Exhibit 2.1
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re )
)
HIGHLANDS INSURANCE GROUP, INC., ) Chapter 11
HIGHLANDS HOLDING COMPANY, INC., )
HIGHLANDS CLAIMS AND SAFETY ) Case No. 02-13196(LK)
SERVICES, INC., ) through 02-13201(LK)
HIGHLANDS SERVICES CORPORATION, )
AMERICAN RELIANCE, INC., ) (Jointly Administered)
NORTHWESTERN NATIONAL HOLDING )
COMPANY, INC., )
)
Debtors. )
- --------------------------------------)
DEBTORS' AMENDED JOINT PLAN OF REORGANIZATION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
Dated: March 17, 2003
Wilmington, Delaware
DUANE MORRIS LLP
Richard W. Riley, Esquire (DE 4052)
William K. Harrington, Esquire (DE 4051)
1100 North Market Street, Suite 1200
Wilmington, Delaware 19801
Telephone: (302) 657-4900
Telefax: (302) 657-4901
rwriley@duanemorris.com
wkharrington@duanemorris.com
Lawrence J. Kotler, Esquire
Christopher J. Redd, Esquire
4200 One Liberty Place
Philadelphia, PA 19103-7396
Telephone: (215) 979-1517
Telecopy: (215) 970-1020
ljkotler@duanemorris.com
cjredd@duanemorris.com
TABLE OF CONTENTS
Page
INTRODUCTION ..................................................................................... 1
Article 1 DEFINITIONS; RULES OF CONSTRUCTION ..................................................... 1
1.1 Defined Terms ........................................................................ 1
1.2 Rules of Construction ................................................................ 9
(a) Generally ...................................................................... 9
(b) Exhibits ....................................................................... 9
(c) Time Periods ................................................................... 9
(d) Miscellaneous Rules ............................................................ 9
Article 2 CLASSIFICATION OF CLAIMS AND INTERESTS ................................................. 10
2.1 General Rules of Classification ...................................................... 10
2.2 Summary .............................................................................. 10
Article 3 TREATMENT OF UNCLASSIFIED CLAIMS ....................................................... 10
3.1 No Classification .................................................................... 10
3.2 Administrative Claims ................................................................ 11
3.3 Priority Tax Claims .................................................................. 11
Article 4 TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS ........................................... 11
4.1 Class 1: Priority Claims ............................................................ 11
4.2 Class 2: Bank Group Claims .......................................................... 11
4.3 Class 2(a): Other Secured Claims .................................................... 11
4.4 Class 3: General Unsecured Claims ................................................... 12
4.5 Class 4: LMI Interest ............................................................... 12
4.6 Class 5: HIGI Interests ............................................................. 12
Article 5 IMPLEMENTATION OF PLAN ................................................................. 13
5.1 The Liquidating Trust ................................................................ 13
(a) Establishment of the Trust ..................................................... 13
(b) Issuance of New HIGI Stock and Transfer of Other Trust Assets .................. 13
(c) Transfer for the Benefit of Trust Holders ...................................... 13
(d) Purpose of the Liquidating Trust ............................................... 13
(e) Valuation of Trust Assets ...................................................... 14
(f) Termination .................................................................... 14
5.2 Liquidating Trustee and Trust Advisory Board ......................................... 14
(a) Appointment .................................................................... 14
(b) Action by Trust Advisory Board ................................................. 14
5.3 Issuance of Liquidating Trust Units and Applicability of Securities Laws ............. 15
(a) Stated Value and Accrued Interest .............................................. 15
(b) Issuance by Book Entry ......................................................... 15
(c) Securities Laws ................................................................ 15
(d) Transfer of Liquidating Trust Units ............................................ 15
i
5.4 Surviving Debtor Entities and Insurance Company Subsidiaries ......................... 16
(a) Corporate Structure ............................................................ 16
(b) Liquidating Trustee as Director ................................................ 16
(c) Regulatory Authority of State Departments of Insurance ......................... 16
5.5 Distribution Provisions .............................................................. 17
(a) Annual Distributions from the Liquidating Trust ................................ 17
(b) Quarterly Distributions from the Liquidating Trust ............................. 17
(c) Distributions from HIGI and HIGI Subsidiaries .................................. 17
(d) Manner of Payment of Distributions ............................................. 17
(e) Distributions on Non-Business Days ............................................. 17
(f) No Distribution Pending Allowance .............................................. 17
(g) No Distribution in Excess of Allowed Amounts ................................... 18
(h) De Minimis Distributions ....................................................... 18
(i) Unclaimed Distributions ........................................................ 18
5.6 Allocation of Tax Items .............................................................. 19
5.7 Setoffs .............................................................................. 19
5.8 Distributions to Holders of Disputed Claims and Interests ............................ 19
(a) Resolution of Disputed Claims .................................................. 19
(b) Distributions when a Disputed Claim or Interest Becomes Allowed or is Disallowed 19
(c) Late Claims .................................................................... 20
(d) Estimation of Claims ........................................................... 20
(e) Procedure ...................................................................... 20
5.9 Intercompany Claims .................................................................. 20
5.10 Expense Reimbursement and Indemnity .................................................. 20
5.11 Claims Payment Success Fees .......................................................... 21
5.12 Exemption from Transfer Tax .......................................................... 21
5.13 Cancellation of the HIGI Interests ................................................... 21
5.14 Cancellation of Agreements ........................................................... 21
5.15 Debtors' Continued Corporate Existence and Vesting of Assets ......................... 21
5.16 Obligations Incurred After the Confirmation Date ..................................... 22
5.17 Remedies Upon Default ................................................................ 22
Article 6 EXECUTORY CONTRACTS .................................................................... 22
6.1 Assumption, Assignment and Rejection ................................................. 22
6.2 Cure of Monetary Defaults ............................................................ 22
6.3 Rejection Damages Bar Date ........................................................... 22
6.4 Contracts and Leases Entered Into After the Petition Date ............................ 23
Article 7 EFFECT OF THE PLAN ON CLAIMS AND INTERESTS ............................................. 23
7.1 Jurisdiction of Court ................................................................ 23
7.2 Binding Effect ....................................................................... 23
7.3 Term of Existing Injunctions or Stays ................................................ 23
7.4 Injunction ........................................................................... 23
7.5 Release of Collateral ................................................................ 24
7.6 Liquidating Trustee's Rights and Causes of Action .................................... 24
7.7 Preservation of Insurance ............................................................ 24
ii
Article 8 ACCEPTANCE OR REJECTION OF THE PLAN .................................................... 24
8.1 Voting Classes ....................................................................... 24
8.2 Acceptance by Impaired Classes ....................................................... 25
8.3 Presumed Acceptance of Plan .......................................................... 25
8.4 Presumed Rejection of Plan ........................................................... 25
8.5 Non-Consensual Confirmation .......................................................... 25
Article 9 CONDITIONS TO CONFIRMATION AND OCCURRENCE OF EFFECTIVE DATE ............................ 25
9.1 Conditions to Confirmation ........................................................... 25
9.2 Conditions to Occurrence of Effective Date ........................................... 25
9.3 Effect of Nonoccurrence of the Conditions to Occurrence of Effective Date ............ 25
Article 10 SEVERABILITY OF AND AMENDMENTS TO THE PLAN ............................................ 26
10.1 Severability of Plan ................................................................. 26
10.2 Amendments ........................................................................... 26
(a) Preconfirmation Amendment ...................................................... 26
(b) Post-confirmation Amendment Not Requiring Resolicitation ....................... 26
(c) Post-confirmation Amendment Requiring Resolicitation ........................... 27
Article 11 ADMINISTRATIVE PROVISIONS ............................................................. 27
11.1 Administrative Bar Date .............................................................. 27
(a) General Provisions ............................................................. 27
(b) Professionals .................................................................. 27
11.2 Retention of Jurisdiction ............................................................ 27
11.3 Payment of Statutory Fees ............................................................ 28
11.4 Effectuating Documents and Further Transactions ...................................... 28
11.5 Limitation of Liability .............................................................. 28
11.6 Releases ............................................................................. 29
(a) Release by Debtors ............................................................. 29
(b) Release by Holders of Claims and Interests ..................................... 29
11.7 Reservation of Rights ................................................................ 29
11.8 Successors and Assigns ............................................................... 29
11.9 Governing Law ........................................................................ 30
11.10 Relation to Disclosure Statement, Confirmation Order and Agreements .................. 31
Schedule 1.1 Surviving Debtor Entities
Schedule 5.15 Officers and Directors
iii
Schedule 6.1 Executory Contracts to be Assumed or Assumed and Assigned
Debtor: Highlands Insurance Group, Inc.
Debtor: American Reliance, Inc.
Debtor: Highlands Claims and Safety, Inc.
EXHIBIT A Liquidating Trust Agreement
EXHIBIT B Success Fee Agreement
iv
INTRODUCTION
Highlands Insurance Group, Inc., Highlands Holding Company, Inc.,
Highlands Claims and Safety Services, Inc., Highlands Services Corporation,
American Reliance, Inc., and Northwestern National Holding Company, Inc.
(collectively, the "Debtors") as debtors and debtors-in-possession in the
above-captioned chapter 11 cases, hereby propose the following joint plan of
reorganization pursuant to section 1121(a) of title 11 of the Bankruptcy Code.
Reference is made to the Disclosure Statement for a discussion of the Debtors'
history, businesses, properties, results of operations, projections for future
recoveries, as well as a summary and analysis of the Plan and other related
matters. The Debtors are the proponents of the Plan within the meaning of
section 1129 of the Bankruptcy Code.
These reorganization cases have been consolidated for procedural purposes
and are being jointly administered pursuant to an order of the United States
Bankruptcy Court for the District of Delaware. This Plan contemplates the
substantive consolidation of the Debtors for purposes of distribution and
voting.
Under section 1125(b) of the Bankruptcy Code, a vote to accept or reject
the Plan cannot be solicited from a holder of a Claim or Interest until such
time as the Disclosure Statement has been approved by the Bankruptcy Court and
distributed to such holders. ALL HOLDERS OF CLAIMS AGAINST AND INTERESTS IN THE
DEBTORS ARE ENCOURAGED TO READ THE PLAN AND THE RELATED DISCLOSURE STATEMENT IN
THEIR ENTIRETY BEFORE VOTING TO ACCEPT OR TO REJECT THE PLAN. SUBJECT TO CERTAIN
RESTRICTIONS AND REQUIREMENTS SET FORTH IN THE PLAN, THE DEBTORS RESERVE THE
RIGHT TO ALTER, AMEND, MODIFY, REVOKE OR WITHDRAW THIS PLAN PRIOR TO ITS
SUBSTANTIAL CONSUMMATION.
ARTICLE 1
DEFINITIONS; RULES OF CONSTRUCTION
1.1 Defined Terms. As used herein, the following terms have the respective
meanings specified below, unless the context otherwise requires (such meanings
to be equally applicable to both the singular and plural and masculine and
feminine forms of the terms defined). Any term used in this Plan but not defined
herein and that is used in the Bankruptcy Code or Bankruptcy Rules shall have
the meaning assigned to that term in the Bankruptcy Code or Bankruptcy Rules.
"Administrative Claim" means any Claim under sections 503(b) and
507(a)(1) of the Bankruptcy Code, including, without limitation: (a) the
actual, necessary costs and expenses incurred by the Debtors after the
Petition Date, and (b) compensation for legal and other services and
reimbursement of expenses awarded pursuant to sections 330(a), 331 or 1103
of the Bankruptcy Code.
"Allowed" means, with respect to a Claim, (i) the extent to which a
Claim is not objected to within the period fixed by the Bankruptcy Code,
the Bankruptcy Rules or orders of the Court and (a) scheduled by the
Debtors pursuant to the Bankruptcy Code and the Bankruptcy Rules in a
liquidated amount and not listed as contingent,
1
unliquidated or disputed, (b) Proof of which is timely Filed under
applicable law with the Court pursuant to the Bankruptcy Code, the
Bankruptcy Rules or any applicable orders of the Court, or (c) Proof of
which is late-Filed and allowed by Final Order after notice and a hearing,
(ii) any Claim which is otherwise allowed by a Final Order, including,
without limitation, the Confirmation Order, or (iii) any Claim Allowed
under this Plan. With respect to an Interest, "Allowed" means (i) the
extent to which the Interest is not objected to within the period fixed by
the Bankruptcy Code, the Bankruptcy Rules or orders of the Court and (a)
identified on the Debtors' lists of equity security holders or other
records, (b) Proof of which is timely Filed under applicable law with the
Court pursuant to the Bankruptcy Code, the Bankruptcy Rules or any
applicable orders of the Court, or (c) Proof of which is late-Filed and
allowed by Final Order after notice and a hearing, or (ii) any Interest
which is otherwise allowed by a Final Order, including, without
limitation, the Confirmation Order.
"Allowed Administrative Claim" means an Administrative Claim to the
extent it is Allowed.
