EXHIBIT 2.1
Clifton R. Jessup, Jr.
Bruce H. White
DIXON & DIXON LTD., L.L.P.
2500 Fountain Place
1445 Ross Avenue
Dallas, Texas 75202
Telephone: (214) 754-0155
FAX: (214) 754-0704
And
J. Scott Bovitz (#93548)
Of Counsel
DIXON & DIXON LTD., L.L.P.
333 S. Grand Avenue, Suite 2000
Los Angeles, California 90071-1524
Telephone: (213) 346-8310
FAX: (213) 620-1811
Attorneys for Debtor
and Debtor in Possession
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
SANTA ANA DIVISION
In re ) Case No. SA 94-19491-JR
)
CALIFORNIA SEVEN ASSOCIATES ) Chapter 11
LIMITED PARTNERSHIP, a )
California Limited Partnership, ) PLAN OF REORGANIZATION
) UNDER CHAPTER 11 OF THE
Debtor. ) BANKRUPTCY CODE PROPOSED
) BY THE DEBTOR DATED
Employer Tax I.D. #94-2970056 ) MARCH 16, 1995
)
) Date: [TO BE SET]
) Time: [TO BE SET]
) Place: Courtroom 606
) 34 Civic Center Plaza
) Santa Ana, CA 92701
)
PLAN OF REORGANIZATION UNDER CHAPTER 11 OF THE
BANKRUPTCY CODE PROPOSED BY THE
DEBTOR DATED MARCH 16, 1995
TABLE OF CONTENTS
PAGE
ARTICLE I - DEFINITIONS AND INTERPRETATION. . . . . . . . 1
A. Terms Defined in this Plan. . . . . . . . . . . . . . 1
1.01 Acceptance . . . . . . . . . . . . . . . . . . 1
1.02 Administrative Claim . . . . . . . . . . . . . 2
1.03 Administrative Convenience Claim . . . . . . . 2
1.04 Administrative Convenience Class . . . . . . . 2
1.05 Affiliate. . . . . . . . . . . . . . . . . . . 2
1.06 Allowed Administrative Claim . . . . . . . . . 3
1.07 Allowed Amount . . . . . . . . . . . . . . . . 3
1.08 Allowed Claim. . . . . . . . . . . . . . . . . 3
1.09 Allowed Interest . . . . . . . . . . . . . . . 4
1.10 Bankruptcy Code or Code. . . . . . . . . . . . 4
1.11 Bankruptcy Court or Court. . . . . . . . . . . 4
1.12 Bankruptcy Rules . . . . . . . . . . . . . . . 4
1.13 Bar Date . . . . . . . . . . . . . . . . . . . 5
1.14 Business Day . . . . . . . . . . . . . . . . . 5
1.15 CAL 7. . . . . . . . . . . . . . . . . . . . . 5
1.16 Case . . . . . . . . . . . . . . . . . . . . . 5
1.17 Cash . . . . . . . . . . . . . . . . . . . . . 5
1.18 Chapter 5 Causes of Action . . . . . . . . . . 5
1.19 Chapter 5 Recoveries . . . . . . . . . . . . . 6
1.20 Chapter 11 . . . . . . . . . . . . . . . . . . 6
1.21 Claim. . . . . . . . . . . . . . . . . . . . . 6
1.22 Claimant . . . . . . . . . . . . . . . . . . . 6
1.23 Class. . . . . . . . . . . . . . . . . . . . . 6
1.24 Collateral . . . . . . . . . . . . . . . . . . 7
1.25 Confirmation . . . . . . . . . . . . . . . . . 7
1.26 Confirmation Date. . . . . . . . . . . . . . . 7
1.27 Confirmation Order . . . . . . . . . . . . . . 7
1.28 Congen . . . . . . . . . . . . . . . . . . . . 7
1.29 Congen Claim . . . . . . . . . . . . . . . . . 7
1.30 Creditor . . . . . . . . . . . . . . . . . . . 7
1.31 Creditors' Committee . . . . . . . . . . . . . 7
1.32 Debtor . . . . . . . . . . . . . . . . . . . . 7
1.33 Debtor's Financial Projections . . . . . . . . 8
1.34 Designee . . . . . . . . . . . . . . . . . . . 8
1.35 Disallowed Claim . . . . . . . . . . . . . . . 8
1.36 Disclosure Statement . . . . . . . . . . . . . 8
(i)
PAGE
1.37 Disputed Claim . . . . . . . . . . . . . . . . 8
1.38 Disputed Interest. . . . . . . . . . . . . . . 9
1.39 District Court . . . . . . . . . . . . . . . . 10
1.40 Effective Date . . . . . . . . . . . . . . . . 10
1.41 Entity . . . . . . . . . . . . . . . . . . . . 10
1.42 Estate . . . . . . . . . . . . . . . . . . . . 10
1.43 Executory Contracts. . . . . . . . . . . . . . 10
1.44 Face Amount. . . . . . . . . . . . . . . . . . 11
1.45 Fee Application. . . . . . . . . . . . . . . . 11
1.46 File or Filed. . . . . . . . . . . . . . . . . 11
1.47 Filing Date. . . . . . . . . . . . . . . . . . 11
1.48 Final Order. . . . . . . . . . . . . . . . . . 11
1.49 Fiscal Year. . . . . . . . . . . . . . . . . . 11
1.50 General Partner. . . . . . . . . . . . . . . . 11
1.51 Insurance Policy . . . . . . . . . . . . . . . 12
1.52 Insured Claim. . . . . . . . . . . . . . . . . 12
1.53 Insurers . . . . . . . . . . . . . . . . . . . 12
1.54 Interest . . . . . . . . . . . . . . . . . . . 12
1.55 LIBOR. . . . . . . . . . . . . . . . . . . . . 12
1.56 Maxim. . . . . . . . . . . . . . . . . . . . . 13
1.57 Maxim Management Agreement . . . . . . . . . . 13
1.58 Objection Deadline . . . . . . . . . . . . . . 13
1.59 Operating Properties . . . . . . . . . . . . . 13
1.60 Other Priority Claims. . . . . . . . . . . . . 14
1.61 Partnership Units. . . . . . . . . . . . . . . 14
1.62 Plan . . . . . . . . . . . . . . . . . . . . . 14
1.63 Plan Proponent . . . . . . . . . . . . . . . . 14
1.64 Professional Persons . . . . . . . . . . . . . 14
1.65 Properties . . . . . . . . . . . . . . . . . . 14
1.66 Pro Rata . . . . . . . . . . . . . . . . . . . 14
1.67 R&B. . . . . . . . . . . . . . . . . . . . . . 15
1.68 R&B Management Agreements. . . . . . . . . . . 15
1.69 Reorganized Debtor . . . . . . . . . . . . . . 15
1.70 Schedules. . . . . . . . . . . . . . . . . . . 16
1.71 Secured Claim. . . . . . . . . . . . . . . . . 16
1.72 Sherman Oaks . . . . . . . . . . . . . . . . . 16
1.73 Tax Claim. . . . . . . . . . . . . . . . . . . 16
1.74 Term of the Plan . . . . . . . . . . . . . . . 16
1.75 Trade Claimants. . . . . . . . . . . . . . . . 16
1.76 Travelers. . . . . . . . . . . . . . . . . . . 17
1.77 Travelers Secured Claim. . . . . . . . . . . . 17
1.78 Unclaimed Property . . . . . . . . . . . . . . 17
1.79 Unsecured Claim. . . . . . . . . . . . . . . . 18
B. Interpretation, Rules of Construction and Other Terms 18
ARTICLE II - CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS 19
2.01 Division of Claims . . . . . . . . . . . . . . 19
2.02 Administrative Claims and Priority Tax Claims. 19
2.03 Allowed Claims and Interests . . . . . . . . . 20
(ii)
PAGE
2.04 Classification of Claims and Interests . . . . 20
(a) Class 1. . . . . . . . . . . . . . . . . . 20
(b) Class 2. . . . . . . . . . . . . . . . . . 20
(c) Class 3. . . . . . . . . . . . . . . . . . 20
(d) Class 4. . . . . . . . . . . . . . . . . . 20
(e) Class 5. . . . . . . . . . . . . . . . . . 20
(f) Class 6. . . . . . . . . . . . . . . . . . 20
(g) Class 7. . . . . . . . . . . . . . . . . . 21
(h) Class 8. . . . . . . . . . . . . . . . . . 21
(i) Class 9. . . . . . . . . . . . . . . . . . 21
ARTICLE III - IDENTIFICATION OF IMPAIRED CLASSES OF CLAIMS
AND EQUITY INTERESTS . . . . . . . . . . . 21
3.01 Unimpaired Classes of Claims and Interests . . 21
3.02 Impaired Classes of Claims and Equity
Interests. . . . . . . . . . . . . . . . . 21
ARTICLE IV - TREATMENT OF CERTAIN UNCLASSIFIED ADMINISTRATIVE,
STATUTORY FEES AND TAX CLAIMS. . . . . . . 22
4.01 Administrative Claims. . . . . . . . . . . . . 22
(a) Allowed Administrative Claims Against
the Debtor . . . . . . . . . . . . . . 22
(b) Bar Date for Filing Applications for
Allowance and Payment of Administrative
Expense Claims . . . . . . . . . . . . 22
4.02 Payment of Statutory Fees. . . . . . . . . . . 23
4.03 Tax Claims . . . . . . . . . . . . . . . . . . 23
4.04 Disallowance of Certain Interest and Penalties
on Tax Claims. . . . . . . . . . . . . . . 24
4.05 Disallowance of Special Taxes. . . . . . . . . 24
ARTICLE V - TREATMENT OF UNIMPAIRED CLASSES . . . . . . . 25
5.01 Class 4 Claims . . . . . . . . . . . . . . . . 25
5.02 Class 7 Claims . . . . . . . . . . . . . . . . 25
ARTICLE VI - TREATMENT OF CLASSES IMPAIRED UNDER THE PLAN 25
6.01 Class 1 Claims . . . . . . . . . . . . . . . . 25
6.02 Class 2 Claims . . . . . . . . . . . . . . . . 28
6.03 Class 3 Claims . . . . . . . . . . . . . . . . 28
6.04 Class 5 Claims . . . . . . . . . . . . . . . . 29
6.05 Class 6 Claims . . . . . . . . . . . . . . . . 29
6.06 Class 8 Claims . . . . . . . . . . . . . . . . 29
6.07 Class 9 Interests. . . . . . . . . . . . . . . 29
ARTICLE VII - MEANS FOR EXECUTION OF PLAN AND CONDITIONS
TO PLAN BECOMING EFFECTIVE . . . . . . . . 30
7.01 Partnership Structure. . . . . . . . . . . . . 30
(iii)
PAGE
7.02 Conditions to Plan Becoming Effective and
Events to Occur on the Effective Date . . 30
7.03 Repair of Sherman Oaks . . . . . . . . . . . . 30
7.04 Vesting of Assets in Reorganized Debtor. . . . 31
7.05 The Reorganized Debtor's Obligations Under
the Plan . . . . . . . . . . . . . . . . . 32
7.06 Unclaimed Property . . . . . . . . . . . . . . 32
7.07 Implementation of Plan Under State Partnership
Law. . . . . . . . . . . . . . . . . . . . 33
ARTICLE VIII - PROVISIONS GOVERNING DISTRIBUTIONS . . . . 34
8.01 Distributions by Reorganized Debtor. . . . . . 34
8.02 Date of Distributions for Claims Allowed as of
the Effective Date . . . . . . . . . . . . 34
8.03 Delivery of Distributions. . . . . . . . . . . 35
(a) General. . . . . . . . . . . . . . . . . . 35
(b) Means of Cash Payments. . . . . . . . . . 36
(c) De Minimis Cash Distributions. . . . . . . 36
8.04 Setoff . . . . . . . . . . . . . . . . . . . . 36
ARTICLE IX - EXECUTORY CONTRACTS. . . . . . . . . . . . . 37
9.01 Assumption, Rejection and Assignment of
Executory Contracts. . . . . . . . . . . . 37
(a) Executory Contracts. . . . . . . . . . . . 37
(b) Assumption of Residential Tenant Real
Estate Leases. . . . . . . . . . . . . 37
(c) Management Agreements. . . . . . . . . . . 37
(d) Payment of Cure Amounts. . . . . . . . . . 38
(e) Remaining Executory Contracts and Leases . 38
(f) Rejected Executory Contracts and
Proofs of Claim. . . . . . . . . . . . 39
ARTICLE X - COMPOSITION OF GENERAL PARTNER AND
POSTCONFIRMATION MANAGEMENT. . . . . . . . 40
10.01 General Partner. . . . . . . . . . . . . . . . 40
10.02 Management . . . . . . . . . . . . . . . . . . 41
(a) Maxim Management Agreement . . . . . . . . 41
(b) R&B Management Agreement . . . . . . . . . 41
