Exhibit 99.4
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- ---------------------------------------X In Proceeding for Reorganization under
In re: Chapter 11 of the Bankruptcy Code
NANTUCKET INDUSTRIES, INC., CASE NO. 00 B 10867 (JHG)
Debtor.
- ---------------------------------------X
SECOND AMENDED JOINT PLAN OF REORGANIZATION
Nantucket Industries, Inc., the Debtor herein, (the "Debtor") and
Accutone, Inc. jointly propose the following Plan of Reorganization (the "Plan")
pursuant to Section 1121 of the Bankruptcy Code:
ARTICLE I
DEFINITIONS
For the purposes of this Plan, the following terms shall have the
respective meanings hereinafter set forth:
1.1 ACCUTONE refers to Accutone, Inc., a Pennsylvania corporation, which
will be acquired by the Debtor upon the confirmation of the Plan.
1.2 ALLOWED AMOUNT means (a) the amount of a Claim timely filed with the
Clerk of the Bankruptcy Court or that is listed by the Debtor in its schedules
filed with the Court (as they may be amended or supplemented from time to time
in accordance with Bankruptcy Rule 1009) as undisputed, non-contingent or
liquidated, as to which Claim (i) no objection to the allowance thereof has been
interposed within any period of time fixed by the Bankruptcy Code, the
Bankruptcy Rules or orders of the Court, or (ii) an objection has been
interposed, which objection has been determined by a Final Order to the extent
such objection is determined in favor of a claimant; or (c) the amount of an
Administration Claim (i) as to which Claim no objection has been interposed
within any period of time fixed by the Bankruptcy Code, the Bankruptcy Rules or
orders of the Court, or (ii) as to which Claim an objection has been interposed,
which objection has been determined by a Final Order to the extent such
objection is determined in favor of the claimant, or (iii) with respect to fees
and expenses of Professional Persons, the amount of such fees and expenses as
allowed by a Final Order.
1.3 ALLOWED CLAIM shall mean a Claim in an amount to the extent it has
become an Allowed Amount.
1.4 BANKRUPTCY CODE means the United States Bankruptcy Code, Title 11 of
the United States Code.
1.5 CASH shall mean cash, cash equivalents (including certified checks,
wire transfers and money orders) and other assignable and readily marketable
direct obligations of the United States of America and certificates of deposit
issued by banks.
1.6 CHAPTER 11 CASE means the instant case commenced by a voluntary
petition for relief under Chapter 11 of the United States Bankruptcy Code, 11
U.S.C. ss.1101, et seq., on March 3, 2000 and pending in the United States
Bankruptcy Court for the Southern District of New York.
1.7 CLAIM has the meaning set forth in Section 101(5) of the Bankruptcy
Code.
1.8 CLASS means a category of holders of Claims which are substantially
similar to other Claims in such Class.
1.9 CONFIRMATION DATE means the date of entry of an order of the Court
confirming the Plan in accordance with the Bankruptcy Code.
1.10 COURT means the United States Bankruptcy Court for the Southern
District of New York or any other court having jurisdiction over the instant
Chapter 11 Case.
1.11 DISTRIBUTION DATE shall mean a date upon which the distribution
provided for under the terms of the Plan shall be made, which shall be as soon
as practicable following the Effective Date.
1.12 EFFECTIVE DATE means the date upon which the order confirming the
Plan becomes a Final Order.
1.13 FINAL ORDER means an order of the Court which is no longer appealable
pursuant to the applicable rules of procedure.
1.14 GENERAL UNSECURED CLAIM means a Claim that is unsecured by property
of the Debtor and that is not entitled to priority in distribution pursuant to
Sections 503 or 507 of the Bankruptcy Code.
1.15 PERSON means an individual, corporation, partnership, association, a
joint stock company, a joint venture, an estate, a trust, an unincorporated
organization or a governmental entity or any political subdivision thereof or
any other entity.
1.16 PLAN means this Plan of Reorganization, including such amendments and
corrections as are permitted by the Court pursuant to Section 1127 of the
Bankruptcy Code, or otherwise.
1.17 PROFESSIONAL PERSONS means persons retained or to be compensated
pursuant to Sections 327, 328, 330, and 331 and 503 (b) of the Bankruptcy Code.
1.18 PRO RATA with respect to an allocation among several Persons of an
aggregate amount, denotes an allocation to each such Person of a share of such
aggregate amount equal to the product of (a) such aggregate amount, multiplied
by (b) a fraction of which the numerator is the amount of such person's
respective Claim, and the denominator is the total amount of the Claims of all
Persons to whom Pro Rata shares are to be allocated.
