EXHIBIT 99.1
Oneida Ltd.: Bankruptcy Court Enters Interim Trading Procedures Order in Oneida
Chapter 11 Cases
Oneida, N.Y., May 3, 2006 -- Oneida Ltd. (OTCBB:ONEIE) announced today that on
May 2, 2006, the United States Bankruptcy Court for the Southern District of New
York entered an interim order in Oneida's chapter 11 proceedings setting forth
trading procedures for certain of Oneida's equity securities. The order
requires, among other things, that a notice be filed with the Bankruptcy Court
and provided to Oneida of the acquisition or disposition of Oneida equity
securities by any person or entity who is now or becomes an owner of at least
4.5% of such securities, and that Oneida have the opportunity to object to the
proposed transfer. The purpose of the order is to preserve Oneida's net
operating losses pursuant to applicable U.S. tax laws and is customary in
chapter 11 cases. The Bankruptcy Court authorized the publication of the
following notice in connection with the entry of the interim order:
NOTICE OF (A) NOTIFICATION PROCEDURES APPLICABLE TO SUBSTANTIAL
HOLDERS OF EQUITY SECURITIES AND (B) NOTIFICATION AND HEARING
PROCEDURES FOR TRADING IN EQUITY SECURITIES
TO ALL PERSONS OR ENTITIES WITH EQUITY INTERESTS IN THE DEBTORS:(1)
PLEASE TAKE NOTICE that on March 19, 2006, Oneida Ltd. ("Oneida") and certain of
its direct and indirect subsidiaries, (collectively, the "Debtors"), commenced
cases under chapter 11 of title 11 of the United States Code (as amended, the
"Bankruptcy Code"). Subject to certain exceptions, section 362 of the Bankruptcy
Code operates as a stay of any act to obtain possession of property of the
Debtors' estates or of property from the Debtors' estates or to exercise control
over property of the Debtors' estates.
PLEASE TAKE FURTHER NOTICE that on May 2, 2006, the United States Bankruptcy
Court for the Southern District of New York (the "Bankruptcy Court"), entered an
interim order (the "Interim Order") granting the Motion of Debtors for Interim
and Final Orders Pursuant to 11 U.S.C. Sections 105(a), 362 and 541 (I)
Establishing Notification and Hearing Procedures for Trading In Equity
Securities and (II) Setting an Expedited Interim Hearing and Shortening Notice,
dated April 28, 2006 (Docket No. 190) (the "Motion"), and approving the
procedures set forth below in order to preserve the Debtors' net operating
losses ("NOLs") pursuant to sections 105, 362 and 541 of the Bankruptcy Code.
Any purchase, sale or other transfer of equity securities in the Debtors in
violation of the procedures set forth below shall be null and void ab initio as
an act in violation of the automatic stay under section 362 of the Bankruptcy
Code and shall confer no rights on the transferee. PLEASE TAKE FURTHER NOTICE
that, pursuant to the Interim Order, the following procedures shall apply to
holding and trading in Equity Securities of Oneida:
Notice of Substantial Equityholder Status. Any person or entity who
currently is or becomes a Substantial Equityholder (as defined in
paragraph (f) below) shall file with the Bankruptcy Court (at the
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(1) In addition to Oneida Ltd., the following entities are debtors in these
related cases: Sakura, Inc.; Buffalo China, Inc.; Delco International,
Ltd.; Kenwood Silver Company, Inc.; Oneida Food Service, Inc.; Oneida
International Inc.; Oneida Silversmiths Inc.; and THC Systems, Inc.
holder's election, in a redacted form that does not include such
holder's taxpayer identification number and the number of equity
securities of Oneida that such holder beneficially owns), and serve
upon the Debtors and counsel for the Debtors, a notice of such
status, unredacted, in the form attached as Exhibit 1A to the
Interim Order within fifteen calendar days of the later of (i) the
entry of the Interim Order and (ii) the date on which such person or
entity becomes a Substantial Equityholder. Except to the extent
necessary to respond to a Proposed Equity Acquisition Transaction
(as defined below), or to the extent that the information contained
therein is already public, the Debtors shall keep all such notices
strictly confidential and shall not disclose the contents thereof to
any person or entity; provided, however, that the Debtors may
disclose the contents thereof to their counsel and professional
financial advisers and/or the counsel and professional financial
advisers to the Official Committee of Unsecured Creditors (the
"Creditors' Committee"), who shall themselves keep all such notices
strictly confidential and shall not disclose the contents thereof to
any other person or entity, including a member of the Creditors'
Committee, subject to further order of the Bankruptcy Court.