ARTICLE XI - PROVISIONS FOR THE RETENTION, ENFORCEMENT,
SETTLEMENT OR ADJUSTMENT OF CLAIMS
BELONGING TO THE DEBTOR OR TO THE ESTATE . 42
11.01 Preservation and Handling of Claims. . . . . . 42
11.02 Prosecution of Objections to Claims. . . . . . 42
11.03 Authority to Prosecute Objections. . . . . . . 43
(iv)
PAGE
11.04 Treatment of Disputed Claims . . . . . . . . . 43
(a) Payments on Account of Disputed Claims . . 43
(b) Disputed Claims Reserves Distributions on
Account of Disputed Claims, Once Allowed . 43
ARTICLE XII - MISCELLANEOUS . . . . . . . . . . . . . . . 44
12.01 Discharge. . . . . . . . . . . . . . . . . . . 44
12.02 Revesting. . . . . . . . . . . . . . . . . . . 45
12.03 Termination. . . . . . . . . . . . . . . . . . 46
12.04 Injunction . . . . . . . . . . . . . . . . . . 46
12.05 Term of Injunctions or Stays . . . . . . . . . 47
12.06 Jurisdiction Retained. . . . . . . . . . . . . 48
12.07 Exculpation. . . . . . . . . . . . . . . . . . 50
12.08 Nonwaiver. . . . . . . . . . . . . . . . . . . 50
12.09 Successors and Assigns . . . . . . . . . . . . 51
12.10 Modification of the Plan . . . . . . . . . . . 51
12.11 Payment Dates. . . . . . . . . . . . . . . . . 52
12.12 Notices. . . . . . . . . . . . . . . . . . . . 52
12.13 Governing Law. . . . . . . . . . . . . . . . . 52
12.14 Severability . . . . . . . . . . . . . . . . . 53
ARTICLE XIII - CONFIRMABILITY OF THE PLAN AND CRAMDOWN. . 53
13.01 Cramdown . . . . . . . . . . . . . . . . . . . 53
EXHIBITS
EXHIBIT "A" - Debtor's Financial Projections
EXHIBIT "B" - Rejected Executory Contracts
EXHIBIT "C" - Limited Partnership Agreement
(v)
6233C/10566.9
California Seven Associates Limited Partnership, a
California Limited Partnership, the Debtor and Debtor in
Possession in the above-captioned Chapter\11 case, proposes the
following Plan of Reorganization (the "Plan") pursuant to
11\U.S.C. \1121(a).
Reference is made to the Disclosure Statement filed by
the Proponent on or about March 17, 1995, which discusses
CAL\7, and its history, business, management, Properties,
financial information and results of operations. The
Disclosure Statement also contains a summary and analysis of
this Plan. Creditors are urged to consult the Disclosure
Statement before voting to accept or reject this 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 ACCEPTANCES OR
REJECTIONS OF THIS PLAN.
ARTICLE I
DEFINITIONS AND INTERPRETATION
A. TERMS DEFINED IN THIS PLAN
In addition to such other terms as are defined in other
sections of the Plan, the following capitalized terms shall
have the following meanings:
1.01. "Acceptance" shall have the same meaning
contained in Section 1126 of the Bankruptcy Code (11 U.S.C.
\1126) and requires that holders of a Class of Claims against
1
6159C/10566.9
the Debtor accept this Plan by at least two thirds in dollar
amount and more than one half in number of such Class of Claims.
1.02. "Administrative Claim" shall mean a Claim for
any cost or expense of administration in connection with this
Case of a kind specified in Section 364(c)(1) of the Bankruptcy
Code (11 U.S.C. \364(c)(1)) or in Section 503(b) of the
Bankruptcy Code (11 U.S.C. \503(b)) and referred to in Section
507(a)(1) of the Bankruptcy Code (11 U.S.C. \507(a)(1)),
including without limitation, the actual, necessary costs and
expenses of preserving the Estate and of operating the business
of the Debtor, including wages, salaries, commissions or any
other compensation for services rendered after the commencement
of the bankruptcy Case, compensation for legal or other
services and reimbursement of costs and expenses under Sections
330(a) or 331 of the Bankruptcy Code (11 U.S.C. \330(a) or
331) or otherwise allowed by the Court, and all fees and
charges assessed against the Estate under Chapter 123,
Title\28, United States Code (28 U.S.C. \1911 et seq.).
1.03. "Administrative Convenience Claim" shall mean
the Unsecured Claim in the amount of $1000 or less, or an
Unsecured Claim voluntarily reduced to $1000 by the election of
the holder of the Unsecured Claim.
1.04. "Administrative Convenience Class" shall mean
all Unsecured Creditors of the Debtor with Claims of $1000 or
less or Claims voluntarily reduced to $1000.
1.05. "Affiliate" shall have the same meaning as
2
6159C/10566.9
such term is defined in Section 101(2) of the Bankruptcy Code
(11 U.S.C. \101(2)).
1.06. "Allowed Administrative Claim" shall mean all
or that portion of any Administrative Claim which has been
allowed by a Final Order of the Bankruptcy Court or is
otherwise allowed under relevant provisions of the Bankruptcy
Code or is expressly designated an Allowed Administrative
Expense Claim under this Plan.
1.07. "Allowed Amount" shall mean the dollar amount
of an Allowed Claim or Allowed Interest.
1.08. "Allowed Claim" shall mean a Claim, whether or
not complete evidence of such Claim is set forth in an
applicable Proof of Claim or in this Plan, other than an
Administrative Claim, that:
(a) either
(1) is scheduled by the Debtor pursuant to the
Bankruptcy Code, other than a Claim scheduled as
disputed, contingent or unliquidated, or
(2) proof of which has been timely filed with
the Court pursuant to the Bankruptcy Code or any
order of the Court, or later filed with leave of
the Court after notice and a hearing; and
(b) either
(1) no objection to the allowance of which or
a motion to expunge has been interposed before any
3
6159C/10566.9
final date for the filing of such objections or
motions set forth in the Confirmation Order, or
(2) any objection to the allowance of which or
a motion to expunge has been overruled by a Final
Order, or
(3) which has otherwise been allowed by a
Final Order or designated as an Allowed Claim
under this Plan.
1.09. "Allowed Interest" shall mean an Interest in
the partnership of the Debtor, held either by the General
Partner or by Limited Partners, and either that is not a
Disputed Interest or that has been allowed by a Final Order.
1.10. "Bankruptcy Code" or "Code" shall mean the
Bankruptcy Reform Act of 1978, as subsequently amended,
principally codified at 11 U.S.C. \101, et seq.
1.11. "Bankruptcy Court" or "Court" shall mean the
United States Bankruptcy Court for the Central District of
California (Santa Ana Division), or, if such court ceases to
have jurisdiction over the Case, such court or adjunct thereof
that exercises jurisdiction over the Case in lieu of the
Bankruptcy Court for the Central District of California, having
jurisdiction over the Case.
1.12. "Bankruptcy Rules" shall mean the Federal Rules
of Bankruptcy Procedure promulgated by the United States
Supreme Court pursuant to Section 2075 of Title 28, United
States Code, and, where appropriate, the Local Bankruptcy Rules
4
6159C/10566.9
for the United States Bankruptcy Court for the Central District
of California to the extent applicable in this Case.
1.13. "Bar Date" shall mean January 30, 1995, the
date set by the Court for filing a proof of Claim or Interest
in this Case.
1.14. "Business Day" shall mean any day except
Saturday, Sunday or any other day on which the law authorizes
commercial banks in the City of Santa Ana, California, to be
closed.
1.15. "CAL 7" shall mean California Seven Associates
Limited Partnership, a California Limited Partnership, the
Debtor and Debtor in possession in the above-captioned case.
1.16. "Case" shall mean the Chapter 11 case commenced
in the Court by the Debtor on the Petition Date.
1.17. "Cash" shall mean cash and cash equivalents
which evidence immediately available funds.
1.18. "Chapter 5 Causes of Action" shall mean all
claims of the Debtor and Reorganized Debtor against any and all
third parties, including without limitation, claims for the
recovery of (a)\transfers of cash, offsets, debt forgiveness
and other types or kinds of property, or the value thereof,
recoverable exclusively pursuant to Sections 544, 545, 547,
548, 549, 550 and 553 of the Code; (b)\damages, general or
exemplary or both relating to or based upon (1)\fraud,
negligence, gross negligence, willful misconduct, or any tort
5
6159C/10566.9
actions, (2)\violations of Federal or State securities laws,
(3)\violations of applicable corporate laws, (4)\breaches of
fiduciary or agency duties, (5)\breaches of causes of action
based upon alter ego or other liability theories; (c)\damages
based upon any other claim of the Debtor, to the extent not
specifically compromised or released pursuant to the Plan or an
agreement referred to, or incorporated into, the Plan or Final
Order entered after notice and opportunity for hearing; (d)\any
claims of the Debtor for equitable subordination under Section
510(c) of the Code or under other applicable laws; and (e)\all
unresolved objections to any Disputed Claims.
1.19. "Chapter 5 Recoveries" shall mean the rights of
the Debtor or any assignee to any proceeds from (a)\any award,
judgment or other determination rendered or made in favor of
the Debtor or assignee as to any Chapter 5 Cause of Action or
(b)\any compromise or settlement entered into by or on behalf
of the Debtor or on behalf of the Estate.
1.20. "Chapter 11" shall mean Chapter 11 of the
Bankruptcy Code.
1.21. "Claim" shall mean a claim against the Debtor,
whether or not asserted, as defined in Section 101(5) of the
Bankruptcy Code (11 U.S.C. \101(5)) by whatever right the
Claimant may have against the Debtor.
1.22. "Claimant" shall mean the holder of a Claim.
1.23. "Class" shall mean a category of holders of
Claims or Interests as provided in Article II of this Plan.
6
6159C/10566.9
1.24. "Collateral" shall mean any property of the
Debtor subject to a valid and enforceable lien to secure the
payment of a Claim.
