IN THE UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF TENNESSEE
CHATTANOOGA DIVISION
____________________________________
)
IN RE: )
)
THE KRYSTAL COMPANY, ) CASE NO. 95-15306
)
DEBTOR. ) CHAPTER 11
)
ORDER CONFIRMING SECOND AMENDED AND RESTATED PLAN
OF REORGANIZATION FILED BY THE KRYSTAL COMPANY
The Second Amended and Restated Plan of Reorganization filed by The Krystal
Company (the "Plan"), having been filed with the Court on February 10, 1997 by
The Krystal Company ("Krystal"); copies of the Plan, the Disclosure Statement
dated February 10, 1997, as revised February 24, 1997, to Accompany Second
Amended and Restated Plan of Reorganization Filed by The Krystal Company (the
"Disclosure Statement) and related documents having been distributed to all
creditors as provided in the Order Approving Disclosure Statement and Fixing
Time for Filing Acceptances or Rejection of Krystal's Second Amended Chapter 11
Plan, Fixing Date for Hearing on Confirmation and Time for Filing Objections to
Confirmation and Fixing Date, Time and Place for Hearing on Confirmation of
Plan, together with notice thereof and the Summary of Ballots having been filed
with the Court on April 9, 1997; the hearing on confirmation of the Plan having
been commenced on April 9, 1997 (the "Confirmation Hearing") and the Court
having considered all Objections; and upon the statements of counsel and the
evidence adduced at the Confirmation Hearing, and all of the proceedings held
before this Court; and the appearances of all interested parties having been
noted on the record of the Confirmation Hearing; and upon the Plan and the
record of the Confirmation Hearing, the Court having found and concluded that
the Plan should be confirmed as reflected by the Court's ruling at the
conclusion of the Confirmation Hearing, which ruling is incorporated herein by
reference as though set forth in full; and after due consideration and
deliberation, it is hereby ORDERED, ADJUDGED, FOUND and DECREED that:
I. FINDINGS OF FACT
A. THE DISCLOSURE STATEMENT.
1. By order dated February 26, 1997, the Court approved the Disclosure
Statement as containing "adequate information" within the meaning of
section 1125 of the Bankruptcy Code.
B. SOLICITATION AND VOTING.
2. Based upon the certificate of service, dated December 26, 1996 filed
by Krystal, the Court finds that all persons required to receive notice of the
hearings held on December 23, 1996 and February 14, 1997 to consider the
adequacy of the Disclosure Statement, and the Confirmation Hearing, have
received due, proper, timely and adequate notice of such hearings in accordance
with the Order of this Court dated February 26, 1997 and have had an opportunity
to appear at and be heard at such hearings.
3. Krystal has solicited votes with respect to the Plan only from
Classes 3, 4, 5 and 6. Krystal's solicitation of votes with respect to the Plan
was conducted in good faith and in a manner consistent with the Bankruptcy Code.
4. Based upon the Certificate of Krystal, which was filed with the Court
on April 9, 1997, concerning acceptances and rejections of the Plan, the number
and amount of claims timely voting to accept the Plan, exclusive of any votes
cast by holders of claims subject to objection that have not obtained temporary
allowances of such claims for voting purposes, are as follows:
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- --------------------------------------------------------------------------------
VOTERS ACCEPTING VOTERS REJECTING
- --------------------------------------------------------------------------------
NUMBER AMOUNT NUMBER AMOUNT
------ ------ ------ ------
- --------------------------------------------------------------------------------
CLASS 3 1 $2,895,666.03 0 $0.00
(100%) (100%) (0%) (0%)
- --------------------------------------------------------------------------------
CLASS 4 1 $137,500.00 0 $0.00
(100%) (100%) (0%) (0%)
- --------------------------------------------------------------------------------
CLASS 5 7003 $39,965,926.30 19 $22,122.22
(99%) (99.94%) (1%) (.06%)
- --------------------------------------------------------------------------------
CLASS 6 3 $36,245,298.63 0 $0.00
(100%) (100%) (0%) (0%)
- --------------------------------------------------------------------------------
5. Based upon the numbers and amounts of claims set forth above, the
holders of at least two-thirds in amount and a majority in number of the allowed
claims in each of Class 3, 4, 5 and 6 actually voting have accepted the Plan,
exclusive of any votes cast by holders of claims subject to objection that have
not obtained temporary allowances of such claims for voting purposes.
