is incorporated and
pursuant to the certificate of incorporation and bylaws in effect prior to the
Effective Date, except to the extent such certificate of incorporation and
bylaws are amended and restated pursuant to this Plan, without prejudice to any
right to terminate such existence (whether by merger or otherwise) under
applicable law after the Effective Date.
(b) Corporate Action. Each of the matters provided for under the
Plan involving corporate action to be taken by or required of RoomStore shall,
as of the Effective Date, be deemed to have occurred and be effective as
provided herein, and shall be authorized and approved in all respects without
any requirement of further action by the stockholders, creditors, or members of
the board of directors of RoomStore.
(c) Certificate of Incorporation and Bylaws. On the Effective Date,
the certificate of incorporation and bylaws of RoomStore shall be amended and
restated as necessary to satisfy the provisions of the Plan and the Bankruptcy
Code. The amended and restated certificate of incorporation of Reorganized
RoomStore shall, among other things, authorize 1,000 shares of New RoomStore
Common Stock, one cent par value per share, and prohibit the issuance of
non-voting equity securities consistent with the requirements of Section 1123(a)
of the Bankruptcy Code. The form of certificate of incorporation of Reorganized
RoomStore, as so amended and restated, and the form of bylaws of Reorganized
RoomStore, as so amended and restated shall be filed as part of the Plan
Supplement.
(d) Vesting of RoomStore Assets. On the Effective Date, the
RoomStore Assets shall be deemed transferred to Reorganized RoomStore free and
clear of any obligation to resolve or pay any Claims, except those
Administrative Claims of HMY RoomStore, Inc. arising from the operation of the
RoomStore business postpetition.
6.13 Reorganized RoomStore: Directors and Officers.
(a) Appointment of Directors. On the Effective Date, the term of
office of the current members of the Debtors' board of directors shall expire.
The Plan Supplement shall detail the number of directors of the initial board of
directors of Reorganized RoomStore, each of whom shall be selected by the
Creditors' Committee. The Persons designated to serve as members of such initial
board of directors shall be identified in the Plan Supplement. After the
Effective Date, the composition of Reorganized RoomStore's board of directors
shall be subject to the provisions of the amended and restated certificate of
35
incorporation and bylaws of Reorganized RoomStore. The board of directors of
RoomStore shall have responsibility for the management, control and operation of
Reorganized RoomStore on and after the Effective Date.
(b) Appointment of Officers. The existing senior officers of
RoomStore shall continue to serve in such capacities with Reorganized RoomStore
after the Effective Date, subject to the terms of any applicable employment
agreements and the rights of Reorganized RoomStore's board of directors to
dismiss such officers with or without cause.
(c) Effectuating Documents; Further Transactions. The Chairman of
the Board of Directors, the Chief Executive Officer, or any other officer of
RoomStore or Reorganized RoomStore, as the case may be, shall be authorized to
execute, deliver, file, or record such contracts, instruments, releases,
indentures, and other agreements or documents, and take such actions as may be
necessary or appropriate to effectuate and further evidence the terms and
conditions of the Plan. The Secretary or Assistant Secretary of RoomStore or
Reorganized RoomStore, as the case may be, shall be authorized to certify or
attest to any of the foregoing actions.
6.14 Reorganized RoomStore: Issuance of New Securities.
(a) Exemption from Registration. On the Effective Date, Reorganized
RoomStore shall issue the New RoomStore Common Stock in accordance with the
provisions of Section 6.6 of the Plan. Commencing on the Effective Date and
continuing until the termination of the Liquidation Trust, the Liquidation Trust
shall issue beneficial interests in the Liquidation Trust to holders of Allowed
Claims in exchange for their interests in the Trust Assets. Except as otherwise
directed by the Liquidating Trust Committee to convert the New RoomStore Common
Stock to Cash pursuant to Section 6.11 hereof, on the Initial Distribution Date,
the Liquidating Trust shall make Distributions of New RoomStore Common Stock to
holders of Allowed Unsecured Claims in discharge of and in exchange for such
Allowed Unsecured Claims. The issuance of the New RoomStore Common Stock in
accordance with the provisions of Section 6.6 of the Plan, the issuance of the
beneficial interests in the Liquidation Trust to the holders of Allowed
Unsecured Claims in exchange for their interests in the Liquidating Trust, and
the Distribution by the Liquidation Trust of the New RoomStore Common Stock to
the holders of Allowed Unsecured Claims, in discharge of and in exchange for
such Allowed Unsecured Claims, shall be exempt from the registration
requirements of the Securities Act and the registration and qualification
requirements of all applicable state securities laws pursuant to the exemption
afforded by Section 1145(a) of the Bankruptcy Code.
(b) Future Registration. Commencing on or before the Initial
Distribution Date with respect to the Distribution of New RoomStore Common Stock
to the holders of Allowed Unsecured Claims in accordance with the Plan,
Reorganized RoomStore shall use all commercially reasonable efforts to list the
New RoomStore Common Stock on either the New York Stock Exchange or the NASDAQ
Stock Market as Reorganized RoomStore may determine in its discretion reasonably
exercised, or, if the New RoomStore Common Stock is not approved for listing on
either exchange, on a national securities exchange or for quotation on a
national automated interdealer quotation system as promptly as practicable, but
shall have no liability if it is unable to do so.
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(c) Executive Incentive Program. RoomStore's basic compensation
program for executive officers consists of base salary and pay for performance.
Base salaries for senior executives are based upon a combination of factors
including past individual performance, competitive salary levels, and the
individual's potential for making significant contributions to future Company
performance. Incentive bonuses are annual bonus awards based upon individual
performance and actual operating results compared to planned operating results.
RoomStore believes that stock options, restricted stock, or other
equity-based compensation programs are an important performance-based component
of senior executive compensation and will motivate senior executives and other
key employees to contribute to the long-term growth of shareholder value. The
terms of Reorganized RoomStore's equity incentive plan will be described more
fully in the Plan Supplement.
6.15 Reorganized RoomStore: Post-Effective Date Financing. Reorganized
RoomStore expects to enter into the New Credit Facility to obtain the funds
necessary to (i) satisfy the Debtors' funding requirements under the Plan and
(ii) allow RoomStore to conduct Reorganized RoomStore's post-reorganization
operations. Documents evidencing the New Credit Facility, or commitment letters
with respect thereto, shall be filed by the Debtors with the Bankruptcy Court no
later than the Confirmation Date. In the Confirmation Order, the Bankruptcy
Court shall approve the New Credit Facility in substantially the form filed with
the Bankruptcy Court and authorize the Liquidation Trust and Reorganized
RoomStore, as applicable, to execute the same together with such other documents
as the New Credit Facility lenders may reasonably require to effectuate the
treatment afforded to such parties under the New Credit Facility.
