EXHIBIT 99.1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
IN RE: ) Chapter 11
)
OAKWOOD HOMES CORPORATION, ) Case No. 02-13396 (PJW)
et al.,(1) )
Debtors. ) Jointly Administered
)
)
)
SUPPLEMENTAL DISCLOSURE STATEMENT
FOR SECOND AMENDED JOINT CONSOLIDATED PLAN OF
REORGANIZATION OF OAKWOOD HOMES CORPORATION
AND ITS AFFILIATED DEBTORS AND DEBTORS-IN-POSSESSION
Dated: February 6, 2004
MORRIS, NICHOLS, ARSHT & TUNNELL
Robert J. Dehney (No. 3578)
Derek C. Abbott (No. 3376)
Daniel B. Butz (No. 4227)
1201 North Market Street
P.O. Box 1347
Wilmington, Delaware 19899-1347
(302) 658-9200
- and -
RAYBURN COOPER & DURHAM, P.A.
C. Richard Rayburn, Jr.
Albert F. Durham
Patricia B. Edmondson
1200 Carillon, 227 West Trade Street
Charlotte, North Carolina 28202-1675
(704) 334-0891
Co-Counsel for Oakwood Homes Corporation,
et al., Debtors and Debtors In Possession
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(1) The Debtors are the following entities: Oakwood Homes Corporation, New
Dimension Homes, Inc., Dream Street Company, LLC, Oakwood Shared
Services, LLC, HBOS Manufacturing, LP, Oakwood MHD4, LLC, Oakwood
Acceptance Corporation, LLC, Oakwood Mobile Homes, Inc., Suburban Home
Sales, Inc., FSI Financial Services, Inc., Home Service Contract, Inc.,
Tri-State Insurance Agency, Inc., Golden West Leasing, LLC, Crest
Capital, LLC and Preferred Housing Services, LP.
TABLE OF CONTENTS
PAGE
I. INTRODUCTION AND SUMMARY INFORMATION. 1
A. Purpose of this Document. 2
B. Summary Information. 3
C. History of the Sale Transaction and the Second Amended Plan. 14
1. The First Amended Plan. 14
2. Exit Financing for Stand Alone Option. 14
3. The Marketing Process. 15
4. The Proposed Sale Transaction. 16
5. The Purchase Agreement for the Sale Transaction. 16
6. Approval of Bidding Procedures, Expense Reimbursement and Breakup Fee. 21
7. The Solicitation of Qualifying Overbids and the Competitive Sale. 21
8. Plan Implementation under the Sale Option. 22
(a) Consummation of Sale Transaction. 22
(b) Authorization of the Sale Transaction. 22
(c) Revesting and Transfer of Assets. 22
(d) Merger of Debtors and Vesting of Assets in
Reorganized Sale Debtors. 23
(e) Treatment of Old Common Stock, Interests and
Beneficial Interest in the Liquidation Trust. 23
(f) Considerations Regarding the Additional Debtors. 24
(g) Distributions of Cash. 24
9. Plan Implementation under the Stand Alone Option. 24
(a) Vesting of Assets in the Reorganized Debtors. 24
i
(b) Amended and Restated Certificates of Incorporation. 25
(c) Amended and Restated Bylaws. 25
(d) New Securities. 25
(e) Directors. 26
(f) Officers. 26
(g) Employment Contracts and Professional Retentions. 26
(h) Corporate Action and Other Documents and Actions. 27
(i) Approval of the Exit Facility. 27
(j) Distributions of Cash. 27
(k) Distributions of Proceeds from the Liquidation Trust. 27
10. Plan Implementation under Either the Sale Option or the Stand
Alone Option. 27
(a) Substantive Consolidation. 28
(b) Creation of the Liquidation Trust. 29
(c) Federal Income Tax Treatment of the Trust for the
Liquidation Trust Assets. 30
(d) Appointment of Liquidation Trustee. 32
(e) The Liquidation Trust Advisory Committee. 32
(f) Causes of Actions and Defenses. 33
(g) Termination of the Final DIP Agreement. 33
(h) Dissolution of the Creditors' Committee. 34
D. The Confirmation Hearing, Voting Procedures, Bar Dates, And Other
Important Deadlines. 34
1. Time and Place of the Confirmation Hearing. 34
2. Entities Entitled to Vote on the Plan. 34
ii
3. Deadline for Voting For or Against the Plan. 35
4. Deadline for Objecting to Confirmation of the Plan. 36
5. Deadlines for Parties to Executory Contracts and
Unexpired Leases to Assert Damage Claims and to
Object to the Terms of Assumption. 36
6. Administrative Claims Bar Date. 38
7. Fee Claims Bar Date. 39
8. Unsecured Claims Bar Date. 39
9. Materials to Be Filed in Support of Confirmation. 39
10. Information Regarding the Plan. 40
11. Effective Date of the Plan. 40
12. Important Notice and Cautionary Statement. 40
II. THE PLAN OF REORGANIZATION. 42
A. Funding of Distributions under the Plan. 42
B. Reserves. 42
(a) Establishment of Disputed Claim Reserves for Cash Distributions. 42
(b) Establishment of the Stand Alone Voting Trust for New Common
Stock and New Warrant Distribution. 43
(c) Amounts to Be Reserved. 43
(d) Distribution. 44
(e) Termination of Disputed Claim Reserve or Stand Alone Voting Trust. 44
(f) Limitation of Liability for Funding the Disputed Claim Reserve. 44
C. Releases. 44
D. Exculpation. 45
E. Injunction. 45
iii
F. Waiver of Certain Claims. 46
G. Retention of Old Common Stock by Holders of Interests under the Sale Option. 46
III. PROJECTED DISTRIBUTION ANALYSIS FOR THE SALE OPTION. 47
A. Introduction. 47
B. Basis of Presentation. 47
C. Post Closing Operations. 47
D. Wind Down Team. 48
E. The Wind Down. 48
F. Frequency of Payments. 48
G. Avoidance Actions. 49
H. Professional Fees. 49
IV. ADDITIONAL CONSIDERATIONS REGARDING RISK. 50
A. Risks Associated with the Sale Option. 50
B. Risks Associated with the Stand Alone Option. 51
V. CERTAIN TAX CONSEQUENCES OF A SALE TRANSACTION. 54
A. General. 54
B. Consequences to the Debtors. 55
C. Consequences to the Holders of Certain Claims. 55
1. Gain or Loss - Generally. 56
2. Market Discount. 56
3. Distributions in Discharge of Accrued But Unpaid Interest. 57
D. Tax Treatment of the Liquidation Trust and Holders of Beneficial
Interests Therein. 57
1. Classification of the Liquidation Trust. 57
2. General Tax Reporting by the Liquidation Trust and
Beneficiaries. 58
iv
3. Tax Reporting for Liquidation Trust Assets Allocable to
Disputed Claims. 59
4. Withholding. 59
E. Tax Treatment of the Reorganized Sale Debtors under the Sale Option. 60
VI. CONFIRMATION PROCEDURES. 60
A. Voting and Right to Be Heard at Confirmation. 61
1. Who May Support or Object to Confirmation of the Plan. 61
2. Who May Vote to Accept or Reject the Plan. 61
3. What Is an Allowed Claim for Voting Purposes. 61
4. What Is an Impaired Class of Claims or Interests. 62
5. Who Is Not Entitled to Vote. 62
6. Votes Necessary to Confirm the Plan. 62
7. Votes Necessary for a Class to Accept the Plan. 62
8. Treatment of Non-Accepting Classes. 62
9. Request for Confirmation Despite Non-Acceptance by
Impaired Classes. 63
B. Hypothetical Liquidation Analysis. 63
C. Feasibility. 64
D. Alternatives to the Plan. 64
VII. RECOMMENDATION AND CONCLUSION. 65
EXHIBIT A. Disclosure Statement for Revised First Amended Joint Plan of
Reorganization
EXHIBIT B. Second Amended Joint Consolidated Plan of Reorganization
EXHIBIT C. Distribution Analysis for Sales Transaction
EXHIBIT D. Clayton Homes Asset Purchase Agreement
v
I. INTRODUCTION AND SUMMARY INFORMATION.
Oakwood Homes Corporation ("Oakwood"), a North Carolina
corporation, and fourteen of its direct and indirect subsidiaries and affiliated
partnerships (the "Affiliate Debtors" and collectively with Oakwood, the
"Debtors") are debtors and debtors-in-possession in jointly-administered Chapter
11 cases that currently are pending in the United States Bankruptcy Court for
the District of Delaware (the "Bankruptcy Court"). The Debtors commenced their
respective Chapter 11 Cases(2) by filing voluntary petitions in the Bankruptcy
Court on November 15, 2002 (the "Petition Date").
The Debtors are joint proponents of the Second Amended Joint
Consolidated Plan of Reorganization of Oakwood Homes Corporation and Its
Affiliated Debtors and Debtors-in-Possession (as such may be amended from time
to time, the "Plan"), dated February 6, 2004, a copy of which is attached hereto
as EXHIBIT B. The Plan has two distinct purposes. First, it authorizes: (a) a
sale of substantially all of the Debtors' assets to Clayton Homes, Inc.
("Clayton Homes") in a sale transaction; (b) the liquidation of substantially
all of the Debtors' remaining assets; and (c) the distribution of proceeds by
the Liquidation Trust (collectively, the "Sale Option"). If the Sale Option is
not consummated due to the termination of the Purchase Agreement, the Plan
authorizes: (a) a restructure, compromise and discharge of creditors' Claims
against, and stockholders' Interests in, the Debtors; (b) the reorganization of
the Debtors' financial affairs; and (c) the emergence of the Reorganized Stand
Alone Debtors from the Chapter 11 Cases as ongoing businesses (collectively, the
"Stand Alone Option").
The Stand Alone Option described in the Plan is substantially
similar to the Debtors Revised First Amended Joint Consolidated Plan of
Reorganization (the "Stand Alone Plan") that was described in the Disclosure
Statement for Revised First Amended Joint Consolidated Plan of Reorganization
approved by the Bankruptcy Court on October 3, 2003, (the "Original Disclosure
Statement"). To the extent that the statements within this Supplemental
Disclosure Statement contradict statements made in the Original Disclosure
Statement as to the Stand Alone Option, the statements made in this Supplemental
Disclosure Statement control
This Supplemental Disclosure Statement is intended to be read
in conjunction with the Original Disclosure Statement a copy of which is
incorporated herein by reference and attached hereto as EXHIBIT A. However, as
mentioned above, to the extent that the statements within this Supplemental
Disclosure Statement contradict statements made in the Original Disclosure
Statement, the statements made in this Supplemental Disclosure Statement
control.
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(2) Unless otherwise provided, capitalized terms that are not defined in
this Supplemental Disclosure Statement shall have the meanings assigned
to them in the Plan.
1
A. PURPOSE OF THIS DOCUMENT.
The purpose of this Supplemental Disclosure Statement is to
enable the Holders of Claims and Interests against the Debtors' to make an
informed judgment about whether to vote to accept or reject the Plan by
explaining and describing (i) the Sale Option and (ii) the changes between the
Stand Alone Option and the stand alone transaction described in the Stand Alone
Plan and Original Disclosure Statement. This Supplemental Disclosure Statement
summarizes the provisions of the Plan and provides certain information relating
to the Debtors, their Chapter 11 Cases, the Plan and the process the Bankruptcy
Court will follow in determining whether to confirm the Plan.
The Bankruptcy Court has reviewed this Supplemental Disclosure
Statement and on February 6, 2004 determined that it contains adequate
information and may be sent to you [Docket No. 3543]. The Bankruptcy Court,
however, has not yet made a determination as to whether the Plan should be
confirmed, and has not conducted an independent investigation of the factual and
financial matters described herein.
READ THIS SUPPLEMENTAL DISCLOSURE STATEMENT AND THE ORIGINAL DISCLOSURE
STATEMENT CAREFULLY TO FIND OUT:
1. HOW THE PLAN WILL AFFECT YOUR CLAIMS OR INTERESTS,
2. WHAT RIGHTS YOU HAVE WITH RESPECT TO VOTING FOR OR AGAINST THE
PLAN,
3. HOW AND WHEN TO VOTE FOR OR AGAINST THE PLAN, AND
4. WHAT RIGHTS YOU HAVE WITH RESPECT TO SUPPORTING OR OBJECTING
TO THE PLAN.
YOU SHOULD READ THIS SUPPLEMENTAL DISCLOSURE STATEMENT, THE
ORIGINAL DISCLOSURE STATEMENT ATTACHED AS EXHIBIT "A" (INCLUDING THE EXHIBITS)
AND THE PLAN ATTACHED AS EXHIBIT "B" (INCLUDING THE PLAN SUPPLEMENT AND THE
EXHIBITS) (COLLECTIVELY THE "DISCLOSURE STATEMENT") IN THEIR ENTIRETY. HOWEVER,
THE DISCLOSURE STATEMENT CANNOT TELL YOU EVERYTHING ABOUT YOUR RIGHTS. YOU
SHOULD CONSULT YOUR OWN LEGAL, FINANCIAL AND TAX ADVISORS TO OBTAIN MORE
SPECIFIC ADVICE ON HOW THE PLAN WILL AFFECT YOU AND WHAT IS THE BEST COURSE OF
ACTION FOR YOU.
THE DISCLOSURE STATEMENT HAS BEEN PREPARED BY THE DEBTORS IN
GOOD FAITH AND IN COMPLIANCE WITH APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE.
THE INFORMATION CONTAINED IN THE DISCLOSURE STATEMENT IS BELIEVED TO BE CORRECT
AT THE TIME OF THE FILING OF THE DISCLOSURE STATEMENT BASED UPON THE BEST
2
INFORMATION THEN CURRENTLY AVAILABLE TO THE DEBTORS. ONCE APPROVED BY THE
BANKRUPTCY COURT, THE DISCLOSURE STATEMENT WILL NOT BE UPDATED BASED UPON
SUBSEQUENT EVENTS. NO INFORMATION PROVIDED BY ANY PERSON OR ENTITY (INCLUDING
THE DEBTORS' AGENTS, OFFICERS, DIRECTORS, EMPLOYEES, ACCOUNTANTS, FINANCIAL
ADVISORS, ATTORNEYS OR AFFILIATES) CONCERNING THE DEBTORS, THEIR OPERATIONS,
FUTURE REVENUES, PROFITABILITY, VALUATIONS, OR OTHERWISE, OTHER THAN AS SET
FORTH IN THE DISCLOSURE STATEMENT, HAS BEEN AUTHORIZED. ANY INFORMATION,
REPRESENTATION, PROMISE, STATEMENT OR INDUCEMENT MADE TO SECURE OR OBTAIN
ACCEPTANCES OR REJECTIONS OF THE PLAN THAT ARE OTHER THAN, OR ARE INCONSISTENT
WITH, THE INFORMATION CONTAINED IN THE DISCLOSURE STATEMENT SHOULD NOT BE RELIED
UPON BY ANY PERSON IN ARRIVING AT A DECISION TO VOTE FOR OR AGAINST THE PLAN.
ANY SUCH ADDITIONAL INFORMATION, REPRESENTATIONS, AND INDUCEMENTS SHOULD BE
IMMEDIATELY REPORTED TO THE ATTENTION OF THE DEBTORS AND THE BANKRUPTCY COURT.
B. SUMMARY INFORMATION.
The following information summarizes the terms of the Plan and
describes your rights to be heard and vote with respect to the Plan.
THE FOLLOWING INFORMATION IS A SUMMARY ONLY AND DOES NOT FULLY
ADDRESS ALL OF YOUR RIGHTS, ALL PROVISIONS OF THE PLAN OR ALL OF THE
CONSEQUENCES CONFIRMATION OF THE PLAN MAY HAVE ON YOUR RIGHTS. YOU ARE STRONGLY
ENCOURAGED TO READ THE DISCLOSURE STATEMENT AND THE PLAN IN THEIR ENTIRETY AND
TO CONSULT WITH YOUR LEGAL, FINANCIAL AND TAX ADVISORS PRIOR TO DECIDING WHETHER
TO SUPPORT OR OPPOSE THE PLAN.
THE DEBTORS AND THEIR The Debtors design, manufacture and market
BUSINESSES: manufactured and modular homes. In addition, they
arrange financing for a portion of their retail sales
and, as agent, provide a variety of insurance
products to customers. The Debtors are among the
major producers and retailers of manufactured homes
and historically have originated consumer loans
secured by the manufactured homes. The Debtors'
consolidated financial statements reflect that, for
the fiscal year ended September 30, 2002, the
Debtors, on a consolidated basis, generated net sales
of approximately $927 million. As of December 31,
2002, the Debtors, on a consolidated basis, had
approximately $812 million in assets and
approximately $1.1 billion in liabilities.
3
PURPOSE OF THE PLAN: The Plan provides for a Sale Option and Stand Alone
Option. The purpose of the Disclosure Statement is to
enable the Debtors' creditors and stockholders to
make an informed judgment about whether to vote to
accept or reject the Plan. The Disclosure Statement
summarizes the provisions of the Plan and provides
certain information relating to the Debtors, their
Chapter 11 Cases, the Plan and the process the
Bankruptcy Court will follow in determining whether
to confirm the Plan.
The Sale Option described in the Plan would be
effected in accordance with the Purchase Agreement
attached to this Supplemental Disclosure Statement as
Exhibit "D". Under the Sale Option the proceeds of
sale and the liquidation of substantially all of the
remaining Assets will fund the distributions to be
made under the Plan.
The Stand Alone Option described in the Plan is
substantially similar to the Stand Alone Plan that
was described in the Original Disclosure Statement
providing for a recapitalization of the Debtors
through the restructure, compromise and discharge of
the Debtors' existing creditor Claims and stockholder
Interests in a manner intended to enable the Debtors
to emerge from their Chapter 11 Cases as an
integrated viable business. The Stand Alone Option of
the Plan differs from its predecessor insofar as it
classifies Secured Claims as impaired rather than
unimpaired because of the potential impairment of
Holders of Secured Claims if the Debtors choose to
return the collateral securing such Secured Claim.
Because of the possibility for impairment under the
Stand Alone Option (and only under the Stand Alone
Option), the Debtors are allowing such Holders of
Secured Claims to vote on the Plan. Additionally, the
Stand Alone Option differs from its predecessor
insofar as it prescribes a different treatment for
the Convenience Claims in Class 3, including the
addition of an opt-out provision. The Stand Alone
Option also differs from its predecessor as the Stand
Alone Option's release provisions, found in Article
VII of the Plan, have been modified, and in the case
of releases by Holders of Claims and Interests,
eliminated.
The Debtors intend to effect the transaction
contemplated by the Sale Option, but in the event
that the Purchase Agreement is terminated, the
Debtors intend to effect the Stand Alone Option. To
provide for a continuation of necessary
debtor-in-possession financing and for the creation
of an exit financing facility in the event the Stand
Alone Option is consummated, the Debtors and
Greenwich Capital Financial Products, as agent,
entered into an amended and restated
debtor-in-possession financing agreement which
effectively provides for both and became effective on
4
December 31, 2003.
BASIC STRUCTURE OF THE Under the Sale Option, unless otherwise noted, the
PLAN: Debtors' secured creditors will receive distributions
of Cash or equivalent consideration and the Debtors'
unsecured creditors will receive beneficial interests
in the Liquidation Trust, which will distribute Cash
based upon those beneficial interests. Under the Sale
Option, Holders of Interests will retain their Old
Common Stock, representing their interest in the
Reorganized Sale Debtors. Under the Stand Alone
Option, unless otherwise noted, the Debtors' secured
creditors will receive distributions of Cash or
equivalent consideration and the Debtors' unsecured
creditors will receive distributions of New Common
Stock in the Reorganized Stand Alone Debtors or other
consideration on or after the Plan's Effective Date
in satisfaction of their Claims. Additionally, under
the Stand Alone Option, the Debtors' Interest Holders
will receive the New Warrants in exchange for their
Old Common Stock if the Classes consisting of Holders
of Secured Claims and Unsecured Claims vote in favor
of the Plan. Only those parties that have Allowed
Claims or Interests against the Debtors will receive
consideration under the Plan. The amount and type of
consideration a creditor will receive may depend,
among other things, upon whether the Holders' Allowed
Claim or Interest is (a) entitled to special priority
under the Bankruptcy Code, (b) a Secured Claim, (c)
an Unsecured Claim or (d) otherwise separately
classified under the Plan.
The Plan groups most creditors and stockholders into
various Classes of Claims and Interests and provides
for the treatment of each Class. Certain creditors,
such as Holders of Administrative Claims arising
after the commencement of the Chapter 11 Cases,
Holders of Fee Claims, and Holders of Allowed
Priority Tax Claims, are not grouped in any Class,
but nonetheless will be treated under the Plan
pursuant to the Bankruptcy Code.
Upon the Plan's Effective Date, all Junior Notes,
Senior Notes, B-2 REMIC Guarantees and the
Resecuritization Note Put Option will be cancelled
and the obligations represented by such instruments
will be discharged, with certain exceptions as
provided for under the Plan. Under the Stand Alone
Option, the Interests will also be cancelled and the
obligations represented by such instruments will be
discharged upon the Plan's Effective Date.
Under the Plan, all of the Debtors' assets and
liabilities are deemed substantively consolidated for
purposes of distributions to the Debtors' creditors
and stockholders. Thus, Holders of Unsecured
5
Claims of one of the consolidated Debtors will
receive the same treatment as Holders of Unsecured
Claims of any of the other Debtors. Additionally,
Holders of Claims against multiple Debtors on account
of affiliate guarantees and co-obligations of
multiple Debtors will be entitled to only one
distribution from the Debtors' consolidated Estates.
The Plan contains numerous other provisions
governing, among other things: (a) the assumption,
assumption and assignment and rejection of executory
contracts and unexpired leases; (b) the continuation
of management and the designation of new boards of
directors for the Reorganized Stand Alone Debtors,
under the Stand Alone Option; (c) the restructuring
of the Debtors' various legal entities, under the
Stand Alone Option; (d) the creation, funding and
operation of the Liquidation Trust; (e) the
resolution of Disputed Claims against the Debtors;
(f) the Bankruptcy Court's retention of jurisdiction
following confirmation of the Plan and (g) the scope
and nature of the Debtors' discharge following
confirmation. Please refer to the Plan itself for
more detailed information.
IF THE SALE OPTION UNDER THE PLAN IS NOT IMPLEMENTED,
CLAYTON HOMES MAY BE ENTITLED TO A BREAK-UP FEE OF
$11.0 MILLION AS DESCRIBED IN SECTIONS I.C.6 AND
I.C.7 OF THIS SUPPLEMENTAL DISCLOSURE STATEMENT.
CLASSIFICATIONS AND The following Summary Table sets forth the
TREATMENT OF CREDITORS' classification and treatment of creditors' Claims and
CLAIMS AND STOCKHOLDERS' stockholders' Interests under the Plan. The
INTERESTS UNDER THE PLAN: descriptions in the Summary Table are only summaries
and do not include all terms and conditions of the
Plan. You are strongly advised to consult the
relevant Plan provisions for a full description of
the respective Classes and corresponding treatments
under the Plan, especially as such treatments may
differ under the Sale Option as compared to the Stand
Alone Option.
6
SUMMARY TABLE - CLAIMS
CLASS CLAIM STATUS VOTING RIGHTS RECOVERY(3)
- -------------------------------------------------------------------------------------------------------------
Class 1 Priority Non-Tax Claims Unimpaired Not Entitled to Vote; 100.0%
Deemed to Accept
- ---------------------------------------------------------------------------------------------------------------
Class 2A Secured Tax Claims Impaired Entitled to Vote 100.0%
- ---------------------------------------------------------------------------------------------------------------
Class 2B 1997 Bonds Secured Claim Impaired Entitled to Vote 100.0%
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Class 2C 1998 Bonds Secured Claim Impaired Entitled to Vote 100.0%
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Class 2D Auto Secured Claim Impaired Entitled to Vote 100.0%
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Class 2E Carolina Secured Claim Impaired Entitled to Vote 100.0%
- ---------------------------------------------------------------------------------------------------------------
Class 2F First American Secured Claim Impaired Entitled to Vote 100.0%
- ---------------------------------------------------------------------------------------------------------------
Class 2G Foothill Secured Claim Impaired Entitled to Vote 100.0%
- ---------------------------------------------------------------------------------------------------------------
Class 2J Thomas Secured Claim Impaired Entitled to Vote 100.0%
- ---------------------------------------------------------------------------------------------------------------
Class 2K U.S. Bank Secured Claim Impaired Entitled to Vote 100.0%
- ---------------------------------------------------------------------------------------------------------------
Class 2L Other Secured and Setoff Claims Impaired Entitled to Vote 100.0%
- ---------------------------------------------------------------------------------------------------------------
Class 3 Convenience Claims Impaired Entitled to Vote 25.0%
- ---------------------------------------------------------------------------------------------------------------
Class 4A Senior Note Claims Impaired Entitled to Vote 50.3% Stand
Alone
37.4% Sale
- ---------------------------------------------------------------------------------------------------------------
Class 4B Junior Note Claims Impaired Entitled to Vote 50.3% Stand
Alone
37.4% Sale
- ---------------------------------------------------------------------------------------------------------------
Class 4C REMIC Guarantee Claims Impaired Entitled to Vote 50.3% Stand
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(3) EXHIBIT C to this Supplemental Disclosure Statement provides an
analysis of the recoveries to each class of Claims and Interests and
provides this estimate of their respective percentage recovery under
the Sale Option (see Schedule 6 to Exhibit B of the Original Disclosure
Statement for an analysis of the recoveries to each class of Claims and
Interests under the Stand Alone Option). All recovery percentages in
this summary table were determined using assumptions and estimates
which may be subject to change. As there are significant disputes
concerning the Allowed amount of many of the Unsecured Claims, (a)
distributions may be delayed pursuant to the procedures for Disputed
Claim reserves as described in Section II.B herein and (b) actual
recovery percentages may differ for Unsecured Creditors. .Also note
that the estimates of recovery to the Unsecured Classes under the Sale
Option are subject to change based upon the value of the Assets left
behind in the Reorganized Sale Debtors to ensure that assets in the
Liquidation Trust can be distributed free from certain tax and future
claim liability. This concept is further described herein in Article VI
of the Plan. The Creditors' Committee does not necessarily agree with
the Debtors' estimate for unsecured creditor recoveries, as set forth
on Exhibit C. Among other things, the Creditors' Committee believes
that: (1) the estimated costs of winding down the estates and
administrating the Liquidation Trust (which costs are paid out of the
assets of the Liquidation Trust and, therefore, out of potential
unsecured creditor recoveries) may be overstated; (2) the estimated
amount of estate proceeds necessary to capitalize the Reorganized Sale
Debtors may be less than the amounts stated on Exhibit C (which amount
ultimately will be stated in the Plan Supplement or, if there is
disagreement over the amount at the time of the Plan Supplement, likely
will be determined by the Bankruptcy Court at the Confirmation
Hearing); and (3) additional sums may be available for distribution to
unsecured creditors on account of Avoidance Actions, including estate
preference claims.
7
Alone
37.4% Sale
- ---------------------------------------------------------------------------------------------------------------
Class 4D Litigation Claims Impaired Entitled to Vote 50.3% Stand
Alone
37.4% Sale
- ---------------------------------------------------------------------------------------------------------------
Class 4E Other Unsecured Claims Impaired Entitled to Vote 50.3% Stand
Alone
37.4% Sale
- ---------------------------------------------------------------------------------------------------------------
Class 6A Non-Debtor-Held Interests Impaired Entitled to Vote Unknown
Stand Alone
Unknown Sale
SUMMARY TABLE - TREATMENTS(4)
CLASS DESCRIPTION(5) TREATMENT UNDER THE PLAN
- -----------------------------------------------------------------------------------------------------------------------
CLASS 1 (PRIORITY NON-TAX CLAIMS)(6) Subject to the terms herein, and unless the Holder of
an Allowed Priority Non-Tax Claim agrees to receive
Number of Filed Claims: 48 other, less favorable treatment, each Holder of an
Amount of Filed Claims: $1,254,000 Allowed Priority Non-Tax Claim shall be paid 100% of
Amount of Scheduled Claims: $136,000 the unpaid amount of such Allowed Priority Non-Tax
Estimated Amount of Allowed Claims: $500,000.00 Claim in Cash as soon as reasonably practicable upon
the first Distribution Date after such Claim becomes
an Allowed Claim.
Class 1 is an Unimpaired Class, and Holders of Class 1
Claims are not entitled to vote.
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(4) The numbers included in this table have been prepared based on the
following:
1) The classification of claims reflects the
company's analysis of the nature of the claims. The
company is currently in the process of reconciling
the claims.
2) All expunged claims are excluded.
3) All withdrawn claims are excluded.
4) Any scheduled liability that has been paid-in-full
as allowed by the First Day Motions is excluded.
5) All cross-case duplicates are excluded.
(5) All Estimated Amounts of Allowed Claims in this summary table were
determined using assumptions and estimates which may be subject to
change. Additionally, as there are significant disputes concerning the
Allowed amount of many of the Unsecured Claims, distributions may be
delayed pursuant to the procedures for Disputed Claim reserves as
described in Section II.B herein.
(6) Includes adjustments due to the settlement of the WARN Act litigation
referenced in the Original Disclosure Statement.
8
CLASSES 2A, B, C, D, E, F, Subject to the provisions of sections
G, J, K, L (SECURED CLAIMS)(7) 502(b)(3) and 506(d) of the Bankruptcy
Code and the Plan, each Holder of an Allowed
Number of Filed Secured Claim shall receive (i) under the
Claims: 19 Sale Option, 100% of the unpaid amount of
Amount of Filed such Allowed Claim in Cash or, in the case
Claims: $2,308,000 of an Allowed Class 2G Claim, 100% of the
Amount of Scheduled unpaid amount of such Allowed Claim in
Claims: $59,341,000 accordance with section 5.03 of the Purchase
Estimated Amount of Allowed Agreement; or (ii) under the Stand Alone
Claims: $6,858,000 Option, at the option of the Reorganized
Stand Alone Debtors: (a) 100% of the Net
Proceeds from the sale of the relevant
collateral, up to the unpaid amount of such
Allowed Claim (with such payments to be
made, if applicable, from accounts set up by
the Debtors, during the Chapter 11 Cases, in
connection with the sale of such
collateral), subject to applicable
inter-creditor lien priorities; (b) the
return of the relevant collateral; (c) the
reinstatement of the Claim in accordance
with the provisions of 11 U.S.C. Section
1124(2); (d) the indubitable equivalent
pursuant to 11 U.S.C. Section
1129(b)(2)(A)(iii); (e) such other, less
favorable, treatment as shall be agreed to
between the Holder of such Claim and the
Reorganized Stand Alone Debtors or the
Liquidation Trust, as appropriate; or (f)
such other, less favorable, treatment as is
determined by Final Order of the Bankruptcy
Court. Such Distribution shall be made on or
as soon as reasonably practicable upon the
first Distribution Date after such Claim
becomes an Allowed Claim. Upon receipt by
the relevant Holder of such Distributions,
such Holder's Lien, offset right or other
security interest in the relevant collateral
shall be deemed released. To the extent a
Claim is partially a Secured Claim based on
an offset right and partially an Allowed
Claim of another type, such Secured Claim
shall be deemed to have been (x) setoff only
to the extent of the allowed amount of the
allowed, liquidated, nondisputed,
noncontingent claim owing to the Debtors,
Liquidation Trust, the Reorganized Sale
Debtors or the Reorganized Stand Alone
Debtors and (y) a Claim classified in
another relevant Class for any excess of
such Claim over the amount so set off. If a
Claim is fully a Secured Claim based on an
offset right, the allowance of such Claim
shall not affect any obligations or
liabilities due and payable (at such time)
to the Debtors or their successors that are
in an amount in excess of the amount validly
offset and the payment, in full and in cash,
of all amounts due and owing as of the
Effective Date to the Debtors or their
successors
- ---------------------------
(7) These amounts include all Secured Claims (Classes 2A through 2L). These
amounts include the pre-petition funded credit facility which has since
been replaced by the DIP financing. Also included in the scheduled
liability is the contingent liability resulting from the outstanding
letters of credit as of the filing.
9
and the turnover of any property of the
Debtors or their successors held by such
claimant on account of any unliquidated,
disputed or contingent right of setoff shall
be a precondition of the allowance of such
Secured and Setoff Claim.
These Classes are Impaired and the Holders
of Claims in these Classes are entitled to
vote.
CLASS 3 (CONVENIENCE CLAIMS)(8) Subject to the terms herein, unless the
Holder of an Allowed Class 3 Claim agrees to
receive other, less favorable treatment,
each Holder of an Allowed Class 3 Claim
shall receive 25% of the unpaid amount of
such Allowed Class 3 Claim on the Initial
Distribution Date, or as soon as reasonably
practicable thereafter, at the election of
the Debtors or the Liquidation Trustee upon
reasonable notice to the relevant Holders.
Class 3 is an Impaired Class, and Holders of
Class 3 Claims are entitled to vote. The
Convenience Class Election must be made at
the time of balloting for voting to accept
or reject the Plan and clearly indicated on
the Holder's Ballot and any such election
for treatment as a Convenience Claim through
a Convenience Class Opt-In Election shall
count as a vote for the Plan; provided,
however, that, if any Claim that is
otherwise eligible for the Convenience Class
Election is a Disputed Claim at the time of
balloting, the Convenience Class Election
may be made in a Final Order allowing such
Claim. Once a Convenience Class Election has
been made with respect to a Claim, such
election shall be irrevocable; provided,
however, that a Convenience Class Election
can be changed or made upon the written
consent of the Debtors, prior to the
Effective Date, and the Liquidation Trust
(under the Sale Option) or the Reorganized
Stand Alone Debtors (under the Stand Alone
Option), after the Effective Date. Whether a
Holder of a Claim has properly made a
Convenience Class Election shall have no
effect on whether such Claim is or may
become a Disputed Claim or an Allowed Claim.
CLASS 4A (SENIOR NOTE CLAIMS) Subject to the terms herein and unless the
Holder of an Allowed Class 4A Claim who is
Number of Filed Claims: 3 the beneficial holder of such Class 4A Claim
Amount of Filed Holder of an Allowed Claim in this Class
Claims: $304,620,000 shall receive in full satisfaction,
Amount of Scheduled settlement, release and discharge and in
Claims: $303,800,000 exchange for such Claim (i) under both the
Estimated Amount of Allowed Sale Option and the
Claims: $304,647,000
- ---------------------------
(8) For the purpose of this chart, Convenience Class Claims (Class 3) are
included in the Class 4E Other Unsecured Claims.
10
Stand Alone Option, a beneficial interest in
the Liquidation Trust in a proportion
Ratable to other Allowed Claims in Class 4A,
Class 4C, Class 4D and Class 4E; and (ii)
under the Stand Alone Option, shares of New
Common Stock in an amount that is Ratable to
other allowed Claims in Class 4A, Class 4B,
Class 4C, Class 4D and Class 4E. Such
distributions shall be made on or as soon as
reasonably practicable after the first
Distribution Date after such Claim becomes
an Allowed Claim, subject to the
establishment of appropriate reserves for
Disputed Claims in accordance with the
provisions of the Plan, including reserves
of New Common Stock held by the Stand Alone
Voting Trust.
Class 4A is an Impaired Class, and Holders
of Allowed Class 4A Claims who are the
beneficial holders of such Class 4A Claims
are entitled to vote.
CLASS 4B (JUNIOR NOTE CLAIMS) Subject to the terms herein and unless the
Holder of an Allowed Class 4B Claim who is
Number of Filed the beneficial holder of such Class 4B Claim
Claims: 1 agrees to receive other, less favorable
Amount of Filed treatment, such Holder of an Allowed Class
Claims: $2,701,000 4B Claim shall receive, in full
Amount of Scheduled satisfaction, settlement, release, and
Claims: $2,700,000 discharge of and in exchange for such Claim:
Estimated Amount of Allowed (i) under both the Sale Option and the Stand
Claims: $2,701,000 Alone Option, a beneficial interest in the
Liquidation Trust in a proportion Ratable to
other Allowed Claims in Class 4A, Class 4B,
Class 4C, Class 4D and Class 4E; and (ii)
under the Stand Alone Option, shares of New
Common Stock in an amount that is Ratable to
other Allowed Claims in Class 4A, Class 4B,
Class 4C, Class 4D, and Class 4E. Such
distributions shall be made on or as soon as
reasonably practicable after the first
Distribution Date after such Claim becomes
an Allowed Claim, subject to the
establishment of appropriate reserves for
Disputed Claims in accordance with the
provisions of the Plan, including reserves
of New Common Stock held by the Stand Alone
Voting Trust.
Class 4B is an Impaired Class, and Holders
of Allowed Class 4B Claims who are the
beneficial holders of such Class 4B Claims
are entitled to vote.
CLASS 4C (REMIC GUARANTEE CLAIMS) Subject to the terms herein and unless the
Holder of an Allowed Class 4C Claim agrees
Number of Filed to receive other, less favorable treatment,
Claims: 25 such Holder of an Allowed Class 4C Claim
Amount of Filed shall receive, in full satisfaction,
Claims: $1,054,193,000 settlement,
11
Amount of Scheduled release, and discharge of and in exchange
Claims: $274,764,000 for such Claim: (i) under both the Sale
Estimated Amount of Allowed Option and the Stand Alone Option, a
Claims: $275,809,000(9) beneficial interest in the Liquidation Trust
in a proportion Ratable to other Allowed
Claims in Class 4A, Class 4B, Class 4C,
Class 4D, and Class 4E; and (ii) under the
Stand Alone Option, shares of New Common
Stock in an amount that is Ratable to other
allowed Claims in Class 4A, Class 4B, Class
4C, Class 4D and Class 4E. Such
distributions shall be made on or as soon as
reasonably practicable after the first
Distribution Date after such Claim becomes
an Allowed Claim, subject to the
establishment of appropriate reserves for
Disputed Claims in accordance with the
provisions of the Plan, including reserves
of New Common Stock held by the Stand Alone
Voting Trust.
Class 4C is an Impaired Class, and Holders
of Allowed Class 4C Claims who are the
beneficial holders of such Class 4C Claims
are entitled to vote.
CLASS 4D (LITIGATION CLAIMS) Subject to the terms herein and unless the
Holder of an Allowed Class 4D Claim agrees
to receive other, less favorable treatment,
Number of Filed such Holder of an Allowed Class 4D Claim
Claims: 1,061 shall receive, in full satisfaction,
Amount of Filed settlement, release, and discharge of and in
Claims: $507,899,000 exchange for such Claim: (i) under both the
Amount of Scheduled Sale Option and the Stand Alone Option, a
Claims: $292,000 beneficial interest in the Liquidation Trust
Estimated Amount of Allowed in a proportion Ratable to other Allowed
Claims: $35,000,000 Claims in Class 4A, Class 4B, Class 4C,
Class 4D, and Class 4E; and (ii) under the
Stand Alone Option, shares of New Common
Stock in an amount that is Ratable to other
allowed Claims in Class 4A, Class 4B, Class
4C, Class 4D and Class 4E. Such
distributions shall be made on or as soon as
reasonably practicable after the first
Distribution Date after such Claim becomes
an Allowed Claim, subject to the
establishment of appropriate reserves for
Disputed Claims in accordance with the
provisions of the Plan, including reserves
of New Common Stock held by the Stand Alone
Voting Trust
Class 4D is an Impaired Class, and Holders
of Allowed Class 4D Claims are entitled to
vote.
- ---------------------------
(9) The actual Allowed amount of the Class 4C Claims could vary widely,
depending on the outcome of certain ongoing litigation in the Chapter
11 Cases. This litigation is described in the Original Disclosure
Statement.
12
CLASS 4E (OTHER UNSECURED Subject to the terms herein and unless the
CLAIMS)(10) Holder of an Allowed Class 4E Claim agrees
to receive other, less favorable treatment,
Number of Filed such Holder of an Allowed Class 4e Claim
Claims: 4,056 shall receive, in full satisfaction,
Amount of Filed settlement, release, and discharge of and in
Claims: $295,672,000 exchange for such Claim: (i) under both the
Amount of Scheduled Sale Option and the Stand Alone Option, a
Claims: $216,600,000 beneficial interest in the Liquidation Trust
Estimated Amount of Allowed in a proportion Ratable to other Allowed
Claims: $68,730,000 Claims in Class 4A, Class 4B, Class 4C,
Class 4D, and Class 4E; and (ii) under the
Stand Alone Option, shares of New Common
Stock in an amount that is Ratable to other
allowed Claims in Class 4A, Class 4B, Class
4C, Class 4D and Class 4E. Such
distributions shall be made on or as soon as
reasonably practicable after the first
Distribution Date after such Claim becomes
an Allowed Claim, subject to the
establishment of appropriate reserves for
Disputed Claims in accordance with the
provisions of the Plan, including reserves
of New Common Stock held by the Stand Alone
Voting Trust
Class 4E is an Impaired Class, and Holders
of Allowed Class 4E Claims are entitled to
vote.
CLASS 6A (NON-DEBTOR-HELD Subject to the terms herein and unless the
INTEREST) Holder of an Allowed Class 6A Claim agrees
to receive other, less favorable treatment,
such Holder of an Allowed Interest in this
Class shall receive, in full satisfaction,
settlement, release, and discharge of and in
exchange for such Interest: (i) under the
Sale Option, retention of its Interest in
Reorganized Sale Oakwood; or (ii) under the
Stand Alone Option, the New Warrants in a
proportion Ratable to other Allowed
Interests in Class 6A. Such distributions
shall be made on or as soon as reasonably
practicable after the first Distribution
Date after such Interest becomes an Allowed
Interest, subject to the establishment of
appropriate reserves for Disputed Interests
in accordance with the provisions of the
Plan; provided, however, that no
distribution shall be made to Holders of
Allowed Class 6A Interests if any of Class
A, Class 4B, Class 4C, Class 4D or Class 4E
does not accept the Plan.
Class 6A is an Impaired Class, and all
Holders of Allowed Class 6A Claims are
entitled to vote.
- ---------------------------
(10) The claimed and scheduled totals for Class 4E include various
contingent claims (floorplan guarantees and other guarantees). The
claimed and scheduled amounts are generally stated at the maximum
potential liability of the contingent claim. The Debtors' belief that
the actual liquidated claim will be less than the maximum potential
liability is reflected in the lower claim estimate per the disclosure
statement.
13
C. HISTORY OF THE SALE TRANSACTION AND THE SECOND
AMENDED PLAN.
1. THE FIRST AMENDED PLAN.
On the Petition Date, the Debtors filed voluntary petitions in
this Court for relief under chapter 11 of title 11 of the United States Code, 11
U.S.C. Sections 101-1330 (as amended, the "Bankruptcy Code"). The Debtors
continue to operate their businesses and manage their properties as
debtors-in-possession pursuant to sections 1101(a) and 1108 of the Bankruptcy
Code. On February 18, 2003, the Debtors filed a Joint Consolidation Plan Of
Reorganization Of Oakwood Homes Corporation And Its Affiliated Debtors And
Debtors-In-Possession and the [Proposed] Disclosure Statement For Joint
Consolidated Plan Of Reorganization Of Oakwood Homes Corporation And Its
Affiliated Debtors And Debtors-In-Possession Under Chapter 11 Of The United
States Bankruptcy Code. On June 19, 2003, the Debtors filed a First Amended
Joint Consolidated Plan Of Reorganization Of Oakwood Homes Corporation And Its
Affiliated Debtors And Debtors-In-Possession and the [Proposed] Disclosure
Statement For First Amended Joint Consolidated Plan Of Reorganization Of Oakwood
Homes Corporation And Its Affiliated Debtors And Debtors-In-Possession Under
Chapter 11 Of The United States Bankruptcy Code.
On September 9, 2003 the Debtors' filed the Stand Alone Plan
and the proposed Original Disclosure Statement. The September 9, 2003 revisions
contained no material changes, just the addition of certain exhibits and
disclosures. On October 3, 2003, the Bankruptcy Court approved the Original
Disclosure Statement and the Stand Alone Plan was circulated for balloting.
Prior to the confirmation hearing for the Stand Alone Plan,
negotiations with Clayton Homes resulted in a purchase offer, and the Debtors,
after consultation with and approval by the Creditors' Committee, decided to
propose a plan that included both the Sale Option and the Stand Alone Option.
2. EXIT FINANCING FOR STAND ALONE OPTION.
In December 2003, the Debtors also sought and obtained interim
approval of an amended debtor-in-possession financing facility with Greenwich
Capital Financial Products, as agent (the "Amended Greenwich DIP Agreement"),
and the Court granted final approval for that facility on January 15, 2004. The
Amended Greenwich DIP Agreement was intended (a) to allow the Debtors to
continue borrowing under terms that are more favorable than the terms of the
first Greenwich DIP facility, and (b) to provide necessary exit financing in the
event the Stand Alone Option is consummated. The exit financing will be on terms
substantially similar to those contained in the Amended Greenwich DIP Agreement
and will take effect automatically upon the occurrence of certain conditions
precedent. The Amended Greenwich DIP Agreement thus ensures that the Debtors
have the necessary financing regardless of whether the Debtors consummate the
Stand Alone Option or the Sale Option.
The Amended Greenwich DIP Agreement provides for three
"tranches" in one full recourse revolving credit facility: (1) a $150 million
revolving credit facility for financing manufactured housing loans and
contracts; (2) a $50 million revolving credit facility for funding recoverable
advances of principal and interest by Oakwood Advance Receivables, LLC, as
14
servicer for various securitization trusts, and (3) a $75 million revolving
credit facility for general corporate purposes including cash collateralization
of letters of credit. The Debtors paid a $5 million fee to put the exit
financing in place, but no fees were required to extend and restructure the
debtor-in-possession financing. Again, as mentioned above, the exit facility
will be on substantially the same terms and with substantially the same
availability as the amended debtor-in-possession financing facility.