C. THE PLAN SATISFIES THE REQUIREMENTS OF THE BANKRUPTCY CODE.
6. The Plan complies with the applicable provisions of the Bankruptcy
Code.
7. Krystal has complied with the applicable provisions of the Bankruptcy
Code.
8. The Plan was proposed in order to pay all Allowed Claims of Creditors
in full and to effect the reorganization of Krystal.
9. The Plan has been proposed in good faith and not by any means
forbidden by law.
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10. The Plan designates classes of claims and classes of equity interests.
With respect to each class of claims or equity interests under the Plan, each
claim or equity interest is substantially similar to the other claims or equity
interests in such class.
11. The Plan provides the same treatment for each claim or equity interest
in any particular class of claims or equity interests.
12. The Plan provides for the amendment on the Effective Date of Krystal's
articles of incorporation to prohibit the issuance of equity securities to the
extent required by section 1123(a)(6) of the Bankruptcy Code.
13. There is no governmental regulatory commission that has jurisdiction
over Krystal's rates, and the Plan does not provide for any change in Krystal's
rates.
14. Under the Plan, claims and equity interests in Classes 1, 2 and 7 are
unimpaired and, therefore, are conclusively presumed to accept the Plan and will
be paid or provided for in full.
15. Under the Plan, claims in Classes 3, 4, 5 and 6 are impaired and,
therefore, are entitled to vote on and have accepted the Plan.
16. Krystal has disclosed the identity and affiliations of any individual
proposed to serve, after confirmation of the Plan, as a director, officer or
voting trustee of Krystal or a successor to Krystal under the Plan and the
appointment to, or continuance in, such office of such individual, is consistent
with the interests of creditors and equity security holders and with public
policy.
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17. On the Effective Date of the Plan, (a) all of the Krystal's Property
shall revest in the reorganized Debtor, and (b) all claims against Krystal shall
be deemed claims against the reorganized Debtor.
18. The discharge and injunction contained in Article 9 of the Plan are
integral to the Plan and provide a material benefit to Krystal's Estate.
19. The Plan provides that any payment made or to be made by Krystal for
services or for costs and expenses in connection with the Chapter 11 Case, or in
connection with the Plan and incident to the Chapter 11 Case, has been approved
by or is subject to the approval of the Court.
20. The Plan provides adequate means for its implementation.
21. Confirmation of the Plan is not likely to be followed by liquidation
or further financial reorganization not proposed in the Plan.
22. Krystal will have sufficient funds to meet its postconfirmation
obligations, to pay for the costs of its operations and to satisfy all Allowed
Claims in accordance with the provisions of the Plan.
23. The distributions under the Plan will be at least equal to the
distributions that would be payable if this Case was a case under chapter 7 of
the Bankruptcy Code. Accordingly, the liquidation analysis under chapter 7
contained in the Disclosure Statement and as further presented at the
Confirmation Hearing clearly demonstrates that each holder of a claim or equity
interest in each impaired Class under the Plan either has accepted the Plan, or
will receive or retain under the Plan on account of such claim or interest
property of a value that is at least equal to the amount that such holder would
receive or retain in a chapter 7 liquidation of Krystal's Estate.
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24. The Plan provides that, except as otherwise agreed by the holder of
such claim, each holder of an allowed administrative expense claim will be paid
in full, in Cash, not later than the Effective Date for claims already matured
or past due as of the Effective Date, or in the ordinary course of payment for
claims not yet matured or past due as of the Effective Date. No holder of an
administrative expense claim has asserted a sustained objection to such holder's
treatment under the Plan and, therefore, each such holder is deemed to have
agreed to such treatment.