Acquisition of Equity Securities. At least fifteen calendar days prior to
the proposed date of any transfer of equity securities (including
options to acquire stock, as defined below) that would result in an
increase in the amount of equity securities of Oneida beneficially
owned by a Substantial Equityholder or that would result in a person
or entity becoming a Substantial Equityholder (a "Proposed Equity
Acquisition Transaction"), such person, entity or Substantial
Equityholder (a "Proposed Equity Transferee") shall file with the
Bankruptcy Court (at the holder's election, in a redacted form that
does not include such holder's taxpayer identification number and
the number of equity securities of Oneida that such holder
beneficially owns and proposes to purchase or otherwise acquire),
and serve on the Debtors and counsel for the Debtors, a Notice of
Intent to Purchase, Acquire or Otherwise Accumulate an Equity
Interest (an "Equity Acquisition Notice"), unredacted, in the form
attached as Exhibit 1B to the Interim Order, specifically and in
detail describing the intended transaction acquiring the Debtors'
equity securities.
Disposition of Equity Securities. At least fifteen calendar days prior to
effectuating any transfer of equity securities (including options to
acquire stock, as defined below) that would result in a decrease in
the
amount of equity securities of Oneida beneficially owned by a
Substantial Equityholder or that would result in a person or entity
ceasing to be a Substantial Equityholder (a "Proposed Equity
Disposition Transaction"), such person, entity or Substantial
Equityholder (a "Proposed Equity Transferor") shall file with the
Bankruptcy Court (at the holder's election, in a redacted form that
does not include such holder's taxpayer identification number and
the number of equity securities of Oneida that such holder
beneficially owns and proposes to sell or otherwise transfer), and
serve on the Debtors and counsel for the Debtors, a Notice of Intent
to Sell, Trade or Otherwise Transfer an Equity Interest (an "Equity
Disposition Notice"), unredacted, in the form attached as Exhibit 1C
to the Interim Order, specifically and in detail describing the
intended transaction disposing of the Debtors' equity securities.
Objection Procedures. The Debtors shall have fifteen calendar days after
the filing of an Equity Acquisition Notice or an Equity Disposition
Notice, as the case may be (the "Objection Deadline"), to file with
the Bankruptcy Court and serve on a Proposed Equity Transferor or a
Proposed Equity Transferee, as the case may be, an objection to any
proposed transfer of equity securities of Oneida described in any
Equity Acquisition Notice or Equity Disposition Notice on the ground
that such transfer may adversely affect the Debtors' ability to
utilize their NOLs (an "Objection") as a result of an ownership
change under Section 382 of the Internal Revenue Code of 1986 (as
amended, the "IRC").
If the Debtors file an Objection by the Objection Deadline, the
Proposed Equity Acquisition Transaction or the Proposed Equity
Disposition Transaction will not be effective unless approved
by a final and nonappealable order of the Bankruptcy Court.
The Debtors shall bear the burden of establishing the adverse
effect of the proposed transfer of equity securities of Oneida
on the Debtors' ability to utilize their NOLs.
If the Debtors do not file an Objection by the Objection Deadline,
or if the Debtors provide written authorization to the
Proposed Equity Transferee or Proposed Equity Transferor
approving the Proposed Equity Acquisition Transaction or the
Proposed Equity Disposition Transaction, as the case may be,
prior to the Objection Deadline, then such Proposed Equity
Acquisition Transaction or the Proposed Equity Disposition
Transaction, as the case may be, may proceed solely as
specifically described in the Equity Acquisition Notice or the
Equity Disposition Notice. Further transactions within the
scope of this
paragraph must be the subject of additional notices as set
forth herein, with an additional fifteen-day waiting period.
Unauthorized Transactions in Equity Securities. Effective as of the
date of the Interim Order and until further order of the
Bankruptcy Court to the contrary, any purchase, sale or other
transfer of equity securities of Oneida in violation of the
procedures set forth herein shall be null and void ab initio
as an act in violation of the automatic stay pursuant to
sections 362 and 105(a) of the Bankruptcy Code.
Definitions. For purposes of the Interim Order:
Substantial Equityholder. A "Substantial Equityholder" is any
person or entity that beneficially owns at least
2,150,157 shares (representing approximately 4.5% of all
issued and outstanding shares) of the stock (as such
term is used for purposes of the Section 382 ownership
change test) of Oneida.
Equity Securities. "Equity securities" of Oneida means the
common stock of Oneida and the 6% cumulative preferred
stock of Oneida (it being understood that such preferred
stock shall be included in the determination of
Substantial Equityholder status on an as-converted
basis).