3. THE MARKETING PROCESS.
On May 9, 2003, the Debtors retained Miller Buckfire Lewis
Ying & Co. LLC ("Miller Buckfire") to, among other things, assist them in
identifying a buyer or investor for the Debtors' business. On July 21, 2003, the
Court entered an order authorizing Oakwood's retention of Miller Buckfire as
financial advisors and investment bankers.
Preliminarily, Miller Buckfire contacted approximately thirty
parties identified, after consultation with Debtors' management and the
Committee, as the most likely candidates to purchase or invest in Oakwood's
business. Of those contacted, fourteen signed confidentiality agreements and
received initial information from Miller Buckfire about the Debtors' business.
On June 23, 2003, Miller Buckfire delivered an information
memorandum (the "Information Memorandum") to those fourteen parties. The
Information Memorandum consisted of detailed information regarding the Debtors'
assets; extensive historical and projected financial results; an overview of the
manufactured housing industry; and management assessments of Oakwood's business.
The deadline for interested parties to submit non-binding
expressions of interest was July 11, 2003. Non-binding expressions of interest
were required to include a proposed purchase price range, form of bid, breakdown
of consideration and proof of financial wherewithal to consummate a transaction.
The Debtors received four non-binding expressions of interest from parties
potentially interested in acquiring, or investing in, the Debtors' business (the
"Interested Parties").
Based upon the non-binding expressions of interest received by
the Debtors, the Debtors, in consultation with Miller Buckfire, conducted
management presentations for the Interested Parties. Additionally, the
Interested Parties were given access to a data room created by Miller Buckfire
and the Debtors' financial advisors, FTI Consulting, Inc. Moreover, the Debtors'
management team and Miller Buckfire responded to numerous information requests
and questions from the Interested Parties regarding the Debtors' operating and
financial records. After this further due diligence, two parties made final bids
for all, or substantially all, of the Debtors' assets.
On September 3, 2003, Miller Buckfire advised the Debtors
about the specifics of the two (2) final bids. At the time, the Debtors, in
consultation with the Creditors' Committee, decided that neither of these final
bids accurately reflected the value of the Debtors. The Debtors concluded that a
proposed sale could not be considered until such time as an initial bid was
received, which would serve as a "stalking-horse" for an auction and which would
approach the value of the reorganized Debtors under the Stand Alone Plan.
15
Nonetheless, negotiations continued between the Debtors and
the two parties that made final bids. Eventually, the Debtors and Clayton Homes
were able to come to mutually agreeable terms embodied in the Purchase
Agreement. Clayton Homes is a subsidiary of Berkshire Hathaway, Inc. Berkshire
Hathaway Inc. is a substantial holder of certain of Oakwood's senior notes, the
beneficiary of certain guarantees from Oakwood regarding payments under certain
real estate mortgage investment conduit certificates issued by non-debtor
affiliates of Oakwood, a participant in Oakwood's debtor-in-possession financing
facility, and a participant in the warehouse facility through which Oakwood
funds certain lending activities. In addition, an affiliate of Berkshire sits on
the Creditors' Committee.
4. THE PROPOSED SALE TRANSACTION.
Miller Buckfire made a presentation to Oakwood's board of
directors on November 18, 2003 comparing the likely results of a sale to Clayton
Homes with those of the Stand Alone Plan. According to that presentation, Miller
Buckfire believed that Oakwood's total enterprise value ranged between $300 and
$400 million at that time based on its then current business plan and industry
and market conditions. The presentation also showed the Clayton Homes purchase
price of $372.5 million to be at the upper end of that range, especially since
the price excluded unrestricted and restricted cash on the balance sheet of
approximately $142 million. Thus, even allowing for purchase price adjustments
at closing, the Sale Option compares favorably to the Stand Alone Plan and Stand
Alone Option for total value.
On November 24, 2003, after extensive negotiations with the
Creditors' Committee, the Debtors executed the Purchase Agreement with Clayton
Homes that provides for the purchase and sale of substantially all of the
Debtors' assets.
5. THE PURCHASE AGREEMENT FOR THE SALE
TRANSACTION.
The Purchase Agreement with Clayton Homes, a copy of which is
attached hereto as EXHIBIT D, was the culmination of the marketing process
conducted by the Debtors and Miller Buckfire. The Purchase Agreement provides,
among other things, for the sale of the business through the sale of all of the
assets and properties used in or relating to the business except for certain
excluded assets, all pursuant to an amended plan of reorganization. In addition,
the Purchase Agreement provides that Clayton Homes will continue to offer
employment to a substantial majority of the employees of Oakwood and that
Clayton Homes will assume certain liabilities arising out or relating to the
transferred assets or the business.
The Purchase Agreement also provides, as described more fully
below, that the Debtors will continue to operate the business in accordance with
past practices and consult with Clayton Homes regarding certain matters pending
confirmation of the amended plan of reorganization and the closing under the
Purchase Agreement.
16
The material terms of the Purchase Agreement include:(11)
(a) Purchased Assets. The assets to be acquired by the
Buyer include the following:
(i) Certain Real Property;
(ii) Real Property Leases;
(iii) Inventory;
(iv) Certain Tangible Personal Property;
(v) Personal Property Leases;
(vi) Business Contracts;
(vii) Prepaid Expenses;
(viii) Certain Intangible Personal Property;
(ix) Licenses;
(x) Vehicles;
(xi) Books and Records;
(xii) Certain Accounts Receivable;
(xiii) REMIC Receivables;
(xiv) Contract Escrow Amounts;
(xv) Security Deposits;
(xvi) Third Party Warranties; and
(xvii) Certain Other Assets and Properties.
(b) Excluded Assets. Assets that are excluded from the
proposed transaction with the Buyer and that will remain property of
the Debtor's estate include:
(i) Cash;
(ii) Tax Refunds;
(iii) Certain Real Property;
- ---------------------------
(11) This summary is provided for convenience only and is qualified in its
entirety by the Purchase Agreement. The Purchase Agreement should be
reviewed in its entirety by any interested party and, to the extent
that there is any discrepancy, the terms and conditions of the Purchase
Agreement shall control. The summary refers to the Debtors as Sellers
and to Clayton Homes as Buyer and capitalized terms not otherwise
defined in this Section C5 of the Supplemental Disclosure Statement
have the meaning given to them in the Purchase Agreement.
17
(iv) Certain Accounts Receivable;
(v) Certain Tangible Personal Property;
(vi) Certain Intangible Personal Property;
(vii) Excluded Books and Records;
(viii) Excluded Contracts;
(ix) Excluded Security Deposits;
(x) Litigation Claims;
(xi) Investments;
(xii) Equity Interests in Sellers;
(xiii) Certain Other Assets and Properties;
(xiv) Purchase Agreement Related Rights;
(xv) Insurance; and
(xvi) Excluded Loans.
(c) Assumed Liabilities. (i) all of those liabilities and
categories of liabilities listed in Section 1.02 of Sellers' Disclosure
Schedule, (ii) the Assumed Rebate Liabilities, (iii) the Assumed
Warranty Service Liabilities, subject to Section 1.02(b) below, and
(iv) all liabilities arising after the Closing Date under the Real
Property Leases, Personal Property Leases, the Business Contracts, the
Business Licenses and, to the extent provided in Section 4.13,
liabilities arising after the Closing Date under the Servicing
Agreements (other than in each case under clauses 1 through 4, any
liability arising out of or relating to a breach that occurred on or
prior to the Closing Date and/or any other amount or payment necessary
to satisfy Bankruptcy Code Section 365(b) in connection with such
assumption). Notwithstanding the foregoing, Buyer shall be and remain
liable to Sellers for the Assumed Liabilities under (1) Section
1.02(a)(ii), (2) Section 1.02(a)(iii), (3) Section 1.02(a)(iv) relating
solely to retail customer purchase contracts and (4) Business Contracts
listed under "Vendor Contracts" on Section 1.01(a)(vii) of Sellers'
Disclosure Schedule except to the extent such Assumed Liabilities are
assigned in accordance with Section 10.11.
(d) Excluded Liabilities. All Liabilities of Sellers that
are not expressly assumed by Buyer in Section 1.02 (a) of the Purchase
Agreement are specifically excluded (all such excluded Liabilities,
collectively, the "Excluded Liabilities"), including, without
limitation, any and all liability, damages and expenses, whether now
existing or hereafter arising, in any way relating to (i) any employee
benefit plans or policies of Sellers, Taxes (subject to Section 1.04(c)
and Section 4.08), personal injury claims, claims for bodily injury or
property damage, products liability claims, environmental claims,
breach of contract claims, employment claims, lender liability claims,
REMIC Class R certificates and any non-economic interests therein or,
except to the extent included in the Assumed Liabilities, pre-petition
secured or unsecured claims, (ii) any Employee Retained Liabilities,
(iii) Excluded Assets, or (iv) except for the
18
Assumed Liabilities, the ownership or operation of the Transferred
Assets prior to the Closing Date.
(e) Purchase Price. Buyer hereby agrees to purchase the
Transferred Assets from Sellers and to pay or cause to be paid to
Sellers the Total Purchase Price. The "Total Purchase Price" shall mean
(i) $372,500,000 (the "Initial Purchase Price"), (ii) minus the Working
Capital Adjustment Amount, (iii) plus or minus, as appropriate, any
amounts payable pursuant to Section 1.04(c), (iv) minus the Assumed
Rebate Liabilities, (v) minus the Warranty Service Liability Amount,
(vi) plus the Additional Loan Amount, (vii) minus the Asset Adjustment
Amount, (viii) plus or minus, as appropriate, the P&I Advances
Adjustment Amount and (ix) minus the Contract Escrow Offset Amount. The
"Estimated Purchase Price" shall mean (i) the Initial Purchase Price,
(ii) plus or minus, as appropriate, any amounts determinable on the
Closing Date payable pursuant to Section 1.04(c), (iii) minus the
Assumed Rebate Liabilities, (iv) minus the Warranty Service Liability
Amount, (v) minus the Asset Adjustment Amount and (vi) plus the
Additional Loan Amount
(f) Assignment Provision. Neither the Purchase Agreement
nor any right, interest or obligation under it may be assigned by any
party without the prior written consent of the other parties and any
attempt to do so will be void, provided, however, that Buyer may
assign, transfer and/or delegate all or any portion of its rights,
duties and obligations under the Purchase Agreement (including any
Assumed Liabilities and rights with respect to any Transferred Assets,
but not including its obligation to pay or cause to be paid the Total
Purchase Price and any amount required to be paid by it pursuant to
Section 8.02(d)) to any Affiliate(s) of Buyer. In the event of any such
assignment, transfer or delegation to one or more Affiliates of Buyer,
and notwithstanding any provision to the contrary herein (but subject
to the further provisions of Section 10.11), (a) Buyer shall have no
liability or obligation (whether arising by contract, the Purchase
Agreement, tort or otherwise) for any such assigned, transferred or
delegated rights, duties and obligations, and (b) each Seller agrees to
cooperate with Buyer and such Affiliate(s) in documenting, executing
and effecting the valid assignment, transfer and/or delegation of those
rights, duties or obligations from the respective Seller directly to
such Affiliate(s); provided, however, that notwithstanding the
foregoing, Purchase shall remain liable to Sellers under the Purchase
Agreement for any such assigned, transferred or delegated duties or
obligations to the extent such duties or obligations relate to Assumed
Liabilities under (1) Section 1.02(a)(ii), (2) Section 1.02(a)(iii),
(3) Section 1.02(a)(iv) relating solely to retail customer purchase
contracts or (4) Business Contracts listed under "Vendor Contracts" on
Section 1.01(a)(vii) of Sellers' Disclosure Schedule, unless, with
respect to any such assigned, transferred or delegated duties or
obligations: (x) Sellers shall have given their prior written consent
(which consent shall not be unreasonably withheld) to the assignment,
transfer or delegation; or (y) Buyer shall have (i) put funds into
escrow pursuant to an escrow agreement reasonably satisfactory to
Sellers or (ii) obtained a surety bond or letter of credit in favor of
Sellers, in each case in an amount mutually agreed by Sellers and Buyer
to be sufficient to pay in full, and otherwise indemnify Sellers
against, any such assigned, transferred or delegated duties and
obligations.
19
(g) Termination. The Purchase Agreement may be terminated
at any time prior to Closing: (a) By mutual written agreement of
Sellers and Buyer; (b) By Sellers or Buyer upon notification to the
non-terminating party by the terminating party: (i) at any time after
March 15, 2004 (the "Termination Date"), if the Closing shall not have
been consummated on or prior to such date and such failure is not
caused by a breach of the Purchase Agreement by the terminating party,
provided, however, that in the circumstances described in Section
8.01(b)(vii) the Termination Date shall be extended the same number of
days as the extension pursuant to Section 8.01(b)(vii); provided,
further, that in the event that the Closing shall not have been
consummated on or prior to such date and such failure is due solely to
the failure of the parties to obtain HSR Approval (as hereinafter
defined), then so long as Sellers are using their commercially
reasonable efforts to obtain HSR Approval, such date shall be extended
for so long as Sellers are using their commercially reasonable efforts
to obtain HSR Approval, but in no event shall such date be extended
under this provision beyond May 31, 2004. For purposes of the Purchase
Agreement, "HSR Approval" means all consents and approvals under the
HSR Act required for the parties to perform their obligations under the
Purchase Agreement and the Operative Agreements and to consummate the
transactions contemplated hereby and thereby; (ii) if at or prior to
the Closing any material condition set forth herein for the benefit of
the terminating party shall not have been timely met and cannot be met
prior to the Termination Date (as such date may be extended pursuant to
Section 8.01(b)(i)) and has not been waived by the terminating party;
provided that the terminating party shall not be responsible for the
failure of such condition to be satisfied; (iii) if there has been a
material breach of any representation, warranty, covenant, agreement or
obligation (or any breach of any representation or warranty that is
qualified by its terms by reference to materiality or Material Adverse
Effect) on the part of the non-terminating party set forth in the
Purchase Agreement, which breach is not curable or, if curable, has not
been cured within ten (10) days following receipt by the
non-terminating party of notice of such breach from the terminating
party; (iv) if (A) any court of competent jurisdiction (other than the
U.S. Bankruptcy Court) or other competent Governmental or Regulatory
Authority (other than the U.S. Bankruptcy Court) shall have issued an
Order which has become final and non-appealable or (B) any Law (other
than the Bankruptcy Code) shall be in effect, in either case making
illegal or otherwise prohibiting the effectuation of any material part
of the transactions contemplated by the Purchase Agreement; (v) if the
U.S. Bankruptcy Court shall have issued an Order which has become final
and nonappealable restricting or restraining in a material manner or
enjoining or otherwise prohibiting or making illegal the effectuation
of any material part of the transactions contemplated by the Purchase
Agreement (including an Order denying confirmation of the Plan); (vi)
if the U.S. Bankruptcy Court has not issued an Order approving the
Bidding Procedures (in substantially the form set forth on Exhibit H
attached hereto) by December 15, 2003; (vii) if the U.S. Bankruptcy
Court has not entered the Confirmation Order in the form required by
Section 6.06 (approving the Plan in a form providing for the
effectuation of all the transactions contemplated by the Purchase
Agreement in accordance with the terms and provisions hereof), on or
before March 1, 2004, provided, however, that if on such date Sellers
are using their commercially reasonable efforts to obtain entry of the
Confirmation Order in such form, then such date shall be extended for
so long as Sellers are using their commercially
20
reasonable efforts to obtain entry of the Confirmation Order in such
form, but in no event shall such date be extended beyond March 31,
2004; (viii) if the U.S. Bankruptcy Court confirms a plan of
reorganization for Sellers that does not contemplate the transactions
contemplated by the Purchase Agreement; or (ix) if the U.S. Bankruptcy
Court approves a Person other than Buyer as the Successful Bidder or an
Alternative Transaction.
6. APPROVAL OF BIDDING PROCEDURES, EXPENSE
REIMBURSEMENT AND BREAKUP FEE.
The Purchase Agreement also required the Debtors to conduct an
auction under Bankruptcy Court approved Bidding Procedures with respect to the
business and provided that Clayton Homes would receive a Breakup Fee of $11
million. The Bidding Procedures were a material inducement for, and condition
of, Clayton Homes' entry into the Purchase Agreement. Oakwood believes that the
Bidding Procedures were fair and reasonable in view of (a) the intensive
analysis, due diligence investigation, and negotiation undertaken by Clayton
Homes and other interested bidders in the marketing process, (b) the extensive
resources and expenditures undertaken by Clayton Homes in moving toward
consummation of the transaction, and (c) the fact that the Clayton Homes bid was
likely to serve as a catalyst for other potential bidders with the result that
Oakwood would receive the highest and/or best offer for its business, to the
benefit of Oakwood, its estates, its creditors and all other
parties-in-interest.
7. THE SOLICITATION OF QUALIFYING OVERBIDS AND
THE COMPETITIVE SALE.
In order to ensure that the Debtors achieved the best price
possible for their business, the Debtors solicited higher and better offers
meeting certain requirements. Any proposed bid was to be contingent upon and
subject to confirmation of the amended plan of reorganization and any transfer
was to be "as is" and "where is" without condition or warranty, except as
expressly set forth in the Purchase Agreement.
The Bankruptcy Court approved the Bidding Procedures on
December 15, 2003 and those procedures set a deadline, and outlined the
requirements, for Qualified Bids other than from Clayton Homes. If other
Qualified Bids had been received, a competitive auction was to be held on
January 14, 2004. However, no Qualified Bids (other than from Clayton Homes)
were received. At the Approval Hearing on January 23, 2004, the Debtors reported
the same to the Bankruptcy Court and asked the Bankruptcy Court to approve the
Clayton Homes transaction as the highest and best bid. On January 23, 2004, the
Bankruptcy Court approved Clayton Homes' offer as the winning bidder pursuant to
that auction process.
Under the Sale Option, the classification of the Classes
contained in the Stand Alone Plan remain unchanged, with the exception of a
revised Convenience Class. However, the treatment and voting rights of those
Classes differ, as will other matters described in the Original Disclosure
Statement.
21
8. PLAN IMPLEMENTATION UNDER THE SALE OPTION.
Provided that the conditions to confirmation and of
consummation of the Sale Option (which are itemized in the Plan) are met, upon
entry of the Confirmation Order, all transactions contemplated by the Purchase
Agreement shall be authorized and the following will occur on the Effective
Date:
(a) CONSUMMATION OF SALE TRANSACTION.
Entry of the Confirmation Order shall constitute the
Bankruptcy Court's approval of the Purchase Agreement and the transactions to be
entered into, and actions to be taken, thereunder pursuant to sections 363, 365,
1123, 1129, 1145 and 1146(c) of the Bankruptcy Code. The Debtors shall sell and
Transfer the Purchased Business to the Buyer in accordance with the Purchase
Agreement.
(b) AUTHORIZATION OF THE SALE
TRANSACTION.
The confirmation of this Plan shall authorize the
consummation of all transactions contemplated by the Purchase Agreement with no
requirement of any further authorization by the boards of directors,
shareholders, members, managers, partners or general partners of any of the
Debtors. Upon confirmation, the appropriate officers of the Debtors shall be
authorized to execute any and all documents and perform any and all acts
necessary and appropriate to consummate all transactions contemplated by the
Purchase Agreement.
(c) REVESTING AND TRANSFER OF ASSETS.
Pursuant to Bankruptcy Code section 1141(b), the
assets and property of the Estates and of the Debtors shall vest or revest, such
that: (i) on the Effective Date, the Purchase Consideration, less the
Reorganized Sale Debtors Capitalization Amount, and the Excluded Sale Trust
Assets, including any value associated with Debtor Suburban Home Sales, Inc. to
the extent such value is an Excluded Asset, shall vest in the Liquidation Trust;
and (ii) on the Effective Date, the Excluded Sale Debtor Assets and the
Reorganized Sale Debtors Capitalization Amount shall vest or revest in the
Reorganized Sale Debtors; provided, however, that the Liquidation Trust may
abandon or otherwise not accept any Excluded Sale Trust Assets that the
Liquidation Trust believes, in good faith, have no value to the Liquidation
Trust. Any Excluded Sale Trust Assets which the Liquidation Trust abandons or
otherwise does not accept shall not vest or revest in the Liquidation Trust and
shall vest or revest in the Reorganized Sale Debtors.
As of the Effective Date, all Assets vested or
revested in the Liquidation Trust or the Reorganized Sale Debtors, and all
assets and property dealt with by the Plan, including all Assets transferred to
the Buyer pursuant to the Purchase Agreement, shall be free and clear of all
Claims, Liens, and interests except as otherwise specifically provided in the
Plan or in the Confirmation Order. Any property of any non-debtor affiliates of
the Debtors, and any Claims and Liens against any non-debtor affiliates of the
Debtors or their respective properties
22
shall not be affected or impaired by the operation of the Plan, the Confirmation
Order, or otherwise except as specifically provided herein.
(d) MERGER OF DEBTORS AND VESTING OF
ASSETS IN REORGANIZED SALE DEBTORS.
The Debtors' anticipate that, on the Effective Date, the
Reorganized Sale Debtors shall each remain organized as they were prior to the
Petition Date under the applicable state law of each of their respective
jurisdictions of organization, except to the extent a different corporate
structure is determined to benefit the Reorganized Sale Debtors or the
Liquidation Trust and/or such entities have not previously been merged,
liquidated or dissolved in accordance with applicable law prior to the Effective
Date. Pursuant to the Plan, each of the Reorganized Sale Debtors will be
governed by an independent and disinterested Person selected by the Debtors with
the consent of the Creditors' Committee and Berkshire, which consent shall not
be unreasonably withheld, and identified in the Plan Supplement, as each
Reorganized Sale Debtors' sole officer, director or similar appropriate capacity
under state law; provided, however, that an outstanding Fee Claim shall not
render a Person ineligible to serve as the sole officer and director of any of
the Reorganized Sale Debtors. Such individual shall be empowered to take all
necessary and appropriate corporate actions without further meetings or voting
by shareholders, members, partners, or holders of ownership interests. If
Oakwood Financial Corporation is not a debtor under the Bankruptcy Code as of
the Effective Date, Reorganized Sale OKWD shall retain the stock of Oakwood
Financial Corporation. If Oakwood Financial Corporation is a debtor under the
Bankruptcy Code on the Effective Date, its plan of reorganization shall provide
for the ownership of its stock by the Reorganized Sale Debtors.
(e) TREATMENT OF OLD COMMON STOCK,
INTERESTS AND BENEFICIAL INTEREST
IN THE LIQUIDATION TRUST.
On the Effective Date, the shares of Old Common Stock
shall remain outstanding pursuant to the terms of the Plan; provided, however,
that the rights of Holders of Old Common Stock may be altered to effectuate the
purposes of the Plan. The Reorganized Sale Debtors likely will be dissolved in
accordance with state law, in which event the shares of Old Common Stock shall
not be transferable, shall not be listed on any exchange, and no periodic
reports will be filed with the Securities and Exchange Commission. The
beneficial interests of the Liquidation Trust issued pursuant to the Plan shall
be issued pursuant to the exemption from securities registration contained in
section 1145 of the Bankruptcy Code. Any securities issued or transferred by the
Reorganized Sale Debtors or the Liquidation Trust shall be issued or transferred
pursuant to the exemption from securities registration contained in section 1145
of the Bankruptcy Code and shall be exempt from taxes pursuant to section
1146(c) of the Bankruptcy Code.
23
(f) CONSIDERATIONS REGARDING THE
ADDITIONAL DEBTORS.
In order to consummate the sale under the Purchase
Agreement three more entities wholly owned by the Debtors--Oakwood Financial
Corporation, Oakwood Investment Corporation and Oakwood Servicing Holdings Co.,
LLC. (and potentially other similar entities) may become debtors and may file
motions and plans of reorganization to facilitate certain transfers. These
entities are special purpose entities with limited activities and their filings
and bankruptcy cases, even if substantively consolidated with the Debtors, would
not have a material effect on distributions to creditors.
Pursuant to the Plan or a separate motion, OSHC
shall, under sections 105, 363 and 365 of the Bankruptcy Code, as of the
Effective Date, (i) reject the Subservicing Agreements, (ii) assume the
Servicing Agreements, and (iii) assign the Servicing Agreements to the Buyer in
accordance with Section 4.13 of the Purchase Agreement. To the extent the
Subservicing Agreements and Servicing Agreement are not already the subjects of
a separate order or orders of the Bankruptcy Court, the Plan shall constitute a
motion for authority to reject the Subservicing Agreements and to assume and
assign the Servicing Agreements in accordance with Section 4.13 of the Purchase
Agreement.
(g) DISTRIBUTIONS OF CASH.
The Liquidation Trust shall be responsible for making
all distribution of Cash to Holders of Allowed Administrative Claims, Allowed
Priority Tax Claims, Allowed Class 1 Claims, Allowed Class 2 Claims and Allowed
Class 3 Claims, subject to appropriate reserves as described in Section 8.2 of
the Plan.
9. PLAN IMPLEMENTATION UNDER THE STAND ALONE
OPTION.
If the Sale Option does not occur due to the termination of
the Purchase Agreement by its terms (provided that the Debtors may not terminate
it without the consent of the Creditors' Committee, such consent not being
unreasonably withheld) and if the conditions for confirmation and consummation
of the Stand Alone Option (as specified in the Plan) are met, the Stand Alone
Option will be implemented and the following will occur on the Effective Date:
(a) VESTING OF ASSETS IN THE
REORGANIZED DEBTORS.
Pursuant to section 1141(b) of the Bankruptcy Code,
except for the Initial Stand Alone Trust Assets, as otherwise provided in the
Plan, property of the Estates and of the Debtors shall revest, such that: (i) on
the Effective Date, the Initial Stand Alone Trust Assets shall vest in the
Liquidation Trust; and (ii) on the Effective Date, all of the Assets other than
the Initial Stand Alone Trust Assets shall vest or revest in the Reorganized
Stand Alone Debtors.
24
As of the Effective Date, all Assets vested or
revested in the Liquidation Trust or the Reorganized Stand Alone Debtors, and
all assets and property dealt with by the Plan, shall be free and clear of all
Claims, Liens, and interests except as otherwise specifically provided in the
Plan or in the Confirmation Order. Any property of any non-debtor affiliates of
the Debtors, and any Claims and Liens against any non-debtor affiliates of the
Debtors or their respective properties shall not be affected or impaired by the
operation of the Plan, the Confirmation Order, or otherwise except as
specifically provided herein.
From and after the Effective Date, the Reorganized
Stand Alone Debtors may operate their businesses and use, acquire, and dispose
of property without supervision or approval of the Bankruptcy Court, free of any
restrictions of the Bankruptcy Code, the Bankruptcy Rules, and the guidelines
and requirements of the United States Trustee, other than those restrictions
expressly imposed by the Plan or the Confirmation Order.
(b) AMENDED AND RESTATED CERTIFICATES
OF INCORPORATION.
Upon the Effective Date, the Reorganized Stand Alone
Debtors shall file their Amended and Restated Certificates of Incorporation, as
set forth in the Plan Supplement, with the offices of the Secretary of State of
the state that governs their respective entities in accordance with the
respective state law. Each Amended and Restated Certificate of Incorporation
will, among other things, provide for the prohibition of the issuance of
non-voting equity securities to the extent required by section 1123(a) of the
Bankruptcy Code, and with respect to Reorganized Stand Alone Oakwood, authorize
20,000,000 shares of New Common Stock. After the Effective Date, the Reorganized
Stand Alone Debtors may amend and restate their Amended and Restated
Certificates of Incorporation and other constituent documents as permitted by
applicable law.
(c) AMENDED AND RESTATED BYLAWS.
The Reorganized Stand Alone Debtors shall adopt and
effect the Amended and Restated Bylaws, as set forth in the Plan Supplement.
(d) NEW SECURITIES.
On the Effective Date, Reorganized Stand Alone
Oakwood shall issue, in accordance with the provisions of this Plan and the
registration rights agreement in the Plan Supplement, 10,000,000 shares of the
New Common Stock, which shall constitute 100% of the total number of shares of
such New Common Stock to be issued and outstanding on or immediately after the
Effective Date, and the New Warrants to be distributed pursuant to the terms of
the Plan. The Reorganized Stand Alone Debtors shall endeavor in good faith to
list the New Common Stock on a national exchange as soon as reasonably
practicable. The New Warrants, as provided in the Warrant Agreement, shall have
a seven year maturity and an exercise price initially computed for an initial
market value of New Common Stock, which would result in 100% recovery to the
Holders of Class 4A, 4B, 4C, 4D and 4E Claims as provided for in the Warrant
Agreement. The exercise price will increase annually at the risk free
25
rate (30-year Treasury rate) until their expiration. The shares of New Common
Stock and New Warrants issued pursuant to the Plan shall be issued pursuant to
the exemption from securities registration contained in section 1145 of the
Bankruptcy Code and shall be exempt from taxes pursuant to section 1146(c) of
the Bankruptcy Code.
(e) DIRECTORS.
Upon the Effective Date, the operation of each of the
Reorganized Stand Alone Debtors shall become the general responsibility of their
respective boards of directors (or their equivalents) who shall, thereafter,
have the responsibility for the management, control and operation of each of the
Reorganized Stand Alone Debtors. The initial board of directors for Reorganized
Stand Alone Oakwood shall be comprised of five (5) directors, all of whom are
disinterested under the Bankruptcy Code and independent under applicable
securities law; provided, however, that an outstanding Fee Claim shall not
render a Person ineligible to serve on the initial board of directors; provided
further, however, that the chief executive officer of the Reorganized Stand
Alone Debtors may be named to the initial board of directors. The initial board
of directors shall be designated by the Creditors' Committee, which such
designations shall be reasonably acceptable to the Debtors and Berkshire and
shall be included by the Debtors in the Plan Supplement, prior to the Effective
Date. If, prior to the Confirmation Hearing, the Creditors' Committee does not
so designate an initial board of directors, or designates an incomplete initial
board of directors, the existing members of the board of directors of Oakwood,
before the Confirmation Hearing, shall so designate those remaining undesignated
directorships. The initial boards of directors of the reorganized Affiliate
Debtors shall be the same as that of Reorganized Stand Alone Oakwood unless
otherwise designated by the board of directors of Reorganized Stand Alone
Oakwood. Pursuant to section 1129(a)(5) of the Bankruptcy Code, the names of
each of the director nominees shall be disclosed prior to the entry of any
Confirmation Order. All such directors shall be deemed elected, and those
directors not continuing in office shall be deemed removed therefrom, effective
on the Effective Date, pursuant to the Confirmation Order. Such directors'
tenure and the manner of selection of new directors shall be initially as
provided in the Amended and Restated Certificates of Incorporation and the
Amended and Restated Bylaws.
(f) OFFICERS.
On the Effective Date, the existing officers of each
of the Debtors shall be retained and shall remain as officers of the Reorganized
Stand Alone Debtors and shall continue to serve until such time as they may
resign, be removed or be replaced by the board of directors of each of the
Reorganized Stand Alone Debtors.
(g) EMPLOYMENT CONTRACTS AND
PROFESSIONAL RETENTIONS.
From and after the Effective Date, the Reorganized
Stand Alone Debtors may enter into employment contracts with their respective
officers, agents or employees. The Reorganized Stand Alone Debtors may, among
other things, retain any employee, professional, consultant, or claims, notice
or disbursing agents as it shall deem necessary to comply with the
26
provisions of this Plan, including those Persons that have served as employees,
professionals, consultants or agents during the Chapter 11 Cases.
(h) CORPORATE ACTION AND OTHER
DOCUMENTS AND ACTIONS.
The adoption of the Amended and Restated Certificates
of Incorporation, the Amended and Restated Bylaws, the selection of directors
and officers for the Reorganized Stand Alone Debtors, the issuance and
distribution of the New Common Stock and New Warrants, the execution and
delivery of any contract, instrument, release, document or agreement, and any
other matter provided for under the Plan involving the corporate action to be
taken by or required of any of the Reorganized Stand Alone Debtors shall be
deemed to have occurred and be effective as provided herein, and shall be
authorized and approved in all respects without any requirement of further
action by stockholders or directors of any of the Debtors or Reorganized Stand
Alone Debtors.
(i) APPROVAL OF THE EXIT FACILITY.
Entry of the Confirmation Order shall, to the extent
necessary, authorize and approve, without any further action by the Debtors, the
Exit Facility Agreement and the transactions to be entered into, and actions to
be taken thereunder, pursuant the Bankruptcy Code. The form of the Exit Facility
Agreement is included in the Plan Supplement.
(j) DISTRIBUTIONS OF CASH.
The Reorganized Stand Alone Debtors shall be
responsible for making all distributions of Cash to Holders of Allowed
Administrative Claims, Allowed Priority Tax Claims, Allowed Class 1 Claims,
Allowed Class 2 Claims and Allowed Class 3 Claims, subject to appropriate
reserves as described in Section 8.2 of the Plan.
(k) DISTRIBUTIONS OF PROCEEDS FROM THE
LIQUIDATION TRUST.
The Reorganized Stand Alone Debtors shall be
responsible for directing the Liquidation Trust with respect to the creation of
reserves, as described in Section 8.2 of the Plan, and the distribution of the
assets of the Liquidation Trust to Holders of Allowed Claims from Classes 4A,
4B, 4C, 4D and 4E.
10. PLAN IMPLEMENTATION UNDER EITHER THE SALE OPTION OR
THE STAND ALONE OPTION.
The following will be implemented and occur on the Effective
Date whether reorganization proceeds under the Sale Option or the Stand Alone
Option
27
(a) SUBSTANTIVE CONSOLIDATION.
(i) EFFECT OF SUBSTANTIVE
CONSOLIDATION.
On the Effective Date, the Estates shall be
substantively consolidated for all purposes related to the Plan (but only for
those purposes) including voting, confirmation, distributions and claim
determinations. The substantive consolidations of the Estates shall have the
following effects: (i) all assets and liabilities of the Debtors shall be
treated as though they were merged for purposes of distribution; (ii) all
prepetition and postpetition cross-corporate guarantees of the Debtors shall be
eliminated; (iii) all Claims based upon guarantees of collection, payment or
performance made by one or more Debtors as to the obligations of another Debtor
or of any other Person shall be discharged, released and of no further force and
effect; (iv) any obligation of any Debtor and all guarantees thereof executed by
one or more of the Debtors shall be deemed to be one obligation of the Estate;
(v) any Claims filed or to be filed in connection with any such obligation and
such guarantees shall be deemed one Claim against the Estate; (vi) each and
every Claim filed in the individual Chapter 11 Case of any of the Debtors shall
be deemed filed against the consolidated Estate in the consolidated Chapter 11
Cases and shall be deemed a single obligation of the relevant Estate under the
Plan on and after the Confirmation Date; and (vii) the Chapter 11 Cases of the
Affiliate Debtors shall be closed and the consolidated Estate be administered
through Oakwood's Chapter 11 Case.
In connection with, and as a result of, the
substantive consolidation of the Debtors' Estates and Chapter 11 Cases as
provided in the Plan, on the occurrence of the Effective Date all Intercompany
Claims shall be (i) released, (ii) contributed to capital, (iii) dividended or
(iv) remain Unimpaired, depending on the tax consequences, and Holders of
Intercompany Claims shall not be entitled to, and shall not, receive or retain
any property or interest in property on account of such Claims, except to the
extent potential tax consequences otherwise dictate. Notwithstanding this
Section 6.3, on the Effective Date, all Debtor Holders of Allowed Debtor-Held
Interests in any of the Debtors shall either (i) retain such Debtor-Held
Interest, in which case the Debtor Holding an Interest in an Affiliate Debtor
shall continue to hold such Debtor-Held Interest in the corresponding
Reorganized Subsidiary or (ii) receive new equity in the appropriate reorganized
Affiliate Debtor upon the cancellation of the old equity.
The substantive consolidation provided for herein
shall not, other than for purposes related to the Plan and distributions to be
made hereunder, affect the legal and corporate structures of the Debtors or the
Non-Debtor-Held Interests, the rights and defenses of the Liquidation Trust and
the Reorganized Stand Alone Debtors pertaining to the Causes of Action, and any
obligations under any executory contract or unexpired leases assumed in the Plan
or otherwise in the Chapter 11 Cases.
(ii) PLAN AS MOTION FOR
APPROVAL OF SUBSTANTIVE
CONSOLIDATION.
The Plan shall serve as a motion seeking entry of an
order substantively consolidating the Estates as provided herein.
28
(b) CREATION OF THE LIQUIDATION TRUST.
The Liquidation Trustee shall sign the Liquidation
Trust Agreement and accept the Liquidation Trust assets on behalf of the
beneficiaries thereof, and the Liquidation Trust will then be deemed created and
effective without any further action of the directors or shareholders of the
Debtors. The Liquidation Trust shall be established for the sole purpose of
liquidating its assets, with no objective to continue or engage in the conduct
of a trade or business. The beneficiaries of the Liquidation Trust shall be
bound by the Liquidation Trust Agreement. Interests in the Liquidation Trust
shall be uncertificated and shall be nontransferable except upon death of the
interest holder or by operation of law. The Liquidation Trust shall have a term
of five (5) years from the Effective Date, without prejudice to the rights of
the Liquidation Trustee, in consultation with the Liquidation Trust Advisory
Committee, to extend such term as applicable law shall allow.
The Liquidation Trustee may invest Cash (including
any earnings thereon or proceeds therefrom) as permitted by section 345 of the
Bankruptcy Code and in other prudent investments, as authorized by the
Liquidation Trust Advisory Committee; provided, however, that such investment
are investments permitted to be made by a Liquidation Trust within the meaning
of Treasury Regulation section 301.7701-4(d), as reflected therein, or under
applicable IRS guidelines, rulings, or other controlling authorities.
The Liquidation Trustee shall be the exclusive
trustee of the assets of the Liquidation Trust for purposes of 31 U.S.C. Section
3713(b) and 26 U.S.C. Section 6012(b)(3). The powers, rights, and
responsibilities of the Liquidation Trustee shall be specified in the
Liquidation Trust Agreement and shall include the authority and responsibility
to: (a) receive, manage, invest, supervise, and protect trust assets; (b) pay
taxes or other obligations incurred by the trust; (c) retain and compensate,
without further order of the Bankruptcy Court, the services of employees,
professionals and consultants (including those Persons that have served as
employees, professionals, consultants or claims, noticing and disbursing agents
during the Chapter 11 Cases) to advise and assist in the administration,
prosecution and distribution of trust assets; (d) calculate and implement
distributions of trust assets; (e) prosecute, compromise, and settle, in
accordance with the specific terms of that agreement, all Claims and Causes of
Action vested in the Liquidation Trust; and (f) under the Sale Option, resolve
issues involving Claims and Interests pursuant to Article X of the Plan.
All costs and expenses associated with the
administration of the Liquidation Trust, including reasonable compensation for
the Liquidation Trustee and, as set forth in the Liquidation Trust Agreement,
the Liquidation Trust Advisory Committee, shall be the responsibility of and
paid by the Liquidation Trust in accordance with the Liquidation Trust
Agreement. Under the Sale Option, the Liquidation Trust is the successor to the
Debtors' rights to books and records under the Purchase Agreement. Under the
Stand Alone Option, the Reorganized Stand Alone Debtors shall cooperate with the
reasonable requests of the Liquidation Trustee in furtherance of the Liquidation
Trustee's responsibility to recover trust assets and shall afford reasonable
access during normal business hours, upon reasonable notice, to personnel and
books and records of the Reorganized Stand Alone Debtors to representatives of
the Liquidation Trust to enable the Liquidation Trustee to perform the
Liquidation Trustee's tasks under the
29
Liquidation Trust Agreement and the Plan. The Reorganized Stand Alone Debtors
will not be required to make expenditures in response to unreasonable requests.
The Liquidation Trust shall be responsible for filing
all federal, state and local tax returns for the Liquidation Trust. The
Liquidation Trust shall comply with all withholding and reporting requirements
imposed by any federal, state, local or foreign taxing authority, and all
distributions made by the Liquidation Trust shall be subject to any such
withholding and reporting requirements. The Liquidation Trust shall provide
reports to holders of interests in the Liquidation Trust as the Liquidation
Trust Advisory Committee deems appropriate.
(c) FEDERAL INCOME TAX TREATMENT OF THE
TRUST FOR THE LIQUIDATION TRUST
ASSETS.
For federal income tax purposes, it is intended that
the Liquidation Trust be classified as a Liquidation Trust under section
301.7701-4 of the Treasury regulations and that such trust be owned by its
beneficiaries (i.e., the Holders of Allowed Claims in Classes 4A, 4B, 4C, 4D and
4E). Accordingly, for federal income tax purposes, it is intended that the
beneficiaries be treated as if they had received a distribution from the Debtors
of an undivided interest in each of the assets of the Liquidation Trust and then
contributed such interests to the Liquidation Trust.
(i) LIQUIDATION TRUST ASSETS
TREATED AS OWNED BY
HOLDERS OF ALLOWED CLAIMS.
For all federal income tax purposes, all parties
(including, without limitation, the Debtors, the Liquidation Trust, and the
Holders of Allowed Claims in Classes 4A, 4B, 4C, 4D and 4E) shall treat the
transfer of assets to the Liquidation Trust for the benefit of the Holders of
Allowed Claims in Classes 4A, 4B, 4C, 4D and 4E, as (A) a transfer of the assets
of the Liquidation Trust directly to the Holders of Allowed Claims in Classes
4A, 4B, 4C, 4D and 4E, followed by (B) the transfer by such Holders to the
Liquidation Trust of the assets of the Liquidation Trust in exchange for
beneficial interests in the Liquidation Trust. Accordingly, the Holders of such
Allowed Claims shall be treated for federal income tax purposes as the grantors
and owners of their respective share of the assets of the Liquidation Trust.
(ii) TAX REPORTING.
The Liquidation Trust shall file returns for the
Liquidation Trust as a grantor trust pursuant to Treasury Regulation section
1.671-4(a) and in accordance with this Section 6.3(c). The Liquidation Trust
also shall annually send to each holder of a beneficial interest a separate
statement setting forth the holder's share of items of income, gain, loss,
deduction or credit and will instruct all such holders to report such items on
their federal income tax returns. The Liquidation Trust's taxable income, gain,
loss, deduction or credit will be allocated (subject to Section 8.2 of the Plan,
relating to Disputed Claims) to the Holders of Allowed Claims in Classes 4A, 4B,
4C, 4D and 4E in accordance with their relative beneficial interests in the
Liquidation Trust.
30
As soon as possible after the Effective Date, the
Liquidation Trust shall make a good faith valuation of the assets of the
Liquidation Trust, and such valuation shall be used consistently by all parties
(including, without limitation, the Debtors, the Liquidation Trust, and the
Holders of Allowed Claims in Classes 4A, 4B, 4C, 4D and 4E) for all federal
income tax purposes. The Liquidation Trust also shall file (or cause to be
filed) any other statements, returns or disclosures relating to the Liquidation
Trust that are required by any governmental unit.
Notwithstanding anything else in the Plan, subject to
definitive guidance from the Internal Revenue Service or a court of competent
jurisdiction to the contrary, the Liquidation Trust shall (i) treat any assets
allocable to, or retained on account of, Disputed Claims as held by one or more
discrete trusts for federal income tax purposes (the "Disputed Claims Reserve"),
consisting of separate and independent shares to be established in respect of
each Disputed Claim, in accordance with the trust provisions of the Tax Code
(sections 641 et. seq.), (ii) treat as taxable income or loss of the Disputed
Claims Reserve, with respect to any given taxable year, the portion of the
taxable income or loss of the Liquidation Trust that would have been allocated
to the holders of Disputed Claims had such Claims been Allowed on the Effective
Date (but only for the portion of the taxable year with respect to which such
Claims are unresolved), (iii) treat as a distribution from the Disputed Claims
Reserve any increased amounts distributed by the Liquidation Trust as a result
of any Disputed Claims resolved earlier in the taxable year, to the extent such
distributions relate to taxable income or loss of the Disputed Claims Reserve
determined in accordance with the provisions hereof, and (iv) to the extent
permitted by applicable law, shall report consistent with the foregoing for
state and local income tax purposes. All Holders of Claims in Classes 4A, 4B,
4C, 4D and 4E shall report, for tax purposes, consistent with the foregoing.
The Liquidation Trustee shall be responsible for
payments, out of the Liquidation Trust Assets, of any taxes imposed on the trust
or its assets, including the Disputed Claims Reserve. In the event, and to the
extent, any Cash retained on account of Disputed Claims in the Disputed Claims
Reserve is insufficient to pay the portion of any such taxes attributable to the
taxable income arising from the assets allocable to, or retained on account of,
Disputed Claims, such taxes shall be (i) reimbursed from any subsequent Cash
amounts retained on account of Disputed Claims, or (ii) to the extent such
Disputed Claims have subsequently been resolved, deducted from any amounts
distributable by the Liquidation Trustee as a result of the resolutions of such
Disputed Claims.
The Liquidation Trustee may request an expedited
determination of Taxes of the Debtors and of the Liquidation Trust, including
the Disputed Claims Reserve under section 505(b) of the Bankruptcy Code for all
returns filed for, or on behalf of, the Debtors and the Liquidation Trust for
all taxable periods through the dissolution of the Liquidation Trust.
(iii) DISSOLUTION.
The Liquidation Trustee and the Liquidation Trust
shall be discharged or dissolved, as the case may be, at such time as (i) all
Disputed Claims have been resolved, (ii) all assets of the Liquidation Trust
have been liquidated, and (iii) all distributions required to be made by the
Liquidation Trustee under the Plan have been made, but in no event shall the
Liquidation Trust be dissolved later than five years from the Effective Date
unless the
31
Bankruptcy Court, upon motion within the six month period prior to the fifth
anniversary (or the end of any extension period approved by the Bankruptcy
Court), determines that a fixed period extension (not to exceed three years,
together with any prior extensions, without a favorable letter ruling from the
Internal Revenue Service that any further extension would not adversely affect
the status of the trust as a Liquidation Trust for federal income tax purposes)
is necessary to facilitate or complete the recovery and liquidation of the
assets of the Liquidation Trust.