25. The Plan provides that each holder of an Allowed Priority Claim will
be paid in full, in Cash, not later than the later of the Effective Date or the
date on which such Allowed Priority Claim becomes due and payable pursuant to
the terms thereof, unless the holder of such claim has agreed to less favorable
treatment for such holder's claim. No holder of an Allowed Priority Claim has
objected to such holder's treatment under the Plan and, therefore, each such
holder is deemed to have agreed to such treatment.
26. The Plan provides for the payment on the Effective Date of all fees
payable under 28 U.S.C. Section 1930.
27. All payments relating to retiree benefits have been made since the
commencement of the Case in accordance with section 1114 of the Bankruptcy Code
and the Plan provides that the Debtor shall continue all Retiree Benefits for
the duration of the period Krystal has obligated itself to provide such
benefits; and.
28. Each impaired Class of claims entitled to vote on the Plan has voted
to accept the Plan.
II. CONCLUSIONS OF LAW
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A. THE COURT HAS JURISDICTION TO CONFIRM THE PLAN.
29. The Court has jurisdiction to consider confirmation of the Plan
pursuant to 28 U.S.C. Section 1334(b). The Confirmation Hearing is a core
proceeding pursuant to 28 U.S.C. Section 157(b)(2)(L) and venue properly lies in
this district pursuant to 28 U.S.C. Section 1408(a).
30. Krystal is a proper debtor under section 109 of the Bankruptcy Code
and is a proper proponent of the Plan under section 1121(a) of the Bankruptcy
Code.
B. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1122 OF THE BANKRUPTCY CODE.
31. Section 1122(a) of the Bankruptcy Code states that a plan may place a
claim or equity interest in a particular class if such claim or equity interest
is substantially similar to the other claims or equity interests of such class.
Section 1122(b) of the Bankruptcy Code provides that a plan may designate a
separate class of claims consisting only of every unsecured claim that is less
than or reduced to an amount that the court approves as reasonable and necessary
for administrative convenience. A classification scheme satisfies section 1122
of the Bankruptcy Code when a reasonable basis exists for the choices made and
all claims within a particular class are substantially similar.
32. The classification of claims and equity interests in the Plan is
reasonable and necessary to implement the Plan and, therefore, satisfies the
requirements of section 1122 of the Bankruptcy Code.
C. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1123(a)(1) OF THE BANKRUPTCY
CODE.
33. The Plan designates classes of claims and equity interests and,
therefore, satisfies the requirements of section 1123(a)(1) of the Bankruptcy
Code.
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D. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1123(a)(2) OF THE BANKRUPTCY
CODE.
34. The Plan specifies that Classes 1, 2 and 7 are unimpaired under the
Plan. Accordingly, the Plan satisfies the requirements of section 1123(a)(2) of
the Bankruptcy Code.
E. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1123(a)(3) OF THE BANKRUPTCY
CODE.
35. Article 4 of the Plan specifies the treatment of each impaired Class
of claims and/or equity interests (i.e., Classes 3, 4, 5 and 6) and,
accordingly, the Plan satisfies the requirements of section 1123(a)(3) of the
Bankruptcy Code.
F. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1123(a)(4) OF THE BANKRUPTCY
CODE.
36. Section 1123(a)(4) of the Bankruptcy Code requires a plan to provide
the same treatment for each claim or equity interest of a particular class,
unless the holder of a particular claim or equity interest agrees to less
favorable treatment of such particular claim or equity interest. The Plan
provides the same treatment for each claim or equity interest in each particular
Class and, accordingly, satisfies section 1123(a)(4) of the Bankruptcy Code.
G. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1123(a)(5) OF THE BANKRUPTCY
CODE.
37. The Plan provides adequate means for the implementation thereof and,
accordingly, satisfies section 1123(a)(5) of the Bankruptcy Code.
H. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1123(a)(6) OF THE BANKRUPTCY
CODE.
38. Section 1123(a)(6) requires a plan to provide for the inclusion in the
charter of the debtor, if the debtor is a corporation, or of any corporation to
which the debtor transfers all or any
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part of the debtor's estate or with which the debtor has merged or consolidated,
of a provision prohibiting the issuance of nonvoting equity securities.
