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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): AUGUST 14, 2003
SEVEN SEAS PETROLEUM INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CAYMAN ISLANDS 0-22483 73-468669
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
5555 SAN FELIPE, SUITE 1700
HOUSTON, TEXAS 77056
(ADDRESS OF PRINCIPAL
EXECUTIVE OFFICES
AND ZIP CODE)
(713) 622-8218
(REGISTRANT'S TELEPHONE NUMBER,
INCLUDING AREA CODE)
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ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
(b) The following information is being furnished in connection with the
order confirming the Second Amended Plan of Reorganization (the "Plan") of Seven
Seas Petroleum Inc. (the "Company") dated August 2, 2003.
(1) The order confirming the Plan was signed by the United States
Bankruptcy Court for the Southern District of Texas, Houston Division (the
"Court").
(2) The Court signed the order confirming the Plan on August 4, 2003.
In accordance with Bankruptcy Rule 9006(a), the Effective Date of the Plan
was August 14, 2003.
The order confirming the Plan is attached as Exhibit 2.2 to this
Form 8-K
(3) The following is a fair summarization of the material features of
the Plan, the terms of which are incorporated by reference into this Form
8-K. To the extent, if any, that this summary conflicts with the terms of
the Plan, the terms of the Plan shall control. Capitalized terms used in
this summary and not defined herein are given the meaning attributed to
them in the Plan, which is attached as Exhibit 2.1 to this Form 8-K.
The Plan implements a compromise and settlement between the Trustee and on
behalf of the Estate and the Collateral Agent for the benefit of the Secured
Lenders. The compromise and settlement provides that the Secured Lenders shall
have an Allowed Secured Claim in an aggregate amount equal to $45 million in
principal plus accrued and accruing interest, fees and expenses, including fees
and expenses of counsel. The Allowed Secured Claims of the Secured Lenders shall
be paid pursuant to the terms set forth in Section 4.2 of the Plan. The Secured
Lenders shall retain their existing liens and security interests in their
collateral. The compromise and settlement further provides that Chesapeake, as
the Collateral Agent for the benefit of the Secured Lenders, shall receive the
Initial Payment in the amount of $8,750,000 to be distributed to the Secured
Lenders on the Effective Date of the Plan. This amount was paid in full on the
Effective Date of the Plan. All Cash remaining after the Initial Payment
exclusive of Cash received from proceeds held back from the sale of certain
assets of the estate (the "Holdback Proceeds") described later herein or certain
other assets (the "Contingent Assets") also further described herein remained in
accounts of the Company and the Subsidiaries and was utilized to fund the actual
expenses of the Company and the Subsidiaries through the Effective Date.
On the Effective Date, Cash from the Expense Savings and the Holdback
Proceeds were distributed to the Collateral Agent for the benefit of the Secured
Lenders and the parties designated to receive distributions on behalf of various
creditor constituencies ("Plan Designees") pursuant to the Expense Savings
Sharing Ratio and the Holdback Proceeds Sharing Ratio, respectively. All
distributions to the Plan Designees (whether made on the Effective Date or
otherwise) were and shall be made in the order of absolute priority in
accordance with the provisions of the Bankruptcy Code. Cash from the Contingent
Expense Savings realized by the Reorganized Company after the Effective Date
shall be distributed to the Collateral Agent and the Plan Designees within five
(5) business days after receipt of such Cash pursuant to the Expense Savings
Sharing Ratio. Additionally, Cash from the Contingent Assets shall be
distributed to the Collateral Agent for the benefit of the Secured Lenders and
the Plan Designees pursuant to certain ratios known as the Contingent Asset
Sharing Ratios. The Plan constitutes a motion, as permitted pursuant to section
1123(a)(5)(E) and (b)(3)(A) of the Bankruptcy Code and Rule 9019 of the
Bankruptcy Rules, for the approval of this compromise and settlement.
The Trustee was responsible for making the Initial Payment and the other
payments to be made on the Effective Date to the other parties then entitled.
Upon the payment of the Initial Payment, the
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payments from the Expense Savings and the Holdback Proceeds, and the other
Effective Date disbursements to parties then entitled thereto, the Trustee was
discharged from his duties and responsibilities herein. The Trustee is now Sole
Officer of the Reorganized Company, having the exclusive executive authority for
the Reorganized Company. The Reorganized Company's initial board of directors
(the "Board") is composed of (i) the Sole Officer, who serves as Chairman of the
Board of Directors, and (ii) three directors designated by the Secured Lenders
holding 66-2/3% in aggregate amount of the Chesapeake Note and the Senior Notes
and (iii) the one director designated by the majority vote of the Committee. If,
as and when the Secured Lenders have been repaid an amount equal to 75% of their
Allowed Claims, the Board shall be reconstituted to consist of (i) the Sole
Officer, who shall serve as Chairman of the Board of Directors, (ii) two
directors designated by the Secured Lenders holding 66-2/3% of the aggregate
amount of the Chesapeake Note and the Senior Notes and (iii) the director then
serving as designated by majority vote of the Committee and one director
designated by the Unsecured Noteholders holding 66-2/3% of the aggregate amount
of the Unsecured Notes. If, as and when the Secured Lenders have been repaid an
amount equal to 100% of their Allowed Claims, the Board members designated by
the Secured Lenders shall tender their resignations, and the Board shall be
reconstituted such that it will be composed of (i) the Sole Officer and (ii) the
Board members then serving as the representatives of the unsecured creditors.