"Allowed Claim" means a Claim to the extent that such Claim is
Allowed, except that, unless otherwise specified herein, in section 506(b)
of the Bankruptcy Code, or by order of the Bankruptcy Court, "Allowed
Claim" shall not include (x) for Prepetition Claims, interest on such
Claim or Claims accruing from or after the Petition Date, (y) punitive or
exemplary damages, or (z) any fine, penalty or forfeiture.
"Allowed Priority Claim" means a Priority Claim to the extent it is
Allowed.
"Annual Distribution" means any Distribution made on an Annual
Distribution Date to holders of Liquidating Trust Units then entitled to
Distributions from the Liquidating Trust, as set forth in the Plan and the
Liquidating Trust Agreement.
"Annual Distribution Date" means the fifth Business Day after the
end of each calendar year from and after the Effective Date upon which a
Distribution can be made.
"Assets" means all assets, rights, Interests and property of the
Debtors of any nature whatsoever, including, without limitation, all Cash,
Causes of Action, and other property of the Estates pursuant to section
541 of the Bankruptcy Code.
"Available Cash" means all Cash of the Liquidating Trust, including
all net Cash proceeds from the liquidation of Trust Assets and Cash income
from all sources, including income on any investments held pursuant to the
Section 5.5. of the Liquidating Trust Agreement, less any Cash required
for the payment of taxes and any other expenses (including unpaid amounts
for Allowed Administrative Claims, Allowed Priority Claims and Allowed
Priority Tax Claims) necessary, or which will become necessary, for the
administration of the Liquidating Trust, as determined in the reasonable
discretion of the Liquidating Trustee and the Trust Advisory Board.
"Bank Group Agent" means JPMorgan Chase Bank, as Administrative
Agent of the Bank Group under the Credit Agreement, and any successor
thereto.
2
"Bank Group" means the Bank Group Agent, each other financial
institution that is a party to the Credit Agreement, and each of their
respective successors and assigns.
"Bank Group Claim" means the Claim of any member of the Bank Group
arising under the Credit Agreement.
"Bank Group Liens" means the Liens on Collateral constituting
Interests in various of the HIGI Subsidiaries which are pledged to the
Bank Group or the Bank group Agent, as the case may be, to secure the Bank
Group Claims.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
amended and codified at title 11 of the United States Code, 11 U.S.C.
Sections 101 et seq.
"Bankruptcy Court" means the United States Bankruptcy Court for the
District of Delaware which has jurisdiction over the Chapter 11 Cases.
"Bankruptcy Rules" means the Federal Rules of Bankruptcy Procedure
and the Official Bankruptcy Forms, as amended, including the Federal Rules
of Civil Procedure, as amended, made applicable through the Federal Rules
of Bankruptcy Procedure, and the Local Rules of the Bankruptcy Court.
"Bar Date" means such date(s) fixed by Final Order(s) of the
Bankruptcy Court by which Proofs of Claim, Proofs of Interest, or requests
for allowance of Administrative Claims must be Filed.
"Business Day" means any day except a Saturday, Sunday, or "legal
holiday" as such term is defined in Bankruptcy Rule 9006(a).
"Cash" means cash and cash equivalents in dollar denominated
currency of the United States of America.
"Cause of Action" means any and all claims, rights and causes of
action belonging to the Debtors or their Estates including, but not
limited to, any and all claims, rights and causes of action described or
identified in the Disclosure Statement or which the Debtors or the Estates
may have against any Person arising under sections 544 through 550 of the
Bankruptcy Code, or any similar provision of state law or any other law,
rule, regulation, decree, order, statute or otherwise.
"Chapter 11 Cases" means case numbers 02-13196(LK) through
02-13201(LK), inclusive, commenced by the Debtors under chapter 11 of the
Bankruptcy Code on the Petition Date in the Bankruptcy Court.
"Claim" means a claim, as such term is defined in section 101(5) of
the Bankruptcy Code, against the Debtors.
"Class" means a group of (i) Claims or Interests as classified in
Article 2 of the Plan, or (ii) Liquidating Trust Units as classified in
Article 2 of the Liquidating Trust Agreement.
3
"Class [ ] Claim" means a Claim in the particular Class of Claims
identified and described in Article 2 and Article 4 of the Plan.
"Class [ ] Trust Unit" means a Liquidating Trust Unit in the
particular Class of Liquidating Trust Units issued to the Class of Claims
identified and described in Article 2 and Article 4 of the Plan.
"Collateral" means any property or interest in property of the
Estates of the Debtors that is subject to an unavoidable Lien to secure
the payment of performance of a Claim.
"Confirmation Date" means the date on which the Clerk of the
Bankruptcy Court enters the Confirmation Order.
"Confirmation Hearing" means the hearing conducted by the Bankruptcy
Court to consider confirmation of the Plan.
"Confirmation Order" means the order, entered by the Clerk of the
Bankruptcy Court, confirming the Plan in accordance with the provisions of
the Bankruptcy Code.
"Court" shall have the same meaning as Bankruptcy Court.
"Credit Agreement" means that certain Credit Agreement, dated as of
April 30, 1997 and amended from time to time, among HIGI, the lenders
signatory thereto and the Bank Group Agent, and any of the documents or
instruments related thereto.
"D&O Insurance" means the officers and directors insurance
maintained by the Debtors which covers the Debtors' present and former
officers and directors.
"Debentures" means the collective reference to each of those certain
debentures due December 31, 2005 issued by HIGI as follows: (i) the 10%
Convertible Subordinated Debentures; (ii) the 12.5% Convertible
Subordinated Debentures; and (iii) the 10% Convertible Subordinated
Debentures, Series 2.
"Debenture Claim" means the Claim of any Person arising under the
Debentures.
"Debtors" shall have the meaning set forth in the Introduction.
"Disallowed" means the extent to which a Disputed Claim is not
Allowed whether by Final Order of the Court, by agreement of the parties,
or otherwise.
"Disclosure Statement" means the written disclosure statement that
relates to the Plan, as amended, supplemented or modified from time to
time, and as approved by the Bankruptcy Court under section 1125 of the
Bankruptcy Code.
"Disclosure Statement Order" means the order of the Court approving
the Disclosure Statement as containing adequate information pursuant to
section 1125 of the Bankruptcy Code.
4
"Disputed" means, with respect to a Claim (i) if no Proof of Claim
has been timely Filed or deemed timely Filed under applicable law or order
of the Court, a Claim that has been listed on a Debtor's Schedules as
disputed, contingent or unliquidated, or (ii) if a Proof of Claim has been
timely Filed or deemed timely Filed under applicable law or order of the
Court, a Proof of Claim as to which an objection has been timely Filed and
not withdrawn, overruled or denied or granted in whole by a Final Order.
With respect to an Interest, "Disputed" means an Interest with respect to
which a Proof has been Filed which is inconsistent with the list of equity
security holders or other records of the Debtors and as to which an
objection has been timely Filed and not withdrawn, overruled or denied or
granted in whole by a Final Order.
"Distribution" means the distribution of Available Cash from the
Liquidating Trust on account of Liquidating Trust Units in accordance with
this Plan and the Liquidating Trust Agreement.
"Distribution Address" means the address of the holders of any Claim
as set forth in the Proof of Claim filed by such Person, as such address
may have been updated pursuant to Bankruptcy Rule 2002(g), or if no Proof
of Claim is Filed by such Person, the address set forth in the relevant
Debtor's Schedules or other books and records as the same may be updated
from time to time.
"Distribution Date" means any date on which a Distribution is made,
including, without limitation, any Annual Distribution Date or Quarterly
Distribution Date.
"Effective Date" means a Business Day selected by the Debtors which
is not later than eleven (11) days after the Confirmation Order is entered
by the Bankruptcy Court, or as soon thereafter as practicable.
"Estates" means, as to each Debtor, the estate of such Debtor in its
Chapter 11 Case created by section 541 of the Bankruptcy Code upon the
commencement of such Chapter 11 Case.
"Exhibit" means an exhibit to either the Plan or the Disclosure
Statement.
"File" or "Filed" means filed with the Bankruptcy Court in the
Chapter 11 Cases.
"Final Claims Resolution Date" means the date on which the last
Disputed Claim has been resolved, either by consent, order of the
Bankruptcy Court or otherwise.
"Final Order" means any order as to which the time to appeal,
petition for certiorari, or move for reargument or rehearing has expired
or shall have been waived in writing and as to which no appeal, petition
for certiorari, or other proceedings for reargument or rehearing shall
then be pending, or, in the event that an appeal, writ of certiorari, or
reargument or rehearing thereof has been sought, such order shall have
been affirmed (or certiorari has been denied) by the highest court to
which such order was appealed, or from which reargument or rehearing was
sought, and the time to take any further appeal, petition for certiorari
or motion for reargument or rehearing shall have expired.
5
"General Unsecured Claim" means an any Claim, including any
Debenture Claim, that is not an Administrative Claim, Priority Tax Claim,
Priority Claim, or a Bank Group Claim or other Secured Claim.
"HIGI" means Highlands Insurance Group, Inc., a Delaware
corporation.
"HIGI Interests" means all classes and shares of Interests in HIGI
authorized, issued and held by any Person immediately prior to the
Effective Date, including, without limitation, any and all shares of
preferred stock, common stock, stock held by HIGI as treasury stock, any
outstanding warrants or options for any of the foregoing, and any other
"equity security" of HIGI as defined by section 101(16) of the Bankruptcy
Code, but excluding the LMI Interest.
"HIGI Subsidiaries" means the Insurance Company Subsidiaries and the
Surviving Debtor Entities, other than HIGI.
"Insurance Company Subsidiaries" means each insurance company
affiliated with the Debtors or any of the Surviving Debtor Entities which
is not the subject of any rehabilitation or liquidation order of any court
of competent jurisdiction.
"Intercompany Claim" means any Claims between and among the
Surviving Debtor Entities.
"Interest" means (a) a share in a corporation, whether or not
transferable or denominated "stock," or similar security, (b) a membership
interest in a limited liability company, (c) the interest of a limited
partner in a limited partnership, (d) a warrant, option or right (other
than a right to convert) to purchase, sell or subscribe to a share,
security or interest of a kind specified in subparagraphs (a), (b) or (c)
of this paragraph, or (e) an interest of a general partner in a limited or
general partnership.
"IRC" means the Internal Revenue Code of 1986, as amended.
"IRS" means the Internal Revenue Service.
"Lien" means any charge against or interest in property to secure
payment of a debt or performance of an obligation.
"Liquidating Trust" means the liquidating trust to be created on the
Effective Date, in accordance with Article V of the Plan and the
Liquidating Trust Agreement.
"Liquidating Trust Agreement" means the agreement, substantially in
the form annexed hereto as Exhibit A, to be dated as of the Effective
Date, which establishes and describes the Liquidating Trust.
"Liquidating Trust Unit" means an undivided, but classified,
beneficial interest in the Liquidating Trust evidenced by the Liquidating
Trust Agreement.
6
"Liquidating Trustee" means the Person appointed in accordance with
the Liquidating Trust Agreement to administer the Liquidating Trust. "LMI
Interest" means the shares of Series One Preferred Stock of HIGI issued to
LMI Insurance Company with a stated liquidation value of $1,000 per share.
"LMI Interest" means the shares of Series One Preferred Stock of
HIGI issued to LMI Insurance Company with a stated liquidation value of
$1,000 per share.
"New HIGI Stock" means one hundred (100) shares of newly authorized
common stock of HIGI, $0.01 par value, to be issued to the Liquidating
Trust pursuant to Article V of the Plan.
"Other Secured Claims" means all Secured Claims, other than the Bank
Group Claims, against any of the Debtors held by any Person.
"Paying Agent" means the Bank Group Agent with respect to the Bank
Group Claims and any other agent (other than the Liquidating Trustee)
contractually authorized and/or obligated to make Distributions to holders
of Claims.
"Person" means an individual, corporation, general partnership,
limited partnership, limited liability company, limited liability
partnership, association, joint venture, trust, estate, unincorporated
organization, or a government or any agency or political subdivision
thereof.
"Petition Date" means October 31, 2002, the date upon which the
chapter 11 petitions of each of the Debtors were filed.
"Plan" means this joint chapter 11 plan of reorganization,
including, without limitation, the Exhibits and schedules hereto, as such
may be altered, amended, or otherwise modified from time to time.
"Prepetition Claim" means any Claim arising on or prior to the
Petition Date.
"Priority Claim" means any Claim entitled to priority pursuant to
section 507(a) of the Bankruptcy Code, other than (a) an Administrative
Claim or (b) a Priority Tax Claim.
"Priority Tax Claim" means any Claim entitled to priority pursuant
to section 507(a)(8) of the Bankruptcy Code.
"Professionals" means the attorneys, accountants and other
professionals whose retention has been approved by the Court in these
Chapter 11 Cases.
"Proof" or "Proof of" means, as the context requires, either a proof
of claim or a proof of interest filed in accordance with the Bankruptcy
Code, Bankruptcy Rules and any Final Order setting a Bar Date in the
Chapter 11 Cases.