6.16 Fractional Shares. No fractional shares of New RoomStore Common
Stock or Cash in lieu thereof shall be distributed. For purposes of
Distribution, fractional shares of New RoomStore Common Stock shall be rounded
down to the next whole number or zero, as applicable, and no Cash will be
distributed in lieu thereof. As a result of this rounding, less than all shares
of New RoomStore Common Stock specified in the Plan may actually be issued
hereunder.
6.17 Funding of the Liquidation Trust. On the Effective Date, the
Debtors shall transfer to the Liquidation Trust, in the form of an irrevocable
contribution to the Liquidation Trust, (i) sufficient Cash to fund the
Administrative Claims Reserve, Other Priority Claims Reserve and the Other
Secured Claims Reserve and (ii) the greater of $3,750,000 or all remaining Cash
held by the Debtors, except for $100,000 which shall be transferred to
Reorganized RoomStore, which Cash shall be used to pay the costs and expenses of
the Liquidation Trust, including the costs and expenses incurred in connection
with the prosecution or settlement of the Estate Actions and the costs and
expenses incurred by the Liquidation Trustee and the members of the Liquidation
Trust Committee in the performance of their respective duties under the Trust
Agreement. Additionally, on the Effective Date, unless otherwise liquidated, the
Liquidation Trust shall, as may be necessary for funding the costs and expenses
of the Liquidation Trust, (i) sell the Berrios Note to Reorganized RoomStore and
receive, in return, Cash in the amount of $5 million and a note issued by
37
RoomStore in the aggregate face amount of $9 million, which note shall bear
interest at the market rate of interest per annum, or (ii) other assets to be
determined. In the event that these funds are insufficient to: (i) fully fund
the Administrative Claims Reserve, Other Priority Claims Reserve and the Other
Secured Claims Reserve; and (ii) to pay the costs and expenses of the
Liquidation Trust, including the costs and expenses incurred in connection with
the prosecution or settlement of the Estate Actions and the costs and expenses
incurred by the Liquidation Trustee and the members of the Liquidation Trust
Committee in the performance of their respective duties under the Trust
Agreement, the Liquidation Trustee may, at any time or from time to time,
require Reorganized RoomStore to make an additional irrevocable capital
contribution, which shall not exceed $3,500,000 in aggregate.
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ARTICLE VII
UNEXPIRED LEASES AND EXECUTORY CONTRACTS
7.1 Assumption/Rejection of Contracts and Leases. Each executory
contract and unexpired lease to which any of the Debtors are a party shall be
deemed automatically rejected as of the Effective Date, unless such executory
contract or unexpired lease (a) shall have been previously assumed by the
Debtors, (b) is the subject of a motion to assume filed, or a notice of
assumption served pursuant to order of the Bankruptcy Court, on or before the
Confirmation Date, or (c) is listed on the schedule of to-be-assumed contracts
and leases included in the Plan Supplement. The Confirmation Order shall
constitute an order of the Bankruptcy Court approving such rejections and
assumptions, pursuant to Section 365 of the Bankruptcy Code.
7.2 Payments Related to Assumption of Executory Contracts and Unexpired
Leases. The provisions (if any) of each executory contract and unexpired lease
to be assumed and Reinstated under this Plan that are or may be in default shall
be satisfied solely by Cure. Any Person claiming that a monetary Cure amount is
due in connection with the assumption of any executory contract or unexpired
lease as contemplated by Section 365(b) of the Bankruptcy Code must file a
monetary Cure claim with the Bankruptcy Court asserting all alleged amounts
accrued through the Effective Date, if any (the "Cure Claim"), no later than
thirty (30) days after the Effective Date (the "Cure Claim Submission
Deadline"). Any party failing to submit a Cure Claim by the Cure Claim
Submission Deadline shall be forever barred from asserting, collecting, or
seeking to collect any amounts relating thereto against the Debtors, the
Liquidation Trust, or Reorganized RoomStore except to the extent such amounts
are otherwise included in the Debtors' Schedules. The Liquidation Trustee and
Reorganized RoomStore shall have ninety (90) days from the Cure Claim Submission
Deadline (the "Cure Claim Objection Deadline") to file objections to Cure
Claims. Any Disputed Cure Claims, if not resolved consensually by the parties,
shall be resolved by the Bankruptcy Court or, at the mutual election of the
parties, in any non-Bankruptcy forum. Disputed Cure Claims shall be set for
status at subsequent hearings following the Cure Claim Objection Deadline with
separate evidentiary hearings to be set by the Bankruptcy Court as needed. If
the Debtors do not dispute a Cure Claim, the Liquidation Trust or Reorganized
RoomStore, as applicable, shall pay the Cure Claim, if any, to the claimant
within twenty (20) days of the Cure Claim Objection Deadline. In the event of a
dispute regarding (a) the nature or the amount of any Cure, (b) the ability of
the Liquidation Trustee, Reorganized RoomStore or any assignee to provide
"adequate assurance of future performance" (within the meaning of Section 365(b)
of the Bankruptcy Code) under the contract or lease to be assumed, or (c) any
other matter pertaining to assumption, any such Cure shall be paid by the
Liquidation Trust or Reorganized RoomStore, as applicable, as soon as reasonably
practicable after such agreement or Final Order (but in no event any later than
twenty (20) days thereafter). The Plan Supplement will list any and all
executory contracts and unexpired leases to be assumed by the Liquidation Trust.
7.3 Rejection Damages Bar Date. If the rejection by the Debtors
(pursuant to the Plan or otherwise) of an executory contract or unexpired lease
results in a Claim, such Claim shall be forever barred and shall not be
enforceable against the Debtors, the Liquidation Trust, Reorganized RoomStore,
39
or such entities' properties unless a proof of claim is filed with the Claims
Agent and served upon the Liquidation Trustee within thirty (30) days after
service of the earlier of (a) notice of the Confirmation Order or (b) other
notice that the executory contract or unexpired lease has been rejected.
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ARTICLE VIII
PROVISIONS GOVERNING DISTRIBUTIONS
8.1 Time of Distributions. Except as otherwise provided for herein or
ordered by the Bankruptcy Court, distributions under the Plan shall be made on
or as soon as practicable after the Effective Date.
8.2 No Interest on Claims. Unless otherwise specifically provided for
in the Plan or the Confirmation Order, Postpetition Interest shall not accrue or
be paid on Claims, and no Claimholder shall be entitled to interest accruing on
or after the Petition Date on any Claim, right, or Interest. Additionally, and
without limiting the foregoing, interest shall not accrue or be paid on any
Disputed Claim in respect of the period from the Effective Date to the date a
final distribution is made when and if such Disputed Claim becomes an Allowed
Claim.