(d) APPOINTMENT OF LIQUIDATION TRUSTEE.
The Liquidation Trustee for the Liquidation Trust
shall be an independent and disinterested Person designated by the Creditors'
Committee with the consent of the Debtors and Berkshire, whose approval shall
not be unreasonably withheld, and identified in the Plan Supplement; provided,
however, that an outstanding Fee Claim shall not render a Person ineligible to
serve as the Liquidation Trustee.
(e) THE LIQUIDATION TRUST ADVISORY
COMMITTEE.
On the Effective Date, the Liquidation Trust Advisory
Committee shall be formed pursuant to the Liquidation Trust Agreement. The
Liquidation Trust Advisory Committee shall be comprised of five (5) members,
consisting of WL Ross & Co. LLC, Aegon USA Investment Management, LLC, and three
(3) independent and disinterested members to be appointed by the Creditors'
Committee with the consent of the Debtors and Berkshire, whose approval shall
not be unreasonably withheld; provided, however, that an outstanding Fee Claim
shall not render a Person ineligible to serve on the Liquidation Trust Advisory
Committee. The three (3) independent and disinterested members shall be
identified in the Plan Supplement. If WL Ross & Co. LLC or Aegon USA Investment
Management, LLC subsequently determine that they are no longer interested in
serving as members of the Liquidation Trust Advisory Committee, the Creditors'
Committee will select replacement members, to be identified in the Plan
Supplement, with the consent of the Debtors and Berkshire, whose approval shall
not be unreasonably withheld (reasonableness shall be determined in light of the
balance between Holders of REMIC Guarantee Claims and Holders of other Claims in
connection with the ongoing litigation concerning the Class 4C Claims). If, as
of the Confirmation Date, the Creditors' Committee has not appointed the three
(3) independent and disinterested members of the Trust Advisory Committee, until
at least three (3) members are so appointed, the Debtors, before the
Confirmation Hearing, shall so designate those remaining undesignated members of
the Trust Advisory Committee. The Liquidation Trustee shall make such reports to
and seek such advice from, if any, the Liquidation Trust Advisory Committee as
required under the Liquidation Trust Agreement. The Liquidation Trust Advisory
Committee may, by majority vote, authorize the Liquidation Trustee to invest the
corpus of the Liquidation Trust in prudent investments other than those
described in section 345 of the Bankruptcy Code.
The Liquidation Trust Advisory Committee's role with
respect to issues involving Claims and Interests pursuant to Article X of the
Plan will be handled only by the three (3) independent and disinterested members
of the five (5) member Board. The Liquidation Trust Advisory Committee shall
have only consultation rights with respect to the decisions of the
32
Liquidation Trustee in managing the Liquidation Trust. In the event that the
Liquidation Trust Advisory Committee disagrees with any intended actions or
inaction of the Trustee, it shall have (a) the right to seek an order from the
Bankruptcy Court compelling the Liquidation Trustee to act or cease acting in
accordance with the order and (b) the right to remove the Liquidation Trustee if
the Liquidation Trust Advisory Committee believes that the intended actions or
inaction rise to the level of gross negligence or willful misconduct. In the
event of the resignation or removal of the Liquidation Trustee, the Liquidation
Trust Advisory Committee shall, by majority vote or order of the Bankruptcy
Court, designate a person to serve as successor Liquidation Trustee.
The Liquidation Trust Advisory Committee shall be
entitled to retain and compensate, without further order of the Bankruptcy
Court, the services of employees, professionals and consultants (including
without limitation claims, noticing and disbursing agents) to advise and assist
the Liquidation Trust Advisory Committee in the furtherance of its duties,
including those Persons that have served as employees, professionals,
consultants or agents during the Chapter 11 Cases.
The Liquidation Trust Advisory Committee may, at its
discretion, require a fidelity bond from the Liquidation Trustee in such
reasonable amount as may be agreed to by majority vote of the Liquidation Trust
Advisory Committee.
(f) CAUSES OF ACTIONS AND DEFENSES.
Prosecution and settlement of all Causes of Action,
including Avoidance Actions, shall be the sole responsibility of the Liquidation
Trust, pursuant to this Plan, and the Confirmation Order; provided, however,
that, under the Stand Alone Option, Avoidance Actions pertaining to the secured
status of any Disputed Secured Claim shall be vested in the Reorganized Stand
Alone Debtors. The Liquidation Trust shall have all rights, powers, and
interests of the Debtors, as debtors in possession, to pursue, settle or abandon
such Causes of Action as a representative of the Estates pursuant to section
1123(b)(3) of the Bankruptcy Code. All Causes of Action, including Avoidance
Actions, are reserved and preserved to the extent set forth in Section 7.2 of
the Plan and shall not be impacted or affected in any way by the substantive
consolidation of the Estates.
(g) TERMINATION OF THE FINAL DIP
AGREEMENT.
Subject to the payment in full of all amounts owed
under the Final DIP Agreement or other such treatment as agreed to by the
Debtors and the DIP Lenders, on the Effective Date, the obligations arising
under the Final DIP Agreement shall be deemed to have terminated. All amounts
due and owing, if any, under the Final DIP Agreement shall be paid in full on
the Effective Date as Allowed Administrative Claims, and all liens, mortgages
and security interests granted under the Final DIP Agreement shall automatically
be extinguished without the need for any filings or further actions under the
state or federal laws, and all authorities shall be authorized to accept the
Confirmation Order and notice of Effective Date as a release or satisfaction of
all such liens, mortgages and security interests.
33
(h) DISSOLUTION OF THE CREDITORS'
COMMITTEE.
The Creditors' Committee shall continue in existence
until the Effective Date to exercise those powers and perform those duties
specified in section 1103 of the Bankruptcy Code and shall perform such other
duties as it may have been assigned by the Bankruptcy Court prior to the
Effective Date. On the Effective Date, the Creditors' Committee shall be
dissolved and its members shall be deemed released of any continuing duties,
responsibilities and obligations in connection with the Chapter 11 Cases or the
Plan and its implementation, and the retention and employment of the Creditors'
Committee's attorneys, accountants and other agents shall terminate, except with
respect to (i) all Fee Claims, (ii) any appeals of the Confirmation Order, and
(iii) any estate litigation commenced by the Creditors' Committee pending on the
Effective Date not resolved by the Plan.
D. THE CONFIRMATION HEARING, VOTING PROCEDURES, BAR
DATES, AND OTHER IMPORTANT DEADLINES.
1. TIME AND PLACE OF THE CONFIRMATION HEARING.
The Plan cannot become effective until after it has been
confirmed by the Bankruptcy Court and the conditions to the Effective Date set
forth in the Plan have either been satisfied or waived.
The hearing to determine whether the Bankruptcy Court will
enter the Confirmation Order to confirm the Plan will take place on March 16,
2004 at 11:00a.m. in the Courtroom of the Honorable Peter J. Walsh, United
States Bankruptcy Court for the District of Delaware, 824 Market Street, 6th
Floor, Wilmington, Delaware 19801. The Confirmation Hearing may be continued
from time to time without further notice.
2. ENTITIES ENTITLED TO VOTE ON THE PLAN.
Prior to the Confirmation Hearing, certain Holders of Claims
and Interests will have an opportunity to vote to accept or reject the Plan.
Pursuant to the Bankruptcy Code, Holders of Allowed Claims and Interests in
Classes 2A, 2B, 2C, 2D, 2E, 2F, 2G, 2J, 2K, 2L, 3, 4D, 4E and 6A and those
Holders who are the beneficial holders of Allowed Claims in Classes 4A, 4B, and
4C (each individually, a "Voting Class," and collectively, the "Voting Classes")
are entitled to vote on the Plan because these Classes are Impaired under the
Plan within the meaning of section 1124 of the Bankruptcy Code, but will
nonetheless receive distributions under the Plan. The impairment of a Claim or
Interest generally occurs if the legal, equitable, or contractual rights of the
Holder are altered. Class 1 is not Impaired and, therefore, is not entitled to
vote and is deemed to have accepted the Plan.
The Plan may be confirmed even if it is not accepted by each
Voting Class. The Bankruptcy Code defines "acceptance" with respect to a Class
of Impaired Claims as acceptance by Holders of at least two-thirds in dollar
amount and more than one-half in number of the
34
Allowed Claims in such Class whose Holders cast Ballots. In the event that a
Voting Class does not accept the Plan, the Debtors nonetheless will seek to have
the Plan confirmed, provided that the Plan is "fair and equitable" and does not
"unfairly discriminate" against the non-accepting Class of creditors or
stockholders, as provided in section 1129 of the Bankruptcy Code. The Debtors
believe that they can satisfy this standard under either the Sale Option or the
Stand Alone Option of the Plan.
THE DEBTORS BELIEVE THAT THE PLAN PROVIDES THE BEST POSSIBLE
RECOVERIES TO THE HOLDERS OF IMPAIRED CLAIMS AND THAT ACCEPTANCE OF THE PLAN IS
IN THE BEST INTEREST OF SUCH HOLDERS. THEY THEREFORE RECOMMEND THAT YOU VOTE TO
ACCEPT THE PLAN.
3. DEADLINE FOR VOTING FOR OR AGAINST THE PLAN.
The Debtors are providing copies of this Disclosure Statement
and Ballots, which include detailed voting instructions, to all known Holders of
Claims in the Voting Classes. If you are entitled to vote as the Holder of an
Allowed Claim in one of the Voting Classes, you may vote by completing the
enclosed Ballot and returning the Ballot by the Ballot Deadline in the enclosed
envelope to the Balloting Agent at the address identified on your Ballot.
Initially, the Balloting Agent is BSI. If a Ballot is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation,
or other Person acting in a fiduciary or representative capacity, such Person
should indicate such capacity when signing.
TO BE COUNTED, YOUR BALLOT (OR, IN THE CASE OF PUBLICLY HELD
INSTRUMENTS, THE MASTER BALLOT CAST ON YOUR BEHALF) INDICATING ACCEPTANCE OR
REJECTION OF THE PLAN MUST BE RETURNED IN ACCORDANCE WITH THE ACCOMPANYING
INSTRUCTIONS AND RECEIVED BY THE BALLOTING AGENT NO LATER THAN MARCH 12, 2004 AT
4:00 P.M., EASTERN TIME, OR IT WILL NOT BE COUNTED IN CONNECTION WITH
CONFIRMATION OF THE PLAN. IN NO CASE SHOULD A BALLOT BE DELIVERED EITHER TO THE
BANKRUPTCY COURT OR TO THE DEBTORS OR THEIR ATTORNEYS. ANY EXECUTED BALLOT THAT
DOES NOT INDICATE EITHER ACCEPTANCE OR REJECTION SHALL NOT BE COUNTED.
A Ballot cast with respect to the Plan does not result in the
filing or allowance of a Claim. Nor does the casting of a Ballot relieve a
creditor of the obligation to file a proof of Claim in a timely manner. The
Debtors reserve the right to object to any Claims until the Claims/Interests
Objection Deadline; provided, however, that distributions may be made to Holders
of Allowed Claims prior to the expiration of the Claims/Interests Objection
Deadline upon agreement of the Reorganized Stand Alone Debtors and the
Liquidation Trust. Notwithstanding any of the foregoing, the Debtors, the
Reorganized Stand Alone Debtors or the Liquidation Trustee may request from the
Bankruptcy Court an extension of the Claims/Interests Objection Deadline.
35
4. DEADLINE FOR OBJECTING TO CONFIRMATION OF
THE PLAN.
As noted, all Holders of Claims or Interests are entitled to
be heard with respect to confirmation of the Plan, even if they are not eligible
to vote to accept or reject the Plan. Objections to confirmation of the Plan
must be filed with the Bankruptcy Court and served upon (a) counsel for the
Debtors (Morris, Nichols, Arsht & Tunnell, 1201 North Market Street, P.O. Box
1347, Wilmington, Delaware, 19899-1347, attention: Robert J. Dehney, Esq.; and
Rayburn Cooper & Durham, P.A., 1200 Carillon, 227 West Trade Street, Charlotte,
North Carolina, 28202-1675, attention: Albert F. Durham, Esq.); (b) counsel for
the Committee (McCarter & English, 919 North Market Street, Suite 1800,
Wilmington, Delaware, 19899, attention: William F. Taylor, Jr., Esq.; and King &
Spalding LLP, 1185 Avenue of the Americas, New York, New York 10036, attention:
Robert J. Stark, Esq.); (c) counsel for Greenwich (Pachulski, Stang, Ziehl,
Young, Jones & Weintraub P.C., 919 North Market Street, Suite 1600, P.O. Box
8705, Wilmington, Delaware, 19899, attention: Laura Davis Jones, Esq.; and
Kirkland & Ellis, 777 South Figueroa Street, Los Angeles, California, 90017,
attention: Bennet L. Spiegel, Esq.); (d) counsel for Berkshire Hathaway Inc. and
Clayton Homes (Munger, Tolles & Olson LLP, 355 S. Grand Avenue, Los Angeles, CA
90071, attention: Thomas Walper, Esq. and Young Conaway Stargatt & Taylor, LLP,
The Brandywine Building, 1000 West Street, 17th Floor, Wilmington, DE 19801,
attention: Michael R. Nestor, Esq.) and (e) such other parties as are identified
in the accompanying notice of the Confirmation Hearing so that they are received
by no later than March 12, 2004, at 4:00 p.m., Eastern Time.
5. DEADLINES FOR PARTIES TO EXECUTORY CONTRACTS
AND UNEXPIRED LEASES TO ASSERT DAMAGE CLAIMS
AND TO OBJECT TO THE TERMS OF ASSUMPTION.
Section 365 of the Bankruptcy Code allows the Debtors to
assume, assume and assign, or reject executory contracts and unexpired leases to
which the Debtors were parties as of the Petition Date. In order to assume, or
assume and assign, a contract or lease, the Debtors must make provision for the
cure of certain outstanding defaults as required by Section 365 of the
Bankruptcy Code. If the Debtors reject a contract or lease, the contract or
lease is deemed to have been breached by the Debtors immediately before the
Petition Date, and the non-debtor party to the contract or lease may be entitled
to an Unsecured Claim for damages resulting from such breach.
Under the Sale Option, on the Effective Date, and to the
extent permitted by applicable law, (a) any and all executory contracts and
unexpired leases of any Debtor that are listed on Sections 1.09(a) or 1.09(b) of
Sellers' Disclosure Schedule as being assumed and assigned to the Buyer pursuant
to the Purchase Agreement shall be deemed assumed and assigned to the Buyer
pursuant to the Plan in accordance with the Purchase Agreement and (b) (i) any
and all executory contracts or unexpired leases which are the subject of
separate motions filed pursuant to section 365 of the Bankruptcy Code by the
Debtors prior to the commencement of the Confirmation Hearing, (ii) such
contracts or leases as are listed on the Executory Contract Schedule filed by
the Debtors (which may be modified by the Debtors, the Reorganized Sale
36
Debtors, the Reorganized Stand Alone Debtors or Liquidation Trust up to sixty
(60) days after the Effective Date), (iii) the Servicing Agreements, and (iv)
any and all executory contracts or unexpired leases assumed prior to entry of
the Confirmation Order shall be deemed assumed pursuant to the provisions of
section 365 and section 1123 of the Bankruptcy Code as of the Effective Date.
All other executory contracts and unexpired leases of each of the Debtors shall
be deemed rejected in accordance with the provisions of section 365 and section
1123 of the Bankruptcy Code. The Confirmation Order shall constitute an order of
the Court approving all such assumption and assignments and rejections pursuant
to section 365 of the Bankruptcy Code.
Under the Stand Alone Option, on the Effective Date, and to
the extent permitted by applicable law, (a) any and all executory contracts or
unexpired leases which are the subject of separate motions filed pursuant to
section 365 of the Bankruptcy Code by the Debtors prior to the commencement of
the Confirmation Hearing, (b) such contracts or leases as are listed on the
Executory Contract Schedule filed by the Debtors, which may be modified by the
Debtors, the Reorganized Sale Debtors, the Reorganized Stand Alone Debtors or
Liquidation Trust up to sixty (60) days after the Effective Date, and (c) any
and all executory contracts or unexpired leases rejected prior to entry of the
Confirmation Order shall be rejected pursuant to the provisions of section 365
and section 1123 of the Bankruptcy Code as of the Effective Date, if not already
rejected as of a prior date. All other executory contracts and unexpired leases
of each of the Debtors shall be deemed assumed in accordance with the provisions
of section 365 and section 1123 of the Bankruptcy Code as of the Effective Date.
Contracts or leases entered into after the Petition Date will be performed by
the Reorganized Debtors in the ordinary course of their businesses. The
Confirmation Order shall constitute an order of the Court approving all such
assumption and assignments and rejections pursuant to section 365 of the
Bankruptcy Code.
If the rejection of any executory contract or unexpired lease
under the Plan gives rise to a Claim by the non-Debtor party or parties to such
contract or lease, such Claim, to the extent that it is timely filed and is an
Allowed Claim, shall be classified in Class 4E; provided, however, that the
Unsecured Claim arising from such rejection shall be forever barred and shall
not be enforceable against the Debtors, the Reorganized Sale Debtors, the
Reorganized Stand Alone Debtors, the Liquidation Trust, their successors or
properties, unless a proof of such Claim is filed and served on the Liquidation
Trust (under the Sale Option) or the Reorganized Stand Alone Debtors (under the
Stand Alone Option) and the Claims Agent within thirty (30) days after the date
of notice of the entry of the order of the Bankruptcy Court rejecting the
executory contract or unexpired lease which may include, if applicable, the
Confirmation Order. FAILURE TO COMPLY WITH THIS DEADLINE SHALL FOREVER BAR THE
HOLDER OF A CLAIM FROM SEEKING PAYMENT THEREOF. See the Plan for more
information about how to comply with this deadline and to determine whether this
deadline applies to you.
Unless otherwise noted in the Executory Contract Schedule or
the Purchase Agreement, or any schedule thereto, the cure amount pursuant to
section 365(b)(1) of the Bankruptcy Code for any executory contracts or
unexpired leases shall be $0.00. Any dispute regarding (i) the nature or amount
of any payment necessary to satisfy the listed cure amount under the contract or
lease to be assumed or assumed and assigned, (ii) the ability of the Debtors,
the Buyer or any other assignee, as the case may be, to provide "adequate
assurance of future performance," within the meaning of section 365 of the
Bankruptcy Code, under the contract or lease to be assumed or assumed and
assigned or (iii) any other matter pertaining to assumption or
37
assumption and assignment under section 365 of the Bankruptcy Code shall be
forever barred and shall not be enforceable against the Debtors, the Liquidation
Trust, the Reorganized Sale Debtor, the Reorganized Stand Alone Debtors, their
successors or properties, unless a motion or objection, as appropriate, is filed
and served on the Debtors (prior to the Effective Date), the Liquidation Trust
and the Buyer (under the Sale Option) or the Reorganized Stand Alone Debtors
(under the Stand Alone Option) within thirty (30) days after the date of notice
of proposed assumption or assumption and assignment, or such later date as
allowed by the Bankruptcy Court. The Liquidation Trust (under the Sale Option)
or the Reorganized Stand Alone Debtors (under the Stand Alone Option), and not
the Buyer, shall be responsible for paying any cure costs associated with the
assumption and assignment of any executory contract or unexpired lease assumed
and assigned to the Buyer, whether pursuant to the Plan or pursuant to any other
order of the Bankruptcy Court. The Liquidation Trust (under the Sale Option) and
the Reorganized Stand Alone Debtors (under the Stand Alone Option) shall have
the right to dispute any asserted cure amounts, including any amounts noted in
the Executory Contract Schedule or the Purchase Agreement.
6. ADMINISTRATIVE CLAIMS BAR DATE.
An Administrative Claim includes: (a) a DIP Claim; (b) a
Claim, other than a Fee Claim, for payment of costs or expenses of
administration specified in sections 503(b) and 507(a)(1) of the Bankruptcy
Code, including, without limitation (i) the actual, necessary costs and expenses
incurred after the Petition Date for preserving the Estates and operating the
businesses of the Debtors (such as wages, salaries or commissions for services
rendered) and (ii) all fees and charges assessed against the Estates pursuant to
section 1930 of title 28 of the United States Code; or (c) any Claim based upon
a seller's common law right to reclaim goods as used in section 546(c) of the
Bankruptcy Code pursuant to the Bankruptcy Court's Order Establishing Procedures
With Respect To Reclamation Claims (D.I. 36) entered on November 19, 2002 (y)
that has been granted priority under section 546(c)(2)(A) of the Bankruptcy Code
or (z) which the Debtors, in their reasonable discretion, elect to treat as
though such priority has been granted. Notwithstanding the foregoing,
Administrative Claims shall not include any Intercompany Claims.
Respecting Administrative Claims subject to the Administrative
Claim Bar Date Order, a Holder of such Administrative Claim must have complied
with the provisions of such order to be eligible to receive distributions under
the Plan on account of such Administrative Claim.
TO BE ELIGIBLE TO RECEIVE DISTRIBUTIONS UNDER THE PLAN ON
ACCOUNT OF AN ADMINISTRATIVE CLAIM THAT IS NOT SUBJECT TO THE ADMINISTRATIVE
CLAIM BAR DATE ORDER AND THAT IS NOT A FEE CLAIM, ALL REQUESTS FOR PAYMENT OF
SUCH ADMINISTRATIVE CLAIMS MUST BE MADE BY PROOF OF ADMINISTRATIVE CLAIM FILED
WITH THE CLAIMS AGENT SO AS TO BE RECEIVED ON OR BEFORE 4:00 P.M. (EASTERN TIME)
ON THE DATE THAT IS THE FIRST BUSINESS DAY AFTER THE DATE THAT IS TWENTY (20)
DAYS AFTER THE EFFECTIVE DATE, UNLESS OTHERWISE AGREED TO BY THE LIQUIDATION
TRUST (UNDER THE SALE OPTION) OR THE REORGANIZED STAND ALONE DEBTORS (UNDER THE
STAND ALONE OPTION). AMENDMENTS TO SUCH CLAIMS SHALL BE GOVERNED BY THE
PROVISIONS SET FORTH IN SECTION 10.3 OF THE PLAN.
38
7. FEE CLAIMS BAR DATE.
A Fee Claim includes: (a) a Claim of a professional person
retained by order of the Bankruptcy Court for compensation and/or reimbursement
of expenses pursuant to section 327, 328, 330 or 331 of the Bankruptcy Code in
connection with the Chapter 11 Cases or (b) a Claim of any professional or other
party-in-interest seeking compensation or reimbursement of expenses in
connection with the Chapter 11 Cases pursuant to sections 503(b)(3), 503(b)(4),
503(b)(5) or 503(b)(6) of the Bankruptcy Code.
ALL FINAL APPLICATIONS FOR PAYMENT OF FEE CLAIMS SHALL BE
FILED WITH THE BANKRUPTCY COURT AND SERVED ON OR BEFORE THE FIRST BUSINESS DAY
THAT IS SIXTY (60) DAYS AFTER THE EFFECTIVE DATE OR SUCH OTHER DATE AS OTHERWISE
AGREED BY THE LIQUIDATION TRUST (UNDER THE SALE OPTION) OR THE REORGANIZATION
STAND ALONE (UNDER THE STAND ALONE OPTION).
8. UNSECURED CLAIMS BAR DATE.
An Unsecured Claim includes any Claim, arising pre-petition,
that is not: (a) an Administrative Claim; (b) a Priority Non-Tax Claim; (c) a
Priority Tax Claim; (d) a Fee Claim; (e) a Secured Claim; (f) an Intercompany
Claim; or (g) an Interest. All Proofs of Claim for Unsecured Claims must have
been filed with the Claims Agent by the general claims bar date established by
the Bankruptcy Court, which was March 27, 2003. The Claims Agent is currently
BSI.
9. MATERIALS TO BE FILED IN SUPPORT OF
CONFIRMATION.
In support of confirmation of the Plan, the Debtors will file
the Plan Supplement, to the extent not filed simultaneously with the Plan and
the Supplemental Disclosure Statement, at least five (5) Business Days prior to
the deadline established for voting on the Plan. The Plan Supplement may be
inspected in the offices of the Clerk of the Bankruptcy Court during normal
business hours. A copy of the Plan Supplement shall be mailed to the Creditors'
Committee, the members of the Creditors' Committee and any Holder of a Claim or
Interest that makes a written request for such Plan Supplement to the Debtors.
At confirmation, the Debtors will ask the Bankruptcy Court to approve
substantially the forms of the documents contained in the Plan Supplement
pursuant to the Confirmation Order.
The Plan Supplement comprised of, among other things, the
forms of the documents related to the Amended Certificates of Incorporation,
Amended Bylaws, the Liquidation Trust Agreement, the Stand Alone Voting Trust
Agreement, the Executory Contract Schedule, the Exit Facility Agreement and, to
the extent necessary to implement the Plan, proposed amendments to the
Reorganized Sale Debtors' organizational documents, to the extent not filed
simultaneously with the Plan and Disclosure Statement, shall be filed with the
Bankruptcy Court at least five (5) Business Days prior to the deadline
established for voting on this Plan. Upon its filing, the Plan Supplement may be
inspected in the offices of the Clerk of the Bankruptcy Court during normal
business hours. A copy of the Plan Supplement shall be
39
mailed to the Creditors' Committee, and any Holder of a Claim or Interest that
makes a specific written request for such Plan Supplement to the Debtors. The
documents contained in the Plan Supplement shall be approved by the Bankruptcy
Court pursuant to the Confirmation Order.
10. INFORMATION REGARDING THE PLAN.
NO PERSON IS AUTHORIZED BY THE DEBTORS IN CONNECTION WITH THE
PLAN OR THE SOLICITATION OF VOTES WITH RESPECT TO THE PLAN TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED IN THIS
SUPPLEMENTAL DISCLOSURE STATEMENT AND THE EXHIBITS HERETO OR INCORPORATED HEREIN
BY REFERENCE, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MAY NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE DEBTORS OR APPROVED BY THE
BANKRUPTCY COURT.
11. EFFECTIVE DATE OF THE PLAN.
The Effective Date of the Plan will occur on: : (a) if no stay
of the Confirmation Order is in effect, the first Business Day after the date
all of the conditions set forth in the Plan have been satisfied or waived as set
forth in the Plan, or such later date as may reasonably be agreed to by the
Debtors, the Creditors' Committee and the Buyer; or (b) if a stay of the
Confirmation Order is in effect, on the first Business Day (or such later date
as may reasonably be agreed by the Debtors, the Creditors' Committee and the
Buyer) after the later of: (i) the date such stay is vacated; and (ii) the date
each condition set forth in the Plan has been satisfied or waived as set forth
in the Plan.
12. IMPORTANT NOTICE AND CAUTIONARY STATEMENT.
The historical financial data relied upon in preparing the
Plan and this Disclosure Statement is based on the Debtors' books and records.
The hypothetical liquidation analysis, projections, and other financial
information have been developed by the Debtors with the assistance of their
financial advisors. Nevertheless, the hypothetical liquidation analysis,
projections, and other financial information are estimates only, and the timing,
amount, and value of actual Distributions to creditors may be affected
significantly by many factors that cannot be predicted.
ALTHOUGH THE PROFESSIONAL ADVISORS EMPLOYED BY THE DEBTORS
HAVE ASSISTED IN THE PREPARATION OF THIS DISCLOSURE STATEMENT BASED UPON FACTUAL
INFORMATION AND ASSUMPTIONS RESPECTING FINANCIAL, BUSINESS, REGULATORY, AND
ACCOUNTING DATA PROVIDED BY THE DEBTORS AND THIRD PARTIES, THEY HAVE NOT
INDEPENDENTLY VERIFIED SUCH INFORMATION AND MAKE NO REPRESENTATIONS AS TO THE
ACCURACY THEREOF. IN ADDITION, MUCH OF THE FINANCIAL INFORMATION CONTAINED
HEREIN HAS NOT BEEN SUBJECT TO AN AUDIT. THE DEBTORS ARE UNABLE TO WARRANT OR
40
REPRESENT THAT THE INFORMATION CONTAINED HEREIN, INCLUDING THE FINANCIAL
INFORMATION, IS WITHOUT INACCURACY OR OMISSION, OR THAT ACTUAL VALUES OR
FINANCIAL PERFORMANCE WILL COMPORT WITH THE ESTIMATES HEREIN.
THE DEBTORS' ACTUAL RESULTS OF OPERATIONS AND THE TIMING,
AMOUNT, AND VALUE OF DISTRIBUTIONS UNDER THE PLAN MAY DIFFER MATERIALLY AND
ADVERSELY FROM THOSE PROJECTED HEREIN. THE DEBTORS' FUTURE OPERATIONS MAY BE
AFFECTED BY NUMEROUS ECONOMIC, COMPETITIVE, REGULATORY, LEGISLATIVE, LEGAL,
OPERATIONAL, AND OTHER FACTORS THAT CANNOT BE PREDICTED.
THIS SUPPLEMENTAL DISCLOSURE STATEMENT CONTAINS A DISCUSSION
OF CERTAIN RISK FACTORS RELATING TO THE PLAN AND THE DEBTORS' ONGOING BUSINESS
OPERATIONS. THE DEBTORS STRONGLY ADVISE THAT ALL PARTIES IN INTEREST REVIEW
THESE RISK FACTORS CAREFULLY AND CONSULT WITH THEIR ADVISORS BEFORE VOTING ON
THE PLAN OR OTHERWISE DECIDING TO SUPPORT OR OPPOSE CONFIRMATION.
NOTHING CONTAINED HEREIN SHALL CONSTITUTE AN ADMISSION OF ANY
FACT OR LIABILITY BY ANY PARTY, BE ADMISSIBLE IN ANY PROCEEDING INVOLVING THE
DEBTORS OR ANY OTHER PARTY, OR BE DEEMED CONCLUSIVE ADVICE ON THE TAX,
SECURITIES, OR OTHER LEGAL EFFECTS OF THE REORGANIZATION AS TO HOLDERS OF CLAIMS
OR INTERESTS. YOU SHOULD CONSULT YOUR OWN LEGAL COUNSEL OR TAX ADVISOR ON ANY
QUESTIONS OR CONCERNS RESPECTING TAX, SECURITIES, OR OTHER LEGAL CONSEQUENCES OF
THE PLAN.
THE NEW COMMON STOCK AND NEW WARRANTS TO BE ISSUED PURSUANT TO
THE STAND ALONE OPTION WILL NOT HAVE BEEN, AT THE TIME OF ISSUANCE, THE SUBJECT
OF A REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES OR
"BLUE SKY" LAW, AND WILL BE ISSUED IN RELIANCE UPON THE EXEMPTION FROM THE
SECURITIES ACT AND EQUIVALENT STATE LAW REGISTRATION PROVIDED BY BANKRUPTCY CODE
SECTION 1145(a)(1).
CAUTIONARY STATEMENT:
INFORMATION INCLUDED IN THIS SUPPLEMENTAL DISCLOSURE STATEMENT
REGARDING THE DEBTORS CONTAINS STATEMENTS THAT MAY CONSTITUTE "FORWARD-LOOKING
INFORMATION," AS THAT TERM IS DEFINED BY THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 ("REFORM ACT"), INCLUDING INFORMATION CONCERNING THE DEBTORS'
PLAN AND PROJECTED FINANCIAL PERFORMANCE FOLLOWING THEIR EMERGENCE FROM
BANKRUPTCY. THE FORWARD-LOOKING STATEMENTS MADE IN THIS SUPPLEMENTAL DISCLOSURE
STATEMENT ARE QUALIFIED IN
41
THEIR ENTIRETY BY THE RISK FACTORS SET FORTH IN THIS SUPPLEMENTAL DISCLOSURE
STATEMENT AND ARE BEING MADE PURSUANT TO THE PROVISIONS OF THE REFORM ACT AND
WITH THE INTENTION OF OBTAINING THE BENEFITS OF THE "SAFE HARBOR" PROVISIONS OF
THE REFORM ACT.
II. THE PLAN OF REORGANIZATION.
Attached hereto as EXHIBIT B, in its entirety, is the Second
Amended Joint Consolidated Plan Of Reorganization Of Oakwood Homes Corporation
And Its Affiliated Debtors And Debtors-In-Possession, which is fully
incorporated herein and shall be considered a portion of this Supplemental
Disclosure Statement. Certain notable provisions of the Plan are recited or
described below. HOLDERS OF CLAIMS AND INTERESTS AND OTHER INTERESTED PARTIES
MUST READ THE PLAN IN ITS ENTIRETY TO MAKE AN INFORMED JUDGMENT CONCERNING THE
PLAN. FOR AN ANALYSIS OF ESTIMATED RECOVERIES UNDER THE PLAN, HOLDERS OF CLAIMS
AND INTERESTS SHOULD READ SCHEDULE 6 TO EXHIBIT B TO THIS PLAN.
A. FUNDING OF DISTRIBUTIONS UNDER THE PLAN.
The distributions to be made pursuant to the Plan will be
available from (a) funds realized in connection with past operations of the
Debtors and their non-debtor affiliates, (b) existing Cash assets of the
Debtors, and (c) the liquidation of certain non-Cash assets of the Debtors. If
the Sale Option occurs, the sale proceeds will provide most of the cash to be
distributed pursuant to the Plan. If the Sale Option does not occur, the Stand
Alone Option will be funded also by the Exit Facility, the New Common Stock and
the New Warrants.
As described in EXHIBIT C to this Supplemental Disclosure
Statement, the $250 million Exit Facility will be utilized to fund the estimated
Cash exit requirements for the Stand Alone Plan, including those Distributions
to be made on the Initial Distribution Date, of $49.2 million. The balance of
availability under the Exit Facility along with the estimated $20.0 million of
Cash on hand will be available to the Reorganized Debtors for working capital
purposes under the Stand Alone Plan.
B. RESERVES.
(a) ESTABLISHMENT OF DISPUTED CLAIM
RESERVES FOR CASH DISTRIBUTIONS.
On the Initial Distribution Date (or on any other date on which
distributions for any particular Class (or group of Classes in the case of Class
4) of Claims are made pursuant to the Plan by the Liquidation Trust), and in
connection with making all distributions required to be made on any such date
under the Plan, the Liquidation Trust (under the Sale Option) or the Reorganized
Stand Alone Debtors (under the Stand Alone Option) shall establish, for record
keeping purposes only, a separate Disputed Claim reserve on account of
distributions of Cash for
42
each of the relevant Classes (or group of Classes in the case of Class 4), as
necessary pursuant to the Plan.
(b) ESTABLISHMENT OF THE STAND ALONE
VOTING TRUST FOR NEW COMMON STOCK
AND NEW WARRANT DISTRIBUTION.
Under the Stand Alone Option, on the Effective Date, there shall be
established the Stand Alone Voting Trust pursuant to the Stand Alone Voting
Trust Agreement. The purpose of the Stand Alone Voting Trust shall be to hold
the New Common Stock and New Warrants, if applicable, in reserve for Disputed
Claims or Interests for each of the relevant Classes (or group of Classes in the
case of Class 4), as necessary pursuant to the Plan. Pursuant to the Stand Alone
Voting Trust Agreement, there will be three (3) independent and disinterested
Persons designated as the Stand Alone Voting Trustees by the Creditors'
Committee with the consent of the Debtors and Berkshire, whose approval shall
not be unreasonably withheld, and identified in the Plan Supplement; provided,
however, that an outstanding Fee Claim shall not render a Person ineligible to
serve as a Stand Alone Voting Trustee. The Reorganized Stand Alone Debtors shall
be responsible for and shall indemnify the Stand Alone Voting Trust for any
reasonable costs of administration, including, without limitation, the payment
of fees earned by the Stand Alone Voting Trustees under the Stand Alone Voting
Trust Agreement and reasonable professional costs. Upon allowance of any
Disputed Claim or Interest for which New Common Stock or New Warrants is held in
the Stand Alone Voting Trust, an appropriate amount of such New Common Stock or
New Warrants shall promptly be released to the Reorganized Stand Alone Debtors
for distribution to the Holder of the Allowed Claim or Interest pursuant to the
terms of the Plan.
(c) AMOUNTS TO BE RESERVED.
The Liquidation Trust and/or the Stand Alone Voting Trust shall reserve
the Ratable proportion of all Cash, New Common Stock, New Warrants or other
property allocated for distribution on account of each Disputed Claim based upon
the asserted amount of each such Disputed Claim, or such lesser amount as may be
agreed to by the Holder of the Claim on one hand and the Liquidation Trust or
the Stand Alone Voting Trust on the other hand, as applicable, or as may
otherwise be determined by order of the Bankruptcy Court. All Cash or other
property allocable to the relevant Class (or group of Classes in the case of
Class 4) hereunder shall be distributed by the Liquidation Trust to the relevant
Disputed Claim reserve on the Initial Distribution Date (or such other date on
which distributions for any particular Class of Claims are made pursuant to the
Plan). All New Common Stock or New Warrants allocable to the relevant Class (or
group of Classes in the case of Class 4) hereunder shall be distributed by the
Stand Alone Voting Trustees to the Stand Alone Voting Trust on the Initial
Distribution Date (or such other date on which distributions for any particular
Class of Claims are made pursuant to the Plan). To the extent that the property
placed in a Disputed Claim reserve consists of Cash, that Cash shall be
deposited in an interest-bearing account at a qualified institution, consistent
with the Liquidation Trust Agreement.
43
(d) DISTRIBUTION.
Payments on any Disputed Claim that becomes an Allowed Claim shall be
distributed on the first Quarterly Distribution Date after the Claim is Allowed.
Distributions shall be made only to the extent of the aggregate distributions
that the Holder of any such Allowed Claim would have received had such Claim
been Allowed as of the Effective Date (less any taxes paid with respect to
amounts held in the Disputed Reserves). No interest shall accrue or be paid on
the unpaid amount of any distribution paid on a Quarterly Distribution Date.
Distributions to each Holder of a Disputed Claim that has become an Allowed
Claim (and to the extent that the holder of the Disputed Claim has not received
prior distributions on account of that Claim) shall be made in accordance with
the provisions of the Plan governing the Class (or group of Classes in the case
of Class 4) of Claims in which the Claim is classified.
(e) TERMINATION OF DISPUTED CLAIM
RESERVE OR STAND ALONE VOTING
TRUST.
Each Disputed Claim reserve shall be closed and extinguished by the
Liquidation Trustee when all distributions and other dispositions of Cash or
other property required to be made under the Plan have been made. Upon closure
of a Disputed Claim reserve, all Cash or other property held in that Disputed
Claim Reserve shall revest in and become the property of the Liquidation Trust.
The Stand Alone Voting Trust shall be closed and extinguished by the Stand Alone
Voting Trustees when all distributions of New Common Stock and New Warrants
required to be made under the Plan have been made.
(f) LIMITATION OF LIABILITY FOR FUNDING
THE DISPUTED CLAIM RESERVE.
Except as expressly set forth in the Plan, the Liquidation Trust shall
have no duty to fund the Disputed Reserves.
C. RELEASES.
As of the Effective Date, the Debtors shall be deemed to have waived
and released the Debtors, the Creditors' Committee, Berkshire and the Buyer, and
each of those parties' officers, directors, members, ex officio members, and the
Interested Party Professionals, from any and all Causes of Action of the Debtors
(including claims which the Debtors otherwise have legal power to assert,
compromise or settle in connection their Chapter 11 Cases) arising on or before
the Effective Date; provided, however, that this provision shall not operate as
a waiver or release of any Causes of Action (a) in respect to any loan, advance
or similar payment by the Debtors to such parties, (b) in respect of any
contractual obligation owed to any of the Debtors by such parties, including,
without limitation, the obligations arising under the Purchase Agreement, the
Final DIP Agreement and the Exit Facility Agreement, (c) in respect to any
Causes of Action based upon the willful misconduct or gross negligence of such
parties, (d) to the extent based upon or attributable to such parties gaining in
fact a personal profit to which such parties were not legally entitled,
including, without limitation, profits made from the purchase or sale of
44
equity securities of Oakwood which are recoverable by Oakwood or its successors
pursuant to section 16(b) of the Securities Exchange Act of 1934, as amended and
(e) that is an Avoidance Action; provided further, however, that this provision
shall not operate as a waiver or release of any right that any party in interest
may have to object to any Claim, including Fee Claims, or any Interest and shall
not otherwise operate as a waiver or release of any objection to Claims or
Interests pending as of the Effective Date, regardless of whether such objection
was brought by the Debtors or any other party in interest.
D. EXCULPATION.
The Debtors, the Creditors' Committee, Berkshire and the Buyer, and
each of those parties' officers, directors, members, ex officio members, and the
Interested Party Professionals shall neither have nor incur any liability, in
any form, to any Holder of a Claim or Interest, or a governmental entity on
behalf of a Holder of a Claim or Interest, for any act or omission in connection
with or arising out of their involvement in the filing and conduct of the
Chapter 11 Cases, including the type or value of distributions, if any, reserved
under the Plan for Holders of Interest, the solicitation of votes for acceptance
or rejection of the Plan, the pursuit of confirmation and consummation of the
Plan, the administration of the Plan or the property to be distributed under the
Plan, except for any liabilities which may arise under the statutes or
regulations administered by the Securities and Exchange Commission or from any
willful misconduct or gross negligence, and, in all respects, shall be entitled
to rely upon the advice of counsel with respect to their duties and
responsibilities under the Plan and applicable law.
E. INJUNCTION.
CONFIRMATION OF THIS PLAN SHALL HAVE THE EFFECT OF, AMONG OTHER THINGS,
PERMANENTLY ENJOINING ALL PERSONS WHO HAVE HELD, HOLD OR MAY HOLD OR HAVE
ASSERTED, ASSERT OR MAY ASSERT CLAIMS AGAINST OR INTERESTS IN ANY OF THE DEBTORS
AGAINST ANY OF THE DEBTORS, WITH RESPECT TO ANY SUCH CLAIM OR INTEREST FROM AND
AFTER THE EFFECTIVE DATE, FROM TAKING ANY OF THE FOLLOWING ACTIONS (OTHER THAN
ACTIONS TO ENFORCE ANY RIGHTS OR OBLIGATIONS UNDER THE PLAN): (a) COMMENCING,
CONDUCTING OR CONTINUING IN ANY MANNER, DIRECTLY OR INDIRECTLY, ANY SUIT, ACTION
OR OTHER PROCEEDING OF ANY KIND (INCLUDING, WITHOUT LIMITATION, ANY PROCEEDING
IN A JUDICIAL, ARBITRAL, ADMINISTRATIVE OR OTHER FORUM) AGAINST OR AFFECTING THE
ESTATES, THE LIQUIDATION TRUST, THE REORGANIZED SALE DEBTORS, THE REORGANIZED
STAND ALONE DEBTORS, THE BUYER OR ANY OF THEIR PROPERTY; (b) ENFORCING, LEVYING,
ATTACHING (INCLUDING, WITHOUT LIMITATION, ANY PRE-JUDGMENT ATTACHMENT),
COLLECTING OR OTHERWISE RECOVERING BY ANY MANNER OR MEANS, WHETHER DIRECTLY OR
INDIRECTLY, ANY JUDGMENT, AWARD, DECREE OR ORDER AGAINST THE ESTATES, THE
LIQUIDATION TRUST, THE REORGANIZED SALE DEBTORS, THE REORGANIZED STAND ALONE
DEBTORS, THE BUYER OR ANY OF THEIR PROPERTY; (c) CREATING, PERFECTING OR
OTHERWISE ENFORCING IN ANY MANNER, DIRECTLY OR INDIRECTLY, ANY ENCUMBRANCE OF
ANY KIND AGAINST THE ESTATES, THE LIQUIDATION TRUST, THE REORGANIZED SALE
DEBTORS, THE REORGANIZED STAND ALONE DEBTORS, THE BUYER OR ANY OF THEIR
PROPERTY; (d) ASSERTING ANY RIGHT OF SETOFF, DIRECTLY OR INDIRECTLY, AGAINST ANY
OBLIGATION DUE THE ESTATES, THE LIQUIDATION TRUST, THE REORGANIZED SALE DEBTORS,
THE REORGANIZED STAND ALONE DEBTORS, THE BUYER OR ANY OF THEIR PROPERTY, EXCEPT
AS CONTEMPLATED OR ALLOWED BY THE PLAN; (e) ACTING OR PROCEEDING IN ANY MANNER,
IN ANY PLACE WHATSOEVER, THAT DOES NOT CONFORM TO OR COMPLY WITH THE PROVISIONS
OF THE PLAN; AND (f) PROSECUTING OR OTHERWISE ASSERTING ANY CLAIM OR INTEREST,
INCLUDING ANY RIGHT, CLAIM OR CAUSE OF ACTION, RELEASED PURSUANT TO THE PLAN.
ADDITIONALLY,
45
UNLESS OTHERWISE EXPLICITLY STATED IN THE PLAN, THE INJUNCTION CONTEMPLATED BY
THIS SECTION SHALL PROHIBIT THE ASSERTION AGAINST THE LIQUIDATION TRUST OF ALL
CLAIMS OR INTERESTS, IF ANY, RELATED TO THE DEBTORS, THAT ARE NOT OTHERWISE
DISCHARGED OR RELEASED BY THE PLAN OR THE CONFIRMATION ORDER.
F. WAIVER OF CERTAIN CLAIMS.
Subject to the occurrence of the Initial Distribution Date, and except
as otherwise expressly provided in the Plan or Confirmation Order, all Holders
of Junior Notes Claims, Senior Notes Claims and REMIC Guarantee Claims and
Junior Notes Indenture Trustees, the Senior Notes Indenture Trustees, the REMIC
Trustees and the Resecuritization Trustee shall all be deemed, by virtue of
their receipt of distributions and/or other treatment contemplated under the
Plan, to have forever covenanted with each other to waive, release and not to
assert, sue, or otherwise seek any recovery from each other or the Debtors, the
Creditors' Committee, and each of those parties' officers, directors, members,
ex officio members and the Interested Party Professionals, whether for tort,
contract, violations of federal or state securities laws, or otherwise, based
upon any claim, right or cause of action related to the construction and
enforcement of the Junior Notes Indenture, the Senior Notes Indenture or any
obligations under the B-2 REMIC Guarantees and the Resecuritization Note Put
Option or any alleged priority or subordination in respect of distributions
received on account of Junior Notes Claims, Senior Notes Claims or REMIC
Guarantee Claims; provided further, however, that this provision shall not
operate as a waiver or release of any right that any party in interest may have
to object to any Claim, including Fee Claims, or any Interest and shall not
otherwise operate as a waiver or release of any objection to Claims or Interests
pending as of the Effective Date, regardless of whether such objection was
brought by the Debtors or any other party in interest.