"Quarterly Distribution" means any Distribution made on a Quarterly
Distribution Date to holders of Liquidating Trust Units then entitled to
Distributions from the Liquidating Trust, as set forth in the Plan and the
Liquidating Trust Agreement.
7
"Quarterly Distribution Date" means the fifth Business Day after the
end of each calendar quarter (i.e., March 31, June 30, September 30 and
December 31 for each calendar year) from and after the Effective Date upon
which Quarterly Distributions can be made.
"Ratable" or "Ratable Share" means a number (expressed as a
percentage) equal to the proportion that an Allowed Claim bears to the
aggregate amount or number of Allowed Claims in such Class as of the date
of determination.
"Reinstated" means leaving unaltered the legal, equitable and
contractual rights to which a Claim entitles the holder of such Claim, in
accordance with section 1124 of the Bankruptcy Code.
"Schedules" means the schedules of assets and liabilities and the
statement of financial affairs, as each may be amended from time to time,
Filed by the Debtors as required by section 521 of the Bankruptcy Code and
the Bankruptcy Rules.
"Secured Claim" means a Claim secured by a Lien on any Asset or
right of setoff, which Lien or right of setoff, as the case may be, is
valid, perfected and enforceable under applicable law and is not subject
to avoidance under the Bankruptcy Code or applicable nonbankruptcy law,
but only to the extent of the value, pursuant to section 506(a) of the
Bankruptcy Code, of any interest of the holder of the Claim in property of
the Estate(s) securing such Claim.
"State Departments of Insurance" means the collective reference to
any Department of Insurance, Office of the Commissioner of Insurance, or
any other regulatory board or authority authorized by State statute and
having jurisdiction over the businesses, operations, and activities of the
Insurance Company Subsidiaries on or after the Petition Date.
"Success Fee Agreement" means that certain agreement made and
entered into by the Liquidating Trust substantially in the form annexed
hereto as Exhibit B, which provides for the payment of various fees upon
and after the payment of Distributions to Trust Holders in certain
predetermined amounts.
"Surviving Debtor Entities" means each Debtor and any non-debtor
affiliate of the Debtors (other than the Insurance Company Subsidiaries)
whose corporate existence continues at any time after the Effective Date,
including without limitation those entities listed on Schedule 1.1 hereto.
"Treasury Regulations" means those regulations promulgated pursuant
to the IRC.
"Trust Advisory Board" means the board designated as such and
composed of the Liquidating Trustee and a maximum of four (4) other
individual persons designated by the Trust Holders from time to time as
set forth in the Liquidating Trust Agreement.
8
"Trust Assets" means (i) the New HIGI Stock issued to the
Liquidating Trust on the Effective Date, and (ii) all right, title and
interest of the Debtors in any Assets existing on or as of the Effective
Date, but excluding any Interests in the HIGI Subsidiaries.
"Trust Holders" is as defined in Section 5.1(a).
"Trust Holders of Record" means Trust Holders of record as set forth
in the register maintained by the Liquidating Trustee and shall not mean
any beneficial owner not recorded on such official registry.
"Unclaimed Distribution" means any Distribution, other than
Distributions to holders of Bank Group Claims, which have not been
claimed, including funds for any check (i) mailed to a Distribution
Address and returned as undeliverable without a proper forwarding address,
(ii) not mailed or delivered because no Distribution Address to mail or
deliver such Distribution was available, or (iii) delivered but not cashed
or deposited.
"U.S. Trustee Fees" means all fees and charges assessed against the
Estates by the United States Trustee and due pursuant to section 1930 of
title 28 of the United States Code.
1.2 Rules of Construction.
(a) Generally. For purposes of this Plan, (a) any reference in the
Plan to an existing document, schedule or Exhibit Filed or to be Filed means
such document, schedule or Exhibit as it may have been or may be amended,
modified or supplemented; (b) unless otherwise specified, all references in the
Plan to Sections, Articles, schedules and Exhibits are references to Sections,
Articles, schedules and Exhibits of or to the Plan; and (c) the rules of
construction set forth in section 102 of the Bankruptcy Code and the Bankruptcy
Rules shall apply unless superseded herein or in the Confirmation Order.
(b) Exhibits. All schedules and Exhibits are incorporated into and
are a part of this Plan as if set forth in full herein. Copies of schedules and
Exhibits, after being Filed, can be obtained upon written request to Duane
Morris LLP, 4200 One Liberty Place, Philadelphia, Pennsylvania, 19103 (Attn:
Christopher J. Redd, Esq.), counsel to the Debtors.
(c) Time Periods. In computing any period of time prescribed or
allowed by this Plan, the provisions of Bankruptcy Rule 9006(a) shall apply.
(d) Miscellaneous Rules. (i) The words "herein," "hereof,"
"hereunder," and other words of similar import refer to this Plan as a whole,
not to any particular Section, subsection, or clause, unless the context
requires otherwise; (ii) whenever it appears appropriate from the context, each
term stated in the singular or the plural includes the singular and the plural,
and each pronoun stated in the masculine, feminine or neuter includes the
masculine, feminine and the neuter; and (iii) captions and headings to Articles
and Sections of the Plan are inserted for convenience or reference only and are
not intended to be a part or to affect the interpretation of the Plan.
9
ARTICLE 2
CLASSIFICATION OF CLAIMS AND INTERESTS
2.1 General Rules of Classification. The categories of Claims and
Interests listed in Section 2.2 below classify Claims and Interests for all
purposes, including voting on, confirmation of, and Distributions under the Plan
and pursuant to sections 1122 and 1123(a)(1) of the Bankruptcy Code. A Claim or
Interest is classified in a particular Class only to the extent that the Claim
or Interest falls within the description of that Class, and is classified in a
different Class to the extent that any remainder of such Claim or Interest falls
within the description of such different Class. A Claim is in a particular Class
only to extent that such Claim is an Allowed Claim in that Class and has not
been paid, released, or otherwise settled prior to the Effective Date.
2.2 Summary. Claims, other than Administrative Claims and Priority Tax
Claims, are classified for all purposes, including voting, confirmation, and
distribution, as follows:
CLASS CLAIM STATUS; DISTRIBUTIONS VOTING RIGHTS
----- ----- --------------------- -------------
Class 1 Priority Claims Unimpaired Not Entitled to Vote
Class 2 Bank Group Claims Impaired; Will Receive Entitled to Vote
Class A Trust Units
Class 2(a) Other Secured Claims Unimpaired Not Entitled to Vote
Class 3 General Unsecured Claims Impaired; Will Receive Entitled to Vote
Class B Trust Units
Class 4 LMI Interest Impaired; Will Receive Entitled to Vote
Class C Trust Units
Class 5 HIGI Interests Cancelled; No Distribution Not entitled to Vote
ARTICLE 3
TREATMENT OF UNCLASSIFIED CLAIMS
3.1 No Classification. In accordance with section 1123(a)(1) of the
Bankruptcy Code, Administrative Claims and Priority Tax Claims have not been
classified and thus are excluded from the Classes described in Section 2.2.
10
3.2 Administrative Claims. Subject to the Bar Date provisions in Section
11.1, and except to the extent the Debtors and the holder of an Allowed
Administrative Claim agree to a different treatment, the Liquidating Trustee
shall pay to each holder of an Allowed Administrative Claim an amount equal to
such Allowed Administrative Claim in Cash, on the later of (i) the Effective
Date or (ii) five days after the date on which said Administrative Claim becomes
an Allowed Administrative Claim, or as soon thereafter as is practicable;
provided, however, that Allowed Administrative Claims representing obligations
incurred in the ordinary course of business of the Debtors shall be paid by the
Debtors or the Liquidating Trustee, as the case may be, in accordance with the
terms and conditions of the particular agreements from which such Allowed
Administrative Claims arose.
3.3 Priority Tax Claims. Except to the extent the Debtors and the holder
of an Allowed Priority Tax Claim agree to different treatment, the Liquidating
Trustee shall make deferred Cash payments over a period not exceeding six years
from the date of assessment of such tax as required by section 1129(a)(9)(C) of
the Bankruptcy Code; provided, however, that the Liquidating Trust shall have
the right to pay any Priority Tax Claim, or any remaining balance of such Claim,
in full, at any time on or after the Effective Date, without premium or penalty.
ARTICLE 4
TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS
4.1 Class 1: Priority Claims. Except to the extent the Debtors and the
holder of an Allowed Priority Claim agree to different treatment, the
Liquidating Trustee shall pay to each holder of an Allowed Priority Claim an
amount equal to such Allowed Priority Claim in Cash, on the later of (i) the
Effective Date or (ii) five days after the date on which said Priority Claim
becomes an Allowed Priority Claim, or as soon thereafter as is practicable.
4.2 Class 2: Bank Group Claims. The Bank Group Claims shall be deemed
Allowed Claims as of the Petition Date in the aggregate of all amounts due and
owing under the Credit Agreement on account of principal and accrued but unpaid
interest through the Petition Date. The approximate amount of the Bank Group
Claims (which is subject to verification) is $49,096,586.44. On the Effective
Date, the holders of Bank Group Claims shall each be issued Class A Trust Units
in accordance with the provisions of the Liquidating Trust Agreement in the
amount of their Allowed Claims. The Liquidating Trust Agreement shall provide
that the Bank Group Claims represented by the Class A Trust Units will be paid
in full, with interest, before any Distributions are made to the holders of any
other Claims or Class of Claims or Liquidating Trust Units, except for Allowed
Administrative Claims, Allowed Priority Tax Claims, and Allowed Priority Claims,
if any. Interest on the Bank Group Claims will accrue and be paid, if paid, on
the Allowed amount of such Claims as of the Petition Date and at the applicable
non-default contract rate specified in the Credit Agreement. In addition to the
foregoing, the Bank Group (or the Bank Group Agent, as the case may be) will
retain the Bank Group Liens. The Bank Group Claims are impaired and, thus, each
holder of the Bank Group Claim is entitled to vote to accept or reject the Plan.
4.3 Class 2(a): Other Secured Claims. At the sole option of the Debtors or
the Liquidating Trustee, as the case may be, on the later of (x) the Effective
Date, or (y) for Claims
11
in Class 2(a) that were Disputed Claims and have become Allowed Secured Claims,
as soon thereafter as is practicable, such Allowed Secured Claims shall: (i) be
Reinstated; or (ii) receive the Collateral securing such Allowed Secured Claim;
or (iii) receive Cash in an amount, not to exceed the Allowed amount of such
Claim or equal to the proceeds actually realized from the sale of any Collateral
securing such Claim, less the actual costs and expenses of disposing of such
Collateral; or (iv) receive such other treatment as may be agreed upon by the
Debtors or the Liquidating Trustee, as the case may be, and the holder of an
Allowed Secured Claim. In the event that the Debtors or the Liquidating Trustee
elects, pursuant to option (ii) above, to distribute to the holder of an Allowed
Secured Claim, the Collateral securing such Allowed Secured Claim, the holder of
such Allowed Secured Claim shall bear all expenses relating to the transfer of
possession and rights in the Collateral, including, but not limited to, storage
expenses. Holders of Allowed claims in Class 2(a) are not impaired and, thus,
each such holder is not entitled to vote to accept or reject the Plan in its
capacity as a holder of such Claim.
4.4 Class 3: General Unsecured Claims. On the Effective Date, each holder
of an Allowed General Unsecured Claim in Class 3 shall be issued Class B
Liquidating Trust Units in accordance with the provisions of the Liquidating
Trust Agreement in the amount of each holder's Allowed General Unsecured Claim.
Class 3 Claims shall include the Debenture Claims, which shall be deemed Allowed
Claims as of the Petition Date in the aggregate amount of $71,412,251.59 on
account of principal and accrued, but unpaid, interest through the Petition
Date. The Liquidating Trust Agreement shall provide that Allowed General
Unsecured Claims represented by the Class B Trust Units will be paid in full,
with interest, prior to the payment of any amounts to the holder of the LMI
Interest represented by Class C Trust Units, but only after full payment of the
Bank Group Claims in accordance with Section 4.2 of this Plan and the
Liquidating Trust Agreement. Interest on Allowed General Unsecured Claims will
accrue and be paid, if paid, on the Allowed amount of such Claims as of the
Petition Date and at the applicable non-default rate specified in any valid
contract upon which such Allowed General Unsecured Claim is or was based or, if
no rate is specified or no such contract exists, at the federal judgment rate as
of the Petition Date. Holders of Allowed General Unsecured Claims in Class 3 are
impaired and are entitled to vote to accept or reject the Plan.
