SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________
Form 10-Q
QUARTERLY REPORT
PURSUANT TO
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1994
Commission File Number: 0-16648
________________________________________________
B-E HOLDINGS, INC.
DELAWARE 39-1593043
P. O. BOX 500
1100 MILWAUKEE AVENUE
SOUTH MILWAUKEE, WISCONSIN 53172
(414) 768-4000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding November 9, 1994
Class C Common Stock, par value $.01
per share 9,161,037
Class D Common Stock, par value $.01
per share 108,822
B-E HOLDINGS, INC. AND SUBSIDIARIES
INDEX
Page No.
Part I. Financial Information:
Consolidated Condensed Balance Sheets - 3-5
September 30, 1994 and December 31, 1993
Consolidated Condensed Statements of Operations - 6-7
Quarters and nine months ended September 30, 1994
and 1993
Consolidated Condensed Statements of Cash Flows - 8-9
Nine months ended September 30, 1994 and 1993
Notes to Consolidated Condensed Financial 10-13
Statements
Management's Discussion and Analysis of Financial 14-23
Condition and Results of Operations
Part II. Other Information 24-26
Signature Page 27
Exhibit Index EI-1
B-E HOLDINGS, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
CONSOLIDATED CONDENSED BALANCE SHEETS
September 30, December 31, September 30, December 31,
1994 1993 1994 1993
ASSETS LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT ASSETS: (DEFICIENCY IN ASSETS)
Cash and cash CURRENT LIABILITIES:
equivalents $ 22,282,181 $ 13,696,244 Accounts payable and
Restricted funds accrued expenses $ 26,917,048 $ 53,665,642
on deposit - 512,173 Liability to customers
Receivables 29,223,405 25,731,294 on uncompleted contracts
Inventories - Note 5 68,338,749 63,671,237 and warranties 4,562,490 8,196,401
Prepaid expenses and Income taxes 903,729 448,493
other assets 1,947,730 1,630,226 Short-term obligations 68,221 -
____________ ____________ Current maturities of
Total Current Assets 121,792,065 105,241,174 long-term debt - Note 7 8,239,256 4,954,196
____________ ____________
OTHER ASSETS: 40,690,744 67,264,732
Restricted funds Long-term debt classified
on deposit 5,588,498 6,024,659 as a current
Goodwill - net 16,791,105 17,003,213 liability - Note 7 788,250 201,979,324
Intangible assets - net 6,355,275 7,780,263 ____________ ____________
Other assets 1,069,610 2,480,555
____________ ____________ Total Current
29,804,488 33,288,690 Liabilities 41,478,994 269,244,056
PROPERTY, PLANT AND EQUIPMENT: DEFERRED LIABILITIES:
Cost 89,321,966 87,511,688 Income taxes 266,043 157,544
Less accumulated Liability to customers on
depreciation (46,425,216) (41,141,094) uncompleted contracts
____________ ____________ and warranties 4,475,418 4,587,014
42,896,750 46,370,594 Postretirement benefits 15,444,048 15,590,236
Deferred plant closing
expenses and other 5,950,224 7,298,284
____________ ____________
26,135,733 27,633,078
LONG-TERM DEBT, less
amounts classified as
current liabilities
and liabilities subject
to compromise - Note 7 84,456 768,728
LIABILITIES SUBJECT
TO COMPROMISE - Note 4 255,417,775 -
PREFERRED STOCK -
Notes 4 and 8
Series A Redeemable, subject
to compromise in 1994 -
par value $.01 share,
liquidation preference
$25 share plus accrued
dividends, 2,412,791.57
shares in 1994 and 1993
issued and outstanding
(aggregate liquidation/
redemption preference
$71,091,180 at September 30,
1994 and $70,088,379 at
December 31, 1993) 71,091,180 30,301,570
Series B - par value
and liquidation preference
$.01 per share, issued and
outstanding 6,291,805
shares 62,918 62,918
COMMON STOCKHOLDERS' INVESTMENT
(DEFICIENCY IN ASSETS):
Class C - par value $.01 per
share, authorized 20,000,000
shares, issued and outstanding
9,172,791 shares in 1994
and 9,176,427 shares
in 1993 91,728 91,764
Class D - par value $.01 per
share, authorized 20,000,000
shares, issued and outstanding
97,068 shares in 1994 and
88,154 shares in 1993 971 882
Warrants - authorized
10,000,000, issued and
outstanding 1,114 in 1994
and 6,392 in 1993 169 971
Accumulated deficit (196,034,874) (138,994,351)
Cumulative foreign
currency translation
adjustments (3,835,747) (4,209,158)
____________ ____________
(199,777,753) (143,109,892)
____________ ____________ ____________ ____________
$194,493,303 $184,900,458 $194,493,303 $184,900,458
See accompanying notes to consolidated condensed financial statements.
B-E HOLDINGS, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Quarter Ended September 30, Nine Months Ended September 30,
1994 1993 1994 1993
Revenues:
Net shipments $ 50,647,644 $ 51,042,210 $144,610,730 $152,125,896
Interest, royalties and miscellaneous 156,563 232,764 2,017,792 708,036
____________ ____________ ____________ ____________
50,804,207 51,274,974 146,628,522 152,833,932
____________ ____________ ____________ ____________
Costs and Expenses:
Cost of products sold 41,707,350 42,703,971 120,740,401 128,230,802
Product development, selling,
administrative, and miscellaneous
expenses 7,738,809 8,076,556 23,106,805 25,623,026
Interest expense (contractual
interest for 1994 - $9,659,743
and $28,158,629, respectively)
- Note 4 2,673,272 9,021,986 11,323,313 26,098,169
____________ ____________ ____________ ____________
52,119,431 59,802,513 155,170,519 179,951,997
____________ ____________ ____________ ____________
Loss before reorganization items, income
taxes and cumulative effects of changes
accounting principles (1,315,224) (8,527,539) (8,541,997) (27,118,065)
Reorganization items - pre-petition
- Note 4 - 1,508,991 1,255,200 2,680,148
Reorganization items - post-petition
- Note 4 1,384,676 - 5,259,190 -
____________ ____________ ____________ ____________
Loss before income taxes and cumulative
effects of changes in accounting
principles (2,699,900) (10,036,530) (15,056,387) (29,798,213)
Income taxes 457,627 204,964 1,195,328 1,051,739
____________ ____________ ____________ ____________
Loss before cumulative effects of changes
in accounting principles (3,157,527) (10,241,494) (16,251,715) (30,849,952)
Cumulative effects of changes in accounting
principles for:
Postretirement benefits - - - (11,744,109)
Income taxes - - - 446,724
____________ ____________ ____________ ____________
Net loss (3,157,527) (10,241,494) (16,251,715) (42,147,337)
Redeemable preferred stock accretion -
pre-petition - (171,303) (105,548) (489,726)
Redeemable preferred stock dividends -
pre-petition - (70,262) (40,453) 125,859
Redeemable preferred stock reorganization
item - Note 4 - - (40,554,805) -
____________ ____________ ____________ ____________
Net loss attributable to common
stockholders $ (3,157,527) $(10,483,059) $(56,952,521) $(42,511,204)
Weighted average of common shares
outstanding 9,269,859 9,187,738 9,268,293 8,823,307
Net loss per share of common stock:
Loss before cumulative effects of changes
in accounting principles $( .34) $(1.11) $(1.75) $(3.50)
Cumulative effects of changes in accounting
principles for:
Postretirement benefits - - - (1.33)
Income taxes - - - .05
______ ______ ______ ______
Net loss (.34) (1.11) (1.75) (4.78)
Redeemable preferred stock dividends
and accretion - pre-petition - (.03) (.01) (.04)
Redeemable preferred stock
reorganization item - - (4.38) -
______ ______ ______ ______
Net loss per share attributable to
common stockholders $ (.34) $(1.14) $(6.14) $(4.82)
See accompanying notes to consolidated condensed financial statements.
B-E HOLDINGS, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Nine Months
Ended September 30,
1994 1993
Cash Flows From Operating Activities
Net loss $(16,251,715) $(42,147,337)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation 5,832,018 5,781,459
Amortization of purchase adjustments
and financing fees 2,914,210 3,335,428
Deferred rent (interest) on sale and
leaseback financing arrangement 5,189,104 4,289,683
Amortization of debt discount 71,179 343,601
(Gain) loss on sale of property,
plant and equipment (13,723) 84,357
Cumulative effects of changes in
accounting principles - 11,297,385
Non-cash reorganization items 1,079,805 -
Changes in assets and liabilities
including items subject to
compromise:
Increase in receivables (3,384,878) (3,298,423)
Increase in inventories (4,325,773) (3,560,114)
Increase in other
current assets (293,745) (23,043)
Decrease (increase) in
other assets 102,683 (275,933)
Increase in current liabilities
other than income taxes,
short-term obligations
and current maturities
of long-term debt 16,336,156 15,040,976
Increase (decrease) in
income taxes 589,386 (1,514,413)
Decrease in deferred liabilities
other than income taxes (776,589) (1,563,538)
____________ ____________
Net cash provided by (used in)
operating activities 7,068,118 (12,209,912)
____________ ____________
Cash Flows From Investing Activities
Decrease in restricted
funds on deposit 948,334 2,934,013
Purchases of property, plant
and equipment (2,053,815) (2,164,471)
Proceeds from sale of property, plant
and equipment 74,354 31,926
____________ ____________
Net cash (used in) provided by
investing activities (1,031,127) 801,468
____________ ____________
Cash Flows From Financing Activities
Payment of current maturities of
long-term debt (27,473) (372,879)
Payment of other obligations - net (307,613) -
Proceeds from exercise of warrants 53 29,024
Proceeds from issuance of long-term
project financing obligations 7,238,984 5,286,900
Reduction of long-term project
financing obligations (4,339,705) -
____________ ____________
Net cash provided by
financing activities 2,564,246 4,943,045
____________ ____________
Effect of exchange rate changes
on cash (15,300) 218,017
____________ ____________
Net increase (decrease) in cash
and cash equivalents 8,585,937 (6,247,382)
Cash and cash equivalents at
beginning of period 13,696,244 16,019,517
____________ ____________
Cash and cash equivalents at
end of period $ 22,282,181 $ 9,772,135
Supplemental Disclosures of Cash Flow Information
1994 1993
Cash paid (received) during
the period for:
Interest on long-term debt
and bank borrowings $ 222,313 $ 288,275
Income taxes - net of refunds (395,057) 921,025
Reorganization items 6,514,390 2,680,148
Supplemental Schedule of Non-Cash Investing and Financing Activities
Prior to the Petition Date, the Company increased the carrying amount of the
Series A redeemable preferred stock by amounts representing the estimated fair
value of the pre-petition dividends not declared or paid, but which are
payable under mandatory redemption features. The Company also recorded
preferred stock discount accretion on these securities prior to the Petition
Date. As of the Petition Date, the Company increased the carrying amount of
the Series A redeemable preferred stock to the amount of the allowed claim in
the Prepackaged Plan. The amounts as reflected in the consolidated condensed
financial statements were as follows:
1994 1993
Redeemable preferred stock
dividends at net book value $ 129,257 $ 301,599
Redeemable preferred stock accretion 105,548 489,726
Write-up to amount of allowed
claim in the Prepackaged Plan 40,554,805 -
____________ ____________
$ 40,789,610 $ 791,325
See accompanying notes to consolidated condensed financial statements.
B-E HOLDINGS, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. On February 18, 1994 (the "Petition Date"), B-E Holdings, Inc. ("the
Company") and Bucyrus-Erie Company ("Bucyrus") commenced voluntary
petitions under chapter 11 of the Bankruptcy Code and filed a prepackaged
joint plan of reorganization (the "Prepackaged Plan") in the United States
Bankruptcy Court, Eastern District of Wisconsin (the "Bankruptcy Court").
Pursuant to the Bankruptcy Code, the business and affairs of the Company
and Bucyrus are being conducted as debtors-in-possession by their
respective officers and directors, subject to the supervision and orders
of the Bankruptcy Court.
The Company and Bucyrus have reported recurring losses from operations
which have resulted in a common stockholders' net deficiency in assets,
and they have been unable to generate sufficient cash flow to meet their
obligations and sustain their operations. In addition, the Company and
Bucyrus have refrained from paying interest due on certain long-term debt
obligations and are not in compliance with their debt agreements, which
has resulted in certain debt holders accelerating the due dates of the
related obligations. These matters raise substantial doubt about the
Company's, Bucyrus' and their subsidiaries' abilities to continue as going
concerns.
The accompanying consolidated condensed financial statements have been
prepared on the basis of generally accepted accounting principles
applicable to a going concern; such principles assume realization of
assets and payment of liabilities in the normal course of business. The
appropriateness of using the going concern basis is also dependent upon,
among other things, confirmation of a plan of reorganization, future
successful operations and the ability to generate sufficient cash from
operations and financing sources to meet obligations.
The accompanying consolidated condensed financial statements do not
purport to reflect or provide for the consequences of the bankruptcy
proceedings, including the result if the Bankruptcy Court does not approve
the Prepackaged Plan. If the Company and Bucyrus are unable to obtain
such approval, and no other consensual plan of reorganization can be
agreed upon under chapter 11 of the Bankruptcy Code, the Company and
Bucyrus believe it is possible that a liquidation under chapter 7 of the
Bankruptcy Code will occur and that no net proceeds would be available for
distribution to the holders of the Company's and Bucyrus' equity
securities and, possibly, various classes of the Company's and Bucyrus'
debt securities. Such consolidated condensed financial statements do not
purport to show (a) as to assets, their realizable value on a liquidation
basis or their availability to satisfy liabilities; (b) as to pre-petition
liabilities, the amounts that may be allowed for claims or contingencies,
or the status of priority thereof; (c) as to stockholder accounts, the
effect of any changes that may be made in the capitalization of the
Company and Bucyrus; or (d) as to operations, the effect of any changes
that may be made in their business. The outcome of these matters is not
presently determinable.
2. In the opinion of the Company, the accompanying consolidated condensed
financial statements contain all adjustments (consisting of normal
recurring accruals and other adjustments as stated in subsequent notes)
necessary to present fairly the financial results for the interim periods.
Certain items are included in these statements based on estimates for the
entire year. Also, certain reclassifications have been made to the 1993
financial statements to present them on a basis consistent with the
current year.
3. Certain notes and other information have been condensed or omitted from
these interim financial statements and, therefore, these statements should
be read in conjunction with the Company's 1993 annual report on Form 10-K
filed with the Securities and Exchange Commission on April 15, 1994.
4. The accompanying consolidated condensed financial statements have been
prepared in accordance with Statement of Position 90-7, "Financial
Reporting by Entities in Reorganization Under the Bankruptcy Code" ("SOP
90-7"). Accordingly, revenues and expenses resulting from the
reorganization of the Company and Bucyrus are recorded as earned and
incurred and reported separately as reorganization items in the
accompanying Consolidated Condensed Statements of Operations. Interest
expense subsequent to the Petition Date on the unsecured debt of the
Company and Bucyrus, excluding debt of the foreign subsidiaries, is not
being accrued. In addition, liabilities and the redeemable preferred
stock subject to compromise under the bankruptcy proceedings are now
reported at the amount of the allowed claims in the Prepackaged Plan and
are segregated from other liabilities in the Consolidated Condensed
Balance Sheet at September 30, 1994.
Liabilities Subject to Compromise as of September 30, 1994 consist of the
following:
10% Senior Notes of Bucyrus $ 74,628,000
Resettable Senior Notes of Bucyrus 60,000,000
Series A 12-1/2% Senior Debentures of the Company 22,917,756
9% Sinking Fund Debentures of Bucyrus 804,000
Lease Obligation of Bucyrus under sale
and leaseback financing arrangement 31,366,979
Series A 10.65% Senior Secured Notes of Bucyrus 11,500,000
Series B 16.5% Senior Secured Notes of Bucyrus 5,250,000
Accounts payable and accrued expenses 8,092,634
Accrued interest 35,076,676
Liability to customers on uncompleted contracts
and warranties 4,450,000
Other 1,331,730
____________
Total $255,417,775
The Company has received approval from the Bankruptcy Court to pay or
otherwise honor certain pre-petition machine contracts, customer warranty
claims, and obligations owing to employees, including but not limited to,
wages and salaries, payroll taxes, benefits, expenses and insurance
premiums. Accordingly, such liabilities have not been classified as
Liabilities Subject to Compromise.
Reorganization items included in the Consolidated Condensed Statements of
Operations consist of the following:
Quarter Nine Months
Ended September 30, Ended September 30,
1994 1993 1994 1993
Legal and pro-
fessional fees -
pre-petition $ - $ 1,508,991 $ 1,255,200 $ 2,680,148
Legal and pro-
fessional fees -
post-petition 1,520,001 - 4,433,727 -
Net write-down of
debt to amount
of allowed claim
in the Prepackaged
Plan - - (33,122) -
(Continued) Quarter Nine Months
Ended September 30, Ended September 30,
1994 1993 1994 1993
Interest income (135,325) - (254,342) -
Write-off capitalized
financing costs - - 1,112,927 -
____________ ____________ ____________ ____________
Subtotal 1,384,676 1,508,991 6,514,390 2,680,148
Write-up of
redeemable
preferred stock
to amount of
allowed claim
in the Pre-
packaged Plan - - 40,554,805 -
____________ ____________ ____________ ____________
Total $ 1,384,676 $ 1,508,991 $ 47,069,195 $ 2,680,148
5. Inventories are summarized as follows:
September 30, December 31,
1994 1993
Raw materials and parts $ 13,166,366 $ 10,324,233
Inventoried costs relating to
uncompleted contracts 5,421,918 670,835
Work in process 12,300,056 15,344,264
Finished products (primarily
replacement parts) 41,405,012 37,863,277
Customers' advances offset
against costs incurred on
uncompleted contracts (3,954,603) (531,372)
____________ ____________
$ 68,338,749 $ 63,671,237
6. Net loss per share has been computed based on the average number of common
shares outstanding during the period. Warrants, Series B Convertible
Preferred Stock and stock options outstanding are not included in the per
share calculations because they are anti-dilutive. If the Company's
Prepackaged Plan is approved, the issuance of new common stock will
further dilute current equity interests.
7. In accordance with SOP 90-7, all long-term debt of the Company and
Bucyrus, except for the project financing obligations and debt of foreign
subsidiaries, has been reclassified to Liabilities Subject to Compromise.
Prior year comparative balances have not been reclassified to conform with
current year balances stated under SOP 90-7. Long-term debt is comprised
of the following:
September 30, December 31,
1994 1993
10% Senior Notes of Bucyrus,
in default $ - $ 74,701,142
Resettable Senior Notes of Bucyrus,
in default - 60,000,000
Series A 12-1/2% Senior Debentures
of the Company, in default - 22,843,780
9% Sinking Fund Debentures of
Bucyrus, in default - 766,777
Lease Obligation of Bucyrus under sale
and leaseback financing arrangement,
in default - 26,177,875
(Continued) September 30, December 31,
1994 1993
Series A 10.65% Senior Secured Notes
of Bucyrus, in default - 11,500,000
Series B 16.5% Senior Secured Notes
of Bucyrus, in default - 5,250,000
Project financing obligations
of Bucyrus 6,559,158 3,659,879
Other 2,552,804 2,802,795
_____________ ____________
9,111,962 207,702,248
Less:
Current maturities of
long-term debt (8,239,256) (4,954,196)
Amounts classified as a
current liability (788,250) (201,979,324)
_____________ ____________
Amounts classified as long-term debt $ 84,456 $ 768,728
8. The Company did not declare a dividend in cash or in kind on March 15,
1993, September 15, 1993, March 15, 1994 or September 15, 1994 on its
Series A 12-1/2% Cumulative Exchangeable Preferred Stock ("Series A
Preferred Stock"). In accordance with SOP 90-7, the Company has increased
the carrying amount of the Series A Preferred Stock (which includes the
unpaid dividends of March 15, 1993 and September 15, 1993 and the accrued
dividend for the period of September 16, 1993 through February 18, 1994)
in the accompanying Consolidated Condensed Balance Sheet to the amount of
the allowed claim in the Prepackaged Plan.
9. The following balance sheet separates the Consolidated Condensed Balance
Sheet as of September 30, 1994, into the assets, liabilities and
stockholders' investment (deficiency in assets) of those entities that are
in bankruptcy proceedings and those that are not in bankruptcy
proceedings.