G. RETENTION OF OLD COMMON STOCK BY HOLDERS OF INTERESTS
UNDER THE SALE OPTION.
Due to certain tax issues described in Section V.E of the Supplemental
Disclosure Statement and the potential for Future Claims, the Debtors believe
that the retention of the Old Common Stock of the Reorganized Sale Debtors by
the current Holders of Interests in Oakwood is appropriate under the Sale
Option. Such retention (i) may avoid the occurrence of an "ownership change"
(within the meaning of IRC Section 382) of the Reorganized Sale Debtors and
facilitate the preservation of such losses and (ii) serve to channel Future
Claims away from the Liquidation Trust.
If the losses are not available, the future tax liability of the
Reorganized Sale Debtors could be substantial. Moreover, the Reorganized Sale
Debtors could have some future tax liability notwithstanding the availability of
the loss carryforwards. In order to keep such potentially substantial tax
liability of the Reorganized Sale Debtors from affecting the Liquidation Trust,
the Debtors believe that the retention of the Old Common Stock by the current
Holders of Interests is in the best interests of the Debtors, their Creditors
and the Estates.
Additionally, due to the potential for Future Claims, the existence of
the Reorganized Sale Debtors separate from the existence of the Liquidation
Trust and with the necessary insurance, will serve to insulate the Liquidation
Trust from such Claims.
46
III. PROJECTED DISTRIBUTION ANALYSIS FOR THE SALE OPTION.(12)
A. INTRODUCTION.
Attached hereto as EXHIBIT C(13) is a Projected Distribution
Analysis (the "Analysis") The Analysis presents estimated recoveries to Holders
of Claims and Interests following Confirmation and implementation of the Sale
Option. Because the closing date is uncertain and the Purchase Agreement
contains provisions for purchase price adjustments, there is inherent
uncertainty in the sales proceeds assumptions which are necessarily based on a
forecast of operating results. For purposes of the Analysis, cash has been
estimated as of March 31, 2004 and may vary due to (1) cash used or generated by
Oakwood through March 31, 2004 and (2) post closing adjustments in accordance
with the Purchase Agreement. The sales proceeds assumptions and other estimates
utilized in the Analysis are considered reasonable by Management of the Debtors
and are described below and in the Analysis.
B. BASIS OF PRESENTATION.
The Analysis has been prepared on a consolidated basis as of
March 31, 2004 reflecting the value of both the Debtor and non-Debtor entities.
The March 31, 2004 date is assumed to be the closing date of the sale to Clayton
Homes. A change in the closing date could have a substantial effect on the sales
proceeds assumption. Upon the closing, substantially all Net Proceeds and unsold
assets, Administrative Claims, Claims, Avoidance Actions and remaining employees
would be transferred to the Liquidation Trust, except that the Excluded Sale
Debtor Assets will be transferred to the Reorganized Sale Debtors.
C. POST CLOSING OPERATIONS.
There are significant assumptions in the estimated costs of
post-closing operations. In accordance with the Purchase Agreement, the
Liquidation Trust employees are forecast to remain in the old Oakwood Homes
headquarters for a six-month period with free rent and complete access to
records and computer systems.
- ---------------------------
(12) See the Original Disclosure Statement for the Projected Distribution
under the Stand Alone Option and the Liquidation Analysis.
(13) The Creditors' Committee does not necessarily agree with the Debtors'
estimate for unsecured creditor recoveries, as set forth on Exhibit C.
Among other things, the Creditors' Committee believes that: (1) the
estimated costs of winding down the estates and administrating the
Liquidation Trust (which costs are paid out of the assets of the
Liquidation Trust and, therefore, out of potential unsecured creditor
recoveries) may be overstated; (2) the estimated amount of estate
proceeds necessary to capitalize the Reorganized Sale Debtors may be
less than the amounts stated on Exhibit C (which amount ultimately will
be stated in the Plan Supplement or, if there is disagreement over the
amount at the time of the Plan Supplement, likely will be determined by
the Bankruptcy Court at the Confirmation Hearing); and (3) additional
sums may be available for distribution to unsecured creditors on
account of Avoidance Actions, including estate preference claims.
47
Following the six-month period the Liquidation Trust is
forecast to acquire its own space and equipment to continue functioning through
the distribution period. It is assumed the Liquidation Trust would expend
approximately $10,000 per month for systems and $10,000 per month rent after
relocating to its new location for that period of time necessary to administer
the Liquidation Trust.
D. WIND DOWN TEAM.
The Debtors expect that, pursuant to the Plan, the wind down
team will be led by the Liquidation Trustee who will consult with an advisory
board described in the Plan as the Liquidation Trust Advisory Committee. The
wind down team is assumed to employ fewer employees each month based on the
decline of activity required to realize on any remaining assets, resolve claims,
issue recoveries to creditors, dissolve inactive companies and complete various
filings such as tax returns and other tax reporting requirements.
E. THE WIND DOWN.
The forecast assumes that the vast majority of the Liquidation
Trust's activity during the wind down period will occur within the six months
following Confirmation. However, it should be recognized that Claims resolution,
particularly with respect to Litigation Claims, as well as the realization on
some of the assets held by the Liquidation Trust for sale, and the collection of
deposits related to workers compensation could continue for a number of years.
The wind down costs have been estimated accordingly and may vary based upon
decisions made by the Liquidation Trustee and the Liquidation Trust Advisory
Committee in their business judgment in managing the Liquidation Trust and its
fiduciary obligations to creditors.
The Analysis includes estimates of proceeds for assets not yet
sold as well as the Allowed Claims amounts, some of which are currently in
dispute and may be resolved in an amount different from the estimated claims in
the Analysis. Any variation in amounts from the Analysis for the proceeds of
assets, collection of deposits from workers compensation, resolution of claims,
and costs for the Liquidation Trustee and its professionals will impact the
recoveries.
F. FREQUENCY OF PAYMENTS.
The analysis assumes that the Liquidation Trust will be making
quarterly distributions based on the realization of assets remaining in the
Liquidation Trust and the resolution of claims for the first two years. To the
extent the claims are disputed, the Liquidation Trustee will reserve the full
amount of the Claim until such time as the dispute is resolved. Resolved Claims
will be treated as Allowed Claims and included in the calculation of the next
distribution following the allowance of the claim. Claims that have been filed
as contingent or unliquidated will be estimated prior to the first distribution
to establish a reserve. All Holders of general unsecured Claims (other than
Class 3 Claims) will receive partial distributions for at least two years.
48
G. AVOIDANCE ACTIONS.
Under both the Sale Option and the Stand Alone Option, the Liquidation
Trust will pursue Avoidance Actions; provided, however, that, under the Stand
Alone Option, Avoidance Actions pertaining to the secured status of any Disputed
Secured Claim shall be vested in the Reorganized Stand Alone Debtors. The
estimated distributions do not reflect any Avoidance Action recoveries or
related litigation costs which may impact the overall recoveries of individual
creditors.
H. PROFESSIONAL FEES.
The Debtors expect that, pursuant to the Plan, the Liquidation
Trust will retain professionals for purposes including, but not limited to, the
following:
1. Trade claims objections and preference litigation;
2. Investigation and prosecution of Avoidance Actions;
3. Defense of Litigation Claims; and
4. Resolution of Tax Claims.
The Liquidation Trustee and the Liquidation Trust Advisory Committee may hire
professionals presently serving in the case or other professionals as deemed
necessary.
The Analysis has been prepared by or under the direction of
the Debtors' management and has not been audited. Readers are urged to review
carefully all of the notes and assumptions included in the Analysis and to
consult with their own financial, legal, and tax advisors regarding the same.
INFORMATION INCLUDED IN THE ANALYSIS CONTAINS FORWARD LOOKING
STATEMENTS WITHIN THE MEANING OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. SUCH FORWARD LOOKING INFORMATION IS
BASED ON INFORMATION AVAILABLE WHEN SUCH STATEMENTS ARE MADE AND IS SUBJECT TO
RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE EXPRESSED IN THE STATEMENTS.
49
IV. ADDITIONAL CONSIDERATIONS REGARDING RISK.
The following disclosures are not intended to be inclusive and
should be read in connection with the other disclosures contained in this
Supplemental Disclosure Statement and the Exhibits hereto. You should consult
your legal, financial, and tax advisors regarding the risks associated with the
Plan and the distributions you may receive thereunder.
A. RISKS ASSOCIATED WITH THE SALE OPTION.
CLAIMS VALUATION RISKS. If the Sale Option is confirmed, the
costs of the wind down, the estimates in the Analysis for proceeds of assets not
yet sold, as well as the amounts of Claims that remain to be allowed or
estimated could vary considerably from those assumed in the Analysis, any of
which contingencies would have an impact on the amount available for
distribution. Also, adjustments to the Total Purchase Price as called for in the
Purchase Agreement could affect the amounts available for distribution.
Additionally, the estimates of recovery to the Unsecured
Classes under the Sale Option are subject to change based upon the value of the
Assets left behind in the Reorganized Sale Debtors to ensure that assets in the
Liquidation Trust can be distributed free from certain tax and future claim
liability. This concept is further described in Article VI of the Plan. The
Creditors' Committee does not necessarily agree with the Debtors' estimate for
unsecured creditor recoveries, as set forth on Exhibit C. Among other things,
the Creditors' Committee believes that: (1) the estimated costs of winding down
the estates and administrating the Liquidation Trust (which costs are paid out
of the assets of the Liquidation Trust and, therefore, out of potential
unsecured creditor recoveries) may be overstated; (2) the estimated amount of
estate proceeds necessary to capitalize the Reorganized Sale Debtors may be less
than the amounts stated on Exhibit C (which amount ultimately will be stated in
the Plan Supplement or, if there is disagreement over the amount at the time of
the Plan Supplement, likely will be determined by the Bankruptcy Court at the
Confirmation Hearing); and (3) additional sums may be available for distribution
to unsecured creditors on account of Avoidance Actions, including estate
preference claims.
ASSUMPTIONS REGARDING VALUE OF DEBTORS' ASSETS: It was assumed
in the preparation of the projections that the historical book value of the
Debtors' assets generally approximates the fair value thereof, except for
specific adjustments discussed in the notes thereto. For financial reporting
purposes, the fair value of the assets of the Debtors (including deferred tax
assets) must be determined as of the Effective Date. Although such valuation is
not presently expected to result in values that are materially different than
the values assumed in the preparation of the projections herein, there can be no
assurance with respect thereto.
CERTAIN RISKS OF NON-CONFIRMATION: There can be no assurance
that the requisite acceptances to confirm the Plan will be received. Even if the
requisite acceptances are received, there can be no assurance that the
Bankruptcy Court will confirm the Plan. A non-accepting Holder of Claims or
Interests might challenge the adequacy of the Disclosure Statement or the
balloting procedures and results as not being in compliance with the Bankruptcy
Code and/or Bankruptcy Rules. Even if the Bankruptcy Court were to determine
that the balloting procedures and results were appropriate, the Bankruptcy Court
could still decline to confirm the Plan if it
50
were to find that any of the statutory requirements for confirmation had not
been met. Section 1129 of the Bankruptcy Code sets forth the requirements for
confirmation and requires, among other things, a finding by the Bankruptcy Court
that the confirmation of the Plan is not likely to be followed by a liquidation
or a need for further financial reorganization and that the value of
Distributions to non-accepting Holders of Claims and Interests within a
particular Class under the Plan will not be less than the value of Distributions
such Holders would receive if the Debtors were liquidated under Chapter 7 of the
Bankruptcy Code. While there can be no assurance that the Bankruptcy Court will
conclude that these requirements have been met, the Debtors believe that the
Plan will not be followed by a need for further financial reorganization and
that non-accepting Holders within each Class under the Plan will receive
Distributions at least as great as would be received following a liquidation
pursuant to Chapter 7 of the Bankruptcy Code when taking into consideration all
administrative expenses and costs associated with any such Chapter 7 case, as
set forth further in the discussion of the Liquidation Analysis in Section X of
the Original Disclosure Statement.
The confirmation and consummation of the Plan are also subject
to certain conditions. If the Plan were not to be confirmed, it is unclear
whether a sale transaction or the restructuring could be implemented and what
distribution Holders of Claims or Interests ultimately would receive with
respect to their Claims or Interests. If an alternative plan of reorganization
could not be agreed to and confirmed, it is possible that the Debtors would have
to liquidate their assets, in which case the Debtors believe that it is likely
that Holders of Claims or Interests would receive substantially less than the
treatment they will receive pursuant to the Plan.
B. RISKS ASSOCIATED WITH THE STAND ALONE OPTION.
RISKS ASSOCIATED WITH CONCENTRATED OWNERSHIP OF THE NEW COMMON
STOCK AND NEW WARRANTS: If the Stand Alone Option in the Plan is confirmed,
ownership of a substantial number and percentage of shares of the New Common
Stock will be concentrated among a relatively small number of holders. Sales of
or offers to sell a substantial number of shares of New Common Stock, or the
perception by investors, investment professionals, and securities analysts of
the possibility of such sales, could affect adversely the market for and price
of the New Common Stock to be issued under the Plan.
LACK OF TRADING; MARKET VOLATILITY: There can be no assurance
that a market will develop for the New Common Stock issued pursuant to the Stand
Alone Option in the Plan (or for any other security issued pursuant to the
Plan). Although the Reorganized Stand Alone Debtors will use reasonable efforts
to cause the New Common Stock to be listed on a national securities exchange, it
is unlikely that initial listing requirements will be satisfied on the Effective
Date. Even if such securities are subsequently listed, there is no assurance
that an active market for such New Common Stock will develop or, if any such
market does develop, that it will continue to exist, or as to the degree of
price volatility in any such market that does develop. Accordingly, no assurance
can be given as to the liquidity of the market for the New Common Stock or the
price at which any sales may occur. Finally, any creditor or stockholder who may
be considered an "underwriter" under section 1145(b) of the Bankruptcy Code may
not be able to resell the New Common Stock (or any other securities received
under the Plan) without registration under securities laws, except in certain
"ordinary course" transactions.
51
CERTAIN RISKS ASSOCIATED WITH THE CHAPTER 11 CASES: The
Debtors are parties to various material contractual arrangements under which the
commencement of transactions contemplated by the Plan could, subject to the
Debtors' rights and powers under sections 362 and 365 of the Bankruptcy Code:
(a) result in a breach, violation, default, or conflict; (b) give other parties
thereto rights of termination or cancellation; or (c) have other adverse
consequences on the operations of the Debtors or the Reorganized Stand Alone
Debtors. The magnitude of any such adverse consequences may depend upon, among
other factors, the diligence and vigor with which the other parties to such
contracts may seek to assert any such rights and pursue any such remedies in
respect to such matters, and the ability of the Debtors or Reorganized Stand
Alone Debtors to resolve such matters on acceptable terms through negotiations
with such other parties or otherwise.
RISKS RELATING TO THE PROJECTIONS: The Debtors have prepared
projections in connection with the development of the Plan and to present the
projected effects of the Plan and the projected results of operations following
the Effective Date of the Plan. These projections assume the Plan and
transactions contemplated thereby will be implemented in accordance with their
terms. The assumptions and estimates underlying such projections are inherently
uncertain and are subject to, among other factors, business, economic,
legislative, and competitive risks and uncertainties that could cause actual
results to differ materially from those projected. Such uncertainties and other
factors include approval by the Bankruptcy Court of the Plan and potential
objections of third parties. Accordingly, the projections herein are not
necessarily indicative of the future financial condition, results of operations,
or equity value of the Reorganized Stand Alone Debtors, which may vary
materially from those projections. Consequently, the projections contained
herein should not be regarded as a representation or guarantee by the Debtors,
the Debtors' advisors, or any other person that the projections herein can or
will be achieved.
ASSUMPTIONS REGARDING VALUE OF DEBTORS' ASSETS: It was assumed
in the preparation of the projections included in the Original Disclosure
Statement that the historical book value of the Debtors' assets generally
approximates the fair value thereof, except for specific adjustments discussed
in the notes thereto. For financial reporting purposes, the fair value of the
assets of the Debtors (including deferred tax assets) must be determined as of
the Effective Date. Although such valuation is not presently expected to result
in values that are materially different than the values assumed in the
preparation of the projections herein, there can be no assurance with respect
thereto.
LEVERAGE, LIQUIDITY, AND CAPITAL REQUIREMENTS: In addition to
Cash generated by operations, the Debtors' principal sources of liquidity
following their emergence from bankruptcy will be the proceeds of loan
dispositions, exit financing in amounts necessary to repay the
debtor-in-possession financing and Cash accumulated by the Debtors during the
Chapter 11 Cases. After the Effective Date of the Plan, the Debtors expect that
in addition to working capital requirements, repayment of the Debtors'
obligations under the exit financing and any notes issued pursuant to the Plan
will impose liquidity requirements on the Debtors. Any increase in the interest
rate pertaining to this indebtedness may reduce the funds available to the
Debtors for their future operations. While the Debtors believe that they will
have adequate liquidity to meet requirements following the Effective Date of the
Plan, no assurances can be had in this regard. Any inability of the Debtors to
service their indebtedness, obtain additional
52
financing, as needed, or comply with the financial covenants contained in the
debt instruments issued pursuant to the Plan could have a material adverse
effect on the Debtors.
RISING COST AND AVAILABILITY OF LABOR: There can be no
assurances that rising labor costs will not have a material adverse effect on
the Debtors in the future.
RISING COST AND AVAILABILITY OF SUPPLIERS AND RAW MATERIALS:
There can be no assurances that rising supplier and raw material costs will not
have a material adverse effect on the Debtors in the future.
HIGHLY COMPETITIVE INDUSTRY: There can be no assurance that
increased competition in the future will not adversely affect the Debtors'
financial condition and results of operations.
CERTAIN RISKS OF NON-CONFIRMATION: There can be no assurance
that the requisite acceptances to confirm the Plan will be received. Even if the
requisite acceptances are received, there can be no assurance that the
Bankruptcy Court will confirm the Plan. A non-accepting Holder of Claims or
Interests might challenge the adequacy of the Disclosure Statement or the
balloting procedures and results as not being in compliance with the Bankruptcy
Code and/or Bankruptcy Rules. Even if the Bankruptcy Court were to determine
that the balloting procedures and results were appropriate, the Bankruptcy Court
could still decline to confirm the Plan if it were to find that any of the
statutory requirements for confirmation had not been met. Section 1129 of the
Bankruptcy Code sets forth the requirements for confirmation and requires, among
other things, a finding by the Bankruptcy Court that the confirmation of the
Plan is not likely to be followed by a liquidation or a need for further
financial reorganization and that the value of Distributions to non-accepting
Holders of Claims and Interests within a particular Class under the Plan will
not be less than the value of Distributions such Holders would receive if the
Debtors were liquidated under Chapter 7 of the Bankruptcy Code. While there can
be no assurance that the Bankruptcy Court will conclude that these requirements
have been met, the Debtors believe that the Plan will not be followed by a need
for further financial reorganization and that non-accepting Holders within each
Class under the Plan will receive Distributions at least as great as would be
received following a liquidation pursuant to Chapter 7 of the Bankruptcy Code
when taking into consideration all administrative expenses and costs associated
with any such Chapter 7 case, as set forth further in the discussion of the
Liquidation Analysis in Section X of the Original Disclosure Statement.
The confirmation and consummation of the Plan are also subject
to certain conditions. If the Plan were not to be confirmed, it is unclear
whether a sale transaction or the restructuring could be implemented and what
distribution Holders of Claims or Interests ultimately would receive with
respect to their Claims or Interests. If an alternative plan of reorganization
could not be agreed to and confirmed, it is possible that the Debtors would have
to liquidate their assets, in which case the Debtors believe that it is likely
that Holders of Claims or Interests would receive substantially less than the
treatment they will receive pursuant to the Plan.
53
V. CERTAIN TAX CONSEQUENCES OF A SALE TRANSACTION.
A. GENERAL.
The following discussion is a summary of certain United States
federal income tax consequences of the Sale Option to the Debtors and certain
holders of Claims and Interests. Please refer to the approved Original
Disclosure Statement for a summary of United States federal income tax
consequences of the Stand Alone Option. This description is for informational
purposes only and, due to the lack of definitive judicial or administrative
authority or interpretation, substantial uncertainties exist with respect to
various tax consequences of the Sale Option as discussed herein. Only the
principal United States federal income tax consequences of the Sale Option to
the Debtors and to Holders of Claims and Interests who are entitled to vote to
accept or reject the Plan are described below. No opinion of counsel has been
sought or obtained with respect to any tax consequences of the Sale Option. No
rulings or determinations of the Internal Revenue Service ("IRS") or any other
tax authorities have been sought or obtained with respect to any tax
consequences of the Sale Option, and the discussion below is not binding upon
the IRS or other such authorities. No representations are being made regarding
the particular tax consequences of the confirmation and consummation of the Plan
to the Debtors or any Holder of a Claim. No assurance can be given that the IRS
would not assert, or that a court would not sustain, a position different from
any discussed herein.
The following United States federal income tax consequences
are based on the Internal Revenue Code of 1986, as amended (the "IRC"), Treasury
Regulations promulgated and proposed thereunder, judicial decisions and
published administrative rules and pronouncements of the IRS as in effect on the
date hereof. Changes in such rules or new interpretations thereof may occur,
possibly with retroactive effect, and could significantly affect the United
States federal income tax consequences described below.
This summary does not address foreign, state or local tax
consequences or any non-income tax consequences of the Sale Option, nor does it
purport to address the federal income tax consequences of the Sale Option to
special classes of taxpayers (such as foreign taxpayers, broker-dealers, banks,
mutual funds, insurance companies, financial institutions, small business
investment companies, regulated investment companies, tax-exempt organizations,
and investors in REMICs and pass-through entities).
ACCORDINGLY, THE FOLLOWING SUMMARY OF CERTAIN UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT A
SUBSTITUTE FOR CAREFUL TAX PLANNING AND ADVICE BASED UPON THE INDIVIDUAL
CIRCUMSTANCES PERTAINING TO A HOLDER OF A CLAIM. ALL HOLDERS OF CLAIMS ARE URGED
TO CONSULT THEIR OWN TAX ADVISORS FOR THE FEDERAL, FOREIGN, STATE, LOCAL AND
OTHER TAX CONSEQUENCES APPLICABLE UNDER THE PLAN.
54
B. CONSEQUENCES TO THE DEBTORS.
Upon implementation of the Sale Option, the Debtors will sell
substantially all of their assets in a taxable transaction in which gain and
loss is recognized for U.S. federal income tax purposes. It is anticipated that
the Debtors will realize an overall loss on these transactions (without regard
to their pre-existing net operating losses ("NOLs")) and will not incur any
federal income tax as a result thereof.
In addition, as discussed below, pursuant to the Sale Option,
the Debtors will be treated for U.S. federal income tax purposes as transferring
the portion of their assets, if any, that comprise part of the Liquidation Trust
assets directly to the Holders of Allowed Claims, which Holders then will be
treated as contributing such assets to the Liquidation Trust. Accordingly, the
transfer of any non-cash assets by the Debtors to the Liquidation Trust may
result in the recognition of gain or loss by the Debtors, depending in part on
the value of such assets on the Effective Date. Nevertheless, taking into
account the losses expected to be incurred in the Sale Option, plus reported and
anticipated NOLs and NOL carryforwards and the tax basis in such assets, the
Debtors do not expect to incur federal income tax liability as a result of such
transfer.
For additional information regarding tax issues specific to
the Reorganized Sale Debtors under the Sale Option, see Section V.E of this
Supplemental Disclosure Statement, below.
C. CONSEQUENCES TO THE HOLDERS OF CERTAIN CLAIMS.
The United States federal income tax consequences of the Sale
Option contemplated by the Plan to Holders of Allowed Claims (including the
character, timing and amount of income, gain or loss recognized) will depend
upon, among other things, (1) the manner in which a Holder acquired a Claim; (2)
the length of time the Claim has been held; (3) whether the Claim was acquired
at a discount; (4) whether the Holder has taken a bad debt deduction with
respect to the Claim (or any portion thereof) in the current or prior years; (5)
whether the Holder has previously included in its taxable income accrued but
unpaid interest with respect to the Claim; (6) the Holder's method of tax
accounting; and (7) whether the Claim is an installment obligation for federal
income tax purposes. Therefore, Holders of Claims should consult their own tax
advisors for information that may be relevant to their particular situations and
circumstances and the particular tax consequences to them of the transactions
contemplated by the Plan. This discussion assumes that the holder has not taken
a bad debt deduction with respect to a Claim (or any portion thereof) in the
current or any prior year and such Claim did not become completely or partially
worthless in a prior taxable year.
55
1. GAIN OR LOSS - GENERALLY.
In general, each Holder of an Allowed Claim will recognize
gain or loss in an amount equal to the difference between (i) the fair market
value of the undivided interest in the Liquidation Trust assets and any other
consideration received by the holder in satisfaction of its Claim (other than in
respect of any Claim for accrued but unpaid interest, and excluding any portion
required to be treated as imputed interest due to the post-Effective Date
distribution of such consideration upon the resolution of Disputed Claims) and
(ii) the Holder's adjusted tax basis in its Claim (other than any Claim for
accrued but unpaid interest). For a discussion of the U.S. federal income tax
consequences of distributions in respect of any Claim for accrued but unpaid
interest, see "Distributions in Discharge of Accrued But Unpaid Interest,"
below.
As discussed below, the Liquidation Trust has been structured
to qualify as a "grantor trust" for U.S. federal income tax purposes.
Accordingly, each Holder of an Allowed Claim will be treated for U.S. federal
income tax purposes as directly receiving and as a direct owner of its allocable
percentage of the Liquidation Trust assets. See "Tax Treatment of Liquidation
Trust and Holders of Beneficial Interests Therein," below. Pursuant to the Plan,
the Liquidation Trustee will make a good faith valuation of the Liquidation
Trust assets, and all parties, including the Holders of Allowed Claims, must
consistently use such valuation for all federal income tax purposes.
Due to the possibility that a Holder of an Allowed Claim may
receive additional distributions subsequent to the Effective Date in respect of
any subsequently disallowed Disputed Claims or unclaimed distributions, the
imputed interest provisions of the IRC may apply to treat a portion of such
later distributions to such Holders as imputed interest.
After the Effective Date, any amount a Holder receives as a
distribution from the Liquidation Trust in respect of its beneficial interests
in the Liquidation Trust (other than as a result of the subsequent disallowance
of Disputed Claims) should not be included, for federal income tax purposes, in
the Holder's amount realized in respect of its Allowed Claim but should be
separately treated as a distribution received in respect of such Holder's
beneficial interests in the Liquidation Trust.
2. MARKET DISCOUNT.
The market discount provisions of the IRC may apply to Holders
of certain Claims. In general, a debt obligation other than a debt obligation
with a fixed maturity of one year or less that is acquired by a holder in the
secondary market (or, in certain circumstances, upon original issuance) is a
"market discount bond" as to that holder if its stated redemption price at
maturity (or, in the case of debt obligation having original issue discount, the
revised issue price) exceeds the adjusted tax basis of the debt obligation in
the holder's hands immediately after its acquisition. However, a debt obligation
will not be a "market discount bond" if such excess is less than a statutory de
minimis amount. Gain recognized by a creditor with respect to a "market discount
bond" generally will be treated as ordinary interest income to the extent of the
market discount accrued on such bond during the creditor's period of ownership,
unless the creditor elected to include accrued market discount in taxable income
56
currently. A holder of a market discount bond that is required under the market
discount rules of the IRC to defer deduction of all or a portion of the interest
on indebtedness incurred or maintained to acquire or carry the bond may be
allowed to deduct such interest, in whole or in part, on disposition of such
bond.
3. DISTRIBUTIONS IN DISCHARGE OF ACCRUED BUT
UNPAID INTEREST.
Pursuant to the Plan, distributions to any Holder of an
Allowed Claim will be allocated first to the original principal portion of such
Claim as determined for federal income tax purposes, and then, to the extent the
consideration exceeds such amount, to the portion of such Claim representing
accrued but unpaid interest. However, there is no assurance that the IRS would
respect such allocation for federal income tax purposes.
In general, to the extent that an amount of cash or other
property is received by a holder of debt in satisfaction of interest accrued
during its holding period, such amount will be taxable to the holder as interest
income (if not previously included in the holder's gross income). Conversely, a
holder generally will recognize a deductible loss to the extent any accrued
interest previously included in its gross income is not paid. Each holder is
urged to consult its tax advisor regarding the allocation of consideration and
the deductibility of unpaid interest for U.S. federal income tax purposes.
D. TAX TREATMENT OF THE LIQUIDATION TRUST AND HOLDERS OF
BENEFICIAL INTERESTS THEREIN.
Upon the Effective Date, the Liquidation Trust shall be
established for the benefit of Holders of Allowed Claims, whether allowed on or
after the Effective Date.
1. CLASSIFICATION OF THE LIQUIDATION TRUST.
The Liquidation Trust is intended to qualify as a Liquidation
Trust for federal income tax purposes. In general, a Liquidation Trust is not a
separate taxable entity but rather is treated for federal income tax purposes as
a "grantor" trust (i.e., a pass-through entity). However, merely establishing a
trust as a Liquidation Trust does not ensure that it will be treated as a
grantor trust for U.S. federal income tax purposes. The IRS, in Revenue
Procedure 94-45, 1994-2 C.B. 684, set forth the general criteria for obtaining
an IRS ruling as to the grantor trust status of a Liquidation Trust under a
chapter 11 plan. The Liquidation Trust has been structured with the intention of
complying with such general criteria. Pursuant to the Plan, and in conformity
with Revenue Procedure 94-45, all parties (including the Debtors, the
Liquidation Trust and the Holders of Allowed Claims) are required to treat, for
federal income tax purposes, the Liquidation Trust as a grantor trust of which
the Holders of Allowed Claims are the owners and grantors, and the following
discussion assumes that the Liquidation Trust will be so respected for U.S.
federal income tax purposes. However, no ruling has been requested from the IRS
and no opinion of counsel has been requested concerning the tax status of the
Liquidating Trust as a grantor trust. Accordingly, there can be no assurance
that the IRS would not take a contrary position. If the IRS were to challenge
successfully such classification, the federal income tax consequences to the
Liquidation Trust, the holders of Claims and the U.S. Debtors
57
could vary from those discussed herein (including the potential for an entity
level tax on any income of the Liquidation Trust).
2. GENERAL TAX REPORTING BY THE LIQUIDATION
TRUST AND BENEFICIARIES.
For all U.S. federal income tax purposes, all parties
(including the Debtors, the Liquidation Trustee, and the Holders of Allowed
Claims) must treat the transfer of the Liquidation Trust Assets to the
Liquidation Trust, in accordance with the terms of the Plan, as a transfer of
the such Liquidation Trust assets by the Debtors directly to the Holders of
Allowed Claims followed by the contribution of such Liquidation Trust assets by
such Holders to the Liquidation Trust. Consistent therewith, all parties must
treat the Liquidation Trust as a grantor trust of which such holders are the
owners and grantors. Thus, such holders (and any subsequent holders of interests
in the Liquidation Trust) will be treated as the direct owners of an undivided
interest in the assets of the Liquidation Trust for all U.S. federal income tax
purposes. These assets initially will have a tax basis equal to their fair
market value on the Effective Date. Pursuant to the Plan, the Liquidation
Trustee will determine the fair market value of the Liquidation Trust assets as
of the Effective Date, and all parties, including the Holders of Allowed Claims,
must consistently use such valuation for all federal income tax purposes.
Accordingly, except as discussed below (in connection with
pending Disputed Claims), each Holder of an Allowed Claim will be required to
report on its U.S. federal income tax return its allocable share of any income,
gain, loss, deduction or credit recognized or incurred by the Liquidation Trust,
in accordance with its relative beneficial interest. The character of items of
income, deduction and credit to any Holder and the ability of such Holder to
benefit from any deductions or losses may depend on the particular situation of
such Holder.
The U.S. federal income tax reporting obligations of a holder
are not dependent upon the Liquidation Trust distributing any cash or other
proceeds. Therefore, a Holder may incur a federal income tax liability with
respect to its allocable share of the income of the Liquidation Trust regardless
of the fact that the trust has not made any concurrent distribution to the
Holder. In general, a distribution of cash by the Liquidation Trust to Holders
of Allowed Claims, other than in respect of cash retained on account of Disputed
Claims and subsequently distributed, will not be taxable to the holders, as such
Holders already are regarded for federal income tax purposes as owning the
underlying assets of the Liquidation Trust.
The Liquidation Trustee will file with the IRS returns for the
Liquidation Trust as a grantor trust pursuant to Treasury Regulation section
1.671-4(a). The Liquidation Trustee will also send to each Holder of an Allowed
Claim, as a holder of a beneficial interest in the trust, a separate statement
setting forth such holder's share of items of income, gain, loss, deduction or
credit and will instruct the holder to report such items on its federal income
tax return. The Liquidation Trustee will also file, or cause to be filed, all
appropriate tax returns with respect to any Liquidation Trust Assets allocable
to Disputed Claims, as discussed below.
58
3. TAX REPORTING FOR LIQUIDATION TRUST ASSETS
ALLOCABLE TO DISPUTED CLAIMS.
Absent definitive guidance from the IRS or a court of
competent jurisdiction to the contrary (including the issuance of applicable
Treasury Regulations, the receipt by the Liquidation Trustee of a private letter
ruling if the Liquidation Trustee so requests one, or the receipt of an adverse
determination by the IRS upon audit if not contested by the Liquidation
Trustee), the Liquidation Trustee shall:
(a) treat all Liquidation Trust assets allocable to, or
retained on account of, Disputed Claims, as a discrete trust for
federal income tax purposes, consisting of separate and independent
trust assets to be established in respect of each Disputed Claim, in
accordance with the trust provisions of the IRC (sections 641 et seq.
of the IRC) and to report and remit taxes attributable thereto;
(b) treat as taxable income or loss of this separate trust
with respect to any given taxable year the portion of the taxable
income or loss of the Liquidation Trust that would have been allocated
to the holders of such Disputed Claims had such Claims been Allowed on
the Effective Date (but only for the portion of the taxable year with
respect to which such Claims are unresolved);
(c) treat as a distribution from this separate trust any
increased amounts distributed by the Liquidation Trust as a result of
any Disputed Claim resolved earlier in the taxable year, to the extent
such distribution relates to taxable income or loss of this separate
trust determined in accordance with the provisions hereof; and
(d) to the extent permitted by applicable law, report and
remit taxes due to the appropriate authorities consistently for state
and local income tax purposes.
In addition, pursuant to the Plan, all Holders of Claims are
required to report in a manner consistent with such treatment. Accordingly,
subject to issuance of definitive guidance, the Liquidation Trustee will report
on the basis that any amounts earned by this separate trust and any taxable
income of the Liquidation Trust allocable to it are subject to a separate entity
level tax, except to the extent such earnings are distributed during the same
taxable year. Any amounts earned by or attributable to the separate trust and
distributed to a holder during the same taxable year will be includible in such
holder's gross income.
4. WITHHOLDING.
All distributions to holders of Claims under the Plan (whether
by the Debtors or the Liquidation Trustee) are subject to any applicable tax
withholding, including employment tax withholding. Under federal income tax law,
interest, dividends, and other reportable payments may, under certain
circumstances, be subject to "backup withholding" at the then applicable
withholding rate (currently 28%). Backup withholding generally applies if the
holder (a) fails to furnish its social security number or other taxpayer
identification number ("TIN"), (b) furnishes an incorrect TIN, (c) fails
properly to report interest or dividends, or (d) under certain
59
circumstances, fails to provide a certified statement, signed under penalty of
perjury, that the TIN provided is its correct number and that it is not subject
to backup withholding. Backup withholding is not an additional tax but merely an
advance payment, which may be refunded to the extent it results in an
overpayment of tax. Certain persons are exempt from backup withholding,
including, in certain circumstances, corporations and financial institutions.
E. TAX TREATMENT OF THE REORGANIZED SALE DEBTORS UNDER
THE SALE OPTION.
On or after the Effective Date, it is expected that all of the
Debtors and certain non-debtor subsidiaries will be combined into one or more
entities, by merger or otherwise, that are intended to be organized as
corporations for federal income tax purposes. Following this combination, the
assets of the Reorganized Sale Debtors will consist primarily of cash and
certain residual interests in REMIC Trusts. A consequence of holding such
residual interests is that certain income, deductions, gains and losses arising
from the assets of the underlying REMIC Trusts will be allocated to Reorganized
Sale Debtors. Based on various projections and assumptions regarding the future
performance of these REMIC Trusts, the Debtors believe that it is unlikely that
the Reorganized Sale Debtors will in any taxable year have material positive
taxable income resulting from its ownership of these residual interests,
provided they continue to have access to the substantial historic loss
carryforwards attributable to such residual interests. The Debtors believe that
the retention of the Old Common Stock of the Reorganized Sale Debtors by the
current Holders of Interests in Oakwood may avoid the occurrence of an
"ownership change" (within the meaning of IRC Section 382) of the Reorganized
Sale Debtors and facilitate the preservation of such losses. If such losses are
not available, the future tax liability of the Reorganized Sale Debtors could be
substantial. Moreover, if the performance of the assets in the REMIC Trusts
exceeds the projections and assumptions referred to above, the Reorganized Sale
Debtors could have some future tax liability notwithstanding the availability of
the loss carryforwards.
VI. CONFIRMATION PROCEDURES.
PERSONS CONCERNED WITH CONFIRMATION OF THE PLAN SHOULD CONSULT
WITH THEIR OWN ATTORNEYS BECAUSE THE LAW ON CONFIRMING A PLAN OF REORGANIZATION
IS VERY COMPLEX. The following discussion is intended solely for the purpose of
alerting readers about certain basic Plan confirmation issues, which they may
wish to consider. The Debtors CANNOT and DO NOT represent that the discussion
contained below is a comprehensive summary of the law on this topic.
Many requirements must be met before the Bankruptcy Court can
confirm the Plan. Some of the requirements discussed in this Disclosure
Statement include acceptance of the Plan by the Voting Classes, whether the Plan
can be confirmed even if one or more classes do not accept the Plan, whether the
Plan pays creditors at least as much as creditors would receive in a Chapter 7
liquidation, and whether the Plan is feasible. These requirements, however, are
not the only requirements for confirmation.
60
A. VOTING AND RIGHT TO BE HEARD AT CONFIRMATION.
1. WHO MAY SUPPORT OR OBJECT TO CONFIRMATION OF
THE PLAN.
Any party in interest may support or object to the
confirmation of the Plan. As explained in further detail below, entities that
may not have a right to vote (e.g., entities whose Claims or Interests belong to
an Unimpaired Class or to a Class that will receive no Distribution under the
Plan) may still have a right to support or object to the confirmation of the
Plan.
2. WHO MAY VOTE TO ACCEPT OR REJECT THE PLAN.
A creditor generally has a right to vote for or against the
Plan if that creditor has a Claim that is both "allowed" for purposes of voting
and classified in an Impaired Class. Notwithstanding the foregoing, under
section 1126(g) of the Bankruptcy Code, impaired classes that will neither
receive nor retain any consideration under a plan are deemed to have rejected
the plan and do not vote.
Under the Plan, only Holders of Allowed Claims and Interests
in Classes 2A, 2B, 2C, 2D, 2E, 2F, 2G, 2J, 2K, and 2L, 3, 4D, 4E and 6A and
those Holders who are the beneficial holders of Allowed Claims in Classes 4A,
4B, and 4C (the aforementioned "Voting Classes") are entitled to vote on the
Plan. Holders of Claims in Class 1 are Unimpaired and deemed to have accepted
the Plan.
3. WHAT IS AN ALLOWED CLAIM FOR VOTING
PURPOSES.
As noted above, a creditor's Claim must be "allowed" for
purposes of voting in order for such creditor to have the right to vote.
Generally, for voting purposes a Claim is deemed "allowed," absent an objection
to the Claim, if: (a) a proof of Claim was timely filed, or (b) if no proof of
Claim was filed, the Claim is identified in the Debtors' Schedule of Assets and
Liabilities as other than "disputed," "contingent," or "unliquidated," and an
amount of the Claim is specified in the Schedules of Assets and Liabilities, in
which case the Claim will be deemed allowed for the specified amount. In either
case, when an objection to a Claim is filed, the creditor holding the Claim
cannot vote unless the Bankruptcy Court, after notice and hearing, either
overrules the objection, or allows the Claim for voting purposes. Moreover,
Bankruptcy Rule 3018(a) provides that, with respect to Holders of Senior Notes,
Junior Notes, B-Piece Certificates and Old Common Stock, such Holders must be of
record on the date that the Disclosure Statement is approved under section 1125
of the Bankruptcy Code in order to vote on the Plan.
Note that the definition of "Allowed Claim" used in the Plan
for purposes of determining whether creditors are entitled to receive
Distributions thereunder may differ materially from that used by the Bankruptcy
Court to determine whether a particular Claim is "allowed" for purposes of
voting. Holders of Claims are advised to review the definitions of "Allowed
Claim" and "Disputed Claim" in the Plan to determine whether they may be
entitled to receive distributions under the Plan.
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4. WHAT IS AN IMPAIRED CLASS OF CLAIMS OR
INTERESTS.
As noted above, a Claim or Interest that is "allowed" for
voting purposes only has the right to vote if it is in a Class that is Impaired
under the Plan and if that Class will receive or retain any consideration under
the Plan. A Class is Impaired if the Plan alters the legal, equitable, or
contractual rights of the Holders of Claims or Interests of that Class. As
noted, under the Plan, all Classes are Impaired except Class 1.
5. WHO IS NOT ENTITLED TO VOTE.
The Holders of the following types of Claims are not entitled
to vote: (a) Claims that have been disallowed; (b) Claims that are subject to a
pending objection and that have not been allowed for voting purposes; (c) Claims
in Unimpaired Classes; (d) Claims entitled to priority pursuant to sections
507(a)(1), 507(a)(2), and 507(a)(7) of the Bankruptcy Code; and (e) Claims in
Classes that do not receive or retain any property under the Plan. Holders of
Claims and Interests in Unimpaired Classes are not entitled to vote because such
Classes are deemed to have accepted the Plan. Holders of Claims entitled to
priority pursuant to sections 507(a)(1), 507(a)(2), and 507(a)(7) of the
Bankruptcy Code are not entitled to vote because such Claims are not placed in
Classes and they are required to receive certain treatment specified by the
Bankruptcy Code. Claims and Interests in Classes that do not receive or retain
any property under the Plan do not vote because such Classes are deemed to have
rejected the Plan. Even if your Claim or Interest is of the type described
above, you may still have a right to support or object to the confirmation of
the Plan.
6. VOTES NECESSARY TO CONFIRM THE PLAN.
The Court cannot confirm the Plan unless: (a) at least one
Impaired Class has accepted the Plan without counting the votes of any Insiders
within that Class; and (b) either all Impaired Classes have voted to accept the
Plan, or the Plan is eligible to be confirmed by "cramdown" with respect to any
dissenting Impaired Class as discussed in section 1129(b) of the Bankruptcy
Code.
7. VOTES NECESSARY FOR A CLASS TO ACCEPT THE
PLAN.
A Class of Claims is considered to have accepted the Plan when
more than one-half (1/2) in number and at least two-thirds (2/3) in dollar
amount of the Claims that actually voted have voted in favor of the Plan.
8. TREATMENT OF NON-ACCEPTING CLASSES.
As noted above, even if all Impaired Classes do not accept the
proposed Plan, the Bankruptcy Court may nonetheless confirm the Plan if the
non-accepting Classes are treated in the manner required by the Bankruptcy Code.
The process by which a Plan is confirmed despite rejections by non-accepting
Classes and made binding on those Classes is commonly referred to
62
as a "cramdown." The Bankruptcy Code allows the Plan to be "crammed down" on
non-accepting Classes of Claims or Interests if the Plan meets the requirements
of section 1129(a)(1) through (a)(7) and 1129(a)(9) through (a)(13) of the
Bankruptcy Code and if the Plan does not "discriminate unfairly" and is "fair
and equitable" with respect to non-accepting Classes as those terms are defined
in section 1129(b) of the Bankruptcy Code section.
9. REQUEST FOR CONFIRMATION DESPITE
NON-ACCEPTANCE BY IMPAIRED CLASSES.
The Debtors have asked the Bankruptcy Court to confirm this
Plan by cramdown on any Classes that are deemed to have rejected the Plan and on
any Impaired Voting Class that does not vote to accept the Plan.
B. HYPOTHETICAL LIQUIDATION ANALYSIS.
Another confirmation requirement is the "Best Interest Test"
or "Hypothetical Liquidation Test" incorporated in section 1129(a)(7) of the
Bankruptcy Code. The test applies to individual Holders of Unsecured Claims and
Holders of Interests that are both (i) in Impaired Classes under the Plan, and
(ii) do not vote to accept the Plan. Section 1129(a)(7) of the Bankruptcy Code
requires that such Holders of Unsecured Claims and Holders of Interests receive
or retain an amount under the Plan not less than the amount that such Holders
would receive or retain if the Debtors were to be liquidated under Chapter 7 of
the Bankruptcy Code.