4.5 Class 4: LMI Interest. On the Effective Date, the holder of the LMI
Interest shall be issued Class C Liquidating Trust Units in accordance with the
provisions of the Liquidating Trust Agreement in an amount equal to the stated
liquidation value of the LMI Interest. The Liquidating Trust Agreement shall
provide that the LMI Interest represented by the Class C Trust Units will be
paid only after the Bank Group Claims and all Allowed General Unsecured Claims
have been paid in full and proper reserve for any Disputed Claims has been made
in accordance with this Article 4 and the Liquidating Trust Agreement. As of the
Effective Date, all dividends on or relating to the LMI Interest shall cease to
accrue and shall not be issued or paid by the issuance of Liquidating Trust
Units or in any other manner or form. The LMI Interest is impaired and, thus,
the holder of the LMI Interest is entitled to vote to accept or reject the Plan
in its capacity as a holder of such Interest.
4.6 Class 5: HIGI Interests. Holders of HIGI Interests shall receive no
property under the Plan and the HIGI Interests shall be cancelled on and as of
the Effective Date. The holders of the HIGI Interests are impaired and, for
purposes of the Plan, each holder of a HIGI
12
Interest is conclusively presumed to have rejected the Plan and is not entitled
to vote to accept or reject the Plan.
ARTICLE 5
IMPLEMENTATION OF PLAN
5.1 The Liquidating Trust.
(a) Establishment of the Trust. On the Effective Date, the Debtors,
on their own behalf and on behalf of holders of Allowed Claims and Allowed
Interests in Classes 2 through 4 (hereinafter, collectively referred to as the
"Trust Holders") shall execute the Liquidating Trust Agreement and shall take
all other steps necessary to establish the Liquidating Trust. The Liquidating
Trust Agreement shall contain provisions customary to trust agreements utilized
in comparable circumstances, including, but not limited to, any and all
provisions necessary to ensure the treatment of the Liquidating Trust as a
liquidating trust for United States federal income tax purposes.
(b) Issuance of New HIGI Stock and Transfer of Other Trust Assets.
On the Effective Date, the Debtors shall issue the New HIGI Stock and transfer
(as described in Section 5.1(c) below) all of their right, title and interest in
and to all other Trust Assets to the Liquidating Trust, free and clear of any
lien, Claim or Interest in such property of any other Person except for the Bank
Group Liens or as otherwise provided for in this Plan or the Liquidating Trust
Agreement. Title to all Trust Assets shall vest in the Liquidating Trust on the
Effective Date. The Debtors or such other Persons that may have possession or
control of such Trust Assets shall transfer possession or control of such Trust
Assets to the Liquidating Trustee and shall execute documents or instruments
necessary to effectuate such transfers.
(c) Transfer for the Benefit of Trust Holders. The transfer of the
Trust Assets to the Liquidating Trust shall be made for the benefit of the Trust
Holders, whether the Claims of Trust Holders are Allowed on or after the
Effective Date of the Plan. In this regard, the Trust Assets will be transferred
to the Trust Holders to be held by the Debtors on their behalf. Immediately
thereafter, on behalf of the Trust Holders, the Debtors shall transfer the Trust
Assets to the Liquidating Trust in exchange for the Liquidating Trust Units,
which units shall be distributed by the Liquidating Trustee to the Trust Holders
in exchange for their Allowed Claims or Interests in accordance with Article 4
hereof and the Liquidating Trust Agreement. Upon the transfer of the Trust
Assets, the Liquidating Trustee shall succeed to all of the Debtors' right,
title and interest in the Trust Assets and the Debtors will have no further
interest in or with respect to the Trust Assets or the Liquidating Trust. For
all United States federal income tax purposes, all parties (including, without
limitation, the Debtors, the Liquidating Trustee, and the Trust Holders) shall
treat the transfer of Trust Assets to the Liquidating Trust described in Section
1.2 of the Liquidating Trust Agreement and herein (and any subsequent transfers
of Assets) as a transfer to the Trust Holders followed by a transfer by such
Trust Holders to the Liquidating Trust, and the beneficiaries of the Liquidating
Trust shall be treated as the grantors and owners thereof.
(d) Purpose of the Liquidating Trust. The Liquidating Trust shall be
established for the sole purpose of liquidating the Trust Assets, in accordance
with Treasury
13
Regulation section 301.7701-4(d), with no objective to continue or engage in the
conduct of a trade or business, except to the extent reasonably necessary to,
and consistent with, the liquidating purpose of the Liquidating Trust. Subject
to definitive guidance from the IRS, all parties shall treat the Liquidating
Trust as a liquidating trust for United States federal income tax purposes.
(e) Valuation of Trust Assets. From time to time as necessary, the
Liquidating Trustee shall in good faith determine the fair market value of the
Trust Assets and any other Assets transferred to the Liquidating Trust and
thereafter apprise the Trust Advisory Board and the Trust Holders of Record in
writing regarding such valuation. Any such valuation shall be used consistently
by all parties (including, without limitation, the Debtors, the Liquidating
Trustee and the Trust Holders) for all purposes, including United States federal
income tax purposes.
(f) Termination. The Liquidating Trust will terminate on the earlier
of (a) thirty (30) days after the full and final Distribution of the Trust
Assets or proceeds thereof in accordance with the terms of the Liquidating Trust
Agreement and this Plan, and (b) the fifth (5th) anniversary of the Effective
Date; provided, however, that within six months of the fifth (5th) anniversary
of the Effective Date, the Court, upon a motion by the Liquidating Trustee or
any party in interest, may extend the term of the Liquidating Trust for an
additional term of not more than five (5) years if it is necessary for the
liquidation of the Trust Assets. Multiple extensions may be obtained so long as
Court approval is obtained within six months of the beginning of each such
extended term. The Liquidating Trustee shall seek all necessary extensions the
term of the Liquidating Trust in order to fully implement this Plan.
Notwithstanding the foregoing, the Liquidating Trustee shall not unduly prolong
the duration of the Liquidating Trust and shall at all times endeavor to
resolve, settle or otherwise dispose of all property and Claims that constitute
Trust Assets and to effect the full and final Distribution of the Trust Assets
to the Trust Holders in accordance with the terms hereof and the Liquidating
Trust Agreement and thereafter terminate the Liquidating Trust as soon as
practicable.
5.2 Liquidating Trustee and Trust Advisory Board.
(a) Appointment. Stephen L. Kibblehouse shall be appointed as the
Liquidating Trustee and shall hold such position until his removal, resignation
or death. There shall also be appointed a Trust Advisory Board composed of the
Liquidating Trustee and a maximum of four (4) other individual persons
designated by the Trust Holders as set forth in the Liquidating Trust Agreement.
In the event that the Trust Advisory Board is not formed or ceases to exist for
any reason, all references in the Liquidating Trust Agreement to required
approval or other action of such Trust Advisory Board shall be of no force or
effect or shall be deemed to be references to the Liquidating Trustee, as
appropriate.
(b) Action by Trust Advisory Board. The Trust Advisory Board will
direct the actions of Liquidating Trustee in the exercise of the authority
granted to the Liquidating Trustee under the Liquidating Trust Agreement and
this Plan. Unless otherwise specified in the Liquidating Trust Agreement, any
action taken or direction given by the Trust Advisory Board shall be taken or
given by a majority of the members of the Trust Advisory Board. The Liquidating
Trust shall not and shall not be authorized to enter into any agreement or
14
consummate any transaction involving the sale of the stock, assets, operations
or business of any Surviving Debtor Entity or Insurance Company Subsidiary
unless at least eighty percent (80%) of the members then comprising the Trust
Advisory Board have voted in favor of any such sale. The Trust Advisory Board
shall be authorized to adopt by-laws consistent with this Plan and the
Liquidating Trust Agreement to govern its activities.
5.3 Issuance of Liquidating Trust Units and Applicability of Securities
Laws.
(a) Stated Value and Accrued Interest. The stated value of each
Liquidating Trust Unit shall be one dollar. Interest accruing on or with respect
to a Claim or Class of Claims shall accrue on the basis of one Liquidating Trust
Unit for every dollar of interest accrued. Notwithstanding any other provisions
of this Plan, only whole numbers of Liquidating Trust Units shall be issued and
all Claims, and any interest accruing on Claim, shall be rounded to the nearest
dollar.
(b) Issuance by Book Entry. All Liquidating Trust Units shall be
uncertificated and issued to Trust Holders by book entry only in the register
maintained by the Liquidating Trustee. The Liquidating Trustee shall not be
required to send any notice to Trust Holders upon the issuance of the
Liquidating Trust Units or the updating of any book entries on account of
accrued interest on Claims or otherwise. Notwithstanding the foregoing, upon
request made to the Liquidating Trustee in writing by a Trust Holder, the
Liquidating Trustee shall confirm the amount and class of Liquidating Trust
Units then issued in the name of such Trust Holder.
(c) Securities Laws. Under section 1145 of the Bankruptcy Code, the
issuance of Liquidating Trust Units shall be exempt from registration under the
Securities Act of 1933 and applicable state and local laws requiring
registration of securities. The Liquidating Trustee will not attempt to register
the Liquidating Trust Units under any state or federal securities law at any
time, and the Liquidating Trustee, with the advice of counsel, will take such
action (including, without limitation, any action described in Section 5.3(d)
below) as it deems necessary to ensure that the Liquidating Trust will not at
any time be required to comply with the registration and reporting requirements
of the Securities Exchange Act of 1934, as amended, the Investment Company Act
of 1940, as amended or any other state or local law requiring the registration
of securities.
(d) Transfer of Liquidating Trust Units. The Liquidating Trust Units
shall be transferable by the Trust Holders upon and after issuance, however,
neither the Liquidating Trustee nor the Trust Advisory Board will at any time
shall seek to have the Liquidating Trust Units listed on any exchange or on the
over-the-counter market after the Effective Date. The Liquidating Trustee, with
the advice and consent of the Trust Advisory Board, may at any time establish
procedures governing the transfer of Liquidating Trust Units, including, without
limitation, the imposition of fees in such amounts as may be deemed necessary or
appropriate in relation to the costs of maintaining the register of Trust
Holders. Notwithstanding the foregoing, no assignment, pledge, mortgage, sale,
transfer or other disposition (as used in this Section 5.3(d), a "Transfer") of
any Liquidating Trust Units shall be permitted until the proposed transferor has
delivered to the Liquidating Trustee at the proposed transferor's sole expense a
written opinion satisfactory to the Liquidating Trustee from legal counsel
satisfactory to the
15
Liquidating Trustee providing, and the Liquidating Trustee has concluded, that
such Transfer would not (i) result in a violation of, or require registration of
the Liquidating Trust Units under, the Securities Act of 1933, as amended, or
any state securities laws; (ii) result in a violation of, or require the
Liquidating Trust to register as an investment company under, the Investment
Company Act of 1940, as amended; (iii) result in a violation of, or require the
Liquidating Trust to make any filings or obtain approvals or qualifications
under, the Trust Indenture Act of 1939, as amended; (iv) result in a violation
of any other law, rule or regulation by the Liquidating Trust or any Trust
Holder; (v) result in the Liquidating Trust being subjected to any additional
regulatory requirements or restrictions; (vi) cause an "ownership change" within
the meaning of section 382 of the IRC within two years following the Effective
Date; (vii) if the Liquidating Trust is deemed to be a partnership for United
States federal income tax purposes, result in the treatment of the Liquidating
Trust as a "publicly traded partnership" within the meaning of section 7704 of
the IRC and the Treasury Regulations promulgated thereunder; or (viii) result or
potentially result in any adverse tax or other consequences to the Liquidating
Trust, the assets held by it, or the Debtors. Any purported Transfer in
violation of the foregoing will not be registered on the register maintained by
the Liquidating Trustee. The Liquidating Trustee shall provide the proposed
transferor with any and all information necessary to enable such proposed
transferor to provide the opinion required by this Section 5.3(d).
5.4 Surviving Debtor Entities and Insurance Company Subsidiaries.
(a) Corporate Structure. Through the Liquidating Trust's position as
direct or indirect equity owner of each of the Surviving Debtor Entities, the
Liquidating Trustee shall cause the Surviving Debtor Entities to act
consistently with the purposes and provisions of the Liquidating Trust and the
Liquidating Trust Agreement. The Liquidating Trustee may authorize and direct
the merger, consolidation, dissolution of or other restructuring transaction
with respect to any of the Surviving Debtor Entities to the extent deemed
necessary and appropriate by the Liquidating Trustee and Trust Advisory Board.
Through the Liquidating Trust's position as direct or indirect equity owner of
each of the Insurance Company Subsidiaries, the Liquidating Trustee shall cause
the Insurance Company Subsidiaries to act consistently with the purposes and
provisions of the Liquidating Trust and the Liquidating Trust Agreement and, in
addition, any and all supervisory orders, protective orders or other
requirements of the State Departments of Insurance. Subject to any and all
consents, conditions, or requirements of the State Departments of Insurance, the
Liquidating Trustee and Trust Advisory Board may authorize and direct the
merger, consolidation, dissolution of or other restructuring transaction with
respect to any of the Insurance Company Subsidiaries to the extent deemed
necessary and appropriate by the Liquidating Trustee and Trust Advisory Board.