39. On the Effective Date, the reorganized Debtor's certificate of
incorporation will be amended to prohibit the issuance of nonvoting equity
securities to the extent required by section 1123(a)(6) of the Bankruptcy Code.
40. The reorganized Debtor will not have more than one class of securities
possessing voting power for purposes of section 1123(a)(6).
41. Based upon the foregoing, the Plan satisfies the requirements of
section 1123(a)(6) of the Bankruptcy Code.
I. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1123(a)(7) OF THE BANKRUPTCY
CODE.
42. The Plan provides for the management of the reorganized Debtor in a
manner consistent with the interests of creditors and equity security holders
and with public policy. Accordingly, the Plan satisfies the requirements of
section 1123(a)(7) of the Bankruptcy Code.
J. THE ASSUMPTION AND REJECTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
PURSUANT TO SECTION 1123(b)(2) OF THE BANKRUPTCY CODE IS IN THE BEST
INTERESTS OF KRYSTAL, ITS ESTATE AND CREDITORS.
43. In accordance with section 1123(b)(2) of the Bankruptcy Code, the Plan
provides for the assumption by Krystal of all executory contracts and unexpired
leases to which Krystal is a party on the Confirmation Date and which had not
previously been assumed or rejected.
44. Krystal's decision regarding the assumption of executory contracts and
unexpired leases is based upon and is within the sound business judgment of
Krystal and is in the best interests of Krystal, its Estate and its creditors.
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K. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1129(a)(1) OF THE BANKRUPTCY
CODE.
45. The Plan complies with all of the applicable provisions of the
Bankruptcy Code.
L. KRYSTAL HAS SATISFIED THE REQUIREMENTS OF SECTION 1129(a)(2) OF THE
BANKRUPTCY CODE.
46. Section 1129(a)(2) of the Bankruptcy Code requires that the plan
proponent comply with all of the applicable provisions of the Bankruptcy Code.
47. Krystal has complied with all of the provisions of the Bankruptcy Code
and the Bankruptcy Rules governing notice, disclosure and solicitation in
connection with the Plan, the Disclosure Statement and all other matters
considered by the Court in connection with this Case.
48. Good, sufficient and timely notice of the Confirmation Hearing and of
all other hearings in this Chapter 11 Case has been given to all holders of
claims and equity interests and all other parties in interest to whom notice
should have been given.
49. The solicitation of votes from holders of claims was made following
approval of the Disclosure Statement and dissemination of the Disclosure
Statement to holders of claims in Classes that are impaired under the Plan and
entitled to vote and was made in good faith and in compliance with the
applicable provisions of the Bankruptcy Code and Bankruptcy Rules.
50. With respect to impaired Classes 3, 4, 5 and 6, the solicitation and
tabulation of ballots were properly performed.
51. Krystal has fulfilled all of the obligations and duties owed to its
Estate as required and set forth in sections 1107 and 1108 of the Bankruptcy
Code.
52. Therefore, Krystal has satisfied the requirements of
section 1129(a)(2) of the Bankruptcy Code.
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M. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1129(a)(3) OF THE BANKRUPTCY
CODE.
53. In accordance with section 1129(a)(3) of the Bankruptcy Code, the Plan
has been proposed in good faith and not by any means forbidden by law. In
determining that the Plan has been proposed in good faith, the Court has
examined the totality of the circumstances surrounding the formulation of the
Plan.
54. The fact that the Plan has been accepted by Classes 3, 4, 5 and 6
demonstrates the determination of creditors that the Plan is in their best
interests and maximizes distributions available to them.
55. On the basis of the evidence presented at the Confirmation Hearing,
the Court finds and concludes that the Plan has been proposed with the
legitimate purpose of completing the reorganization of Krystal's business and to
maximize the returns available to creditors.
56. In light of all the circumstances, the Plan satisfies
section 1129(a)(3) of the Bankruptcy Code.
N. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1129(a)(4) OF THE BANKRUPTCY
CODE.