Beneficial Ownership. "Beneficial ownership" of equity
securities shall be determined in accordance with
applicable rules under Section 382, the Treasury
Regulations promulgated thereunder and rulings issued by
the Internal Revenue Service and, to the extent provided
in those rules from time to time, shall include (i)
direct and indirect ownership (e.g., a holding company
would be considered to beneficially own all shares owned
or acquired by its subsidiaries), (ii) ownership by a
holder's family members and any group of persons acting
pursuant to a formal or informal understanding to make a
coordinated acquisition of stock and (iii) ownership of
shares which a holder has an option to acquire.
Option. An "option" to acquire stock includes any contingent
purchase, warrant, convertible debt, put, stock subject
to risk of forfeiture, contract to acquire stock or
similar interest, in each case, determined under the
rules set forth in Treasury Regulation section 1.382-4.
PLEASE TAKE FURTHER NOTICE that, upon the request of any person, counsel to the
Debtors, Shearman & Sterling LLP, 599 Lexington Avenue, New York, NY 10022
(Att'n: Abigail Deering), will provide a copy of the Interim Order and a form of
each of the required notices described above.
PLEASE TAKE FURTHER NOTICE that a hearing to consider approval of the Motion on
a final basis will be held at 10:00 a.m. prevailing Eastern time on May 12, 2006
before the Honorable Allan
L. Gropper, United States Bankruptcy Judge, in the Bankruptcy Court, Courtroom
617, One Bowling Green, New York, New York 10004-1408.
PLEASE TAKE FURTHER NOTICE that objections, if any, to approval of the Motion on
a final basis must (i) be in writing, (ii) conform to the Federal Rules of
Bankruptcy Procedure and the Local Bankruptcy Rules for the Southern District of
New York, (iii) be filed with the Bankruptcy Court in accordance with General
Order M-242, as amended (registered users of the Bankruptcy Court's case filing
system must file electronically and all other parties-in-interest must file on a
3.5 inch disk, preferably in Portable Document Format (PDF), WordPerfect or any
other Windows-based word processing format), (iv) be submitted in hard-copy form
directly to the chambers of the Honorable Allan L. Gropper, United States
Bankruptcy Judge and (v) be served upon (a) the Debtors at Oneida Ltd., 163-181
Kenwood Avenue, Oneida, New York 13421 (Att'n: General Counsel), (b) counsel to
the Debtors, Shearman & Sterling LLP, 599 Lexington Avenue, New York, NY 10022
(Att'n: Douglas P. Bartner, Esq. and Michael H. Torkin, Esq.), (c) the Office of
the United States Trustee for the Southern District of New York, 33 Whitehall
Street, Suite 2100, New York, New York 10044 (Att'n: Richard C. Morrissey,
Esq.), (d) proposed counsel to the Official Committee of Unsecured Creditors,
Otterbourg, Steindler, Houston & Rosen, P.C., 230 Park Avenue, New York, New
York 10169 (Att'n: Scott L. Hazan, Esq. and Lorenzo Marinuzzi, Esq.) (e) counsel
to the agent under the Debtors' prepetition credit facility and proposed
postpetition credit facility, Morgan, Lewis & Bockius LLP, 101 Park Avenue, New
York, New York 10178 (Att'n: Richard S. Toder, Esq. and Leonard Klingbaum,
Esq.), and (f) any other party that has filed a Notice of Appearance in these
cases, in each case so as to be received no later than 12:00 p.m. prevailing
Eastern time on May 10, 2006.
FAILURE TO FOLLOW THE PROCEDURES SET FORTH IN THIS NOTICE WILL CONSTITUTE A
VIOLATION OF THE AUTOMATIC STAY PRESCRIBED BY SECTION 362 OF THE BANKRUPTCY
CODE.
ANY PROHIBITED PURCHASE, SALE, TRADE OR OTHER TRANSFER OF EQUITY SECURITIES IN
THE DEBTORS IN VIOLATION OF THE INTERIM ORDER WILL BE NULL AND VOID AB INITIO
AND WILL CONFER NO RIGHTS ON THE TRANSFEREE AND MAY BE PUNISHED BY CONTEMPT OR
OTHER SANCTIONS IMPOSED BY THE BANKRUPTCY COURT.
PLEASE TAKE FURTHER NOTICE that the requirements set forth in this Notice are in
addition to applicable securities, corporate and other laws, and do not excuse
compliance therewith.
Dated: New York, New York
May 2, 2006
By: /s/ Douglas P. Bartner
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Douglas P. Bartner (DB-2301)
Michael H. Torkin (MT-5511)
Bryan R. Kaplan (BK-2627)
SHEARMAN & STERLING LLP
599 Lexington Avenue
New York, New York 10022
Telephone: (212) 848-4000
Facsimile: (212) 848-7179
Attorneys for the Debtors and
Debtors in Possession