The Debtors do not intend that their Chapter 11 Cases actually
will be converted to Chapter 7 liquidations. However, in order to apply the Best
Interest Test, the Debtors have prepared a hypothetical liquidation analysis
attached to the Original Disclosure Statement as Exhibit C. The hypothetical
liquidation analysis projects an estimate of what Holders of Unsecured Claims
and Holders of Interests might receive in the event the Debtors' Chapter 11
Cases were to be converted to Chapter 7 cases and the Debtors' assets
subsequently liquidated. THE DEBTORS' HYPOTHETICAL LIQUIDATION ANALYSIS IS BASED
UPON ASSUMPTIONS THAT THE DEBTORS BELIEVE TO BE REASONABLE BASED UPON THE BEST
INFORMATION AVAILABLE TO THEM. HOWEVER, THERE ARE NUMEROUS ECONOMIC, LEGAL,
OPERATIONAL, AND OTHER UNCERTAINTIES THAT COULD DRAMATICALLY CHANGE THE RESULTS
IN AN ACTUAL LIQUIDATION. MOREOVER, BECAUSE THE BUSINESSES IN WHICH THE DEBTORS'
OPERATE ARE HIGHLY REGULATED, THERE MAY BE SIGNIFICANT REGULATORY CONSEQUENCES
AND RESTRICTIONS IN A LIQUIDATION THAT CANNOT BE PREDICTED WITH ANY CERTAINTY.
THUS, THERE CAN BE NO GUARANTY THAT AN ACTUAL LIQUIDATION OF THE DEBTORS WOULD
RESULT IN THE PROJECTED RECOVERIES FOR HOLDERS OF UNSECURED CLAIMS AND HOLDERS
OF INTERESTS.
In a typical Chapter 7 case, a trustee is elected or appointed
to liquidate the debtor's assets for distribution to creditors in accordance
with the priorities set forth in the Bankruptcy Code. Secured creditors
generally are paid first from the sales proceeds of properties securing their
liens. If any assets are remaining in the bankruptcy estates after the
satisfaction of secured creditors' claims from their collateral, administrative
expenses generally are next to receive payment. Unsecured creditors are paid
from any remaining sales proceeds, according to their respective priorities.
Unsecured creditors with the same priority share in proportion to the amount of
their allowed claims in relationship to the total amount of allowed
63
claims held by all unsecured creditors with the same priority. Finally, equity
interest holders receive the balance that remains, if any, after all creditors
are paid.
The hypothetical liquidation analysis included as an exhibit
to the Original Disclosure Statement projects that Holders of Unsecured Claims
and Holders of Interests would receive less consideration in the event the
Debtors were to be liquidated under Chapter 7 of the Bankruptcy Code than under
this Plan in either the Sale Option or the Stand Alone Option. Moreover, it is
projected that Holders of Secured Claims would receive less than payment in
full. Under the Plan, Holders of Priority Non-Tax Claims will receive payment in
full, and most Holders of Unsecured Claims will receive Distributions of New
Common Stock or Cash. Thus, the Debtors believe that all creditors will receive
at least as favorable treatment under the Plan as they would in a hypothetical
liquidation, and in fact, most creditors will receive far better treatment under
the Plan. Holders of Old Common Stock will receive nothing in a hypothetical
liquidation, and thus would not be better off in a liquidation.
C. FEASIBILITY.
The Bankruptcy Code requires that, in order for the Plan to be
confirmed, the Debtors must demonstrate that consummation of the Plan is not
likely to be followed by the liquidation or the need for further financial
reorganization of the Debtors.
For purposes of determining whether the Plan meets the
feasibility requirement, the Debtors have analyzed their ability to meet their
obligations under the Plan. Under the Sale Transaction Option, the proceeds fund
distribution. Under the Stand Alone Option, the Projections set forth in Exhibit
B to the Original Disclosure Statement (which is itself Exhibit B to this
Supplemental Disclosure Statement), show continued availability under the
Debtors' revolving line of credit and net operating income in years 2004 through
2008. Based upon those Projections, the Debtors believe that the Stand Alone
Option is feasible and that they will be able to make all payments required to
be made pursuant to the Stand Alone Option. HOLDERS OF CLAIMS AND INTERESTS ARE
ADVISED TO REVIEW CAREFULLY THE CAUTIONARY STATEMENTS INCLUDED IN SECTION I OF
THIS DISCLOSURE STATEMENT AND THE ASSUMPTIONS INCLUDED IN THE PROJECTIONS IN
CONNECTION WITH THEIR REVIEW OF THE SAME. AS NOTED THEREIN, ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THOSE PROJECTED.
D. ALTERNATIVES TO THE PLAN.
If the Plan is not confirmed, the Debtors (or if the Debtors'
exclusive period in which to file a plan has expired, any other party in
interest) could attempt to formulate a different plan. Such a plan might involve
a sale or an orderly liquidation of the Debtors' assets. The Debtors have
explored various alternatives in connection with the formulation and development
of the Plan. They believe that the Plan, as described herein, enables creditors
to realize the most value under the circumstances. In a liquidation under
Chapter 11, the Debtors' assets could be sold in an orderly fashion over a more
extended period of time than in a liquidation under Chapter 7, possibly
resulting in somewhat greater (but indeterminate) recoveries than would be
obtained in a Chapter 7 case, and the expenses for professional fees would most
likely be lower
64
than those incurred in a Chapter 7 case. Although preferable to a Chapter 7
liquidation, the Debtors believe that a liquidation under Chapter 11 is a much
less attractive alternative to creditors than the Plan because of the greater
returns potentially provided by the Plan.
The likely form of any liquidation would be the sale of
individual assets. Based on this analysis, it is likely that a liquidation of
the Debtors' assets would produce less value for distribution to creditors than
that recoverable in each instance under the Plan. In the opinion of the Debtors,
the recoveries projected to be available in liquidation are not likely to afford
Holders of Claims as great a realization potential as does the Plan.
VII. RECOMMENDATION AND CONCLUSION.
The Debtors believe that confirmation and implementation of
the Plan are preferable to any of the feasible alternatives because the Plan
will provide substantially greater recoveries for creditors under either the
Sale Option or the Stand Alone Option. ACCORDINGLY, THE DEBTORS URGE HOLDERS OF
IMPAIRED CLAIMS TO VOTE TO ACCEPT THE PLAN BY SO INDICATING ON THEIR BALLOTS AND
RETURNING THEM AS SPECIFIED IN THIS DISCLOSURE STATEMENT AND ON THE BALLOTS.
Dated: February 6, 2004 NEW DIMENSION HOMES, INC.
Wilmington, Delaware
By: /s/ Robert A. Smith
-----------------------------------------
Name: Robert A. Smith
Title: Vice President
DREAM STREET COMPANY, LLC
By: /s/ Robert A. Smith
-----------------------------------------
Name: Robert A. Smith
Title: Vice President
OAKWOOD SHARED SERVICES, LLC
By: /s/ Robert A. Smith
-----------------------------------------
Name: Robert A. Smith
Title: Vice President
65
HBOS MANUFACTURING, LP
By: Oakwood Mobile Homes, Inc., General
Partner
By: /s/ Robert A. Smith
-----------------------------------------
Name: Robert A. Smith
Title: Vice President
OAKWOOD MHD4, LLC
By: /s/ Robert A. Smith
-----------------------------------------
Name: Robert A. Smith
Title: Vice President
OAKWOOD ACCEPTANCE CORPORATION, LLC
By: /s/ Robert A. Smith
-----------------------------------------
Name: Robert A. Smith
Title: Vice President
OAKWOOD HOMES CORPORATION
By: /s/ Robert A. Smith
-----------------------------------------
Name: Robert A. Smith
Title: Executive Vice President
OAKWOOD MOBILE HOMES, INC.
By: /s/ Robert A. Smith
-----------------------------------------
Name: Robert A. Smith
Title: Vice President
66
SUBURBAN HOME SALES, INC.
By: /s/ Robert A. Smith
-----------------------------------------
Name: Robert A. Smith
Title: Vice President
FSI FINANCIAL SERVICES, INC.
By: /s/ Robert A. Smith
-----------------------------------------
Name: Robert A. Smith
Title: Vice President
HOME SERVICE CONTRACT, INC.
By: /s/ Robert A. Smith
-----------------------------------------
Name: Robert A. Smith
Title: Vice President
TRI-STATE INSURANCE AGENCY, INC.
By: /s/ Robert A. Smith
-----------------------------------------
Name: Robert A. Smith
Title: Vice President
GOLDEN WEST LEASING, LLC
By: /s/ Randelle R. Smith
-----------------------------------------
Name: Randelle R. Smith
Title: Vice President
67
CREST CAPITAL, LLC
By: /s/ Randelle R. Smith
-----------------------------------------
Name: Randelle R. Smith
Title: Vice President
PREFERRED HOUSING SERVICES, LP
By: Oakwood Mobile Homes, Inc., General
Partner
By: /s/ Robert A. Smith
-----------------------------------------
Name: Robert A. Smith
Title: Vice President
- and -
MORRIS, NICHOLS, ARSHT & TUNNELL
/s/ Daniel B. Butz
--------------------------------------------
Robert J. Dehney (No. 3578)
Derek C. Abbott (No. 3376)
Daniel B. Butz (No. 4227)
1201 North Market Street
P.O. Box 1347
Wilmington,Delaware 19899-1347
(302) 658-9200
- and -
RAYBURN COOPER & DURHAM, P.A.
C. Richard Rayburn, Jr.
Albert F. Durham
Patricia B. Edmondson
1200 Carillon, 227 West Trade Street
Charlotte, North Carolina 28202-1675
(704) 334-0891
68
EXHIBIT A
DISCLOSURE STATEMENT FOR REVISED FIRST AMENDED JOINT
PLAN OF REORGANIZATION
[Exhibit intentionally omitted - Exhibit is filed as an attachment to a Form 8-K
filed by the Company on October 14, 2003]
EXHIBIT B
CONSOLIDATED SECOND AMENDED
JOINT/PLAN OF REORGANIZATION
EXHIBIT B
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
IN RE: ) Chapter 11
)
OAKWOOD HOMES CORPORATION, ) Case No. 02-13396 (PJW)
et al.,(1) )
Debtors. ) Jointly Administered
)
) HEARING DATE: MARCH 16, 2004 AT 11:00 A.M. (EST)
_____________________________) OBJECTIONS DUE: MARCH 12, 2004 AT 4:00 P.M. (EST)
SECOND AMENDED JOINT CONSOLIDATED PLAN OF
REORGANIZATION OF OAKWOOD HOMES CORPORATION AND ITS
AFFILIATED DEBTORS AND DEBTORS-IN-POSSESSION
Dated: February 6, 2004
MORRIS, NICHOLS, ARSHT & TUNNELL
Robert J. Dehney (No. 3578)
Derek C. Abbott (No. 3376)
Daniel B. Butz (No. 4227)
1201 North Market Street
P.O. Box 1347
Wilmington, Delaware 19899-1347
(302) 658-9200
- and -
RAYBURN COOPER & DURHAM, P.A.
C. Richard Rayburn, Jr.
Albert F. Durham
Patricia B. Edmondson
1200 Carillon, 227 West Trade Street
Charlotte, North Carolina 28202-1675
(704) 334-0891
Co-Counsel for Oakwood Homes Corporation,
et al., Debtors and Debtors In Possession
______________________
(1) The Debtors are the following entities: Oakwood Homes Corporation, New
Dimension Homes, Inc., Dream Street Company, LLC, Oakwood Shared
Services, LLC, HBOS Manufacturing, LP, Oakwood MHD4, LLC, Oakwood
Acceptance Corporation, LLC, Oakwood Mobile Homes, Inc., Suburban Home
Sales, Inc., FSI Financial Services, Inc., Home Service Contract, Inc.,
Tri-State Insurance Agency, Inc., Golden West Leasing, LLC, Crest
Capital, LLC and Preferred Housing Services, LP.
PURSUANT TO SECTION 1125 OF THE BANKRUPTCY CODE, NOTHING
CONTAINED IN THIS PLAN SHOULD BE CONSTRUED AS CONSTITUTING A
SOLICITATION OF ACCEPTANCES OF THIS PLAN UNTIL SUCH TIME AS THE DEBTORS'
DISCLOSURE STATEMENT HAS BEEN APPROVED BY THE BANKRUPTCY COURT AND
DISTRIBUTED, WITH APPROPRIATE BALLOTS, TO ALL HOLDERS OF IMPAIRED CLAIMS
AGAINST AND INTERESTS IN THE DEBTORS ENTITLED TO VOTE ON THE PLAN. THE
DEBTORS RESERVE THE RIGHT TO FILE AMENDMENTS AND/OR MODIFICATIONS TO THE
PLAN AND DISCLOSURE STATEMENT FROM TIME TO TIME UNTIL A DISCLOSURE
STATEMENT AND PLAN PROPOSED BY THE DEBTORS IS APPROVED BY THE BANKRUPTCY
COURT. REFERENCE IS MADE TO SUCH DISCLOSURE STATEMENT FOR A DISCUSSION
OF VOTING INSTRUCTIONS, RECOVERY INFORMATION, CLASSIFICATION, THE
DEBTORS' HISTORY, BUSINESSES, PROPERTIES, RESULTS OF OPERATIONS AND A
SUMMARY AND ANALYSIS OF THIS PLAN. ALL HOLDERS OF CLAIMS AND INTEREST
HOLDERS ARE HEREBY ADVISED AND ENCOURAGED TO READ THE DISCLOSURE
STATEMENT AND THIS PLAN IN THEIR ENTIRETY BEFORE VOTING TO ACCEPT OR
REJECT THIS PLAN.
THIS PLAN AND THE DISCLOSURE STATEMENT HAVE NOT BEEN REQUIRED
TO BE PREPARED IN ACCORDANCE WITH FEDERAL OR STATE SECURITIES LAWS OR
OTHER APPLICABLE NONBANKRUPTCY LAW. PERSONS OR ENTITIES TRADING IN OR
OTHERWISE PURCHASING, SELLING OR TRANSFERRING SECURITIES WHETHER DEBT OR
EQUITY OF THE DEBTORS SHOULD EVALUATE THIS PLAN IN LIGHT OF THE PURPOSES
FOR WHICH IT WAS PREPARED.
AS TO CONTESTED MATTERS, ADVERSARY PROCEEDINGS AND OTHER
ACTUAL, THREATENED OR POTENTIAL ACTIONS, THIS PLAN AND THE DISCLOSURE
STATEMENT SHALL NOT BE DEEMED OR CONSTRUED AS AN ADMISSION, STIPULATION
OR WAIVER, BUT RATHER AS A STATEMENT MADE IN SETTLEMENT NEGOTIATIONS.
TABLE OF CONTENTS
PAGE
----
ARTICLE I. DEFINITIONS, RULES OF INTERPRETATION,
COMPUTATION OF TIME AND GOVERNING LAW 1
1.1 DEFINITIONS. 1
(1) 1997 BONDS SECURED CLAIM 1
(2) 1997-A GUARANTEE 1
(3) 1997-B GUARANTEE 1
(4) 1997-C GUARANTEE 1
(5) 1997-D GUARANTEE 1
(6) 1998 BONDS SECURED CLAIM 2
(7) 1998-B GUARANTEE 2
(8) 1998-C GUARANTEE 2
(9) 1998-D GUARANTEE 2
(10) 1999-A GUARANTEE 2
(11) 1999-B GUARANTEE 2
(12) 1999-C LIMITED GUARANTEE 2
(13) 1999-C GUARANTEE 2
(14) 1999-D GUARANTEE 2
(15) 1999-E GUARANTEE 2
(16) 2000-A GUARANTEE 2
(17) 2000-B GUARANTEE 2
(18) 2001-B GUARANTEE 2
(19) 2001-C GUARANTEE 2
(20) 2001-D GUARANTEE 2
(21) 2001-E GUARANTEE 3
(22) 2002-A GUARANTEE 3
(23) 2002-B GUARANTEE 3
(24) ADMINISTRATIVE CLAIM 3
(25) ADMINISTRATIVE CLAIM BAR DATE ORDER 3
(26) AFFILIATE DEBTOR(S) 3
(27) ALLOWED CLAIM OR INTEREST 3
(28) ALLOWED [CLASS DESIGNATION] CLAIM OR INTEREST 4
(29) AMENDED AND RESTATED BYLAWS 4
(30) AMENDED AND RESTATED CERTIFICATES OF INCORPORATION 4
(31) APPROVAL HEARING 4
(32) ASSETS 4
(33) AUTO SECURED CLAIM 4
(34) AVOIDANCE ACTIONS 4
(35) B-2 REMIC GUARANTEES 4
(36) B-PIECE REMIC CERTIFICATES 5
(37) BALLOT 5
(i)
(38) BALLOT DEADLINE 5
(39) BALLOTING AGENT 5
(40) BANKRUPTCY CODE 5
(41) BANKRUPTCY COURT 5
(42) BANKRUPTCY RULES 5
(43) BAR DATE ORDER 5
(44) BERKSHIRE 5
(45) BID PROCEDURES ORDER 5
(46) BSI 5
(47) BUSINESS DAY 5
(48) BUYER 6
(49) CAROLINA SECURED CLAIM 6
(50) CASH 6
(51) CASH EQUIVALENTS 6
(52) CAUSES OF ACTION 6
(53) CHAPTER 11 CASE 6
(54) CLAIM 6
(55) CLAIMS AGENT 7
(56) CLAIMS/INTERESTS OBJECTION DEADLINE 7
(57) CLASS 7
(58) CONFIRMATION DATE 7
(59) CONFIRMATION HEARING 7
(60) CONFIRMATION ORDER 7
(61) CONVENIENCE CLAIM 7
(62) CONVENIENCE CLASS ELECTION 7
(63) CONVENIENCE CLASS OPT-IN ELECTION 7
(64) CONVENIENCE CLASS OPT-OUT ELECTION 7
(65) CREDITORS' COMMITTEE 8
(66) DEBTOR-HELD INTEREST 8
(67) DEBTOR(S) 8
(68) DIP CLAIM 8
(69) DIP LENDERS 8
(70) DISALLOWED 8
(71) DISCLOSURE STATEMENT 8
(72) DISCLOSURE STATEMENT ORDER 8
(73) DISPUTED AMOUNT 8
(74) DISPUTED CLAIM OR INTEREST 8
(75) DISPUTED CLAIMS RESERVE 9
(76) DISTRIBUTION ADDRESS 9
(77) DISTRIBUTION DATE 9
(78) EFFECTIVE DATE 9
(79) ESTATE 9
(80) ESTIMATION ORDER 9
(81) EXCLUDED ASSETS 9
(82) EXCLUDED SALE DEBTOR ASSETS 10
(83) EXCLUDED SALE TRUST ASSETS 10
(84) EXECUTORY CONTRACT SCHEDULE 10
(ii)
26
(85) EXIT FACILITY 10
(86) EXIT FACILITY AGREEMENT 10
(87) EXIT FACILITY LENDER 10
(88) FACE AMOUNT 10
(89) FEE CLAIM 10
(90) FEE ORDER 10
(91) FINAL DIP AGREEMENT 10
(92) FINAL DIP ORDER 11
(93) FINAL ORDER 11
(94) FIRST AMERICAN SECURED CLAIM 11
(95) FOOTHILL 11
(96) FOOTHILL SECURED CLAIM 11
(97) FUTURE CLAIM 11
(98) HOLDER 11
(99) IMPAIRED 12
(100) INITIAL DISTRIBUTION DATE 12
(101) INITIAL STAND ALONE TRUST ASSETS 12
(102) INSIDER 12
(103) INTERCOMPANY CLAIM 12
(104) INTEREST 12
(105) INTERESTED PARTY PROFESSIONALS 12
(106) JPMORGAN 12
(107) JUNIOR NOTES 13
(108) JUNIOR NOTES CLAIM 13
(109) JUNIOR NOTES INDENTURE 13
(110) JUNIOR NOTES INDENTURE TRUSTEE 13
(111) LIEN 13
(112) LIQUIDATION TRUST 13
(113) LIQUIDATION TRUST ADVISORY COMMITTEE 13
(114) LIQUIDATION TRUST AGREEMENT 13
(115) LIQUIDATION TRUSTEE 13
(116) LITIGATION CLAIMS 13
(117) NET PROCEEDS 14
(118) NEW COMMON STOCK 14
(119) NEW WARRANTS 14
(120) NON-DEBTOR-HELD INTEREST 14
(121) OAC 14
(122) OAKWOOD 14
(123) OFC 14
(124) OFC AND OIC TAX CLAIMS 14
(125) OIC 14
(126) OLD COMMON STOCK 14
(127) OMI 14
(128) OMI TRUST 1995-B 15
(129) OMI TRUST 1996-A 15
(130) OMI TRUST 1996-B 15
(131) OMI TRUST 1996-C 15
(iii)
(132) OMI TRUST 1997-A 15
(133) OMI TRUST 1997-B 15
(134) OMI TRUST 1997-C 15
(135) OMI TRUST 1997-D 15
(136) OMI TRUST 1998-A 16
(137) OMI TRUST 1998-B 16
(138) OMI TRUST 1998-C 16
(139) OMI TRUST 1998-D 16
(140) OMI TRUST 1999-A 16
(141) OMI TRUST 1999-B 16
(142) OMI TRUST 1999-C 16
(143) OMI TRUST 1999-D 16
(144) OMI TRUST 1999-E 16
(145) OMI TRUST 2000-A 17
(146) OMI TRUST 2000-B 17
(147) OMI TRUST 2000-C 17
(148) OMI TRUST 2000-D 17
(149) OMI TRUST 2001-B 17
(150) OMI TRUST 2001-C 17
(151) OMI TRUST 2001-D 17
(152) OMI TRUST 2001-E 17
(153) OMI TRUST 2002-A 18
(154) OMI TRUST 2002-B 18
(155) OMI TRUST 2002-C 18
(156) OSHC 18
(157) OTHER SECURED AND SETOFF CLAIM 18
(158) OTHER UNSECURED CLAIMS 18
(159) PERSON 18
(160) PETITION DATE 18
(161) PLAN 18
(162) PLAN SUPPLEMENT 18
(163) PNC 18
(164) PREPETITION LOAN AGREEMENT 18
(165) PRIORITY NON-TAX CLAIM 19
(166) PRIORITY TAX CLAIM 19
(167) PROOF OF CLAIM 19
(168) PURCHASE AGREEMENT 19
(169) PURCHASE CONSIDERATION 19
(170) PURCHASED BUSINESS 19
(171) QUARTERLY DISTRIBUTION DATE 19
(172) RATABLE, RATABLY OR RATABLE SHARE 19
(173) RECORD DATE 19
(174) REMIC GUARANTEE CLAIMS 19
(175) REMIC TRUSTEE 19
(176) REMIC TRUSTS 19
(177) REORGANIZED SALE DEBTORS 20
(178) REORGANIZED SALE OKWD 20
(iv)
(179) REORGANIZED SALE DEBTORS CAPITALIZATION AMOUNT 20
(180) REORGANIZED STAND ALONE DEBTORS 20
(181) REORGANIZED STAND ALONE OAKWOOD 20
(182) RESECURITIZATION NOTE 20
(183) RESECURITIZATION NOTE PUT OPTION 20
(184) RESECURITIZATION TRUST 20
(185) RESECURITIZATION TRUSTEE 21
(186) RESIDUAL REMIC CERTIFICATES 21
(187) SALE OPTION 21
(188) SCHEDULE OF ASSETS AND LIABILITIES 21
(189) SECURED CLAIM 21
(190) SECURED TAX CLAIM 21
(191) SENIOR NOTES 21
(192) SENIOR NOTES CLAIM 21
(193) SENIOR NOTES INDENTURE 21
(194) SENIOR NOTES INDENTURE TRUSTEE 21
(195) SERVICING AGREEMENTS 22
(196) SOLICITATION PROCEDURES ORDER 22
(197) STAND ALONE OPTION 22
(198) STAND ALONE VOTING TRUST 22
(199) STAND ALONE VOTING TRUST AGREEMENT 22
(200) STAND ALONE VOTING TRUSTEE 22
(201) STATEMENT OF FINANCIAL AFFAIRS 22
(202) SUBSERVICING AGREEMENTS 22
(203) THOMAS SECURED CLAIM 22
(204) TRANSFER 22
(205) U.S. BANK SECURED CLAIM 22
(206) U.S. GOVERNMENT OBLIGATIONS 22
(207) UNCLAIMED PROPERTY 23
(208) UNIMPAIRED 23
(209) UNITED STATES TRUSTEE 23
(210) UNSECURED CLAIM 23
(211) WARRANT AGREEMENT 23
(212) X REMIC CERTIFICATES 23
1.2 RULES OF INTERPRETATION, COMPUTATION OF TIME AND GOVERNING LAW. 23
(a) Rules of Interpretation. 23
(b) Computation of Time. 24
(c) Governing Law. 24
ARTICLE II. METHOD OF CLASSIFICATION OF CLAIMS AND INTERESTS AND GENERAL PROVISIONS 24
2.1 GENERAL RULES OF CLASSIFICATION. 24
2.2 HOLDERS OF CLAIMS ENTITLED TO VOTE. 25
2.3 ACCEPTANCE BY IMPAIRED CLASSES. 25
2.4 NON-CONSENSUAL CONFIRMATION. 25
(v)
2.5 ADMINISTRATIVE CLAIMS, PRIORITY TAX CLAIMS AND FEE CLAIMS. 25
2.6 SPECIAL PROVISION REGARDING UNIMPAIRED CLAIMS. 25
2.7 INTENTIONALLY OMITTED. 25
2.8 BAR DATES FOR ADMINISTRATIVE CLAIMS. 25
2.9 BAR DATE FOR FEE CLAIMS. 26
ARTICLE III. UNCLASSIFIED CLAIMS 26
3.1 ADMINISTRATIVE CLAIMS. 26
3.2 PRIORITY TAX CLAIMS. 27
3.3 FEE CLAIMS. 27
3.4 OFC AND OIC TAX CLAIMS. 27
ARTICLE IV. CLASSIFICATION, TREATMENT AND VOTING OF CLAIMS AND INTERESTS 28
4.1 SUMMARY. 28
4.2 CLASS 1 (PRIORITY NON-TAX CLAIMS). 29
4.3 CLASS 2A (SECURED TAX CLAIMS). 29
4.4 CLASS 2B (1997 BONDS SECURED CLAIMS). 30
4.5 CLASS 2C (1998 BONDS SECURED CLAIMS). 30
4.6 CLASS 2D (AUTO SECURED CLAIMS). 31
4.7 CLASS 2E (CAROLINA SECURED CLAIMS). 31
4.8 CLASS 2F (FIRST AMERICAN SECURED CLAIMS). 32
4.9 CLASS 2G (FOOTHILL SECURED CLAIMS). 32
4.10 INTENTIONALLY OMITTED. 33
4.11 INTENTIONALLY OMITTED. 33
4.12 CLASS 2J (THOMAS SECURED CLAIMS). 33
4.13 CLASS 2K (U.S. BANK SECURED CLAIMS). 34
4.14 CLASS 2L (OTHER SECURED AND SETOFF CLAIMS). 34
4.15 CLASS 3 (CONVENIENCE CLAIMS). 35
4.16 CLASS 4A (SENIOR NOTES CLAIMS). 36
4.17 CLASS 4B (JUNIOR NOTES CLAIMS). 36
4.18 CLASS 4C (REMIC GUARANTEE CLAIMS). 36
4.19 CLASS 4D (LITIGATION CLAIMS). 37
4.20 CLASS 4E (OTHER UNSECURED CLAIMS). 37
4.21 INTENTIONALLY OMITTED. 38
4.22 CLASS 6A (NON-DEBTOR-HELD INTERESTS). 38
4.23 INTENTIONALLY OMITTED. 38
ARTICLE V. CONDITIONS PRECEDENT 38
5.1 CONDITIONS TO CONFIRMATION. 38
(a) Under the Sale Option. 38
(b) Under the Stand Alone Option. 41
5.2 CONDITIONS TO CONSUMMATION. 42
(a) Under the Sale Option. 42
(b) Under the Stand Alone Option. 43
5.3 WAIVER OF CONDITIONS. 44
(vi)
5.4 EFFECT OF NONOCCURRENCE OF THE CONDITIONS TO CONSUMMATION. 44
ARTICLE VI. IMPLEMENTATION 44
6.1 PLAN IMPLEMENTATION UNDER THE SALE OPTION. 45
(a) Consummation of Sale Transaction. 45
(b) Authorization of the Sale Transaction. 45
(c) Revesting and Transfer of Assets. 45
(d) Merger of Debtors and Vesting of Assets in
Reorganized Sale Debtors. 46
(e) Treatment of Old Common Stock, Interests and Beneficial
Interest in the Liquidation Trust. 46
(f) Considerations Regarding the Additional Debtors. 46
(g) Distributions of Cash. 47
6.2 PLAN IMPLEMENTATION UNDER THE STAND ALONE OPTION. 47
(a) Vesting of Assets. 47
(b) Amended and Restated Certificates of Incorporation. 47
(c) Amended and Restated Bylaws. 48
(d) New Securities. 48
(e) Directors. 48
(f) Officers. 49
(g) Employment Contracts and Professional Retentions. 49
(h) Corporate Action and Other Documents and Actions. 49
(i) Approval of the Exit Facility. 49
(j) Distributions of Cash. 50
(k) Distributions of Proceeds from the Liquidation Trust. 50
6.3 PROVISIONS CONCERNING PLAN IMPLEMENTATION UNDER BOTH THE
SALE OPTION AND THE STAND ALONE OPTION. 50
(a) Substantive Consolidation. 50
(b) Creation of the Liquidation Trust. 51
(c) Federal Income Tax Treatment of the Trust for
the Liquidation Trust Assets. 52
(d) Appointment of Liquidation Trustee 54
(e) The Liquidation Trust Advisory Committee. 54
(f) Causes of Actions and Defenses. 55
(g) Termination of the Final DIP Agreement. 56
(h) Dissolution of the Creditors' Committee. 56
ARTICLE VII. EFFECTS OF PLAN CONFIRMATION 56
(vii)
7.1 DISCHARGE. 56
7.2 RETENTION OF CAUSES OF ACTION/RESERVATION OF RIGHTS. 57
7.3 POST-CONSUMMATION EFFECT OF EVIDENCE OF CLAIMS OR INTERESTS. 57
7.4 TREATMENT OF FUTURE CLAIMS. 58
7.5 LIMITED RELEASES BY DEBTORS. 58
7.6 TERM OF INJUNCTIONS OR STAYS. 59
7.7 EXCULPATION. 59
7.8 INJUNCTION. 59
7.9 WAIVER OF CERTAIN CLAIMS. 60
7.10 INTENTIONALLY OMITTED. 60
7.11 RELEASE OF LIENS AND PERFECTION OF LIENS. 60
7.12 INSURANCE PRESERVATION. 61
ARTICLE VIII. GENERAL PROVISIONS REGARDING TREATMENT OF CLAIMS AND INTERESTS
AND DISTRIBUTIONS UNDER THE PLAN 62
8.1 SPECIAL CONSIDERATIONS FOR DISTRIBUTIONS TO CLASSES 4A, 4B AND 4C. 62
8.2 DISPUTED CLAIM RESERVES AND STAND ALONE VOTING TRUST. 62
(a) Establishment of Disputed Claim Reserves for Cash
Distributions. 62
(b) Establishment of the Stand Alone Voting Trust for New Common
Stock and New Warrant Distribution. 63
(c) Amounts to Be Reserved. 63
(d) Distribution. 64
(e) Termination of Disputed Claim Reserve or Stand Alone Voting Trust. 64
(f) Limitation of Liability for Funding the Disputed Claim Reserve. 64
8.3 TRANSMITTAL OF DISTRIBUTIONS AND NOTICES. 64
8.4 UNCLAIMED DISTRIBUTIONS. 65
8.5 SETOFFS. 65
8.6 WITHHOLDING TAXES AND EXPENSES OF DISTRIBUTION. 65
8.7 ALLOCATION OF PLAN DISTRIBUTIONS BETWEEN PRINCIPAL AND INTEREST. 65
8.8 DISPUTED IDENTITY OF HOLDER. 65
8.9 TRANSFERS OF CLAIMS. 66
8.10 METHOD OF CASH DISTRIBUTIONS. 66
8.11 DE MINIMIS DISTRIBUTIONS. 66
8.12 NO DISTRIBUTION IN EXCESS OF ALLOWED AMOUNT OF CLAIM. 66
8.13 EXEMPTION FROM CERTAIN TRANSFER TAXES. 67
(viii)
ARTICLE IX. EXECUTORY CONTRACTS AND UNEXPIRED LEASES 67
9.1 ASSUMPTION OR REJECTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES. 67
9.2 BAR DATE FOR REJECTION DAMAGES. 68
9.3 PROCEDURES FOR THE DETERMINATION OF CURE AMOUNTS. 68
ARTICLE X. DISPUTED, CONTINGENT AND UNLIQUIDATED CLAIMS AND INTERESTS 69
10.1 OBJECTIONS TO CLAIMS AND INTERESTS. 69
10.2 ESTIMATION OF CLAIMS OR INTERESTS. 69
10.3 AMENDMENTS TO CLAIMS OR INTERESTS. 70
10.4 AUTHORITY TO SETTLE DISPUTED CLAIMS OR INTERESTS. 70
10.5 NO RECOURSE. 70
ARTICLE XI. ADMINISTRATIVE PROVISIONS 71
11.1 RETENTION OF JURISDICTION. 71
11.2 INTENTIONALLY OMITTED. 73
11.3 AMENDMENTS. 73
(a) Preconfirmation Amendment. 73
(b) Postconfirmation/Preconsummation Amendment Not Requiring
Resolicitation. 74
(c) Postconfirmation/Preconsummation Amendment Requiring
Resolicitation. 74
11.4 SEVERABILITY OF PLAN PROVISIONS. 74
11.5 SUCCESSORS AND ASSIGNS. 74
11.6 EFFECTUATING DOCUMENTS AND FURTHER TRANSACTIONS. 75
11.7 PLAN SUPPLEMENT. 75
11.8 CONFIRMATION ORDER AND PLAN CONTROL. 75
11.9 PAYMENT OF STATUTORY FEES. 75
11.10 WITHDRAWAL OF PLAN. 75
11.11 PAYMENT DATES. 76
11.12 NOTICES. 76
11.13 NO ADMISSIONS. 77
ARTICLE XII. CONFIRMATION REQUEST 78
(ix)
INTRODUCTION
The Chapter 11 Cases of Oakwood Homes Corporation, Oakwood
Mobile Homes, Inc., Oakwood Acceptance Corporation, LLC, HBOS Manufacturing, LP,
Suburban Home Sales, Inc., FSI Financial Services, Inc., Home Service Contract,
Inc., Tri-State Insurance Agency, Inc., New Dimension Homes, Inc., Dreamstreet
Company, LLC, Golden West Leasing, LLC, Crest Capital, LLC, Oakwood Shared
Services, LLC, Preferred Housing Services, LP, and Oakwood MHD4, LLC have been
consolidated for procedural purposes only and are being jointly administered
pursuant to an order of the Bankruptcy Court. The Plan is proposed by the
Debtors. Reference is made to the Disclosure Statement for a discussion of,
among other things, the Debtors' history, businesses, historical financial
information and properties, and for a summary of the Plan. All creditors
entitled to vote on the Plan should review the Disclosure Statement and the
terms of the Plan before voting to accept or reject the Plan. In addition, there
are other agreements and documents which have been or will be filed as the Plan
Supplement which are referenced in the Plan and/or the Disclosure Statement and
will be available for review. No solicitation materials, other than the
Disclosure Statement and related materials transmitted therewith and approved by
the Bankruptcy Court, have been authorized by the Bankruptcy Court for use in
soliciting acceptances or rejections of the Plan.
ARTICLE I.
DEFINITIONS, RULES OF INTERPRETATION,
COMPUTATION OF TIME AND GOVERNING LAW
1.1 DEFINITIONS.
The capitalized terms set forth below shall have the following
meanings:
(1) 1997 BONDS SECURED CLAIM means that portion of the
Claim of Wells Fargo Bank, N.A. arising under loan agreements with Elkhart
County, Indiana respecting certain variable rate demand economic development
bonds, but only to the extent that it is a Secured Claim secured by a Letter of
Credit Mortgage on Debtor HBOS Manufacturing, LP's plant in Elkhart County,
Indiana.
(2) 1997-A GUARANTEE means the Limited Guarantee by
Oakwood, dated February 1, 1997, of the B-Piece REMIC Certificates issued by OMI
Trust 1997-A.
(3) 1997-B GUARANTEE means the Limited Guarantee by
Oakwood, dated May 1, 1997, of the B-Piece REMIC Certificates issued by OMI
Trust 1997-B.
(4) 1997-C GUARANTEE means the Limited Guarantee by
Oakwood, dated August 1, 1997, of the B-Piece REMIC Certificates issued by OMI
Trust 1997-C.
(5) 1997-D GUARANTEE means the Limited Guarantee by
Oakwood, dated November 1, 1997, of the B-Piece REMIC Certificates issued by OMI
Trust 1997-D.
1
(6) 1998 BONDS SECURED CLAIM means that portion of the
Claim of Wells Fargo Bank, N.A. arising under loan agreements with Kosciusko
County, Indiana respecting certain variable rate demand economic development
bonds, but only to the extent that it is a Secured Claim secured by a Letter of
Credit and Mortgage on Debtor HBOS Manufacturing, LP's plant in Kosciusko
County, Indiana.
(7) 1998-B GUARANTEE means the Limited Guarantee by
Oakwood, dated May 1, 1998, of the B-Piece REMIC Certificates issued by OMI
Trust 1998-B.
(8) 1998-C GUARANTEE means the Guarantee by Oakwood,
dated August 10, 2001, of the B-Piece REMIC Certificates issued by OMI Trust
1998-C.
(9) 1998-D GUARANTEE means the Limited Guarantee by
Oakwood, dated October 1, 1998, of the B-Piece REMIC Certificates issued by OMI
Trust 1998-D.
(10) 1999-A GUARANTEE means the Limited Guarantee by
Oakwood, dated January 1, 1999, of the B-Piece REMIC Certificates issued by OMI
Trust 1999-A.
(11) 1999-B GUARANTEE means the Limited Guarantee by
Oakwood, dated April 1, 1999, of the B-Piece REMIC Certificates issued by OMI
Trust 1999-B.
(12) 1999-C LIMITED GUARANTEE means the Limited Guarantee
by Oakwood, dated June 1, 1999, of the B-Piece REMIC Certificates issued by OMI
Trust 1999-C.
(13) 1999-C GUARANTEE means the Guarantee by Oakwood,
dated August 10, 2001, of the B-Piece REMIC Certificates issued by OMI Trust
1999-C.
(14) 1999-D GUARANTEE means the Guarantee by Oakwood,
dated August 10, 2001, of the B-Piece REMIC Certificates issued by OMI Trust
1999-D.
(15) 1999-E GUARANTEE means the Guarantee by Oakwood,
dated August 10, 2001, of the B-Piece REMIC Certificates issued by OMI Trust
1999-E.
(16) 2000-A GUARANTEE means the Guarantee by Oakwood,
dated August 10, 2001, of the B-Piece REMIC Certificates issued by OMI Trust
2000-A.
(17) 2000-B GUARANTEE means the Guarantee by Oakwood,
dated August 10, 2001, of the B-Piece REMIC Certificates issued by OMI Trust
2000-B.
(18) 2001-B GUARANTEE means the Guarantee by Oakwood,
dated August 10, 2001, of the B-Piece REMIC Certificates issued by OMI Trust
2001-B.
(19) 2001-C GUARANTEE means the Guarantee by Oakwood,
dated August 10, 2001, of the B-Piece REMIC Certificates issued by OMI Trust
2001-C.
(20) 2001-D GUARANTEE means the Guarantee by Oakwood,
dated January 10, 2002, of the B-Piece REMIC Certificates issued by OMI Trust
2001-D.
2
(21) 2001-E GUARANTEE means the Guarantee by Oakwood,
dated November 1, 2001, of the B-Piece REMIC Certificates issued by OMI Trust
2001-E.
(22) 2002-A GUARANTEE means the Guarantee by Oakwood,
dated February 1, 2002, of the B-Piece REMIC Certificates issued by OMI Trust
2002-A.
(23) 2002-B GUARANTEE means the Guarantee by Oakwood,
dated May 1, 2002, of the B-Piece REMIC Certificates issued by OMI Trust 2002-B.
(24) ADMINISTRATIVE CLAIM means: (a) a DIP Claim; (b) a
Claim, other than a Fee Claim, for payment of costs or expenses of
administration specified in sections 503(b) and 507(a)(1) of the Bankruptcy
Code, including, without limitation (i) the actual, necessary costs and expenses
incurred after the Petition Date for preserving the Estates and operating the
businesses of the Debtors (such as wages, salaries or commissions for services
rendered) and (ii) all fees and charges assessed against the Estates pursuant to
section 1930 of title 28 of the United States Code; or (c) any Claim based upon
a seller's common law right to reclaim goods as used in section 546(c) of the
Bankruptcy Code pursuant to the Bankruptcy Court's Order Establishing Procedures
With Respect To Reclamation Claims (D.I. 36) entered on November 19, 2002 (y)
that has been granted priority under section 546(c)(2)(A) of the Bankruptcy Code
or (z) which the Debtors, in their reasonable discretion, elect to treat as
though such priority has been granted. Notwithstanding the foregoing,
Administrative Claims shall not include any Intercompany Claims.
(25) ADMINISTRATIVE CLAIM BAR DATE ORDER means the
Bankruptcy Court's order (D.I. 2148) which established the bar date for the
filing of certain Administrative Claims arising between the Petition Date and
September 30, 2003.
(26) AFFILIATE DEBTOR(S) means, in the singular or plural
form, the following debtors and debtors-in-possession under the Bankruptcy Code
in Chapter 11 Case Nos. 02-13390 through 02-13395 and 02-13397 through 02-13404,
pending in the Bankruptcy Court: Oakwood Mobile Homes, Inc., Oakwood Acceptance
Corporation, LLC, HBOS Manufacturing, LP, Suburban Home Sales, Inc., FSI
Financial Services, Inc., Home Service Contract, Inc., Tri-State Insurance
Agency, Inc., New Dimension Homes, Inc., Dreamstreet Company, LLC, Golden West
Leasing, LLC, Crest Capital, LLC, Oakwood Shared Services, LLC, Preferred
Housing Services, LP, and Oakwood MHD4, LLC.
(27) ALLOWED CLAIM OR INTEREST means a Claim or Interest
to the extent (a) such Claim or Interest is scheduled by a Debtor pursuant to
the Bankruptcy Code and Bankruptcy Rules in a liquidated amount and not listed
as contingent, unliquidated, zero, undetermined or disputed; or (b) a proof of
such Claim has been timely filed, or deemed timely filed with the Bankruptcy
Court pursuant to the Bankruptcy Code, the Bankruptcy Rules and/or any
applicable Final Orders of the Bankruptcy Court, or late filed with leave of the
Bankruptcy Court, and either (i) is not objected to within the period fixed by
the Bankruptcy Code, the Bankruptcy Rules and/or applicable orders of the
Bankruptcy Court or (ii) has otherwise been allowed by a Final Order. An Allowed
Claim or Allowed Interest: (y) includes a previously Disputed Claim or Interest
to the extent such Disputed Claim or Interest becomes allowed when the context
so requires; and (z) shall be net of any valid setoff or recoupment amount based
on a
3
valid offset or recoupment right. Unless otherwise expressly provided herein, in
the Confirmation Order or in another Final Order of the Bankruptcy Court, the
term "Allowed Claim" or "Allowed Interest" shall not, for the purposes of
computation of distributions under the Plan, include (i) any non-compensatory
penalties, fines, punitive damages, exemplary damages, multiple damages, treble
damages or any other claims or obligations that do not compensate for actual
losses incurred or (ii) any other amounts not allowable under the Bankruptcy
Code or applicable law.
(28) ALLOWED [CLASS DESIGNATION] CLAIM OR INTEREST means
an Allowed Claim or Allowed Interest in the specified Class. For example, an
Allowed Convenience Claim is an Allowed Claim in the Class designated herein as
Class 3.
(29) AMENDED AND RESTATED BYLAWS mean the Reorganized
Stand Alone Debtors' bylaws which shall be substantially in the form set forth
in the Plan Supplement.
(30) AMENDED AND RESTATED CERTIFICATES OF INCORPORATION
means the Reorganized Stand Alone Debtors' certificates of incorporation, LLC
agreements or similar organizational documents in effect under the laws of the
appropriate states, as amended by the Plan, which shall be substantially in the
form set forth in the Plan Supplement.
(31) APPROVAL HEARING means the Approval Hearing as set
forth in the Bid Procedures Order.
(32) ASSETS means all assets and properties of every kind,
nature, character and description (whether real, personal or mixed, whether
tangible or intangible (including contract rights), wherever situated and by
whomever possessed), including the goodwill related thereto, operated, owned or
leased by the Debtors that constitute property of the Estates within the purview
of section 541 of the Bankruptcy Code, including without limitation, any and all
claims, causes of action or rights of the Debtors under federal, state or
foreign law, letters of credit issued for or on behalf of the Debtors and the
proceeds thereof and monies deposited to secure the performance of any contract
or lease by the Debtors or any affiliate thereof.
(33) AUTO SECURED CLAIM means that portion of the Claim of
Citizens Federal S&L and other lenders, but only to the extent that it is a
Secured Claim secured by eight (8) automobiles owned by Debtor Suburban Home
Sales, Inc.
(34) AVOIDANCE ACTIONS mean any claims, rights, defenses
or other causes of action arising under any section of chapter 5 of the
Bankruptcy Code, including, without limitation, sections 502, 510, 541, 542,
543, 544, 545, 547, 548, 549, 550, 551 and 553 of the Bankruptcy Code or under
similar or related state or federal statues and common law, including state
fraudulent transfer laws, whether or not litigation has been commenced as of the
Confirmation Date to prosecute such actions.