Debtors- Non-
In- Bankrupt
Possession Entities Eliminations Consolidated
(Dollars in Thousands)
Current assets $ 75,059 $ 47,763 $ (1,030) $121,792
Property, plant &
equipment, net 35,157 7,740 - 42,897
Other assets 82,093 8,547 (60,836) 29,804
Due from
affiliates 22,193 2,421 (24,614) -
________ ________ ________ ________
Total assets $214,502 $ 66,471 $(86,480) $194,493
Current
liabilities $ 28,941 $ 12,695 $ (157) $ 41,479
Long-term debt - 84 - 84
Other liabilities 277,954 3,600 - 281,554
Due to affiliates 1,348 21,197 (22,545) -
Preferred stock 71,154 - - 71,154
Stockholders'
investment
(deficiency in
assets) (164,895) 28,895 (63,778) (199,778)
________ ________ ________ ________
Total liabilities
and stockholders'
investment
(deficiency in
assets) $214,502 $ 66,471 $(86,480) $194,493
B-E HOLDINGS, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following information is provided to assist in the understanding of
the Company's operations for the quarter ended September 30, 1994. The
acquisition of Bucyrus-Erie Company ("Bucyrus") by the Company on February 4,
1988 was accounted for as a purchase and, accordingly, the assets and
liabilities of the Company were recorded at their estimated fair values as of
the acquisition date. The excess of the related purchase cost over the fair
value of identifiable net assets has been allocated to goodwill. The
financial statements include the related depreciation and amortization charges
associated with the fair value adjustments since the date of the acquisition.
Corporate Reorganization
On February 22, 1993, the Company and Bucyrus announced their intention to
pursue a restructuring of their capital structures. Subsequent to the
Company's and Bucyrus' announcement of their intention to pursue a
restructuring and, at the suggestion of the Company and Bucyrus, holders of
the Series A 12-1/2% Senior Debentures and the 10% Senior Notes, and other
persons in an ex officio capacity, formed the Public Debtholders Committee for
the purpose of negotiating a consensual plan of restructuring (the
"Restructuring") which would be accomplished as part of a joint "prepackaged"
plan of reorganization of the Company and Bucyrus under chapter 11 of the
Bankruptcy Code (the "Prepackaged Plan"). The purpose of the Restructuring is
to improve and enhance the long-term viability of the Company and Bucyrus by
adjusting their capitalization to reflect current and projected operating
performance levels. Specifically, the Prepackaged Plan is designed to reduce
the Company's and Bucyrus' overall indebtedness and their corresponding debt
service obligations by exchanging all of their senior unsecured debt
securities for common equity.
A. The Prepackaged Plan and the Original Solicitation
The Company and Bucyrus reached agreements with the Public Debtholders
Committee and Greycliff Partners Limited ("Greycliff") acting on behalf of the
holders (the "South Street Funds") of Bucyrus' Series A 10.65% Senior Secured
Notes, Series B 16.5% Senior Secured Notes and obligations of Bucyrus under
its sale and leaseback financing arrangement (the "Sale Leaseback" and,
together with the Senior Secured Notes, the "Bucyrus Secured Obligations") as
to the terms of the Restructuring and the Prepackaged Plan during the third
and fourth quarters of 1993. Following such agreements, the Company and
Bucyrus filed a Disclosure Statement and Proxy Statement-Prospectus (the
"Disclosure Statement") for the solicitation of acceptances of the Prepackaged
Plan with the Securities and Exchange Commission (the "SEC"). On January 12,
1994, Bucyrus' Registration Statement on Form S-4 bearing Registration No. 33-
73904, which included the final version of the Disclosure Statement dated
January 12, 1994 detailing the terms of the Prepackaged Plan, was declared
effective by the SEC. The Prepackaged Plan provided for the Company to merge
with and into Bucyrus and for the issuance of common stock and warrants to
purchase such common stock to holders of the Company's and Bucyrus' unsecured
debt securities and equity securities and for the refinancing of the Bucyrus
Secured Obligations.
On January 14, 1994, the Company and Bucyrus distributed the Disclosure
Statement to holders of record on December 29, 1993 of all classes of the
Company's and Bucyrus' debt securities and the Company's equity securities
soliciting from such holders acceptances of the Prepackaged Plan. The
solicitation period for accepting or rejecting the Prepackaged Plan ended at
5:00 PM EST on February 14, 1994. All classes of the Company's and Bucyrus'
bondholders and the Company's stockholders voting on the Prepackaged Plan
voted to accept the Prepackaged Plan, except for Jackson National Life
Insurance Company ("JNL"), the holder of Bucyrus' Resettable Senior Notes
("Resettable Notes"). On February 18, 1994 (the "Petition Date"), the Company
and Bucyrus filed voluntary petitions under chapter 11 of the Bankruptcy Code,
and filed the Prepackaged Plan in the United States Bankruptcy Court, Eastern
District of Wisconsin (the "Bankruptcy Court"), Case Nos. 94-20786-RAE and 94-
20787-RAE. The Company's and Bucyrus' chapter 11 cases (the "Reorganization
Cases") were assigned to United States Bankruptcy Judge Russell A. Eisenberg.
B. Hearing On The Disclosure Statement
As required under the Bankruptcy Code, a hearing to consider whether the
solicitation of acceptances or rejections of the Prepackaged Plan pursuant to
the Disclosure Statement satisfied the applicable provisions of the Bankruptcy
Code was held on June 16, 1994 by the Bankruptcy Court. On June 20, 1994 at
the conclusion of the hearing, the Bankruptcy Court directed the Company and
Bucyrus to amend the Disclosure Statement and to resolicit acceptances from
their creditors and security holders of the Prepackaged Plan. From June 20,
1994 to September 19, 1994, the Company and Bucyrus held discussions with
interested parties regarding possible modifications to the Prepackaged Plan.
Participants in these discussions included the official creditors committee of
Bucyrus appointed in the Reorganization Cases (the "Creditors Committee"), the
South Street Funds, and PPM America, Inc., as investment advisor to JNL.
These discussions led to the formulation of an amended plan of reorganization
on September 1, 1994; further discussions resulted in the formulation of the
Second Amended Joint Plan of Reorganization (the "Amended Plan"), which was
filed with the Bankruptcy Court on September 19, 1994 and which is an
amendment and restatement of the Prepackaged Plan. The Amended Plan provides
for modified distributions to holders of the debt and equity securities of the
Company and Bucyrus in comparison to the Prepackaged Plan. The Amended Plan
also modifies the treatment of certain claims held or asserted to be held by
the Company and Bucyrus against one another and third parties. The Bankruptcy
Court's June 20, 1994 order directed the Company and Bucyrus to resolicit
acceptances through the use of a supplement to the Disclosure Statement (the
"Disclosure Supplement") describing the Amended Plan and containing additional
disclosure regarding (i) the interests and activities of Goldman, Sachs & Co.
("Goldman") and its affiliate, Broad Street Investment Fund I, L.P. ("Broad
Street"), in relation to the Company and Bucyrus, (ii) matters relating to
litigation claims asserted by JNL and (iii) matters affecting the releases
provided under the Prepackaged Plan.
On September 19, 1994, the Bankruptcy Court approved the Disclosure
Supplement, taken together with the Disclosure Statement, as containing
"adequate information" within the meaning of section 1125(a)(1) of the
Bankruptcy Code, and authorized the solicitation of acceptances by the Company
and Bucyrus of the Amended Plan.
C. The Amended Plan
The Amended Plan provides for the Company to merge with and into Bucyrus
(the survivor of such Merger is referred to as the "Reorganized Company").
The Reorganized Company would issue common stock ("New Common Stock") to
holders of the Company's and Bucyrus' unsecured debt securities and equity
securities and to Bell Helicopter Textron, Inc. ("Bell") pursuant to a
litigation settlement. Under the Amended Plan, the Reorganized Company will
not issue warrants to purchase New Common Stock. As described below under
"Limitations on Releases Under the Amended Plan", the Amended Plan also
provides for the distribution to JNL, subject to certain conditions, of the
proceeds of any recoveries with respect to certain causes of action against
Non-Released Persons (as defined below).
The Amended Plan also provides for modified treatment of the Bucyrus
Secured Obligations held by the South Street Funds relative to the treatment
proposed in the Prepackaged Plan. The South Street Funds have agreed,
following negotiations, to make additional economic concessions with respect
to the principal amount, terms and conditions of the debt securities to be
issued to the South Street Funds pursuant to the Amended Plan (the "New South
Street Notes"). Pursuant to the summary of principal terms agreed to by
Greycliff on behalf of the South Street Funds (the "Summary of Principal
Terms"), the South Street Funds have agreed to accept New South Street Notes
with an aggregate principal value equal to the aggregate amount of the secured
claims of the South Street Funds as of the confirmation date of the Amended
Plan (the "Confirmation Date") less $2,500,000. Assuming a Confirmation Date
of December 31, 1994, the aggregate amount of the New South Street Notes to be
issued under the Amended Plan is approximately $52.5 million. Under the
Prepackaged Plan, the South Street Funds had made various contingent
concessions regarding the interest rate applicable to their claim; the
conditions for the concessions to become effective had not occurred.
The Summary of Principal Terms provides that the New South Street Notes
shall accrue interest during the first year following the effectiveness of the
Amended Plan at 10.5% whether paid in cash or in kind, and thereafter at 10.5%
if paid in cash or 13.0% if paid in kind. The Reorganized Company will
generally be permitted to make payments of accrued interest on the New South
Street Notes in kind rather than in cash, at the discretion of the Reorganized
Company during the entire five year term of the New South Street Notes. Under
the Prepackaged Plan, the secured claims of the South Street Funds were to be
refinanced at an initial interest rate of 13.5% per annum, payable in cash.
No repayments of principal are required prior to final maturity of the New
South Street Notes.
The New South Street Notes will be secured by a first priority lien and
security interest on substantially all of the Reorganized Company's property
(other than real estate), subject to a senior lien securing extensions of
credit in an amount not to exceed $15 million for the issuance of letters of
credit and for borrowings for working capital purposes described below under
"Provision of Working Capital Financing".
The distribution of the New South Street Notes to the South Street Funds
will be in full and final satisfaction of their claims against the Company and
Bucyrus and will not be subject to avoidance, disgorgement, reallocation or
challenge following the Effective Date. However, the South Street Funds are
"Non-Released Persons" under the Amended Plan and may be subject to claims or
Causes of Action relating to other matters brought on behalf of the Company,
Bucyrus or the Reorganized Company by JNL as described below under
"Limitations on Releases Under the Amended Plan".
D. Provision of Working Capital Financing
Subject to loan committee approval and the issuance of the New South
Street Notes, Bank One, Milwaukee, N.A. ("Bank One") has proposed providing to
the Reorganized Company a working capital and letter of credit facility in an
amount not to exceed $15,000,000. This facility, which would be provided
without closing fees, would replace the Letter of Credit Agreement described
below under "Post-Petition Letter of Credit Agreement" and would be secured by
a first priority lien and security interest on substantially all of the
Reorganized Company's property (other than real estate). Bank One has
indicated that it would also consider providing, on a case by case basis,
additional funds for lease transactions and for specific project financing
either alone or with other participating lenders. There can be no assurance
that Bank One's loan committee will approve, or that Bank One will provide,
such working capital and letter of credit facility to the Reorganized Company.
E. Limitations on Releases Under the Amended Plan
The releases contained in the Amended Plan do not release any Cause of
Action (as defined in the Amended Plan) which the Company, Bucyrus, or the
Reorganized Company may have against Broad Street, Goldman, the South Street
Funds, Greycliff, or any of their respective successors, predecessors and
other related parties (the "Non-Released Parties"). The Prepackaged Plan
purported to release Causes of Action against the Non-Released Parties. Under
the Amended Plan, following the effective date of the Amended Plan JNL will
have the exclusive right and authority, in its sole discretion (subject to JNL
providing, prior to the Confirmation Date, an undertaking in form and
substance satisfactory to the Company, Bucyrus and the Creditors Committee, to
indemnify and hold harmless the Company, Bucyrus and the Reorganized Company
with respect to any losses or liabilities arising from or related to JNL's
exercise of its exclusive right and authority), to pursue as a representative
of the Company's and Bucyrus' bankruptcy estates any claims, rights or Causes
of Action against a Non-Released Person. Any recovery of cash or property
obtained by or on behalf of the Reorganized Company with respect to any Cause
of Action against a Non-Released Person which arose prior to the Petition Date
shall constitute a distribution on JNL's claim as the holder of the Resettable
Notes. JNL will be required to pay all the costs and expenses of pursuing
such matters. In the event that JNL fails to provide such satisfactory
indemnification, the Reorganized Company may pursue any claims, rights and
Causes of Action for its own account and at its own expense.
F. Resolicitation
On September 23, 1994, the Company and Bucyrus distributed the Disclosure
Supplement, the Disclosure Statement, the Amended Plan and other relevant
materials to holders of record on September 1, 1994 (the "Voting Record Date")
of all classes of the Company's and Bucyrus' debt securities and the Company's
equity securities and certain other creditors soliciting from such persons
acceptances of the Amended Plan. The solicitation period for accepting or
rejecting the Prepackaged Plan ended at 5:00 PM EST on October 31, 1994.
All classes of creditors and of the Company's and Bucyrus' bondholders and
the Company's stockholders voting on the Amended Plan voted to accept the
Amended Plan, except for the holders of the Company's Series B Convertible
Preferred Stock, being Goldman and its affiliate, Broad Street. The Amended
Plan received the levels of support indicated in the following table from each
class of the impaired debt and equity securities voting on the Amended Plan.
All percentages indicated are based on the votes actually cast by holders of
the Company's or Bucyrus' securities except for the right hand column which
indicates the percentage of the outstanding principal amount, or outstanding
shares of stock, in each impaired class as of the Voting Record Date, that
actually voted in that class.
Percent Percent of
Approval of Outstanding
Principal Principal
Amount or Percent Amount or
Shares of Approval of Shares of
Stock Holders Stock that
Voting Voting Voted
___________ ___________ ___________
Bucyrus Series A 100% 100% 100%
10.65% Senior Secured
Notes and Series B
16.5% Senior Secured
Notes
Claims Under Sale 100% 100% 100%
Leaseback
Bucyrus 10% (Interest 96.03% 97.25% 73.12%
Rate Reset to 16% as
of January 1, 1993)
Senior Notes
Bucyrus Resettable 100% 100% 100%
Senior Notes
(Continued) Percent Percent of
Approval of Outstanding
Principal Principal
Amount or Percent Amount or
Shares of Approval of Shares of
Stock Holders Stock that
Voting Voting Voted
___________ ___________ ___________
Bucyrus 9% Sinking 93.38% 80.00% 16.92%
Fund Debentures
Holdings Series A 98.54% 92.75% 65.78%
12-1/2% Senior
Debentures
Holdings Series A 96.94% 94.30% 50.23%
12-1/2% Cumulative
Exchangeable Preferred
Stock
Holdings Series B 0% 0% 100%
Convertible Preferred
Stock
Holdings Class C 99.31% 93.81% 76.87%
Common Stock
Holdings Class D 93.90% 80.00% 68.91%
Common Stock
Holdings Stock Options 100% 100% 84.17%
The results of the voting on the Amended Plan were certified to the Bankruptcy
Court on November 4, 1994 by the Company's and Bucyrus' Voting Agent, D.F.
King & Co., Inc. In addition, Bucyrus (as holder of inter-company debt) and
Bell voted to accept the Amended Plan.
G. Confirmation and Cram Down
A hearing to consider confirmation of the Amended Plan has been scheduled
to commence in the Bankruptcy Court on November 29, 1994. If Goldman and its
affiliate, Broad Street, the holders of the Company's Series B Convertible
Preferred Stock continue to reject the Amended Plan, the Company and Bucyrus
intend to seek confirmation of the Amended Plan under the "cram down"
provisions of the Bankruptcy Code (pursuant to which a plan of reorganization
may be confirmed despite the non-acceptance by an impaired class) and will ask
the Bankruptcy Court to confirm the Amended Plan over the objection of the
holders of the Company's Series B Convertible Preferred Stock. The Company
and Bucyrus believe that the Amended Plan meets the "cram down" requirements
set forth in the Bankruptcy Code, although no assurance to this effect can be
given. Although the Company and Bucyrus believe that requisite acceptances of
the Amended Plan have been received and that the Amended Plan meets the "cram
down" requirements of the Bankruptcy Code, the Bankruptcy Court must find that
all statutory conditions to confirmation have been met, and accordingly, there
can be no assurance that the Bankruptcy Court will confirm the Amended Plan.
In addition, confirmation and consummation of the Amended Plan are subject to
further conditions described in the Amended Plan, and there can be no
assurance that these will be satisfied, or, if not satisfied, waived or
waivable by the Company and Bucyrus.
H. Post-Petition Letter Of Credit Agreement
On April 14, 1994, the Company and Bucyrus obtained an order from the
Bankruptcy Court authorizing Bucyrus to enter into a post-petition letter of
credit financing agreement (the "Letter of Credit Agreement") with Bank One to
meet its on-going business needs following the Petition Date. Pursuant to the
Letter of Credit Agreement, Bank One has agreed to issue (a) stand-by letters
of credit in an amount, which when added to the aggregate amount available for
drawing under certain stand-by letters of credit issued by Bank One prior to
the Petition Date, does not exceed $12,500,000 and (b) commercial letters of
credit in an amount not to exceed $250,000. As of September 30, 1994, the
unused portion of the letter of credit facility under the Letter of Credit
Agreement was $9,058,399. As security for the financing under the Letter of
Credit Agreement, the Bankruptcy Court has authorized Bucyrus to pledge cash
collateral to Bank One and to grant liens and security interests to Bank One
over certain accounts receivable of Bucyrus and inventory of Bucyrus generated
on or after the Petition Date and certain other assets. The Letter of Credit
Agreement expired on October 31, 1994. Bank One has agreed to extend the
Letter of Credit Agreement to the earlier to occur of December 31, 1994 or the
Effective Date (as defined in the Amended Plan).
I. Operation During Chapter 11 Proceedings
The Company and Bucyrus intend to operate in the ordinary course during
their chapter 11 cases and intend to take all steps necessary to ensure that
their vendors, trade creditors, employees and customers with warranty or other
claims are unimpaired by the Amended Plan. None of the subsidiaries of the
Company and Bucyrus will be parties to the Amended Plan.
J. Liquidity Pending Consummation Of The Restructuring
Until the Plan is implemented on the Effective Date, the Company and
Bucyrus will be required to rely on their internal cash resources to operate
their businesses and pay other costs. Bucyrus believes that it will have
sufficient cash resources and financing to meet trade obligations and cover
operating and restructuring expenses during the pendency of their chapter 11
cases. During the pendency of their chapter 11 cases, the Company and Bucyrus
intend to pay all post-petition operating expenses (including trade
obligations) in the ordinary course of business.
Net Shipments and Net Loss
Net shipments for the quarter and nine months ended September 30, 1994
were $50,647,644 and $144,610,730, respectively, compared with $51,042,210 and
$152,125,896 for the quarter and nine months ended September 30, 1993,
respectively. Shipments of repair parts and services for the quarter ended
September 30, 1994 increased 4.8% from the quarter ended September 30, 1993.
For the nine months ended September 30, 1994, shipments of repair parts and
services increased 3.1% from the nine months ended September 30, 1993.
Machine shipments for the quarter ended September 30, 1994 decreased 15.5%
from the quarter ended September 30, 1993 and for the nine months ended
September 30, 1994 decreased 23.6% from the nine months ended September 30,
1993. Both decreases were primarily due to decreased electric mining shovel
shipments. The pricing for machines and repair parts has continued to remain
steady during these periods.
Net loss for the quarter and nine months ended September 30, 1994 was
$3,157,527 and $16,251,715, respectively, compared with a net loss of
$10,241,494 and $42,147,337 for the quarter and nine months ended
September 30, 1993, respectively. The decrease in net loss for the quarter
ended September 30, 1994 was primarily due to reduced interest expense. The
decrease in net loss for the nine months ended September 30, 1994 was
primarily due to reduced interest expense and $11,297,385 for the cumulative
effects of changes in accounting principles as a result of adoption of
Statement of Financial Accounting Standards No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions", and Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" in the first
quarter of 1993, partially offset by an increase in reorganization items of
$3,834,242 in 1994. Also included in net losses were amortizations of non-
cash purchase accounting and financing charges of $1,821,524 and $5,831,686
for the quarter and nine months ended September 30, 1994, respectively, and
$2,164,905 and $6,247,475 for the quarter and nine months ended September 30,
1993, respectively.