57. In accordance with section 1129(a)(4) of the Bankruptcy Code, all
payments made or to be made by Krystal or by a person issuing securities or
acquiring property under the Plan, for services or for costs and expenses in or
in connection with the Case or the Plan and incident to this Case, have been
approved by or are subject to the approval of the Court as reasonable.
58. Accordingly, the Plan satisfies the requirements of section 1129(a)(4)
of the Bankruptcy Code.
O. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1129(a)(5) OF THE BANKRUPTCY
CODE.
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59. Krystal has disclosed in the Disclosure Statement the identities and
affiliations of any individual proposed to serve, after confirmation of the
Plan, as a director, officer or voting trustee of Krystal, and the service of
such individuals is consistent with the interests of creditors and equity
security holders and with public policy. Accordingly, the requirements of
section 1129(a)(5)(A) of the Bankruptcy Code have been satisfied.
60. Krystal has adequately disclosed in the Disclosure Statement the
identities of insiders that will be employed or retained by the Reorganized
Debtor and the nature of any compensation for such insiders.
P. SECTION 1129(a)(6) OF THE BANKRUPTCY CODE IS NOT APPLICABLE TO THE PLAN.
61. The Plan does not provide for change in any rate that requires
regulatory approval. There is no governmental regulatory commission that has
jurisdiction over Krystal's rates. Therefore, section 1129(a)(6) of the
Bankruptcy Code is not applicable to the Plan.
Q. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1129(a)(7) OF THE BANKRUPTCY
CODE.
62. Section 1129(a)(7) requires each creditor or equity interest holder in
an impaired class to accept the plan, or receive or retain under the plan on
account of such claim or interest property of a value, as of the effective date
of the plan, that is not less than the amount that such holder would receive or
retain if the debtor were liquidated under chapter 7 of the Bankruptcy Code.
63. Krystal has shown that the value of distributions to each creditor and
equity interest holder under the Plan is not less than the value of
distributions that each creditor and equity interest holder would receive in a
chapter 7 liquidation scenario.
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64. Based upon the record of the Confirmation Hearing and of the Case, the
Court finds that all holders of claims or equity interests in impaired Classes
will receive at least as much under the Plan as they would under a chapter 7
liquidation.
65. Accordingly, the Plan satisfies the "best interest of creditors" test
under section 1129(a)(7) of the Bankruptcy Code.
R. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1129(a)(8) OF THE BANKRUPTCY
CODE.
66. Section 1129(a)(8) of the Bankruptcy Code requires that, with respect
to each class of claims or interests, such class has accepted the plan, or
such class is not impaired under the plan.
67. The claims in each of Classes 1, 2 and 7 are unimpaired and each
holder of a claim in each such Class is conclusively presumed to have accepted
the Plan and the solicitation of acceptances with respect to each such Class is
not required. In addition, each of impaired Classes 3, 4, 5 and 6 have accepted
the Plan. Accordingly, the requirements of section 1129(a)(8) have been
satisfied.
S. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1129(a)(9) OF THE BANKRUPTCY
CODE.
68. The Plan provides for the payment in full, in Cash, of all claims
specified in section 507 of the Bankruptcy Code and, accordingly, satisfies the
requirements of all three subsections of section 1129(a)(9) of the Bankruptcy
Code.
T. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1129(a)(10) OF THE
BANKRUPTCY CODE.
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69. Pursuant to section 1129(a)(10) of the Bankruptcy Code, at least one
impaired class of claims must accept the plan, determined without including any
acceptance of the plan by any insider.
70. The Plan satisfies section 1129(a)(10) because Classes 3, 4, 5 and 6,
all of the voting Classes, have accepted the Plan, determined without including
any acceptance of the Plan by an insider holding a claim in such Classes.
U. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1129(a)(11) OF THE
BANKRUPTCY CODE.
71. Section 1129(a)(11) of the Bankruptcy Code requires that a plan must
be "feasible," that is, the Court must determine that confirmation of the plan
is not likely to be followed by the liquidation or further financial
reorganization of the debtor or its successor under the plan, unless such
liquidation or reorganization is proposed in the plan.