1.19 REQUESTS FOR PAYMENT means a debt asserted against the Debtor for
goods, services or other consideration rendered after the commencement of the
Case and prior to the Effective Date representing the actual and necessary costs
and expenses of administration of the Debtor's estate referenced in Section 503
of the Bankruptcy Code.
1.20 SECURED CLAIM or Allowed Secured Claim means a Claim to the extent
that it is secured by an interest in property of the estate of the Debtor by
means of the voluntary or involuntary conveyance of an interest in property of
the estate such as a mortgage, judgment lien or otherwise.
1.21 SHARES as used in this plan shall mean shares of common stock to be
issued to creditors and current shareholders by the reorganized pursuant to 11
U.S.C. ss.1145 "free harbor" provision and shall be freely tradeable on the
public securities markets to the extent allowed by law.
1.22 SUBSIDIARIES refers to the subsidiaries of the Debtor to wit,
Nantucket Mills, Inc., a Delaware corporation, Nantucket Hosiery, Inc., a
Delaware corporation, Nantucket Hosiery Mills, Inc., a North Carolina
corporation, and Nantucket Management, Inc., a New York, corporation.
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ARTICLE II
DESIGNATION OF CLASSES OF CLAIMS
For the purposes of the Plan, Claims are classified as follows:
2.1 Class 1 shall consist of the Allowed Claims of governmental units the
Claims of which are entitled to priority of distribution under Section 507(a)(8)
of the Bankruptcy Code.
2.2 Class 2 shall consist of NAN Investors, LP, to the extent it is a
holder of an Allowed Secured claim.
2.3 Class 3 shall consist of the holders of Allowed General Unsecured
Claims.
2.4 Class 4 shall consist of the holders of issued and outstanding shares
of preferred stock in the Debtor.
2.5 Class 5 shall consist of the holders of issued and outstanding shares
of common stock in the Debtor.
ARTICLE III
PROVISIONS FOR PAYMENT OF ADMINISTRATIVE DEBT
3.1 Each holder of an Allowed Claim for an Administrative Expense
including, without limitation, trustee's attorneys', accountants' and U.S.
Trustee's fees to the extent awarded by the Bankruptcy Court, shall be paid on
the Effective Date, or upon entry of an order allowing such claim, whichever
shall be later, or as soon as practicable thereafter, in accordance with such
terms as may be agreed upon by the Debtor and the holder of an Administrative
Expense Claim.
3.2 All trade and service debts and obligations, if any, incurred in the
normal course of business by the Debtor during the reorganization Case shall be
paid when due in the ordinary course of business.
3.3 Notwithstanding the foregoing, any agreement for the payment of
Administrative Debt will provide for the payment in full of all outstanding fees
of the United States Trustee pursuant to 28 U.S.C. ss.1930(a)(6), which shall be
paid on the Effective Date of the Plan and the Debtor or any successor thereto
by merger, consolidation or otherwise, on or after the Effective Date, shall be
liable for same, and the reorganized Debtor shall pay such fees until the entry
of a final decree in this Case, or until the Case is converted to another
chapter of the Bankruptcy Code or is dismissed.
ARTICLE IV
TREATMENT OF PRIORITY TAX DEBT
4.1 Holders of Class 1 Allowed Claims of governmental units shall be paid
in full settlement and satisfaction of such claims by payment, on account of
such claims, of deferred cash payments over a period of six years after the
earlier of the date of assessment of such claim or the Effective Date of the
Plan, together with interest at the rate provided for in the United States Tax
Code as of the date of such payments.
ARTICLE V
TREATMENT OF SECURED DEBT
5.1 Holder of the Class 2 Secured Claim shall be permitted to liquidate
the assets of the Debtor serving as collateral for its Allowed Claim in a
commercially reasonable manner and to reduce its Claim thereby. The balance of
its Claim remaining after application of the proceeds of the liquidation of the
collateral, shall be treated as a Class 3 General Unsecured Claim.
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ARTICLE VI
TREATMENT OF IMPAIRED CLASSES OF CLAIMS
6.1 Holders of Class 3 Allowed General Unsecured Claims shall receive, in
full settlement and satisfaction of their respective claims, one (1) Shares per
$5.00 of Allowed General Unsecured Claim.
6.2 Holders of Class 4 issued and outstanding shares of preferred stock in
the Debtor shall receive, in full settlement and satisfaction of their
liquidation preference and all other rights appurtenant to such shares, one (1)
Share per $20.00 of liquidation preference currently held, and the currently
outstanding shares of preferred stock shall be canceled of record.
6.3 Holders of Class 5 issued and outstanding shares of common stock in
the Debtor shall receive, in full settlement and satisfaction of their
respective equity interests, one (1) Share per ten (10) shares of currently
issued stock presently held, and the current outstanding common shares in the
Debtor shall be canceled of record.