8.3 Liquidation Trustee. Except as otherwise provided in the Plan or
the Confirmation Order, the Liquidation Trustee shall make all distributions
required under the Plan except with respect to a holder of a Claim whose
distribution is governed by an Indenture, which distributions shall be deposited
with the Indenture Trustee, who shall deliver such distributions to the holders
of Claims in accordance with the provisions of this Plan and the terms of the
Indenture; provided, however, that if the Indenture Trustee is unable to make
such distributions, the Liquidation Trustee shall make such distributions.
8.4 Surrender of Securities or Instruments. On or before the Initial
Distribution Date, or as soon as practicable thereafter, each holder of an
instrument evidencing either a Claim, including, without limitation, a Claim on
account of an Indenture (as to each, a "Certificate"), shall surrender such
Certificate to the Liquidation Trustee, or, with respect to indebtedness that is
governed by the Indenture, the Indenture Trustee, and such Certificate shall be
cancelled. No distribution of property hereunder shall be made to or on behalf
of any such holder unless and until such Certificate is received by the
Liquidation Trustee or the Indenture Trustee or the unavailability of such
Certificate is reasonably established to the satisfaction of the Liquidation
Trustee (or the Indenture Trustee). 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 reasonably satisfactory to the Liquidation Trustee or the
Indenture Trustee prior to the second anniversary of the Effective Date, shall
be deemed to have forfeited all rights and Claims in respect of such Certificate
and shall not participate in any Distribution hereunder, and all property in
respect of such forfeited Distribution, including any dividends or interest
attributable thereto, shall revert to the Liquidation Trust notwithstanding any
federal or state escheat laws to the contrary. Following any such reversion, the
Liquidation Trustee shall distribute such property such that: (i) holders of
Allowed Funded Debt Unsecured Claims shall receive a Pro Rata share of the
property resulting from the Class 5(b) Trust Allocation and any property that
shall remain after such Distribution shall be applied to the Funded Debt
Unsecured Claims Reserve (subject to adjustment to the extent additional cash or
notes are required to be paid or issued to fully satisfy the Wachovia Secured
Claims, Prudential Notes Secured Claims, or Synthetic Lease Secured Claims);
41
(ii) holders of Allowed Heilig Unsecured Claims shall receive a Pro Rata share
of the property resulting from the Class 5(c) Trust Alloaction and any property
that shall remain after such Distribution shall be applied to the Heilig
Unsecured Claims Reserve (subject to adjustment to the extent additional cash or
notes are required to be paid or issued to fully satisfy the Wachovia Secured
Claims, Prudential Notes Secured Claims, or Synthetic Lease Secured Claims); and
(iii) holders of Allowed RoomStore Unsecured Creditors shall receive a Pro Rata
share of such property that is included in .008065% of the shares of New
RoomStore Common Stock for every $10,000 of RoomStore Unsecured Claims and any
property that shall remain after such Distribution shall be applied to the
RoomStore Unsecured Claims Reserve. Any such Distribution shall be made on the
first Periodic Distribution Date following the date of any such reversion.
8.5 Distribution Instructions. Prior to any distribution on account of
any Claim pursuant to an Indenture, the Indenture Trustee shall (a) inform the
Liquidation Trustee as to the amount of properly surrendered Claims pursuant
thereto and (b) instruct the Liquidation Trustee, in a form and manner that the
Liquidation Trustee reasonably determines to be acceptable, of the names of such
Claimholders who have properly surrendered Certificates.
8.6 Services of Indenture Trustee. The services, with respect to
consummation of the Plan, of the Indenture Trustee under the Indentures shall be
as set forth elsewhere in this Plan, and the Liquidation Trustee shall reimburse
the Indenture Trustee in the ordinary course for reasonable and necessary
services performed by it as contemplated by, and in accordance with, this Plan,
without the need for the filing of an application with, or approval by, the
Bankruptcy Court.
8.7 Record Date for Distributions to Holders of Claims. At the close of
business on the Record Date, the transfer ledgers respecting each of the Claims
shall be closed, and there shall be no further changes in such record holders.
Neither the Liquidation Trustee nor the Indenture Trustee shall have any
obligation to recognize any transfer of Claims occurring after the Record Date.
The Liquidation Trustee and the Indenture Trustee shall be entitled instead to
recognize and deal for all purposes hereunder with only those record holders of
Claims stated on such transfer ledgers as of the close of business on the Record
Date.
8.8 Claims Administration Responsibility. The Liquidation Trustee will
retain responsibility for administering, disputing, objecting to, compromising,
or otherwise resolving and making distributions to all Claims against the
Debtors.
8.9 Delivery of Distributions. Distributions to Allowed Claimholders
shall be made by the Liquidation Trustee: (a) at the addresses set forth on the
proofs of claim filed by such Claimholders (or at the last known addresses of
such Claimholders if no proof of claim or interest is filed or if the Debtors
have been notified in writing of a change of address); (b) at the addresses set
forth in any written notices of address changes delivered to the Liquidation
Trustee after the date of any related proof of claim; (c) at the addresses
reflected in the Schedules if no proof of claim has been filed and the
Liquidation Trustee has not received a written notice of a change of address; or
(d) in the case of a Claimholder whose Claim is governed by an Indenture and is
administered by the Indenture Trustee, at the addresses contained in the
official records of the Indenture Trustee. If any Claimholder's distribution is
returned as undeliverable, no further distributions to such Claimholder shall be
made unless and until the Liquidation Trustee or the Indenture Trustee is
notified of such Claimholder's then current address, at which time all missed
distributions shall be made to such Claimholder without interest. Amounts in
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respect of undeliverable distributions shall be returned to the Liquidation
Trust until such distributions are claimed. All claims for undeliverable
distributions shall be made on or before the second anniversary of the Effective
Date. After such date, all unclaimed property shall revert to the Liquidation
Trust. Upon such reversion, the claim of any Claimholder, or their successors,
with respect to such property shall be discharged and forever barred
notwithstanding any federal or state escheat laws to the contrary. Following any
such reversion, the Liquidation Trustee shall distribute such property such
that: (i) holders of Allowed Funded Debt Unsecured Claims shall receive a Pro
Rata share of the property resulting from the Class 5(b) Trust Allocation and
any property that shall remain after such Distribution shall be applied to the
Funded Debt Unsecured Claims Reserve (subject to adjustment to the extent
additional cash or notes are required to be paid or issued to fully satisfy the
Wachovia Secured Claims, Prudential Notes Secured Claims, or Synthetic Lease
Secured Claims); (ii) holders of Allowed Heilig Unsecured Claims shall receive a
Pro Rata share of the property resulting from the Class 5(c) Trust Allocation
and any property that shall remain after such Distribution shall be applied to
the Heilig Unsecured Claims Reserve (subject to adjustment to the extent
additional cash or notes are required to be paid or issued to fully satisfy the
Wachovia Secured Claims, Prudential Notes Secured Claims, or Synthetic Lease
Secured Claims); and (iii) holders of Allowed RoomStore Unsecured Creditors
shall receive a Pro Rata share of such property that is included in .008065% of
the shares of New RoomStore Common Stock for every $10,000 of RoomStore
Unsecured Claims and any property that shall remain after such Distribution
shall be applied to the RoomStore Unsecured Claims Reserve. Any such
Distribution shall be made on the first Periodic Distribution Date following the
date of any such reversion.