72. Krystal has demonstrated that it will have sufficient funds to meet
its postconfirmation obligations, to pay for the costs of its operations and to
satisfy claims as set forth in the Plan and to continue its businesses, the Plan
complies with the feasibility standard set forth in section 1129(a)(11) of the
Bankruptcy Code.
V. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1129(a)(12) OF THE
BANKRUPTCY CODE.
73. All fees payable under 28 U.S.C. Section 1930 have been paid or the
Plan provides for the payment, on or before the Effective Date, of all such
fees. Accordingly, the Plan satisfies the requirements of section 1129(a)(12)
of the Bankruptcy Code. Krystal shall continue to pay U.S. Trustee's fees and
to file monthly operating reports until a final decree is entered or until this
case is dismissed or converted to another chapter under the Bankruptcy Code.
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W. THE PLAN SATISFIES SECTION 1129(a)(13) OF THE BANKRUPTCY CODE WITH RESPECT
TO RETIREE BENEFITS.
74. All payments relating to retiree benefits have been made since the
commencement of the Case and the Plan provides for Krystal to continue to pay
such benefits for the duration of the period Krystal has obligated itself to
provide such benefits in satisfaction of Section 1129(a)(13) of the Bankruptcy
Code.
X. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1129(d) OF THE BANKRUPTCY
CODE.
75. The principal purpose of the Plan is not the avoidance of taxes or
avoidance of the requirements of Section 5 of the Securities Act of 1933, and
there has been no Objection filed by any governmental unit asserting such
avoidance. Therefore, the Plan satisfies the requirements of section 1129(d) of
the Bankruptcy Code.
Y. THE DISCHARGE AND INJUNCTION PROVISIONS OF THE PLAN ARE CONSISTENT WITH
SECTIONS 105, 1129 AND OTHER APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE.
76. This Court has jurisdiction to approve and order the discharge and
injunction, as provided in Article 9 of the Plan, pursuant to 28 U.S.C. Section
1334 and section 105 of the Bankruptcy Code.
77. Section 105(a) of the Bankruptcy Code permits the approval of the
discharge and the issuance of the injunction, as provided in Article 9 of the
Plan. The discharge and injunction provisions of the Plan are consistent with
sections 105 and 1129 and other applicable provisions of the Bankruptcy Code,
including section 524(e).
III. DECRETAL PROVISIONS
78. The Plan be, and it hereby is, confirmed.
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79. To the extent any Objections to confirmation of the Plan have not been
withdrawn prior to entry of this Order or are not cured by the relief granted
herein, all remaining Objections to confirmation of the Plan be, and they hereby
are, overruled and all withdrawn Objections be, and they hereby are, deemed
withdrawn with prejudice.
80. The Confirmation Date be, and it hereby is, the date on which the
Clerk of this Court enters this order on its docket.
81. The Effective Date be, and it hereby is, the first business day after
satisfaction of the conditions contained in section 9.10 of the Plan, which date
shall be at least ten days following the Confirmation Date.
82. The record of the Confirmation Hearing be, and it hereby is, closed.
83. In accordance with section 1141 of the Bankruptcy Code, the Plan and
its provisions be, and they hereby are, binding upon Krystal, the reorganized
Debtor, each person or entity acquiring or receiving property under the Plan,
and each holder of a claim against or equity interest in Krystal, whether or not
the claim or equity interest of such creditor or equity interest holder is
impaired under the Plan, such creditor or equity interest holder has filed, or
is deemed to have filed, a proof of claim or equity interest, and such creditor
or equity interest holder has accepted or rejected the Plan.
84. In accordance with section 1141 of the Bankruptcy Code, all property
of the Estate on the Effective Date shall, on the Effective Date, be, and it
hereby is, vested in the reorganized Debtor as designated in and provided for by
the Plan.