1.25. "Confirmation" shall mean the entry of an order
by the Court confirming this Plan.
1.26. "Confirmation Date" shall mean the date of the
entry of the Confirmation Order by the Bankruptcy Court Clerk's
Office.
1.27. "Confirmation Order" shall mean the order
signed by the Court confirming this Plan.
1.28. "Congen" shall mean Congen Properties, Inc., a
Delaware corporation, a creditor holding the second lien on the
Properties.
1.29. "Congen Claim" shall mean the Claim held by
Congen evidenced by that certain promissory note dated October
25, 1990 in the original principal amount of $14,000,000 with
related deeds of trust and other security documents executed by
CAL 7 and delivered to Congen, as supplemented and amended and
all related documents which shall be treated as an Allowed
Claim as to principal and accrued interest.
1.30. "Creditor" shall mean the holder of an Allowed
Claim against the Debtor.
1.31. "Creditors' Committee" shall mean the Official
Committee of Unsecured Creditors appointed in this Case
pursuant to Section 1102 of the Code.
1.32. "Debtor" shall mean CAL 7, Debtor and Debtor
7
6159C/10566.9
in Possession in the above-captioned Case.
1.33. "Debtor's Financial Projections" shall mean the
financial projections attached to this Plan as Exhibit "A".
1.34. "Designee" of any person shall mean any Entity
appointed in any writing executed and delivered by such person
for the purpose or purposes specified in such writing. Such
person shall be permitted to appoint different Designees for
different purposes.
1.35. "Disallowed Claim" shall mean any Claim or
portion thereof which has been disallowed by a Final Order.
1.36. "Disclosure Statement" shall mean the
Disclosure Statement pursuant to Section 1125 of the Bankruptcy
Code with respect to the Plan of Reorganization Under Chapter
11 of the Bankruptcy Code Proposed by the Debtor Dated March
17, 1995, together with any amendments or modifications thereto.
1.37. "Disputed Claim" shall mean: (a)\a Claim as to
which, if no proof of Claim has been Filed by the Claims Bar
Date or has otherwise been deemed timely Filed under applicable
law and such Claim has been scheduled by the Debtor in its
Schedule of Liabilities as other than disputed, contingent or
unliquidated: (1)\the Debtor has objected to the Claim and
(2)\(I) any agreement to settle the dispute has not been
executed or (II)\if such agreement was executed prior to the
Confirmation Date, such agreement has not been approved by the
Court; or (b)\a Claim as to which, if a proof of Claim has been
Filed by the Claims Bar Date or has otherwise been deemed
8
6159C/10566.9
timely Filed under applicable law, an objection has been Filed
by the Debtor or any other party in interest and which
objection, if timely Filed, has not been withdrawn on or before
any date fixed by the Plan or order of the Court for Filing
such objections and such objection has not been denied by a
Final Order. Prior to the time that an objection has been or
may be timely Filed, for the purpose of the Plan, a Claim
asserted in a proof of Claim shall be considered a Disputed
Claim if: (a)\the amount of the Claim specified in the proof
of Claim exceeds the amount of any corresponding Claim
scheduled by the Debtor in its Schedule of Liabilities; (b)\any
corresponding Claim in the Debtor's Schedule of Liabilities has
been scheduled as disputed, contingent or unliquidated,
irrespective of the amount scheduled; or (c)\no corresponding
Claim has been scheduled by the Debtor in its Schedule of
Liabilities. As to any Disputed Claim, only the portion
thereof which either (a) exceeds the amount of any
corresponding Claim scheduled by the Debtor in its Schedule of
Liabilities or (b) is asserted by Debtor in objections filed in
connection therewith as disputed, contingent or unliquidated
shall be deemed the "disputed portion" of such Disputed Claims.
1.38. "Disputed Interest" shall mean any Interest in
the Debtor and as to which an objection has been Filed by the
Debtor or any other party in interest and which objection, if
timely Filed, has not been withdrawn on or before any date
fixed by the Plan or by order of the Court for Filing such
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6159C/10566.9
objections and such objection has not been denied by a Final
Order.
1.39. "District Court" shall mean the United States
District Court for the Central District of California.
1.40. "Effective Date" shall mean, and shall occur on
the later of (a) the 11th day after the entry of the
Confirmation Order; (b) July 1, 1995; or (c) such later date as
may be mutually agreed by the Debtor and the Creditors'
Committee, with notice and an opportunity to object, to all
parties requesting special notice, unless the effectiveness of
the Confirmation Order has been stayed or vacated, in which
case the Effective Date shall be the later of the 11th day
after the entry of the Confirmation Order or such date
thereafter when any stay of the effectiveness of the
Confirmation Order has expired or otherwise terminated.
1.41. "Entity" shall mean any individual,
corporation, partnership, joint venture, association, joint
stock company, unincorporated organization, estate, trust,
governmental unit or other entity including the Debtor and the
U.S. Trustee, whether singular or plural, but does not include
the Federal Deposit Insurance Corporation and/or the Resolution
Trust Corporation, their successors or assigns.
1.42. "Estate" shall mean the estate created in this
Bankruptcy Case pursuant to Section 541 of the Bankruptcy Code
(11 U.S.C. \541).
1.43. "Executory Contracts" shall mean all leases
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6159C/10566.9
and executory contracts within the meaning of Section 365 of
the Bankruptcy Code (11 U.S.C. \365) including but not limited
to and all leases or executory contracts that are modified by
this Plan.
1.44. "Face Amount" shall mean with respect to any
Claim the full stated liquidated amount claimed by the holder
of such Claim in any proof of Claim timely filed by such holder
plus the amount determined by (i) agreement of such holder and
Reorganized Debtor, or (ii) by the Court as to the unliquidated
portion, if any, of such Claim.
1.45. "Fee Application" shall mean the application of
a professional person under Sections 330 or 503 of the
Bankruptcy Code (11 U.S.C. \330 or 503) for allowance of
compensation and reimbursement of expenses in the Chapter 11
Case.
1.46. "File" or "Filed" shall mean file or filed with
the Court in this Case.
1.47. "Filing Date" shall mean September 16, 1994,
the day this Case was filed with the Court.
1.48. "Final Order" shall mean an order as to which
any appeal that has been or may be taken has been resolved or
as to which the time for appeal has expired.
1.49. "Fiscal Year" shall mean the annual accounting
period used by the Debtor which is a calendar year.
1.50. "General Partner" shall mean CIGNA Realty
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6159C/10566.9
Resources, Inc. - Seventh, the sole General Partner of the
Debtor.
1.51. "Insurance Policy" shall mean the collective
insurance policies that provided coverage to the Debtor's
Properties by the Insurers pursuant to the insurance contracts
identified as follows:
(1) Aetna Policy No. 007-MO-15631-SCA (the "Aetna
Policy");
(2) Home Policy No. MLP 9109969 (the "Home Policy");
(3) Phoenix Policy No. E-CIP-P22456 (the "Phoenix
Policy"); and
(4) Lexington Policy No. 8690158 (the "Lexington
Policy").
1.52. "Insured Claim" shall mean the Claim arising
from the damage to Sherman Oaks from the Northridge earthquake
and any other claims covered by the Debtor's Insurance Policy.
1.53. "Insurers" shall collectively mean the Aetna
Life Insurance Company ("Aetna"), Home Insurance Company
("Home"), Phoenix Assurance Company of New York ("Phoenix") and
Lexington Insurance Company ("Lexington").
1.54. "Interest" shall mean the rights of a partner
(general or limited) arising from his, her or its status as an
Equity Interest holder.
1.55. "LIBOR" shall mean the London Inter-Bank
Offering Rate which is published daily in the Wall Street
Journal.
12
6159C/10566.9
1.56. "Maxim" shall mean Maxim Property Management,
formerly known as Prometheus Management Group, an independent
contractor managing the Amberway Apartments for CAL 7 pursuant
to the Maxim Management Agreement.
1.57. "Maxim Management Agreement" shall mean the
Management Agreement dated May 1, 1992, by and between
California Seven Associates Limited Partnership ("Owner"), and
Promethius Management Group, as supplemented and amended from
time to time.
1.58. "Objection Deadline" shall mean the date by
which Objections to Claims shall be filed with the Bankruptcy
Court and served upon the respective holders of each of the
Claims as provided in Section 11.01 of the Plan.
1.59. "Operating Properties" shall mean the following
five (5) apartment complexes and related site improvements
owned and operated by CAL 7 that are currently leased and have
tenants as of the Confirmation Date:
(1) Amberway Apartments
489 S. Chatham Circle
Anaheim, California
(2) Pacifica Club
6700 Warner Avenue
Huntington Beach, California
(3) Oakwood Apartments (West Los Angeles)
3636 Sepulveda Blvd.
Los Angeles, California
(4) Mission Bay East
3883 Ingraham Street
San Diego, California
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6159C/10566.9
(5) Arbor Park Apartments
859 N. Mountain Avenue
Upland, California
1.60. "Other Priority Claims" shall mean a Claim
which is entitled to priority under Section 507 of the
Bankruptcy Code (11 U.S.C. \507) other than a Claim entitled
to priority under Sections 507(a)(1), 364(c)(1) or 507(a)(7) of
the Bankruptcy Code (11 U.S.C. \507(a)(1) or 507(a)(7)).
1.61. "Partnership Units" shall mean the limited
partnership voting securities issued by CAL 7 and currently
held by the limited partners and by the General Partner.
1.62. "Plan" shall mean this Plan of Reorganization
Under Chapter 11 of the Bankruptcy Code Proposed by the Debtor
Dated March 17, 1995, including any amendment or modification
thereto, which Plan shall also constitute a Plan of
Reorganization within the meaning of Section 368(a)(1) of the
Internal Revenue Code (26 U.S.C. \368(a)(1)).
1.63. "Plan Proponent" shall mean the Debtor and such
other entities which, by appropriate pleadings filed in the
Case prior to the Confirmation Date, join as Plan Proponents.
1.64. "Professional Persons" shall mean an Entity
retained or to be compensated pursuant to Sections 327, 328,
330, 503(b) or 1103 of the Bankruptcy Code.
1.65. "Properties" shall mean the Operating
Properties plus Sherman Oaks property.
1.66. "Pro Rata" shall mean, proportionately, based
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6159C/10566.9
on the percentage amount of the distribution made on account of
a particular Allowed Claim or Allowed Interest and the
distributions made on account of all Allowed Claims or Allowed
Interests of the Class in which the particular Allowed Claim or
Allowed Interest is included.
1.67. "R&B" shall mean R&B Apartment Management
Company, Inc., an independent contractor managing the Arbor
Park Apartments, Pacifica Club Apartments and Oakwood
Management Company, a division of R&B Realty Group, independent
contractor managing Oakwood Apartments (West Los Angeles),
Sherman Oaks Apartments, and Mission Bay East Apartments
pursuant to the R&B Management Agreements.
1.68. "R&B Management Agreements" shall mean the
following Management Agreements which have been supplemented or
amended from time to time:
1. Management Agreement, Arbor Park Apartments,
Upland, California, dated May 1, 1991;
2. Management Agreement, Pacifica Club Apartments,
dated May 1, 1992;
3. Second Amendment to Management and Leasing
Agreement dated August 1992;
4. First Amendment to Management and Leasing
Agreement dated January 1, 1991; and
5. Management and Leasing Agreement dated January
30, 1985.