(35) B-2 REMIC GUARANTEES means collectively, the 1997-A
Guarantee, the 1997-B Guarantee, the 1997-C Guarantee, the 1997-D Guarantee, the
1998-B Guarantee, the 1998-C Guarantee, the 1998-D Guarantee, the 1999-A
Guarantee, the 1999-B Guarantee, the 1999-C Limited Guarantee, the 1999-C
Guarantee, the 1999-D Guarantee, the 1999-E Guarantee, the 2000-A Guarantee, the
2000-B Guarantee, the 2001-B Guarantee, the 2001-C
4
Guarantee, the 2001-D Guarantee, the 2001-E Guarantee, the 2002-A Guarantee and
the 2002-B Guarantee.
(36) B-PIECE REMIC CERTIFICATES means the B-2 certificates
issued by the REMIC Trusts.
(37) BALLOT means the ballot distributed to each eligible
Holder of a Claim or Interest by the Balloting Agent, on which ballot such
Holder may, among other things, vote for or against the Plan.
(38) BALLOT DEADLINE means the date and time set by the
Bankruptcy Court by which the Balloting Agent must receive all Ballots.
(39) BALLOTING AGENT means the entity designated by the
Bankruptcy Court to distribute, collect and tabulate Ballots from Holders, or
any successor Claims Agent. Initially, the Balloting Agent is BSI.
(40) BANKRUPTCY CODE means title 11 of the United States
Code, as now in effect or hereafter amended.
(41) BANKRUPTCY COURT means the United States Bankruptcy
Court for the District of Delaware, having jurisdiction over the Chapter 11
Cases and, to the extent of any withdrawal of the reference made pursuant to
section 157 of title 28 of the United States Code, the United States District
Court for the District of Delaware.
(42) BANKRUPTCY RULES means the Federal Rules of
Bankruptcy Procedure and the local rules and general orders of the Bankruptcy
Court, as now in effect or hereafter amended.
(43) BAR DATE ORDER means the Bankruptcy Court's Order
Establishing Bar Dates for Filing Proofs of Claim and Approving Form and Manner
of Notice Thereof (D.I. 370), dated January 7, 2003 which established the bar
date for the filing of proofs of Unsecured Claims as March 27, 2003.
(44) BERKSHIRE means Berkshire Hathaway Inc., a
corporation incorporated under the laws of Delaware.
(45) BID PROCEDURES ORDER means the Order Under 11 U.S.C.
Sections 105(a) and 363 and Fed. R. Bankr. P. 2002 and 6004 Approving Bidding
Procedures, Break-Up Fee, Performance of Pre-Closing Obligations, and Form and
Manner of Notice Thereof with Respect to Proposed Sale Pursuant to Plan of
Reorganization (D.I. 2652).
(46) BSI means Bankruptcy Services LLC.
(47) BUSINESS DAY means any day except a Saturday, Sunday
or "legal holiday" as such term is defined in Bankruptcy Rule 9006(a).
5
(48) BUYER means Clayton Homes, Inc. or its designee or
its designees, as set forth in the Purchase Agreement.
(49) CAROLINA SECURED CLAIM means that portion of the
Claim of Carolina First Bank arising under a note dated December 27, 2001, but
only to the extent that it is a Secured Claim secured by land owned by Debtor
Oakwood Mobile Homes, Inc. and located at 3200 Earle E. Morris, Jr. Hwy,
Piedmont, South Carolina.
(50) CASH means cash and Cash Equivalents, including but
not limited to bank deposits, checks, treasury notes and other marketable
securities.
(51) CASH EQUIVALENTS means equivalents of cash in the
form of readily marketable securities or instruments issued by a person other
than the Debtors or Reorganized Sale Debtors, including, without limitation,
U.S. Government Obligations, commercial paper of domestic corporations carrying
a Moody's Rating of "A" or better, or equivalent rating of any other nationally
recognized rating service, or interest-bearing certificates of deposit or
similar obligations of domestic banks or other financial institutions having a
shareholders' equity or equivalent capital of not less than Two Hundred Million
U.S. Dollars ($200,000,000.00), having maturities of no more than one (1) year,
at the then best generally available rates of interest for like amounts and like
periods.
(52) CAUSES OF ACTION mean any and all claims, rights,
defenses, offsets, recoupments, actions in law or equity or otherwise, causes of
action, choses in action, suits, damages, rights to legal or equitable remedies,
judgments, third-party claims, counterclaims and cross-claims, including, but
not limited, to: all Avoidance Actions and all other claims in avoidance,
recovery, subordination or other actions against any Persons, including, but not
limited to, those actions described in the Disclosure Statement as amended, the
Schedules of Assets and Liabilities as amended from time to time, the Statement
of Financial Affairs as amended from time to time and the Plan as amended,
whether arising under the Bankruptcy Code or federal, state, or common law, but
regardless of whether any of the foregoing matters are subject to pending
litigation or proceedings at the Confirmation Date or brought after that date;
provided, however, that under the Sale Option, Causes of Action do not include
those claims, rights, defenses, offsets, recoupments, actions in equity or other
causes of action that are transferred to the Buyer pursuant to the Purchase
Agreement.
(53) CHAPTER 11 CASE means the chapter 11 case of each
Debtor pending before the Bankruptcy Court.
(54) CLAIM means any claim, as such term is defined in
section 101(5) of the Bankruptcy Code, including but not limited to any
liability, Interest, Lien, encumbrance or any other "debt" (as that term is
defined in section 101(12) of the Bankruptcy Code), from or against the Debtors,
their Estates, whether reduced to judgment or not, liquidated or unliquidated,
contingent or noncontingent, asserted or unasserted, fixed or not, matured or
unmatured, disputed or undisputed, legal or equitable, known or unknown, or
arising from any agreement of the Debtors entered into or obligation of any kind
of the Debtors incurred before the Effective Date, or from any conduct of the
Debtors occurring prior to the Effective Date or that otherwise arose before the
Effective Date (including, without limitation, all interest, if any, on any such
debts,
6
whether such interest accrued before or after the date of commencement of the
applicable Chapter 11 Case).
(55) CLAIMS AGENT means the entity designated by the
Bankruptcy Court to act as the claims agent in the Chapter 11 Cases, or any
successor claims agent. As of the date of the Plan, the Claims Agent is BSI.
(56) CLAIMS/INTERESTS OBJECTION DEADLINE means the last
day for filing objections to Claims, including but not limited to Administrative
Claims, and Interests as provided in Article X of the Plan.
(57) CLASS means a group of Claims or Interests described
in Articles III and IV of the Plan.
(58) CONFIRMATION DATE means the date the Bankruptcy Court
enters the Confirmation Order on its docket.
(59) CONFIRMATION HEARING means the hearing or hearings
pursuant to which the Bankruptcy Court considers the confirmation of this Plan.
(60) CONFIRMATION ORDER means the order of the Bankruptcy
Court confirming the Plan pursuant to section 1129 of the Bankruptcy Code.
(61) CONVENIENCE CLAIM means the Claims of a Holder of one
or more Allowed Unsecured Claims that, pursuant to section 1122(b) of the
Bankruptcy Code, otherwise would be Allowed Other Unsecured Claims that have
aggregate Face Amounts of: (i) $5,000.00 or less unless the Holder has properly
made the Convenience Class Opt-Out Election on a Ballot properly cast by the
Ballot Deadline to opt out of Class 3; or (ii) more than $5,000.00 if the Holder
has properly made the Convenience Class Opt-In Election on a Ballot properly
cast by the Ballot Deadline to opt into Class 3.
(62) CONVENIENCE CLASS ELECTION means a Convenience Class
Opt-In Election and/or a Convenience Class Opt-Out Election.
(63) CONVENIENCE CLASS OPT-IN ELECTION means the election
available to a Holder of one or more Allowed Other Unsecured Claims with
aggregate Face Amounts in excess of $5,000.00 to opt into Class 3 and have such
Claim(s) treated as a Convenience Claim; provided, however, that the Holder of
Such Allowed Other Unsecured Claim(s) has agreed to reduce the Face Amount of
such Claim(s) for purposes of voting and distributions under the Plan to a
single Claim in an amount equal to or less than $5,000.00.
(64) CONVENIENCE CLASS OPT-OUT ELECTION means the election
available to a Holder of one or more Allowed Unsecured Claims that, pursuant to
section 1122(b) of the Bankruptcy Code, otherwise would be a Convenience Claim
that has an aggregate Face Amount of $5,000.00 or less to opt out of Class 3 and
have such Claim treated as an Other Unsecured Claim.
7
(65) CREDITORS' COMMITTEE means the Official Committee of
Unsecured Creditors in the Chapter 11 Cases, as appointed by the United States
Trustee and reconstituted from time to time.
(66) DEBTOR-HELD INTEREST means an Interest in Oakwood or
an Affiliate Debtor when the Holder is another Debtor.
(67) DEBTOR(S) mean, in the singular form, Oakwood or any
one of the Affiliate Debtors and, in the plural form, all of Oakwood and the
Affiliate Debtors.
(68) DIP CLAIM means a Claim of a DIP Lender arising under
the Final DIP Agreement and the Final DIP Order.
(69) DIP LENDERS collectively means Greenwich Capital
Financial Products, Inc. and the other financial institutions (including
Berkshire or one of its designees or affiliates) lending under the Final DIP
Agreement.
(70) DISALLOWED means a Claim or Interest or any portion
thereof that (a) has been disallowed by a Final Order, (b) is scheduled at zero
or as contingent, disputed or unliquidated and as to which no Proof of Claim has
been timely filed pursuant to the Bar Date Order or deemed timely filed with the
Bankruptcy Court pursuant to either the Bankruptcy Code or any Final Order or
(c) is not scheduled by the Debtors in the Schedules of Assets and Liabilities
and as to which (i) no Proof of Claim has been timely filed pursuant to the Bar
Date Order or deemed timely filed with the Bankruptcy Court pursuant to either
the Bankruptcy Code or any Final Order, or (ii) no request for payment of an
Administrative Claim or Fee Claim has been timely filed by the applicable
deadline pursuant to Sections 2.8 and 2.9 of the Plan or deemed timely filed
with the Bankruptcy Court pursuant to either the Bankruptcy Code or any Final
Order.
(71) DISCLOSURE STATEMENT means the disclosure statement
that relates to this Plan that was approved by the Bankruptcy Court (D.I. 2050),
as such Disclosure Statement may be amended, modified, or supplemented,
including the supplemental disclosure statement (D.I. 3538) approved by the
Bankruptcy Court by the Disclosure Statement Order pursuant to section 1125 of
the Bankruptcy Code (and all exhibits and schedules annexed thereto or referred
to therein).
(72) DISCLOSURE STATEMENT ORDER means the order of the
Bankruptcy Court approving the Disclosure Statement, as supplemented, as
containing adequate information pursuant to section 1125 of the Bankruptcy Code
(D.I. 3543).
(73) DISPUTED AMOUNT means an amount equal to the total of
that portion (including, when appropriate, the whole) of a Claim or Interest
that is a Disputed Claim or Interest, including that portion of the Face Amount
of a Disputed Claim or Interest which is not an Allowed Claim or Interest or a
Disallowed Claim or Interest.
(74) DISPUTED CLAIM OR INTEREST means that portion
(including, when appropriate, the whole) of a Claim or Interest that is not an
Allowed Claim or Interest or Disallowed Claim or Interest and (i) to which an
objection has been timely filed or (ii) before the
8
time that an objection has been or may be filed if: (a) the amount or
classification of the Claim or Interest specified in the relevant proof of Claim
or Interest exceeds the amount or is different from the classification of any
corresponding Claim or Interest scheduled by the relevant Debtor in its
Schedules of Assets and Liabilities; (b) any corresponding Claim or Interest
scheduled by the relevant Debtor has been scheduled as disputed, contingent or
unliquidated; or (c) no corresponding Claim or Interest has been scheduled by
the relevant Debtor in its Schedules of Assets and Liabilities.
(75) DISPUTED CLAIMS RESERVE shall have the meaning
ascribed to it in Section 6.3(c)(ii) of the Plan.
(76) DISTRIBUTION ADDRESS means (a) the address indicated
on any notice of appearance filed by a Person or his authorized agent prior to
the Effective Date, (b) if no notice of appearance has been filed, then the
address indicated on a properly filed Proof of Claim or, absent such a Proof of
Claim, the address set forth in the relevant Schedule of Assets and Liabilities
for that Person or register maintained for registered securities, or (c) for
REMIC Guarantee Claims, the address set forth in Section 8.3 of the Plan.
(77) DISTRIBUTION DATE means (i) initially, the Initial
Distribution Date, and (ii) subsequently, the Quarterly Distribution Dates or
such other dates as the Liquidation Trust may establish from time to time to
make any distribution.
(78) EFFECTIVE DATE means: (a) if no stay of the
Confirmation Order is in effect, the first Business Day after the date all of
the conditions set forth in the Plan have been satisfied or waived as set forth
in the Plan, or such later date as may reasonably be agreed to by the Debtors,
the Creditors' Committee and the Buyer (under the Sale Option) or Berkshire
(under the Stand Alone Option); or (b) if a stay of the Confirmation Order is in
effect, on the first Business Day (or such later date as may reasonably be
agreed by the Debtors, the Creditors' Committee and the Buyer (under the Sale
Option) or Berkshire (under the Stand Alone Option)) after the later of: (i) the
date such stay is vacated; and (ii) the date each condition set forth in the
Plan has been satisfied or waived as set forth in the Plan.
(79) ESTATE means the relevant estate created in each of
the Chapter 11 Cases pursuant to section 541 of the Bankruptcy Code, both
individually and collectively, including the consolidated Estates of the Debtors
pursuant to the Plan and the Confirmation Order.
(80) ESTIMATION ORDER means a Final Order of the
Bankruptcy Court, pursuant to Rule 3018 of the Bankruptcy Rules, which may be
the Confirmation Order, estimating for voting, distribution or any other proper
purposes under the Bankruptcy Code (under section 502(c) of the Bankruptcy Code)
the aggregate (and if applicable, individual) Face Amount of Disputed Claims,
whether classified or unclassified under this Plan.
(81) EXCLUDED ASSETS mean those Assets that, under the
Sale Option, will not be Transferred to the Buyer on the Effective Date, as
provided in the Purchase Agreement. For the avoidance of doubt, the Causes of
Action are Excluded Assets.
9
(82) EXCLUDED SALE DEBTOR ASSETS mean the following
Excluded Assets: (a) all policies of insurance held by the Debtors and their
non-debtor affiliates; and (b) all Excluded Assets owned by OFC and OIC.
(83) EXCLUDED SALE TRUST ASSETS mean all Excluded Assets
other than the Excluded Sale Debtor Assets.
(84) EXECUTORY CONTRACT SCHEDULE means the schedule of
executory contracts and unexpired leases designated by the Debtors for
assumption, under the Sale Option, or rejection, under the Stand Alone Option,
as of the Effective Date of the Plan, pursuant to sections 365 and 1123(b)(2) of
the Bankruptcy Code and Section 9.1 of this Plan, which shall be in
substantially the form contained in the Plan Supplement.
(85) EXIT FACILITY means the financing or financings
obtained by the Debtors pursuant to the Exit Facility Agreement under the Stand
Alone Option.
(86) EXIT FACILITY AGREEMENT means, under the Stand Alone
Option, that certain financing agreement obtained by the Debtors which is
substantially in the form set forth in the Plan Supplement.
(87) EXIT FACILITY LENDER means the lender or lenders
providing the Exit Facility under the Stand Alone Option.
(88) FACE AMOUNT means: (a) with respect to any Claim for
which a Proof of Claim is filed, an amount equal to: (i) the liquidated amount,
if any, set forth therein; or (ii) any other amount set forth in an Estimation
Order or order allowing such a Claim; or (b) with respect to any Claim scheduled
in the relevant Debtor's Schedules of Assets and Liabilities, but for which no
Proof of Claim is timely filed, the amount of the Claim scheduled as undisputed,
noncontingent and liquidated.
(89) FEE CLAIM means: (a) a Claim of a professional person
retained by order of the Bankruptcy Court for compensation and/or reimbursement
of expenses pursuant to section 327, 328, 330 or 331 of the Bankruptcy Code in
connection with the Chapter 11 Cases or (b) a Claim of any professional or other
party-in-interest seeking compensation or reimbursement of expenses in
connection with the Chapter 11 Cases pursuant to sections 503(b)(3), 503(b)(4),
503(b)(5) or 503(b)(6) of the Bankruptcy Code.
(90) FEE ORDER means the Bankruptcy Court's Administrative
Order, Pursuant To Sections 331 And 105 Of The Bankruptcy Code, Establishing
Procedures For Interim Compensation And Reimbursement Of Expenses Of
Professionals [D.I. 60] dated December 18, 2002 (D.I. 277), in the Chapter 11
Cases, as may have been amended or supplemented from time to time.
(91) FINAL DIP AGREEMENT means the Amended and Restated
Debtor-In-Possession Financing And Security Agreement, dated as of December 31,
2003, by and among the Debtors and Greenwich Capital Financial Products, Inc.,
as agent, and all other supporting and related agreements and documents, as
amended, whenever finalized and signed, as authorized by the Final DIP Order.
10
(92) FINAL DIP ORDER means the Bankruptcy Court's Final
Order Pursuant To 11 U.S.C. Sections 105, 362 And 364, And Bankruptcy Rules
2002, 4001 And 9014 (a) Approving Replacement Debtor-In-Possession Financing
With Administrative Expense Superpriority And Secured By Senior Liens, (b)
Granting Senior Liens And Superpriority Administrative Expense Status And (c)
Granting Other Relief (D.I. 328) dated December 31, 2002 as amended and restated
by the Bankruptcy Court's Final Order Pursuant To 11 U.S.C. Sections 105, 362
And 364, And Bankruptcy Rules 2002, 4001 And 9014 (a) Approving Replacement
Debtor-In-Possession Financing With Administrative Expense Superpriority And
Secured By Senior Liens, (b) Granting Senior Liens And Superpriority
Administrative Expense Status And (c) Granting Other Relief (D.I. 3346) dated
January 15, 2004.
(93) FINAL ORDER means an order or judgment of the
Bankruptcy Court, as entered on the docket of the Bankruptcy Court, that has not
been reversed, stayed, modified or amended, and as to which: (a) the time to
appeal or seek review has expired and no timely filed appeal or petition for
review, rehearing, remand or certiorari is pending; or (b) any appeal taken or
petition for review, rehearing, remand or certiorari filed has been resolved by
the highest court to which the order or judgment was appealed or from which
certiorari was sought; provided, however, that the possibility that a motion
under section 502(j) of the Bankruptcy Code, Rule 59 or Rule 60 of the Federal
Rules of Civil Procedure, or any analogous rule under the Bankruptcy Rules or
other rules or law governing procedure in cases before the Bankruptcy Court, may
be filed with respect to such order shall not cause such order not to be a Final
Order.
(94) FIRST AMERICAN SECURED CLAIM means that portion of
the Claim of First American Title on behalf of Yuet and Toy Wong arising under a
note dated July 8, 1981, but only to the extent that it is a Secured Claim
secured by property owned by Debtor HBOS Manufacturing, LP and located at 6258
Northwest Grand Ave., Glendale, Arizona 85301.
(95) FOOTHILL collectively means Foothill Capital
Corporation and certain other lenders (including Wells Fargo Bank, N.A.) under
the Prepetition Loan Agreement.
(96) FOOTHILL SECURED CLAIM means that portion of the
Claim of Foothill arising under the Prepetition Loan Agreement, but only to the
extent that it is a Secured Claim secured by an escrow deposit established
pursuant to the Bankruptcy Court's Order Adjourning Hearing On Foothill Capital
Corp.'s As Agent For Itself & Certain DIP Lenders, Notice Of Payoff & Setting
Dates By Which Briefs Are Due (D.I. 471), dated January 23, 2003; and the
agreement executed pursuant to that order.
(97) FUTURE CLAIM means any Claim against a Debtor that
(a) arises out of or relates to pre-Confirmation Date actions, omissions,
events, occurrences, or failures, (b) did not manifest itself sufficiently prior
to the Confirmation Date to provide the Holder of the Claim with a
Constitutionally sufficient opportunity to file proof of such Claim or otherwise
assert rights with respect to such Claim in the Debtors' Chapter 11 cases, and
(c) did not "arise" for purposes of applicable non-bankruptcy law until after
the Confirmation Date.
(98) HOLDER means a Person holding an Interest or a Claim.
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(99) IMPAIRED shall have the meaning ascribed to such term
in section 1124 of the Bankruptcy Code.
(100) INITIAL DISTRIBUTION DATE means (a) with respect to
Administrative Claims, Priority Non-Tax Claims, Priority Tax Claims and
Convenience Claims, the date that is the later of (i) the Effective Date (or as
soon thereafter as reasonably practicable) and (ii) the date (or as soon
thereafter as is reasonably practicable) such Claims become Allowed Claims or
otherwise become payable under the Plan; (b) with respect to Fee Claims, the
date (or as soon thereafter as reasonably practicable) that such Claims (i) are
allowed by Final Order of the Bankruptcy Court or (ii) become Allowed Claims
after the Effective Date; and (c) with respect to the Secured Claims, the Junior
Notes Claims, the Senior Notes Claims, the REMIC Guarantee Claims, the
Litigation Claims, the Other Unsecured Claims and the Interests (subject to the
priority scheme set forth in the Plan), the date as soon as reasonably
practicable after the Effective Date or the date they become Allowed Claims.
With respect to Secured Claims, occurrence of the Distribution Date shall be
subject, if applicable, to the Estates' receipt of the Net Proceeds of the sale
of the relevant collateral.
(101) INITIAL STAND ALONE TRUST ASSETS means the Causes of
Action and $1,000,000 in Cash.
(102) INSIDER shall have the meaning ascribed to such term
in section 101(31) of the Bankruptcy Code.
(103) INTERCOMPANY CLAIM means a Claim of any Debtor
against another Debtor, whether arising before or after the Petition Date,
including, without limitation, any Claim by OAC against OSHC for damages arising
from rejection of the Subservicing Agreements.
(104) INTEREST means any equity security, including Old
Common Stock, within the meaning of section 101(16) of the Bankruptcy Code, in a
Debtor. For purposes of voting and distributions under the Plan, the defined
term Interest shall also include a Claim against a Debtor that is subject to
subordination under section 510(b) of the Bankruptcy Code.
(105) INTERESTED PARTY PROFESSIONALS means the following
professionals, and only the following professionals, of the Debtors, the
Creditors' Committee or members and ex officio members of the Creditors'
Committee: Morris, Nichols, Arsht & Tunnell; Rayburn, Cooper & Durham, P.A.;
Hunton & Williams; Kennedy Covington Lobdell & Hickman L.L.P.; FTI Consulting,
Inc.; PricewaterhouseCoopers LLP; Akin Gump Strauss Hauer & Feld LLP; McCarter &
English, LLP; Deloitte & Touche LLP; Alvarez & Marsal; Stites & Harbison, PLLC;
Faegre & Benson LLP; Seward & Kissel LLP; Richards, Layton & Finger, P.C.;
Morgan Lewis & Bockius LLP; Prime Locations, LLC; The Core Network; Andrew
Davidson & Co., Inc.; Miller Buckfire Lewis Ying & Co., LLC; Munger, Tolles &
Olson LLP; Young Conaway Stargatt & Taylor, LLP; and King & Spalding LLP.
(106) JPMORGAN means JPMorgan Chase Bank, formerly known as
The Chase Manhattan Bank.
12
(107) JUNIOR NOTES mean the 8% Reset Debentures in the
original principal amount of $17 million due June 1, 2007, pursuant to an
Indenture and a First Supplemental Indenture, both dated March 1, 1992, and the
8% Reset Debentures in the original principal amount of $23 million due June 1,
2007, pursuant to a Second Supplemental Indenture dated July 15, 1992.
(108) JUNIOR NOTES CLAIM means an Unsecured Claim of the
Junior Notes Indenture Trustee under the Junior Notes Indenture, or an Unsecured
Claim of any Holder of Junior Notes for the payment of any principal, premium,
if any, and interest owing and unpaid as of the Petition Date in respect of such
Junior Notes.
(109) JUNIOR NOTES INDENTURE means the Indenture and First
Supplemental Indenture both dated March 1, 1992 and the Second Supplemental
Indenture dated July 15, 1992, between the Debtors and First Union National
Bank, f/k/a Delaware Trust Company, with respect to the Junior Notes, as the
same may have been amended and/or supplemented from time to time.
(110) JUNIOR NOTES INDENTURE TRUSTEE means U.S. Bank Trust,
N.A., as the indenture trustee under the Junior Notes Indenture, or any
successor indenture trustees under the Junior Notes Indenture.
(111) LIEN has the meaning ascribed to such term in section
101(37) of the Bankruptcy Code (but a lien that has or may be avoided pursuant
to an Avoidance Action or any other Cause of Action shall not constitute a
Lien).
(112) LIQUIDATION TRUST means the trust created on the
Effective Date pursuant to this Plan and the Liquidation Trust Agreement.
(113) LIQUIDATION TRUST ADVISORY COMMITTEE means the
advisory board that is to be created pursuant to Section 6.3 of the Plan.
(114) LIQUIDATION TRUST AGREEMENT means that certain
agreement which is to govern the Liquidation Trust, substantially in the form
set forth in the Plan Supplement.
(115) LIQUIDATION TRUSTEE means the trustee appointed
pursuant to the Plan and the Liquidation Trust Agreement.
(116) LITIGATION CLAIMS means: (a) all Claims against the
Debtors asserted under lawsuits or complaints which are pending as of the
commencement of the Chapter 11 Cases in any court, including, without
limitation, state or federal court; (b) all Claims against the Debtors subject
to mediation or arbitration which are pending as of the commencement of the
Chapter 11 Cases that could potentially be asserted under lawsuits or complaints
in any court; or (c) all Claims raised or made to the Debtors by any Person,
including, without limitation, offices of state attorneys general, related to
matters arising prior to commencement of the Chapter 11 Cases that could have
been asserted under lawsuits or complaints in any court or could have been
subject to mediation or arbitration.
13
(117) NET PROCEEDS means the Cash consideration received
from the sale, Transfer, or collection of property of the Estates or the
conversion of such property to Cash in some other manner as contemplated in, or
reasonably within the scope of, this Plan including the Purchase Consideration,
whether occurring prior to or after the Effective Date, less the reasonable,
necessary and customary expenses attributable to such sale, Transfer, collection
or conversion, including costs of curing defaults under executory contracts that
are assigned, paying personal property or other taxes accruing in connection
with such sale, Transfer or conversion of such property, brokerage fees and
commissions, collection costs, reasonable attorneys' fees and expenses, and any
applicable taxes or other claims of any governmental authority in connection
with such property and any escrows or accounts established to hold funds for
purchase price adjustments, indemnification claims or other purposes in
connection with such sale, Transfer or collection; provided, however, that upon
the release to the Liquidation Trust (under the Sale Option) or the Reorganized
Stand Alone Debtors (under the Stand Alone Option) of funds from such escrows or
accounts, such funds shall become Net Proceeds of the relevant sale, Transfer or
collection.
(118) NEW COMMON STOCK means, under the Stand Alone Option,
the 20,000,000 shares of common stock of Reorganized Stand Alone Oakwood to be
authorized in accordance with the Plan and Reorganized Stand Alone Oakwood's
Amended and Restated Certificate of Incorporation, having a par value of $0.01
per share.
(119) NEW WARRANTS means, under the Stand Alone Option,
warrants to purchase 1,000,000 shares of New Common Stock pursuant to the terms
of the Warrant Agreement, under the Stand Alone Option.
(120) NON-DEBTOR-HELD INTEREST means an Interest in Oakwood
when the Holder is not a Debtor.
(121) OAC means Oakwood Acceptance Corporation, LLC.
(122) OAKWOOD means Oakwood Homes Corporation.
(123) OFC means Oakwood Financial Corporation.
(124) OFC AND OIC TAX CLAIMS mean all contingent
unliquidated Claims (a) against OFC for federal and state income taxes arising
out of its ownership of certain of the REMIC Residual Certificates; and (b)
against OIC for federal and state income taxes arising out of its ownership of
certain of the Residual REMIC Certificates.
(125) OIC means Oakwood Investment Corporation.
(126) OLD COMMON STOCK means the pre-confirmation common
stock of, or other equity interest in, however derivative, Oakwood and
outstanding or held in treasury as of the Record Date.
(127) OMI means Oakwood Mortgage Investors, Inc.
14
(128) OMI TRUST 1995-B means the trust formed pursuant to
the Series 1995-B Pooling and Servicing Agreement, dated as of October 1, 1995,
as amended September 28, 2001, and incorporating the Standard Terms to Pooling
and Servicing Agreement, November 1995 Edition, among OMI, OAC, as Servicer, and
JPMorgan as successor in interest to the Chase Manhattan Trust Company, National
Association, as trustee.
(129) OMI TRUST 1996-A means the trust formed pursuant to
the Series 1996-A Pooling and Servicing Agreement, dated as of February 1, 1996,
as amended September 28, 2001, and incorporating the Standard Terms to Pooling
and Servicing Agreement, November 1995 Edition, among OMI, OAC, as Servicer, and
JPMorgan as successor in interest to the Chase Manhattan Trust Company, National
Association, as trustee.
(130) OMI TRUST 1996-B means the trust formed pursuant to
the Series 1996-B Pooling and Servicing Agreement, dated as of July 1, 1996, as
amended September 28, 2001, and incorporating the Standard Terms to Pooling and
Servicing Agreement, November 1995 Edition, among OMI, OAC, as Servicer, and
JPMorgan as successor in interest to PNC, as trustee.
(131) OMI TRUST 1996-C means the trust formed pursuant to
the Series 1996-C Pooling and Servicing Agreement, dated as of October 1, 1995,
as amended September 28, 2001, and incorporating the Standard Terms to Pooling
and Servicing Agreement, November 1995 Edition, among OMI, OAC, as Servicer, and
JPMorgan as successor in interest to PNC, as trustee.
(132) OMI TRUST 1997-A means the trust formed pursuant to
the Series 1997-A Pooling and Servicing Agreement, dated as of February 1, 1997,
as amended September 28, 2001, and incorporating the Standard Terms to Pooling
and Servicing Agreement, November 1995 Edition, among OMI, OAC, as servicer, and
JPMorgan as successor in interest to PNC, as trustee.
(133) OMI TRUST 1997-B means the trust formed pursuant to
the Series 1997-B Pooling and Servicing Agreement, dated as of May 1, 1997, as
amended September 28, 2001, and incorporating the Standard Terms to Pooling and
Servicing Agreement, November 1995 Edition, among OMI, OAC, as servicer, and
JPMorgan as successor in interest to PNC, as trustee.
(134) OMI TRUST 1997-C means the trust formed pursuant to
the Series 1997-C Pooling and Servicing Agreement, dated as of August 1, 1997,
as amended September 28, 2001, and incorporating the Standard Terms to Pooling
and Servicing Agreement, November 1995 Edition, among OMI, OAC, as servicer, and
JPMorgan as successor in interest to PNC, as trustee.
(135) OMI TRUST 1997-D means the trust formed pursuant to
the Series 1997-D Pooling and Servicing Agreement, dated as of November 1, 1997,
as amended September 28, 2001, and incorporating the Standard Terms to Pooling
and Servicing Agreement, November 1995 Edition, among OMI, OAC, as servicer, and
JPMorgan as successor in interest to PNC, as trustee.
15
(136) OMI TRUST 1998-A means the trust formed pursuant to
the Series 1998-A Pooling and Servicing Agreement, dated as of February 1, 1998,
as amended September 28, 2001, and incorporating the Standard Terms to Pooling
and Servicing Agreement, November 1995 Edition, among OMI, OAC, as Servicer, and
JPMorgan as successor in interest to PNC, as trustee.
(137) OMI TRUST 1998-B means the trust formed pursuant to
the Series 1998-B Pooling and Servicing Agreement, dated as of May 1, 1998, as
amended December 11, 2000 and September 28, 2001, and incorporating the Standard
Terms to Pooling and Servicing Agreement, November 1995 Edition, among OMI, OAC,
as servicer, and JPMorgan as successor in interest to PNC, as trustee.
(138) OMI TRUST 1998-C means the trust formed pursuant to
the Series 1998-C Pooling and Servicing Agreement, dated as of August 1, 1998,
as amended December 12, 2000, September 28, 2001 and August 10, 2001, and
incorporating the Standard Terms to Pooling and Servicing Agreement, July 1998
Edition, among OMI, OAC, as servicer, and JPMorgan as successor in interest to
PNC, as trustee.
(139) OMI TRUST 1998-D means the trust formed pursuant to
the Series 1998-D Pooling and Servicing Agreement, dated as of October 1, 1998,
as amended April 29, 1999 and September 28, 2001, and incorporating the Standard
Terms to Pooling and Servicing Agreement, July 1998 Edition, among OMI, OAC, as
servicer, and JPMorgan as successor in interest to PNC, as trustee.
(140) OMI TRUST 1999-A means the trust formed pursuant to
the Series 1999-A Pooling and Servicing Agreement, dated as of January 1, 1999,
as amended September 28, 2001, and incorporating the Standard Terms to Pooling
and Servicing Agreement, July 1998 Edition, among OMI, OAC, as servicer, and
JPMorgan as successor in interest to PNC, as trustee.
(141) OMI TRUST 1999-B means the trust formed pursuant to
the Series 1999-B Pooling and Servicing Agreement, dated as of April 1, 1999, as
amended September 28, 2001, and incorporating the Standard Terms to Pooling and
Servicing Agreement, July 1998 Edition, among OMI, OAC, as servicer, and
JPMorgan as successor in interest to PNC, as trustee.
(142) OMI TRUST 1999-C means the trust formed pursuant to
the Series 1999-C Pooling and Servicing Agreement, dated as of June 1, 1999, as
amended November 1, 2000, December 12, 2000, September 28, 2001 and August 10,
2001, and incorporating the Standard Terms to Pooling and Servicing Agreement,
May 1999 Edition, among OMI, OAC, as servicer, and JPMorgan as successor in
interest to PNC, as trustee.
(143) OMI TRUST 1999-D means the trust formed pursuant to
the Series 1999-D Pooling and Servicing Agreement, dated as of August 1, 1999,
as amended December 12, 2000, September 28, 2001 and August 10, 2001, and
incorporating the Standard Terms to Pooling and Servicing Agreement, May 1999
Edition, among OMI, OAC, as servicer, and JPMorgan as successor in interest to
PNC, as trustee.
(144) OMI TRUST 1999-E means the trust formed pursuant to
the Series 1999-E Pooling and Servicing Agreement, dated as of November 1, 1999,
as amended December 11,
16
2000, September 28, 2001 and August 10, 2001, and incorporating the Standard
Terms to Pooling and Servicing Agreement, May 1999 Edition, among OMI, OAC, as
servicer, and JPMorgan as successor in interest to PNC, as trustee.
(145) OMI TRUST 2000-A means the trust formed pursuant to
the Series 2000-A Pooling and Servicing Agreement, dated as of March 1, 2000, as
amended December 11, 2000, September 28, 2001 and August 10, 2001, and
incorporating the Standard Terms to Pooling and Servicing Agreement, May 1999
Edition, among OMI, OAC, as servicer, and JPMorgan as successor in interest to
PNC, as trustee.
(146) OMI TRUST 2000-B means the trust formed pursuant to
the Series 2000-B Pooling and Servicing Agreement, dated as of June 1, 2000, as
amended December 11, 2000, September 28, 2001 and August 10, 2001, and
incorporating the Standard Terms to Pooling and Servicing Agreement, May 1999
Edition, among OMI, OAC, as servicer, and JPMorgan as successor in interest to
PNC, as trustee.
(147) OMI TRUST 2000-C means the trust formed pursuant to
the Series 2000-C Pooling and Servicing Agreement, dated as of September 1,
2000, as amended December 1, 2000, December 14, 2000 and September 28, 2001, and
incorporating the Standard Terms to Pooling and Servicing Agreement, May 1999
Edition, among OMI, OAC, as Servicer, and Wells Fargo Bank Minnesota, National
Association, as trustee.
(148) OMI TRUST 2000-D means the trust formed pursuant to
the Series 2000-D Pooling and Servicing Agreement, dated as of December 1, 2000,
as amended September 28, 2001, and incorporating the Standard Terms to Pooling
and Servicing Agreement, May 1999 Edition, among OMI, OAC, as Servicer, and
Wells Fargo Bank Minnesota, National Association, as trustee.
(149) OMI TRUST 2001-B means the trust formed pursuant to
the Series 2001-B Pooling and Servicing Agreement, dated as of February 1, 2001,
as amended September 28, 2001 and August 10, 2001, and incorporating the
Standard Terms to Pooling and Servicing Agreement, February 2001 Edition, among
OMI, OAC, as servicer, and JPMorgan as successor in interest to PNC, as trustee.
(150) OMI TRUST 2001-C means the trust formed pursuant to
the Series 2001-C Pooling and Servicing Agreement, dated as of May 1, 2001, as
amended October 2, 2001, August 10, 2001 and December 12, 2001, and
incorporating the Standard Terms to Pooling and Servicing Agreement, May 2001
Edition, among OMI, OAC, as servicer, and JPMorgan as successor in interest to
PNC, as trustee.
(151) OMI TRUST 2001-D means the trust formed pursuant to
the Series 2001-D Pooling and Servicing Agreement, dated as of August 1, 2001,
as amended December 12, 2001 and January 10, 2002, and incorporating the
Standard Terms to Pooling and Servicing Agreement, May 2001 Edition, among OMI,
OAC, as servicer, and JPMorgan as successor in interest to PNC, as trustee.
(152) OMI TRUST 2001-E means the trust formed pursuant to
the Series 2001-E Pooling and Servicing Agreement, dated as of November 1, 2001,
and incorporating the Standard
17
Terms to Pooling and Servicing Agreement, September 2001 Edition, among OMI,
OAC, as servicer, and JPMorgan as successor in interest to PNC, as trustee.
(153) OMI TRUST 2002-A means the trust formed pursuant to
the Series 2002-A Pooling and Servicing Agreement, dated as of February 1, 2002,
and incorporating the Standard Terms to Pooling and Servicing Agreement,
September 2001 Edition, among OMI, OAC, as servicer, and JPMorgan as successor
in interest to PNC, as trustee.
(154) OMI TRUST 2002-B means the trust formed pursuant to
the Series 2002-B Pooling and Servicing Agreement, dated as of May 1, 2002, and
incorporating the Standard Terms to Pooling and Servicing Agreement, September
2001 Edition, among OMI, OAC, as servicer, and JPMorgan as successor in interest
to PNC, as trustee.
(155) OMI TRUST 2002-C means the trust formed pursuant to
the Series 2002-C Pooling and Servicing Agreement, dated as of August 1, 2002,
and incorporating the Standard Terms to Pooling and Servicing Agreement,
September 2001 Edition, among OMI, OAC, as servicer, and JPMorgan as successor
in interest to PNC, as trustee.
(156) OSHC means Oakwood Servicing Holdings Co., LLC.
(157) OTHER SECURED AND SETOFF CLAIM means any Secured
Claim that is not: (a) a DIP Claim; (b) the 1997 Bonds Secured Claim; (c) the
1998 Bonds Secured Claim; (d) the Auto Secured Claim; (e) the Carolina Secured
Claim; (f) the First American Secured Claim; (g) the Foothill Secured Claim; (h)
the Thomas Secured Claim; (i) the U.S. Bank Secured Claim; or (j) a Secured Tax
Claim.
(158) OTHER UNSECURED CLAIMS means an Unsecured Claim that
is not: (a) a Convenience Claim; (b) a REMIC Guarantee Claim; (c) a Senior Notes
Claim; (d) a Junior Notes Claim; (e) a Litigation Claim; (f) an Administrative
Claim; (g) a Fee Claim; (h) a Priority Tax Claim; or (i) a Priority Non-Tax
Claim.
(159) PERSON shall have the meaning ascribed to such term
in section 101(41) of the Bankruptcy Code.
(160) PETITION DATE means November 15, 2002.
(161) PLAN means this Plan of Reorganization, dated as of
the date set forth on the first page hereof, for each of the Debtors, together
with any amendments or modifications hereto as the Debtors may file hereafter in
accordance with the terms of the Plan.
(162) PLAN SUPPLEMENT means the Bankruptcy Court filing
specified in Section 11.7 of the Plan, the content of which is incorporated
herein by reference.
(163) PNC means PNC Bank National Association.
(164) PREPETITION LOAN AGREEMENT means that Loan and
Security Agreement dated January 22, 2002 among the Debtors and Foothill, as
amended pursuant to the First
18
Amendment to Loan Agreement dated July 2002 and the Second Amendment to Loan
Agreement dated July 31, 2002.
(165) PRIORITY NON-TAX CLAIM means any Claim entitled to
priority pursuant to section 507(a) of the Bankruptcy Code that is not: (i) an
Administrative Claim; (ii) a Priority Tax Claim; or (iii) a Fee Claim.
(166) PRIORITY TAX CLAIM means a Claim for taxes entitled
to priority pursuant to section 507(a)(8) of the Bankruptcy Code.
(167) PROOF OF CLAIM means a proof of claim that is timely
filed and in compliance with the Bankruptcy Rules and the Bar Date Order.
(168) PURCHASE AGREEMENT means that certain Asset Purchase
Agreement, dated as of November 24, 2003, by and among the Debtors and certain
non-debtor affiliates and Buyer, as attached as an exhibit to the Disclosure
Statement, pursuant to which the Buyer will purchase the Purchased Business
under the Sale Option.
(169) PURCHASE CONSIDERATION means the consideration to be
paid by the Buyer pursuant to the Purchase Agreement under the Sale Option.
(170) PURCHASED BUSINESS means, under the Sale Option, all
of the Assets to be Transferred to the Buyer on the Effective Date pursuant to
the Purchase Agreement. For the avoidance of doubt, the Purchased Business does
not include the Excluded Assets.
(171) QUARTERLY DISTRIBUTION DATE means the first Business
Day after the end of each quarterly calendar period (i.e., March 31, June 30,
September 30, and December 31 of each calendar year) following the Effective
Date.
(172) RATABLE, RATABLY OR RATABLE SHARE means, at any time,
the proportion that the Face Amount of a Claim in a particular Class or group of
Classes (in the case of Class 4) bears to the aggregate Face Amount of all
Claims (including Disputed Claims but excluding Disallowed Claims) in such Class
or group of Classes (in the case of Class 4), unless the Plan otherwise
provides.
(173) RECORD DATE means the Confirmation Date.
(174) REMIC GUARANTEE CLAIMS mean all of the Unsecured
Claims arising from the B-2 REMIC Guarantees and the Resecuritization Note Put
Option.
(175) REMIC TRUSTEE means JPMorgan in its capacity as
trustee, indenture trustee, successor trustee, securities intermediary,
verification agent, paying agent, as applicable, and Resecuritization Trustee,
for the holders of notes and certificates, including Holders of the B-Piece
REMIC Certificates and the Resecuritization Note, issued by each of the REMIC
Trusts and the Resecuritization Trust and any duly appointed successor or
successors.
(176) REMIC TRUSTS mean the following non-Debtor Real
Estate Mortgage Investment Conduit Securitization Trusts: the OMI Trust 1995-B,
the OMI Trust 1996-A, the
19
OMI Trust 1996-B, the OMI Trust 1996-C, the OMI Trust 1997-A, the OMI Trust
1997-B, the OMI Trust 1997-C, the OMI Trust 1997-D, the OMI Trust 1998-A, the
OMI Trust 1998-B, the OMI Trust 1998-C, the OMI Trust 1998-D, the OMI Trust
1999-A, the OMI Trust 1999-B, the OMI Trust 1999-C, the OMI Trust 1999-D, the
OMI Trust 1999-E, the OMI Trust 2000-A, the OMI Trust 2000-B, the OMI Trust
2000-C, the OMI Trust 2000-D, the OMI Trust 2001-B, the OMI Trust 2001-C, the
OMI Trust 2001-D, the OMI Trust 2001-E, the OMI Trust 2002-A, the OMI Trust
2002-B and the OMI Trust 2002-C.
(177) REORGANIZED SALE DEBTORS means, under the Sale
Option, (a) Reorganized Sale OKWD, (b) the Affiliate Debtors and OSHC as merged
into Reorganized Sale OKWD on or after the Effective Date, (c) OFC and (d) OIC
on and after the Effective Date.
(178) REORGANIZED SALE OKWD means, under the Sale Option,
Oakwood on and after the Effective Date.
(179) REORGANIZED SALE DEBTORS CAPITALIZATION AMOUNT means,
under the Sale Option, those Assets as may be identified in the Plan Supplement
and determined pursuant to an order or orders of the Bankruptcy Court (which may
be the Confirmation Order) to be appropriate to fund the post-Effective Date
operation of the Reorganized Sale Debtor, including the payment of all insurance
premiums and the resolution of Future Claims.
(180) REORGANIZED STAND ALONE DEBTORS means, under the
Stand Alone Option, Reorganized Stand Alone Oakwood and the Affiliate Debtors on
and after the Effective Date as reincorporated or otherwise established.
(181) REORGANIZED STAND ALONE OAKWOOD means, under the
Stand Alone Option, Oakwood on and after the Effective Date as reincorporated or
otherwise established.
(182) RESECURITIZATION NOTE means the Class A note issued
by the Resecuritization Trust secured, in part, by certain B-Piece REMIC
Certificates and X REMIC Certificates issued by the OMI Trust 1998-C, the OMI
Trust 1999-C, the OMI Trust 1999-D, the OMI Trust 1999-E, the OMI Trust 2000-A,
the OMI Trust 2000-B, the OMI Trust 2001-B, the OMI Trust 2001-C, the OMI Trust
2001-D, the OMI Trust 2001-E, the OMI Trust 2002-A and the OMI Trust 2002-B.
(183) RESECURITIZATION NOTE PUT OPTION means Oakwood's
obligation to the holder of the Resecuritization Note to purchase the
Resecuritization Note on each payment date under the Resecuritization Note,
beginning with the payment date occurring in September 2011 and ending with the
payment date occurring in September 2012.