8.10 Procedures for Treating and Resolving Disputed and Contingent
Claims.
(a) No Distributions Pending Allowance. No payments or distributions
shall be made with respect to all or any portion of a Disputed Claim unless and
until all objections to such Disputed Claim have been settled or withdrawn or
have been determined by a Final Order, and the Disputed Claim has become an
Allowed Claim. All objections to Claims must be filed and served on the holders
of each such Claim on or before the Claims Objection Deadline.
(b) Claims Reserves. In addition to the Administrative Claim
Reserve, the Other Priority Claims Reserve and the Other Secured Claims Reserve,
the Liquidation Trustee shall withhold a separate (i) RoomStore Unsecured Claims
Reserve, (ii) Funded Debt Unsecured Claims Reserve, and (iii) Heilig Unsecured
Claims Reserve, from the property to be distributed to holders of Allowed
Unsecured Claims. The Liquidation Trustee will place in the Funded Debt and
Heilig Unsecured Claims Reserve, respectively, any dividends, payments, or other
distributions made on account of, as well as any obligations arising from, the
property withheld in the Funded Debt and Heilig Unsecured Claims Reserve,
respectively, to the extent that such property continues to be withheld in the
Funded Debt and Heilig Unsecured Claims Reserve at the time such distributions
are made or such obligations arise. In addition, the Liquidation Trustee will
place in the RoomStore Unsecured Claims Reserve any dividends, payments, or
other distributions made on account of, as well as any obligations arising from
43
the property withheld in the RoomStore Unsecured Claims Reserve, to the extent
that such property continues to be withheld in the RoomStore Unsecured Claims
Reserve at the time such distributions are made or such obligations arise.
Nothing in the Plan or the Disclosure Statement will be deemed to entitle the
Claimholder of a Disputed Claim to Post-Petition Interest on such Claim.
(c) Distributions After Allowance. Payments and distributions from
the Reserve to each respective Claimholder on account of a Disputed Claim, to
the extent that it ultimately becomes an Allowed Claim, will be made in
accordance with provisions of the Plan that govern distributions to such
Claimholders. On the first Periodic Distribution Date following the date when a
Disputed Claim becomes an Allowed Claim, the Liquidation Trustee will distribute
to the Claimholder any property held in a Reserve that would have been
distributed on the dates distributions were previously made to Claimholders had
such Allowed Claim been an Allowed Claim on such dates. After a Final Order has
been entered, or other final resolution has been reached with respect to all
Disputed Claims, any remaining property held in the Reserve will be distributed
to the Liquidation Trust in accordance with the other provisions of this Plan.
All Distributions made under sub-Section (c) hereof on account of an Allowed
Claim will be made together with any dividends, payments, or other distributions
made on account of, as well as any obligations arising from, the distributed
property as if such Allowed Claim had been an Allowed Claim on the dates
Distributions were previously made to Allowed Claimholders included in the
applicable class.
8.11 Minimum Distributions. The Liquidation Trustee shall not have any
obligation to make a distribution on account of an Allowed Claim from any
Distribution Reserve or otherwise if (a) the aggregate amount of all
distributions authorized to be made from such Distribution Reserve or otherwise
on the Periodic Distribution Date in question is or has a value less than [o],
or (b) if the amount to be distributed to the specific holder of the Allowed
Claim on the particular Periodic Distribution Date does not constitute a final
distribution to such holder and is or has a value less than $50.
8.12 Lost, Stolen, Mutilated or Destroyed Instrument or Security. Any
holder of an Allowed Claim evidenced by instruments, securities or other
documentation canceled pursuant to Section 6.4 of the Plan that has been lost,
stolen, mutilated, or destroyed, shall in lieu of surrendering such instrument,
security or documentation: (a) deliver to the Liquidation Trust (or, in the case
of the Unsecured Notes, the Indenture Trustee) (i) an affidavit of loss
reasonably satisfactory to the Liquidation Trust (or, in the case of the
Unsecured Notes, the Indenture Trustee) setting forth the unavailability of such
instrument, security, or other documentation and (ii) such additional security
or indemnity as may reasonably be requested by the Liquidation Trust (or, in the
case of the Unsecured Notes, the Indenture Trustee) to hold the Liquidation
Trust (or, in the case of the Unsecured Notes, the Indenture Trustee) harmless
from any damages, liabilities, or costs incurred in treating such Entity as a
holder of an Allowed Claim and (b) satisfy any other requirement under the
Indenture or any other relevant document. Upon compliance with this Section 8.12
by a holder of an Allowed Claim evidenced by such instrument, security, or other
documentation, such holder shall, for all purposes under the Plan, be deemed to
have surrendered such instrument, security, or other documentation.
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ARTICLE IX
ALLOWANCE AND PAYMENT OF
CERTAIN ADMINISTRATIVE CLAIMS
9.1 Professional Claims.
(a) Final Fee Applications. All final requests for payment of
Professional Claims must be filed no later than 60 days after the Effective
Date; provided, however, that Bilzin Sumberg Baena Price & Axelrod LLP shall
file its final request for payment of its Professional Claim on the later of 60
days after the Effective Date or 30 days after a Final Order is entered in the
Lender Avoidance Action. After notice and a hearing in accordance with the
procedures established by the Bankruptcy Code and prior orders of the Bankruptcy
Court, the allowed amounts of such Professional Claims shall be determined by
the Bankruptcy Court.
(b) Post-Effective Date Compensation. Upon the Effective Date, any
requirement that professionals comply with Sections 327 through 331 of the
Bankruptcy Code in seeking retention or compensation for services rendered after
such date will terminate.
9.2 Substantial Contribution Compensation and Expenses Bar Date. Any
Person who requests compensation or expense reimbursement for making a
substantial contribution in the Chapter 11 Cases pursuant to Sections 503(b)(3),
503(b)(4), and 503(b)(5) of the Bankruptcy Code must file an application with
the clerk of the Bankruptcy Court, on or before a date which is thirty (30) days
after the Effective Date (the "503 Deadline"), and serve such application on the
Liquidation Trustee, the members of the Liquidation Trust Committee and as
otherwise required by the Bankruptcy Court and the Bankruptcy Code on or before
the 503 Deadline, or be forever barred from seeking such compensation or expense
reimbursement.