1.69. "Reorganized Debtor" shall mean the Debtor's
15
6159C/10566.9
partnership entity resulting from the Plan on and after the
Effective Date.
1.70. "Schedules" shall mean the Schedules of Assets
and Liabilities and the Statement of Financial Affairs filed by
the Debtor in this Case, together with any amendments thereto.
1.71. "Secured Claim" shall mean a Claim secured by a
lien on property of the Debtor, which lien is valid, perfected
and enforceable under applicable law and which is not subject
to avoidance under the Bankruptcy Code or other applicable
non-bankruptcy law and which is duly established in the Case,
but only to the extent of the value of the Collateral that
secures payment of the Claim.
1.72. "Sherman Oaks" shall mean the Oakwood Apartment
complex located at 4500 Woodman Avenue, Sherman Oaks,
California, that was damaged in the Northridge earthquake on
January 17, 1994.
1.73. "Tax Claim" shall mean Claims of the kind
specified in Section 507(a)(7) of the Bankruptcy Code
(11\U.S.C. \507(a)(7)).
1.74. "Term of the Plan" shall mean the period of
time commencing on the Effective Date and ending on the date of
the final payment due under the plan.
1.75. "Trade Claimants" shall mean the holders of
Claims for goods and services rendered to or for any of the
Properties, including but not limited to the Claims of all
16
6159C/10566.9
vendors, suppliers, contractors, R&B and Maxim.
1.76. "Travelers" shall mean The Travelers Life
Insurance Company, a secured Creditor of the Debtor.
1.77. "Travelers Secured Claim" shall mean the
Secured Claim held by Travelers evidenced by the original note
secured by deeds of trust dated December 20, 1984 in the
principal amount of $100,000,000, which debt was originally
incurred on or about December 20, 1984 and was assumed by the
Debtor on or about January 31, 1985 with related security
documents, as supplemented and amended, together with all
related documents which are referenced in the Proof of Claim
filed by Travelers on or about January 23, 1995.
1.78. "Unclaimed Property" shall mean any Cash or
Reorganization Securities which are unclaimed one year
following the Effective Date. Unclaimed Property shall include:
(a) checks (and the funds represented thereby),
which have been returned as undeliverable after having
been properly posted to the forwarding address most
recently provided to the Debtor or Reorganized Debtor;
(b) funds for checks which have not been paid;
(c) checks (and the funds represented thereby),
which are not mailed or delivered because of the
absence of a proper address in which to mail or deliver
such property; and
(d) interest on Cash constituting Unclaimed
Property.
17
6159C/10566.9
1.79. "Unsecured Claim" shall mean any Claim that is
not an Administrative Claim, an Administrative Convenience
Claim, an Other Priority Claim, a Tax Claim or a Secured Claim.
B. INTERPRETATION, RULES OF CONSTRUCTION AND OTHER TERMS.
Any term used in this Plan that is not defined herein,
whether in this Article I or elsewhere, but that is used in the
Code or the Bankruptcy Rules has the meaning assigned to that
term in the Code or the Bankruptcy Rules and shall be construed
in accordance with the Rules of Construction thereunder.
Any capitalized term used in this Plan that is not
defined herein, but that is defined and used in the Disclosure
Statement has the meaning ascribed to that term in the
Disclosure Statement.
The words "herein," "hereof," "hereto," "hereunder" and
others of similar importance refer to the Plan as a whole and
not to any particular section, subsection or clause contained
in the Plan.
Unless specified otherwise in a particular reference, a
reference in this Plan to an article or a section is a
reference to that article or section of this Plan.
Any reference in this Plan to a document or instrument
being in a particular form means that the document or
instrument shall be in substantially such form.
Any reference in this Plan to an existing document or
instrument means such document or instrument as it may have
been amended, modified or supplemented from time to time.
18
6159C/10566.9
As contextually appropriate, each term stated in either
the singular or plural shall include both the singular and the
plural.
In addition to the foregoing, the rules of construction
set forth in Section 102 of the Code (11 U.S.C. \102) shall
apply to this Plan.
In computing any period of time prescribed or allowed by
this Plan, the provisions of Bankruptcy Rule 9006(a) shall
apply.
All exhibits to this Plan are incorporated into this
Plan, and shall be deemed to be included in this Plan,
regardless of when filed with the Court.
ARTICLE II
CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS
2.01. Division of Claims. For purposes of
organization, voting and all confirmation matters, except as
otherwise provided herein, all Claims (except for
Administrative Claims and priority Tax Claims) and all Equity
Interests shall be classified as set forth in this Article II
of the Plan.
2.02. Administrative Claims and Priority Tax Claims.
As provided in Section 1123(a)(1) of the Bankruptcy Code (11
U.S.C. \1123(a)(1)), Administrative Claims and priority Tax
Claims against the Debtor shall not be classified for purposes
of voting or receiving distributions under the Plan. Rather,
all such Claims shall be treated separately as
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6159C/10566.9
unclassified Claims pursuant to the terms set forth in Article
IV of the Plan.
2.03. Allowed Claims and Interests. A Claim or
Interest is in a particular Class only to the extent the Claim
or Interest is an Allowed Claim or Allowed Interest as defined
herein.
2.04. Classification of Claims and Interests. Claims
against the Estate and Interests in the Debtor are classified
as follows:
(a) Class 1 - Class 1 consists of the Travelers
Secured Claim;
(b) Class 2 - Class 2 consists of the Congen Claim;
(c) Class 3 - Class 3 consists of the claims of any
other secured or undersecured claimants;
(d) Class 4 - Class 4 consists of the Other
Priority Claims;
(e) Class 5 - Class 5 consists of Administrative
Convenience Claims against the Debtor;
(f) Class 6 - Class 6 consists of all Unsecured
Claims of Trade Claimants (except Administrative
Convenience Claims in Class 5, undersecured or Secured
Claimants in Class 3, Tenants' Claims in Class 7 and
claims of the General Partner and other claimants in
Class 8);
20
6159C/10566.9
(g) Class 7 - Class 7 consists of the Allowed
Unsecured Claims of the tenants of the Debtor residing
in the Operating Properties;
(h) Class 8 - Class 8 consists of the Allowed
Unsecured Claims of the General Partner and of CIGNA
Financial Partners, Inc. and CIGNA Investments, Inc.;
and
(i) Class 9 - Class 9 consists of the Allowed
Interests of the General Partner and the limited
partners of the Debtor.
ARTICLE III
IDENTIFICATION OF
IMPAIRED CLASSES OF CLAIMS AND EQUITY INTERESTS
3.01. Unimpaired Classes of Claims and Interests.
The class consisting of Other Priority Claims (Class 4) is not
impaired under the Plan. This class is deemed to have accepted
the Plan under the provisions of Section 1126(f) of the
Bankruptcy Code (11 U.S.C. \1126(f)). The Class consisting of
the Allowed Unsecured Claims of the tenants of the Debtor
(Class 7) is not impaired because their leases will be assumed
and their security deposits paid according to the terms of
their leases. This Class is deemed to have accepted the Plan
under the provisions of Section 1126(f) of the Bankruptcy Code
(11\U.S.C. \1126(f)). The Plan Proponent shall not solicit
acceptances of the Plan from Classes 4 and 7.
3.02. Impaired Classes of Claims and Equity
Interests. Classes 1, 2, 3, 5, 6, 8 and 9 are impaired under
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6159C/10566.9
the Plan. The Plan Proponent shall seek acceptances of the
Plan from these Classes.
ARTICLE IV
TREATMENT OF CERTAIN UNCLASSIFIED
ADMINISTRATIVE, STATUTORY FEES AND TAX CLAIMS
4.01. Administrative Claims.
(a) Allowed Administrative Claims Against the Debtor.
Subject to the Bar Date provisions of Paragraph (b) of
this Article IV, the holders of Allowed Administrative
Claims against the Debtor, unless otherwise agreed,
are entitled to priority under Section 507(a)(1) of
the Bankruptcy Code. An Entity entitled to payment
pursuant to Sections 546(c) or 553 of the Bankruptcy
Code, and an Entity entitled to payment of
administrative expenses pursuant to Sections 503 and
507(a) of the Bankruptcy Code, shall receive on
account of such Allowed Administrative Claims or
administrative expenses unless otherwise agreed, Cash
in the amount of such Allowed Administrative Claims or
administrative expenses on the Effective Date.
Notwithstanding the foregoing, outstanding operating
payables incurred in the ordinary course of business
of the Debtor shall be paid according to their terms.
Professional fee expenses for services rendered after
the Effective Date shall be paid by Reorganized Debtor
in the ordinary course of business.
(b) Bar Date for Filing Applications for Allowance
and Payment of Administrative Expense Claims.
22
6159C/10566.9
Applications for allowance and payment of Administrative
Claims must be filed on or within 90 days after the
Effective Date. The Court shall not consider any
applications for allowance of Administrative Claims
filed after such date. Reorganized Debtor and all other
interested parties shall have until 30 days after the
filing of such Administrative Claims to object to such
Administrative Claims. All Administrative Claims that
become Allowed Administrative Claims after the
Confirmation Date will be treated like other Allowed
Administrative Claims and will be paid on the later of
the Effective Date or within 30 days after becoming an
Allowed Administrative Claim unless otherwise ordered by
the Court. Any of such Claims which are Allowed but
which are not determined to be Administrative Claims
will be treated as Class 6 Claims.
4.02. Payment of Statutory Fees. On or before the
Effective Date, all fees payable pursuant to Section 1930 of
Title 28, United States Code, 28 U.S.C. \1930, as determined
by the Court at the Confirmation Hearing, shall be paid in Cash
equal to the amount of such Administrative Claim.
4.03. Tax Claims. All Tax Claims shall be paid by the
Debtor in full, in Cash, on the Effective Date or pursuant to
their terms; provided, however, that Reorganized Debtor may
elect to pay a Tax Claim in deferred Cash payments of a value
as of the Effective Date equal to the Allowed Amount of such
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6159C/10566.9
Tax Claim payable over a period (a) not exceeding six years
from the date of assessment if an assessment has been made
prior to the Effective Date, and (b) not exceeding six (6)
years from the Effective Date if no assessment has been made
prior to such date (with interest at the rate of 5.25% from the
Effective Date of the Plan) or as the holder of such Tax Claim
and Reorganized Debtor may otherwise agree.
4.04. Disallowance of Certain Interest and Penalties on
Tax Claims. Holders of Tax Claims shall not receive any
payment on account of postpetition interest on, or penalties
with respect to, or arising in connection with, such Tax
Claims, except as allowed by a Final Order. The Plan, the
Confirmation Order and Section 1141(d) of the Bankruptcy Code
provide for the discharge of any such Claims for postpetition
interest or penalties. Holders of Tax Claims shall not assess
or attempt to collect such interest or penalties from the
Debtor, the Estate, Reorganized Debtor or from any of its
respective properties.
4.05. Disallowance of Special Taxes. The issuance,
transfer, or exchange of a security as defined under the
Bankruptcy Code or applicable law, or the making or delivery of
any instrument of transfer under this Plan, shall not be taxed
under any state or local law imposing a stamp tax or similar
tax as provided in Bankruptcy Code Section 1146.
24
6159C/10566.9
ARTICLE V
TREATMENT OF UNIMPAIRED CLASSES
5.01. Class 4 Claims. Class 4 Claims (the Other
Priority Claims) if any, shall be paid in Cash in full on the
Effective Date or as otherwise agreed between the Debtor and
such claimant.