85. Except as otherwise provided in the Plan, on the Effective Date, the
transfer of any assets by Krystal or the reorganized Debtor as contemplated by
the Plan, and the vesting of the
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assets of Krystal in the reorganized Debtor pursuant to sections 1141(b) and (c)
of the Bankruptcy Code be, and they hereby are, on the Effective Date, free and
clear of all claims against and equity interests in Krystal, and liens or
encumbrances securing same, and the Plan and this Order supersede any Court
order issued prior to the date hereof that is inconsistent herewith.
86. Except as set forth in the Plan, on and after the Effective Date,
every holder of a claim or equity interest be, and they hereby are, precluded
and permanently enjoined from commencing or continuing any action, employment of
process or act to collect, offset or recover the Claims discharged by the Plan
and from taking any action to enforce rights, or alleged rights, against
Krystal, against any of Krystal's Property, against any property of the Estate,
or against any collateral in which said Creditors assert a Lien, which rights,
or alleged rights, are inconsistent with the terms of the Plan. The injunction
provided for herein and in the Plan does not prohibit creditors from taking any
enforcement action against Krystal, its property or any other person in the
event that Krystal fails to comply with the terms of the Plan.
87. All rights and Causes of Action accruing to Krystal be, and they
hereby are, assets of the Reorganized Debtor, which may pursue those rights and
Causes of Action as appropriate as set forth in the Plan, in accordance with
what is in the best interests of, and for the benefit of, the reorganized Debtor
and those creditors who will receive distributions subsequent to the Effective
Date.
88. The reorganized Debtor be, and it hereby is, authorized to be
represented by the professionals retained by Krystal, and such professionals are
hereby authorized to provide services to the reorganized Debtor without the
necessity of obtaining any other or further approvals of the Bankruptcy Court.
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89. The reorganized Debtor be, and it hereby is, ordered to file and serve
all objections to claims as soon as practicable, but in no event later than
sixty (60) days after the Confirmation Date; provided, however, that if no
objection has been filed by the above date, the claim to which the proof of
claim or scheduled claim relates shall be treated as an Allowed Claim if such
claim has not been allowed or disallowed earlier. Except as to objections
pending as of the Confirmation Date, after the Confirmation Date, only the
reorganized Debtor shall have the authority to prosecute, settle, compromise,
withdraw or litigate to judgment objections to claims and counterclaims.
90. The reorganized Debtor shall distribute Cash in accordance with the
relevant provisions of Articles 3, 4 and 7 of the Plan, in payment of all
Allowed Claims. The Plan shall not be deemed to have been substantially
consummated until such time as all conditions set forth in section 9.10 of the
Plan have been satisfied or have occurred and at least $35,000,000 of the
proceeds of the financing obtained to implement the Plan have been distributed
to Creditors in satisfaction of Allowed Claims. Nothing herein shall be deemed
to alter the definition of "substantial consummation" as set forth in the Plan.
91. The reorganized Debtor be, and it hereby is, authorized and directed
to take all necessary steps, and to perform all necessary acts, to consummate
the terms and conditions of the Plan.
92. The reorganized Debtor be, and it hereby is, ordered to distribute
Cash and other property in accordance with the applicable provisions of the
Plan.
93. On the Confirmation Date, all executory contracts and unexpired leases
that exist between Krystal and any person or entity, that have not been
previously assumed or rejected by
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order of the Court or which are not the subject of a motion to assume or reject
pending on the Confirmation Date, be, and they hereby are, assumed in accordance
with the provisions and requirements of section 365 of the Bankruptcy Code and
entry of the Confirmation Order by the Clerk of the Court shall constitute an
order approving such assumptions pursuant to section 365(a) of the Bankruptcy
Code.
94. All proofs of claim with respect to claims arising from the rejection
of executory contracts or unexpired leases must be filed with the Court no later
than thirty days after the Confirmation Date. Any claim not filed within such
time will be forever barred from assertion against the reorganized Debtor,
Krystal, the Estate and its property. Unless otherwise ordered by the Court,
all such claims arising from the rejection of executory contracts or unexpired
leases will be, and will be treated as, Class 5 claims.