9.3 Other Administrative Claims. All other requests for payment of an
Administrative Claim (other than as set forth in Section 2.1 of this Plan) that
are not otherwise time barred as a result of the establishment of the
Administrative Claims Bar Date must be filed with the Bankruptcy Court and
served on the Liquidation Trustee no later than thirty (30) days after the
Effective Date. Unless the Debtors, the Liquidation Trustee, RoomStore or
another party-in-interest objects to an Administrative Claim by the Claims
Objection Deadline, such Administrative Claim shall be deemed allowed in the
amount requested. In the event that any party-in-interest objects to an
Administrative Claim, the Bankruptcy Court shall determine the allowed amount of
such Administrative Claim. Notwithstanding the foregoing, no request for payment
of an Administrative Claim need be filed with respect to an Administrative Claim
which is paid or payable by RoomStore in the ordinary course of its business.
45
ARTICLE X
EFFECT OF THE PLAN ON CLAIMS AND INTERESTS
10.1 Vesting of Assets. On the Effective Date, all property (other than
the RoomStore Assets) comprising the Estates (including but not limited to the
Estate Actions) shall vest in the Liquidation Trust and the RoomStore Assets
shall vest in Reorganized RoomStore in accordance with Sections 6.5, 6.7, and
6.12 of the Plan, all of which property shall so vest free and clear of all
liens, charges, encumbrances, rights and Claims of creditors and Interests of
equity security holders (other than as expressly provided herein). As of the
Effective Date, Reorganized RoomStore may operate its business, and the
Liquidation Trust and Reorganized RoomStore may use, acquire, and dispose of
property without supervision of the Bankruptcy Court, free of any restrictions
of the Bankruptcy Code or Bankruptcy Rules, other than those restrictions
expressly imposed by the Plan and Confirmation Order.
10.2 Discharge of the Liquidation Trust and RoomStore. Pursuant to
Section 1141(d) of the Bankruptcy Code, except as otherwise specifically
provided in this Plan or in the Confirmation Order, the Distributions and rights
that are provided in this Plan shall be in complete satisfaction, discharge, and
release, effective as of the Confirmation Date (but subject to the occurrence of
the Effective Date), of all Claims, whether known or unknown, against,
liabilities of, liens on, obligations of, rights against, and Interests in the
Debtors or any of their assets or properties, regardless of whether any property
shall have been distributed or retained pursuant to the Plan on account of such
Claims, rights, and Interests, including, but not limited to, demands and
liabilities that arose before the Confirmation Date, any liability (including
withdrawal liability) to the extent such Claims relate to services performed by
employees of the Debtors prior to the Petition Date and that arise from a
termination of employment or a termination of any employee or retiree benefit
program regardless of whether such termination occurred prior to or after the
Confirmation Date, and all debts of the kind specified in Sections 502(g),
502(h) or 502(i) of the Bankruptcy Code, in each case whether or not (i) a proof
of claim or interest based upon such debt, right, or Interest is filed or deemed
filed under Section 501 of the Bankruptcy Code, (ii) a Claim or Interest based
upon such debt, right, or Interest is allowed under Section 502 of the
Bankruptcy Code, or (iii) the holder of such a Claim, right, or Interest
accepted the Plan. The Confirmation Order shall be a judicial determination of
the discharge of all liabilities of and Interests in the Debtors, the
Liquidation Trust and RoomStore, subject to the Effective Date occurring.
10.3 Compromises and Settlements. Pursuant to Bankruptcy Rule 9019(a),
the Debtors may compromise and settle various Claims (a) against them and (b)
that they have against other Persons. The Debtors and the Creditors' Committee,
as joint proponents of the Plan, expressly reserve the right (with Bankruptcy
Court approval, following appropriate notice and opportunity for a hearing) to
compromise and settle Claims against the Debtors and claims that the Debtors may
have against other Persons up to and including the Effective Date. After the
Effective Date, such right shall pass to the Liquidation Trustee as contemplated
in Section 6.9 of this Plan.
10.4 Release of Certain Parties. As of the Confirmation Date, but
subject to the Effective Date, and except as otherwise expressly provided in the
Plan, the Liquidation Trust and Reorganized RoomStore will be deemed to have
released the Released Parties, from any and all claims (as such term is defined
46
in Section 101(5) of the Bankruptcy Code), obligations, rights, Causes of
Action, and liabilities which the Debtors or the Estates are entitled to assert,
whether known or unknown, foreseen or unforeseen, existing or hereafter arising,
based in whole or in part upon any act or omission, transaction, or occurrence
in any way relating to the Debtors, these Chapter 11 Cases, or the Plan;
provided, however, that no Person shall enjoy the benefit of this provision if
any claim or objection has been asserted in writing prior to the Confirmation
Date.
10.5 Setoffs. The Liquidation Trustee may, but shall not be required
to, set off against any Claim, and the payments or other distributions to be
made pursuant to the Plan in respect of such Claim, claims of any nature
whatsoever that the Debtors may have against such Claimholder; but neither the
failure to do so nor the allowance of any Claim hereunder shall constitute a
waiver or release by the Estates of any such claim that they may have against
such Claimholder.
10.6 Exculpation and Limitation of Liability. Except as otherwise
specifically provided in this Plan and the Plan Supplement, the Debtors, the
Liquidation Trustee, the Liquidation Trust Committee, the members of the
Liquidation Trust Committee, Reorganized RoomStore, the Creditors' Committee,
the members of the Creditors' Committee in their capacities as such, and any of
such parties' respective present officers, directors, employees, advisors,
attorneys, representatives, financial advisors, investment bankers, or agents
and any of such parties' successors and assigns, shall not have or incur, and
are hereby released from, any claim, obligation, Cause of Action, or liability
to one another or to any Claimholder or Interestholder, or any other party in
interest, or any of their respective agents, employees, representatives,
financial advisors, attorneys or Affiliates, or any of their successors or
assigns, for any act or omission in connection with, relating to, or arising out
of the filing the Chapter 11 Cases, negotiation and filing of the Plan, the
pursuit of confirmation of the Plan, the consummation of the Plan, the
administration of the Plan or the property to be distributed under the Plan,
except for their fraud, gross negligence or willful misconduct, and in all
respects shall be entitled to reasonably rely upon the advice of counsel with
respect to their duties and responsibilities under the Plan; provided, however,
that no Person shall enjoy the benefit of this provision if any claim or
objection has been asserted in writing prior to the Confirmation Date.
10.7 Injunction. The Confirmation Order shall provide that
satisfaction, release, and discharge pursuant to Article X of this Plan shall
also act as an injunction against any Person commencing or continuing any
action, employment of process, or act to collect, offset, or recover any Claim
or Cause of Action satisfied, released, or discharged under this Plan to the
fullest extent permissible under applicable law, including, without limitation,
to the extent provided for or authorized by Sections 524 and 1141 of the
Bankruptcy Code.