5.02. Class 7 Claims. Class 7 Claims, all Unsecured
Claims of the Tenants of the Operating Properties, shall have
their leases assumed on the Effective Date and shall be
entitled to receive their security deposits pursuant to the
terms of their leases.
ARTICLE VI
TREATMENT OF CLASSES IMPAIRED UNDER THE PLAN
6.01. Class 1 Claims. The holder of the Class 1 Claim
(the Travelers Secured Claim in the approximate amount of
$97,880,497.00) shall receive in full and complete satisfaction
of its Allowed Secured Claim, six modified Notes (the
"Travelers Modified Notes"). The Travelers Modified Notes
shall contain the same terms as the original Travelers' Note
except as modified by the terms of this Plan. Any accrued and
unpaid postpetition interest shall be added to the principal
amounts of the Travelers Modified Notes. The addition of
accrued interest to principal shall not include default
interest, late charges or attorneys' fees.
The Reorganized Debtor shall execute and deliver to
Travelers the Travelers Modified Notes. The Travelers Modified
25
6159C/10566.9
Notes shall each be secured by a corresponding first lien
evidenced by six corresponding separate first deeds of trust on
the Properties. The amount of the Allowed Secured Claim of
Travelers shall be allocated between the Travelers Modified
Notes and the Properties as follows (subject to adjustments for
payments made):
Note #1 Amberway Apartments $12,550,000
Note #2 Arbor Park Apartments $8,410,000
Note #3 Mission Bay East Apartments $25,500,000
Note #4 Oakwood Apartments - West
Los Angeles $18,600,000
Note #5 Pacifica Club Apartments $16,000,000
Note #6 Sherman Oaks Apartments $16,820,497
The six notes and deeds of trust shall not be cross-defaulted
and cross-collateralized.
The Sherman Oaks note shall be executed and delivered to
Travelers only upon completion of the repair and stabilization
of occupancy of Sherman Oaks. From the Effective Date until
the completion of the repairs and stabilization of occupancy of
Sherman Oaks (approximately 18 months from the Effective Date)
the debt attributable to Sherman Oaks shall be secured by the
Sherman Oaks Apartments with a value of $14,900,000 and by the
cash balance maintained in the Reorganized Debtor's bank
account. For the 18 month period, monthly payments in arrears
of interest only at the rate of 8.125% on the principal amount
of $14,900,000 shall be paid commencing on the tenth day of the
26
6159C/10566.9
second month after the Effective Date. Upon the execution and
delivery of the Sherman Oaks note, principal plus interest at
the rate of 10.3% per annum based on a 30-year amortization
shall be paid in monthly payments. The rate of interest shall
be adjusted annually on the anniversary of the Effective Date
based upon LIBOR.
The balance of the Allowed Secured Claim in the total
amount of $82,980,497.00 evidenced by the notes secured by
first deeds of trust on the Operating Properties shall earn
interest at the rate of 10.3% per annum for the first 18 months
commencing on the first day of the first month after the
Effective Date. The payments of interest only shall be due and
payable monthly in arrears by the tenth day of the month.
Thereafter, interest at the rate of 10.3% per annum based on a
30-year amortization on the principal balance of all six notes
shall be paid until December 31, 2004, when the total
outstanding balance of each of the six Travelers Modified Notes
shall be due and payable in full. The interest rate shall be
adjusted annually on the anniversary of the Effective Date
based upon LIBOR. All payments made to Travelers postpetition
shall be credited against the amounts of the six notes pro rata.
The Debtor shall maintain the Properties in good and
tenantable condition using funds for capital expenditures with
regard to the five Operating Properties and after stabilization
of occupancy, Sherman Oaks, as estimated in the Debtor's
Projections attached to this Plan. These amounts shall be
27
6159C/10566.9
expended in the ordinary course of business to maintain the
five Operating Properties and Sherman Oaks in a good and
tenantable condition. The Reorganized Debtor may prepay the
loans to Travelers at any time without penalty through sale of
one or more of the Properties or through refinancing of one or
more of the Properties.
The holder of the Allowed Class 1 Claim shall retain its
liens on the Properties to secure the Travelers Modified Notes
on the same terms and conditions as set forth in the original
Travelers security documents except as modified in this Plan.
6.02. Class 2 Claims. The holder of Class 2 Claim
(the Congen Claim in the approximate amount of $15,600,000)
shall receive in full and complete satisfaction of its claim
cash paid on the Effective Date in the amount of $50,000.00 and
shall receive sixty-six and two-thirds (66-2/3) Partnership
Units.
6.03. Class 3 Claims. The holder(s) of the Class 3
Claims (all other secured claimants and undersecured claimants)
shall receive in full and complete satisfaction of their
claims, modified notes in the Allowed Amounts of their claims.
The modified notes shall provide for interest at the rate of
10.3% per annum based on a 30-year amortization of the
principal balance of the modified notes until December 31,
2004, when the total outstanding balance of the modified notes
shall be due and payable in full. The interest rate shall be
adjusted annually on each anniversary of the Effective Date
28
6159C/10566.9
based upon LIBOR. The Claimants in Class\3 claims shall retain
their liens, if any, in accordance with their priority.
6.04. Class 5 Claims. Class 5, all Unsecured Allowed
Claims of the Debtor of $1000 or less or such Claims that are
voluntarily reduced to $1000 (the Administrative Convenience
Class in the approximate amount of $41,000.00), shall receive
Cash for their Allowed Claims equal to the amount of such Claim
not to exceed $1000 as follows: Fifty percent (50%) of such
claim shall be paid on the Effective Date and Fifty percent
(50%) shall be paid seven months after the Effective Date.
6.05. Class 6 Claims. The holders of Class 6 Claims
(the Unsecured Creditors of the Debtor with Allowed Claims in
the approximate aggregate amount of $460,500.00) shall receive
payment in full for their Allowed Claims in Cash to be paid in
annual payments over of term of three (3) years plus interest
at the rate of 5.25% per annum. The first payment shall be
made on the Effective Date.
6.06. Class 8 Claims. The holders of Class 8 Claims
(the Allowed Claims of the affiliates of the General Partner)
shall have their prepetition Unsecured Claims discharged on the
Effective Date.
6.07. Class 9 Interests. The holders of Allowed
Class 9 Interests shall retain their partnership interests in
the Debtor, subject to the treatment of Class 2 as hereinbefore
described.
29
6159C/10566.9
ARTICLE VII
MEANS FOR EXECUTION OF PLAN AND CONDITIONS
TO PLAN BECOMING EFFECTIVE
7.01. Partnership Structure. The Debtor, upon the
Effective Date, shall become the Reorganized Debtor, and shall
take all appropriate actions set forth in the Plan. On and
after the Effective Date, the control of the Reorganized Debtor
shall be determined according to the Limited Partnership
Agreement which is attached hereto as Exhibit "C" and
applicable non-bankruptcy law as modified by this Plan.
7.02. Conditions to Plan Becoming Effective and
Events to Occur on the Effective Date. The Plan shall not be
consummated and the Effective Date shall not occur until each
of the following conditions have been satisfied or such
conditions occur on the Effective Date:
(a) The Confirmation Order shall have been entered
by the Bankruptcy Court in a form satisfactory to the
Debtor;
(b) The Allowed Priority Claims (Class 4) shall
receive payment in full; and
(c) All Administrative Convenience Claims (Class
5) and Allowed Unsecured Claims in Class 6 shall
receive their first pro rata payment.
7.03. Repair of Sherman Oaks. The Reorganized
Debtor, in its sole discretion, shall rebuild, repair and/or
reconstruct (hereinafter collectively referred to as "Repair")
Sherman Oaks. The Reorganized Debtor, in its sole discretion,
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6159C/10566.9
may enter into contracts, including but not limited to
construction contracts, for the Repair of Sherman Oaks. The
Insurers are directed to immediately pay any and all insurance
proceeds from the Insurance Policy directly to the Debtor as
sole payee. The Reorganized Debtor shall have the right, in
its sole discretion, to use the proceeds from the Insurance
Policy, including but not limited to the business
interruption/rent loss proceeds, to Repair Sherman Oaks. The
Debtor shall further have the right to use any and all
insurance proceeds from the Insurance Policy to pay, including,
but not limited to the deductible required under the Insurance
Policy, and any and all upgrades of the Sherman Oaks property
not otherwise covered by the Insurance Policy. Travelers shall
not interfere in any way with the Repair of Sherman Oaks.
7.04. Vesting of Assets in Reorganized Debtor.
During the period following the entry of the Confirmation
Order, the Debtor shall continue as Debtor in Possession, until
the Effective Date and then shall operate and conduct its
business as the Reorganized Debtor. Except as otherwise
provided in the Plan, on the Effective Date, all property of
the Estate, and any property acquired by the Debtor or any
property treated under any provision of the Plan, shall vest in
Reorganized Debtor, free and clear of all Claims, liens,
charges, other encumbrances and Interests except for the
Claims, liens and security interests specifically retained in
the Plan. Reorganized Debtor may operate its business and may
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6159C/10566.9
use, acquire and dispose of cash and property and compromise or
settle any Claims or Interest without supervision or approval
by the Court and free of any restrictions of the Code or
Bankruptcy Rules, other than those restrictions expressly
imposed by the Plan and the Confirmation Order. Without
limiting the foregoing, Reorganized Debtor may pay after the
Effective Date the charges that the Debtor incurs after the
Confirmation Date for Professionals' fees, disbursements,
expenses or related support services without application to the
Court.
7.05. The Reorganized Debtor's Obligations Under the
Plan. Reorganized Debtor shall perform all of the duties and
obligations under the Plan, including obligations to pay or
otherwise satisfy the Allowed Claims. All Cash necessary for
Reorganized Debtor to make payments pursuant to the Plan shall
be obtained from the Debtor's existing Cash balances, cash in
accounts, payments from the Insurers, interest accrued or to
accrue, funds to be received or from the operations of the
Debtor or Reorganized Debtor and any funds received from or
through the City of Los Angeles. Reorganized Debtor may enter
into leases of the Property and may seek to refinance any
individual Property as it deems necessary or appropriate.
7.06. Unclaimed Property. Unclaimed Property shall
be held and maintained by Reorganized Debtor or its Agent, if
any. If the Entity entitled to any such Cash or Non-Cash
Unclaimed Property is located within one (1) year
32
6159C/10566.9
after the Effective Date, such Unclaimed Property, together
with any Cash or non-Cash dividends excluding interest earned
thereon, shall be paid and distributed to such Entity. If,
however, such Entity cannot be located within one (1) year
following the Effective Date, any such Cash Unclaimed Property
and Unclaimed Property and related interest thereon, shall
become the property of Reorganized Debtor.
7.07. Implementation of Plan Under State Partnership
Law. The General Partner of the Debtor is authorized and
directed to take all necessary or appropriate action under
state partnership statutes applicable to the Debtor to
implement the Plan, including amending the limited partnership
agreement of the Debtor which, upon the Effective Date, is
necessary to implement the plan. The General Partner of the
Debtor shall take all such actions without meetings or other
action by the limited partners of the Debtor. The General
Partner of the Debtor and/or the Reorganized Debtor, may
designate one or more officers of the General Partner to
execute documents and certificates and to take all other
actions authorized pursuant to this Plan. Without limiting the
generality of the foregoing, the actions authorized under this
Section of the Plan may include: (a) amending the partnership
agreement of the Debtor, which, upon the Effective Date, shall
become the Reorganized Debtor; and (b) filing documents and
certificates and taking other actions with respect to the
Secretary of State or other appropriate officials of each
33
6159C/10566.9
applicable state. From and after the Effective Date, the
actions of the General Partner of the Reorganized Debtor
(except actions ratifying any of the actions specified above in
this Section 7.07 to authorize and implement the express
provisions of this Plan) shall be subject to all applicable
state partnership laws.