The Company's consolidated backlog on September 30, 1994 was $74,299,361
compared with $74,023,040 on December 31, 1993 and $80,361,734 on
September 30, 1993. Machine backlog is up .5% from December 31, 1993 and down
26.1% from September 30, 1993. The decrease from September 30, 1993 was
primarily in electric mining shovel volume due to partial shipment of the
Anshan Iron & Steel Company orders described below. Repair parts and service
backlog is up .3% from December 31, 1993 and up 6.9% from September 30, 1993.
New orders for the quarter ended September 30, 1994 increased 65.0% from
the quarter ended September 30, 1993 and for the nine months ended
September 30, 1994 increased 3.4% from the nine months ended September 30,
1993. New machine orders for the quarter ended September 30, 1994 were higher
than the quarter ended September 30, 1993, as there were no new machine orders
received in the third quarter of 1993. New machine orders for the nine months
ended September 30, 1994 decreased 13.5% from the nine months ended
September 30, 1993. This decrease was primarily due to decreased electric
mining shovel volume. During the second quarter of 1993, Bucyrus received an
order from Mitsubishi Corporation for Anshan Iron & Steel Company in China for
eight electric mining shovels for approximately $38 million. New repair parts
and service orders for the quarter ended September 30, 1994 increased 32.5%
from the quarter ended September 30, 1993 and for the nine months ended
September 30, 1994 increased 10.3% from the nine months ended September 30,
1993. The increase in both comparisons was primarily due to increases at both
domestic and foreign locations. The Company believes expansion of coal
production in China and India, new copper projects in South America and
replacement of old equipment in iron ore mines should provide near term
machine sales potential. Continued upgrading of machines along with movement
of large draglines to new mine sites, and normal drill and shovel parts demand
should result in increased shipments of repair parts worldwide in the next
twelve months. However, the United States coal market continues to be
negatively impacted by the effects of The Clean Air Act. The Company is not
able to determine the impact, if any, of the recent election in South Africa
on future shipments by the Company in South Africa, however, the impact to
date has not been severely negative.
Interest, Royalties and Miscellaneous
Interest, royalties and miscellaneous for the quarter and nine months
ended September 30, 1994 were $156,563 and $2,017,792, respectively, compared
with $232,764 and $708,036 for the quarter and nine months ended September 30,
1993, respectively. The increase in the year-to-date comparison was primarily
due to a favorable insurance settlement of $1,350,000 in the second quarter of
1994.
Cost of Products Sold
Cost of products sold for the quarter ended September 30, 1994 was
$41,707,350 or 82.3% of shipments compared with $42,703,971 or 83.7% of
shipments for the quarter ended September 30, 1993. For the nine months ended
September 30, 1994, cost of products sold was $120,740,401 or 83.5% of
shipments compared with $128,230,802 or 84.3% of shipments for the nine months
ended September 30, 1993. The change in the cost of products sold percentage
was primarily the result of the mix of products sold. Included in cost of
products sold were foreign currency translation losses of $8,671 for the
quarter ended September 30, 1994 and $220,319 for the nine months ended
September 30, 1994 compared with losses of $201,370 for the quarter ended
September 30, 1993 and $772,571 for the nine months ended September 30, 1993.
The gains and losses occurred in Brazil and were the result of applying
Statement of Financial Accounting Standards No. 52, "Foreign Currency
Translation".
Product Development, Selling, Administrative, and Miscellaneous Expenses
Product development, selling, administrative and miscellaneous expenses
for the quarter ended September 30, 1994 were $7,738,809 or 15.3% of shipments
compared with $8,076,556 or 15.8% of shipments for the quarter ended September
30, 1993. The amounts for the nine months ended September 30, 1994 and 1993
were $23,106,805 or 16.0% of shipments and $25,623,026 or 16.8% of shipments,
respectively. The decrease in the quarterly and year-to-date comparisons was
primarily due to reduced product development expense as a result of increased
work on specific customer contracts.
Interest Expense
Interest expense for the quarter and nine months ended September 30, 1994
was $2,673,272 and $11,323,313, respectively, compared with $9,021,986 and
$26,098,169 for the quarter and nine months ended September 30, 1993,
respectively. The decreases were primarily due to not accruing interest
subsequent to February 18, 1994 on the Company's and Bucyrus' unsecured debt
which includes Bucyrus' 10% Senior Notes, Bucyrus' Resettable Senior Notes,
Bucyrus' 9% Sinking Fund Debentures and the Company's Series A 12-1/2% Senior
Debentures.
Income Taxes
The Company has federal net operating loss carryforwards of approximately
$115,700,000 expiring in the years 2003 through 2009, available to offset
future federal taxable income. The Company also has approximately $80,300,000
of state net operating loss carryforwards, which expire in the years 1997
through 2009, available to offset future state taxable income in states where
it has significant operations.
As previously discussed, the Company and Bucyrus have filed the
Prepackaged Plan with the Bankruptcy Court and commenced cases under
chapter 11 of the Bankruptcy Code. The consummation of the Prepackaged Plan
would cause the Company and Bucyrus to undergo "ownership changes" within the
meaning of Section 382 of the Internal Revenue Code. Such ownership changes
will, depending on the outcome of the chapter 11 cases of the Company and
Bucyrus, including the effective date of the Prepackaged Plan and various
other matters, significantly restrict the utilization of the Company's and
Bucyrus' net operating loss and tax credit carryforwards.
Profitability Measurements
Ratios of returns on net shipments, assets employed, and shareholders'
investment are not meaningful at this time for the Company due to losses
incurred.
Liquidity and Capital Resources
Working capital and current ratio are two financial measurements which
provide an indication of the Company's ability to meet its short-term
obligations. These measurements at September 30, 1994 and December 31, 1993
were as follows:
September 30, December 31,
1994 1993
Working capital (deficiency)
(in millions) $ 80.3 $(164.0)
Current ratio 2.9 to 1 .4 to 1
The increase in working capital for the nine months ended September 30,
1994 was primarily due to the reclassification of certain liabilities,
primarily long-term debt and accrued interest, to Liabilities Subject to
Compromise. Working capital includes restricted funds on deposit of zero and
$512,173 at September 30, 1994 and December 31, 1993, respectively, and long-
term debt classified as a current liability of $788,250 and $201,979,324 at
September 30, 1994 and December 31, 1993, respectively. If the long-term debt
had not been reclassified, working capital and the current ratio would have
been as follows:
September 30, December 31,
1994 1993
Working capital (in millions) $ 81.1 $ 38.0
Current ratio 3.0 to 1 1.6 to 1
The table below summarizes the Company's cash position at September 30,
1994:
Restricted Unrestricted
Location Cash Cash Total
United States $ 2,340,000 $ 15,293,086 $ 17,633,086
Foreign Subsidiaries 17,632 5,783,910 5,801,542
Equipment Assurance
Limited 3,230,866 1,205,185 4,436,051
____________ ____________ ____________
$ 5,588,498 $ 22,282,181 $ 27,870,679
The unrestricted cash at the foreign subsidiaries and Equipment Assurance
Limited ("EAL"), an off-shore insurance subsidiary of Bucyrus, is primarily
required for working capital purposes at these respective locations.
In order to provide a better understanding of the Company's results from
operations, the following table reconciles Loss Before Reorganization Items,
Income Taxes and Cumulative Effects of Changes in Accounting Principles to
Cash Provided From Operations Before Interest Expense, Reorganization Items,
Income Taxes and Cumulative Effects of Changes in Accounting Principles:
Quarter Nine Months
Ended September 30, Ended September 30,
1994 1993 1994 1993
Loss before
reorganization items,
income taxes and
cumulative effects
of changes in
accounting
principles $ (1,315,224) $ (8,527,539) $ (8,541,997) $(27,118,065)
Non-cash expenses:
Depreciation
expense -
historical 984,153 1,074,687 2,985,721 3,213,013
Depreciation and
amortization of
purchase adjustments
and financing
fees 1,821,524 2,046,051 5,760,507 5,903,874
Deferred rent
(interest) on sale
and leaseback
financing
arrangement 1,848,146 1,524,376 5,189,104 4,289,683
Amortization of debt
discount 0 118,854 71,179 343,601
____________ ____________ ____________ ____________
Cash provided
from (used in)
operations after
interest expense
(Continued) Quarter Nine Months
Ended September 30, Ended September 30,
1994 1993 1994 1993
and before
reorganization items,
income taxes and
cumulative effects of
changes in accounting
principles 3,338,599 (3,763,571) 5,464,514 (13,367,894)
Cash interest
expense (1) 825,126 7,378,756 6,063,030 21,464,885
____________ ____________ ____________ ____________
Cash provided from
operations before
interest expense,
reorganization
items, income taxes
and cumulative
effects of changes
in accounting
principles $ 4,163,725 $ 3,615,185 $ 11,527,544 $ 8,096,991
(1) Includes all accrued but unpaid interest prior to the Petition Date.
Interest on the unsecured debt of the Company and Bucyrus does not accrue
subsequent to the Petition Date. Excludes amortization of debt discount and
deferred rent (interest) on the sale and leaseback financing arrangement.
On July 24, 1992, Bucyrus entered into a credit agreement with Bank One
which provides for the issuance from time to time by Bank One of standby
letters of credit for the account of Bucyrus in an aggregate amount of up to
$12,500,000 at any one time, secured in part pursuant to a security agreement
and in part by cash provided by Bucyrus, and certain other commercial and
standby letters of credit. The agreement expired on February 28, 1994. On
April 14, 1994, the Company and Bucyrus obtained an order from the Bankruptcy
Court authorizing Bucyrus to enter into the Letter of Credit Agreement with
Bank One to meet its on-going business needs following the Petition Date.
Pursuant to the Letter of Credit Agreement, Bank One has agreed to issue (a)
stand-by letters of credit in an amount, which when added to the aggregate
amount available for drawing under certain stand-by letters of credit issued
by Bank One prior to the Petition Date, does not exceed $12,500,000 and (b)
commercial letters of credit in an amount not to exceed $250,000. As of
September 30, 1994, the unused portion of the letter of credit facility under
the Letter of Credit Agreement was $9,058,399. As security for the financing
under the Letter of Credit Agreement, the Bankruptcy Court has authorized
Bucyrus to pledge cash collateral to Bank One and to grant liens and security
interests to Bank One over certain accounts receivable of Bucyrus and
inventory of Bucyrus generated on or after the Petition Date and certain other
assets. The Letter of Credit Agreement expired on October 31, 1994 and stand-
by letters of credit issued pursuant to the Letter of Credit Agreement may not
terminate later than April 30, 1995 without the consent of Bank One. Bank One
has agreed to extend the Letter of Credit Agreement to the earlier to occur of
December 31, 1994 or the Effective Date (as defined in the Amended Plan).
Bucyrus has pledged to Bank One $2,340,000 of its cash to secure its
reimbursement obligations under the Letter of Credit Agreement.
As required under various agreements, EAL has pledged $3,230,866 of its
cash to secure its reimbursement obligations for outstanding letters of credit
and an affiliate's bank debt at September 30, 1994. These collateral amounts
are classified as Restricted Funds on Deposit in the Consolidated Condensed
Balance Sheets.
At September 30, 1994, the Company's subsidiaries had approximately
$1,075,000 of open approved capital appropriations.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings and Other Contingencies
Voluntary Petitions under Chapter 11 of the Bankruptcy Code
On February 18, 1994 (the "Petition Date"), the Company and Bucyrus
commenced voluntary petitions under chapter 11 of the Bankruptcy
Code and filed the Prepackaged Plan in the United States Bankruptcy
Court, Eastern District of Wisconsin, Case Nos. 94-20786-RAE and
94-20787-RAE and thereby commenced cases under chapter 11 of the
Bankruptcy Code. The Company's and Bucyrus' chapter 11 cases have
been assigned to United States Bankruptcy Judge Russell A.
Eisenberg.
See Part I, "Corporate Reorganization."
Item 3. Defaults Upon Senior Securities.
(a) (i) Holdings Series A 12-1/2% Senior Debentures. As
disclosed in the 1993 10-K, the Company did not pay
interest which was due and payable on March 15, 1993,
September 15, 1993, March 15, 1994 and September 15, 1994
on its Series A 12-1/2% Senior Debentures ("Series A
Debentures"). The amounts of such defaults were
$2,543,291, $2,589,667, $2,547,444 and $2,589,667,
respectively, (which amounts include $265,797, $270,644,
$266,231 and $270,644, respectively, of interest with
respect to the $4,295,000 in principal amount of Series A
Debentures which Bucyrus owns), and the total arrearage
as of the Petition Date was $7,342,619. On November 24,
1993, the indenture trustee for the Series A Debentures
("Firstar"), without instruction from the holders of such
securities, sent a notice of acceleration to the Company
declaring such securities to be immediately due and
payable. On December 17, 1993, Firstar, a defendant in
the JNL Lawsuit, filed a cross-claim against the Company
seeking judgment on the principal of, interest on and
other amounts due and owing under the Series A
Debentures, and filed a notice of motion for summary
judgment on such cross-claim. As a result of the
Company's and Bucyrus' chapter 11 petitions, prosecution
of the cross-claim against the Company has been stayed
against the Company as of the Petition Date.
(ii) Bucyrus 9% Sinking Fund Debentures. As disclosed in the
1993 10-K, Bucyrus did not pay interest which was due and
payable on June 1, 1993 and December 1, 1993 on its 9%
Sinking Fund Debentures ("Sinking Fund Debentures"). In
addition, Bucyrus did not pay interest which was due and
payable on June 1, 1994 on the Sinking Fund Debentures.
The applicable period of grace for such payments under
the indenture governing the Sinking Fund Debentures has
expired, resulting in an event of default thereunder.
The indenture trustee for the Sinking Fund Debentures,
Chemical Bank, has advised Bucyrus of the occurrence of
an event of default. Each of such defaults was in an
amount of $36,180, and the total arrearage as of the
Petition Date was $88,296.
(iii) Bucyrus Resettable Senior Notes. As disclosed in the
1993 10-K, Bucyrus did not pay interest which was due and
payable on June 30, 1993 and December 31, 1993 on its
Resettable Senior Notes ("Resettable Senior Notes"). In
addition, Bucyrus did not pay interest which was due and
payable on June 30, 1994 on the Resettable Senior Notes.
The applicable period of grace for such payments under
the indenture governing the Resettable Senior Notes has
expired, resulting in an event of default thereunder.
Each of such defaults was in an amount of $4,500,000, and
the total arrearage as of the Petition Date was
$10,824,107 which includes default interest. In
addition, the interest payment defaults which have
occurred and are continuing in respect of the Sinking
Fund Debentures, the Senior Secured Notes and the 10%
Senior Notes constitute an event of default under the
Resettable Senior Notes. On October 20, 1993, the
indenture trustee for the Resettable Senior Notes, at the
direction of JNL, the sole holder of the Resettable
Senior Notes, sent a notice of acceleration to Bucyrus
declaring all unpaid principal of, and accrued interest
on, the Resettable Senior Notes to be immediately due and
payable. On November 22, 1993, JNL, together with the
indenture trustee for the Resettable Senior Notes, filed
a notice of motion for partial summary judgment relating
to its claim for all principal of and interest on the
Resettable Senior Notes in connection with the JNL
Lawsuit. As a result of the Company's and Bucyrus'
chapter 11 petitions, prosecution of such motion for
partial summary judgment has been stayed against Bucyrus
and the Company as of the Petition Date.
(iv) Bucyrus Series A 10.65% Senior Secured Notes and Series B
16.5% Senior Secured Notes. As disclosed in the 1993
10-K, Bucyrus did not pay interest which was due and
payable on June 30, 1993 and December 31, 1993 on its
Series A 10.65% Senior Secured Notes and Series B 16.5%
Senior Secured Notes (collectively, "Senior Secured
Notes"). In addition, Bucyrus did not pay interest which
was due and payable on June 30, 1994 on the Senior
Secured Notes. The applicable period of grace for such
payments under the indenture governing the Senior Secured
Notes has expired, resulting in an event of default
thereunder. The trustee under the Senior Secured Notes,
Norwest Bank Wisconsin, National Association ("Norwest")
has advised Bucyrus of the occurrence of an event of
default. Each of such defaults was in an amount of
$1,045,500, and the total arrearage on the date of filing
this report is approximately $4,299,000 which includes
default interest. In addition, the interest payment
defaults which have occurred and are continuing in
respect of the Sinking Fund Debentures, the Resettable
Senior Notes and the 10% Senior Notes constitute an event
of default under the Senior Secured Notes.
(v) Bucyrus 10% Senior Notes. As disclosed in the 1993 10-K,
Bucyrus did not pay interest which was due and payable on
July 1, 1993 and January 1, 1994 on its 10% Senior Notes
("10% Senior Notes"). In addition, Bucyrus did not pay
interest which was due and payable on July 1, 1994 on the
10% Senior Notes. The applicable period of grace for
such payments under the indenture governing the 10%
Senior Notes has expired, resulting in an event of
default thereunder. Each of such defaults was in an
amount of $5,970,240, and the total arrearage as of the
Petition Date was $13,575,189. On November 24, 1993,
Firstar, the indenture trustee for the 10% Senior Notes,
without instruction from the holders of such securities,
sent a notice of acceleration to Bucyrus declaring such
securities to be immediately due and payable. On
December 17, 1993, Firstar, a defendant in the JNL
Lawsuit, filed a cross-claim against Bucyrus seeking
judgment on the principal of, interest on and other
amounts due and owing under the 10% Senior Notes, and
filed a notice of motion for summary judgment on such
cross-claim. As a result of the Company's and Bucyrus'
chapter 11 petitions, prosecution of the cross-claim
against Bucyrus has been stayed against Bucyrus as of the
Petition Date.
(b) As disclosed in the 1993 10-K, the Company did not declare a
dividend in cash or in kind, due and payable on March 15, 1993,
September 15, 1993, March 15, 1994 and September 15, 1994, on
its Series A 12-1/2% Cumulative Exchangeable Preferred Stock
("Series A Preferred Stock"). Each of such defaults was in an
amount of $3,769,987. The total arrearage as of the Petition
Date was $10,771,391.
Item 4. Submission of Matters to a Vote of Security Holders
As noted in Part I, from September 23, 1994 to October 31, 1994,
the Company and Bucyrus solicited acceptances of the Amended Plan
from the Company's stockholders and certain creditors of the
Company and Bucyrus. At 5:00 PM EST on October 31, 1994, the
solicitation period expired and all classes of the Company's and
Bucyrus' debt securities and the Company's stockholders voting on
the Amended Plan voted to accept the Amended Plan, other than the
holders of the Company's Series B Convertible Preferred Stock.
The information contained in Part I "Corporate Reorganization" --
"F. Resolicitation" is incorporated herein by reference.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits: See Exhibit Index on last page of this report, which
is incorporated herein by reference.
(b) Report on Form 8-K: No reports on Form 8-K were filed during
the third quarter.
SIGNATURES
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 thereunto duly authorized.
B-E HOLDINGS, INC.
(Registrant)
Date November 14, 1994 /s/ Craig R. Mackus
Craig R. Mackus
Controller
Principal Accounting Officer
Date November 14, 1994 /s/ William B. Winter
Chairman of the Board and
Chief Executive Officer
B-E HOLDINGS, INC.