(b) Liquidating Trustee as Director. Subject to the requirements of
other applicable law or the State Departments of Insurance, the Liquidating
Trustee may serve or continue to serve as a member of the board of directors of
any Surviving Debtor Entity or Insurance Company Subsidiary.
(c) Regulatory Authority of State Departments of Insurance. Nothing
in this Plan attempts to limit the authority or ability of the State Departments
of Insurance to regulate the businesses, operations or activities of the
Insurance Company Subsidiaries.
16
5.5 Distribution Provisions.
(a) Annual Distributions from the Liquidating Trust. On each Annual
Distribution Date, the Liquidating Trust shall distribute all Available Cash
from the Liquidating Trust to the Trust Holders (or the relevant Paying Agent,
as the case may be), after making reserve for Disputed Claims as provided for in
Section 5.8(b) below; provided, however, that the Liquidating Trustee shall not
be required to distribute Available Cash on each Annual Distribution Date if the
aggregate Distribution on such date would not exceed $10,000 in value.
(b) Quarterly Distributions from the Liquidating Trust. On each
Quarterly Distribution Date, the Liquidating Trust shall distribute all
Available Cash from the Liquidating Trust to the Trust Holders (or the relevant
Paying Agent, as the case may be), after making reserve for Disputed Claims as
provided for in Section 5.8(b) below; provided, however, that the Liquidating
Trustee shall not be required to distribute Available Cash on each Quarterly
Distribution Date if the aggregate Distribution on such date would not exceed
$300,000 in value.
(c) Distributions from HIGI and HIGI Subsidiaries. In furtherance of
the foregoing, the Liquidating Trustee shall cause HIGI and HIGI shall cause
each other Surviving Debtor Entity and, to the extent permitted by the
applicable State Departments of Insurance, the Liquidating Trustee and each
Surviving Debtor Entity shall cause each Insurance Company Subsidiary to
distribute to the Liquidating Trust on or before each Distribution Date (or such
earlier time as required to be included in the Distribution by the Liquidating
Trust on such Distribution Date) all of the Cash of HIGI and each such HIGI
Subsidiary, less (i) any amounts required or which may be required for the
payment of taxes, (ii) subject to Trust Advisory Board approval, any other
reasonable and necessary expenses of HIGI and each such HIGI Subsidiary, and
(iii) such other amounts as are determined necessary by the Trust Advisory Board
to cover anticipated future expenses of the Liquidating Trust. Notwithstanding
the foregoing, HIGI and the HIGI Subsidiaries need not, and the Liquidating
Trustee shall not direct HIGI or the HIGI Subsidiaries to, distribute Cash in
amounts which fall below certain minimum thresholds established by the Trust
Advisory Board and the Liquidating Trustee from time to time.
(d) Manner of Payment of Distributions. All Distributions to Trust
Holders from the Liquidating Trust shall be made according to the priorities set
forth in Article 4, payable only to Trust Holders of Record and, as to each such
Trust Holder within a Class then entitled to payment, in amounts equal to such
Trust Holders' Ratable Share of the Distribution. All Distributions to Trust
Holders from the Liquidating Trust shall be payable in Cash by wire transfer,
check, or such other method as the Liquidating Trustee deems appropriate under
the circumstances. The Liquidating Trustee shall withhold from the Distribution
of any Trust Holder any amount which the Liquidating Trustee determines to be
required by any federal, state, local or foreign taxing authority, or by any
other law, regulation, rule, ruling, directive or other governmental
requirement.
(e) Distributions on Non-Business Days. Any payment or Distribution
due on a day other than a Business Day shall be made, without interest, on the
next Business Day.
(f) No Distribution Pending Allowance. Notwithstanding any other
provision of this Plan, no Cash or other property shall be distributed, and no
Liquidating Trust Units shall
17
be issued, under this Plan on account of any Disputed Claim or Interest, unless
and until such Claim or Interest becomes an Allowed Claim or Interest.
(g) No Distribution in Excess of Allowed Amounts. Notwithstanding
anything to the contrary contained in this Plan or the Liquidating Trust
Agreement, no holder of an Allowed Claim or Interest shall receive Distributions
of a value which exceed the Allowed amount of such Claim or Interest as of the
Petition Date, plus any accrued interest provided for in this Plan. The
foregoing shall not limit holders of Disputed Claims from receiving accrued
interest as provided in this Plan, if such holders' Disputed Claims become
Allowed. In the event that the Allowed Claims and Interests of all Trust Holders
shall have been paid in full in accordance with this Plan and the Liquidating
Trust Agreement, all excess or subsequent Distributions, and any Unclaimed
Distributions which become excess Distributions, shall be made to the Clerk of
the Bankruptcy Court for distribution to creditors who shall make their claims
upon the Clerk in accordance with Bankruptcy Rule 3011 and section 347(a) of the
Bankruptcy Code (notwithstanding the usual inapplicability of such provisions in
chapter 11 bankruptcy cases). Upon full and final tender of such Distributions
to the Clerk of the Bankruptcy Court, the Liquidating Trustee, the Trust
Advisory Board and each of their respective employees, representatives and
agents shall be fully discharged and released from any claims of any Person to
such Distributions.
(h) De Minimis Distributions. Notwithstanding anything to the
contrary contained in this Plan or the Liquidating Trust Agreement, the
Liquidating Trustee shall not be required to distribute Cash to the holder of an
Allowed Claim or Interest if the amount of Cash to be distributed on account of
such Claim is less than $25. Any holder of an Allowed Claim on account of which
the amount of Cash to be distributed is less than $25 shall have such Claim
discharged and shall be forever barred from asserting any such Claim against the
Debtors, the Liquidating Trust, or their respective property. Any Cash not
distributed pursuant to this provision shall be the property of the Liquidating
Trust, free of any restrictions thereon.
(i) Unclaimed Distributions. Any Unclaimed Distributions, and all
interest, dividends, and other earnings thereon, shall be held and segregated in
sub-accounts of the Liquidating Trust for the benefit of the Trust Holders
entitled thereto under the terms of this Plan and the Liquidating Trust
Agreement. All such Unclaimed Distributions shall be held for a period of one
year following the applicable Distribution Date and during such period shall be
released from the Liquidating Trust and delivered to Trust Holders entitled
thereto only upon presentation of proper proof by such Trust Holders of such
entitlement. At the end of one year following the relevant Distribution Date of
any Unclaimed Distributions, the Trust Holders theretofore entitled to such
Unclaimed Distributions shall cease to be entitled thereto and the Unclaimed
Distributions for each such Trust Holder shall then be distributed on a Ratable
basis to the Trust Holders who have received and have claimed Distributions and
who are otherwise entitled to further Distributions pursuant to the Plan and if
no such Trust Holders then exist, such Unclaimed Distributions shall be
distributed as set forth in Section 5.5(g) above. The Liquidating Trustee shall
pay, or cause to be paid, out of the funds held in any sub-account, all taxes
imposed by any federal, state and local taxing authorities, and any foreign
taxing authorities, on the income generated by the funds held in such
sub-account. The Liquidating Trustee shall also file, or cause to be filed any
tax or information return related to any sub-account. All Cash held in such
sub-accounts shall be invested in accordance with section 5.5 of
18
the Liquidating Trust Agreement and section 345 of the Bankruptcy Code, as
modified by the relevant Orders of the Court for investments made by the Debtors
during the Chapter 11 Cases. The earnings on such investments shall be held in
trust as an addition to the balance of the sub-accounts for the benefit of the
Trust Holders entitled to such Unclaimed Distributions, and shall not constitute
property of the Liquidating Trust.
5.6 Allocation of Tax Items. Unless otherwise required by applicable tax
law, items of income, gain, loss and deduction recognized or incurred by the
Liquidating Trust and the amount of distributions received by the Liquidating
Trust shall be allocated ratably among the Trust Holders who are entitled to
receive Distributions in the tax year in accordance with the priorities set
forth in Article 4 hereof and section 4.4 of the Liquidating Trust Agreement,
provided that where more than one Class of Trust Holders actually receives a
Distribution in a tax year, such items of income, gain, loss and deduction, and
such distributions received by the Liquidating Trust, shall be allocated ratably
based upon the amount of each Distribution made to such Classes of Trust
Holders.
5.7 Setoffs. The Debtors and the Liquidating Trustee, as the case may be,
are authorized, pursuant to section 553 of the Bankruptcy Code, to set off
against any Allowed Claim and the Distributions to be made on account of such
Allowed Claim, the claims, rights and Causes of Action of any nature that the
Debtors or the Liquidating Trustee may at any time 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 shall constitute a waiver or release by
the Debtors or the Liquidating Trustee of any such claims, rights and Causes of
Action that the Debtors or the Liquidating Trustee may at any time possess
against such holder.
5.8 Distributions to Holders of Disputed Claims and Interests.
(a) Resolution of Disputed Claims. No Liquidating Trust Units shall
be issued and no Distribution or payment shall be made on account of a Disputed
Claim or Interest until such Disputed Claim or Interest becomes an Allowed Claim
or Interest. Unless otherwise ordered by the Bankruptcy Court, after the
Effective Date, the Liquidating Trustee, under the direction of the Trust
Advisory Board, shall succeed to the Debtors' right to make and file objections
to Claims and Interests and settle, compromise or otherwise resolve all such
objections previously made or filed by the Debtors. The Debtors or the
Liquidating Trustee, as the case may be, shall file all objections to Claims and
Interests as soon as practicable, but in no event later than (i) ninety (90)
days after the later to occur of the Effective Date or the applicable Bar Date,
or (ii) such other time as may be fixed or extended by the order of the
Bankruptcy Court. All objections to Claims and Interests filed by the Debtors
and the Liquidating Trustee shall be filed and resolved in accordance with all
applicable provisions of the Bankruptcy Code and Bankruptcy Rules and the
Bankruptcy Court will retain jurisdiction to resolve such objections pursuant to
section 502 of the Bankruptcy Code after the Effective Date.
(b) Distributions when a Disputed Claim or Interest Becomes Allowed
or is Disallowed. On each Distribution Date, the Liquidating Trustee shall
reserve and segregate Cash sufficient to pay holders of Disputed Claims and
Interests their Ratable Share, if any, of the Available Cash distributed to
Trust Holders on such Distribution Date. Any such Cash reserved shall be held
and segregated in sub-accounts of the Liquidating Trust for the benefit of
holders of
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Disputed Claims and Interests. In the event a Disputed Claim or Interest is
ultimately Allowed, the holder of such previously Disputed Claim or Interest
shall be issued Liquidating Trust Units in accordance with the treatment of
Classes of Claims or Interests set forth in Article 4, and on the next
succeeding Distribution Date, shall be entitled to such holder's Ratable Share
of any Distributions previously made on account of the Class of Liquidating
Trust Units issued to such holder. Any Cash reserved and held in sub-accounts
for the benefit of a holder of a Disputed Claim or Interest which is
subsequently Disallowed, in whole or in part, shall be distributed as Available
Cash on the next succeeding Distribution Date in accordance with the provisions
of this Plan and the Liquidating Trust Agreement. The Liquidating Trustee shall
pay, or cause to be paid, out of the funds held in any sub-account, all taxes
imposed by any federal, state and local taxing authorities, and any foreign
taxing authorities, on the income generated by the funds held in such
sub-account. The Liquidating Trustee shall also file, or cause to be filed, any
tax or information return related to any sub-account. All Cash held in such
sub-accounts shall be invested in accordance with section 5.5 of the Liquidating
Trust Agreement and section 345 of the Bankruptcy Code, as modified by the
relevant Orders of the Court for investments made by the Debtors during the
Chapter 11 Cases. The earnings on such investments shall be held in trust as an
addition to the balance of the sub-accounts for the benefit of the Trust Holders
entitled to such Distributions, and shall not constitute property of the
Liquidating Trust.
(c) Late Claims. Except as otherwise expressly provided in this
Plan, any Claim which is not deemed filed pursuant to section 1111(a) of the
Bankruptcy Code, or for which a Proof of Claim is not timely filed pursuant to
the Bankruptcy Code, Bankruptcy Rules or any order of the Court setting a Bar
Date, shall not be treated as an Allowed Claim and shall be expunged from the
Claims register in the Chapter 11 Cases without need for any further notice,
motion, objection or order.
(d) Estimation of Claims. The Debtors or the Liquidating Trustee, as
the case may be, may request that the Bankruptcy Court estimate any Claim
subject to estimation under section 502(c) of the Bankruptcy Code and for which
the Debtors may be liable under this Plan, including any Claim for taxes, to the
extent permitted by section 502(c) of the Bankruptcy Code, regardless of whether
any party in interest previously objected to such Claim. The Bankruptcy Court
will retain jurisdiction to estimate any Claim pursuant to section 502(c) of the
Bankruptcy Code at any time during litigation concerning any objection to any
Claim.
(e) Procedure. All of the Claims objection, estimation and
resolution procedures described in this Plan are cumulative and not necessarily
exclusive of one another. Claims may be estimated and subsequently objected to,
compromised, settled, withdrawn or resolved by any mechanism set forth in this
Plan, the Bankruptcy Code, or otherwise approved by the Bankruptcy Court.