ARTICLE VIII
PROVISIONS GOVERNING DISTRIBUTIONS
8.01. Distributions by Reorganized Debtor. All
distributions to be made under the Plan shall be made by
Reorganized Debtor. Reorganized Debtor may employ or contract
with other Entities to assist in or make the distributions
required by the Plan. Reorganized Debtor shall serve without
bond.
8.02. Date of Distributions for Claims Allowed as of
the Effective Date. Except as otherwise provided in this Plan,
or as may be ordered by the Court, distributions of Cash to
Claims Allowed as of the Effective Date and the nondisputed
amount of Disputed Claims and Disputed Interests shall be made
no later than ten (10) days following the Effective Date.
Authorized distributions to Classes 4, 5 and 6 shall be divided
pro rata among the claimants in such Classes and shall be
deemed made as of the Effective Date if made on the Effective
Date or as promptly thereafter as practicable, but in any event
no later than ten (10) days after the Effective Date.
Distributions on account of the disputed portion of Disputed
34
6159C/10566.9
Claims and Disputed Interests allowed after the Effective Date
shall be made pursuant to Article\XI. The Reorganized Debtor
shall establish a disputed claims reserve for the disputed
claims of Classes 4, 5 and 6 as set forth in Article XI of the
Plan.
8.03. Delivery of Distributions.
(a) General. Subject to Bankruptcy Rule 9010,
distributions and deliveries to each holder of an
Allowed Claim shall be made at the address of such
holder as set forth on the proof of Claim filed by such
holder (or at the last known address of such holder if
no proof of Claim is Filed or if the Debtor has been
notified of a change of address), as of the last
business day prior to the Effective Date. If any
holder's distribution is returned as undeliverable, no
further distribution to such holder shall be made
unless and until Reorganized Debtor is notified of such
holder's then current address, at which time all missed
distributions shall be made to such holder without
interest. Reorganized Debtor shall be under no
obligation to attempt to locate the holder of any
Allowed Claim or to recognize any purported transfer or
encumbrance on the rights of holders of Allowed Claims
after the Confirmation Date. Amounts of undeliverable
distributions attempted by Reorganized Debtor shall be
retained by Reorganized Debtor until such distributions
are claimed or until such distributions become
Unclaimed
35
6159C/10566.9
Property. 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 be treated as specified in Section 7.05 of this
Plan and the Claim of any holder with respect to such
property shall be discharged and forever barred.
(b) Means of Cash Payments. Cash payments made
pursuant to the Plan shall be in United States dollars
by checks drawn on the domestic bank selected by the
Debtor or Reorganized Debtor, or by wire transfer from
a domestic bank, at the option of either Debtor or
Reorganized Debtor; provided, however, that cash
payments made to foreign trade creditors holding
Allowed Claims may be paid, at the option of the Debtor
or Reorganized Debtor, in such funds and by such means
as are necessary or customary in a particular foreign
jurisdiction.
(c) De Minimis Cash Distributions. No cash
payment of less than five dollars ($5.00) shall be made
to any holder of a Claim unless a request therefor is
made in writing to Reorganized Debtor.
8.04. Setoff. Reorganized Debtor shall, pursuant to
Section 558 of the Code, or common law rights of setoff and/or
recoupment, in the ordinary course of business, setoff or
assert recoupment against any Allowed Claim, and the
distributions to be made pursuant to the Plan on account of
such Claim, the claims, rights and causes of action of any
36
6159C/10566.9
nature that the Debtor or Reorganized Debtor may hold against
the holder of such Claim; provided, however, that, unless
otherwise provided herein, neither the failure to effect such a
setoff nor the allowance of any Claim hereunder shall
constitute a waiver or release by the Debtor or Reorganized
Debtor of any such claims, rights and causes of action that the
Debtor or Reorganized Debtor may possess against such holder.
ARTICLE IX
EXECUTORY CONTRACTS
9.01. Assumption, Rejection and Assignment of
Executory Contracts.
(a) Executory Contracts. All Executory Contracts
to which the Debtor is a party on the Confirmation Date
shall be assumed on the Effective Date and assigned to
Reorganized Debtor except the executory contracts
listed in Exhibit "B".
(b) Assumption of Residential Tenant Real Estate
Leases. All residential tenant leases in which the
Debtor is lessor shall be assumed on the Effective Date
and assigned to Reorganized Debtor.
(c) Management Agreements. Notwithstanding
anything else in this Plan, the Debtor shall reject the
R&B Management Agreement and the Maxim Management
Agreement effective as of the Effective Date. The
Reorganized Debtor shall enter into new management
37
6159C/10566.9
agreements with R&B and Maxim on or after the Effective
Date with terms consistent with this Plan.
(d) Payment of Cure Amounts. Any monetary amounts
by which each Executory Contract, the unexpired leases
or unexpired lease, as modified, to be assumed under
Sections 9.01(a) and (b) of the Plan is in default
shall be satisfied, pursuant to Section 365(b)(1) of
the Code, at Reorganized Debtor's option or the
assignee of the Debtor: (1)\by payment of the default
amount in Cash on the Effective Date, (2)\by payment of
the default amount in quarterly Cash installments
commencing on the Effective Date and continuing for one
(1) year or (3)\on such other terms as are agreed to by
the parties to such Executory Contract or unexpired
lease. In the event of a dispute regarding the amount
of any cure payments, the ability of Reorganized Debtor
or any assignee to provide "adequate assurance of
future performance" (within the meaning of Section 365
of the Code) under the contract or lease to be assumed,
or any other matter pertaining to assumption, the cure
payments required by Section 365(b)(1) of the Code
shall be made following the entry of a Final Order
resolving the dispute and approving the assumption.
(e) Remaining Executory Contracts and Leases. All
the Executory Contracts that are in effect on the
Confirmation Date, not identified in Sections 9.01(a),
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6159C/10566.9
(b) and (c) above and which have not been previously
rejected, or for which there is not pending a motion to
reject, on or prior to the Confirmation Date, shall be
deemed rejected by the entry of the Confirmation Order.
(f) Rejected Executory Contracts and Proofs of
Claim. The Court shall determine the dollar amount, if
any, of the Claim of any Entity claiming damages by the
rejection of such Executory Contracts under Section
9.01(c) of this Article IX, provided such Entity files
a proof of Claim in the Bankruptcy Court on or before
the Effective Date. Objections to any such proof of
Claim shall be filed by Reorganized Debtor not later
than thirty (30) days after the Effective Date, and the
Court shall determine any such objection. To the
extent such damages are determined by a Final Order of
the Court, such Entity shall become a Class 6 Claimant
for such amount except as allowed by Final Order as an
Allowed Administrative Claim. Any Entity who has a
Claim for rejection of an Executory Contract or Lease
who does not file a proof of Claim therefor on or
before the Effective Date shall not receive any
distribution under this Plan and shall forever be
barred from asserting any Claims against the Debtor,
Reorganized Debtor, any successor to the Debtor or any
property of the Estate.
39
6159C/10566.9
ARTICLE X
COMPOSITION OF GENERAL PARTNER
AND POSTCONFIRMATION MANAGEMENT
10.01. General Partner. The General Partner of the
Debtor shall continue to be CIGNA Realty Resources, Inc. -
Seventh. The General Partner was incorporated in Delaware and
is qualified to do business in the States of California and
Connecticut. The General Partner's office is located at 900
Cottage Grove Road, South Building, Bloomfield, Connecticut
06002. The officers and directors of the General Partner are
as follows:
NAMES OF OFFICERS POSITION WITH THE
AND DIRECTORS OF THE GENERAL PARTNER
GENERAL PARTNER
R. Bruce Albro Director
Philip J. Ward Director
John Wilkinson Director
John D. Carey President, Controller
Verne E. Blodgett Vice President, Counsel
Joseph W. Springman Vice President and
Assistant Secretary
David C. Kopp Secretary
Michael N. Sinisgalli Treasurer
The officers and directors of the General Partner receive
no current or proposed direct compensation from the Debtor or
Reorganized Debtor in such capacities. However, certain
officers and directors of the General Partner receive
compensation from the General Partner and, or its Affiliates
(but not from the Debtor or Reorganized Debtor) for services
performed to the Debtor or Reorganized Debtor. The General
Partner will however receive compensation from the Reorganized
Debtor pursuant to the terms and conditions set forth in the
40
6159C/10566.9
Limited Partnership Agreement attached hereto as Exhibit "C".
10.02. Management. The management of the Property
operations of the Reorganized Debtor shall be performed by
Maxim and R&B as follows:
(a) Maxim Management Agreement. Maxim shall
continue to manage the Amberway Apartments for the
Debtor and, then, the Reorganized Debtor. The
Reorganized Debtor shall enter into a new management
agreement with Maxim. The new management agreement
shall provide for a management fee to Maxim in the
amount of 3% of gross receipts plus the opportunity for
an additional 1.5% incentive fee based upon certain
revenues and expense goals.
(b) R&B Management Agreement. R&B shall continue
to manage the Mission Bay East, Arbor Park, West Los
Angeles, Sherman Oaks and Pacifica Club properties.
The Reorganized Debtor shall enter into a new
management agreement with R&B. The new management
agreement shall provide for a management fee to R&B for
all five properties in the amount of 3% of gross
receipts plus an opportunity for an additional 1.5% of
incentive fee based upon certain revenue and expense
goals.
The New Maxim Management Agreement and the New R&B Management
Agreements as set forth in detail the terms and conditions of
the operational management of the Properties, including but not
limited to the payment of management fees.
41
6159C/10566.9
ARTICLE XI
PROVISIONS FOR THE RETENTION, ENFORCEMENT,
SETTLEMENT OR ADJUSTMENT OF CLAIMS
BELONGING TO THE DEBTOR OR TO THE ESTATE
11.01. Preservation and Handling of Claims. Unless
otherwise provided herein, Reorganized Debtor shall retain and
may enforce all Chapter 5 Causes of Action including but not
limited to all rights pursuant to Sections 502, 510, 544, 545
and 546 of the Bankruptcy Code, all preference claims pursuant
to Section 547 of the Bankruptcy Code not settled prior to or
as a part of this Plan, all fraudulent transfer claims pursuant
to Section 548 of the Bankruptcy Code or state law, all claims
relating to postpetition transactions under Section 549 of the
Bankruptcy Code, all claims recoverable under Section 550 of
the Bankruptcy Code, and all claims against any third party on
account of an indebtedness or any other claim owed to or in
favor of the Debtor. Unless otherwise provided herein, such
claims of the Debtor against third parties may be used by
Reorganized Debtor, at its option, to offset any payment due to
such Entity under this Plan.
11.02. Prosecution of Objections to Claims. Unless
another date is established by the Court or this Plan, all
objections to Claims except for all those Claims otherwise
Allowed in the Plan shall be Filed and served on the holders of
such Claims within thirty (30) days after the Effective Date.