95. Pursuant to sections 105(a) and 1127 of the Bankruptcy Code, this
Court hereby retains jurisdiction over any and all matters arising out of or
relating to the Chapter 11 Case, including, without limitation, (a) all matters
set forth in the Plan, (b) such other matters and purposes as may be necessary
or useful to aid in the confirmation and consummation of the Plan and its
implementation, and (c) any lawsuit or claim arising under, in connection with,
or based directly or indirectly on this Order.
96. All applications for payment of fees and expenses pursuant to
section 503(b) of the Bankruptcy Code be, and they hereby are, required to be
filed with the Court within thirty days after the Confirmation Date and any
requests for payment of such fees and expenses not filed within such time period
be, and they hereby are, discharged and forever barred except as otherwise may
be ordered by the Court.
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97. In accordance with section 1142 of the Bankruptcy Code, the
implementation and consummation of the Plan in accordance with its terms be, and
it hereby is, authorized and approved, including, without limitation, the
execution and delivery of all documents, instruments, certificates and
agreements to be entered into pursuant to the Plan by Krystal and/or any
successors to Krystal, including the reorganized Debtor, and the transfers of
property by and to Krystal and the reorganized Debtor contemplated to be made
pursuant to the Plan, including, without limitation, the granting of liens,
security interests and encumbrances to secure loans obtained to fund the
distributions required by the Plan.
98. In accordance with section 1142 of the Bankruptcy Code, the
reorganized Debtor and Krystal be, and they hereby are, authorized, empowered
and directed to execute, deliver, file and record any document, and to take any
action necessary or appropriate to implement, effectuate and consummate the Plan
in accordance with its terms, whether or not any such document is specifically
referred to in the Plan and without further application to or order of this
Court.
99. The reorganized Debtor be, and it hereby is, authorized and empowered
to take any and all actions as set forth and described in the Plan.
100. Except as provided by the Plan, on the Effective Date, (a) all of
Krystal's Property be, and they hereby are, revested in the reorganized Debtor,
(b) all claims against Krystal be, and they hereby are, deemed claims against
the reorganized Debtor, and (c) the reorganized Debtor shall be managed by the
officers and directors thereof, in good faith so as to maximize the value of the
reorganized Debtor's property, without the supervision or approval of the Court.
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101. The appointment of the officers and directors of the reorganized
Debtor as provided under the Plan be, and it hereby is, deemed to have occurred
and shall be in effect without any requirement of further action or order of the
Court.
102. All persons and entities holding claims or equity interests which are
dealt with under the Plan be, and they hereby are, directed to execute, deliver,
file and/or record all documents, and to take all actions necessary to
implement, effectuate and consummate the Plan in accordance with its terms, and
all such persons shall be bound by the terms and provisions of all documents to
be executed by them in connection with the Plan, whether or not such documents
actually have been executed by such persons.
103. In the event of any inconsistencies between the Plan and any agreement
or document intended to implement the provisions of the Plan, the provisions of
the Plan shall govern unless otherwise explicitly provided for in such
agreements or documents. Except that the order and the attached Settlement
approving the compromise and settlement of the FLSA Claims asserted by persons
represented by Stewart, Estes & Donnell shall govern over the terms of the Plan.
In the event of any inconsistencies between the Plan and this Order, the
provisions of this Order shall govern.
104. The failure specifically to include any particular provision of the
Plan in this Order shall not diminish or impair the efficacy of such provision,
it being understood the intent of the Court that the Plan be confirmed and
approved in its entirety.
105. To the extent any of the foregoing findings of fact constitute
conclusions of law, they are adopted as such. If any of the foregoing
conclusions of law constitute findings of fact, they are adopted as such.
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/s/ JAMES C. COOK
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UNITED STATES BANKRUPTCY JUDGE
PREPARED AND PRESENTED:
KING & SPALDING
By: /s/ SARAH R. BORDERS
---------------------------
David G. Epstein
Ga. Bar No. 249533
Sarah Robinson Borders
Ga. Bar No. 610649
191 Peachtree Street
Atlanta, Georgia 30303
(404) 572-4600
ATTORNEYS FOR THE KRYSTAL COMPANY
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