EXHIBIT INDEX
TO
QUARTERLY REPORT ON FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 1994
Incorporated Sequential
Exhibit Herein By Filed Page
Number Description Reference Herewith Number
27 Financial Data Schedule X
99.1 Second Amended Joint Plan X
of Reorganization of
B-E Holdings, Inc. and
Bucyrus-Erie Company
under Chapter 11 of the
Bankruptcy Code
[ARTICLE] 5
[PERIOD-TYPE] 9-MOS
[FISCAL-YEAR-END] DEC-31-1994
[PERIOD-END] SEP-30-1994
[CASH] 22,282,181
[SECURITIES] 0
[RECEIVABLES] 29,971,405
[ALLOWANCES] (748,000)
[INVENTORY] 68,338,749
[CURRENT-ASSETS] 121,792,065
[PP&E] 89,321,966
[DEPRECIATION] (46,425,216)
[TOTAL-ASSETS] 194,493,303
[CURRENT-LIABILITIES] 41,478,994
[BONDS] 84,456
[COMMON] 92,699
[PREFERRED-MANDATORY] 71,091,180
[PREFERRED] 62,918
[OTHER-SE] (199,870,452)
[TOTAL-LIABILITY-AND-EQUITY] 194,493,303
[SALES] 144,610,730
[TOTAL-REVENUES] 146,628,522
[CGS] 120,740,401
[TOTAL-COSTS] 120,740,401
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 11,323,313
[INCOME-PRETAX] (15,056,387)
[INCOME-TAX] 1,195,328
[INCOME-CONTINUING] (16,251,715)
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (16,251,715)
[EPS-PRIMARY] (1.75)
[EPS-DILUTED] (1.75)
EXHIBIT 99.1
3RD QTR 10-Q - 1994
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF WISCONSIN
- - - -------------------------------x
In re : Chapter 11 Case
Nos. 94-20786-RAE
B-E HOLDINGS, INC. and : 94-20787-RAE
BUCYRUS-ERIE COMPANY,
: Jointly Administered
Debtors.
:
- - - -------------------------------x
SECOND AMENDED JOINT PLAN OF REORGANIZATION
OF B-E HOLDINGS, INC. AND BUCYRUS-ERIE COMPANY
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
B-E Holdings, Inc. and Bucyrus-Erie Company hereby propose the following
Second Amended Joint Plan of Reorganization pursuant to section 1121(a) of the
Bankruptcy Code.
ARTICLE I
DEFINITIONS
As used in the Plan the following terms shall have the meanings
specified below:
1.001. "Administrative Claim" means a Claim for costs and expenses of
administration allowed under section 503(b), 507(b) or 1114(e)(2) of the
Bankruptcy Code, including:
(a) the actual and necessary costs and expenses incurred after the
Petition Date of preserving the Estate and operating the business of a
Debtor (such as wages, salaries or commissions for services and payments
for goods and other services and leased premises), any indebtedness or
obligations incurred or assumed by the Debtors or the Debtors in
Possession in connection with the conduct of their businesses or for the
acquisition or lease of property or for the procurement of services,
including, without limitation, obligations for borrowings under the
Post-Petition Financing Agreement, any costs and expenses of the Debtors
for the management, preservation, sale or other disposition of any
assets, the administration, prosecution or defense of claims by or
against the Debtors and for distributions under the Plan, and shall also
include the Claims for Indenture Trustees for fees and expenses to the
extent contemplated by Section 7.19 of the Plan;
(b) compensation for legal, financial advisory, accounting and other
services and reimbursement of expenses awarded or allowed under section
330(a) or 331 of the Bankruptcy Code; and
(c) all fees and charges assessed against the Estate of a Debtor
under chapter 123 of title 28, United States Code, 28 U.S.C. Sections
1911-1930.
1.002. "Allowed Claim" or "Allowed Unsecured Claim" means for the
purpose of receiving distributions or other treatment pursuant to the Plan,
but subject in all events to the provisions of Section 3.22:
(a) a Claim that has been scheduled by a Debtor in its schedule of
liabilities as other than disputed, contingent or unliquidated and as to
which a Debtor or other party in interest has not Filed an objection by
the Effective Date;
(b) a Claim that either is not a Disputed Claim or has been allowed
by a Final Order;
(c) a Claim that is allowed: (i) in any stipulation of amount and
nature of Claim executed prior to the Confirmation Date and approved by
the Bankruptcy Court; (ii) in any stipulation with a Debtor of amount
and nature of Claim executed on or after the Confirmation Date; or (iii)
in any contract, instrument, indenture or other agreement entered into
or assumed in connection with the Plan;
(d) a Claim relating to a rejected executory contract or unexpired
lease that either (i) is not a Disputed Claim or (ii) has been allowed
by a Final Order, in either case only if a proof of Claim has been Filed
by the Bar Date or has otherwise been deemed timely Filed under
applicable law; or
(e) a Claim that is allowed pursuant to the terms of this Plan.
1.003. "Allowed Equity Interest" means an Equity Interest in Holdings
Stock: (a) as of the Distribution Record Date as registered in the stock
register that is maintained by or on behalf of Holdings and (b) (i) is not a
Disputed Equity Interest or (ii) has been allowed by a Final Order.
1.004. "Allowed . . . Claim" means an Allowed Claim in the
particular Class or category described.
1.005. "Amended By-Laws" means the Restated By-Laws of the Reorganized
Debtor, which shall be substantially in the form set forth in Exhibit A.
1.006. "Amended Certificate of Incorporation" means the Restated
Certificate of Incorporation of the Reorganized Debtor, to be filed pursuant
to the Merger Agreement as described in Section 5.03 of the Plan, which shall
be substantially in the form of Exhibit B.
1.007. "Ballots" means the ballots accompanying the Disclosure
Statement upon which Holders of Impaired Claims and Impaired Equity Interests
shall indicate their acceptance or rejection of the Plan in accordance with
the Voting Instructions.
1.008. "Bankruptcy Code" means title 11 of the United States Code, as
now in effect or hereafter amended.
1.009. "Bankruptcy Court" means the United States Bankruptcy Court
having jurisdiction over the Chapter 11 Cases.
1.010. "Bankruptcy Rules" means the Federal Rules of Bankruptcy
Procedure, as amended from time to time, as applicable to the Chapter 11
Cases, promulgated under 28 U.S.C. Section 2075 and the General and Local
Rules, if any, of the Bankruptcy Court.
1.011. "Bar Date" means the bar date for Filing of proofs of claim with
respect to executory contracts and unexpired leases which are rejected
pursuant to this Plan or otherwise pursuant to section 365 of the Bankruptcy
Code.
1.012. "Becor Transactions" means the acquisition by Holdings of Becor
Western, Inc. pursuant to the Agreement and Plan of Merger dated as of July
28, 1987, as amended, the exchange offer of Bucyrus 10% Senior Notes
consummated on January 28, 1989, the issuance of Bucyrus Resettable Senior
Notes, the issuance of Bucyrus South Street Notes, consummation of the Bucyrus
South Street Lease and certain other related transactions.
1.013. "Bell Helicopter" means Bell Helicopter Textron Inc.
1.014. "Bell Helicopter Claim" means the claims of Bell Helicopter
asserted in or related to the civil action captioned Bell Helicopter Textron
Inc. v. Brad Foote Gear Works, Inc., BWC Gear, Inc., and Bucyrus-Erie Company
pending in the District Court of Tarrant County, Texas, 348th Judicial
District.
1.015. "Beneficial Holder" means the entity holding the beneficial
interest in a Claim or Equity Interest.
1.016. "Broad Street Fund" means Broad Street Investment Fund I, L.P.
1.017. "Bucyrus" means Bucyrus-Erie Company, a Delaware corporation.
1.018. "Bucyrus 10% Senior Notes" means the 10% Senior Notes due 1996
of Bucyrus issued under the Bucyrus 10% Senior Note Indenture.
1.019. "Bucyrus 10% Senior Note Indenture" means the Indenture dated as
of January 28, 1989, between Bucyrus and First Wisconsin Trust Company, now
known as Firstar Trust Company, as trustee.
1.020. "Bucyrus Common Stock" means the common stock, par value $.01
per share, of Bucyrus.
1.021. "Bucyrus General Unsecured Claims" means, collectively, all
unsecured Claims against Bucyrus, including Trade Claims, but excluding claims
of Holders of Bucyrus 10% Senior Notes, Bucyrus Sinking Fund Debentures,
Bucyrus Resettable Senior Notes, Bucyrus South Street Notes and Bucyrus South
Street Lease Claims.
1.022. "Bucyrus Lease Trustee" means State Street Bank and Trust
Company of Connecticut, National Association, as trustee under the Trust
Agreement dated as of July 24, 1992 establishing the SS Equipment Trust No. 1.
1.023. "Bucyrus Priority Claims" means any Claims against Bucyrus
accorded the priority and right of payment under section 507(a) of the
Bankruptcy Code, other than a Priority Tax Claim or on Administrative Claim.
1.024. "Bucyrus Resettable Senior Notes" means the Resettable Senior
Notes due January 1, 1996 of Bucyrus issued under the Bucyrus Resettable
Senior Note Indenture.
1.025. "Bucyrus Resettable Senior Note Indenture" means the Indenture
dated as of June 25, 1990, between Bucyrus and First Wisconsin Trust Company,
as trustee, under which First Trust, National Association acts as successor
trustee.
1.026. "Bucyrus Secured Claims" means, collectively, all Allowed
Secured Claims against Bucyrus held by any entity other than the South Street
Claims.
1.027. "Bucyrus Sinking Fund Debentures" means the 9% Sinking Fund
Debentures due 1999 of Bucyrus issued under the Bucyrus Sinking Fund Debenture
Indenture.
1.028. "Bucyrus Sinking Fund Debenture Indenture" means the Indenture
dated as of June 1, 1974 between Bucyrus and Chemical Bank as successor by
merger to Manufacturers Hanover Trust Company, as trustee.
1.029. "Bucyrus South Street Lease" means, collectively, (i) the
Participation Agreement dated as of July 24, 1992 among Bucyrus, Holdings, the
South Street Funds and the Bucyrus Lease Trustee, (ii) the Purchase Agreement
and Assignment dated as of July 24, 1992 between Bucyrus and the Bucyrus Lease
Trustee, (iii) the Bill of Sale between Bucyrus and the Bucyrus Lease Trustee
dated July 24, 1992, and (iv) the Lease and Agreement dated as of July 24,
1992 between Bucyrus and the Bucyrus Lease Trustee.
1.030. "Bucyrus South Street Lease Claims" means the Claims of the
lessor and the owner participants under the Bucyrus South Street Lease.
1.031. "Bucyrus South Street Notes" means the Series A 10.65% Senior
Secured Notes due July 1, 1995 of Bucyrus and the Series B 16.5% Senior
Secured Notes due January 1, 1996 of Bucyrus issued under the Bucyrus South
Street Note Indenture.
1.032. "Bucyrus South Street Note Claims" means the Claims of Holders
of Bucyrus South Street Notes under (i) the Securities Purchase Agreement
dated as of July 24, 1992 among Bucyrus, Holdings and the South Street Funds,
(ii) the Indenture dated as of July 24, 1992 among Bucyrus, Holdings and the
South Street Note Trustee and (iii) the Bucyrus South Street Notes.
1.033. "Bucyrus South Street Note Indenture" means the Indenture dated
as of July 24, 1992 between Bucyrus, Holdings and the South Street Note
Trustee.
1.034. "Business Day" means any day, other than a Saturday, Sunday or
"legal holiday" (as defined in Bankruptcy Rule 9006(a)).
1.035. "Cash" means cash and cash equivalents.
1.036. "Causes of Action" means all claims (as defined in section
101(5) of the Bankruptcy Code), actions, causes of action, suits, debts, dues,
sums of money, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances, trespasses, damages
or judgments, whether known or unknown and whether asserted or unasserted.
1.037. "Chapter 11 Cases" means the cases under chapter 11 of the
Bankruptcy Code, commenced by the Debtors in the Bankruptcy Court.
1.038. "Claim" means a claim (as defined in section 101(5) of the
Bankruptcy Code) against a Debtor.
1.039. "Class" means a category of Holders of Claims or Equity
Interests as set forth in Article III of the Plan pursuant to section
1123(a)(1) of the Bankruptcy Code.
1.040. "Confirmation" means the entry of the Confirmation Order by the
Bankruptcy Court in its docket, within the meaning of Bankruptcy Rules 5003
and 9021.
1.041. "Confirmation Date" means the date upon which Confirmation
occurs.
1.042. "Confirmation Order" means the order of the Bankruptcy Court
confirming the Plan pursuant to section 1129 of the Bankruptcy Code.
1.043. "Consummation" means the occurrence of the Effective Date.
1.044. "Creditor" means any Holder of a Claim.
1.045. "Creditors Committee" means the statutory committee of unsecured
creditors appointed in the Chapter 11 Case of Bucyrus pursuant to section 1102
of the Bankruptcy Code.
1.046. "Debt Securities Indentures" means the Bucyrus 10% Senior Note
Indenture, the Bucyrus Sinking Fund Debenture Indenture, the Bucyrus
Resettable Senior Note Indenture, and the Holdings Senior Debenture Indenture,
and the Bucyrus South Street Note Indenture.
1.047. "Debtors" means Bucyrus and Holdings, debtors in the Chapter 11
Cases.
1.048. "Debtors in Possession" means Bucyrus and Holdings, as debtors
in possession in the Chapter 11 Cases.
1.049. "Delaware General Corporation Law" means title 8 of the Delaware
Code, as now in effect or hereafter amended.
1.050. "Disbursing Agent" means Bucyrus and/or the Indenture Trustees
and/or any third party disbursing agent as Bucyrus and Holdings may employ in
their sole discretion.
1.051. "Disclosure Statement" means the Disclosure Statement And Proxy
Statement-Prospectus dated January 12, 1994, as supplemented by the Disclosure
Supplement and as further amended, supplemented or modified from time to time,
that is prepared and distributed in accordance with sections 1125, 1126(b)
and/or 1145 of the Bankruptcy Code and Bankruptcy Rule 3018.
1.052. "Disclosure Supplement" means the Supplement to the Disclosure
Statement dated September 19, 1994, as approved by the Bankruptcy Court by
order dated September 19, 1994.
1.053. "Disputed Administrative Claim", "Disputed Claim", "Disputed
Priority Tax Claim" and "Disputed Equity Interest" means any Administrative
Claim, Claim, Priority Tax Claim or Equity Interest, as the case may be:
(a) listed on the Schedules as unliquidated, disputed or contingent;
or
(b) as to which a Debtor or any party in interest has interposed a
timely objection or request for estimation in accordance with the
Bankruptcy Code and the Bankruptcy Rules or is otherwise disputed by the
Debtor in accordance with applicable law, which objection, request for
estimation or dispute has not been withdrawn or determined by a Final
Order.
1.054. "Distribution Record Date" means the close of business on the
Business Day immediately preceding the Effective Date.
1.055. "Effective Date" means the date selected by the Debtors which is
after the Confirmation Date and within 45 days after the Confirmation Date,
subject to extension for reasonable cause shown, after such notice and hearing
as may be required by the Bankruptcy Court, and on which: (a) no stay of the
Confirmation Order is in effect, and (b) all conditions specified in Article
XI.B of the Plan have been (i) satisfied or (ii) waived pursuant to Section
11.04.
1.056. "Equity Holder" means the Holder of an Equity Interest.
1.057. "Equity Interest" means any equity interest in a Debtor
including, but not limited to, the Bucyrus Common Stock, the Holdings Stock,
the Holdings Stock Options, and the Holdings Old Warrants.
1.058. "Estate" means the estate of a Debtor created by section 541 of
the Bankruptcy Code upon the commencement of the Chapter 11 Cases.
1.059. "File" or "Filed" means file or filed with the Bankruptcy Court
in the Chapter 11 Cases.
1.060. "Final Decree" means the decree contemplated under Bankruptcy
Rule 3022.
1.061. "Final Order" means an order or judgment of the Bankruptcy
Court, or other court of competent jurisdiction with respect to the subject
matter, which has not been reversed, stayed, modified or amended, and as to
which the time to appeal or seek certiorari has expired and no appeal or
petition for certiorari has been timely taken, or as to which any appeal that
has been taken or any petition for certiorari that has been or may be filed
has been resolved by the highest court to which the order or judgment was
appealed or from which certiorari was sought.
1.062. "Goldman" means Goldman, Sachs & Co.
1.063. "Holder" means an entity holding an Equity Interest or Claim,
and with respect to a vote on the Plan, means the Beneficial Holder as of the
Voting Record Date or any authorized signatory who has completed and executed
a Ballot or on whose behalf a Master Ballot has been completed and executed in
accordance with the Voting Instructions.
1.064. "Holdings" means B-E Holdings, Inc., a Delaware corporation.
1.065. "Holdings Class C Stock" means the Class C Common Stock, par
value $.01 per share, of Holdings.
1.066. "Holdings Class D Stock" means the Class D Common Stock, par
value $.01 per share, of Holdings.
1.067. "Holdings Class E Stock" means the Class E Common Stock of
Holdings authorized pursuant to the Amended Certificate of Incorporation which
shall be deemed to be issued on the Effective Date.
1.068. "Holdings General Unsecured Claims" means, collectively, all
unsecured Claims against Holdings, including Trade Claims, but excluding
claims of Holders of Holdings Senior Debentures.
1.069. "Holdings Old Warrants" means the 6,392 warrants, each
exercisable for one share of Class A common stock, par value $.01 per share,
of Holdings (i) which were validly exercised by the Holders thereof in
accordance with their terms and (ii) in respect of which Holdings did not
issue shares of Holdings Class C Stock to the Holders thereof because such
Holders on the respective exercise dates resided in states where registration
or exemption permitting the sale of such stock under state securities law was
pending on or prior to the Voting Record Date.
1.070. "Holdings Priority Claims" means any Claims accorded the
priority and right of payment under section 507(a) of the Bankruptcy Code,
other than a Priority Tax Claim or an Administrative Claim.
1.071. "Holdings Secured Claims" means, collectively, all Allowed
Secured Claims against Holdings held by any entity other than the South Street
Claims.
1.072. "Holdings Senior Debentures" means the Series A 12-1/2% Senior
Debentures due September 15, 2002 of Holdings issued under the Holdings Senior
Debenture Indenture.
1.073. "Holdings Senior Debenture Indenture" means the Indenture dated
as of December 1, 1987, as amended, between Holdings and Firstar Trust
Company, as trustee.
1.074. "Holdings Series A Preferred Stock" means the Series A 12-1/2%
Cumulative Exchangeable Preferred Stock, par value $.01 per share, of
Holdings.
1.075. "Holdings Series B Preferred Stock" means the Series B
Convertible Preferred Stock, par value $.01 per share, of Holdings.
1.076. "Holdings Stock" means the Holdings Series A Preferred Stock,
the Holdings Series B Preferred Stock, the Holdings Class C Stock, the
Holdings Class D Stock and the Holdings Old Warrants.
1.077. "Holdings Stock Options" means the options to purchase shares of
Holdings Class C Stock granted pursuant to the B-E Holdings, Inc. 1988 Stock
Option Plan.
1.078. "Impaired" means, with respect to any Claim, Interest or Class,
the condition or effects described in Section 1124 of the Bankruptcy Code.
1.079. "Impaired Claim" means a Claim classified in an Impaired Class.
1.080. "Impaired Class" means Classes 2A, 2B, 4A, 4B, 4C, 4D, 5, 6, 8,
9, 10, 11, 12 and 13 as set forth in Article III.B. of the Plan.
1.081. "Impaired Debt Securities" means the Bucyrus 10% Senior Notes,
the Bucyrus Sinking Fund Debentures, the Bucyrus Resettable Senior Notes, the
Holdings Senior Debentures, the Bucyrus South Street Notes and the Bucyrus
South Street Lease Claims.
1.082. "Impaired Debt Securities Claims" means Claims classified in
Classes 2A, 2B, 4A, 4B, 4C and 6.
1.083. "Impaired Equity Interest" means an Equity Interest classified
in an Impaired Class.
1.084. "Indenture Trustees" means the trustees and successor trustees
(if any) under the Debt Securities Indentures and the Bucyrus Lease Trustee.
1.085. "Indenture Trustee Charging Liens" means any lien or other
priority in payment available to an Indenture Trustee pursuant to an indenture
against distributions made to Holders of Allowed Impaired Debt Securities
Claims for payment of any fees, costs or disbursements incurred by such
Indenture Trustee.
1.086. "Intercompany Claim" means any Claim held by Bucyrus against
Holdings net of any Claims held by Holdings against Bucyrus.
1.087. "Internal Revenue Code" means title 26 of the United States
Code, as now in effect or hereafter amended.
1.088. "Lien" means a lien as defined in section 101(37) of the
Bankruptcy Code.
1.089. "Master Ballots" means the master ballots accompanying the
Disclosure Statement upon which Holders of Impaired Claims and Impaired Equity
Interests shall indicate the acceptance or rejection of the Plan in accordance
with the Voting Instructions.
1.090. "Merger Agreement" means the agreement and plan of merger to be
entered into by or on the Effective Date between Holdings and Bucyrus
providing for the merger contemplated by Section 5.02(c) of the Plan, which
shall be substantially in the form set forth in Exhibit E.