If an objection has not been Filed to the proof of Claim or a
scheduled Claim that relates to a Disputed Claim by the
42
6159C/10566.9
objection bar dates established herein, the Claim to which the
proof of Claim or scheduled Claim relates shall be treated as
an Allowed Claim if such Claim has not been allowed earlier or
Allowed by the Plan. For cause shown, the deadline to File
objections to Claims may be extended by the Court after notice
and opportunity to object has been given to all parties
requesting requesting special notice.
11.03. Authority to Prosecute Objections. Except as
otherwise set forth in the Plan, Reorganized Debtor shall have
the authority to File objections, settle, compromise, withdraw
or litigate to judgment objections to Disputed Claims. Except
as otherwise set forth under the Plan, objections to Claims
pending prior to the Confirmation Date may be prosecuted by the
party which Filed same, if authorized to do so under applicable
law.
11.04. Treatment of Disputed Claims.
(a) Payments on Account of Disputed Claims.
Notwithstanding any other provisions of the Plan, no
payments or distributions shall be made on account of
the disputed portion of any Disputed Claim or Interest
until such disputed portion of the Disputed Claim or
Disputed Interest becomes an Allowed Claim or an
Allowed Interest, respectively, unless otherwise
ordered by the Court. (b)
Disputed Claims Reserves Distributions on Account of
Disputed Claims, Once Allowed. A Disputed Claims
Reserves shall be established for Classes 4 and 5
43
6159C/10566.9
Claims. Cash held in the Disputed Claims Reserves shall
be deposited in a segregated bank account in the name of
Reorganized Debtor, for the benefit of potential
claimants of such funds, and shall be accounted for
separately by class. Reorganized Debtor may invest the
cash held in any reserve in investment vehicles and
accounts permitted under the Plan as selected in
Reorganized Debtor's sole discretion regardless of
approval or disapproval by beneficiaries of the Disputed
Claims Reserve. Reorganized Debtor shall also place in
the Disputed Claims Reserve any net return yielded from
the investments held in such reserve pending
distribution. Within thirty (30) days after the end of
each quarter of a Fiscal Year following the Effective
Date, Reorganized Debtor shall make all distributions on
account of the disputed portion of any Disputed Claim
that has become an Allowed Claim during the preceding
quarter of a Fiscal Year in accordance with the
treatment provided for in the Plan for that respective
Claimant. Such distributions shall be made pursuant to
the provisions of the Plan governing the applicable
Class of Claims.
ARTICLE XII
MISCELLANEOUS
12.01. Discharge. Except as otherwise expressly
provided in this Plan or the Confirmation Order, Confirmation
44
6159C/10566.9
of this Plan constitutes a discharge of the Debtor effective as
of the Effective Date of any Claim and any "debt" (as that term
is defined in Section 101(12) of the Bankruptcy Code), and the
Debtor's liability in respect thereof is extinguished
completely. Except as otherwise expressly provided in the
Plan, all Claims and debts of the Debtor (whether reduced to
judgment or not, liquidated or unliquidated, contingent or
noncontingent, asserted or unasserted, fixed or not, matured or
unmatured, disputed or undisputed, legal or equitable, known or
unknown) that arose from any agreement of the Debtor entered
into, or obligation of the Debtor incurred, before the
Confirmation Date, or from any conduct of the Debtor prior to
the Confirmation Date, or that otherwise arose before the
Confirmation Date, including, without limitation, all interest,
if any, on any such debts, whether such interest accrued before
or after the Filing Date (including, without limitation, any
liability of a kind specified in Sections 502(g), 502(h) and
502(i) of the Bankruptcy Code, whether or not a proof of Claim
is filed or deemed filed under Section 501 of the Bankruptcy
Code, such Claim is allowed under Section 502 of the Bankruptcy
Code, or the holder of such Claim has accepted this Plan) are
released and discharged as of the Effective Date of this Plan.
12.02. Revesting. Except as otherwise expressly
provided in this Plan or the Confirmation Order, on the
Effective Date, Reorganized Debtor shall be vested with all of
the property of the Estate free and clear of all Claims, liens,
45
6159C/10566.9
encumbrances, charges and other interests of Creditors and
equity security holders, and may operate its properties free of
any restrictions imposed by the Bankruptcy Code or by the
Court; provided, however, that Reorganized Debtor shall
continue as a debtor in possession under the Bankruptcy Code
until the Effective Date, and, thereafter, Reorganized Debtor
may operate its business free of any restrictions imposed by
the Bankruptcy Code or the Court.
12.03. Termination. As of the Effective Date, except
as provided in this Plan or the Confirmation Order, all
entities shall be precluded from asserting against Reorganized
Debtor, its respective successors or its respective property,
any other or further Claims, debts, rights, causes of action,
liabilities or equity interests based upon any act or omission,
transaction or other activity of any kind or nature that
occurred prior to the Effective Date. In accordance with the
foregoing, except as provided in this Plan or the Confirmation
Order, as of the Effective Date, the Confirmation Order shall
be a judicial determination of discharge of all such Claims and
other debts and liabilities against the Debtor and termination
of all such Interests and other rights of equity security
holders in the Debtor, pursuant to Sections 524 and 1141 of the
Code, and such discharge shall void any judgment obtained
against the Debtor at any time, to the extent that such
judgment relates to a Claim discharged.
12.04. Injunction. Except as otherwise expressly
46
6159C/10566.9
provided in this Plan, the Confirmation Order shall provide,
among other things, that all Entities who have held, hold or
may hold Claims and all Entities who have held, hold or may
hold Interests against Reorganized Debtor and any of its
Affiliates, are permanently enjoined on and after the Effective
Date from: (a) commencing or continuing in any manner any
action or other proceeding of any kind with respect to any such
Claim against the Debtor, Reorganized Debtor or any of its
Affiliates; (b) the enforcement, attachment, collection or
recovery by any manner or means of any judgment, award, decree
or order against the Debtor, Reorganized Debtor or any of their
respective Affiliates, or the property of the Debtor,
Reorganized Debtor or any of their Affiliates thereof, with
respect to any such Claim; (c) creating, perfecting or
enforcing any encumbrance of any kind against the Debtor,
Reorganized Debtor or any of their respective Affiliates, or
against the property of the Debtor, Reorganized Debtor or any
of their respective Affiliates, with respect to any such Claim;
and (d) from asserting any setoff, right of subrogation or
recoupment of any kind against any obligation due the Debtor,
Reorganized Debtor or any of its Affiliates, or against the
property of the Debtor, Reorganized Debtor or any of its
Affiliates, with respect to any such Claim.
12.05. Term of Injunctions or Stays. Unless otherwise
provided, all injunctions or stays provided for in the case
pursuant to Sections 105 or 362 of the Bankruptcy Code
47
6159C/10566.9
or otherwise shall remain in full force and effect until the
Effective Date rather than the Confirmation Date.
12.06. Jurisdiction Retained. Until the end of the
Term of the Plan, the Court shall have jurisdiction of all
matters arising under, arising out of or relating to this case
including, but not limited to, the following:
(a) To insure that the purpose and intent of this
Plan are carried out;
(b) To consider any modification of this Plan under
Section 1127 of the Bankruptcy Code;
(c) To hear and determine all Claims,
controversies, default suits and disputes against the
Debtor;
(d) To hear, determine and enforce all Claims and
causes of action which may exist on behalf of the
Debtor or the Estate, including, but not limited to,
any right of the Debtor or the Estate to recover such
claims, causes or rights as enumerated in Article XI
above;
(e) To hear and determine all controversies, suits,
defaults and disputes that may arise in connection with
the interpretation, execution or enforcement of this
Plan;
(f) To hear and determine all requests for
compensation and/or reimbursement of expenses for
services rendered or expenses incurred prior to the
Effective Date which may be made after the Effective
Date of the Plan;
48
6159C/10566.9
(g) To hear and determine all objections to Claims,
controversies, suits and disputes that may be pending
at or initiated after the Effective Date, except as
provided in the Confirmation Order;
(h) To consider and act on the compromise and
settlement of any Claim against or cause of action on
behalf of the Debtor or the Estate;
(i) To enforce and interpret by injunction or
otherwise the terms and conditions of the Plan;
(j) To enter an order concluding and terminating
this case;
(k) To correct any defect, cure any omission or
reconcile any inconsistency in the Plan or Confirmation
Order which may be necessary or helpful to carry out
the purposes and intent of the Plan;
(l) To determine all questions and disputes
regarding titles to the assets of the Debtor or the
Estate;
(m) To classify the Claims of any creditor and to
re-examine Claims which have been allowed for purposes
of voting, and to determine objections which may be
filed to creditors' Claims (the failure by the Debtor
to object to, or examine any Claim for the purposes of
voting shall not be deemed a waiver of the Debtor's
right to object to, or re-examine the Claim in whole or
part);
49
6159C/10566.9
(n) To consider and act on such other matters
consistent with this Plan as may be provided in the
Confirmation Order; and
(o) To consider the rejection of Executory
Contracts that are not discovered prior to Confirmation
and allow Claims for damages with respect to the
rejection of any such Executory Contracts within such
future time as the Court may direct.
12.07. Exculpation. The Debtor, Reorganized Debtor,
the Creditors' Committee, and their respective directors,
shareholders, agents, officers, employees, representatives and
attorneys, including Professionals, (acting in such capacity)
shall neither have nor incur liability to any Entity for any
action taken or omitted to be taken in connection with or
related to the formulation, preparation, dissemination,
implementation, Confirmation or consummation of the Plan, the
Disclosure Statement, earlier versions of same or any contract,
instrument, release or other agreement or document created or
entered into, or any other action taken or omitted to be taken
in connection with the Plan or the Case; provided, however,
that the foregoing provisions of this section shall have no
effect on the liability of any Entity that would otherwise
result from any such action or omission to the extent that such
action or omission is determined in a Final Order to have
constituted gross negligence or willful misconduct.
12.08. Nonwaiver. Neither the filing of this Plan
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6159C/10566.9
and the accompanying Disclosure Statement, nor any statement or
provision contained herein, nor the taking by the Debtor or a
party in interest of any action with respect to this Plan
shall: (a) be or be deemed to be an admission against interest
and (b) until the Distribution Date, be or be deemed to be a
waiver of any rights of any creditor or party in interest of
Debtor, and until the Distribution Date all such rights are
specifically reserved. In the event that the Effective Date
does not occur, neither this Plan nor any statement contained
herein, may be used or relied upon in any manner in any suit,
action, proceeding or controversy within or outside of the
bankruptcy case involving the Debtor. The Debtor may withdraw
this Plan at any time prior to Confirmation.
12.09. Successors and Assigns. The rights, benefits
and obligations of any Entity named or referred to in the Plan
shall be binding on, and shall inure to the benefit of, any
heir, executor, administrator, successor or assign of such
Entity.
12.10. Modification of the Plan. The Debtor reserves
the right, in accordance with the Bankruptcy Code, to amend or
modify this Plan prior to the Confirmation Date. After the
Confirmation Date, the Debtor may, upon order of the Court,
amend or modify this Plan in accordance with Section 1127(b) of
the Bankruptcy Code, or remedy any defect or omission or
reconcile any inconsistency in this Plan in such
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6159C/10566.9
manner as may be necessary to carry out the purposes and intent
of this Plan.
12.11. Payment Dates. Whenever any payment or
distribution to be made under the Plan shall be due on a day
other than a Business Day, such payment or distribution shall
instead be made, without interest, on the next Business Day,
except as may be provided in negotiable instruments requiring
such payments.