(184) RESECURITIZATION TRUST means the Oakwood Mortgage
Resecuritization Trust 2001 formed pursuant to the Amended and Restated Trust
Agreement, dated as of February 1, 2002, as amended and supplemented by the
Trust Agreement Amendment and Supplement, dated as of March 1, 2002, and the
Trust Agreement Amendment and Supplement, dated as of June 1, 2002, among OMI,
as depositor, OAC, as securities administrator, and the Resecuritization
Trustee.
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(185) RESECURITIZATION TRUSTEE means JPMorgan in its
capacity as trustee and securities intermediary of the Resecuritization Trust.
(186) RESIDUAL REMIC CERTIFICATES means the Class R REMIC
Certificates representing the residual interests in the REMIC Trusts.
(187) SALE OPTION means the implementation of the Plan
pursuant to Section 6.1 and other attendant provisions of the Plan.
(188) SCHEDULE OF ASSETS AND LIABILITIES means, as amended,
supplemented or modified, a Debtor's schedule of assets and liabilities filed
with the Bankruptcy Court on January 31, 2003 (D.I. 516, 518, 521, 524, 526,
528, 531, 533, 535, 539, 541, 543) pursuant to sections 521(1) and 1106(a)(2) of
the Bankruptcy Code.
(189) SECURED CLAIM means: (a) that portion of a Claim that
is secured by a valid, perfected and enforceable security interest, Lien,
mortgage or other encumbrance, that is not subject to an Avoidance Action, in or
upon any right, title or interest of any of the Debtors in and to property of
the Estates, to the extent of the value of the Holder's interest in such
property as of the relevant determination date or (b) any Claim that is subject
to an offset right pursuant to section 553 of the Bankruptcy Code, to the extent
of the amount subject to a valid setoff, in the case of each of (a) and (b) as
determined by the Bankruptcy Court pursuant to section 506(a) of the Bankruptcy
Code. Such defined term shall not include for voting or distribution purposes
any such Claim that has been or will be paid in connection with the cure of
defaults under an assumed executory contract or unexpired lease under section
365 of the Bankruptcy Code.
(190) SECURED TAX CLAIM means a Claim for taxes to the
extent that it is a Secured Claim under state or federal law, excluding any
Claim that is an Administrative Claim or Priority Tax Claim.
(191) SENIOR NOTES mean the 7.875% Senior Notes in the
aggregate principal amount of $125 million due March 2004 and the 8.125% Senior
Notes in the aggregate principal amount of $175 million due March 2009 pursuant
to an Indenture and First Supplemental Indenture, both dated March 2, 1999.
(192) SENIOR NOTES CLAIM means the Unsecured Claim of the
Senior Notes Indenture Trustee under the Senior Notes Indenture, or the Claim of
any Holder of Senior Notes for the payment of any principal, premium, if any,
and interest owing and unpaid as of the Petition Date in respect of such Senior
Notes.
(193) SENIOR NOTES INDENTURE means the Indenture and First
Supplemental Indenture, both dated March 2, 1999, between the Debtors and Bank
One, N.A., f/k/a The First National Bank of Chicago, with respect to the Senior
Notes, as the same may have been amended from time to time.
(194) SENIOR NOTES INDENTURE TRUSTEE means U.S. Bank Trust,
N.A., as the current indenture trustee under the Senior Notes Indenture, or any
successor indenture trustee(s) to U.S. Bank Trust, N.A. under the Senior Notes
Indenture.
21
(195) SERVICING AGREEMENTS means the servicing agreements
assumed by OAC and assigned to OHSC under section 365 of the Bankruptcy Court as
authorized by Final Orders entered by the Bankruptcy Court (D.I. 369, D.I. 424
and D.I. 425).
(196) SOLICITATION PROCEDURES ORDER means the Order entered
by the Bankruptcy Court establishing procedures with respect to the solicitation
and tabulation of votes to accept or reject the Plan (D.I. 3543).
(197) STAND ALONE OPTION means the implementation of the
Plan pursuant to Section 6.2 and other attendant provisions of the Plan.
(198) STAND ALONE VOTING TRUST means the trust created on
the Effective Date pursuant to the Plan and the Stand Alone Voting Trust
Agreement.
(199) STAND ALONE VOTING TRUST AGREEMENT means that certain
agreement which is to govern the Stand Alone Voting Trust, substantially in the
form set forth in the Plan Supplement.
(200) STAND ALONE VOTING TRUSTEE means the trustees
appointed pursuant to the Plan and the Stand Alone Voting Trust Agreement.
(201) STATEMENT OF FINANCIAL AFFAIRS means, as amended,
supplemented or modified, a Debtor's statement of financial affairs filed with
the Bankruptcy Court on January 31, 2003 (D.I. 515, 517, 520, 522, 525, 527,
530, 532, 534, 537, 540, 542) pursuant to sections 521(1) and 1106(a)(2) of the
Bankruptcy Code.
(202) SUBSERVICING AGREEMENTS means the subservicing
agreements between OSHC and OAC, as amended, approved by Orders of the
Bankruptcy Court (D.I. 369, D.I. 424 and D.I. 425).
(203) THOMAS SECURED CLAIM means that portion of the Claim
of Lecil V. and Tommie Jane Thomas arising under a note dated January 15, 1993,
but only to the extent that it is a Secured Claim secured by property owned by
Debtor HBOS Manufacturing, LP and located at 508 Palmer Road, Rockwell, North
Carolina.
(204) TRANSFER shall have the meaning ascribed to such term
in section 101(54) of the Bankruptcy Code.
(205) U.S. BANK SECURED CLAIM means that portion of the
Claim of U.S. Bank National Association arising under a note dated April 2,
1991, but only to the extent that it is a Secured Claim secured by property
owned by Debtor HBOS Manufacturing, LP and located in Albany, Linn County,
Oregon.
(206) U.S. GOVERNMENT OBLIGATIONS means securities that are
direct obligations of, or obligations guaranteed by, the United States of
America for the timely payment of which obligation or guarantee the full faith
and credit of the United States of America is pledged, or funds consisting
solely of such securities.
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(207) UNCLAIMED PROPERTY means any Cash or other
distributable property unclaimed for a period of ninety (90) days after it has
been delivered (or attempted to be delivered) in accordance with the Plan to the
Holder entitled thereto in respect of such Holder's Allowed Claim. Unclaimed
Property shall, without limitation, include: (a) checks (and the funds
represented thereby) mailed to a Distribution Address and returned as
undeliverable without a proper forwarding address; (b) funds for uncashed
checks; and (c) checks (and the funds represented thereby) not mailed or
delivered because no Distribution Address to mail or deliver such property was
available, notwithstanding efforts by the Liquidation Trust (under the Sale
Option) or the Reorganized Stand Alone Debtors (under the Stand Alone Option) to
locate such address which were commercially reasonable under the circumstances.
(208) UNIMPAIRED shall have the meaning ascribed to such
term in section 1124 of the Bankruptcy Code.
(209) UNITED STATES TRUSTEE means the Office of the United
States Trustee for the District of Delaware.
(210) UNSECURED CLAIM means any Claim, arising
pre-petition, that is not: (a) an Administrative Claim; (b) a Priority Non-Tax
Claim; (c) a Priority Tax Claim; (d) a Fee Claim; (e) a Secured Claim; (f) an
Intercompany Claim; or (g) an Interest.
(211) WARRANT AGREEMENT means that certain agreement
governing exercise of the New Warrants, in substantially the form set forth in
the Plan Supplement.
(212) X REMIC CERTIFICATES mean those certain Class X
"pass-through" asset-backed securities that have been issued by the OMI Trust
1998-C, the OMI Trust 1999-C, the OMI Trust 1999-D, the OMI Trust 1999-E, the
OMI Trust 2000-A, the OMI Trust 2000-B, the OMI Trust 2001-B, the OMI Trust
2001-C, the OMI Trust 2001-D, the OMI Trust 2001-E, the OMI Trust 2002-A, the
OMI Trust 2002-B and the OMI Trust 2002-C.
1.2 RULES OF INTERPRETATION, COMPUTATION OF TIME AND GOVERNING
LAW.
(a) RULES OF INTERPRETATION.
For purposes of the Plan: (a) whenever from the context it is
appropriate, each term, whether stated in the singular or the plural, shall
include both the singular and the plural; (b) any reference in the Plan to a
contract, instrument, release, indenture or other agreement or document being in
a particular form or on particular terms and conditions means that such document
shall be substantially in such form or substantially on such terms and
conditions; (c) any reference in the Plan to an existing document or an exhibit
filed or to be filed means such document or exhibit, as it may have been or may
be amended, modified or supplemented; (d) if the Plan's description of the terms
of an exhibit is inconsistent with the terms of the exhibit, the terms of the
Plan shall control unless the Purchase Agreement is inconsistent with the Plan,
in which case the Purchase Agreement shall control; (e) unless otherwise
specified, all references in the Plan to articles, sections, clauses and
exhibits are references to articles, sections, clauses and exhibits of or to the
Plan; (f) the words "herein" and "hereto" and other words of similar import
refer to this Plan in its entirety rather than to a particular portion of the
Plan; (g) captions and
23
headings to articles and sections are inserted for convenience of reference only
and are not intended to be a part of or to affect the interpretation of the
Plan; (h) any reference to an entity as a Holder of a Claim or Interest includes
that entity's successors, assigns and affiliates; (i) the rules of construction
set forth in section 102 of the Bankruptcy Code shall apply to the extent such
rules are not inconsistent with any other provision in this Section; and (j) any
term used herein that is not defined herein shall have the meaning ascribed to
any such term used in the Bankruptcy Code and/or the Bankruptcy Rules, if used
therein.
(b) COMPUTATION OF TIME.
In computing any period of time prescribed or allowed by the
Plan, the provisions of Bankruptcy Rule 9006(a) shall apply.
(c) GOVERNING LAW.
Except to the extent that the Bankruptcy Code or Bankruptcy
Rules are applicable, and subject to the provisions of any contract, instrument,
release, indenture or other agreement or document entered into in connection
with the Plan, the rights and obligations arising under the Plan shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware, without giving effect to the principles of conflicts of law
thereof.
ARTICLE II.
METHOD OF CLASSIFICATION OF CLAIMS AND INTERESTS
AND GENERAL PROVISIONS
2.1 GENERAL RULES OF CLASSIFICATION.
A Claim or Interest shall be deemed classified in a particular
Class only to the extent that the Claim or Interest qualifies within the
description of that Class and shall be deemed classified in a different Class to
the extent that any remainder of such Claim or Interest qualifies within the
description of such different Class. A Claim or Interest is in a particular
Class only to the extent that such Claim or Interest is Allowed in that Class
and has not been paid or otherwise settled prior to the Effective Date.
24
2.2 HOLDERS OF CLAIMS ENTITLED TO VOTE.
Each Holder of an Allowed Claim and each Holder of a Claim
that has been temporarily allowed for voting purposes by Order under Bankruptcy
Rule 3018(a), which Claim is in an Impaired Class of Claims, shall be entitled
to vote separately to accept or reject the Plan as provided in the Solicitation
Procedures Order. Any Unimpaired Class of Claims shall be deemed to have
accepted the Plan. Any Class of Claims or Interests that will not receive or
retain any property on account of such Claims or Interests shall be deemed to
have rejected the Plan.
2.3 ACCEPTANCE BY IMPAIRED CLASSES.
An Impaired Class of Claims shall have accepted the Plan if
all of the necessary conditions of the Bankruptcy Code and Bankruptcy Rules have
been satisfied.
2.4 NON-CONSENSUAL CONFIRMATION.
To the extent necessary, the Debtors hereby request that the
Bankruptcy Court confirm the Plan in accordance with section 1129(b) of the
Bankruptcy Code. Subject to section 1127 of the Bankruptcy Code, the Debtors
reserve the right to modify the Plan to the extent that confirmation pursuant to
section 1129(b) of the Bankruptcy Code requires modification, provided such
modifications are consistent with Article XI of the Plan.
2.5 ADMINISTRATIVE CLAIMS, PRIORITY TAX CLAIMS AND FEE CLAIMS.
Administrative Claims, Fee Claims, Priority Tax Claims and OFC
and OIC Tax Claims (to the extent that OFC and OIC are included in this Plan)
have not been classified and are excluded from the Classes set forth in Article
IV in accordance with section 1123(a)(1) of the Bankruptcy Code.
2.6 SPECIAL PROVISION REGARDING UNIMPAIRED CLAIMS.
Except as otherwise provided in the Plan, nothing herein shall
affect the rights and defenses, both legal and equitable, of the Liquidation
Trust and the Reorganized Stand Alone Debtors, with respect to any Unimpaired
Claims, including, but not limited to, all rights with respect to legal and
equitable defenses to setoffs or recoupments against Unimpaired Claims and the
right to assert Avoidance Actions against any Holders of an Unimpaired Claim.
2.7 INTENTIONALLY OMITTED.
2.8 BAR DATES FOR ADMINISTRATIVE CLAIMS.
Respecting Administrative Claims subject to the Administrative
Claim Bar Date Order, a Holder of such Administrative Claim must have complied
with the provisions of such order to be eligible to receive distributions under
the Plan on account of such Administrative Claim.
25
To be eligible to receive distributions under the Plan on
account of an Administrative Claim that is not subject to the Administrative
Claim Bar Date Order and that is not a Fee Claim, all requests for payment of
such Administrative Claims must be made by Proof of Administrative Claim filed
with the Claims Agent so as to be received on or before 4:00 p.m. (Eastern Time)
on the date that is the first Business Day after the date that is twenty (20)
days after the Effective Date, unless otherwise agreed to by the Liquidation
Trust (under the Sale Option) or the Reorganized Stand Alone Debtors (under the
Stand Alone Option). Amendments to such Claims shall be governed by the
provisions set forth in Section 10.3 of the Plan.
ANY HOLDER OF AN ADMINISTRATIVE CLAIM THAT DOES NOT ASSERT
SUCH CLAIM IN ACCORDANCE WITH THIS SECTION 2.8, SHALL HAVE ITS CLAIM BE DEEMED
DISALLOWED UNDER THIS PLAN AND BE FOREVER BARRED FROM ASSERTING SUCH CLAIM
AGAINST ANY OF THE DEBTORS, THE REORGANIZED STAND ALONE DEBTORS, THE REORGANIZED
SALE DEBTORS, THE LIQUIDATION TRUST, THE ESTATES OR ANY OF THEIR PROPERTY. ANY
SUCH CLAIM SHALL BE DISCHARGED AND THE HOLDER THEREOF SHALL BE ENJOINED FROM
COMMENCING OR CONTINUING ANY ACTION, EMPLOYMENT OF PROCESS OR ACT TO COLLECT,
OFFSET, RECOUP OR RECOVER SUCH CLAIM.
2.9 BAR DATE FOR FEE CLAIMS.
All final applications for payment of Fee Claims shall be
filed with the Bankruptcy Court and served on or before the first Business Day
that is sixty (60) days after the Effective Date or such other date as otherwise
agreed by the Liquidation Trust (under the Sale Option) or the Reorganization
Stand Alone (under the Stand Alone Option).
ANY HOLDER OF A FEE CLAIM THAT DOES NOT ASSERT SUCH CLAIM IN
ACCORDANCE WITH THIS SECTION 2.9 SHALL HAVE ITS CLAIM BE DEEMED DISALLOWED UNDER
THIS PLAN AND BE FOREVER BARRED FROM ASSERTING SUCH CLAIM AGAINST ANY OF THE
DEBTORS, THE REORGANIZED STAND ALONE DEBTORS, THE REORGANIZED SALE DEBTORS, THE
LIQUIDATION TRUST, THE ESTATES OR ANY OF THEIR PROPERTY. ANY SUCH CLAIM SHALL BE
DISCHARGED AND THE HOLDER THEREOF SHALL BE ENJOINED FROM COMMENCING OR
CONTINUING ANY ACTION, EMPLOYMENT OF PROCESS OR ACT TO COLLECT, OFFSET, RECOUP
OR RECOVER SUCH CLAIM.
ARTICLE III.
UNCLASSIFIED CLAIMS
3.1 ADMINISTRATIVE CLAIMS.
Subject to the terms herein, and unless the Holder of an
Allowed Administrative Claim agrees to receive other, less favorable treatment,
each Holder of an Allowed Administrative Claim shall be paid 100% of the unpaid
allowed amount of such Administrative Claim in Cash on or as soon as reasonably
practicable after the Initial Distribution Date. Notwithstanding the immediately
preceding sentence: (i) under the Stand Alone Option, any Allowed Administrative
Claims for goods sold or services rendered representing liabilities incurred by
the Debtors in the ordinary course of business during the Chapter 11 Cases,
subject to compliance with any applicable bar date, shall be paid in the
ordinary course in accordance with the terms and conditions of any agreements
relating thereto; (ii) Allowed Administrative
26
Claims of the United States Trustee for fees pursuant to section 1930(a)(6) of
title 28 of the United States Code shall be paid in accordance with the
applicable schedule for payment of such fees; and (iii) all Allowed DIP Claims
arising from the Final DIP Agreement shall be paid in accordance with the Final
DIP Agreement and the Final DIP Order.
3.2 PRIORITY TAX CLAIMS.
Subject to the terms herein, and unless the Holder of an
Allowed Priority Tax Claim agrees to receive other, less favorable treatment,
each Holder of an Allowed Priority Tax Claim shall be paid 100% of the unpaid
amount of such Allowed Priority Tax Claim in Cash on or as soon as reasonably
practicable after the Initial Distribution Date; provided, however, that, under
the Stand Alone Option, the Reorganized Stand Alone Debtors may opt to make
distributions for any Allowed Priority Tax Claim over a period not exceeding six
(6) years after the date of assessment of such Allowed Priority Tax Claim as
provided in section 1129(a)(9)(C) of the Bankruptcy Code. If the Reorganized
Stand Alone Debtors elect this option as to any Allowed Priority Tax Claim, then
the payment of such Allowed Priority Tax Claim shall be made in equal
semi-annual installments with the first installment due on the later of: (i) the
Initial Distribution Date; (ii) 30 calendar days after the date on which an
order allowing such Allowed Priority Tax Claim becomes a Final Order; or (iii)
such other time as may be agreed to by the Holder of such Allowed Priority Tax
Claim and the Reorganized Stand Alone Debtors. Each installment shall include
simple interest on the unpaid portion of such Allowed Priority Tax Claim,
without penalty of any kind, at the statutory rate of interest provided for such
taxes under applicable non-bankruptcy law; provided, however, that the
Reorganized Stand Alone Debtors shall reserve the right to pay any Allowed
Priority Tax Claim, or any remaining balance of such Allowed Tax Claim, in full,
at any time on or after the Effective Date, without premium or penalty. Any
Claim or demand for penalty relating to any Priority Tax Claim (other than a
penalty of the type specified in section 507(a)(8)(G) of the Bankruptcy Code)
shall be Disallowed, and the Holder of an Allowed Priority Tax Claim shall not
assess or attempt to collect such penalty from the Debtors, the Liquidation
Trust, the Reorganized Sale Debtors, the Reorganized Stand Alone Debtors, the
Estates or any of their respective property.
3.3 FEE CLAIMS.
Subject to the terms herein, and unless the Holder of an
Allowed Fee Claim agrees to receive other, less favorable treatment, each Holder
of an Allowed Fee Claim shall receive 100% of the unpaid allowed amount of such
Claim in Cash on or as soon as reasonably practicable after the Initial
Distribution Date.
3.4 OFC AND OIC TAX CLAIMS.
To the extent that OFC and OIC are included under this Plan,
all OFC and OIC Tax Claims shall be Unimpaired and shall continue to be valid
and fully enforceable against Reorganized Sale Debtor after the Effective Date.
27
ARTICLE IV.
CLASSIFICATION, TREATMENT AND VOTING OF CLAIMS AND INTERESTS
4.1 SUMMARY.
The classification of Claims and Interests against the Debtors
pursuant to the Plan is as follows:
CLASS CLAIM STATUS VOTING RIGHTS
- --------------------------------------------------------------------------------------------
Class 1 Priority Non-Tax Claims Unimpaired Not Entitled to Vote;
Deemed to Accept
Class 2A Secured Tax Claims Impaired Entitled to Vote
Class 2B 1997 Bonds Secured Claims Impaired Entitled to Vote
Class 2C 1998 Bonds Secured Claims Impaired Entitled to Vote
Class 2D Auto Secured Claims Impaired Entitled to Vote
Class 2E Carolina Secured Claims Impaired Entitled to Vote
Class 2F First American Secured Claims Impaired Entitled to Vote
Class 2G Foothill Secured Claims Impaired Entitled to Vote
Class 2J Thomas Secured Claims Impaired Entitled to Vote
Class 2K U.S. Bank Secured Claims Impaired Entitled to Vote
Class 2L Other Secured and Setoff Claims Impaired Entitled to Vote
Class 3 Convenience Claims Impaired Entitled to Vote
Class 4A Senior Notes Claims Impaired Entitled to Vote
Class 4B Junior Notes Claims Impaired Entitled to Vote
Class 4C REMIC Guarantee Claims Impaired Entitled to Vote
Class 4D Litigation Claims Impaired Entitled to Vote
28
Class 4E Other Unsecured Claims Impaired Entitled to Vote
Class 6A Non-Debtor-Held Interests Impaired Entitled to Vote
4.2 CLASS 1 (PRIORITY NON-TAX CLAIMS).
Classification: Class 1 shall consist of all Priority Non-Tax
Claims.
Treatment: Subject to the terms herein, and unless the Holder
of an Allowed Priority Non-Tax Claim agrees to receive other, less favorable
treatment, each Holder of an Allowed Priority Non-Tax Claim shall be paid 100%
of the unpaid amount of such Allowed Priority Non-Tax Claim in Cash on or as
soon as reasonably practicable after the Initial Distribution Date.
Voting: Class 1 is an Unimpaired Class, and Holders of Class 1
Claims are not entitled to vote.
4.3 CLASS 2A (SECURED TAX CLAIMS).
Classification: Class 2A shall consist of all Secured Tax
Claims, to the extent (i) validly perfected under applicable non-bankruptcy law
prior to the Petition Date or validly perfected after the Petition Date in
accordance with section 546(b) of the Bankruptcy Code and (ii) otherwise
enforceable against the Debtors' Estates or the property thereof.
Treatment: Subject to the provisions of sections 502(b)(3) and
506(d) of the Bankruptcy Code and herein, each Holder of an Allowed Secured Tax
Claim shall receive (i) under the Sale Option, 100% of the unpaid amount of such
Allowed Secured Tax Claim in Cash; or (ii) under the Stand Alone Option, at the
option of the Reorganized Stand Alone Debtors: (a) 100% of the Net Proceeds from
the sale of the relevant collateral, up to the unpaid amount of such Allowed
Claim (with such payments to be made, if applicable, from accounts set up by the
Debtors, during the Chapter 11 Cases, in connection with the sale of such
collateral), subject to applicable inter-creditor lien priorities; (b) the
return of the relevant collateral; (c) the reinstatement of the Claim in
accordance with section 1124(2) of the Bankruptcy Code; (d) the indubitable
equivalent of such Claim in accordance with section 1129(b)(2)(A)(iii) of the
Bankruptcy Code; (e) such other, less favorable, treatment as shall be agreed to
between the Holder of such Claim and the Reorganized Stand Alone Debtors; and
(f) such other, less favorable, treatment as is determined by Final Order of the
Bankruptcy Court. Such distribution, if required, shall be made on or as soon as
reasonably practicable after the Initial Distribution Date (subject, if
applicable, to the receipt by the Reorganized Stand Alone Debtors or the
Liquidation Trust of the Net Proceeds of the sale of the relevant collateral).
Voting: Class 2A is an Impaired Class, and Holders of Class 2A
Claims are entitled to vote.
29
4.4 CLASS 2B (1997 BONDS SECURED CLAIMS).
Classification: Class 2B shall consist of all 1997 Bonds
Secured Claims, to the extent (i) validly perfected under applicable
non-bankruptcy law prior to the Petition Date or validly perfected after the
Petition Date in accordance with section 546(b) of the Bankruptcy Code and (ii)
otherwise enforceable against the Debtors' Estates or the property thereof.
Treatment: Subject to the provisions of sections 502(b)(3) and
506(d) of the Bankruptcy Code and herein, the Holder of the Allowed 1997 Bonds
Secured Claim shall receive (i) under the Sale Option, 100% of the unpaid amount
of such Allowed 1997 Bonds Secured Claim in Cash; or (ii) under the Stand Alone
Option, at the option of the Reorganized Stand Alone Debtors: (a) 100% of the
Net Proceeds from the sale of the relevant collateral, up to the unpaid amount
of such Allowed Claim (with such payments to be made, if applicable, from
accounts set up by the Debtors, during the Chapter 11 Cases, in connection with
the sale of such collateral), subject to applicable inter-creditor Lien
priorities; (b) the return of the relevant collateral; (c) the reinstatement of
the Claim in accordance with section 1124(2) of the Bankruptcy Code; (d) the
indubitable equivalent of such Claim in accordance with section
1129(b)(2)(A)(iii) of the Bankruptcy Code; (e) such other, less favorable,
treatment as shall be agreed to between the Holder of such Claim and the
Reorganized Stand Alone Debtors; and (f) such other, less favorable, treatment
as is determined by Final Order of the Bankruptcy Court. Such distribution, if
required, shall be made on or as soon as reasonably practicable after the
Initial Distribution Date (subject, if applicable, to the receipt by the
Reorganized Stand Alone Debtors or the Liquidation Trust of the Net Proceeds of
the sale of the relevant collateral).
Voting: Class 2B is an Impaired Class, and Holders of Class 2B
Claims are entitled to vote.
4.5 CLASS 2C (1998 BONDS SECURED CLAIMS).
Classification: Class 2C shall consist of all 1998 Bonds
Secured Claims, to the extent (i) validly perfected under applicable
non-bankruptcy law prior to the Petition Date or validly perfected after the
Petition Date in accordance with section 546(b) of the Bankruptcy Code and (ii)
otherwise enforceable against the Debtors' Estates or the property thereof.
Treatment: Subject to the provisions of sections 502(b)(3) and
506(d) of the Bankruptcy Code and herein, a Holder of an Allowed 1998 Bonds
Secured Claim shall receive (i) under the Sale Option, 100% of the unpaid amount
of such Allowed 1998 Bonds Secured Claim in Cash; or (ii) under the Stand Alone
Option, at the option of the Reorganized Stand Alone Debtors: (a) 100% of the
Net Proceeds from the sale of the relevant collateral, up to the unpaid amount
of such Allowed Claim (with such payments to be made, if applicable, from
accounts set up by the Debtors, during the Chapter 11 Cases, in connection with
the sale of such collateral), subject to applicable inter-creditor Lien
priorities; (b) the return of the relevant collateral; (c) the reinstatement of
the Claim in accordance with the provisions of section 1124(2) of the Bankruptcy
Code; (d) the indubitable equivalent of such Claim in accordance with section
1129(b)(2)(A)(iii) of the Bankruptcy Code; (e) such other, less favorable,
treatment as shall be agreed to between the Holder of such Claim and the
Reorganized Stand Alone Debtors; and (f) such other, less favorable, treatment
as is determined by Final Order of the Bankruptcy Court.
30
Such distribution, if required, shall be made on or as soon as reasonably
practicable after the Initial Distribution Date (subject, if applicable, to the
receipt by the Reorganized Stand Alone Debtors or the Liquidation Trust of the
Net Proceeds of the sale of the relevant collateral).
Voting: Class 2C is an Impaired Class, and Holders of Class 2C
Claims are entitled to vote.
4.6 CLASS 2D (AUTO SECURED CLAIMS).
Classification: Class 2D shall consist of all Auto Secured
Claims, to the extent (i) validly perfected under applicable non-bankruptcy law
prior to the Petition Date or validly perfected after the Petition Date in
accordance with section 546(b) of the Bankruptcy Code and (ii) otherwise
enforceable against the Debtors' Estates or the property thereof.
Treatment: Subject to the provisions of sections 502(b)(3) and
506(d) of the Bankruptcy Code and herein, a Holder of an Allowed Auto Secured
Claim shall receive (i) under the Sale Option, 100% of the unpaid amount of such
Allowed Auto Secured Claim in Cash; or (ii) under the Stand Alone Option, at the
option of the Reorganized Stand Alone Debtors: (a) 100% of the Net Proceeds from
the sale of the relevant collateral, up to the unpaid amount of such Allowed
Claim (with such payments to be made, if applicable, from accounts set up by the
Debtors, during the Chapter 11 Cases, in connection with the sale of such
collateral), subject to applicable inter-creditor Lien priorities; (b) the
return of the relevant collateral; (c) the reinstatement of the Claim in
accordance with the provisions of section 1124(2) of the Bankruptcy Code; (d)
the indubitable equivalent of such Claim in accordance with section
1129(b)(2)(A)(iii) of the Bankruptcy Code; (e) such other, less favorable,
treatment as shall be agreed to between the Holder of such Claim and the
Reorganized Stand Alone Debtors; and (f) such other, less favorable, treatment
as is determined by Final Order of the Bankruptcy Court. Such distribution, if
required, shall be made on or as soon as reasonably practicable after the
Initial Distribution Date (subject, if applicable, to the receipt by the
Reorganized Stand Alone Debtors or the Liquidation Trust of the Net Proceeds of
the sale of the relevant collateral).
Voting: Class 2D is an Impaired Class, and Holders of Class 2D
Claims are entitled to vote.
4.7 CLASS 2E (CAROLINA SECURED CLAIMS).
Classification: Class 2E shall consist of all Carolina Secured
Claims, to the extent (i) validly perfected under applicable non-bankruptcy law
prior to the Petition Date or validly perfected after the Petition Date in
accordance with section 546(b) of the Bankruptcy Code and (ii) otherwise
enforceable against the Debtors' Estates or the property thereof.
Treatment: Subject to the provisions of sections 502(b)(3) and
506(d) of the Bankruptcy Code and herein, a Holder of an Allowed Carolina
Secured Claim shall receive (i) under the Sale Option, 100% of the unpaid amount
of such Allowed Carolina Secured Claim in Cash; or (ii) under the Stand Alone
Option, at the option of the Reorganized Stand Alone Debtors: (a) 100% of the
Net Proceeds from the sale of the relevant collateral, up to the unpaid amount
of such Allowed Claim (with such payments to be made, if applicable, from
accounts set
31
up by the Debtors, during the Chapter 11 Cases, in connection with the sale of
such collateral), subject to applicable inter-creditor Lien priorities; (b) the
return of the relevant collateral; (c) the reinstatement of the Claim in
accordance with the provisions of section 1124(2) of the Bankruptcy Code; (d)
the indubitable equivalent of such Claim in accordance with section
1129(b)(2)(A)(iii) of the Bankruptcy Code; (e) such other, less favorable,
treatment as shall be agreed to between the Holder of such Claim and the
Reorganized Stand Alone Debtors; and (f) such other, less favorable, treatment
as is determined by Final Order of the Bankruptcy Court. Such distribution, if
required, shall be made on or as soon as reasonably practicable after the
Initial Distribution Date (subject, if applicable, to the receipt by the
Reorganized Stand Alone Debtors or the Liquidation Trust of the Net Proceeds of
the sale of the relevant collateral).
Voting: Class 2E is an Impaired Class, and Holders of Class 2E
Claims are entitled to vote.
4.8 CLASS 2F (FIRST AMERICAN SECURED CLAIMS).
Classification: Class 2F shall consist of all First American
Secured Claims, to the extent (i) validly perfected under applicable
non-bankruptcy law prior to the Petition Date or validly perfected after the
Petition Date in accordance with section 546(b) of the Bankruptcy Code and (ii)
otherwise enforceable against the Debtors' Estates or the property thereof.
Treatment: Subject to the provisions of sections 502(b)(3) and
506(d) of the Bankruptcy Code and herein, the Holder of the Allowed First
American Secured Claim shall receive (i) under the Sale Option, 100% of the
unpaid amount of such Allowed First American Secured Claim in Cash; or (ii)
under the Stand Alone Option, at the option of the Reorganized Stand Alone
Debtors: (a) 100% of the Net Proceeds from the sale of the relevant collateral,
up to the unpaid amount of such Allowed Claim (with such payments to be made, if
applicable, from accounts set up by the Debtors, during the Chapter 11 Cases, in
connection with the sale of such collateral), subject to applicable
inter-creditor Lien priorities; (b) the return of the relevant collateral; (c)
the reinstatement of the Claim in accordance with provisions of section 1124(2)
of the Bankruptcy Code; (d) the indubitable equivalent of such Claim in
accordance with section 1129(b)(2)(A)(iii) of the Bankruptcy Code; (e) such
other, less favorable, treatment as shall be agreed to between the Holder of
such Claim and the Reorganized Stand Alone Debtors; and (f) such other, less
favorable, treatment as is determined by Final Order of the Bankruptcy Court.
Such distribution, if required, shall be made on or as soon as reasonably
practicable after the Initial Distribution Date (subject, if applicable, to the
receipt by the Reorganized Stand Alone Debtors or the Liquidation Trust of the
Net Proceeds of the sale of the relevant collateral).
Voting: Class 2F is an Impaired Class, and Holders of the
Class 2F Claims are entitled to vote.
4.9 CLASS 2G (FOOTHILL SECURED CLAIMS).
Classification: Class 2G shall consist of all Foothill Secured
Claims, to the extent (i) validly perfected under applicable non-bankruptcy law
prior to the Petition Date or validly perfected after the Petition Date in
accordance with section 546(b) of the Bankruptcy Code and (ii) otherwise
enforceable against the Debtors' Estates or the property thereof.
32
Treatment: Subject to the provisions of sections 502(b)(3) and
506(d) of the Bankruptcy Code and herein, a Holder of an Allowed Foothill
Secured Claim shall receive (a) under the Sale Option, 100% of the unpaid amount
of such Allowed Claim in accordance with section 5.03 of the Purchase Agreement;
or (ii) under the Stand Alone Option, at the option of the Reorganized Stand
Alone Debtors: (a) the relevant collateral; (b) the reinstatement of the Claim
in accordance with the provisions of section 1124(2) of the Bankruptcy Code; (c)
the indubitable equivalent of such Claim in accordance with section
1129(b)(2)(A)(iii) of the Bankruptcy Code; (d) such other, less favorable,
treatment as shall be agreed to between the Holder of such Claim and the
Reorganized Stand Alone Debtors; and (e) such other, less favorable, treatment
as is determined by Final Order of the Bankruptcy Court. Such distribution, if
required, shall be made on or as soon as reasonably practicable after the
Initial Distribution Date.
Voting: Class 2G is an Impaired Class, and Holders of Class 2G
Claims are entitled to vote.
4.10 INTENTIONALLY OMITTED.
4.11 INTENTIONALLY OMITTED.
4.12 CLASS 2J (THOMAS SECURED CLAIMS).
Classification: Class 2J shall consist of all Thomas Secured
Claims, to the extent (i) validly perfected under applicable non-bankruptcy law
prior to the Petition Date or validly perfected after the Petition Date in
accordance with section 546(b) of the Bankruptcy Code and (ii) otherwise
enforceable against the Debtors' Estates or the property thereof.
Treatment: Subject to the provisions of sections 502(b)(3) and
506(d) of the Bankruptcy Code and herein, a Holder of an Allowed Thomas Secured
Claim shall receive (i) under the Sale Option, 100% of the unpaid amount of such
Allowed Thomas Secured Claim in Cash; or (ii) under the Stand Alone Option, at
the option of the Reorganized Stand Alone Debtors: (a) 100% of the Net Proceeds
from the sale of the relevant collateral, up to the unpaid amount of such
Allowed Claim (with such payments to be made, if applicable, from accounts set
up by the Debtors, during the Chapter 11 Cases, in connection with the sale of
such collateral), subject to applicable inter-creditor Lien priorities; (b) the
return of the relevant collateral; (c) the reinstatement of the Claim in
accordance with the provisions of section 1124(2) of the Bankruptcy Code; (d)
the indubitable equivalent of such Claim in accordance with section
1129(b)(2)(A)(iii) of the Bankruptcy Code; (e) such other, less favorable,
treatment as shall be agreed to between the Holder of such Claim and the
Reorganized Stand Alone Debtors; and (f) such other, less favorable, treatment
as is determined by Final Order of the Bankruptcy Court. Such distribution, if
required, shall be made on or as soon as reasonably practicable upon the Initial
Distribution Date (subject, if applicable, to the receipt by the Reorganized
Stand Alone Debtors or the Liquidation Trust of the Net Proceeds of the sale of
the relevant collateral).
Voting: Class 2J is an Impaired Class, and Holders of Class 2J
Claims are entitled to vote.
33
4.13 CLASS 2K (U.S. BANK SECURED CLAIMS).
Classification: Class 2K shall consist of all U.S. Bank
Secured Claims, to the extent (i) validly perfected under applicable
non-bankruptcy law prior to the Petition Date or validly perfected after the
Petition Date in accordance with section 546(b) of the Bankruptcy Code and (ii)
otherwise enforceable against the Debtors' Estates or the property thereof.
Treatment: Subject to the provisions of sections 502(b)(3) and
506(d) of the Bankruptcy Code and herein, a Holder of an Allowed U.S. Bank
Secured Claim shall receive (i) under the Sale Option, 100% of the unpaid amount
of such Allowed U.S. Bank Secured Claim in Cash; or (ii) under the Stand Alone
Option, at the option of the Reorganized Stand Alone Debtors: (a) 100% of the
Net Proceeds from the sale of the relevant collateral, up to the unpaid amount
of such Allowed Claim (with such payments to be made, if applicable, from
accounts set up by the Debtors, during the Chapter 11 Cases, in connection with
the sale of such collateral), subject to applicable inter-creditor Lien
priorities; (b) the return of the relevant collateral; (c) the reinstatement of
the Claim in accordance with the provisions of section 1124(2) of the Bankruptcy
Code; (d) the indubitable equivalent of such Claim in accordance with section
1129(b)(2)(A)(iii) of the Bankruptcy Code; (e) such other, less favorable,
treatment as shall be agreed to between the Holder of such Claim and the
Reorganized Stand Alone Debtors; and (f) such other, less favorable, treatment
as is determined by Final Order of the Bankruptcy Court. Such distribution, if
required, shall be made on or as soon as reasonably practicable after the
Initial Distribution Date (subject, if applicable, to the receipt by the
Reorganized Stand Alone Debtors or the Liquidation Trust of the Net Proceeds of
the sale of the relevant collateral).
Voting: Class 2K is an Impaired Class, and Holders of Class 2K
Claims are entitled to vote.
4.14 CLASS 2L (OTHER SECURED AND SETOFF CLAIMS).
Classification: Class 2L shall consist of all Other Secured
and Setoff Claims, to the extent (i) validly perfected under applicable
non-bankruptcy law prior to the Petition Date or validly perfected after the
Petition Date in accordance with section 546(b) of the Bankruptcy Code and (ii)
otherwise enforceable against the Debtors' Estates or the property thereof.
Treatment: Subject to the provisions of sections 502(b)(3) and
506(d) of the Bankruptcy Code and herein, each Holder of an Allowed Other
Secured and Setoff Claim shall receive (i) under the Sale Option, 100% of the
unpaid amount of such Allowed Other Secured and Setoff Claim in Cash; or (ii)
under the Stand Alone Option, at the option of the Reorganized Stand Alone
Debtors: (a) 100% of the Net Proceeds from the sale of the relevant collateral,
up to the unpaid amount of such Allowed Claim (with such payments to be made, if
applicable, from accounts set up by the Debtors, during the Chapter 11 Cases, in
connection with the sale of such collateral), subject to applicable
inter-creditor Lien priorities; (b) the return of the relevant collateral; (c)
the reinstatement of the Claim in accordance with the provisions of section
1124(2) of the Bankruptcy Code; (d) the indubitable equivalent of such Claim in
accordance with section 1129(b)(2)(A)(iii) of the Bankruptcy Code; (e) such
other, less favorable, treatment as shall be agreed to between the Holder of
such Claim and the Reorganized Stand Alone Debtors; and (f) such other, less
favorable, treatment as is determined by Final Order of the Bankruptcy Court.
34
Such distribution, if required, shall be made on or as soon as reasonably
practicable after the Initial Distribution Date (subject, if applicable, to the
receipt by the Reorganized Stand Alone Debtors or the Liquidation Trust of the
Net Proceeds of the sale of the relevant collateral). To the extent a Claim is
partially an Allowed Other Secured and Setoff Claim based on an offset right and
partially an Allowed Claim of another type, such Other Secured and Setoff Claim
shall be deemed to have been (x) setoff only to the extent of the allowed amount
of the allowed, liquidated, nondisputed, noncontingent claim owing to the
Debtors, Liquidation Trust, the Reorganized Sale Debtors or the Reorganized
Stand Alone Debtors and (y) a Claim classified in another relevant Class for any
excess of such Claim over the amount so set off. If a Claim is a fully Secured
Claim based on an offset right, the allowance of such Claim shall not affect any
obligations or liabilities due and payable (at such time) to the Debtors,
Liquidation Trust, the Reorganized Sale Debtors or the Reorganized Stand Alone
Debtors that are in an amount in excess of the amount validly offset and the
payment, in full and in cash, of all amounts due and owing as of the Effective
Date to the Debtors, Liquidation Trust, the Reorganized Sale Debtors or the
Reorganized Stand Alone Debtors and the turnover of any property of the Debtors,
Liquidation Trust, the Reorganized Sale Debtors or the Reorganized Stand Alone
Debtors held by such claimant on account of any unliquidated, disputed or
contingent right of setoff shall be a precondition of the allowance of such
Other Secured and Setoff Claim.
Voting: Class 2L is an Impaired Class, and Holders of Class 2L
Claims are entitled to vote.
4.15 CLASS 3 (CONVENIENCE CLAIMS).
Classification: Class 3 shall consist of all Convenience
Claims.
Treatment: Subject to the terms herein and unless the Holder
of an Allowed Class 3 Claim makes a Convenience Class Opt-Out Election or agrees
to receive other, less favorable treatment, a Holder of an Allowed Claim in this
Class, including Holders of Other Unsecured Claims making a Convenience Class
Opt-In Election, shall receive, in full satisfaction, settlement, release, and
discharge of and in exchange for such Claim, 25% of the unpaid amount of such
Allowed Class 3 Claim in Cash on or as soon as reasonably practicable after the
Initial Distribution Date.
Voting: Class 3 is an Impaired Class, and Holders of Class 3
Claims are entitled to vote. The Convenience Class Election must be made at the
time of balloting for voting to accept or reject the Plan and clearly indicated
on the Holder's Ballot and any such election for treatment as a Convenience
Claim through a Convenience Class Opt-In Election shall count as a vote for the
Plan; provided, however, that, if any Claim that is otherwise eligible for the
Convenience Class Election is a Disputed Claim at the time of balloting, the
Convenience Class Election may be made in a Final Order allowing such Claim.
Once a Convenience Class Election has been made with respect to a Claim, such
election shall be irrevocable; provided, however, that a Convenience Class
Election can be changed or made upon the written consent of the Debtors, prior
to the Effective Date, and the Liquidation Trust (under the Sale Option) or the
Reorganized Stand Alone Debtors (under the Stand Alone Option), after the
Effective Date. Whether a Holder of a Claim has properly made a Convenience
Class Election shall have no effect on whether such Claim is or may become a
Disputed Claim or an Allowed Claim.
35
4.16 CLASS 4A (SENIOR NOTES CLAIMS).
Classification: Class 4A shall consist of all Senior Notes
Claims.
Treatment: Subject to the terms herein and unless the Holder
of an Allowed Class 4A Claim who is the beneficial holder of such Class 4A Claim
agrees to receive other, less favorable treatment, such Holder of an Allowed
Claim in this Class shall receive, in full satisfaction, settlement, release,
and discharge of and in exchange for such Claim: (i) under both the Sale Option
and the Stand Alone Option, a beneficial interest in the Liquidation Trust in a
proportion Ratable to other Allowed Claims in Class 4A, Class 4B, Class 4C,
Class 4D and Class 4E; and (ii) under the Stand Alone Option, a portion of the
10,000,000 shares of New Common Stock to be issued pursuant to the Plan, in an
amount that is Ratable to other Allowed Claims in Class 4A, Class 4B, Class 4C,
Class 4D and Class 4E. Such distributions, shall be made on or as soon as
reasonably practicable after the Initial Distribution Date, subject to the
establishment of appropriate reserves for Disputed Claims in accordance with the
provisions of the Plan, including reserves of New Common Stock held by the Stand
Alone Voting Trust.
Voting: Class 4A is an Impaired Class, and Holders of Allowed
Class 4A Claims who are the beneficial holders of such Class 4A Claims are
entitled to vote.
4.17 CLASS 4B (JUNIOR NOTES CLAIMS).
Classification: Class 4B shall consist of all Junior Notes
Claims.
Treatment: Subject to the terms herein and unless a Holder of
an Allowed Class 4B Claim who is the beneficial holder of such Class 4B Claim
agrees to receive other, less favorable treatment, such Holder of an Allowed
Claim in this Class shall receive, in full satisfaction, settlement, release,
and discharge of and in exchange for such Claim: (i) under both the Sale Option
and the Stand Alone Option, a beneficial interest in the Liquidation Trust in a
proportion Ratable to other Allowed Claims in Class 4A, Class 4B, Class 4C,
Class 4D and Class 4E; and (ii) under the Stand Alone Option, a portion of the
10,000,000 shares of New Common Stock to be issued pursuant to the Plan, in an
amount that is Ratable to other Allowed Claims in Class 4A, Class 4B, Class 4C,
Class 4D and Class 4E. Such distributions, shall be made on or as soon as
reasonably practicable after the Initial Distribution Date, subject to the
establishment of appropriate reserves for Disputed Claims in accordance with the
provisions of the Plan, including reserves of New Common Stock held by the Stand
Alone Voting Trust.