1.091. "New Bank One Credit Agreement" means the Credit Agreement to be
entered into as of the Effective Date between the Reorganized Debtor and Bank
One, Milwaukee, N.A.
1.092. "New Bucyrus Common Stock" means the 20,000,000 shares of
Bucyrus Common Stock authorized pursuant to the Amended Certificate of
Incorporation.
1.093. "New Bucyrus Notes" means the secured senior notes of New
Bucyrus, due on the fifth anniversary of the Effective Date, which shall be
issued by New Bucyrus on the Effective Date under the New South Street Credit
Agreement and this Plan.
1.094. "New Bucyrus Registration Rights Agreement" means an agreement
regarding the registration and related rights of the holders of the New
Bucyrus Common Stock, the terms and conditions of which agreement are
summarized in Exhibit C to this Plan, which agreement shall be substantially
in the form set forth in the Reorganization Documents.
1.095. "New South Street Credit Agreement" means the credit agreement
that shall be entered into on the Effective Date between the Reorganized
Debtor and the South Street Funds with respect to the New Bucyrus Notes.
1.096. "New South Street Term Sheet" means the term sheet for the New
South Street Credit Agreement, a copy of which is attached hereto as
Exhibit D.
1.097. "Non-Released Persons" is defined in Section 9.04.
1.098. "Old Bucyrus Common Stock" means the 100 shares of Bucyrus
Common Stock held by Holdings on the Petition Date, being all of the
authorized and outstanding shares of Bucyrus Common Stock on that date.
1.099. "Person" means any individual, firm, corporation, association,
partnership, joint venture, trust, or other entity.
1.100. "Petition Date" means the date on which the Debtors filed their
petitions for relief commencing the Chapter 11 Cases.
1.101. "Plan" means this Second Amended Joint Plan of Reorganization,
either in its present form or as it may be altered, amended, modified or
supplemented from time to time in accordance with the Plan, the Bankruptcy
Code and the Bankruptcy Rules.
1.102. "Pre-Petition Secured Lease Claims" means the outstanding
principal amount of the Bucyrus South Street Lease Claims plus the amount of
accrued and unpaid interest thereon as of the Petition Date.
1.103. "Pre-Petition Secured Note Claims" means the outstanding
principal amount of the Bucyrus South Street Note Claims plus the amount of
accrued and unpaid interest thereon as of the Petition Date.
1.104. "Priority Tax Claim" means a Claim of a governmental unit of the
kind specified in section 507(a)(7) of the Bankruptcy Code.
1.105. "Pro Rata" means proportionately so that with respect to an
Allowed Claim or Equity Interest, the ratio of (i) (I) the amount of property
distributed on account of a particular Allowed Claim or Equity Interest to
(II) the amount of the Allowed Claim or Equity Interest, is the same as the
ratio of (ii) (I) the amount of property distributed on account of all Allowed
Claims or Equity Interests of the Class in which the particular Allowed Claim
or Equity Interest is included to (II) the amount of Allowed Claims or Equity
Interests in that Class.
1.106. "Professionals" means all professionals employed in the Chapter
11 Cases pursuant to section 327 or 1103 of the Bankruptcy Code, all
professionals seeking compensation or reimbursement of expenses from the
Debtors, pursuant to section 503(b)(4) or otherwise, and the Examiner
appointed in Bucyrus' Chapter 11 Case.
1.107. "Professional Fee Claims" means Claims against the Debtors for
compensation or reimbursement of expenses of Professionals which were unpaid
as of the Petition Date or which were incurred on or after the Petition Date
and prior to the Effective Date, including claims by any Person for
reimbursement of amounts paid or owing to Professionals.
1.108. "Released Matters", "Released Persons" and "Releasors" are
defined in Section 9.03.
1.109. "Reorganization Documents" means the New Bank One Credit
Agreement, the New South Street Credit Agreement, the New Bucyrus Registration
Rights Agreement and all other documents necessary to effectuate this Plan,
which documents shall be filed by the Debtors with the Bankruptcy Court not
later than twenty (20) days before the commencement of the hearing on
Confirmation.
1.110. "Reorganized Debtor" means Bucyrus as Debtor and Debtor in
Possession, or any successor thereto, by merger, consolidation or otherwise,
on and after the Effective Date.
1.111. "Retirement Plans" means the Bucyrus-Erie Salaried Employees'
Retirement Plan, the Supplementary Retirement Benefit Plan, Bucyrus-Erie
Salaried Employees' Savings Plan and Bucyrus-Erie Hourly Employees' Savings
Plan.
1.112. "Schedules" means the schedules of assets and liabilities,
schedules of executory contracts and the statement of financial affairs that
the Debtors are required to File pursuant to section 521 of the Bankruptcy
Code, the Official Bankruptcy Forms and the Bankruptcy Rules.
1.113. "Secured Claim" means a Claim that is secured by a lien on
property in which an Estate has an interest or that is subject to set off
under section 553 of the Bankruptcy Code, to the extent of the value of the
Claim Holder's interest in the Estate's interest in such property or to the
extent of the amount subject to setoff, as applicable, as determined pursuant
to section 506(a) of the Bankruptcy Code.
1.114. "Securities Act" means the Securities Act of 1933, 15 U.S.C.
Sections 77a-77aa, as now in effect or hereafter amended.
1.115. "South Street Funds" means South Street Corporate Recovery Fund
I, L.P., South Street Leveraged Corporate Recovery Fund, L.P., and South
Street Corporate Recovery Fund I (International), L.P.
1.116. "South Street Claims" means the Claims of the Holders of the
Bucyrus South Street Note Claims and the Claims of the Holders of the Bucyrus
South Street Lease Claims.
1.117. "South Street Note Trustee" means Norwest Bank Wisconsin,
National Association, as trustee under the Bucyrus South Street Note
Indenture.
1.118. "Trade Claim" means any Unsecured Claim against a Debtor arising
from or with respect to the delivery of goods or services to such Debtor in
the ordinary course of the Debtor's business, prior to the Petition Date.
1.119. "Unimpaired Claim" means an unimpaired Claim within the meaning
of section 1124 of the Bankruptcy Code.
1.120. "Unimpaired Class" means an unimpaired Class within the meaning
of section 1124 of the Bankruptcy Code.
1.121. "Unofficial Bondholder Committee" means the ad hoc committee of
holders of the Bucyrus 10% Senior Notes and the Holdings Senior Debentures.
1.122. "Unsecured Claim" means any Claim against a Debtor that is not a
Secured Claim, Administrative Claim, Priority Tax Claim or Other Priority
Claim.
1.123. "Voting Agent" means D.F. King & Co., Inc.
1.124. "Voting Instructions" means the instructions for voting on the
Plan contained in the section of the Disclosure Supplement entitled
"SOLICITATION; VOTING PROCEDURES" and in the Ballots and the Master Ballots.
1.125. "Voting Receipt Date" means the date established by Final Order
of the Bankruptcy Court for the receipt by the Voting Agent of Ballots and
Master Ballots from Holders of Impaired Claims and Impaired Equity Interests.
1.126. "Voting Record Date" means September 1, 1994.
ARTICLE II
TREATMENT OF ADMINISTRATIVE
AND PRIORITY TAX CLAIMS
A. Administrative Claims.
2.01. Subject to the provisions of sections 330(a) and 331 of the
Bankruptcy Code, each Holder of an Allowed Administrative Claim will be paid
the full unpaid amount of such Allowed Administrative Claim in Cash on the
Effective Date, or upon such other terms as may be agreed upon by such Holder
and the Reorganized Debtor or otherwise upon order of the Bankruptcy Court;
provided, however, that Allowed Administrative Claims representing obligations
incurred in the ordinary course of business or otherwise assumed by the
Debtors pursuant to the Plan will be assumed on the Effective Date and paid or
performed by the Reorganized Debtor when due in accordance with the terms and
conditions of the particular agreements governing such obligations.
B. Priority Tax Claims.
2.02. On the Effective Date, each Holder of a Priority Tax Claim due
and payable on or prior to the Effective Date shall be paid Cash in an amount
equal to the amount of such Allowed Claim on such terms as have been or may be
agreed upon by such Holder and the Debtor liable on the Allowed Claim. In
accordance with section 1124 of the Bankruptcy Code, the Plan shall leave
unaltered the legal, equitable and contractual rights of each Holder of a
Priority Tax Claim.
ARTICLE III
CLASSIFICATION AND TREATMENT
OF CLASSIFIED CLAIMS AND EQUITY INTERESTS
A. Summary.
3.01. The following classification of Claims and Equity Interests is
made for purposes of voting on the Plan, making Distributions under the Plan
and for ease of administration:
Class Status
Class 1A - Holdings Priority Claims Unimpaired - not entitled to vote
Class 1B - Bucyrus Priority Claims Unimpaired - not entitled to vote
Class 2A - Bucyrus South Street Impaired - entitled to vote
Note Claims
Class 2B - Bucyrus South Street Impaired - entitled to vote
Lease Claims
Class 3A - Holdings Secured Claims Unimpaired - not entitled to vote
Class 3B - Bucyrus Secured Claims Unimpaired - not entitled to vote
Class 4A - Claims of Holders of Impaired - entitled to vote
Bucyrus 10% Senior Notes
Class 4B - Claims of Holders of Impaired - entitled to vote
Bucyrus Resettable
Senior Note
Class 4C - Claims of Holders of Impaired - entitled to vote
Bucyrus Sinking Fund
Debentures
Class 4D - Bell Helicopter Claim Impaired - entitled to vote
Class 5 - Intercompany Claim Impaired - entitled to vote
Class 6 - Claims of Holders of Impaired - entitled to vote
Holdings Senior Debentures
Class 7A - Holdings General Unimpaired - not entitled to vote
Unsecured Claims
Class 7B - Bucyrus General Unsecured Unimpaired - not entitled to vote
Claims
Class 8 - Equity Interests of Impaired - deemed to have voted
Holder of Old Bucyrus against the Plan
Common Stock
Class 9 - Equity Interests of Impaired - entitled to vote
Holders of Holdings
Series A Preferred Stock
Class 10 - Equity Interests of Impaired - entitled to vote
Holders of Holdings
Series B Preferred Stock
Class 11 - Equity Interests of Impaired - entitled to vote
Holders of Holdings
Class C Stock (including
Equity Interests of Holders
of Holdings Old Warrants)
Class 12 - Equity Interests of Impaired - entitled to vote
Holders of Holdings
Class D Stock
Class 13 - Equity Interests of Impaired - entitled to vote
Holders of Holdings
Stock Options
B. Classification and Treatment.
3.02. Class 1A Holdings Priority Claims.
(a) Classification: Class 1A consists of all Holdings Priority Claims.
(b) Treatment: On the Effective Date, all Allowed Holdings Priority
Claims to the extent then due and owing will be paid in full in Cash by the
Reorganized Debtor, unless the Holder of such Claim and the Reorganized Debtor
agree to a different treatment. Any Allowed Holdings Priority Claim not due
and owing on the Effective Date will be paid in full in Cash by the
Reorganized Debtor when such Claim becomes due and owing.
(c) Voting: Class 1A is unimpaired and the Holders of Claims in Class
1A are not entitled to vote to accept or reject the Plan.
3.03. Class 1B Bucyrus Priority Claims.
(a) Classification: Class 1B consists of all Bucyrus Priority Claims.
(b) Treatment: On the Effective Date, all Allowed Bucyrus Priority
Claims to the extent then due and owing will be paid in full in Cash by the
Reorganized Debtor, unless the Holder of such Claim and the Reorganized Debtor
agree to a different treatment. Any Allowed Bucyrus Priority Claim not due
and owing on the Effective Date will be paid in full in Cash by the
Reorganized Debtor when such Claim becomes due and owing.
(c) Voting: Class 1B is unimpaired and the Holders of Claims in Class
1B are not entitled to vote to accept or reject the Plan.
3.04. Class 2A Bucyrus South Street Note Claims.
(a) Classification: Class 2A consists of all Bucyrus South Street Note
Claims.
(b) Treatment: On the Effective Date, each Holder of an Allowed Class
2A Claim will receive, in full and final satisfaction of such Claim, New
Bucyrus Notes in the principal amount equal to the aggregate outstanding
principal of and accrued unpaid interest to and including the Effective Date
on the Bucyrus South Street Notes held by such Holder as of the Confirmation
Date. For purposes of this Section 3.04(b), the amount of accrued interest on
the Bucyrus South Street Notes shall be calculated without regard to the
pendency of the Chapter 11 Cases and without regard to any penalty, premium,
cost of collection or related expense which may be claimed to be owing with
respect to the Bucyrus South Street Notes.
(c) Voting: Class 2A is Impaired and the Holders of Allowed Class 2A
Claims are entitled to vote to accept or reject the Plan.
3.05. Class 2B Bucyrus South Street Lease Claims.
(a) Classification: Class 2B consists of all Bucyrus South Street Lease
Claims.
(b) Treatment: On the Effective Date, each Holder of an Allowed Class
2B Claim will receive, in full and final satisfaction of such Claim, such
Holder's Pro Rata share of New Bucyrus Notes in a principal amount equal to
the outstanding unpaid amount owing with respect to the Bucyrus South Street
Lease as of the Effective Date, less $2,500,000. For purposes of this Section
3.05(b), the outstanding unpaid amount owing with respect to the Bucyrus South
Street Lease shall be calculated without regard to the pendency of the Chapter
11 Cases and without regard to any penalty, premium, cost of collection or
other expense which may be claimed to be owing with respect to the Bucyrus
South Street Lease.
(c) Voting: Class 2B is Impaired and the Holders of Allowed Class 2B
Claims are entitled to vote to accept or reject the Plan.
3.06. Class 3A Holdings Secured Claims.
(a) Classification: Class 3A consists of all Holdings Secured Claims.
(b) Treatment: The legal, equitable and contractual rights of Holders
of Holdings Secured Claims are unaltered by the Plan or, at the option of the
Debtors, will be treated in any other manner so that such Claims shall
otherwise be rendered unimpaired pursuant to section 1124 of the Bankruptcy
Code.
(c) Voting: Class 3A is unimpaired and the Holders of Claims in Class
3A are not entitled to vote to accept or reject the Plan.
3.07. Class 3B Bucyrus Secured Claims.
(a) Classification: Class 3B consists of all Bucyrus Secured Claims.
(b) Treatment: The legal, equitable and contractual rights of Holders
of Bucyrus Secured Claims are unaltered by the Plan or, at the option of the
Debtors, will be treated in any other manner so that such Claims shall
otherwise be rendered unimpaired pursuant to section 1124 of the Bankruptcy
Code.
(c) Voting: Class 3B is unimpaired and the Holders of Claims in Class
3B are not entitled to vote to accept or reject the Plan.
3.08. Class 4A Claims of Holders of Bucyrus 10% Senior Notes.
(a) Classification: Class 4A consists of the Claims of Holders of
Bucyrus 10% Senior Notes arising from or related to the Bucyrus 10% Senior
Notes.
(b) Treatment: On or as soon as practicable after the Effective Date,
each Holder of an Allowed Class 4A Claim shall receive, in full and final
satisfaction of such Claim, such Holder's Pro Rata share of 5,010,329 shares
of New Bucyrus Common Stock. In the event that Class 9 votes to reject the
Plan, on or as soon as practicable after the Effective Date, each Holder of an
Allowed Class 4A Claim shall receive such Holder's Pro Rata share of an
additional 44,287 shares of New Bucyrus Common Stock.
(c) Voting: Class 4A is Impaired and the Holders of Allowed Class 4A
Claims are entitled to vote to accept or reject the Plan.
3.09. Class 4B Claim of Holder of Bucyrus
(a) Classification: Class 4B consists of the Claim of the Holder of
Bucyrus Resettable Senior Notes arising from or related to the Bucyrus
Resettable Senior Notes.
(b) Treatment: On or as soon as practicable after the Effective Date,
the Holder of the Allowed Class 4B Claim shall receive, in full and final
satisfaction of such Claim, (i) 4,057,203 shares of New Bucyrus Common Stock
and (ii) if the Holder votes to accept the Plan on or prior to the Voting
Receipt Date and executes and delivers the undertaking described in Section
9.06, (x) any recovery of cash or property obtained by or on behalf of the
Reorganized Debtor with respect to any Cause of Action against a Non-Released
Person which arose prior to the Petition Date, and (y) in the event and to the
extent that a Claim or Equity Interest held by a Non-Released Person is not
Allowed by Final Order by reason of the acts or omissions of such Non-Released
Person prior to the Petition Date, the property that would otherwise have been
distributed under the Plan to such Non-Released Person if such Claim or Equity
Interest had been Allowed in full. In the event that Class 9 votes to reject
the Plan, on or as soon as practicable after the Effective Date, the Holder of
the Allowed Class 4B Claim shall receive an additional 35,862 shares of New
Bucyrus Common Stock.
(c) Voting: Class 4B is Impaired and the Holder of the Allowed Class 4B
Claim is entitled to vote to accept or reject the Plan.
3.10. Class 4C Claims of Holders of Bucyrus Sinking Fund Debentures.
(a) Classification: Class 4C consists of the Claims of Holders of
Bucyrus Sinking Fund Debentures arising from or related to the Bucyrus Sinking
Fund Debentures.
(b) Treatment: On or as soon as practicable after the Effective Date,
each Holder of an Allowed Class 4C Claim shall receive, in full and final
satisfaction of such Claim, such Holder's Pro Rata share of 50,686 shares of
New Bucyrus Common Stock. In the event that Class 9 votes to reject the Plan,
on or as soon as practicable after the Effective Date, each Holder of an
Allowed Class 4C Claim shall receive such Holder's Pro Rata share of an
additional 448 shares of New Bucyrus Common Stock.
(c) Voting: Class 4C is Impaired and the Holders of Allowed Class 4C
Claims are entitled to vote to accept or reject the Plan.
3.11. Class 4D Bell Helicopter Claim.
(a) Classification: Class 4D consists of the Bell Helicopter Claim.
The Holder of the Bell Helicopter Claim shall be deemed to have an Allowed
Claim in the amount of $3,350,000.
(b) Treatment: On or as soon as practicable after the Effective Date,
the Holder of the Allowed Class 4D Claim shall receive, in full and final
satisfaction of such Claim, $350,000 in Cash and 170,413 shares of New Bucyrus
Common Stock. In the event that Class 9 votes to reject the Plan, on or as
soon as practicable after the Effective Date, the Holder of the Allowed Class
4D Claim shall receive an additional 1,507 shares of New Bucyrus Common Stock.
(c) Voting: Class 4D is Impaired and the Holder of the Allowed Class 4D
Claim is entitled to vote to accept or reject the Plan.
3.12. Class 5 Intercompany Claim.
(a) Classification: Class 5 consists of the Intercompany Claim.
(b) Treatment: On or as soon as practicable after the Effective Date,
the Holder of an Allowed Class 5 Claim shall receive, in full and final
satisfaction of such Claim, 572,800 shares of Holdings Class E Stock, which
shall be converted pursuant to the Merger Agreement into 572,800 shares of New
Bucyrus Common Stock, which shall be allocated ratably among Holders of Class
4A, 4B, 4C and 4D Claims pursuant to Sections 3.08, 3.09, 3.10 and 3.11 of the
Plan. In the event that Class 9 votes to reject the Plan, on or as soon as
practicable after the Effective Date, each Holder of an Allowed Class 5 Claim
shall receive such Holder's Pro Rata share of an additional 71,285 shares of
Holdings Class E Stock, which shall be converted pursuant to the Merger
Agreement into 71,285 shares of New Bucyrus Common Stock. The shares of New
Bucyrus Stock so converted shall be allocated ratably among Holders of Class
4A, 4B, 4C and 4D Claims pursuant to Sections 3.08, 3.09, 3.10 and 3.11 of the
Plan.
(c) Voting: Class 5 is Impaired and the Holder of an Allowed Class 5
Claim is entitled to vote to accept or reject the Plan.
3.13. Class 6 Claims of Holders of Holdings Senior Debentures.
(a) Classification: Class 6 consists of the Claims of Holders of
Holdings Senior Debentures arising from or related to the Holdings Senior
Debentures.