12.12. Notices. All notices, requests, elections or
demands in connection with the Plan shall be in writing and
shall be deemed to have been given when received or, if mailed,
five (5) days after the date of mailing provided such writing
shall have been sent by registered or certified mail, postage
prepaid, return receipt requested, and sent to the following:
Clifton R. Jessup, Jr.
DIXON & DIXON LTD., L.L.P.
2500 Fountain Place
1445 Ross Avenue
Dallas, Texas 75202
All notices and requests to Claimants and holders of Interests
shall be sent to them at their last known addresses. The
Debtor, and any Claimant or holder of Interests of any Class,
may designate in writing any other address for purposes of this
Section 12.12, which designation shall be effective upon
receipt.
12.13. Governing Law. EXCEPT TO THE EXTENT THAT THE
BANKRUPTCY CODE IS APPLICABLE, THE RIGHTS AND OBLIGATIONS
ARISING UNDER THIS PLAN SHALL BE GOVERNED BY, AND CONSTRUED AND
52
6159C/10566.9
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA.
12.14. Severability. Should any provision in this
Plan be determined to be unenforceable, such determination
shall in no way limit or affect the enforceability and
operative effect of any and all other provisions of this Plan.
ARTICLE XIII
CONFIRMABILITY OF THE PLAN AND CRAMDOWN
13.01. Cramdown. The Debtor hereby requests
Confirmation under Section 1129(b) of the Bankruptcy Code of
any impaired Class that does not accept the Plan pursuant to
Section 1126 of the Bankruptcy Code.
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CAL-7 PROJECTED CASH FLOW
CONSOLIDATED SOURCES AND USES
1995 1996 1997 1998 1999
Total Sources 10,828,091 8,819,467 11,330,730 11,536,425 12,101,086
Total Uses (5,093,957) (12,855,054) (11,975,365) (11,777,005) (11,821,934)
Net Cash Flow 5,734,135 (4,035,587) (644,635) (240,580) 279,153
Cash Balance 5,734,135 1,698,548 1,053,913 813,333 1,092,486
2000 2001 2002 2003 2004
Total Sources 12,661,164 13,265,997 13,967,701 14,716,622 166,191,005
Total Uses (11,809,002) (11,848,333) (11,889,232) (11,931,548) (174,416,860)
Net Cash Flow 852,162 1,417,664 2,078,469 2,785,074 (8,225,855)
Cash Balance 1,944,647 3,362,312 5,440,781 8,225,855 0
CAL - 7 PROJECTED CASH FLOW
SOURCES DETAIL
1995 1996 1997 1998 1999 2000
P r o p e r t y
Operations (1):
Amberway 659,019 1,366,079 1,390,231 1,419,861 1,464,268 1,489,221
Arbor Park 421,019 946,444 970,259 994,545 1,019,304 1,044,536
Mission Bay East 1,413,831 2,800,316 2,979,491 3,071,566 3,266,269 3,426,316
Pacifica Club 796,169 1,729,153 1,777,343 1,826,750 1,877,399 1,929,312
West LA 909,607 1,929,743 2,046,215 2,169,309 2,299,369 2,442,054
Sherman Oaks (2) (284,010) (240,656) 2,070,470 1,980,736 2,099,814 2,225,587
Net Cash Flow 3,915,635 8,531,079 11,234,009 11,462,767 12,026,423 12,557,026
from Oper.
Interest Income:
Security
Deposits (3) 12,840 25,680 25,680 25,680 25,680 25,680
Cash Balance (4) 152,396 191,110 71,041 47,978 48,983 78,458
Insurance 327,308 71,599
Proceeds (5)
Rent Loss Insurance 4,164,000
Available Cash
on Hand (7) 1,020,157
Sherman Oaks 504,000
Cash Collateral
Account
T a x e s & 731,756
Insurance Cash
Collateral Account
Total Sources 10,828,091 8,819,467 11,330,730 11,536,425 12,101,086 12,661,164
2001 2002 2003 2004 2005
P r o p e r t y
Operations (1):
Amberway 1,524,736 1,560,789 1,597,362 1,634,439 1,671,999
Arbor Park 1,070,244 1,096,428 1,123,086 1,150,218 1,177,823
Mission Bay East 3,594,206 3,770,322 3,955,068 4,148,866 4,352,160
Pacifica Club 1,962,517 2,037,037 2,092,897 2,150,122 2,209,250
West LA 2,592,603 2,752,077 2,920,336 3,096,069 3,281,833
Sherman Oaks (2) 2,358,418 2,496,690 2,646,805 2,803,187 2,968,575
Net Cash Flow 13,102,724 13,713,343 14,335,554 14,982,901 15,661,640
from Oper.
Interest Income:
Security
Deposits (3) 25,680 25,680 25,680 25,680
Cash Balance (4) 137,594 228,679 355,389 523,208
Insurance
Proceeds (5)
Sales Proceeds(6)
150,659,216
Rent Loss Insurance
Available Cash
on Hand (7)
Sherman Oaks
Cash Collateral
Account
T a x e s &
Insurance Cash
Collateral Account
Total Sources 13,265,997 13,967,701 14,716,622 166,191,005
<FN>
(1) Assumes July 1 to December 31 cash flows from operations (includes full year of insurance expenses to be paid in December).
The individual property cash flows were estimated by R&B and Maxim based on 1994 actual results and conservative growth
projections. Assumes post confirmation commencement of operations on July 1, 1995.
<FN>
(2) Sherman Oaks cash flow assumes lease-up begins during 1996.
<FN>
(3) Assumes interest earned of 5.35% (our current short-term investment rate) on an average security deposit of $480,000.
<FN>
(4) Represents 5.35% interest earned on the average cash balance. Calculation assumes all sources and uses are spread equally
over the period (i.e. divide total activity by 2).
<FN>
(5) Represents the interest earned on the $9,250,000 insurance proceeds received from Aetna in March 1995. Calculation
assumes 5.75% interest on the total amount ($9,250,000) from April 1 until June 30 and then equal draws against the balance
over the 12 months of drawings, permits and construction for Sherman Oaks.
<FN>
(6) Calculated using MT's assumptions (most pessimistic) of a weighted terminal capitalization rate of 10.1875% applied to the
2005 cash flow and a 2% deduction for sales costs.
<FN>
(7) Does not include $300,000 commitment form the City of Los Angeles Housing Department.
CAL - 7 PROJECTED CASH FLOW
USES DETAIL
1995 1996 1997 1998 1999
Additional Costs 1,728,000
for Sherman Oaks(1)
Debt Service to
Travelers (2):
Sherman Oaks Loan 504,427 1,210,625
Balance of Loan 3,561,246 8,546,991
Total Loan 10,568,984 10,568,984 10,568,984
Principal
Balance
Payment to Congen 50,000
Unsecured Non-Insider
Trade Creditors:
Contracts 115,251
Assumed (3)
Administrative
Conv. Claims (4) 20,407 20,406
Property Tax 48,353 58,701 56,114 53,527 50,940
Claims (5)
O t h e r 153,490 169,913 161,702
Claims(5)
C a p i t a l
Expenditures:
Amberway 25,600 97,100 111,000 105,000 109,200
Arbor Park 61,900 225,533 234,554 243,936 253,694
Mission Bay East 108,180 287,600 293,352 299,219 305,203
Pacifica Club 85,914 206,796 215,068 223,671 232,617
West LA 144,455 130,056 135,258 140,669 146,295
Sherman Oaks 0 0 26,000 42,000 55,000
Admin. Claims 200,983 73,333 73,333
(prof. fees)
Statutory Fees 3,750
CII Management
Fees (6)
G e n e r a l
Partner's Salary(6)
Partnership Expenses 10,000 100,000 100,000 100,000 100,000
Distribution to
Equity Holders
Total Uses 5,093,957 12,855,054 11,975,365 11,777,005 11,821,934
2000 2001 2002 2003 2004
Additional Costs
for Sherman Oaks(1)
Debt Service to
Travelers (2):
Sherman Oaks Loan
Balance of Loan
Total Loan 10,568,984 10,568,984 10,568,984 10,568,984 10,568,984
Principal 91,864,569
Balance
Payment to Congen
Unsecured Non-Insider
Trade Creditors:
Contracts
Assumed (3)
Administrative
Conv. Claims (4)
Property Tax
Claims (5)
O t h e r
Claims(5)
C a p i t a l
Expenditures:
Amberway 113,600 118,100 122,900 127,800 132,900
Arbor Park 263,842 274,395 285,371 296,786 308,657
Mission Bay East 311,307 317,534 323,884 330,362 336,969
Pacifica Club 241,922 251,599 261,663 272,129 283,015
West LA 152,147 158,233 164,562 171,145 177,991
Sherman Oaks 57,200 59,488 61,868 64,342 66,916
Admin. Claims
(prof. fees)
Statutory Fees
CII Management 2,081,491
Fees (6)
G e n e r a l 1,425,000
Partner's Salary(6)
Partnership Expenses 100,000 100,000 100,000 100,000 100,000
Distribution to 67,070,368
Equity Holders
Total Uses 11,809,002 11,848,333 11,889,232 11,931,548 174,416,860
<FN>
(1) Represents the $1,000,000 insurance deductible and $728,000 cost ot upgrade the units based on Paul Foster's report.
<FN>
(2) Debt service to Travelers assume 10.3% on $82,980,497 and 8.125% on $14,900,000 interest only for the first year
and a half (Sherman Oaks construction and lease-up period), then 10.3% interest with 30 year amortization on
$97,880,497 over the remainder of the loan.
<FN>
(3) Represents the total ($115,251.39) amount of default for the Executory Contracts that the Reorganized Debtor assumes.
Assumes payment in full on the Effective Date.
<FN>
(4) Represents the total ($40,812.99) unsecured allowed claims of $1,000 or less. Assumes payment of 50% on the
Effective Date and 50% seven months after the Effective Date.
<FN>
(5) Assumes property tax claims of $241,765.58 is paid over a five year period and the other non-insider trade creditors
claims (greater than $1,000) of $460,470.61 is paid over a three year period. Both claims assume annual payments on
July 1 and each payment includes 5.35% interest on the outstanding balance.
<FN>
(6) CIGNA Investments, Inc. (CII) management fees represent 1% of total property revenues. General Partner's salary is
a flat $150,000 per year. Both amounts are deferred without interest until disposition.
EXHIBIT "B"
REJECTED EXECUTORY CONTRACTS
1. R&B Management Agreements
a. Management Agreement, Arbor Park Apartments, Upland,
California, dated May 1, 1991;
b. Management Agreement, Pacifica Club Apartments,
dated May 1, 1992;
c. Second Amendment to Management and Leasing Agreement
dated August 1992;
d. First Amendment to Management and Leasing Agreement
dated January 1, 1991; and
e. Management and Leasing Agreement dated January 30,
1985.
2. Maxim Management Agreement
Management Agreement dated May 1, 1992, by and between
California Seven Associates Limited Partnership and
Promethius Management Group, as supplemented and amended
from time to time.
EXHIBIT "C"
Reference is made to Registrant Exhibit 3.3, Second Amended and
Restated Limited Partnership Agreement of California Seven Associates Limited
Partnership, dated as of February 14, 1985, incorporated by reference to
Exhibit 3.2 to Form 10 Registration Statement under the Securities Act of 1934,
File No. 0-13458.