5.9 Intercompany Claims. On and as of the Effective Date, the Debtors'
Estates shall be substantively consolidated for purposes of distributions under
the Plan and the Liquidating Trust, and all Intercompany Claims shall be deemed
forever released, waived and discharged.
5.10 Expense Reimbursement and Indemnity. The Liquidating Trustee and each
member of the Trust Advisory Board shall be entitled to receive reimbursement
for actual out-of-pocket expenses reasonably incurred by such persons in the
performance of their duties under the
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Liquidating Trust Agreement and which are not otherwise reimbursed or
reimbursable to such persons from another source. Such Persons shall also be
entitled to indemnification as provided for in the Liquidating Trust Agreement.
5.11 Claims Payment Success Fees. On or after the Effective Date, the
Liquidating Trust shall enter into the Success Fee Agreement with a limited
liability company formed or to be formed by the Liquidating Trustee.
5.12 Exemption from Transfer Tax. Pursuant to section 1146(c) of the
Bankruptcy Code, the issuance and transfer of the Trust Assets to the
Liquidating Trust on or shortly after the Effective Date by the Debtors or the
holders of Allowed Claims shall not be subject to any stamp, real estate
transfer, mortgage, recording or other similar tax.
5.13 Cancellation of the HIGI Interests. As of the Effective Date, the
HIGI Interests shall be cancelled and retired and no consideration will be paid
or delivered with respect thereto. Notwithstanding the foregoing, the holders of
HIGI Interests will not be required to surrender any stock certificate, warrants
or other evidence of such Interests.
5.14 Cancellation of Agreements. On the Effective Date, except as
otherwise provided for herein, the Credit Agreement, the Debentures, and any
other agreement, note, bond, indenture, instrument or document evidencing or
creating a Claim (as used in this Section 5.14, collectively, the "Instruments")
will be deemed cancelled and of no further force or effect with respect to the
Debtors without any further action on the part of the Bankruptcy Court or any
other Person. The holders of such cancelled Instruments will have no Claims
against the Debtors for payment of or on such Instruments except for the rights
provided pursuant to this Plan. Each Instrument that is administered by a Paying
Agent shall continue in effect solely for the purposes of (a) allowing such
Paying Agent to further distribute Distributions to Trust Holders under this
Plan and the Liquidating Trust Agreement, and (b) permitting such Paying Agent
to maintain any rights or liens it may have for fees, costs, expenses and
indemnification under such Instrument (all of which such fees, costs, expenses
and indemnification shall be paid only from the Distributions made to such
Paying Agent under this Plan and the Liquidating Trust Agreement).
5.15 Debtors' Continued Corporate Existence and Vesting of Assets.
Notwithstanding anything to the contrary contained herein, the Liquidating Trust
Agreement or any other agreement or instrument relating thereto, each Debtor
shall continue to exist on and after the Effective Date as a separate entity
with all the powers of a corporation under the laws of its respective state of
incorporation and without prejudice to any right to alter or terminate such
existence (whether by merger or otherwise) under such applicable law.
Notwithstanding the foregoing, to the extent necessary in order to comply with
the Bankruptcy Code, the certificates of incorporation for each Debtor shall be
amended to prohibit the issuance of nonvoting equity securities. Except as
provided herein or in the Liquidating Trust Agreement regarding the transfer to
the Liquidating Trust of the Trust Assets, or any other agreement or instrument
relating thereto, on and after the Effective Date all remaining Assets of the
Debtors (i.e. Interests in subsidiaries) shall vest in each respective Debtor,
free and clear of all Liens, Claims or other encumbrances, except, to the extent
applicable, the Bank Group Liens. Schedule 5.15 sets forth the identity of all
individual persons proposed to serve as officers and directors of the Debtors
after confirmation of the Plan.
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5.16 Obligations Incurred After the Confirmation Date. Payment obligations
incurred after the date and time of entry of the Confirmation Order, including,
without limitation, the Professional fees of the Debtors through the Effective
Date, shall not be subject to application or Proof of Claim and may be paid by
the Debtors or the Liquidating Trust, as the case may be, in the ordinary course
of business and without further Bankruptcy Court approval, as Administrative
Claims.
5.17 Remedies Upon Default. In the event any of the Debtors or the
Liquidating Trustee defaults in any obligation to make any payment or
Distribution, or to do or perform or any other act when required pursuant to
this Plan or the Liquidating Trust Agreement, the aggrieved holder of any
Allowed Claim or Allowed Interest shall have and retain (i) all rights and
remedies available to such holder under any applicable non-bankruptcy law, and
(ii) the right to seek relief with and in the Bankruptcy Court to the full
extent of the Bankruptcy Court's retained jurisdiction in the Chapter 11 Cases.
ARTICLE 6
EXECUTORY CONTRACTS
6.1 Assumption, Assignment and Rejection. As of the Effective Date, all
executory contracts and unexpired leases of each Debtor, including, without
limitation, those executory contracts identified by the Debtors in the
Schedules, shall be deemed rejected by such Debtor pursuant to the provisions of
section 365 of the Bankruptcy Code, except (a) any executory contract or
unexpired lease that has been or is the subject of a motion to reject, assume,
or assume and assign Filed pursuant to section 365 of the Bankruptcy Code by any
of the Debtors before the Effective Date, or (b) any executory contract or
unexpired lease listed in the Schedule attached hereto as Schedule 6.1. Schedule
6.1 lists all contracts that will be assumed or assumed and assigned on and as
of the Effective Date and sets forth, for each contract identified thereon, the
name and address of the counterparty or counterparties to the contract and the
dollar amount of any cure payment that the Debtors will pay to such counterparty
or counterparties on and as of the Effective Date.
6.2 Cure of Monetary Defaults. At the election of the relevant Debtor, any
monetary defaults under each executory contract and unexpired lease to be
assumed under this Plan shall be satisfied pursuant to section 365(b)(1) of the
Bankruptcy Code, in one of the following ways: (a) by payment of the default
amount in Cash on the Effective Date; or (b) on such other terms as agreed to by
the parties to such executory contract or unexpired lease. In the event of a
dispute regarding (i) the amount of any cure payments, (ii) the ability of the
Debtor that is a party thereto to provide adequate assurance of future
performance under the contract or lease to be assumed, or (iii) any other matter
pertaining to assumption, then 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 assumption.
6.3 Rejection Damages Bar Date. If the rejection by any Debtor, pursuant
to the Plan or otherwise, of an executory contract or unexpired lease results in
a Claim, then such Claim shall be forever barred and shall not be enforceable
against such Debtor or the Liquidating Trust or the properties of either of them
unless a Proof of Claim is filed with the clerk of the Bankruptcy Court and
served upon counsel to the Debtors and Liquidating Trustee on or before
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the earlier of (i) thirty (30) days after the date of service of an order of the
Court authorizing such rejection including the Confirmation Order, or (ii) such
other period set by the Court. If and when Allowed, any such rejection damages
Claim for which a Proof is filed pursuant to this Section 6.3 shall be
classified as a General Unsecured Claim and shall be entitled to the treatment
afforded such Claims as set forth in Section 4.4.
6.4 Contracts and Leases Entered Into After the Petition Date. Executory
contracts and unexpired leases entered into and other obligations incurred after
the Petition Date by any Debtor shall be performed by the Liquidating Trust, and
any such executory contracts, unexpired leases and other obligations shall
survive and remain unaffected by entry of the Confirmation Order.
ARTICLE 7
EFFECT OF THE PLAN ON CLAIMS AND INTERESTS
7.1 Jurisdiction of Court. Until the Effective Date, the Court shall
retain jurisdiction over the Debtors and their Estates. Thereafter, jurisdiction
of the Court shall be limited to the subject matters set forth in Section 11.2
of this Plan.
7.2 Binding Effect. Except as otherwise provided in section 1141(d) of the
Bankruptcy Code, on and after the Confirmation Date, the provisions of this Plan
shall bind any holder of a Claim against, or Interest in, the Debtors and their
respective successors and assigns, whether or not the Claim or Interest of such
holder is impaired under this Plan and whether or not such holder has voted to
accept this Plan.
7.3 Term of Existing Injunctions or Stays. Unless otherwise provided
herein, all injunctions or stays provided for in the Chapter 11 Cases pursuant
to sections 105 or 362 of the Bankruptcy Code, or otherwise, and in existence on
the Confirmation Date, shall remain in full force and effect until the later of:
(1) the Final Claims Resolution Date or (2) the Effective Date.
7.4 Injunction. Except as otherwise provided herein or in the Confirmation
Order, the Confirmation Order, when entered, shall constitute an injunction
operative against all holders of debts of, Claims against, or Interests or other
rights of an equity security holder that are terminated pursuant to the terms of
this Plan in each of the Debtors and any holders of Liens on the Assets, which
arose at any time before the entry of the Petition Date. Pursuant to the
Confirmation Order, all such holders of debts, Claims, Interests or other rights
shall be permanently enjoined from taking any of the following actions on
account of such debts, Claims, Interests or other rights: (i) commencing or
continuing in any manner any action or other proceeding against the Debtors, the
Assets, the Liquidating Trust or the Trust Assets; (ii) enforcing, attaching,
collecting or recovering in any manner any judgment, award, decree or order
against the Debtors, the Assets, the Liquidating Trust or the Trust Assets;
(iii) creating, perfecting or enforcing any Lien or encumbrance against the
Debtors, the Assets, the Liquidating Trust or the Trust Assets; (iv) except to
the extent any such rights are expressly preserved by section 553 of the
Bankruptcy Code, asserting a setoff, right of subrogation or recoupment of any
kind against the Debtors, the Assets, the Liquidating Trust or the Trust Assets;
and (v) asserting against the Debtors, the Assets, the Liquidating Trust or the
Trust Assets any other or further debt, Claim, Interest or other right based
upon any document, instrument, act, omission,
23
transaction, or other activity of any kind or nature that existed or occurred
before the Petition Date. The injunction provided for herein shall be effective
against all holders of any debt, Claim, Interest or other right regardless of
whether such holder has filed a Proof of Claim or Interest in respect thereof,
whether the Claim or Interest is at any time becomes an Allowed Claim or
Interest, or whether such holder has voted to accept this Plan.
7.5 Release of Collateral. Except with respect to the Liens of the Bank
Group and/or Bank Group Agent, and unless a particular Secured Claim is
Reinstated or the holder thereof receives the return of its Collateral in
respect of such Claim under this Plan: (i) each holder of a Secured Claim shall
on or immediately before the Effective Date (x) turn over and release to the
Liquidating Trust any and all property that secures or purportedly secures such
Claim; and (y) execute such documents and instruments as the Debtors or the
Liquidating Trust requires to evidence such claimant's release of such property;
and (ii) on the Effective Date, all claims, right, title and interest in such
property shall revert to the Liquidating Trust, free and clear of all Claims and
Interests, including (without limitation) Liens, charges, pledges, encumbrances
and/or security interests of any kind. No Distribution hereunder shall be made
to or on behalf of any holder of such Claim unless and until such holder
executes and delivers to the Liquidating Trust such release of Liens. Any such
holder that fails to execute and deliver such release of Liens within 180 days
of the Effective Date shall be deemed to have no further Claim and shall not
participate in any distribution hereunder. Notwithstanding the immediately
preceding sentence, any holder of a Disputed Claim shall not be required to
execute and deliver such release of Liens until the time such Claim is Allowed
or Disallowed.
7.6 Liquidating Trustee's Rights and Causes of Action. On the Effective
Date, the Liquidating Trust shall be deemed to have taken an assignment of, and
shall thereafter retain and have the right to enforce, any and all present or
future rights, claims or Causes of Action of the Debtors against any Person,
including, without limitation, any rights of the Debtors that arose after the
Petition Date. The Liquidating Trust may pursue, abandon, settle or release any
or all such claims, rights or Causes of Action as it deems appropriate. On and
after the Effective Date, all Persons other than the Liquidating Trustee will be
permanently enjoined from commencing or continuing in any manner any action or
proceeding (whether directly, indirectly, derivatively or otherwise) on account
of any claim, debt, right or Cause of Action that the Liquidating Trust retains
sole and exclusive authority to pursue in accordance with the Liquidating Trust
Agreement.
7.7 Preservation of Insurance. The provisions of this Plan shall not
diminish or impair in any manner the enforceability and coverage of any
insurance policies that may cover Claims against the Debtors or any other Person
including, without limitation, the D&O Insurance.
ARTICLE 8
ACCEPTANCE OR REJECTION OF THE PLAN
8.1 Voting Classes. Each holder of an Allowed Claim in Classes 2, 3, and 4
shall be entitled to vote to accept or reject this Plan.
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8.2 Acceptance by Impaired Classes. An impaired Class of Claims shall be
deemed to have accepted the Plan if (a) the holders (other than any Person
designated under section 1126(e) of the Bankruptcy Code) of at least two-thirds
in dollar amount of the Allowed Claims actually voting in such Class have voted
to accept the Plan, and (b) the holders (other than any Person 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.