(b) Treatment: On or as soon as practicable after the Effective Date,
each Holder of an Allowed Class 6 Claim shall receive, in full and final
satisfaction of such Claim, such Holder's Pro Rata share of 716,021 shares of
Holdings Class E Stock, which shall be converted pursuant to the Merger
Agreement into such Holder's Pro Rata share of 716,021 shares of New Bucyrus
Common Stock. In the event that Class 9 votes to reject the Plan, on or as
soon as practicable after the Effective Date, each Holder of an Allowed Class
6 Claim shall receive such Holder's Pro Rata share of an additional 89,109
shares of Holdings Class E Stock, which shall be converted pursuant to the
Merger Agreement into such Holder's Pro Rata share of 89,109 shares of New
Bucyrus Common Stock. Prior to the effectiveness of the Merger Agreement, the
Holdings Class E Stock that would otherwise be distributed to Bucyrus as a
Holder of Class 9 Claims shall be allocated ratably among Holders of Class 4A,
4B, 4C and 4D Claims pursuant to Sections 3.08, 3.09, 3.10 and 3.11 of the
Plan.
(c) Voting: Class 6 is Impaired and the Holders of Allowed Class 6
Claims are entitled to vote to accept or reject the Plan.
3.14. Class 7A Holdings General Unsecured Claims.
(a) Classification: Class 7A consists of all Holdings General Unsecured
Claims.
(b) Treatment: All Holdings General Unsecured Claims shall be
unimpaired by the Plan. At the option of the Reorganized Debtor, the Plan
shall (i) leave unaltered the legal, equitable and contractual rights of the
Holder of an Holdings General Unsecured Claim, (ii) provide for the payment of
an Holdings General Unsecured Claim in full in Cash on the Effective Date,
(iii) provide for the payment of an Holdings General Unsecured Claim in any
manner agreed to by the Holder of such Claim and the Reorganized Debtor, or
(iv) provide for such other treatment as will render such Holdings General
Unsecured Claim unimpaired in accordance with section 1124 of the Bankruptcy
Code.
(c) Voting: Class 7A is unimpaired and the Holders of Claims in Class
7A are not entitled to vote to accept or reject the Plan.
3.15. Class 7B Bucyrus General Unsecured Claims.
(a) Classification: Class 7B consists of all Bucyrus General Unsecured
Claims.
(b) Treatment: All Bucyrus General Unsecured Claims shall be unimpaired
by the Plan. At the option of the Reorganized Debtor, the Plan shall (i)
leave unaltered the legal, equitable and contractual rights of the Holder of
an Bucyrus General Unsecured Claim, (ii) provide for the payment of an Bucyrus
General Unsecured Claim in full in Cash on the Effective Date, (iii) provide
for the payment of an Bucyrus General Unsecured Claim in any manner agreed to
by the Holder of such Claim and the Reorganized Debtor, or (iv) provide such
other treatment as will render such Bucyrus General Unsecured Claim unimpaired
in accordance with section 1124 of the Bankruptcy Code.
(c) Voting: Class 7B is unimpaired and the Holders of Claims in Class
7B are not entitled to vote to accept or reject the Plan.
3.16. Class 8 Equity Interest of Holder of Old Bucyrus Common Stock.
(a) Classification: Class 8 consists of the Equity Interest of Holdings
as the Holder of Old Bucyrus Common Stock.
(b) Treatment: The Holder of the Class 8 Equity Interest shall receive
no distribution nor retain any property on account of such Equity Interest
under the Plan.
(c) Voting: Class 8 is Impaired and because no distribution will be
made to the Holder of the Class 8 Equity Interest nor will such Holder retain
any property on account of such Equity Interest, the Holder of the Class 8
Equity Interest is deemed to reject the Plan.
3.17. Class 9 Equity Interests of Holders of Holdings Series A
Preferred Stock.
(a) Classification: Class 9 consists of the Equity Interests of Holders
of Holdings Series A Preferred Stock.
(b) Treatment: On or as soon as practicable after the Effective Date,
each Holder of an Allowed Class 9 Equity Interest shall receive, in full and
final satisfaction of such Equity Interest, such Holder's Pro Rata share of
160,394 shares of Holdings Class E Stock, which shall be converted pursuant to
the Merger Agreement into 160,394 shares of New Bucyrus Common Stock. In the
event that Class 9 votes to reject the Plan, on or as soon as practicable
after the Effective Date, each Holder of an Allowed Class 9 Equity Interest
shall receive, in full and final satisfaction of such Equity Interest, such
Holder's Pro Rata share of 80,197 shares of Holdings Class E Stock, which
shall be converted pursuant to the Merger Agreement into 80,197 shares of New
Bucyrus Common Stock.
(c) Voting: Class 9 is Impaired and the Holders of Allowed Class 9
Equity Interests are entitled to vote to accept or reject the Plan.
3.18. Class 10 Equity Interests of Holders of Holdings Series B
Preferred Stock.
(a) Classification: Class 10 consists of the Equity Interests of
Holders of Holdings Series B Preferred Stock.
(b) Treatment: On or as soon as practicable after the Effective Date,
each Holder of an Allowed Class 10 Equity Interest shall receive, in full and
final satisfaction of such Equity Interest, such Holder's Pro Rata share of
32,423 shares of Holdings Class E Stock, which shall be converted pursuant to
the Merger Agreement into 32,423 shares of New Bucyrus Common Stock. In the
event that Class 9 votes to reject the Plan, the Holders of Class 10 Equity
Interests shall receive no distribution nor retain any property on account of
such Equity Interests under the Plan.
(c) Voting: Class 10 is Impaired and the Holders of Allowed Class 10
Equity Interests are entitled to vote to accept or reject the Plan. In the
event that Class 9 votes to reject the Plan, Holders of Class 10 Equity
Interests will be deemed to reject the Plan because no distribution will be
made to the Holders of Class 10 Equity Interests nor will such Holders retain
any property on account of such Equity Interests.
3.19. Class 11 Equity Interests of Holders of Holdings Class C Stock
(including Equity Interests of Holders of Holdings Old Warrants).
(a) Classification: Class 11 consists of the Equity Interests of
Holders of Holdings Class C Stock and the Equity Interests of Holders of
Holdings Old Warrants.
(b) Treatment: On or as soon as practicable after the Effective Date,
each Holder of an Allowed Class 11 Equity Interest shall receive, in full and
final satisfaction of such Equity Interest, such Holder's Pro Rata share of
47,276 shares of Holdings Class E Stock, which shall be converted pursuant to
the Merger Agreement into 47,276 shares of New Bucyrus Common Stock. In the
event that Class 9 votes to reject the Plan, the Holders of Class 11 Equity
Interests shall receive no distribution nor retain any property on account of
such Equity Interests under the Plan.
(c) Voting: Class 11 is Impaired and the Holders of Allowed Class 11
Equity Interests are entitled to vote to accept or reject the Plan. In the
event that Class 9 votes to reject the Plan, Holders of Class 11 Equity
Interests will be deemed to reject the Plan because no distribution will be
made to the Holders of Class 11 Equity Interests nor will such Holders retain
any property on account of such Equity Interests.
3.20. Class 12 Equity Interests of Holders of Holdings Class D Stock.
(a) Classification: Class 12 consists of the Equity Interests of
Holders of Holdings Class D Stock.
(b) Treatment: On or as soon as practicable after the Effective Date,
each Holder of an Allowed Class 12 Equity Interest shall receive, in full and
final satisfaction of such Equity Interest, such Holder's Pro Rata share of
499 shares of Holdings Class E Stock, which shall be converted pursuant to the
Merger Agreement into 499 shares of New Bucyrus Common Stock. In the event
that Class 9 votes to reject the Plan, the Holders of Class 12 Equity
Interests shall receive no distribution nor retain any property on account of
such Equity Interests under the Plan.
(c) Voting: Class 12 is impaired and the Holders of Allowed Class 12
Equity Interests are entitled to vote to accept or reject the Plan. In the
event that Class 9 votes to reject the Plan, Holders of Class 12 Equity
Interests will be deemed to reject the Plan because no distribution will be
made to the Holders of Class 12 Equity Interests nor will such Holders retain
any property on account of such Equity Interests.
3.21. Class 13 Equity Interests of Holders of Holdings Stock Options.
(a) Classification: Class 13 consists of the Equity Interests of
Holders of Holdings Stock Options.
(b) Treatment: The Holders of Class 13 Equity Interests who have
exercised Holdings Stock Options prior to the Effective Date shall be treated
as Holders of Class 11 Equity Interests for purposes of distributions under
the Plan. The Holders of Class 13 Equity Interests who have not exercised
Holdings Stock Options prior to the Effective Date shall receive no
distribution nor retain any property on account of such Equity Interests under
the Plan.
(c) Voting: Class 13 is Impaired and the Holders of Allowed Class 13
Equity Interests are entitled to vote to accept or reject the Plan. In the
event that Class 9 votes to reject the Plan, Holders of Class 13 Equity
Interests will be deemed to reject the Plan because no distribution will be
made to the Holders of Class 13 Equity Interests nor will such Holders retain
any property on account of such Equity Interests.
C. Rights of Debtors Concerning Unimpaired Claims.
3.22. Except as otherwise provided in the Plan, including as provided
in Article IX, nothing under the Plan shall affect the Debtors' or the
Reorganized Debtor's rights in respect of any Unimpaired Claims, including,
but not limited to, all rights in respect of legal and equitable defenses to
or setoffs, recoupments or counterclaims against such Unimpaired Claims.
D. Automatic Amendment to Plan Upon Rejection of Plan by Class 9.
3.23. In the event that Class 9 votes to reject the Plan, then (a) the
Plan shall be deemed automatically amended without further action by the
Debtor such that (i) each Holder of an Allowed Class 9 Equity Interest shall
receive, in full and final satisfaction of such Equity Interest, its Pro Rata
share of 80,197 shares of Holdings Class E Stock, which shall be converted
pursuant to the Merger Agreement into 80,197 shares of New Bucyrus Common
Stock, (ii) the Holders of Class 10, 11 and 12 Equity Interests and the
Holders of Class 13 Equity Interests who have exercised Holdings Stock Options
prior to the Effective Date shall receive no distributions nor retain any
property under the Plan on account of such Equity Interests, and the existing
shares of Holdings Series B Preferred Stock, Holdings Class C Stock and
Holdings Class D Stock shall be canceled as provided by Section 5.02(a) of
this Plan, prior to the merger contemplated by Section 5.02(c) of the Plan,
(iii) the Holder of the Class 5 Claim shall receive an additional 71,285
shares of Holdings Class E Stock, which will be converted pursuant to the
Merger Agreement into 71,285 shares of New Bucyrus Common Stock, which shall
be allocated ratably among Holders of Class 4A, 4B, 4C and 4D Claims pursuant
to Sections 3.08, 3.09, 3.10 and 3.11 of the Plan and (iv) each Holder of an
Allowed Class 6 Claim shall receive, in full and final satisfaction of such
Claim, such Holder's Pro Rata share of 89,109 shares of Holdings Class E
Stock, which shall be converted pursuant to the Merger Agreement into such
Holder's Pro Rata share of 89,109 shares of New Bucyrus Common Stock.
ARTICLE IV
ACCEPTANCE OR REJECTION OF THE PLAN
A. Voting Classes.
4.01. Each Holder of an Allowed Class 2A, 2B, 4A, 4B, 4C, 4D, 5 or 6
Claim or an Allowed Class 9, 10, 11, 12 or 13 Equity Interest shall be
entitled to vote to accept or reject the Plan.
B. Acceptance by Impaired Classes.
4.02. An Impaired Class of Claims shall have accepted the Plan if (i)
the Holders (other than any Holder designated under section 1126(e) of the
Bankruptcy Code) of at least two-thirds in amount of the Allowed Claims
actually voting in such Class have voted to accept the Plan and (ii) the
Holders (other than any Holder designated under section 1126(e) of the
Bankruptcy Code) of more than one-half in number of the Allowed Claims
actually voting in such Class have voted to accept the Plan. An Impaired
Class of Equity Interests shall have accepted the Plan if the Holders (other
than any Holder designated under section 1126(e) of the Bankruptcy Code) of at
least two-thirds in amount of the Allowed Equity Interests actually voting in
such Class have voted to accept the Plan.
C. Presumed Acceptance of Plan.
4.03. Classes 1A, 1B, 3A, 3B, 7A and 7B are unimpaired under the Plan,
and therefore are presumed conclusively to have accepted the Plan pursuant to
section 1126(f) of the Bankruptcy Code.
D. Confirmation Without Acceptance by All Impaired Classes.
4.04. The Debtors will request that the Bankruptcy Court confirm the
Plan in accordance with section 1129(b) of the Bankruptcy Code in view of the
deemed rejection of the Plan by Class 8. In the event that Class 4B or Class
9 fails to accept the Plan, the Debtors intend to seek Confirmation of the
Plan under section 1129(b) of the Bankruptcy Code notwithstanding such
rejection. In the event that any of Classes 2A, 2B, 4A, 4C, 4D, 10, 11, 12 or
13 fails to accept the Plan, the Debtors reserve their right (i) to modify the
Plan in accordance with Article XIII.F of the Plan and (ii) to request that
the Bankruptcy Court confirm the Plan in accordance with section 1129(b) of
the Bankruptcy Code notwithstanding such failures.
ARTICLE V
MEANS FOR IMPLEMENTATION OF THE PLAN
A. Continued Corporate Existence and Vesting of Assets in the Reorganized
Debtor.
5.01. Bucyrus shall, as the Reorganized Debtor, continue to exist after
the Effective Date as a separate corporate entity, with all the powers of a
corporation under the laws of the State of Delaware and without prejudice to
any right to alter or terminate such existence (whether by merger or
otherwise) under such applicable state law. Except as otherwise provided in
the Plan, on or after the Effective Date, all property of the Estates, and any
property acquired by the Debtors or the Reorganized Debtor under the Plan,
shall vest in the Reorganized Debtor, free and clear of all Claims, liens,
charges, or other encumbrances and Equity Interests. On and after the
Effective Date, the Reorganized Debtor may operate its business and may use,
acquire or dispose of property and compromise or settle any Claims or Equity
Interests, without supervision or approval by the Bankruptcy Court and free of
any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those
restrictions expressly imposed by the Plan and the Confirmation Order. In
accordance with section 1109(b) of the Bankruptcy Code, nothing in this
Article V shall preclude any party in interest from appearing and being heard
on any issue in the Chapter 11 Cases.
B. Transactions on the Effective Date.
5.02. On the Effective Date, unless otherwise provided, the following
shall occur and shall be deemed to have occurred simultaneously (except as
specified in clauses (a) and (b) below):
(a) prior to the merger described in Section 5.02(c), (i) Holdings'
certificate of incorporation shall be amended to cancel the Holdings Stock and
create and authorize two million shares of Holdings Class E Stock;
(b) prior to the merger described in Section 5.02(c), each Holder of an
Allowed Class 6 Claim (Holdings Senior Debentures), the Holder of an Allowed
Class 5 Claim (Intercompany Claim) and each Holder of an Allowed Equity
Interest, other than the Class 8 Equity Interest, shall be deemed to have
exchanged such Claim or Equity Interest for shares of Holdings Class E Stock,
as provided for in the Plan;
(c) Bucyrus and Holdings shall enter into the Merger Agreement and
pursuant to the Merger Agreement and subject to filing by Bucyrus of a
certificate of merger with the Secretary of State of the State of Delaware,
Holdings shall merge with and into Bucyrus, the separate corporate existence
of Holdings shall cease and the Old Bucyrus Common Stock, the Holdings Class E
Stock shall be canceled and the Holders of Old Bucyrus Common Stock and
Holdings Stock shall surrender such stock certificates to the applicable
Disbursing Agent as set forth in Section 7.12;
(d) the Holdings Stock Options shall be canceled;
(e) the Bucyrus 10% Senior Notes, the Bucyrus Resettable Senior Notes,
the Bucyrus South Street Notes, the Bucyrus Sinking Fund Debentures and the
Holdings Senior Debentures shall be deemed to be canceled and the Holders
thereof shall surrender such Notes and Debentures to the applicable Disbursing
Agent as set forth in Section 7.12;
(f) the Reorganized Debtor shall be deemed to have exercised Bucyrus'
option under the Bucyrus South Street Lease to repurchase all property leased
to Bucyrus thereunder;
(g) the Debt Securities Indentures and the Bucyrus South Street Lease
shall be deemed canceled, terminated and of no further force and effect, as
permitted by section 1123(a)(5)(F) of the Bankruptcy Code, except as provided
in the Plan and the Indenture Trustees shall be released and discharged from
any further duties with respect to their respective Debt Securities
Indentures.
(h) the Reorganized Debtor shall issue the number of shares of New
Bucyrus Common Stock which shall be distributed pursuant to the Plan;
(i) the Reorganized Debtor shall enter into the New Bank One Credit
Agreement and the New South Street Credit Agreement; and
(j) the Reorganized Debtor shall enter into the New Bucyrus Registration
Rights Agreement.
C. Corporate Governance, Directors and Officers and Corporate Action.
5.03. Merger Agreement and Amended Certificate of Incorporation. On
the Effective Date, pursuant to the Merger Agreement the Reorganized Debtor
will file a certificate of merger, which will have attached thereto the
Amended Certificate of Incorporation, with the Secretary of State of the State
of Delaware in accordance with sections 103, 251 and 303 of the Delaware
General Corporation Law. The Amended Certificate of Incorporation will, among
other things, prohibit the issuance of nonvoting equity securities to the
extent required by section 1123(a)(6) of the Bankruptcy Code, and create and
authorize 20,000,000 shares of New Bucyrus Common Stock. After the Effective
Date, the Reorganized Debtor may amend and restate its Amended Certificate of
Incorporation and other constituent documents as permitted by the Delaware
General Corporation Law.
5.04. Directors and Officers of the Reorganized Debtor.
(a) Subject to any requirement of Bankruptcy Court approval pursuant to
section 1129(a)(5) of the Bankruptcy Code, as of the Effective Date, the
initial officers of the Reorganized Debtor shall be the officers of Bucyrus
immediately prior to the Effective Date. Each such officer shall serve from
and after the Effective Date pursuant to the terms of the Amended Certificate
of Incorporation, the Amended By-Laws and the Delaware General Corporation
Law.
(b) The board of directors of the Reorganized Debtor shall consist of a
single class of directors. The initial board of directors of the Reorganized
Debtor shall consist of seven directors who shall be selected as follows: one
of the directors serving on the initial Board of Directors following the
Effective Date will be an officer of Bucyrus nominated by the Board of
Directors of Bucyrus; two of the directors serving on the initial board of
directors following the Effective Date will be persons who will be nominated
by the Creditors Committee; two of the directors serving on the initial board
of directors following the Effective Date will be persons who will be
nominated by the Holder of the Allowed Class 4B Claim; and the remaining two
directors serving on the initial board of directors following the Effective
Date will be persons who will be nominated jointly by the Creditors Committee
and the Holder of the Allowed Class 4B Claim. Each such director shall serve
from and after the Effective Date until the Reorganized Debtor's 1997 annual
meeting of stockholders, and otherwise pursuant to the terms of the Amended
Certificate of Incorporation, the Amended By-Laws and the Delaware General
Corporation Law. The first annual meeting of stockholders of the Reorganized
Debtor following the Effective Date will be held in 1995 following completion
of the Reorganized Debtor's 1994 fiscal year.
5.05. Corporate Action. The adoption of the Amended Certificate of
Incorporation and the Amended By-Laws, the selection of directors and officers
for the Reorganized Debtor, the distribution of Cash, issuance and
distribution of New Bucyrus Common Stock and the adoption, execution and
implementation of employment, retirement and indemnification agreements,
incentive compensation programs, retirement income plans, welfare benefit
plans and other employee plans and related agreements; and the other matters
provided for under the Plan involving the corporate action to be taken by or
required of the Reorganized Debtor shall be deemed to have occurred and be
effective as provided herein, and shall be authorized and approved in all
respects without any requirement of further action by stockholders or
directors of the Debtors or the Reorganized Debtor.
D. Professional Fee Claims.
5.06. Unless a different time is set by Final Order of the Bankruptcy
Court, all applications for allowance of Administrative Claims under section
503(b)(3) of the Bankruptcy Code, and all applications for awards or allowance
of Professional Fee Claims, shall be Filed not later than sixty (60) days
after the Confirmation Date or be forever barred. Objections to such
applications shall be Filed not later than ninety (90) days after the
Confirmation Date.
E. Sources of Cash for Plan Distribution.
5.07. All Cash necessary for the Reorganized Debtor to make payments
pursuant to the Plan shall be obtained from existing Cash balances, the
operations of the Debtors or the Reorganized Debtor, or post-confirmation
borrowings under the New Bank One Credit Agreement. The Reorganized Debtor
may also make such payments using Cash received from advances or dividends
from the subsidiaries of the Reorganized Debtor in the ordinary course.
