UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): August 10, 2005
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-3919 37-0364250
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
5430 LBJ Freeway, Suite 1740, Dallas, TX 75240-2697
(Address of principal executive offices) (Zip Code)
(972) 458-0028 (Registrant's telephone number,
including area code)
(Former name or address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.03 Bankruptcy or Receivership
On February 26, 2004, Keystone Consolidated Industries, Inc. (the "Company"
or "Keystone"), together with five of its direct and indirect subsidiaries (FV
Steel and Wire Company, DeSoto Environmental Management, Inc., J.L. Prescott
Company, Sherman Wire Company (f/k/a/ DeSoto, Inc.) and Sherman Wire of
Caldwell, Inc.) (collectively, the "Debtors"), filed voluntary petitions for
relief under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy
Code") in the United States Bankruptcy Court for the Eastern District of
Wisconsin in Milwaukee (the "Bankruptcy Court") in the case In re FV Steel and
Wire Company, et al., Case No. 04-22421 (the "Chapter 11 Cases"). Since that
date, the Debtors have continued to operate their businesses and manage their
properties as debtors in possession pursuant to 11 U.S.C. sections 1107(a) and
1108. On March 5, 2004, the United States Trustee appointed an official
committee of unsecured creditors (the "OCUC"). No request has been made for the
appointment of a trustee or examiner in these Chapter 11 Cases.
On August 10, 2005, the Bankruptcy Court entered an order (the
"Confirmation Order") approving and confirming the Debtors' Third Amended Joint
Plan of Reorganization (the "Plan of Reorganization"). The effective date of the
Plan of Reorganization is anticipated to be on or about August 31, 2005
("Effective Date"). A copy of the Plan of Reorganization as confirmed and the
Confirmation Order are attached as Exhibits 2.1 and 99.1, respectively, to this
Current Report on Form 8-K and are incorporated herein by reference.
The following is a summary of the matters that occurred or will occur
pursuant to the Plan of Reorganization. This summary only highlights certain of
the substantive provisions of the Plan of Reorganization and is not intended to
be a complete description of, or a substitute for a full and complete reading
of, the Plan of Reorganization. This summary is qualified in its entirety by
reference to the full text of the Plan of Reorganization.
The Plan of Reorganization provides (among other things) that all equity
interests in Keystone (other than Keystone's equity interests in the other
reorganized Debtors), including, without limitation, Keystone common stock or
preferred stock and any warrants, option rights, conversion rights, rights of
first refusal, causes of action, or other rights (contractual or otherwise) to
acquire or receive any stock or other equity ownership interests in Keystone or
any of the other Debtors, and any contracts, subscriptions, commitments, or
agreements pursuant to which a party was or could have been entitled to receive
shares, securities, or other ownership interests in Keystone or any of the other
Debtors, will be cancelled as of the Effective Date. The holders of such
interests will not receive or retain any property under the Plan of
Reorganization on account of such interests and will receive no distribution
under the Plan of Reorganization. The holders of such interests were, therefore,
deemed to have rejected the Plan of Reorganization and were not entitled to vote
on the Plan of Reorganization. As of the Effective Date, the reorganized Debtors
and all successors in interest were discharged from, and any liability
extinguished, in connection with the commencement or continuation of any action,
act to collect or attempt to recover against any Claim or Interest (as those
terms are defined in the Plan of Reorganization). As of July 31, 2005, and prior
to giving effect to the Plan of Reorganization, the Debtors estimated the book
value of their assets at approximately $335.7 million and their liabilities at
approximately $344.0 million.
As of August 15, 2005, 10,068,450 shares of common stock and 71,899 shares
of preferred stock of Keystone were issued and outstanding. Pursuant to the
terms of the Plan of Reorganization, the 5,100,000 shares of new common stock of
reorganized Keystone will be issued to Contran Corporation ("Contran") and
4,900,000 shares of new common stock of reorganized Keystone will ultimately be
issued, on a pro rata basis, to the holders of allowed general unsecured claims
(as that term is defined in the Plan of Reorganization) against Keystone, which
will represent all of the issued and outstanding shares of common stock of
reorganized Keystone as of the Effective Date.
Other provisions of the Plan of Reorganization include:
o Keystone will assume the previously negotiated amendment to the collective
bargaining agreement with the Independent Steel Workers Alliance (the
"ISWA"), Keystone's largest labor union;
o Keystone will assume the previously negotiated agreements reached with
certain retiree groups that will provide relief by permanently reducing
healthcare related payments to these retiree groups from pre-petition
levels;
o Keystone's obligations due to pre-petition secured lenders other than its
Debtor-In-Possession ("DIP") lenders will be reinstated in full against
reorganized Keystone;
o In addition to the 49% of new common stock of reorganized Keystone being
issued above to the pre-petition unsecured creditors with allowed claims
against Keystone, these creditors will also receive, on a pro rata basis,
in the aggregate, $5.2 million in cash and a $4.8 million secured
promissory note (the aggregate amount of cash and principal amount of the
promissory note may increase based on certain events);
o Certain operating assets and existing operations of Sherman Wire Company
("Sherman Wire"), one of Keystone's pre-petition wholly-owned subsidiaries,
will be sold at fair market value to Keystone, which will then be used to
form and operate a newly created wholly-owned subsidiary of reorganized
Keystone named Keystone Wire Products Inc.;
o Sherman Wire will be reorganized and the proceeds of the operating asset
sale to Keystone and other funds will be distributed, on a pro rata basis,
to Sherman Wire's pre-petition unsecured creditors with allowed claims;
o Sherman Wire's pre-petition wholly-owned non-operating subsidiaries, J.L.