10.8 Release by Holders of Claims or Interests. As of the Effective
Date, in consideration for the distributions provided under the Plan and other
contracts, instruments, releases, agreements or documents to be entered into, or
delivered in connection with, the Plan, each Claimholder, Interestholder and
other party in interest, including the Creditors' Committee and the Liquidation
Trust, and their respective agents, employees, representatives, financial
advisors, attorneys and Affiliates, and their successors and assigns, to the
fullest extent permissible under applicable law, as such law may be extended
47
subsequent to the Effective Date, will be deemed to forever release, waive and
discharge any and all claims (as such term in defined in Section 101(5) of the
Bankruptcy Code), obligations, rights, causes of action, and liabilities,
whether known or unknown, foreseen or unforeseen, existing or hereafter arising,
based in whole or in part upon any act or omission, transaction, or occurrence
taking place on, or prior to, the Effective Date in any way relating to the
Debtors, these Chapter 11 Cases, or the Plan that such entity has, had or may
have against [o].
10.9 Release by Debtors. As of the Effective Date, the Debtors, their
Estates, the Liquidation Trustee and Reorganized RoomStore, to the fullest
extent permissible under applicable law, as such law may be extended subsequent
to the Effective Date, will be deemed to forever release, waive and discharge
any and all claims (as defined in Section 101(5) of the Bankruptcy Code),
obligations, rights, Causes of Action, and liabilities, whether known or
unknown, foreseen or unforeseen, existing or hereafter arising, against the
Released Parties based in whole or in part upon any act or omission,
transaction, or occurrence taking place on, or prior to, the Effective Date in
any way relating to the Debtors, these Chapter 11 Cases, or the Plan; provided,
however, that no Person shall enjoy the benefit of this provision if any claim
or objection has been asserted in writing prior to the Confirmation Date.
10.10 Release of Directors and Officers. As of the Effective Date, the
Released Directors and Officers, excluding Reorganized RoomStore, to the fullest
extent permissible under applicable law, will be forever released from all
obligations, rights, Causes of Action, and liabilities, whether known or
unknown, foreseen or unforeseen, existing or hereafter arising, based in whole
or in part upon any act or omission, transaction, or occurrence which occurred
in each director's and officer's capacity as director or officer of each of the
Debtors, excluding Reorganized RoomStore, and which occurred on, or prior to,
the Effective Date; provided, however, that no Person shall enjoy the benefit of
this provision if any claim or objection has been asserted in writing prior to
the Confirmation Date.
48
ARTICLE XI
CONDITIONS PRECEDENT
11.1 Conditions to Confirmation. The following are conditions precedent
to confirmation of the Plan that may be satisfied or waived in accordance with
Section 11.3 of the Plan:
(a) The Bankruptcy Court shall have approved a disclosure statement
with respect to the Plan in form and substance reasonably acceptable to the
Debtors and the Creditors' Committee.
(b) The Confirmation Order shall be in form and substance reasonably
acceptable to the Debtors and the Creditors' Committee.
(c) The Liquidation Trustee and RoomStore shall have received a
binding, unconditional (except for a customary "market-out," "material adverse
change" or other similar conditions, conditions relating to the issuance of
and/or subscriptions to any high yield securities that are to be issued as a
part of the New Credit Facility and for conditions relating to the occurrence of
the Effective Date) commitment for the New Credit Facility on terms and
conditions reasonably satisfactory to the Debtors and the Creditors' Committee.
(d) The Bankruptcy Court shall have entered an order, which may be
the Confirmation Order, determining that (i) the aggregate amount of Allowed
Claims in Class 2(a), Class 2(b) and Class 2(c) does not exceed $128.5 million
and (ii) the Allowed Claims in Class 2(a), Class 2(b) and Class 2(c), if any,
were satisfied in full or by the Bank Group Secured Notes prior to the
Confirmation Hearing.
(e) The Bankruptcy Court shall have entered one or more orders
(which may include the Confirmation Order) approving the substantive
consolidation of the Debtors as provided for in the Plan and the compromise of
all issues concerning substantive consolidation.
11.2 Conditions to Consummation. The following are conditions precedent
to the occurrence of the Effective Date, each of which may be satisfied or
waived in accordance with Section 11.3 of the Plan:
(a) The Bankruptcy Court shall have entered one or more orders
(which may include the Confirmation Order) authorizing the rejection of
unexpired leases and executory contracts by the Debtors as contemplated by
Section 7.1 hereof.
(b) The Liquidation Trustee and RoomStore shall have entered into
the New Credit Facility (which shall be in a form and substance reasonably
acceptable to RoomStore and the Creditors' Committee) and all conditions
precedent to the consummation thereof (other than the occurrence of the
Effective Date of the Plan) shall have been waived or satisfied in accordance
with the terms thereof and the lenders under the New Credit Facility shall be
ready to fund the amounts required to be funded thereby under this Plan.
49
(c) The Confirmation Order in form and substance reasonably
acceptable to the Debtors and the Creditors' Committee shall have been entered
by the Bankruptcy Court and shall be a Final Order, and no request for
revocation of the Confirmation Order under Section 1144 of the Bankruptcy Code
shall have been made, or, if made, shall remain pending.