ARTICLE VI
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES
A. Assumption of Executory Contracts and Unexpired Leases.
6.01. Immediately prior to the Effective Date, all executory contracts
or unexpired leases of the Debtors will be deemed assumed in accordance with
the provisions and requirements of section 365 and 1123 of the Bankruptcy Code
except those executory contracts and unexpired leases that (i) have been
rejected by order of the Bankruptcy Court, (ii) are the subject of a motion to
reject pending on the Effective Date, (iii) are identified on a list to be
Filed on or before the Confirmation Date as to be rejected, or (iv) are
rejected pursuant to the terms of the Plan. Entry of the Confirmation Order
by the Bankruptcy Court shall constitute approval of such assumptions and
rejections pursuant to sections 365(a) and 1123 of the Bankruptcy Code.
B. Claims Based on Rejection of Executory Contracts or Unexpired Leases.
6.02. All proofs of claims with respect to Claims arising from the
rejection of executory contracts or unexpired leases, if any, must be Filed
within sixty (60) days after the date of entry of an order of the Bankruptcy
Court approving such rejection. Any Claims not Filed within such times will
be forever barred from assertion against the Debtors or Reorganized Debtor,
their Estates and property. Unless otherwise ordered by the Bankruptcy Court
or provided in this Plan, all such Claims for which proofs of claim are
required to be Filed will be, and will be treated as, General Unsecured Claims
subject to the provisions of Article VII hereof.
C. Cure of Defaults for Executory Contracts and Unexpired Leases Assumed.
6.03. Any monetary amounts by which each executory contract and
unexpired lease to be assumed pursuant to the Plan is in default shall be
satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code by payment of
the default amount in Cash on the Effective Date or on such other terms as the
parties to such executory contracts or unexpired leases may otherwise agree.
In the event of a dispute regarding: (i) the amount of any cure payments, (ii)
the ability of the Reorganized Debtor or any assignee to provide "adequate
assurance of future performance" (within the meaning of section 365 of the
Bankruptcy Code) under the contract or lease to be assumed or (iii) any other
matter pertaining to assumption or the cure payments required by section
365(b)(1) of the Bankruptcy Code shall be made following the entry of a Final
Order resolving the dispute and approving the assumption.
D. Indemnification of Directors, Officers and Employees.
6.04. The obligations of the Debtors to indemnify any person serving at
any time on or prior to the Effective Date as one of its directors, officers
or employees by reason of such person's service in such capacity, or as a
director, officer or employee of any other corporation or legal entity, to the
extent provided in a Debtor's constituent documents or by a written agreement
with the Debtor or the Delaware General Corporation Law are classified as
Class 7A (with respect to obligations of Holdings) and Class 7B (with respect
to obligations of Bucyrus) Claims to the extent they arise prior to the
Petition Date, and are Administrative Claims to the extent they arise on or
after the Petition Date. The legal, equitable and contractual rights to which
such directors, officers or employees are entitled by reason of the Debtor's
indemnification obligations shall be unaltered and unimpaired within the
meaning of section 1124(1) of the Bankruptcy Code. Such indemnification
obligations shall survive unaffected by entry of the Confirmation Order,
irrespective of whether such indemnification is owed for an act or event
occurring before or after the Petition Date.
E. Compensation and Benefit Programs.
6.05. Except as otherwise expressly provided hereunder, all employment
and severance policies, and all compensation and benefit plans, policies, and
programs of the Debtors applicable to their employees and retirees and the
employees and retirees of their subsidiaries, including, without limitation,
all savings plans, retirement plans, consultant service agreements and
consultant optional payment agreements entered into between Bucyrus and
certain of its retired employees or directors, health care plans, disability
plans, severance benefit plans, incentive plans, and life, accidental death,
and dismemberment insurance plans are treated as executory contracts under the
Plan and on the Effective Date will be assumed pursuant to the provisions of
sections 365 and 1123 of the Bankruptcy Code.
ARTICLE VII
PROVISIONS GOVERNING DISTRIBUTIONS
A. Distributions for Claims Allowed as of the Effective Date.
7.01. Except as otherwise provided in this Article VII or as may be
ordered by the Bankruptcy Court, distributions to be made on the Effective
Date on account of Claims or Equity Interests that are Allowed as of the
Effective Date and are entitled to receive distributions under the Plan shall
be made on the Effective Date. Distributions to Holders of the Impaired Debt
Securities and Holdings Stock shall be deemed made on the Effective Date if
made on the Effective Date or as promptly thereafter as practicable, but in
any event no later than thirty (30) calendar days after the Effective Date or
such later date when the applicable conditions of Section 7.07 (regarding
undeliverable distributions) or Section 7.12 (regarding surrender of canceled
instruments and securities) are satisfied. Distributions on account of Claims
or Equity Interests that become Allowed Claims or Allowed Equity Interests
after the Effective Date shall be made pursuant to Section 8.04 below.
7.02. For purposes of determining the accrual of interest or rights in
respect of any other payment from and after the Effective Date, New Bucyrus
Common Stock to be issued shall be deemed issued as of the Effective Date
regardless of the date on which it is actually dated, authenticated or
distributed; provided, however, that the Reorganized Debtor shall withhold any
actual payment until such distribution is made and no interest shall accrue or
otherwise be payable on any such withheld amounts.
B. Distributions by Disbursing Agents.
7.03. General. The Disbursing Agents shall make all distributions
required under the Plan.
7.04. Distributions with Respect to Impaired Debt Securities and
Holdings Stock. Notwithstanding the provisions of Sections 5.02(c) and
5.02(g) regarding the cancellation of Holdings Stock, the Debt Securities
Indentures and the Bucyrus South Street Lease, each of Holdings Stock, the
Debt Securities Indentures and the Bucyrus South Street Lease shall continue
in effect to the extent necessary to allow the Disbursing Agents to receive
and make distributions pursuant to the Plan on account of Allowed Equity
Interests and Allowed Impaired Debt Securities Claims and to maintain the
validity of Indenture Trustee Charging Liens subject, however, to the
provision of Section 7.17.
7.05. Compensation to Indenture Trustees. Each Indenture Trustee
providing services related to distributions as a Disbursing Agent pursuant to
the Plan to Holders of Allowed Impaired Debt Securities Claims in Classes 2A,
2B, 4A, 4B, 4C and 6 shall receive, from the Reorganized Debtor, with such
approval as the Bankruptcy Court may require, reasonable compensation for such
services and reimbursement of reasonable out-of-pocket expenses incurred in
connection with such services. These payments shall be made on terms agreed
to with the Reorganized Debtor, and shall be in addition to any distributions
made to any Indenture Trustee on account of any Allowed Impaired Debt
Securities Claims.
C. Delivery and Distributions and Undeliverable or Unclaimed Distributions.
7.06. Delivery of Distributions in General. Distributions to Holders
of Allowed Claims or Allowed Equity Interests shall be made at the address of
the Holder of such Claim or Equity Interest as indicated on records of the
Debtors. Except as otherwise provided by the Plan or the Bankruptcy Code with
respect to undeliverable distributions, distributions to Holders of Allowed
Impaired Debt Securities Claims in Classes 2A 2B, 4A, 4B, 4C and 6 by
Disbursing Agents shall be made in accordance with the provisions of the
applicable Debt Securities Indenture and the Bucyrus South Street Lease and
distributions will be made to Holders of record as of the Distribution Record
Date.
7.07. Undeliverable Distributions.
(a) Holding of Undeliverable Distributions. If any Allowed Claim or
Equity Interest Holder's distribution is returned to the applicable Disbursing
Agent as undeliverable, no further distributions shall be made to such Holder
unless and until the Disbursing Agent is notified in writing of such Holder's
then-current address. Undeliverable distributions shall remain in the
possession of the applicable Disbursing Agent pursuant to this Article VII
until such time as a distribution becomes deliverable. Upon request of the
Reorganized Debtor, undeliverable cash (including dividends on the New Bucyrus
Common Stock) shall not be entitled to any interest, dividends or other
accruals of any kind.
(b) After Distributions Become Deliverable. Within 20 days after the
end of each calendar quarter following the Effective Date, the applicable
Disbursing Agent shall make all distributions that become deliverable during
the preceding calendar quarter.
(c) Failure to Claim Undeliverable Distributions. Any Holder of an
Allowed Claim that does not assert a Claim or Equity Interest pursuant to the
Plan for an undeliverable distribution within five years after the Effective
Date shall have its Claim for such undeliverable distribution discharged and
shall be forever barred from asserting any such Claim or Equity Interest
against the Reorganized Debtor or its respective property. In such cases, (I)
any Cash held for distribution on account of such Claims or Equity Interests
shall be property of the Reorganized Debtor, free of any restrictions thereon;
and (II) any New Bucyrus Common Stock or New Warrants held for distribution on
account of such Claims or Equity Interests shall be returned by the Disbursing
Agent to the Reorganized Debtor and shall be canceled and of no further force
or effect. Nothing contained in the Plan shall require the Disbursing Agents
to attempt to locate any Holder of an Allowed Claim or an Allowed Equity
Interest.
(d) Compliance with Tax Requirements. In connection with the Plan, to
the extent applicable, each Disbursing Agent shall comply with all tax
withholding and reporting requirements imposed on it by any governmental unit,
and all distributions pursuant to the Plan shall be subject to such
withholding and reporting requirements.
D. Distribution Record Date.
7.08. As of the close of business on the Distribution Record Date, the
respective transfer registers for each of the Impaired Debt Securities in
Classes 2A, 2B, 4A, 4B, 4C and 6 as maintained by the Debtors, the respective
Indenture Trustee or their respective agents, shall be closed and the transfer
of Impaired Debt Securities, or any interest therein, will be prohibited.
Moreover, the Disbursing Agents shall have no obligation to recognize the
transfer of any Impaired Debt Securities in such Classes occurring after the
Distribution Record Date, and shall be entitled for all purposes herein to
recognize and deal only with those Holders of record as of the close of
business on the Distribution Record Date.
E. Timing and Calculation of Amounts to be Distributed.
7.09. On the Effective Date, each Holder of an Allowed Claim or Allowed
Equity Interest against the Debtors shall receive the full amount of the
distributions that the Plan provides for Allowed Claims or Allowed Equity
Interests in the applicable Class. Beginning on the date that is twenty (20)
calendar days after the end of the calendar quarter following the Effective
Date and twenty (20) calendar days after the end of each calendar quarter
thereafter, distributions shall also be made, pursuant to Section 8.03 below,
to Holders of Disputed Claims or Disputed Equity Interests in any such Class
whose Claims or Equity Interests were Allowed during the preceding calendar
quarter. Such quarterly distributions shall also be in the full amount that
the Plan provides for Allowed Claims or Allowed Equity Interests in the
applicable Class.
F. Distribution and Fractional Securities.
7.10. Notwithstanding any other provisions of the Plan, only whole
numbers of shares of New Bucyrus Common Stock shall be issued. When any
distribution on account of an Allowed Claim or Allowed Equity Interest would
otherwise result in the issuance of a number of shares of New Bucyrus Common
Stock that is not a whole number, the Disbursing Agents shall aggregate and
sell all fractional shares of New Bucyrus Common Stock otherwise distributable
in accordance with the Plan at then prevailing prices and distribute the net
proceeds to Holders of Claims or Interests otherwise entitled thereto.
G. Setoffs.
7.11. The Reorganized Debtor may, pursuant to section 553 of the
Bankruptcy Code or other applicable law, set off against any Allowed Claim and
the distributions to be made pursuant to the Plan on account of such Claim,
other than any distributions to the Holder of the Allowed Class 4B Claim
pursuant to Section 3.09(b)(y), the claims, rights and Causes of Action of any
nature that the Debtors or Reorganized Debtor may hold against the Holder of
such Allowed Claim; provided, however, that neither the failure to effect such
a setoff nor the allowance of any Claim hereunder shall constitute a waiver or
release by the Debtors or Reorganized Debtor of any such claims, rights and
Causes of Action that the Debtors or Reorganized Debtor may possess against
such Holder.
H. Surrender of Canceled Instruments or Securities.
7.12. As a condition precedent to receiving any distribution pursuant
to the Plan on account of any Allowed Claim or Allowed Equity Interest
evidenced by the instruments, securities, stock certificates or other
documentation canceled pursuant to Article V above, the Holder of such Claim
or Equity Interest shall tender the applicable instruments, securities, stock
certificates or other documentation evidencing such Claim or Equity Interest
to the applicable Disbursing Agent. Any New Bucyrus Common Stock to be
distributed pursuant to the Plan on account of any such Claim or Equity
Interest shall, pending such surrender, be treated as an undeliverable
distribution pursuant to Section 7.07.
I. Impaired Debt Securities.
7.13. Each Holder of an Allowed Claim evidenced by an Impaired Debt
Security shall tender such notes or debentures to the applicable Disbursing
Agent in accordance with written instructions to be provided to such Holders
by the applicable Disbursing Agent as promptly as practicable following the
Effective Date. Such instructions shall specify that delivery of such notes
or debentures will be effected, and risk of loss and title thereto will pass,
only upon the proper delivery of such notes or debentures with a letter of
transmittal in accordance with such instructions. All surrendered Impaired
Debt Securities shall be marked as canceled and delivered by the Disbursing
Agent to the Reorganized Debtor.
J. Holdings Stock Certificates.
7.14. Each Holder of an Allowed Equity Interest evidenced by a stock
certificate shall tender such stock certificate to the applicable Disbursing
agent in accordance with written instructions to be provided to such Holders
by the applicable Disbursing Agent as promptly as practicable following the
Effective Date. Such instructions shall specify that delivery of such stock
certificates will be effected, and risk of loss and title thereto will pass,
only upon the proper delivery of such stock certificates with a letter of
transmittal in accordance with such instructions. All surrendered stock
certificates shall be marked as canceled and delivered by the Disbursing Agent
to the Reorganized Debtor.
K. Failure to Surrender Canceled Impaired Debt Securities or Canceled
Holdings Stock Certificates.
7.15. Any Holder of Impaired Debt Securities or Holdings Stock
certificates that fails to surrender or is deemed to have failed to surrender
the applicable notes, debentures or stock certificates required to be tendered
hereunder within five (5) years after the Effective Date shall have its Claim
or Equity Interest for a distribution pursuant to the Plan on account of such
Impaired Debt Securities or Holdings Stock discharged and shall be forever
barred from asserting any such Claim against the Reorganized Debtor or its
property. In such cases, any Cash, New Bucyrus Common Stock or New Warrants
held for distribution on account of such Claim or Equity Interest shall be
disposed of pursuant to Section 7.07(c).
L. Lost, Stolen, Mutilated or Destroyed Impaired Debt Securities or Stock
Certificates.
7.16. In addition to any requirements under the applicable Debt
Securities Indenture, any Holder of a Claim evidenced by an Impaired Debt
Security that has been lost, stolen, mutilated or destroyed shall, in lieu of
surrendering such Impaired Debt Security, deliver to the Disbursing Agent: (a)
evidence satisfactory to the Disbursing Agent of the loss, theft, mutilation
or destruction; and (b) such security or indemnity as may be required by the
Disbursing Agent to hold the Disbursing Agent harmless from any damages,
liabilities or costs incurred in treating such individual as a Holder of an
Impaired Debt Security. Upon compliance with this Section 7.16 by a Holder of
a Claim evidenced by an Impaired Debt Security, such Holder shall, for all
purposes under the Plan, be deemed to have surrendered an Impaired Debt
Security.
7.17. In addition to any requirements under applicable law, any Holder
of Holdings Stock evidenced by a stock certificate that has been lost, stolen,
mutilated or destroyed must, in lieu of surrendering such stock certificate,
deliver to the Disbursing Agent: (a) evidence satisfactory to the Disbursing
Agent of the loss, theft, mutilation or destruction; and (b) such security or
indemnity as may be required by the Disbursing Agent to hold the Disbursing
Agent harmless from any damages, liabilities or costs incurred in treating
such individual as a Holder of a stock certificate evidencing Holdings Stock.
Upon compliance with these requirements, a Holder of Holdings Stock evidenced
by a stock certificate will, for all purposes under the Plan, be deemed to
have surrendered a stock certificate.
M. Cancellation of Existing Indentures and Bucyrus South Street Lease.
7.18. The cancellation of the Debt Securities Indentures under Section
5.02(g) shall not impair the rights of Holders of Impaired Debt Securities to
receive distributions on account of such Claims under the Plan, nor shall such
cancellation impair the rights of the Indenture Trustees to enforce their
Indenture Trustee Charging Liens, if any, under the Debt Securities Indentures
and the Bucyrus South Street Lease. The Impaired Debt Securities shall not be
canceled other than under Section 5.02(g) of the Plan.
N. Release of Indenture Trustee Charging Liens.
7.19. On or as soon as practicable after the Effective Date, in full
satisfaction of the Allowed Claims secured by Indenture Trustee Charging Liens
in Classes 2A, 2B, 4A, 4B, 4C and 6, the respective Indenture Trustee shall
receive Cash in an amount equal to the amount of such Claims, and any
Indenture Trustee Charging Liens shall be released. Distributions received by
Holders of Allowed Impaired Debt Securities Claims pursuant to the Plan shall
not be reduced on account of such payment of Allowed Claims secured by
Indenture Trustee Charging Liens.
O. Allocation of Distributions to Holders of Allowed Claims.
7.20. All payments made pursuant to the Plan to a Holder of an Allowed
Claim which includes accrued but unpaid interest shall be allocated first to
the principal amount of the Allowed Claim and then to such accrued but unpaid
interest to the extent that the amount of the payments made under the Plan to
such Holder exceed the principal amount of such Claim.
ARTICLE VIII
PROCEDURES FOR RESOLVING DISPUTED CLAIMS
A. Prosecution of Objections to Claims.
8.01. Except as provided by Section 8.02, (a) after the Confirmation
Date, only the Debtors and the Reorganized Debtor shall have the authority to
File objections, settle, compromise, withdraw or litigate to judgment
objections to Claims or Equity Interests, and (b) the Debtors and the
Reorganized Debtor may settle or compromise any Disputed Claim or Equity
Interest without approval of the Bankruptcy Court.
8.02. If the Holder of the Allowed Class 4B Claim votes to accept the
Plan on or prior to the Voting Receipt Date and executes and delivers the
undertaking described in Section 9.06 of the Plan, after the Confirmation
Date, (a) the Holder of the Allowed Class 4B Claim shall have the exclusive
right and authority as a representative of the Debtors' Estates to file
objections, request estimation of, settle, compromise, withdraw or litigate to
judgment objections to Claims or Equity Interests of Non-Released Persons, and
to consent to the allowance of such Claims or Equity Interests, (b) the Holder
of the Allowed Class 4B Claim may settle or compromise any Disputed Claim or
Equity Interest of a Non-Released Person without approval of the Bankruptcy
Court, and (c) Confirmation will constitute appointment of the Holder of the
Allowed Class 4B Claim as the representative of the Debtors' Estates for the
purposes described in clauses (a) and (b) pursuant to section 1123(b)(3)(B) of
the Bankruptcy Code.
B. Estimation of Claims.
8.03. Except as provided by Section 8.02, the Debtors or the
Reorganized Debtor may, at any time, request that the Bankruptcy Court
estimate any contingent or unliquidated Claim pursuant to section 502(c) of
the Bankruptcy Code regardless of whether the Debtors or the Reorganized
Debtor has previously objected to such Claim or whether the Bankruptcy Court
has ruled on any such objection, and the Bankruptcy Court will retain
jurisdiction to estimate any Claim at any time during litigation concerning
any objection to any Claim, including during the pendency of any appeal
relating to any such objection. In the event that the Bankruptcy Court
estimated any contingent or unliquidated Claim, that estimated amount will
constitute either the allowed amount of such Claims or a maximum limitation on
such Claim, as determined by the Bankruptcy Court. If the estimated amount
constitutes a maximum limitation on such Claim, the Debtors or the Reorganized
Debtor may elect to pursue any supplemental proceedings to object to any
ultimate payment on such Claim. All of the aforementioned Claims objection,
estimation and resolution procedures are cumulative and not necessarily
exclusive of one another. Claims may be estimated and subsequently
compromised, settled, withdrawn or resolved by any mechanism approved by the
Bankruptcy Court.