Administrative Claims were paid in full on the Effective Date to the extent
allowed by final or interim order of the Court. Those Administrative claims not
paid as such were or shall be paid upon such other less favorable terms as the
Reorganized Company and any such holder of such a claim may agree.
Priority Tax Claims will be paid either in full or in quarterly payments
over the six (6)-year period following assessment of the tax, together with
interest thereon at the Plan Rate. The holders of Priority Tax Claims shall
retain the security for their claims until paid in full. The Trustee is not
aware of any Priority Tax Claims.
The Plan provides for the payment in full of Class 1 Priority Non-Tax
Claims.
The holders of the Class 2 Allowed Secured Claims shall receive a Pro Rata
Share of Cash from: (i) the Initial Payment; (ii) the Expense Savings and the
Contingent Expense Savings to be distributed to the Collateral Agent pursuant to
the Expense Savings Sharing Ratio; (iii) the Holdback Proceeds to be distributed
to the Collateral Agent pursuant to the Holdback Proceeds Sharing Ratio; and
(iv) the Contingent Assets to be distributed to the Collateral Agent pursuant to
the Contingent Assets Sharing Ratio, until the Allowed Secured Claim is paid in
full with accrued interest.
The holders of Class 3 Allowed Unsecured Claims shall receive a Pro Rata
Share of Cash from: (i) the Expense Savings and the Contingent Expense Savings
to be distributed to the Plan Designees pursuant to the Expense Savings Sharing
Ratio; (iii) the Holdback Proceeds to be distributed to the Plan Designees
pursuant to the Holdback Sharing Ratio; and (iv) the Contingent Assets to be
distributed to the Plan Designees pursuant to the Contingent Assets Sharing
Ratios, until the Allowed Unsecured Claims are paid in full with accrued
interest.
Class 4 Equity Interests shall retain their Interests in the Reorganized
Company. All remaining property of the Company's bankruptcy estate, including
Cash remaining from the Contingent Assets after the payment in full of Allowed
Claims with accrued interest, shall vest in the Reorganized Company, free and
clear of all liens, claims and encumbrances, except as may be provided by the
Plan. The Plan does not propose to modify or supplant any federal or state laws
or regulations which may be applicable to the Company.
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After the Effective Date of the Plan, Litigation Claims shall be prosecuted
or settled by the Reorganized Company.
On the Effective Date of the Plan, the Company was discharged from all
Claims except from those otherwise provided for in the Plan.
(4) As of August 4, 2003, the date of the confirmation order, there
were 37,934,855 shares of the Company issued and outstanding. No shares
will be reserved for future issuance in respect of claims and interests
filed and allowed under the Plan.
(5) Information as to the assets and liabilities of the Company as of
the most recent practicable date to the date that the order confirming the
Plan was entered, is set forth in the Company's Bankruptcy Monthly
Operating Report, filed as Exhibit 99.2 to the Company's Form 8-K dated
June 30, 2003 and incorporated by reference herein as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBIT
(c) Exhibits
Exhibit 2.1 - Second Amended Plan of Reorganization of Seven Seas
Petroleum Inc. dated August 2, 2003.
Exhibit 2.2 - Order Confirming the Second Amended Plan of Reorganization
of Seven Seas Petroleum Inc. dated August 4, 2003.
Exhibit 99.1 - Current Report on Form 8-K, dated June 30, 2003, reporting
the Company's May 2003 Bankruptcy Monthly Operating Report,
incorporated by reference to Exhibit 99.2 of the Company's
Current Report on Form 8-K filed with the Securities
Exchange Commission on July 17, 2003.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SEVEN SEAS PETROLEUM INC.
Date: August 25, 2003
By: /s/ Ben B. Floyd
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Ben B. Floyd
Sole Officer
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INDEX TO EXHIBITS
Exhibit 2.1 - Second Amended Plan of Reorganization of Seven Seas
Petroleum Inc. dated August 2, 2003.
Exhibit 2.2 - Order Confirming the Second Amended Plan of Reorganization
of Seven Seas Petroleum Inc. dated August 4, 2003.
Exhibit 99.1 - Current Report on Form 8-K, dated June 30, 2003, reporting
the Company's May 2003 Bankruptcy Monthly Operating Report,
incorporated by reference to Exhibit 99.2 of the Company's
Current Report on Form 8-K filed with the Securities
Exchange Commission on July 17, 2003.