(d) The Confirmation Date shall have occurred and the Confirmation
Order shall, among other things, provide that:
(i) the provisions of the Confirmation Order and the Plan are
nonseverable and mutually dependent;
(ii) all executory contracts or unexpired leases assumed by the
Debtors during the Chapter 11 Cases or under the Plan shall be assigned
and transferred to, and remain in full force and effect for the benefit
of, RoomStore, notwithstanding any provision in such contract or lease
(including those described in Sections 365(b)(2) and 365(f) of the
Bankruptcy Code) that prohibits such assignment or transfer or that
enables or requires termination of such contract or lease;
(iii) the transfers of property by the Debtors (A) to the
Liquidation Trust and Reorganized RoomStore (1) are or shall be legal,
valid, and effective transfers of property, (2) shall vest in the
Liquidation Trust or Reorganized RoomStore, as applicable, with good
title to such property free and clear of all liens, charges, Claims,
encumbrances, or Interests, except as expressly provided in the Plan or
Confirmation Order, (3) do not and shall not constitute avoidable
transfers under the Bankruptcy Code or under applicable non-bankruptcy
law, and (4) do not and shall not subject the Liquidation Trust or
Reorganized RoomStore to any liability by reason of such transfer under
the Bankruptcy Code or under applicable non-bankruptcy law, including,
without limitation, any laws affecting successor or transferee
liability, and (B) to Claimholders under the Plan are for good
consideration and value and are in the ordinary course of the Debtors'
businesses;
(iv) except as expressly provided in the Plan or the Confirmation
Order, the Liquidation Trust and Reorganized RoomStore are discharged
effective upon the Effective Date from any "debt" (as that term is
defined in Section 101(12) of the Bankruptcy Code), and the Liquidation
Trust and Reorganized RoomStore's liability in respect thereof is
extinguished completely, whether reduced to judgment or not, liquidated
or unliquidated, contingent or noncontingent, asserted or unasserted,
fixed or unfixed, matured or unmatured, disputed or undisputed, legal
or equitable, known or unknown, or that arose from any agreement of the
Debtors entered into or obligation of the Debtors incurred before the
Effective Date, or from any conduct of the Debtors prior to the
Effective Date, or that otherwise arose before the Effective Date,
including, without limitation, all interest, if any, on any such debts,
whether such interest accrued before or after the Petition Date;
50
(v) the Plan does not provide for the liquidation of all or
substantially all of the property of the Debtors and its confirmation
is not likely to be followed by the liquidation of Reorganized
RoomStore or the need for further financial reorganization;
(vi) all Old Common Stock Interests are terminated effective upon
the Effective Date;
(vii) the New RoomStore Common Stock (including the offer of New
RoomStore Common Stock through any warrant, option, right to subscribe,
or conversion privilege or the sale of the New RoomStore Common Stock
upon exercise of such warrant, option, right to subscribe, or
conversion privilege) and the beneficial interests in the Liquidation
Trust to be issued under the Plan in exchange for Claims against the
Debtors are exempt from registration under the Securities Act and
exempt from registration and qualification under all applicable state
securities laws, pursuant to, and to the extent provided by, Section
1145 of the Bankruptcy Code; and
(viii) the Liquidation Trust and Reorganized RoomStore shall have
sufficient Cash to establish the Reserves and make all distributions
required under the Plan.
In the event that the foregoing conditions are not satisfied or waived,
as provided in Section 11.3, then the Confirmation Order shall be vacated and
this Plan shall be of no further force or effect.
11.3 Waiver of Conditions to Confirmation or Consummation. The
conditions set forth in Sections 11.1 and 11.2 of the Plan may be waived by,
collectively, the Debtors and the Creditors' Committee in their discretion
without any notice to parties in interest or the Bankruptcy Court and without a
hearing. The failure to satisfy or waive any condition to the Confirmation Date
or the Effective Date may be asserted by the Debtors or the Creditors' Committee
in their discretion regardless of the circumstances giving rise to the failure
of such condition to be satisfied (including any action or inaction by the
Debtors or the Creditors' Committee). The failure of the Debtors or the
Creditors' Committee to exercise any of the foregoing rights shall not be deemed
a waiver of any other rights, and each such right shall be deemed an ongoing
right, which may be asserted at any time.
51
ARTICLE XII
RETENTION OF JURISDICTION
Pursuant to Sections 105(a) and 1142 of the Bankruptcy Code and except
as provided in this Plan, the Bankruptcy Court shall have exclusive jurisdiction
of all matters arising out of, and related to, the Chapter 11 Cases and the
Plan, including, among other, the following matters:
(a) to hear and determine pending motions for (i) the assumption or
rejection or (ii) the assumption and assignment of executory contracts or
unexpired leases to which the Debtors are a party or with respect to which the
Debtors may be liable, and to hear and determine the allowance of Claims
resulting therefrom including the amount of Cure, if any, required to be paid;
(b) to adjudicate any and all adversary proceedings, applications,
and contested matters that may be commenced or maintained pursuant to the
Chapter 11 Cases or the Plan, proceedings to adjudicate the allowance of
Disputed Claims, and all controversies and issues arising from or relating to
any of the foregoing;
(c) to adjudicate any and all disputes arising from the distribution
of Cash, New RoomStore Common Stock and other property, if any;
(d) to adjudicate any and all disputes arising from the distribution
of Trust Assets by the Liquidation Trust;
(e) to ensure that distributions to Allowed Claimholders are
accomplished as provided herein;
(f) to hear and determine any and all objections to the allowance of
Claims and the estimation of Claims, both before and after the Confirmation
Date, including any objections to the classification of any Claim, and to allow
or disallow any Claim, in whole or in part;
(g) to enter and implement such orders as may be appropriate if the
Confirmation Order is for any reason stayed, revoked, modified, or vacated;
(h) to issue orders in aid of execution, implementation, or
consummation of the Plan;
(i) to consider any modifications of the Plan, to cure any defect or
omission, or to reconcile any inconsistency in any order of the Bankruptcy
Court, including, without limitation, the Confirmation Order;
(j) to hear and determine all applications for compensation and
reimbursement of Professional Claims under the Plan or under Sections 330, 331,
503(b), 1103, and 1129(a)(4) of the Bankruptcy Code;
52
(k) to determine requests for the payment of Claims entitled to
priority under Section 507(a)(1) of the Bankruptcy Code, including compensation
of and reimbursement of expenses of parties entitled thereto;
(l) to hear and determine disputes arising in connection with the
interpretation, implementation, or enforcement of the Plan, the Confirmation
Order, including disputes arising under all agreements, documents, or
instruments executed in connection with this Plan;
(m) to hear and determine all suits or adversary proceedings to
recover assets of the Debtors and property of their Estates, wherever located;
(n) to hear and determine matters concerning state, local, and
federal taxes in accordance with Sections 346, 505, and 1146 of the Bankruptcy
Code;
(o) to hear any other matter not inconsistent with the Bankruptcy
Code;
(p) to hear and determine all disputes involving the existence,
nature, or scope of the discharges provided in the Plan, 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;
(q) to enter a final decree closing the Chapter 11 Cases; and
(r) to enforce all orders previously entered by the Bankruptcy
Court.
Unless otherwise specifically provided herein or in a prior order of
the Bankruptcy Court, the Bankruptcy Court shall have exclusive jurisdiction to
hear and determine disputes concerning Claims, Interests, and any motions to
compromise or settle such disputes. The Bankruptcy Court shall not have
exclusive jurisdiction with respect to Estate Actions held by the Liquidation
Trust.
53
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 Binding Effect. The Plan shall be binding upon and inure to the
benefit of the Debtors, the Liquidation Trust, Reorganized RoomStore, all
present and former Claimholders, all present and former Interestholders, other
parties in interest and their respective heirs, successors, and assigns.
13.2 Modification and Amendments. The Debtors and the Creditors'
Committee may alter, amend, or modify the Plan or any Exhibits thereto under
Section 1127(a) of the Bankruptcy Code at any time prior to the Confirmation
Hearing. After the Confirmation Date and prior to substantial consummation of
the Plan as defined in Section 1101(2) of the Bankruptcy Code, the Debtors and
the Creditors' Committee may, under Section 1127(b) of the Bankruptcy Code,
institute proceedings in the Bankruptcy Court to remedy any defect or omission
or reconcile any inconsistencies in the Plan, the Disclosure Statement, or the
Confirmation Order, and such matters as may be necessary to carry out the
purposes and effects of the Plan.