Prescott Company, and DeSoto Environmental Management, Inc. as well as
Sherman Wire of Caldwell, Inc., a wholly-owned subsidiary of Keystone, will
ultimately be liquidated and the pre-petition unsecured creditors with
allowed claims against these entities will receive their pro-rata share of
the respective entity's net liquidation proceeds;
o Pre-petition unsecured creditors with allowed claims against FV Steel &
Wire Company, another one of Keystone's wholly-owned subsidiaries, will
receive cash in an amount equal to their allowed claims;
o One of Keystone's DIP lenders, EWP Financial, LLC (an affiliate of Contran,
Keystone's largest pre-petition shareholder) will convert $5 million of its
DIP credit facility, and Contran will convert certain of its pre-petition
unsecured claims and all of its administrative claims against Keystone
collectively into 51% of the new common stock of reorganized Keystone being
issued to Contran as stated above; and
o The Board of Directors of reorganized Keystone will consist of seven
individuals, two of which shall be designated by Contran, two of which
shall be designated by the OCUC, and the remaining three directors shall
qualify as independent directors (two of the independent directors shall be
appointed by Contran with the OCUC's consent and one shall be appointed by
the OCUC with Contran's consent).
Keystone has also obtained a commitment from an exit lender for an $80
million credit facility. This credit facility will be used to extinguish the
portion of Keystone's existing debtor-in-possession credit facilities that will
not be converted to equity and to provide working capital upon emergence from
bankruptcy.
On August 12, 2005, Keystone issued a press release concerning the Plan of
Reorganization. A copy of the release is furnished herewith as Exhibit 99.2 and
incorporated by reference herein.
Item 7.01 Regulation FD Disclosure
The registrant hereby furnishes the information set forth in the press
release issued on August 12, 2005, a copy of which is attached hereto as Exhibit
99.2 and incorporated herein by reference.
The information, including the exhibit, the registrant furnishes in this
report is not deemed "filed" for purposes of section 18 of the Securities
Exchange Act of 1934, as amended, or otherwise subject to the liabilities of
that section. Registration statements or other documents filed with the
Securities and Exchange Commission shall not incorporate this information by
reference, except as otherwise expressly stated in such filing.
ITEM 9.01 Financial Statements and Exhibits
(c) Exhibits
2.1 Debtors' Third Amended Joint Plan of Reorganization Pursuant
to Chapter 11 of the United State Bankruptcy Code (with
Technical Amendments)*
99.1 Order Confirming Debtors' Third Amended Joint Plan of
Reorganization Pursuant to Chapter 11 of the United State
Bankruptcy Code (with Technical Amendments)
99.2 Press Release of Keystone Consolidated Industries, Inc. dated
August 12, 2005.
*With the Plan of Reorganization, Keystone filed the following exhibits as a
Plan Supplement with the Bankruptcy Court: (1) Form of Amended and Restated
Certificate of Incorporation and Bylaws for reorganized Keystone Consolidated
Industries, Inc.; (2) Form of Amended and Restated Certificate of Incorporation
and Bylaws for reorganized Sherman Wire Company; (3) Form of Certificate of
Incorporation and Bylaws for Keystone Wire Products Inc.; (4) Form of
Intercorporate Services Agreement between Keystone and Contran; (5) Form of $4.8
Million Secured Note; (6) Wachovia Capital Financial Corporation (Central)
Commitment Letter; (7) Post-Consummation Sherman Wire/Keystone Wire Products
Term Sheet; (8) Form of Creditor Trust-Post Consummation Estate Agreement; (9)
Retained Causes of Action; (10) List of Executory Contracts and Unexpired Leases
to be Assumed; (11) Registration Rights Agreement (the parties have now mutually
agreed this will not be executed); (12) Supplemental Indenture No. 1 for
Keystone's 8% Secured Subordinated Notes due 2009; (13) Disclosure of Officers
and Directors Pursuant to Section 1129(a)(5)(A) of the Bankruptcy Code; and (14)
Form of Engineered Wire Products Stock Pledge Agreement. As permitted by Item
601(b)(2) of Regulation S-K, these exhibits have been omitted from this Current
Report on Form 8-K. Keystone will, upon request, provide copies to the
Securities and Exchange Commission of any exhibit to the Plan of Reorganization.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
(Registrant)
By: /s/ Bert E. Downing, Jr.
---------------------------------
Bert E. Downing, Jr.
Vice President, Chief Financial Officer,
Corporate Controller and Treasurer
Date: August 18, 2005
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- --------------------------------------------------------------
2.1 Debtors' Third Amended Joint Plan of Reorganization Pursuant
to Chapter 11 of the United State Bankruptcy Code (with
Technical Amendments)*
99.1 Order Confirming Debtors' Third Amended Joint Plan of
Reorganization Pursuant to Chapter 11 of the United State
Bankruptcy Code (with Technical Amendments)
99.2 Press Release of Keystone Consolidated Industries, Inc. dated
August 12, 2005.