8.3 Presumed Acceptance of Plan. Classes 1 and 2(a) are unimpaired under
the Plan and, therefore, are conclusively presumed to have accepted the Plan
pursuant to section 1126(f) of the Bankruptcy Code.
8.4 Presumed Rejection of Plan. Class 5 is impaired and shall receive no
distribution of any property under the Plan and, therefore, is conclusively
presumed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy
Code.
8.5 Non-Consensual Confirmation. Due to the deemed rejection of the Plan
by Class 5, the Debtors will request the Bankruptcy Court to confirm the Plan as
to Class 5 in accordance with the provisions of section 1129(b) of the
Bankruptcy Code. In the event that any impaired Class of Claims shall fail to
accept the Plan in accordance with section 1129(a)(8) of the Bankruptcy Code,
the Debtors reserve the right to request that the Court confirm the Plan as to
such Class in accordance with the provisions of section 1129(b) of the
Bankruptcy Code.
ARTICLE 9
CONDITIONS TO CONFIRMATION
AND OCCURRENCE OF EFFECTIVE DATE
9.1 Conditions to Confirmation. This Plan may not be confirmed unless the
Disclosure Statement Order shall have been entered and shall have become a Final
Order, and the Confirmation Order shall have been entered and is in form and
substance reasonably acceptable to the Debtors.
9.2 Conditions to Occurrence of Effective Date. The Effective Date of this
Plan may not occur unless (i) the Confirmation Order shall have been entered and
shall have become a Final Order, (ii) the Liquidating Trust Agreement and the
Success Fee Agreement, both in form and substance reasonably acceptable to the
Debtors, the Bank Group and the Liquidating Trustee, shall have been approved by
the Court pursuant to a Final Order (which may be the Confirmation Order) and
duly authorized, executed and delivered by the parties thereto, and (iii) all
Administrative Claims of Professionals requesting compensation or reimbursement
of expenses pursuant to sections 327, 328, 330, and 331 of the Bankruptcy Code
for services rendered before the Confirmation Date shall have been paid in
accordance with the provisions of Section 11.1(b).
9.3 Effect of Nonoccurrence of the Conditions to Occurrence of Effective
Date. If each of the conditions to the occurrence of the Effective Date have not
been satisfied or duly waived, with the consent of the Bank Group, on or before
the date which is no later than the first Business Day after ninety (90) days
after the Confirmation Order is entered, or by such later date as is approved by
the Court after notice and a hearing, then, upon motion by any party in
interest,
25
the Confirmation Order may be vacated by the Court; provided, however, that,
notwithstanding the filing of such a motion, the Confirmation Order shall not be
vacated if each of the conditions to occurrence of the Effective Date is either
satisfied or duly waived, with the consent of the Bank Group, before the Court
enters an order granting the relief requested in such motion. If the
Confirmation Order is vacated pursuant to this Section, this Plan shall be null
and void in all respects, and nothing contained herein shall (a) constitute a
waiver or release of any Claims by or against, or Interests in, the Debtors, or
(b) prejudice in any manner the rights of any of the Debtors or of any other
party in interest, including, without limitation, the right to seek an extension
of the exclusivity periods under section 1121(d) of the Bankruptcy Code.
ARTICLE 10
SEVERABILITY OF AND AMENDMENTS TO THE PLAN
10.1 Severability of Plan. The Debtors reserve the right to alter, amend,
modify, revoke or withdraw this Plan as it applies to any particular Debtor. The
Debtors reserve the right to make non-substantive changes in this Plan to the
extent such changes are necessary to facilitate the withdrawal of a Debtor from
the Plan. The revocation or withdrawal by a Debtor shall not affect this Plan as
the plan of reorganization of the other Debtors. If a Debtor revokes or
withdraws from this Plan (a) nothing contained herein shall be deemed to
constitute a waiver or release of any Claims by or against such Debtor, or to
prejudice in any manner the rights of such Debtor or any persons in any further
proceedings involving such Debtor, and (b) any provisions of any Confirmation
Order with respect to such Debtor shall be null and void and all such rights of
or against such Debtor shall exist as though this Plan had not been filed and no
actions taken to effectuate it. A determination by the Bankruptcy Court that
this Plan, as it applies to any particular Debtors, is not confirmable pursuant
to section 1129 of the Bankruptcy Code shall not limit or affect the
confirmability of the Plan as it applies to any other Debtor, or the Debtors'
ability to modify the Plan as it applies to any particular Debtor to satisfy the
confirmation requirements of section 1129 of the Bankruptcy Code. Each provision
of this Plan shall be considered severable and, if for any reason any provision
or provisions herein are determined to be invalid and contrary to any existing
or future law, the balance of this Plan shall be given effect without relation
to the invalid provision.
10.2 Amendments.
(a) Preconfirmation Amendment. The Debtors may, with the consent of
the Bank Group, modify this Plan at any time prior to the entry of the
Confirmation Order provided that this Plan, as modified, and the Disclosure
Statement pertaining thereto meet applicable Bankruptcy Code requirements of
sections 1125 and 1127.
(b) Post-confirmation Amendment Not Requiring Resolicitation. After
the entry of the Confirmation Order, the Debtors may, with the consent of the
Bank Group, modify this Plan to remedy any defect or omission, to clarify the
language of any provision, or to reconcile any inconsistencies in the Plan or in
the Confirmation Order, as may be necessary to carry out the purposes and
effects of the Plan, provided that (i) the Debtors obtain approval of the
Bankruptcy Court for such modification, after notice and a hearing, and (ii)
such modification shall not materially and adversely affect the interests,
rights, treatment, or Distributions of any Class of Claims or Interests under
this Plan
26
(c) Post-confirmation Amendment Requiring Resolicitation. After the
Confirmation Date and before the Effective Date of the Plan, the Debtors may
modify this Plan in a way that materially or adversely affects the interests,
rights, treatment, or Distributions of a Class of Claims or Interests provided
that (i) the Plan, as modified, meets applicable Bankruptcy Code requirements,
(ii) the Debtors obtain Bankruptcy Court approval for such modification, after
notice and a hearing, (iii) such modification is accepted by at least two-thirds
in amount, and more than one-half in number, of Allowed Claims or Interests
voting in each class affected by such modification, and (iv) the Debtors comply
with section 1125 of the Bankruptcy Code with respect to the Plan as modified.
ARTICLE 11
ADMINISTRATIVE PROVISIONS
11.1 Administrative Bar Date.
(a) General Provisions. Except as provided below in Section 11.1(b)
for Administrative Claims of Professionals requesting compensation or
reimbursement of expenses, requests for payment of Administrative Claims must be
Filed no later than 30 days after entry of the Confirmation Order. Holders of
Administrative Claims who do not timely File such requests as set forth above
shall be forever barred from asserting such Claims against the Debtors, the
Liquidating Trust or their respective property.
(b) Professionals. All Professionals or other entities requesting
compensation or reimbursement of expenses pursuant to sections 327, 328, 330,
and 331 of the Bankruptcy Code for services rendered before the Confirmation
Date shall File an application for final allowance of compensation and
reimbursement of expenses no later than 45 days after the Confirmation Date.
Objections to applications of Professionals or other entities for compensation
or reimbursement of expenses must be Filed no later than 75 days after the
Confirmation Date. All compensation and reimbursement of expenses allowed by
order of the Court shall be paid to the applicable Professional immediately
thereafter.
11.2 Retention of Jurisdiction. Notwithstanding confirmation of this Plan
or occurrence of the Effective Date, the Court shall retain jurisdiction for all
purposes permitted under applicable law, including, without limitation, the
following purposes:
(i) the determination of the allowability of Claims upon objection
to such Claims by Debtors or the Liquidating Trustee, as the case may be, and
the validity, extent, priority and nonavoidability of consensual and
nonconsensual Liens and other encumbrances;
(ii) the determination of any tax liability pursuant to section 505
of the Bankruptcy Code;
(iii) the approval, pursuant to section 365 of the Bankruptcy Code,
of all matters related to the assumption, assumption and assignment, or
rejection of any executory contract or unexpired lease of any of the Debtors;
27
(iv) the determination of requests for payment of administrative
expenses entitled to priority under section 507(a)(1) of the Bankruptcy Code,
including the compensation of Professionals under section 330 of the Bankruptcy
Code;
(v) the resolution of controversies and disputes regarding the
interpretation of this Plan;
(vi) the implementation of the provisions of this Plan and entry of
orders in aid of confirmation and consummation, including, without limitation,
appropriate orders to protect the Debtors and their successors from actions by
creditors and/or holders of HIGI Interests or any of them, and resolving
disputes and controversies regarding the Assets, the Liquidating Trust, Trust
Assets, or the powers of the Liquidating Trustee;
(vii) the modification of the Plan pursuant to section 1127 of the
Bankruptcy Code;
(viii) the adjudication of any Causes of Action; and
(ix) the entry of a Final Order closing the Chapter 11 Cases.
11.3 Payment of Statutory Fees. The Debtors or the Liquidating Trust, as
the case may be, shall pay all U.S. Trustee Fees until such time as the Court
enters a final decree closing each of the Chapter 11 Cases.
11.4 Effectuating Documents and Further Transactions. Each Debtor shall
and shall be authorized to execute, deliver, file, or record such documents,
contracts, instruments, releases, and other agreements and take such other
action as may be necessary to effectuate and further evidence the terms and
conditions of the Plan.
11.5 Limitation of Liability. None of the Debtors, the Bank Group, the
Bank Group Agent, the holders of Debentures, or any of their respective current
or former officers, directors, subsidiaries, affiliates, members, managers,
shareholders, partners, representatives, employees, attorneys, advisors and
agents, or any of their respective successors and assigns, or any of their
respective properties, shall have or incur any liability to any holder of a
Claim against or Interest in any of the Debtors for any act taken or omitted to
be taken in connection with, relating to, or arising out of (i) the operations,
administration or liquidation of the Debtors during the Chapter 11 Cases, (ii)
the administration of the Chapter 11 Cases, (iii) the Disclosure Statement, the
formulation thereof or any information provided or statement made therein or
omitted therefrom, (iv) the Plan, or the negotiation, filing, prosecution,
administration, formulation, implementation, confirmation or consummation of the
Plan or the property to be distributed thereunder, including all prepetition
activities in connection therewith, or (v) the formulation, negotiation,
execution or delivery of any contract, instrument, release or other agreement or
document created in connection with or related to the Plan, excepting, however,
any act or omission arising out of the gross negligence or willful misconduct
(as determined in a Final Order by a court of competent jurisdiction) of any
Person to whom this Section applies, provided, nevertheless, that any such
Person shall not be deemed grossly negligent or determined to have engaged in
willful misconduct if such Person reasonably relied upon the advice of counsel.
28
11.6 Releases.
(a) Release by Debtors. Effective on the Confirmation Date, but
subject to the occurrence of the Effective Date, and except as otherwise
provided in the Confirmation Order, for good and valuable consideration,
including, without limitation, the granting of releases pursuant to Section
11.6(b) hereof, the adequacy of which is hereby confirmed, the Debtors shall be
deemed to have forever released, waived and discharged the Bank Group and the
Bank Group Agent from any and all claims, obligations, rights, causes of action,
choses in action, demands, suits proceedings and liabilities, whether for fraud,
tort, contract, violations of applicable securities laws, or otherwise, whether
known or unknown, foreseen or unforeseen, liquidated or unliquidated, contingent
or non-contingent, existing or hereafter arising, in law, equity or otherwise
that are based in whole or in part upon any act, omission, transaction, state of
facts, circumstances or other occurrence or failure of an event to occur, taking
place on or prior to the Effective Date and in any way relating to the Debtors,
the Chapter 11 Cases, or the Plan.
(b) Release by Holders of Claims and Interests. Effective on the
Confirmation Date, but subject to the occurrence of the Effective Date, and
except as otherwise provided in the Confirmation Order, in consideration for the
obligations of such Persons under the Plan and the property to be delivered in
connection with the Plan, each holder of a Claim against or Interest in the
Debtors, shall be deemed to have forever released, waived and discharged each of
the Debtors or any of their respective successors and assigns, or any of their
respective properties, from any and all debts, Claims, Interests, obligations,
rights, causes of action, choses in action, demands, suits, proceedings and
liabilities, whether for fraud, tort, contract, violations of applicable
securities laws, or otherwise, whether known or unknown, foreseen or unforeseen,
liquidated or unliquidated, contingent or non-contingent, existing, or hereafter
arising, in law, equity or otherwise that are based in whole or in part upon any
act, omission, transaction, state of facts, circumstances or other occurrence or
failure of an event to occur, taking place on or prior to the Effective Date and
in any way relating to the Debtors, the Chapter 11 Cases, or the Plan; provided,
however, that nothing herein shall constitute a release or be deemed a release
or compromise of (i) any claims, obligations, rights, causes of action, choses
in action, demands, suits, proceedings against or liabilities of any Person
based upon any act or omission arising out of such Person's actual fraud; (ii)
the rights or Liens granted to the holders of Claims and Interests under the
Plan, or (iii) the claims or rights of any Person under any validly existing
insurance policy issued by, or any reinsurance agreement or other contract with,
any Insurance Company Subsidiary.