C. Payments and Distributions on Disputed Claims.
8.04. Notwithstanding any provision in the Plan to the contrary, no
partial payments and no partial distributions will be made with respect to a
Disputed Claim or Disputed Equity Interest until the resolution of such
disputes by settlement or Final Order. Subject to the provisions of this
Section 8.04, as soon as practicable after a Disputed Claim or Disputed Equity
Interest becomes an Allowed Claim or Allowed Equity Interest, the Holder of
such Allowed Claim or Allowed Equity Interest will receive all payments and
distributions to which such Holder is then entitled under the Plan.
Notwithstanding the foregoing, any Person who holds both an Allowed Claim(s)
or Allowed Equity Interest(s) and a Disputed Claims(s) or Disputed Equity
Interest(s) will receive the appropriate payment or distribution on the
Allowed Claims(s) or Allowed Equity Interest(s), although no payment or
distribution will be made on the Disputed Claim(s) or Disputed Equity
Interest(s) until such dispute is resolved by settlement or Final Order.
ARTICLE IX
RELEASE AND RELATED PROVISIONS
A. Subordination.
9.01. The classification and manner of satisfying all Claims and Equity
Interests and the respective distributions and treatments under the Plan take
into account and/or conform to the relative priority and rights of the Claims
and Equity Interests in each Class in connection with any contractual, legal
and equitable subordination rights relating thereto, whether arising under
general principles of equitable subordination, section 510(b) of the
Bankruptcy Code or otherwise, and any and all such rights are settled,
compromised and released pursuant to the Plan. The Confirmation Order shall
permanently enjoin, effective as of the Effective Date, all Persons and
entities from enforcing or attempting to enforce any such contractual, legal
and equitable subordination rights satisfied, compromised and settled pursuant
to this Section 9.01.
B. Limited Release of Directors, Officers and Employees.
9.02. As of the Effective Date, the Debtors shall be deemed to have
waived and released their present and former directors, officers and employees
from any and all Causes of Action of the Debtors (including claims which the
Debtors or Debtors in Possession otherwise have legal power to assert,
compromise or settle in connection with the Chapter 11 Cases) arising on or
prior to the Effective Date; provided, however, that this provision shall not
operate as a waiver or release of any Cause of Action (i) in respect to any
loan, advance or similar payment by the Debtors to any such person or (ii) in
respect of any contractual obligation owed by such person to the Debtors.
C. Release in Respect of Becor Transactions and Certain Other Matters.
9.03. All payments and distributions received hereunder by Holders of
Allowed Claims against and Allowed Equity Interests in the Debtors or the
Reorganized Debtor shall be final and shall not be subject to avoidance,
disgorgement, reallocation or challenge in respect of all Causes of Action by
reason of, arising from, or in connection with or related in any way to the
Released Matters (as defined below). Except as provided in Sections 9.04 and
9.05, as of the Effective Date, the Debtors and the Reorganized Debtor
(collectively, the "Releasors") shall be deemed, for good and valuable
consideration, to have released and discharged all holders of Allowed Claims
against and all holders of Allowed Equity Interests in the Debtors or the
Reorganized Debtor, and any and all of their respective successors,
predecessors, assignors, assignees, parent, subsidiaries, stockholders,
affiliates, present and former directors, trustees, officers, employees,
agents, attorneys, accountants, investment bankers and financial advisors, and
in the case of a partnership, its present and former partners, and in the case
of individuals, their respective heirs, receivers, conservators,
beneficiaries, executors and administrators (and any other person who, within
the meaning of Rule 12b-2 promulgated under the Securities Exchange Act of
1934, as amended, "controls," is "controlled by" or is under "common control"
with, any of such persons), past or present, (collectively, the "Released
Persons") from any and all Causes of Action (including claims which the
Debtors or Debtors in Possession have legal power to assert, compromise or
settle in connection with the Chapter 11 Cases) any of the Releasors ever had,
now has, hereafter can, shall or may have against any of the Released Persons
by reason of, arising from or in connection with or related in any way to (i)
the Becor Transactions, (ii) the administration, collection or renegotiation
of the Impaired Debt Securities, (iii) the acquisition or disposition by any
Released Person of, or any other action taken or not taken by any Released
Person in connection with, or the status of any Released Person as a holder
of, any indebtedness or equity or debt securities of, the Debtors or the
Reorganized Debtor or (iv) the restructuring of the Claims and Equity
Interests which are the subject of this Plan and the negotiation, formulation
or preparation of the Plan (items (i) through (iv) are collectively referred
to as the "Released Matters").
9.04 The release contained in Section 9.03 shall not apply to or
otherwise release any Cause of Action which a Releasor may have against the
Broad Street Fund, Goldman, the South Street Funds, Greycliff Partners, Ltd.
or any of their respective successors, predecessors, assignors, assignees,
parent, subsidiaries, stockholders, affiliates, present and former directors,
trustees, officers, employees, agents, attorneys, accountants, investment
bankers and financial advisors, and in the case of a partnership, its present
and former partners, and in the case of individuals, their respective heirs,
receivers, conservators, beneficiaries, executors and administrators (and any
other person who, within the meaning of Rule 12b-2 promulgated under the
Securities Exchange Act of 1934, as amended, "controls," is "controlled by" or
is under "common control" with, any of such persons), past or present, in each
case acting in such capacity (collectively, the "Non-Released Persons"), other
than a Cause of Action relating to an Allowed Claim or Equity Interest.
9.05. The release contained in Section 9.03 shall not extend to,
affect, release, modify or discharge any obligation under this Plan or under
any contract, instrument, release, indenture or other agreement entered into
or assumed in connection with this Plan.
D. Preservation of Rights of Action.
9.06. Except as otherwise provided in the Plan or in any contract,
instrument, release, indenture or other agreement entered into in connection
with the Plan, in accordance with section 1123(b) of the Bankruptcy Code, the
Reorganized Debtor shall retain and may enforce any claims, rights and Causes
of Action that the Debtors or the Estates may hold against any entity. If the
Holder of the Allowed Class 4B Claim votes to accept the Plan on or prior to
the Voting Receipt Date, then after the Effective Date such Holder shall have
the exclusive right and authority, in its sole discretion, to do the
following, conditioned upon the execution and delivery by such Holder prior to
the Confirmation Date of an undertaking, in form and substance satisfactory to
the Debtors and the Creditors Committee, indemnifying and holding harmless the
Debtors and the Reorganized Debtor with respect to all claims, losses,
expenses and other liabilities arising from or related to such Holder's
exercise of its exclusive right and authority under Sections 8.02, 9.06 and
9.07:
(a) to exercise as a representative of the Debtors in Possession any
powers of the Debtors in Possession under section 544, 547 and 548 of the
Bankruptcy Code with respect to Non-Released Persons; and
(b) to pursue as a representative of the Debtors' Estates any claims,
rights or Causes of Action of the Debtors or the Debtors in Possession
existing on the Confirmation Date against Non-Released Persons, including
without limitation any Causes of Action against a Non-Released Person arising
from the exercise of the powers of the Debtors in Possession under sections
544, 547 and 548 of the Bankruptcy Code.
The Reorganized Debtor may pursue as appropriate any other retained claims,
rights or Causes of Action (including claims, rights or Causes of Action that
the Holder of the Allowed Class 4B Claim does not have the right to pursue
pursuant to clauses (a) and (b) of this Section 9.06), in accordance with the
best interests of the Reorganized Debtor.
9.07. If the Holder of the Allowed Class 4B Claim votes to accept the
Plan on or prior to the Voting Receipt Date and executes and delivers the
undertaking described in Section 9.06, Confirmation will constitute
appointment of the Holder of the Allowed Class 4B Claim as the representative
of the Debtors' Estates for the purposes described in Section 9.06 pursuant to
section 1123(b)(3)(B) of the Bankruptcy Code.
9.08. From and after the Confirmation Date, neither the Debtors nor the
Reorganized Debtor shall enter into or assume any contract, instrument,
release, indenture or other agreement in connection with the Plan or otherwise
which provides for the indemnification or holding harmless of any Non-Released
Person with respect to an objection to a Claim or Equity Interest or a Cause
of Action that the Holder of the Allowed Class 4B Claim has the exclusive
right and authority to pursue pursuant to Sections 8.02, 9.06 and 9.07.
ARTICLE X
REGISTRATION AND RELATED RIGHTS
10.01. Each recipient of ten percent (10%) or more of the New Bucyrus
Common Stock pursuant to this Plan shall have the benefit of the registration
and related rights set forth in the New Bucyrus Registration Rights Agreement,
subject to the restrictions and limitations set forth therein.
ARTICLE XI
CONDITIONS PRECEDENT TO CONFIRMATION
AND CONSUMMATION OF THE PLAN
A. Conditions Precedent to Confirmation.
11.01. It is a condition to Confirmation that the Bankruptcy Court
shall have entered an order or orders, which may be the Confirmation Order,
approving the Reorganization Documents, authorizing the Debtors and the
Reorganized Debtor to enter into the Reorganization Documents and the
transactions contemplated thereby.
11.02. It is a condition to Confirmation that, at the Debtors' option,
the New South Street Credit Agreement shall provide the Reorganized Debtor
with a term loan credit facility substantially in the amounts and on the terms
and conditions as set forth in the South Street Term Sheet.
B. Conditions Precedent to Consummation.
11.03. It is a condition to Consummation of the Plan that the
Confirmation Order shall have been entered.
C. Waiver of Conditions.
11.04. The Debtors may waive the condition set forth in Section 11.01
in a writing executed by each of them.
ARTICLE XII
RETENTION OF JURISDICTION
12.01. Notwithstanding the entry of the Confirmation Order and the
occurrence of the Effective Date, the Bankruptcy Court shall retain such
jurisdiction over the Chapter 11 Cases after the Effective Date as legally
permissible, including jurisdiction to:
(a) Allow, disallow, determine, liquidate, classify, estimate or
establish the priority of secured or unsecured status of any Claim, including
the resolution of any request for payment of any Administrative Claim and the
resolution of any and all objections to the allowance or priority of Claims;
(b) Grant or deny any applications for allowance of compensation or
reimbursement of expenses authorized pursuant to the Bankruptcy Code or the
Plan, for periods ending on or before the Effective Date;
(c) Resolve any matters related to the assumption, assumption and
assignment or rejection of any executory contract or unexpired lease to which
a Debtor is a party or with respect to which a Debtor may be liable and to
hear, determine and, if necessary, liquidate, any Claims arising therefrom,
including those matters related to the amendment after the Effective Date
pursuant to Article VI above to add any executory contracts or unexpired
leases to the list of executory contracts and unexpired leases to be rejected;
(d) Ensure that distributions to Holders of Allowed Claims and Allowed
Equity Interests are accomplished pursuant to the provisions of the Plan,
including ruling on any motion Filed pursuant to Article VIII;
(e) Decide or resolve any motions, adversary proceedings, contested or
litigated matters and any other matters and grant or deny any applications
involving the Debtors that may be pending on the Effective Date;
(f) Enter such orders as may be necessary or appropriate to implement or
consummate the provisions of the Plan and all contracts, instruments,
releases, indentures and other agreements or documents created in connection
with the Plan or the Disclosure Statement, including to correct any defect,
cure any omission or reconcile any inconsistency, except as provided in
Section 12.01(g) or elsewhere herein;
(g) Resolve any cases, controversies, suits, or disputes that may arise
in connection with the Consummation, interpretation or enforcement of the Plan
or any entity's obligations incurred in connection with the Plan, except that
such retention of jurisdiction shall not apply to any cases, controversies,
suits or disputes that may arise in connection with the Reorganized Debtor's
or any other entity's rights or obligations as the issuer or a Holder,
respectively, of New Bucyrus Common Stock, or any other agreements governing,
instruments evidencing or documents relating to any of the foregoing,
including the interpretation or enforcement of any rights, remedies or
obligations under any of the foregoing;
(h) Issue injunctions, enter and implement other orders or take such
other actions as may be necessary or appropriate to restrain interference by
any entity with Consummation or enforcement of the Plan, except as otherwise
provided herein;
(i) Enter and implement such orders as are necessary or appropriate if
the Confirmation Order is for any reason modified, stayed, reversed, revoked
or vacated;
(j) Determine any other matters that may arise in connection with or
relate to the Plan, the Disclosure Statement, the Confirmation Order or any
contract, instrument, release, indenture or other agreement or document
created in connection with the Plan or the Disclosure Statement, except as
provided in Section 12.01(g) or elsewhere herein; and
(k) Enter a Final Decree.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
A. Dissolution of Committee.
13.01. Upon completion of all distributions contemplated by the Plan,
the Creditors Committee shall dissolve and its members shall be released and
discharged from all rights and duties arising from, or related to, the Chapter
11 Cases.
B. Payment of Statutory Fees.
13.02. All fees payable pursuant to section 1930 of title 28 of the
United States Code, as determined by the Bankruptcy Court at the hearing
pursuant to section 1128 of the Bankruptcy Code, shall be paid on or before
the Effective Date.
C. No Interest.
13.03. Except as expressly stated in the Plan, or as allowed by the
Bankruptcy Court, no interest, penalty or late charge is to be allowed on any
Claim subsequent to the Petition Date.
D. Discharge of Debtors.
13.04. Except as otherwise provided in the Plan or the Confirmation
Order, Confirmation shall (a) operate as a discharge, in accordance with
section 1141(d)(1) of the Bankruptcy Code, effective as of the Effective Date,
of any and all debts (as such term is defined in section 101(12) of the
Bankruptcy Code) or Claims against the Debtors and the Reorganized Debtor that
arose at any time before the Effective Date, including, but not limited to,
all principal and interest, whether accrued before, on, or after the Petition
Date and (b) terminate all rights and interests of Holders of Old Bucyrus
Common Stock, Holdings Stock and Holdings Stock Options. On the Effective
Date, as to every discharged debt and Claim, the Holder of such debt or Claim
shall be permanently precluded from asserting against any of the Debtors, the
Reorganized Debtor, or against any of their respective assets or property, any
other and further Claim based upon any document, instrument or act, omission,
transaction or other activity of any kind or nature that occurred prior to the
Effective Date. Without limiting the generality of the foregoing, upon the
Effective Date, the Debtors and the Reorganized Debtor shall be discharged
from any debt that arose before the Effective Date, and any debt of a kind
specified in sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, to the
full extent permitted by section 1141(d)(1)(A) of the Bankruptcy Code. Except
as otherwise specifically provided herein, nothing in the Plan shall be deemed
to waive, limit or restrict in any way the discharge granted upon Confirmation
under section 1141 of the Bankruptcy Code and effective as of the Effective
Date.
E. Injunction.
13.05. On the Effective Date, all entities who have been, are, or may
be Holders of Allowed Claims or Allowed Equity Interests shall be enjoined
from taking any of the following actions against or affecting the Debtors, the
Reorganized Debtor or their respective Estates and property with respect to
such Allowed Claims or Allowed Equity Interests (other than actions brought to
enforce any rights or obligations under the Plan and appeals, if any, from the
Confirmation Order):
(a) commencing, conducting or continuing in any manner, directly or
indirectly, any suit, action or other proceeding of any kind against the
Debtors, the Reorganized Debtor or their respective Estates and property, or
any direct or indirect successor in interest to any of the Debtors or the
Reorganized Debtor, or any assets or property of such transferee or successor;
(b) enforcing, levying, attaching, collecting or otherwise recovering by
any manner or means whether directly or indirectly any judgment, award, decree
or order against the Debtor, the Reorganized Debtor or their respective
Estates and property, or any direct or indirect successor in interest to any
of the Debtors or the Reorganized Debtor, or any assets or property of such
transferee or successor;
(c) creating, perfecting or otherwise enforcing in any manner, directly
or indirectly, any Lien against the Debtors, the Reorganized Debtors or their
respective Estates and property, or any direct or indirect successor in
interest to any of the Debtors or the Reorganized Debtor, or any assets or
property of such transferee or successor other than as contemplated by the
Plan;
(d) asserting any set-off, right of subrogation or recoupment of any
kind, directly or indirectly against any obligation due the Debtors, the
Reorganized Debtor or their respective Estates and property, or any direct or
indirect successor in interest to any of the Debtors or the Reorganized
Debtor, or any assets or property of such transferee or successor; and
(e) proceeding in any manner in any place whatsoever that does not
conform to or comply with the provisions of the Plan.
13.06. Except as provided herein, as of the Effective Date, all
non-Debtor entities are permanently enjoined from commencing or continuing in
any manner, any action or proceeding, whether directly, derivatively, on
account of or respecting any Claim, debt, right, Cause of Action or liability
released or to be released pursuant to Article IX.
F. Modification of Plan.
13.07. The Debtors reserve the right, in accordance with the Bankruptcy
Code and the Bankruptcy Rules, to amend or modify the Plan prior to the entry
of the Confirmation Order. Without limiting the foregoing sentence, the
Debtors reserve the right to amend the Plan to eliminate any distribution
under the Plan to all Holders of Holdings Stock. After the entry of the
Confirmation Order, the Debtors or the Reorganized Debtor, as the case may be,
may, upon order of the Bankruptcy Court, amend or modify the Plan, in
accordance with section 1127(b) of the Bankruptcy Code, or remedy any defect
or omission or reconcile any inconsistency in the Plan in such manner as may
be necessary to carry out the purpose and intent of the Plan.
G. Revocation of Plan.
13.08. The Debtors reserve the right, at any time prior to the entry of
the Confirmation Order, to revoke or withdraw the Plan. If the Debtors revoke
or withdraw the Plan, it shall be null and void and, in such event, nothing
contained herein shall be deemed to constitute a waiver or release of any
Causes of Action or Claims by or against the Debtors or any other entity or to
prejudice in any manner the rights of either of the Debtors or any entity in
any further proceeding involving a Debtor.
H. Rules of Interpretation.
13.09. For purposes of the Plan: (a) whenever from the context it is
appropriate, each term, whether defined in the singular or the plural, shall
include both the singular and the plural; (b) any reference in the Plan to a
contract, instrument, release, indenture or other agreement or document being
in a particular form or on particular terms and conditions means that such
document shall be substantially in such form or substantially on such terms
and conditions; (c) any reference in the Plan to an existing document or
exhibit Filed, or to be Filed, means such document or exhibit, as it may have
been or may be amended, modified or supplemented; (d) unless otherwise
specified, all references in the Plan to Sections, Articles and Exhibits are
references to Sections, Articles and Exhibits of or to the Plan; (f) captions
and headings to Articles and Sections are inserted for convenience of
reference only and are not intended to be a part of or affect the
interpretation of the Plan; and (g) the rules of construction set forth in
section 102 of the Bankruptcy Code shall apply.
I. Computation of Time.
13.10. In computing any period of time prescribed or allowed by the
Plan, the provisions of Bankruptcy Rule 9006(a) shall apply.
J. Governing Law.
13.11. Except to the extent that the Bankruptcy Code or the Bankruptcy
Rules are applicable, and subject to the provisions of any contract,
instrument, release, indenture or other agreement or documents entered into in
connection with the Plan, the rights and obligations arising under the Plan
shall be governed by, and construed and enforced in accordance with, the laws
of the State of New York, without giving effect to the principles of conflict
of laws thereof.
K. Severability.
13.12. Should the Bankruptcy Court determine, prior to the Confirmation
Date, that any provision of the Plan is illegal on its face or illegal as
applied to any Claim or Equity Interest, such provision shall be unenforceable
either as to all Holders of Claims or Equity Interests or as to the Holder of
such Claim or Equity Interest as to which such provision is unenforceable,
respectively. Such a determination of unenforceability shall in no way limit
or affect the enforceability or operative effect of any other provision of the
Plan.
L. Successors and Assigns.
13.13. 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.
Dated: September 19, 1994
B-E HOLDINGS, INC.
By: \s\ William B. Winter
Title: Chairman and Chief Executive Officer
BUCYRUS-ERIE COMPANY
By: \s\ William B. Winter
Title: Chairman and Chief Executive Officer
MILBANK, TWEED, HADLEY & McCLOY
By: \s\ John G. Gellene
(A Member of the Firm)
1 Chase Manhattan Plaza
New York, New York 10005
(212) 530-5000
Reorganization Counsel for Bucyrus-Erie Company
HOWARD, SOLOCHEK & WEBER S.C.
By: \s\ Albert Solochek
(A Member of the Firm)
324 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
(414) 272-0760
Reorganization Counsel for B-E Holdings, Inc.