13.3 Allocation of Plan Distributions Between Principal and Interest.
To the extent that any Allowed Claim entitled to a distribution under the Plan
is composed of indebtedness and accrued but unpaid interest thereon, such
distribution shall, to the extent permitted by applicable law, be allocated for
United States federal income tax purposes to the principal amount of the Claim
first and then, to the extent the consideration exceeds the principal amount of
the Claim, to the portion of the Claim representing accrued but unpaid interest.
13.4 The Creditors' Committee. Effective on the Effective Date, the
Creditors' Committee shall dissolve automatically, whereupon its members,
Professionals, and agents shall be released from any further duties and
responsibilities in the Chapter 11 Cases and under the Bankruptcy Code, except
with respect to applications for Professional Claims and claims for substantial
contribution.
13.5 Revocation, Withdrawal, or Non-Consummation.
(a) Right to Revoke or Withdraw. Each of the Debtors and the
Creditors' Committee reserve the right to revoke or withdraw the Plan at any
time prior to the Effective Date.
(b) Effect of Withdrawal, Revocation, or Non-Consummation. If either
the Debtors or the Creditors' Committee revokes or withdraws the Plan prior to
the Effective Date, or if the Confirmation Date or the Effective Date does not
occur, then the Plan, any settlement, or compromise embodied in the Plan, the
assumption or rejection of executory contracts or unexpired leases effected by
the Plan, and any document or agreement executed pursuant to the Plan shall be
null and void. In such event, nothing contained herein, and no acts taken in
preparation for consummation of the Plan, shall be deemed to constitute a waiver
or release of any Claims by or against or Interests in the Debtors or any other
Person, to prejudice in any manner the rights of the Debtors, the Creditors'
54
Committee, or any other Person in any further proceedings involving the Debtors,
or to constitute an admission of any sort by the Debtors, the Creditors'
Committee, or any other Person.
(c) Severability of Plan Provisions. If, prior to the Confirmation Date, any
term or provision of the Plan is held by the Bankruptcy Court to be illegal,
impermissible, invalid, void or unenforceable, or otherwise to constitute
grounds for denying confirmation of the Plan, the Bankruptcy Court shall, with
the consent of the Debtors and the Creditors' Committee, have the power to
interpret, modify or delete such term or provision (or portions thereof) to make
it valid or enforceable to the maximum extent practicable, consistent with the
original purpose of the term or provision held to be invalid, void or
unenforceable, and such term or provision shall then be operative as
interpreted, modified or deleted. Notwithstanding any such interpretation,
modification or deletion, the remainder of the terms and provisions of the Plan
shall in no way be affected, impaired or invalidated by such interpretation,
modification or deletion.
(d) Notices. Any notice required or permitted to be provided to the
Debtors or the Creditors' Committee under the Plan shall be in writing and
served by (a) certified mail, return receipt requested, (b) hand delivery, or
(c) overnight delivery service, to be addressed as follows:
If to the Debtors:
LeClair Ryan, A Professional Corporation
707 East Main Street
11th Floor
Richmond, Virginia 23219
(804) 783-2003
Attn: Bruce H. Matson, Esq.
If to the Creditors' Committee:
Akin Gump Strauss Hauer & Feld LLP
590 Madison Avenue
New York, New York 10022
(212)872-1000
Attn: Michael Stamer, Esq.
13.6 Term of Injunctions or Stays. Unless otherwise provided herein or
in the Confirmation Order, all injunctions or stays provided for in the Chapter
11 Cases under Section 105 or 362 of the Bankruptcy Code or otherwise, and
extant on the Confirmation Date, shall remain in full force and effect until the
Effective Date.
13.7 Governing Law. Unless a rule of law or procedure is supplied by
federal law (including the Bankruptcy Code and Bankruptcy Rules) or unless
otherwise specifically stated, the laws of the State of Virginia shall govern
the construction and implementation of the Plan, any agreements, documents, and
instruments executed in connection with the Plan, and corporate governance
matters.
55
13.8 No Waiver or Estoppel. Each Claimholder or Interestholder shall be
deemed to have waived any right to assert that its Claim or Interest should be
Allowed in a certain amount, in a certain priority, secured or not subordinated
by virtue of an agreement made with the Debtors and/or their counsel, the
Creditors' Committee and/or its counsel, or any other Person, if such agreement
was not disclosed in the Plan, the Disclosure Statement, or papers filed with
the Bankruptcy Court prior to the Confirmation Date.
Dated: September 16, 2004
HEILIG-MEYERS COMPANY AND
ITS SUBSIDIARIES THAT ARE ALSO
DEBTORS AND DEBTORS IN POSSESSION
IN THE CHAPTER 11 CASES
By: /s/ Ronald L. Barden
----------------------------------------
Managing Director of Reorganization
OFFICIAL COMMITTEE OF UNSECURED
CREDITORS OF HEILIG-MEYERS
COMPANY, et al.
By: ACTION-LANE INDUSTRIES
By: /s/ Larry Witcher
----------------------------------------
Executive Vice President & Chief Financial Officer
HEILIG-MEYERS COMPANY, ET AL.
/s/ Bruce H. Matson
----------------------------------------
Counsel
OFFICIAL COMMITTEE OF UNSECURED
CREDITORS OF HEILIG-MEYERS
COMPANY, et al.
/s/ Shuba Satyaprasad
----------------------------------------
Counsel
56
Bruce H. Matson (Va. Bar No. 22874)
Troy Savenko (Va. Bar No. 44516)
Katherine Macaulay Mueller (Va. Bar No. 44302)
LeCLAIR RYAN, A Professional Corporation
707 East Main Street, Suite 1100
Richmond, Virginia 23219
(804) 783-2003
Counsel for the Debtors
Michael S. Stamer (admitted pro hac vice)
Shuba Satyaprasad (admitted pro hac vice)
AKIN GUMP STRAUSS HAUER & FELD LLP
590 Madison Avenue
New York, New York 10022
(212) 872-1000
- and -
Robert S. Strauss Building
AKIN GUMP STRAUSS HAUER & FELD LLP
1333 New Hampshire Avenue, N.W.
Washington, D.C. 20036
(202) 887-4000
Counsel to the Official Committee Of Unsecured Creditors
57
EXHIBIT A
Heilig-Meyers Company, Inc.
Heilig-Meyers Furniture Company
Heilig-Meyers Furniture West, Inc.
HMY Star, Inc.
HMY Roomstore, Inc.
Macsaver Financial Services, Inc.
A-1