11.7 Reservation of Rights. Except as expressly set forth herein, this
Plan shall have no force or effect unless the Court shall enter the Confirmation
Order. Neither the Filing of the Plan, any statement or provision contained in
the Plan or any schedule, Exhibit or agreement attached to the Plan, nor the
taking of any action by the Debtors with respect to the Plan shall be or shall
be deemed to be an admission or waiver of any rights of the Debtors with respect
to the holders of any Claims or Interests prior to the Effective Date.
11.8 Successors and Assigns. The rights, benefits, and obligations of any
Person named or referred to in the Plan shall be binding upon, and shall inure
to the benefit of, the heir, executor, administrator, successor or assign of
such Person.
29
11.9 Governing Law. Except to the extent the Bankruptcy Code, Bankruptcy
Rules, or other federal laws apply and except for Reinstated Secured Claims
governed by another jurisdiction's law, the rights and obligations arising under
this Plan shall be governed by the laws of the State of Delaware, without giving
effect to principles of conflicts of law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
30
11.10 Relation to Disclosure Statement, Confirmation Order and Agreements.
To the extent the Confirmation Order and/or this Plan is inconsistent with the
Disclosure Statement, this Plan controls the Disclosure Statement, and the
Confirmation Order (and any other subsequent order of the Court) controls this
Plan. To the extent any provision of the Liquidating Trust Agreement is found to
be inconsistent with the provisions of this Plan, the provisions of the
Liquidating Trust Agreement shall control. Notwithstanding the preceding
sentence, the Confirmation Order (and any other subsequent order of the Court)
shall control the Liquidating Trust Agreement.
Respectfully Submitted,
HIGHLANDS INSURANCE GROUP,
INC., HIGHLANDS HOLDING
COMPANY, INC., HIGHLANDS CLAIMS
AND SAFETY SERVICES, INC.,
HIGHLANDS SERVICES
CORPORATION, AMERICAN
RELIANCE, INC. and NORTHWESTERN
NATIONAL HOLDING COMPANY, INC.,
DEBTORS.
By: /s/ Stephen L. Kibblehouse
----------------------------
Stephen L. Kibblehouse
Authorized Signatory
Date: January 16, 2003
Prepared by:
DUANE MORRIS LLP
Richard W. Riley, Esquire (DE 4052)
William K. Harrington, Esquire (DE 4051)
1100 North Market Street, Suite 1200
Wilmington, Delaware 19801
Telephone: (302) 657-4900
Telefax: (302) 657-4901
wkharrington@duanemorris.com
Lawrence J. Kotler, Esquire
Christopher J. Redd, Esquire
4200 One Liberty Place
Philadelphia, PA 19103-7396
Telephone: (215) 979-1517
Telecopy: (215) 970-1020
ljkotler@duanemorris.com
cjredd@duanemorris.com
31
SCHEDULE 1.1
SURVIVING DEBTOR ENTITIES
Highlands Insurance Group, Inc.
Highlands Holding Company, Inc.
Highlands Claims and Safety Services, Inc.
Highlands Services Corporation
American Reliance, Inc.
Northwestern National Holding Company, Inc.
Underwriter Special Risks, Inc.
Highlands Holdings (UK) Ltd.
Highlands Ltd.
Highlands Overseas Limited
1
SCHEDULE 5.15
OFFICERS AND DIRECTORS
1. HIGHLANDS INSURANCE GROUP, INC.
Stephen L. Kibblehouse CEO, President, General Counsel, Director
Albert J. Marino CFO, Treasurer
Georgean M. Wardzinski Vice President, Secretary
Alexandra Rio Assistant Secretary
2. HIGHLANDS HOLDING COMPANY, INC.
Stephen L. Kibblehouse CEO, President, General Counsel, Director
Albert J. Marino CFO, Treasurer, Director
Robert J. Brookes Vice President, Secretary, Director
3. HIGHLANDS SERVICES CORPORATION
Stephen L. Kibblehouse CEO, President, General Counsel, Director
Albert J. Marino CFO, Treasurer
Robert J. Brookes Vice President
4. HIGHLANDS CLAIMS AND SAFETY SERVICES, INC.
Stephen L. Kibblehouse CEO, President, General Counsel, Director
Albert J. Marino CFO, Treasurer, Director
Robert J. Brookes Vice President, Assistant General Counsel, Secretary, Director
Georgean M. Wardzinski Director
5. AMERICAN RELIANCE, INC.
Stephen L. Kibblehouse CEO, President, General Counsel, Director
Albert J. Marino CFO, Treasurer, Director
Robert J. Brookes Vice President, Assistant General Counsel, Secretary, Director
David C. Donaldson Director
1
6. NORTHWESTERN NATIONAL HOLDING COMPANY, INC.
Stephen L. Kibblehouse CEO, President, General Counsel, Director
Albert J. Marino CFO, Treasurer
Robert J. Brookes Vice President, Secretary, Director
2
SCHEDULE 6.1
EXECUTORY CONTRACTS TO BE ASSUMED OR ASSUMED AND ASSIGNED
DEBTOR: HIGHLANDS INSURANCE GROUP, INC.
CURE
NAME OF CONTRACT NAME/ADDRESS OF COUNTERPARTY(IES) ASSIGNEE PAYMENT
- ---------------------------- --------------------------------- ---------------------- -------
Records Management and Iron Mountain Records Highlands Insurance $0.00
Service Agreement dated Management, Inc. Company
as of 2/16/01
- ---------------------------- --------------------------------- ---------------------- -------
Participation Agreement Ivans, Inc. Highlands Insurance $0.00
dated as of 4/13/98 Company
- ---------------------------- --------------------------------- ---------------------- -------
Reinsurance Agreement Hartford Steam Boiler Inspection Highlands Insurance $0.00
effective 1/1/99 and Insurance Company Company
- ---------------------------- --------------------------------- ---------------------- -------
Claims Servicing Old Lyme Insurance Co., of Rhode Highlands Insurance $0.00
Agreement, effective Island, Inc. Company
8/1/99
- ---------------------------- --------------------------------- ---------------------- -------
Trust Agreement dated as Old Lyme Insurance Co., of Rhode Highlands Insurance $0.00
of 8/1/99 Island, Inc. Company
The Bank of New York
Insurance Trust and Escrow Dept.
- ---------------------------- --------------------------------- ---------------------- -------
Reinsurance Treaty Trust Old Lyme Insurance Co., of Rhode Highlands Insurance $0.00
Account Agreement, dated Island, Inc. Company
as of 8/1/99
- ---------------------------- --------------------------------- ---------------------- -------
Agreement of Old Lyme Insurance Co., of Rhode Highlands Insurance $0.00
Reinsurance, dated as of Island, Inc. Company
8/1/99 (as amended)
- ---------------------------- --------------------------------- ---------------------- -------
ISO's Master License Insurance Services Office, Inc. Highlands Insurance $0.00
Agreement For Company
Participating Insurers,
dated as of June, 1998 (as
amended)
- ---------------------------- --------------------------------- ---------------------- -------
ISO Internet Delivery - Insurance Services Office, Inc. Highlands Insurance $0.00
Circulars, Manuals, Loss Company
Costs and Forms,
dated as of June, 1999 (as
amended)
- ---------------------------- --------------------------------- ---------------------- -------
1
CURE
NAME OF CONTRACT NAME/ADDRESS OF COUNTERPARTY(IES) ASSIGNEE PAYMENT
- ---------------------------- --------------------------------- ---------------------- -------
Master Software License DocuCorp International Highlands Insurance $0.00
Agreement, dated as of Company
5/29/01
- ---------------------------- --------------------------------- ---------------------- -------
Master Services DocuCorp International Highlands Insurance $0.00
Agreement, dated as of Company
12/31/97
- ---------------------------- --------------------------------- ---------------------- -------
Product License Information Engineering LLP Highlands Insurance $0.00
Agreement, dated as of Company
1/14/99
- ---------------------------- --------------------------------- ---------------------- -------
Master Professional Information Engineering LLP Highlands Insurance $0.00
Services Agreement, dated Company
as of 1/14/99
- ---------------------------- --------------------------------- ---------------------- -------
NCCI Affiliation National Council on Compensation Highlands Insurance $0.00
Agreement, dated as of Company
6/1/00
- ---------------------------- --------------------------------- ---------------------- -------
Glass Claim Strategic Claim Services, Inc. Highlands Insurance $0.00
Administration Company
Agreement, dated as of
12/23/98
- ---------------------------- --------------------------------- ---------------------- -------
Program Administrator Capital Bonding Corporation Highlands Insurance $0.00
Agreement, dated as of Company and
12/15/99 Northwestern National
Casualty Company
- ---------------------------- --------------------------------- ---------------------- -------
Program Administrator Capital Bonding Corporation Highlands Insurance $0.00
Agreement, dated as of Company and
9/28/00 Northwestern National
Casualty Company
- ---------------------------- --------------------------------- ---------------------- -------
Cut-Through / Guarantee American Healthcare Indemnity N/A $0.00
Endorsement Agreement, Company
dated as of 1/1/00
- ---------------------------- --------------------------------- ---------------------- -------
Brokerage Service Guy Carpenter & Company, Inc. N/A $0.00
Agreement, dated as of
7/1/00
- ---------------------------- --------------------------------- ---------------------- -------
Distribution Agreement, Halliburton Company N/A $0.00
dated as of 10/10/95 (as
amended)
- ---------------------------- --------------------------------- ---------------------- -------
Investment Agreement, Halliburton Company N/A $0.00
dated as of 10/10/95 (as
amended)
- ---------------------------- --------------------------------- ---------------------- -------
Tax Agreement, dated as Halliburton Company N/A $0.00
of 1/12/96
- ---------------------------- --------------------------------- ---------------------- -------
2
CURE
NAME OF CONTRACT NAME/ADDRESS OF COUNTERPARTY(IES) ASSIGNEE PAYMENT
- ---------------------------- --------------------------------- ---------------------- -------
Halliburton Halliburton Company N/A $0.00
Indemnification
Agreement, dated as of
1/22/96
- ---------------------------- --------------------------------- ---------------------- -------
Brown & Root Brown & Root Corporate Services, N/A $0.00
Indemnification Inc.
- ---------------------------- --------------------------------- ---------------------- -------
Agreement, dated as of Brown & Root Holdings, Inc.
1/22/96 Halliburton Company
Lease Agreement, dated as Redhill Investors LLC Pacific National $0.00
of 11/24/99 (as amended) Insurance Company
- ---------------------------- --------------------------------- ---------------------- -------
Agreement dated as of Hartford Fire Insurance Company Highlands Insurance $0.00
9/30/98 Company
- ---------------------------- --------------------------------- ---------------------- -------
DEBTOR: AMERICAN RELIANCE, INC.
CURE
NAME OF CONTRACT NAME/ADDRESS OF COUNTERPARTY(IES) ASSIGNEE PAYMENT
- ---------------------------- --------------------------------- ---------------------- -------
Master License Agreement SERENA Software, Inc. Highlands Insurance $0.00
(on behalf of Highlands Company
Insurance Group) dated as
of 4/30/99
- ---------------------------- --------------------------------- ---------------------- -------
Master License SERENA Software, Inc. Highlands Insurance $0.00
Agreement, dated as of Company
6/10/99
- ---------------------------- --------------------------------- ---------------------- -------
Software License Cognos Corp. Highlands Insurance $0.00
Agreement, dated as of Company
8/31/96
- ---------------------------- --------------------------------- ---------------------- -------
Letter agreement, dated as Cognos Corp. Highlands Insurance $0.00
of 12/23/96 Company
- ---------------------------- --------------------------------- ---------------------- -------
License Agreement, dated Policy Management Sys. Corp. Highlands Insurance $0.00
as of 11/8/94 Company
- ---------------------------- --------------------------------- ---------------------- -------
Master Agreement for Policy Management Sys. Corp. Highlands Insurance $0.00
Data Processing Services, Company
dated as of 11/8/94
- ---------------------------- --------------------------------- ---------------------- -------
3
DEBTOR: HIGHLANDS CLAIMS AND SAFETY, INC.
CURE
NAME OF CONTRACT NAME/ADDRESS OF COUNTERPARTY(IES) ASSIGNEE PAYMENT
- ---------------------------- --------------------------------- ---------------------- -------
Claims Handling Service Sunbelt Insurance Company N/A $0.00
Agreement
- ---------------------------- --------------------------------- ---------------------- -------
4
EXHIBIT A
LIQUIDATING TRUST AGREEMENT
A-1
EXHIBIT B
SUCCESS FEE AGREEMENT
B-1