ARTICLE VII
MEANS OF EXECUTION OF THE PLAN
7.1 The assets of Accutone, Inc. shall be acquired by the Debtor
consisting of its facilities, contracts, service agreements, accounts
receivable, patent rights, customer lists, etc.
7.2 All currently issued and outstanding shares of stock in the Debtor of
all classes and all warrants, options, and subscriptions pertaining to the
Debtor's equity interests shall be deemed canceled and rendered null and void.
7.3 The reorganized Debtor shall issue 6 million Shares of common stock,
out of the total number of shares authorized by the amended charter, as follows:
a. approximately 714,840 Shares shall be issued to holders of
Allowed Claims and Equity Interests in the Debtor in accordance with the terms
of Article IV above;
b. the balance of approximately 5,285,160 Shares shall be issued to
the current equity interest holders of Accutone, Inc. in consideration of, and
in exchange for, that entity.
7.4 Intentionally left blank.
7.5 The currently issued shares of stock in the Subsidiaries, all of which
are held by the Debtor, shall be deemed canceled, null and void.
7.6 Intentionally left blank.
7.7 Pursuant to the provisions of Section 1145 of the Bankruptcy Code, the
issuance, sale or resale of stock under this Plan is exempt from the securities
laws of the United States and any state or local law requiring the registration
for offer or sale of a security or registration or licensing of an issuer of,
underwriter of, or broker or dealer in a security or issuance, distribution or
transfer of such security.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1 Modification of Plan After confirmation, subject to the approval of
the Court, the Plan may be amended to remedy any defect or omission, or to
reconcile any inconsistencies, in such manner as may be necessary to carry out
the purposes of this Plan and of the Bankruptcy Code, so long as any such
amendment does not materially or adversely affect the interests of creditors.
8.2 Objections to Claims All objections to the allowance of Claims or
interests shall be served and filed no later than 90 days following the
Effective Date. Notwithstanding any other
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provisions of this Plan, disputed claims shall be paid in accordance with the
provisions of the Plan upon their allowance by the Court. A reserve shall be
maintained until final disposition by the Court for any claim to which an
objection has been interposed.
8.3 Untendered Shares Any shares in the Debtor that shall remain
untendered for cancellation and replacement by Shares and Subsidiary Shares
shall be deemed canceled, null and void and shall have no value other than for
replacement and exchange in accordance with the terms of this Plan by a
registered holder thereof through the authorized registration agent of the
reorganized Debtor.
8.4 No assumption of liability Accutone is not a principal of the Debtor
and has no present interest in the Debtor and shall have no liability for any
acts, omissions, Claims, debts or other obligations of the Debtor or any claims
arising out of its agreement to be acquired by the Debtor until the Effective
Date of the Plan and thereafter, only in a manner consistent with this Plan.
ARTICLE IX
REJECTION OF ALL EXECUTORY CONTRACTS
9.1 All executory contracts and leases shall be deemed rejected by the
Debtor pursuant to ss.1123(b)(2) of the Bankruptcy Code, unless specifically
assumed by order of the Court.
ARTICLE X
RETENTION OF JURISDICTION
10.1 The court shall retain jurisdiction of this Case pursuant to Sections
105(a) and 1127 of the Bankruptcy Code for the purposes set forth in said
Section 1127 and for the following purposes:
a) to determine any and all objections to the allowance of Claims and
interests;
b) to determine any and all applications for allowance of compensation by
Professional Persons;
c) to determine any and all applications pending on the Confirmation Date
for the rejection or the assumption and assignment of executory contracts and
the allowance of any Claim resulting therefrom;
d) to determine any and all controversies and disputes arising under, or
in connection with the Plan, and such other matters as may be provided for in
the order of confirmation;
e) to determine any and all applications, adversary proceedings and
litigated matters pending on the Confirmation Date;
f) to correct any defect, cure any omission or reconcile an inconsistency
in the Plan as may be necessary to carry out the purpose and intent of the Plan;
g) to determine such other matters and for such other purposes as may be
provided for in the order of confirmation.
Dated: New York, N.Y.
July 5, 2001
NANTUCKET INDUSTRIES, INC.
KOERNER SILBERBERG & WEINER, LLP The Debtor and Debtor in Possession
Attorney for Debtor and By: s/ John H. Treglia
Debtor in Possession -----------------------------------
s/ Joseph L. Fox JOHN H. TREGLIA, President
- -------------------------------- ACCUTONE, INC.
JOSEPH L. FOX, ESQ. (JF2313) By: s/ John H. Treglia
112 Madison Avenue -----------------------------------
New York, New York 10016 JOHN H. TREGLIA, President
(212) 689-4400
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