Voting: Class 4B is an Impaired Class, and Holders of Allowed
Class 4B Claims who are the beneficial holders of such Class 4B Claims are
entitled to vote.
4.18 CLASS 4C (REMIC GUARANTEE CLAIMS).
Classification: Class 4C shall consist of all REMIC Guarantee
Claims.
Treatment: Subject to the terms herein and unless a Holder of
an Allowed Class 4C Claim agrees to receive other, less favorable treatment,
such Holder of an Allowed Claim in this Class shall receive, in full
satisfaction, settlement, release, and discharge of and in exchange
36
for such Claim: (i) under both the Sale Option and the Stand Alone Option, a
beneficial interest in the Liquidation Trust in a proportion Ratable to other
Allowed Claims in Class 4A, Class 4B, Class 4C, Class 4D and Class 4E; and (ii)
under the Stand Alone Option, a portion of the 10,000,000 shares of New Common
Stock to be issued pursuant to the Plan, in an amount that is Ratable to other
Allowed Claims in Class 4A, Class 4B, Class 4C, Class 4D and Class 4E. Such
distributions, shall be made on or as soon as reasonably practicable after the
Initial Distribution Date, subject to the establishment of appropriate reserves
for Disputed Claims in accordance with the provisions of the Plan, including
reserves of New Common Stock held by the Stand Alone Voting Trust. This
treatment shall not prohibit the surrender of REMIC Certificates or interests
therein to the Liquidation Trust (under the Sale Option) or the Reorganized Sale
Debtors (under the Stand Alone Option) in connection with the resolution of
Disputed Class 4C Claims.
Voting: Class 4C is an Impaired Class, and Holders of Allowed
Class 4C Claims who are the beneficial holders of such Class 4C Claims are
entitled to vote.
4.19 CLASS 4D (LITIGATION CLAIMS).
Classification: Class 4D shall consist of all Litigation
Claims.
Treatment: Subject to the terms herein and unless a Holder of
an Allowed Class 4D Claim agrees to receive other, less favorable treatment,
such Holder of an Allowed Claim in this Class shall receive, in full
satisfaction, settlement, release, and discharge of and in exchange for such
Claim: (i) under both the Sale Option and the Stand Alone Option, a beneficial
interest in the Liquidation Trust in a proportion Ratable to other Allowed
Claims in Class 4A, Class 4B, Class 4C, Class 4D and Class 4E; and (ii) under
the Stand Alone Option, a portion of the 10,000,000 shares of New Common Stock
to be issued pursuant to the Plan, in an amount that is Ratable to other Allowed
Claims in Class 4A, Class 4B, Class 4C, Class 4D and Class 4E. Such
distributions, shall be made on or as soon as reasonably practicable after the
Initial Distribution Date, subject to the establishment of appropriate reserves
for Disputed Claims in accordance with the provisions of the Plan, including
reserves of New Common Stock held by the Stand Alone Voting Trust.
Voting: Class 4D is an Impaired Class, and Holders of Allowed
Class 4D Claims are entitled to vote.
4.20 CLASS 4E (OTHER UNSECURED CLAIMS).
Classification: Class 4E shall consist of all Other Unsecured
Claims.
Treatment: Subject to the terms herein and unless a Holder of
an Allowed Class 4E Claim makes a Convenience Class Opt-In Election or agrees to
receive other, less favorable treatment, such Holder of an Allowed Claim in this
Class shall receive, in full satisfaction, settlement, release, and discharge of
and in exchange for such Claim: (i) under both the Sale Option and the Stand
Alone Option, a beneficial interest in the Liquidation Trust in a proportion
Ratable to other Allowed Claims in Class 4A, Class 4B, Class 4C, Class 4D and
Class 4E; and (ii) under the Stand Alone Option, a portion of the 10,000,000
shares of New Common Stock to
37
be issued pursuant to the Plan, in an amount that is Ratable to other Allowed
Claims in Class 4A, Class 4B, Class 4C, Class 4D and Class 4E. Such
distributions, shall be made on or as soon as reasonably practicable after the
Initial Distribution Date, subject to the establishment of appropriate reserves
for Disputed Claims in accordance with the provisions of the Plan, including
reserves of New Common Stock held by the Stand Alone Voting Trust.
Voting: Class 4E is an Impaired Class, and Holders of Allowed
Class 4E Claims are entitled to vote.
4.21 INTENTIONALLY OMITTED.
4.22 CLASS 6A (NON-DEBTOR-HELD INTERESTS).
Classification: Class 6 shall consist of all Non-Debtor-Held
Interests.
Treatment: Subject to the terms herein and unless the Holder
of an Allowed Class 6A Interest agrees to receive other, less favorable
treatment, such Holder of an Allowed Interest in this Class shall receive, in
full satisfaction, settlement, release, and discharge of and in exchange for
such Interest: (i) under the Sale Option, retention of its Interest in Oakwood;
or (ii) under the Stand Alone Option, a portion of the New Warrants to be issued
pursuant to the Plan, in an amount that is Ratable to other Allowed Interests in
Class 6A. Such distributions shall be made on or as soon as reasonably
practicable upon the Initial Distribution Date, subject to the establishment of
appropriate reserves under the Stand Alone Option for Disputed Interests in
accordance with the provisions of the Plan; provided, however, that no
distribution shall be made to Holders of Allowed Class 6A Interests if any of
Class 4A, Class 4B, Class 4C, Class 4D or Class 4E does not accept the Plan.
Voting: Class 6A is an Impaired Class, and all Holders of
Allowed Class 6A Claims are entitled to vote.
4.23 INTENTIONALLY OMITTED.
ARTICLE V.
CONDITIONS PRECEDENT
5.1 CONDITIONS TO CONFIRMATION.
(a) UNDER THE SALE OPTION.
Unless this condition is waived in accordance with the Plan,
the Confirmation Order and the Plan Supplement must be in form and substance
reasonably acceptable to the Debtors, the Creditors' Committee, the Buyer and
Berkshire, and the Confirmation Order shall:
(i) order, find, and decree that the
Purchase Agreement and all other documents
necessary to consummate the sale of the
Purchased Business to the Buyer, including
the documents
38
substantially in the form set forth in the
Plan Supplement, are approved in all
respects and that all parties thereto are
authorized and directed to perform all of
their obligations thereunder;
(ii) order, find, and decree that the
sale of the Purchased Business to the Buyer
pursuant to the Plan and the Purchase
Agreement, including, without limitation,
OSHC's rejection of the Subservicing
Agreements, OSHC's assumption of the
Servicing Agreements, and OSHC's assignment
of the Servicing Agreements to Buyer (but
only if such Subservicing Agreements and
Servicing Agreement are not already the
subjects of a separate order or orders of
the Bankruptcy Court): (a) is in the best
interests of all of the Debtors'
constituencies, (b) maximizes the value of
the Debtors' business enterprises, (c) is
approved pursuant to Bankruptcy Code
sections 105, 363, 365, 1123, and 1129, and
(d) that the Buyer has acted in good faith
for the purposes of Bankruptcy Code sections
363(m) and 365;
(iii) order, find and decree that the
Confirmation Order shall supersede any
orders of the Court issued prior to the
Confirmation Date to the extent that those
prior orders may be inconsistent with the
Confirmation Order;
(iv) order and decree that the Estates
of the Debtors shall be substantively
consolidated but only to the extent set
forth in the Plan;
(v) authorize the implementation of the
Plan in accordance with its terms;
(vi) provide that any transfers effected
or mortgages or other security documents
entered into or to be effected or entered
into under the Plan shall be and are exempt
from any state, city, or other municipality
transfer taxes, mortgage recording taxes,
and any other stamp or similar taxes
pursuant to Bankruptcy Code section 1146(c);
(vii) approve in all respects the other
settlements, transactions, and agreements to
be effected pursuant to the Plan;
(viii) provide that all executory
contracts or unexpired leases assumed by the
Debtors and assigned during the Chapter 11
Cases or under the Plan shall remain in full
force and effect for the benefit of the
assignee thereof notwithstanding any
provisions in any contract or lease
(including provisions of the kinds described
in Bankruptcy Code section 365(b)(2) and
(f)) that prohibit assignment or transfer
thereof or that enable or require
termination or modification of such contract
or lease upon assignment thereof);
(ix) provide that (A) all executory
contracts and unexpired leases of any Debtor
that are listed in the Purchase Agreement as
39
executory contracts and unexpired leases to
be assumed and assigned thereunder shall be
deemed assumed by the Debtor that is a party
thereto and assigned to the Buyer; and (B)
effective as of the Petition Date, all other
executory contracts and unexpired leases of
the Debtors are subject to the treatment
provided in Article IX of the Plan;
(x) provide that with respect to all
assumptions and all assignments described or
authorized in the preceding paragraph, all
such contracts or leases shall remain in
full force and effect for the benefit of the
Buyer, the Reorganized Sale Debtors or the
Liquidation Trust, as applicable,
notwithstanding any provisions in any
contract or lease (including provisions of
the kinds described in Bankruptcy Code
section 365(b)(2) and (f)) that prohibit
assignment or transfer thereof or that
enable or require termination or
modification of such contract or lease upon
assignment thereof;
(xi) establish the Liquidation Trust
consistent with the terms of the Liquidation
Trust Agreement and the Plan;
(xii) order, find and decree that the
Transfers of Assets by the Debtors to the
Buyer, the Reorganized Sale Debtors or the
Liquidation Trust: (A) are or shall be
legal, valid, and effective transfers of
property; (B) vest or shall vest the
transferee with good title to such property
free and clear of all Liens, Claims,
encumbrances, and Interests of any Person,
except as expressly provided in the Plan,
Purchase Agreement or Confirmation Order;
(C) do not and shall not constitute
avoidable transfers under the Bankruptcy
Code or under applicable bankruptcy or
non-bankruptcy law; and (D) do not and shall
not subject the Buyer, the Reorganized Sale
Debtors or the Liquidation Trust to any
liability by reason of such transfer under
the Bankruptcy Code or under applicable
non-bankruptcy law, including any laws
affecting successor or transferee liability
or fraudulent conveyance or transfer laws;
(xiii) find that the Plan complies with
all applicable provisions of the Bankruptcy
Code, including that the Plan was proposed
in good faith and that the Confirmation
Order was not procured by fraud;
(xiv) order, find and decree that, unless
otherwise explicitly stated in the Plan, all
Claims related to the Debtors not otherwise
discharged or released under the Plan, if
any, shall become solely the responsibility
of the Reorganized Sale Debtors and shall
not be the responsibility or liability of
the Liquidation Trust or the Buyer;
(xv) approve, in all respects, the Plan
Supplement;
40
(xvi) find that the provisions of
Bankruptcy Code sections 1145 and 1146(c)
apply to the transactions contemplated
hereunder, if applicable; and
(xvii) appoint a Person to serve as the
responsible officer and director for each of
the Reorganized Sale Debtors empowered to
take action without requiring the vote or
consent of the Holders of Old Common Stock
in accordance with applicable law.
(b) UNDER THE STAND ALONE OPTION.
Unless this condition is waived in accordance with the Plan,
the Confirmation Order and the Plan Supplement must be in form and substance
reasonably acceptable to the Debtors, the Creditors' Committee and Berkshire,
and the Confirmation Order shall:
(i) include a provision authorizing the
Reorganized Debtors to adopt and file their
respective Amended and Restated Certificates
of Incorporation and Amended and Restated
Bylaws;
(ii) order, find and decree that the
Confirmation Order shall supersede any
orders of the Court issued prior to the
Confirmation Date to the extent that those
prior orders may be inconsistent with the
Confirmation Order;
(iii) order and decree that the Estates
of the Debtors shall be substantively
consolidated but only to the extent set
forth in the Plan;
(iv) include a provision authorizing the
issuance of the New Common Stock and New
Warrants, if necessary;
(v) establish the Liquidation Trust
consistent with the terms of the Liquidation
Trust Agreement and the Plan;
(vi) establish the Stand Alone Voting
Trust consistent with the terms of the Stand
Alone Voting Trust Agreement and the Plan;
(vii) order, find and decree that the
Transfers of Assets by the Debtors to the
Reorganized Stand Alone Debtors or the
Liquidation Trust: (A) are or shall be
legal, valid, and effective transfers of
property; (B) vest or shall vest the
transferee with good title to such property
free and clear of all Liens, Claims,
encumbrances, and Interests of any Person,
except as expressly provided in the Plan,
Purchase Agreement or Confirmation Order;
(C) do not and shall not constitute
avoidable transfers under the Bankruptcy
Code or under applicable bankruptcy or
non-bankruptcy law; and (D) do not and shall
not subject the Reorganized Stand Alone
Debtors or the Liquidation Trust to any
liability by reason of such transfer under
the Bankruptcy Code or under applicable
non-bankruptcy law, including any laws
affecting successor or transferee liability;
41
(viii) find that the Plan complies with
all applicable provisions of the Bankruptcy
Code, including that the Plan was proposed
in good faith and that the Confirmation
Order was not procured by fraud;
(ix) order, find and decree that, unless
otherwise explicitly stated in the Plan, all
claims related to the Debtors not otherwise
discharged or released under the Plan, if
any, shall become solely the responsibility
of the Reorganized Stand Alone Debtors and
shall not be the responsibility or liability
of the Liquidation Trust;
(x) find that confirmation of the Plan
is not likely to be followed by the
liquidation of the Reorganized Stand Alone
Debtors or the need for further financial
reorganization, expect as specifically
provided in the Plan;
(xi) approve, in all respects, the Plan
Supplement;
(xii) approve in all respects the other
settlements, transactions, and agreements to
be effectuated pursuant to the Plan,
including the Exit Facility Agreement; and
(xiii) find that the provisions of
Bankruptcy Code sections 1145 and 1146(c)
apply to the transactions contemplated
hereunder, if applicable.
5.2 CONDITIONS TO CONSUMMATION.
(a) UNDER THE SALE OPTION.
The Debtors intend to request that the Confirmation Order
include a finding by the Bankruptcy Court that, notwithstanding Bankruptcy Rule
3020(e), the Confirmation Order shall take effect immediately upon its entry and
shall be a Final Order. Notwithstanding the foregoing, the Plan may not be
consummated, and the Effective Date shall not occur, unless and until each of
the conditions set forth below is satisfied or waived (if and to the extent
permitted by the Plan) by the Debtors, the Creditors' Committee, the Buyer and
Berkshire (such waivers shall not be unreasonably withheld):
(i) after the entry of the Confirmation
Order, no modifications shall have been made
to the Plan except in accordance with its
provisions with respect to its modification;
(ii) the Confirmation Date shall have
occurred and the Confirmation Order, in a
form consistent with Section 5.1(a), shall
have been signed by the judge presiding over
the Chapter 11 Cases and shall have become a
Final Order;
(iii) all conditions precedent to the
confirmation of the Plan in Section 5.1(a)
of the Plan shall have been satisfied and
shall continue to be satisfied;
42
(iv) all actions, documents, and
agreements necessary to implement the
provisions of the Plan to be effectuated on
or prior to the Effective Date, including
any actions, documentation or agreements
necessary for the release of any collateral
pursuant to Section 5.03 of the Purchase
Agreement, shall be reasonably satisfactory
to the Debtors, the Creditors' Committee and
(to the extent required by the Purchase
Agreement) the Buyer, and such actions,
documents, and agreements shall have been
effected or executed and delivered. All
documents to be contained in the Plan
Supplement shall be completed and in final
form and, as applicable, executed by the
parties thereto and all conditions precedent
contained in any of the foregoing shall have
been satisfied or waived;
(v) all conditions to the closing under
the Purchase Agreement shall have been
satisfied or waived in accordance therewith,
and the closing is prepared to occur on the
Effective Date; and
(vi) the Debtors shall have sufficient
Cash on hand (or will have sufficient Cash
immediately upon the closing of the Purchase
Agreement) to make distributions of Cash
required pursuant to the Plan on the Initial
Distribution Date and to fund reasonably
anticipated expenses of the Liquidation
Trust.
(b) UNDER THE STAND ALONE OPTION.
The Debtors intend to request that the Confirmation Order
include a finding by the Bankruptcy Court that, notwithstanding Bankruptcy Rule
3020(e), the Confirmation Order shall take effect immediately upon its entry and
shall be a Final Order. Notwithstanding the foregoing, the Plan may not be
consummated, and the Effective Date shall not occur, unless and until each of
the conditions set forth below is satisfied or waived (if and to the extent
permitted by the Plan) by the Debtors, the Creditors' Committee and Berkshire
(such waivers shall not be unreasonably withheld):
(i) after the entry of the Confirmation
Order, no modifications shall have been made
to the Plan except in accordance with its
provisions with respect to its modification;
(ii) the Confirmation Date shall have
occurred and the Confirmation Order, in a
form consistent with Section 5.1(b), shall
have been signed by the judge presiding over
the Chapter 11 Cases and shall have become a
Final Order;
(iii) all conditions precedent to the
confirmation of the Plan in Section 5.1(b)
of the Plan shall have been satisfied and
shall continue to be satisfied;
(iv) all actions, documents, and
agreements necessary to implement the
provisions of the Plan to be effectuated on
or prior to the Effective Date shall be
reasonably satisfactory to the
43
Debtors, the Creditors' Committee and
Berkshire, and such actions, documents, and
agreements shall have been effected or
executed and delivered. All documents to be
contained in the Plan Supplement shall be
completed and in final form and, as
applicable, executed by the parties thereto
and all conditions precedent contained in
any of the foregoing shall have been
satisfied or waived;
(v) the Debtors shall have sufficient
Cash on hand (or investments projected by
the Debtors to provide timely Cash) to make
distributions of Cash required pursuant to
the Plan on the Initial Distribution Date
and to fund reasonably anticipated expenses
of the Liquidation Trust;
(vi) the Debtors have established the
Liquidation Trust; and
(vii) the Debtors have entered into the
necessary agreements and may commence
borrowing under the Exit Facility.
5.3 WAIVER OF CONDITIONS.
The waiver of any condition set forth in this Article V may be
made without further notice or order of the Bankruptcy Court.
5.4 EFFECT OF NONOCCURRENCE OF THE CONDITIONS TO CONSUMMATION.
If each of the conditions to consummation and the occurrence
of the Effective Date has not been satisfied or duly waived in accordance with
the Plan on or before the first Business Day that is more than ninety (90) days
after the Confirmation Date, or such later date as shall be agreed by the
Debtors, the Creditors' Committee and Berkshire, the Debtors may schedule a
status hearing with the Bankruptcy Court. If the Confirmation Order is
ultimately vacated, the Plan shall be null and void in all respects, and nothing
contained in the Plan shall constitute an admission, a waiver or release of any
Claims against or Interests in any of the Debtors.
ARTICLE VI.
IMPLEMENTATION
In addition to the provisions set forth elsewhere in the Plan,
the following shall constitute the means of execution and implementation of the
Plan. The Sale Option shall be implemented unless the Purchase Agreement is
terminated by its terms; provided, however, that the Debtors may not terminate
the Purchase Agreement, and thereby consummate the Plan pursuant to the Stand
Alone Option, without the consent of the Creditors' Committee, which consent
shall not be unreasonably withheld. If the Purchase Agreement is terminated by
its terms, the Plan will be implemented according to the Stand Alone Option.
44
6.1 PLAN IMPLEMENTATION UNDER THE SALE OPTION.
(a) CONSUMMATION OF SALE TRANSACTION.
Entry of the Confirmation Order shall constitute the
Bankruptcy Court's approval of the Purchase Agreement and the transactions to be
entered into, and actions to be taken, thereunder pursuant to sections 363, 365,
1123, 1129, 1145 and 1146(c) of the Bankruptcy Code. The Debtors shall sell and
Transfer the Purchased Business to the Buyer in accordance with the Purchase
Agreement.
(b) AUTHORIZATION OF THE SALE TRANSACTION.
The confirmation of this Plan shall authorize the
consummation of all transactions contemplated by the Purchase Agreement with no
requirement of any further authorization by the boards of directors,
shareholders, members, managers, partners or general partners of any of the
Debtors. Upon confirmation, the appropriate officers of the Debtors shall be
authorized to execute any and all documents and perform any and all acts
necessary and appropriate to consummate all transactions contemplated by the
Purchase Agreement.
(c) REVESTING AND TRANSFER OF ASSETS.
Pursuant to Bankruptcy Code section 1141(b), the
assets and property of the Estates and of the Debtors shall vest or revest, such
that: (i) on the Effective Date, the Purchase Consideration, less the
Reorganized Sale Debtors Capitalization Amount, and the Excluded Sale Trust
Assets, including any value associated with Debtor Suburban Home Sales, Inc. to
the extent such value is an Excluded Asset, shall vest in the Liquidation Trust;
and (ii) on the Effective Date, the Excluded Sale Debtor Assets and the
Reorganized Sale Debtors Capitalization Amount shall vest or revest in the
Reorganized Sale Debtors; provided, however, that the Liquidation Trust may
abandon or otherwise not accept any Excluded Sale Trust Assets that the
Liquidation Trust believes, in good faith, have no value to the Liquidation
Trust. Any Excluded Sale Trust Assets which the Liquidation Trust abandons or
otherwise does not accept shall not vest or revest in the Liquidation Trust and
shall vest or revest in the Reorganized Sale Debtors.
As of the Effective Date, all Assets vested or
revested in the Liquidation Trust or the Reorganized Sale Debtors, and all
assets and property dealt with by the Plan, including all Assets transferred to
the Buyer pursuant to the Purchase Agreement, shall be free and clear of all
Claims, Liens, and interests except as otherwise specifically provided in the
Plan or in the Confirmation Order. Any property of any non-debtor affiliates of
the Debtors, and any Claims and Liens against any non-debtor affiliates of the
Debtors or their respective properties shall not be affected or impaired by the
operation of the Plan, the Confirmation Order, or otherwise except as
specifically provided herein.
45
(d) MERGER OF DEBTORS AND VESTING OF ASSETS IN
REORGANIZED SALE DEBTORS.
The Debtors' anticipate that, on the Effective Date, the
Reorganized Sale Debtors may or may not each remain organized as they were prior
to the Petition Date under the applicable state law of each of their respective
jurisdictions of organization, except to the extent a different corporate
structure is determined to benefit the Reorganized Sale Debtors or the
Liquidation Trust and/or such entities have not previously been merged,
liquidated or dissolved in accordance with applicable law prior to the Effective
Date. Pursuant to the Plan, each of the surviving Reorganized Sale Debtors will
be governed by an independent and disinterested Person selected by the Debtors
with the consent of the Creditors' Committee and Berkshire, which consent shall
not be unreasonably withheld, and identified in the Plan Supplement, as each
Reorganized Sale Debtors' sole officer, director or similar appropriate capacity
under state law; provided, however, that an outstanding Fee Claim shall not
render a Person ineligible to serve as the sole officer and director of any of
the Reorganized Sale Debtors. Such individual shall be empowered to take all
necessary and appropriate corporate actions without further meetings or voting
by shareholders, members, partners, or holders of ownership interests. If
Oakwood Financial Corporation is not a debtor under the Bankruptcy Code as of
the Effective Date, Reorganized Sale OKWD shall retain the stock of Oakwood
Financial Corporation. If Oakwood Financial Corporation is a debtor under the
Bankruptcy Code on the Effective Date, its plan of reorganization shall provide
for the ownership of its stock by the Reorganized Sale Debtors.
(e) TREATMENT OF OLD COMMON STOCK, INTERESTS AND
BENEFICIAL INTEREST IN THE LIQUIDATION
TRUST.
On the Effective Date, the shares of Old Common Stock
shall remain outstanding pursuant to the terms of the Plan; provided, however,
that the rights of Holders of Old Common Stock may be altered to effectuate the
purposes of the Plan. The Reorganized Sale Debtors likely will be dissolved in
accordance with state law, in which event the shares of Old Common Stock shall
not be transferable, shall not be listed on any exchange, and no periodic
reports will be filed with the Securities and Exchange Commission. The
beneficial interests of the Liquidation Trust issued pursuant to the Plan shall
be issued pursuant to the exemption from securities registration contained in
section 1145 of the Bankruptcy Code. Any securities issued or transferred by the
Reorganized Sale Debtors or the Liquidation Trust shall be issued or transferred
pursuant to the exemption from securities registration contained in section 1145
of the Bankruptcy Code and shall be exempt from taxes pursuant to section
1146(c) of the Bankruptcy Code.
(f) CONSIDERATIONS REGARDING THE ADDITIONAL
DEBTORS.
In order to consummate the sale under the Purchase
Agreement three more entities wholly owned by the Debtors--Oakwood Financial
Corporation, Oakwood Investment Corporation and Oakwood Servicing Holdings Co.,
LLC. (and potentially other similar entities) may become debtors and may file
motions and plans of reorganization to facilitate certain transfers. These
entities are special purpose entities with limited activities and their filings
and bankruptcy cases, even if substantively consolidated with the Debtors, would
not have a material effect on distributions to creditors.
46
Pursuant to the Plan or a separate motion, OHSC
shall, under sections 105, 363 and 365 of the Bankruptcy Code, as of the
Effective Date, (i) reject the Subservicing Agreements, (ii) assume the
Servicing Agreements, and (iii) assign the Servicing Agreements to the Buyer in
accordance with Section 4.13 of the Purchase Agreement. To the extent the
Subservicing Agreements and Servicing Agreement are not already the subjects of
a separate order or orders of the Bankruptcy Court, the Plan shall constitute a
motion for authority to reject the Subservicing Agreements and to assume and
assign the Servicing Agreements in accordance with Section 4.13 of the Purchase
Agreement.
(g) DISTRIBUTIONS OF CASH.
The Liquidation Trust shall be responsible for making
all distribution of Cash to Holders of Allowed Administrative Claims, Allowed
Priority Tax Claims, Allowed Class 1 Claims, Allowed Class 2 Claims and Allowed
Class 3 Claims, subject to appropriate reserves as described in Section 8.2 of
the Plan.
6.2 PLAN IMPLEMENTATION UNDER THE STAND ALONE OPTION.
(a) VESTING OF ASSETS.
Pursuant to section 1141(b) of the Bankruptcy Code,
except for the Initial Stand Alone Trust Assets, as otherwise provided in the
Plan, property of the Estates and of the Debtors shall revest, such that: (i) on
the Effective Date, the Initial Stand Alone Trust Assets shall vest in the
Liquidation Trust; and (ii) on the Effective Date, all of the Assets other than
the Initial Stand Alone Trust Assets shall vest or revest in the Reorganized
Stand Alone Debtors.
As of the Effective Date, all Assets vested or
revested in the Liquidation Trust or the Reorganized Stand Alone Debtors, and
all assets and property dealt with by the Plan, shall be free and clear of all
Claims, Liens, and interests except as otherwise specifically provided in the
Plan or in the Confirmation Order. Any property of any non-debtor affiliates of
the Debtors, and any Claims and Liens against any non-debtor affiliates of the
Debtors or their respective properties shall not be affected or impaired by the
operation of the Plan, the Confirmation Order, or otherwise except as
specifically provided herein.
From and after the Effective Date, the Reorganized
Stand Alone Debtors may operate their businesses and use, acquire, and dispose
of property without supervision or approval of the Bankruptcy Court, free of any
restrictions of the Bankruptcy Code, the Bankruptcy Rules, and the guidelines
and requirements of the United States Trustee, other than those restrictions
expressly imposed by the Plan or the Confirmation Order.
(b) AMENDED AND RESTATED CERTIFICATES OF
INCORPORATION.
Upon the Effective Date, the Reorganized Stand Alone
Debtors shall file their Amended and Restated Certificates of Incorporation, as
set forth in the Plan Supplement, with the offices of the Secretary of State of
the state that governs their respective entities in accordance with the
respective state law. Each Amended and Restated Certificate of Incorporation
will, among other things, provide for the prohibition of the issuance of
non-voting
47
equity securities to the extent required by section 1123(a) of the Bankruptcy
Code, and with respect to Reorganized Stand Alone Oakwood, authorize 20,000,000
shares of New Common Stock. After the Effective Date, the Reorganized Stand
Alone Debtors may amend and restate their Amended and Restated Certificates of
Incorporation and other constituent documents as permitted by applicable law.
(c) AMENDED AND RESTATED BYLAWS.
The Reorganized Stand Alone Debtors shall adopt and
effect the Amended and Restated Bylaws, as set forth in the Plan Supplement.
(d) NEW SECURITIES.
On the Effective Date, Reorganized Stand Alone
Oakwood shall issue, in accordance with the provisions of this Plan and the
registration rights agreement in the Plan Supplement, 10,000,000 shares of the
New Common Stock, which shall constitute 100% of the total number of shares of
such New Common Stock to be issued and outstanding on or immediately after the
Effective Date, and the New Warrants to be distributed pursuant to the terms of
the Plan. The Reorganized Stand Alone Debtors shall endeavor in good faith to
list the New Common Stock on a national exchange as soon as reasonably
practicable. The New Warrants, as provided in the Warrant Agreement, shall have
a seven year maturity and an exercise price initially computed for an initial
market value of New Common Stock, which would result in 100% recovery to the
Holders of Class 4A, 4B, 4C, 4D and 4E Claims as provided for in the Warrant
Agreement. The exercise price will increase annually at the risk free rate
(30-year Treasury rate) until their expiration. The shares of New Common Stock
and New Warrants issued pursuant to the Plan shall be issued pursuant to the
exemption from securities registration contained in section 1145 of the
Bankruptcy Code and shall be exempt from taxes pursuant to section 1146(c) of
the Bankruptcy Code.
(e) DIRECTORS.
Upon the Effective Date, the operation of each of the
Reorganized Stand Alone Debtors shall become the general responsibility of their
respective boards of directors (or their equivalents) who shall, thereafter,
have the responsibility for the management, control and operation of each of the
Reorganized Stand Alone Debtors. The initial board of directors for Reorganized
Stand Alone Oakwood shall be comprised of five (5) directors, all of whom are
disinterested under the Bankruptcy Code and independent under applicable
securities law; provided, however, that an outstanding Fee Claim shall not
render a Person ineligible to serve on the initial board of directors; provided
further, however, that the chief executive officer of the Reorganized Stand
Alone Debtors may be named to the initial board of directors. The initial board
of directors shall be designated by the Creditors' Committee, which such
designations shall be reasonably acceptable to the Debtors and Berkshire and
shall be included by the Debtors in the Plan Supplement, prior to the Effective
Date. If, prior to the Confirmation Hearing, the Creditors' Committee does not
so designate an initial board of directors, or designates an incomplete initial
board of directors, the existing members of the board of directors of Oakwood,
before the Confirmation Hearing, shall so designate those remaining undesignated
directorships.
48
The initial boards of directors of the reorganized Affiliate Debtors shall be
the same as that of Reorganized Stand Alone Oakwood unless otherwise designated
by the board of directors of Reorganized Stand Alone Oakwood. Pursuant to
section 1129(a)(5) of the Bankruptcy Code, the names of each of the director
nominees shall be disclosed prior to the entry of any Confirmation Order. All
such directors shall be deemed elected, and those directors not continuing in
office shall be deemed removed therefrom, effective on the Effective Date,
pursuant to the Confirmation Order. Such directors' tenure and the manner of
selection of new directors shall be initially as provided in the Amended and
Restated Certificates of Incorporation and the Amended and Restated Bylaws.
(f) OFFICERS.
On the Effective Date, the existing officers of each
of the Debtors shall be retained and shall remain as officers of the Reorganized
Stand Alone Debtors and shall continue to serve until such time as they may
resign, be removed or be replaced by the board of directors of each of the
Reorganized Stand Alone Debtors.
(g) EMPLOYMENT CONTRACTS AND PROFESSIONAL
RETENTIONS.
From and after the Effective Date, the Reorganized
Stand Alone Debtors may enter into employment contracts with their respective
officers, agents or employees. The Reorganized Stand Alone Debtors may, among
other things, retain any employee, professional, consultant, or claims, notice
or disbursing agents as it shall deem necessary to comply with the provisions of
this Plan, including those Persons that have served as employees, professionals,
consultants or agents during the Chapter 11 Cases.
(h) CORPORATE ACTION AND OTHER DOCUMENTS AND
ACTIONS.
The adoption of the Amended and Restated Certificates
of Incorporation, the Amended and Restated Bylaws, the selection of directors
and officers for the Reorganized Stand Alone Debtors, the issuance and
distribution of the New Common Stock and New Warrants, the execution and
delivery of any contract, instrument, release, document or agreement, and any
other matter provided for under the Plan involving the corporate action to be
taken by or required of any of the Reorganized Stand Alone Debtors shall be
deemed to have occurred and be effective as provided herein, and shall be
authorized and approved in all respects without any requirement of further
action by stockholders or directors of any of the Debtors or Reorganized Stand
Alone Debtors.
(i) APPROVAL OF THE EXIT FACILITY.
Entry of the Confirmation Order shall, to the extent
necessary, authorize and approve, without any further action by the Debtors, the
Exit Facility Agreement and the transactions to be entered into, and actions to
be taken thereunder, pursuant the Bankruptcy Code.
49
(j) DISTRIBUTIONS OF CASH.
The Reorganized Stand Alone Debtors shall be
responsible for making all distributions of Cash to Holders of Allowed
Administrative Claims, Allowed Priority Tax Claims, Allowed Class 1 Claims,
Allowed Class 2 Claims and Allowed Class 3 Claims, subject to appropriate
reserves as described in Section 8.2 of the Plan.
(k) DISTRIBUTIONS OF PROCEEDS FROM THE
LIQUIDATION TRUST.
The Reorganized Stand Alone Debtors shall be
responsible for directing the Liquidation Trust with respect to the creation of
reserves, as described in Section 8.2 of the Plan, and the distribution of the
assets of the Liquidation Trust to Holders of Allowed Claims from Classes 4A,
4B, 4C, 4D and 4E.
6.3 PROVISIONS CONCERNING PLAN IMPLEMENTATION UNDER BOTH THE SALE
OPTION AND THE STAND ALONE OPTION.
(a) SUBSTANTIVE CONSOLIDATION.
(i) EFFECT OF SUBSTANTIVE
CONSOLIDATION.
On the Effective Date, the Estates shall be
substantively consolidated for all purposes related to the Plan (but only for
those purposes) including voting, confirmation, distributions and claim
determinations. The substantive consolidations of the Estates shall have the
following effects: (i) all assets and liabilities of the Debtors shall be
treated as though they were merged for purposes of distribution; (ii) all
prepetition and postpetition cross-corporate guarantees of the Debtors shall be
eliminated; (iii) all Claims based upon guarantees of collection, payment or
performance made by one or more Debtors as to the obligations of another Debtor
or of any other Person shall be discharged, released and of no further force and
effect; (iv) any obligation of any Debtor and all guarantees thereof executed by
one or more of the Debtors shall be deemed to be one obligation of the Estate;
(v) any Claims filed or to be filed in connection with any such obligation and
such guarantees shall be deemed one Claim against the Estate; (vi) each and
every Claim filed in the individual Chapter 11 Case of any of the Debtors shall
be deemed filed against the consolidated Estate in the consolidated Chapter 11
Cases and shall be deemed a single obligation of the relevant Estate under the
Plan on and after the Confirmation Date; and (vii) the Chapter 11 Cases of the
Affiliate Debtors shall be closed and the consolidated Estate be administered
through Oakwood's Chapter 11 Case.
In connection with, and as a result of, the
substantive consolidation of the Debtors' Estates and Chapter 11 Cases as
provided in the Plan, on the occurrence of the Effective Date all Intercompany
Claims shall be (i) released, (ii) contributed to capital, (iii) dividended or
(iv) remain Unimpaired, depending on the tax consequences, and Holders of
Intercompany Claims shall not be entitled to, and shall not, receive or retain
any property or interest in property on account of such Claims, except to the
extent potential tax consequences otherwise dictate. Notwithstanding this
Section 6.3, on the Effective Date, all Debtor Holders of Debtor-Held Interests
in any of the Debtors shall either (i) retain such Debtor-Held Interest, in
50
which case the Debtor Holding an Interest in an Affiliate Debtor shall continue
to hold such Debtor-Held Interest in the corresponding Reorganized Subsidiary or
(ii) receive new equity in the appropriate reorganized Affiliate Debtor upon the
cancellation of the old equity.
The substantive consolidation provided for herein
shall not, other than for purposes related to the Plan and distributions to be
made hereunder, affect the legal and corporate structures of the Debtors or the
Non-Debtor-Held Interests, the rights and defenses of the Liquidation Trust and
the Reorganized Stand Alone Debtors pertaining to the Causes of Action, and any
obligations under any executory contract or unexpired leases assumed in the Plan
or otherwise in the Chapter 11 Cases.
(ii) PLAN AS MOTION FOR APPROVAL OF
SUBSTANTIVE CONSOLIDATION.
The Plan shall serve as a motion seeking entry of an
order substantively consolidating the Estates as provided herein.
(b) CREATION OF THE LIQUIDATION TRUST.
The Liquidation Trustee shall sign the Liquidation
Trust Agreement and accept the Liquidation Trust assets on behalf of the
beneficiaries thereof, and the Liquidation Trust will then be deemed created and
effective without any further action of the directors or shareholders of the
Debtors. The Liquidation Trust shall be established for the sole purpose of
liquidating its assets, with no objective to continue or engage in the conduct
of a trade or business. The beneficiaries of the Liquidation Trust shall be
bound by the Liquidation Trust Agreement. Interests in the Liquidation Trust
shall be uncertificated and shall be nontransferable except upon death of the
interest holder or by operation of law. The Liquidation Trust shall have a term
of five (5) years from the Effective Date, without prejudice to the rights of
the Liquidation Trustee, in consultation with the Liquidation Trust Advisory
Committee, to extend such term as applicable law shall allow.
The Liquidation Trustee may invest Cash (including
any earnings thereon or proceeds therefrom) as permitted by section 345 of the
Bankruptcy Code and in other prudent investments, as authorized by the
Liquidation Trust Advisory Committee; provided, however, that such investment
are investments permitted to be made by a liquidating trust within the meaning
of Treasury Regulation section 301.7701-4(d), as reflected therein, or under
applicable IRS guidelines, rulings, or other controlling authorities.
The Liquidation Trustee shall be the exclusive
trustee of the assets of the Liquidation Trust for purposes of 31 U.S.C. Section
3713(b) and 26 U.S.C. Section 6012(b)(3). The powers, rights, and
responsibilities of the Liquidation Trustee shall be specified in the
Liquidation Trust Agreement and shall include the authority and responsibility
to: (a) receive, manage, invest, supervise, and protect trust assets; (b) pay
taxes or other obligations incurred by the trust; (c) retain and compensate,
without further order of the Bankruptcy Court, the services of employees,
professionals and consultants (including those Persons that have served as
employees, professionals, consultants or claims, noticing and disbursing agents
during the Chapter 11 Cases) to advise and assist in the administration,
prosecution and distribution of trust assets; (d)
51
calculate and implement distributions of trust assets; (e) prosecute,
compromise, and settle, in accordance with the specific terms of that agreement,
all Claims and Causes of Action vested in the Liquidation Trust; and (f) under
the Sale Option, resolve issues involving Claims and Interests pursuant to
Article X hereof.
All costs and expenses associated with the
administration of the Liquidation Trust, including reasonable compensation for
the Liquidation Trustee and, as set forth in the Liquidation Trust Agreement,
the Liquidation Trust Advisory Committee, shall be the responsibility of and
paid by the Liquidation Trust in accordance with the Liquidation Trust
Agreement. Under the Sale Option, the Liquidation Trust is the successor to the
Debtors' rights to books and records under the Purchase Agreement. Under the
Stand Alone Option, the Reorganized Stand Alone Debtors shall cooperate with the
reasonable requests of the Liquidation Trustee in furtherance of the Liquidation
Trustee's responsibility to recover trust assets and shall afford reasonable
access during normal business hours, upon reasonable notice, to personnel and
books and records of the Reorganized Stand Alone Debtors to representatives of
the Liquidation Trust to enable the Liquidation Trustee to perform the
Liquidation Trustee's tasks under the Liquidation Trust Agreement and the Plan.
The Reorganized Stand Alone Debtors will not be required to make expenditures in
response to unreasonable requests.
The Liquidation Trust shall be responsible for filing
all federal, state and local tax returns for the Liquidation Trust. The
Liquidation Trust shall comply with all withholding and reporting requirements
imposed by any federal, state, local or foreign taxing authority, and all
distributions made by the Liquidation Trust shall be subject to any such
withholding and reporting requirements. The Liquidation Trust shall provide
reports to holders of interests in the Liquidation Trust as the Liquidation
Trust Advisory Committee deems appropriate.
(c) FEDERAL INCOME TAX TREATMENT OF THE TRUST
FOR THE LIQUIDATION TRUST ASSETS.
For federal income tax purposes, it is intended that
the Liquidation Trust be classified as a liquidating trust under section
301.7701-4 of the Treasury regulations and that such trust be owned by its
beneficiaries (i.e., the Holders of Allowed Claims in Classes 4A, 4B, 4C, 4D and
4E). Accordingly, for federal income tax purposes, it is intended that the
beneficiaries be treated as if they had received a distribution from the Debtors
of an undivided interest in each of the assets of the Liquidation Trust and then
contributed such interests to the Liquidation Trust.
(i) LIQUIDATION TRUST ASSETS TREATED AS
OWNED BY HOLDERS OF ALLOWED CLAIMS.
For all federal income tax purposes, all parties
(including, without limitation, the Debtors, the Liquidation Trust, and the
Holders of Allowed Claims in Classes 4A, 4B, 4C, 4D and 4E) shall treat the
transfer of assets to the Liquidating Trust for the benefit of the Holders of
Allowed Claims in Classes 4A, 4B, 4C, 4D and 4E, as (A) a transfer of the assets
of the Liquidation Trust directly to the Holders of Allowed Claims in Classes
4A, 4B, 4C, 4D and 4E, followed by (B) the transfer by such Holders to the
Liquidation Trust of the assets of the Liquidation Trust in exchange for
beneficial interests in the Liquidation Trust. Accordingly, the
52
Holders of such Allowed Claims shall be treated for federal income tax purposes
as the grantors and owners of their respective share of the assets of the
Liquidation Trust.
(ii) TAX REPORTING.
The Liquidation Trust shall file returns for the
Liquidation Trust as a grantor trust pursuant to Treasury Regulation section
1.671-4(a) and in accordance with this Section 6.3(c). The Liquidation Trust
also shall annually send to each holder of a beneficial interest a separate
statement setting forth the holder's share of items of income, gain, loss,
deduction or credit and will instruct all such holders to report such items on
their federal income tax returns. The Liquidation Trust's taxable income, gain,
loss, deduction or credit will be allocated (subject to Section 8.2 of the Plan,
relating to Disputed Claims) to the Holders of Allowed Claims in Classes 4A, 4B,
4C, 4D and 4E in accordance with their relative beneficial interests in the
Liquidation Trust.
As soon as possible after the Effective Date, the
Liquidation Trust shall make a good faith valuation of the assets of the
Liquidation Trust, and such valuation shall be used consistently by all parties
(including, without limitation, the Debtors, the Liquidation Trust, and the
Holders of Allowed Claims in Classes 4A, 4B, 4C, 4D and 4E) for all federal
income tax purposes. The Liquidation Trust also shall file (or cause to be
filed) any other statements, returns or disclosures relating to the Liquidation
Trust that are required by any governmental unit.
Notwithstanding anything else in the Plan, subject to
definitive guidance from the Internal Revenue Service or a court of competent
jurisdiction to the contrary, the Liquidation Trust shall (i) treat any assets
allocable to, or retained on account of, Disputed Claims as held by one or more
discrete trusts for federal income tax purposes (the "Disputed Claims Reserve"),
consisting of separate and independent shares to be established in respect of
each Disputed Claim, in accordance with the trust provisions of the Tax Code
(sections 641 et. seq.), (ii) treat as taxable income or loss of the Disputed
Claims Reserve, with respect to any given taxable year, the portion of the
taxable income or loss of the Liquidation Trust that would have been allocated
to the holders of Disputed Claims had such Claims been Allowed on the Effective
Date (but only for the portion of the taxable year with respect to which such
Claims are unresolved), (iii) treat as a distribution from the Disputed Claims
Reserve any increased amounts distributed by the Liquidation Trust as a result
of any Disputed Claims resolved earlier in the taxable year, to the extent such
distributions relate to taxable income or loss of the Disputed Claims Reserve
determined in accordance with the provisions hereof, and (iv) to the extent
permitted by applicable law, shall report consistent with the foregoing for
state and local income tax purposes. All Holders of Claims in Classes 4A, 4B,
4C, 4D and 4E shall report, for tax purposes, consistent with the foregoing.
The Liquidation Trustee shall be responsible for
payments, out of the Liquidation Trust Assets, of any taxes imposed on the trust
or its assets, including the Disputed Claims Reserve. In the event, and to the
extent, any Cash retained on account of Disputed Claims in the Disputed Claims
Reserve is insufficient to pay the portion of any such taxes attributable to the
taxable income arising from the assets allocable to, or retained on account of,
Disputed Claims, such taxes shall be (i) reimbursed from any subsequent Cash
amounts retained on account of Disputed Claims, or (ii) to the extent such
Disputed Claims have subsequently
53
been resolved, deducted from any amounts distributable by the Liquidation
Trustee as a result of the resolutions of such Disputed Claims.
The Liquidation Trustee may request an expedited
determination of Taxes of the Debtors and of the Liquidation Trust, including
the Disputed Claims Reserve under section 505(b) of the Bankruptcy Code for all
returns filed for, or on behalf of, the Debtors and the Liquidation Trust for
all taxable periods through the dissolution of the Liquidation Trust.
(iii) DISSOLUTION.
The Liquidation Trustee and the Liquidation Trust
shall be discharged or dissolved, as the case may be, at such time as (i) all
Disputed Claims have been resolved, (ii) all assets of the Liquidation Trust
have been liquidated, and (iii) all distributions required to be made by the
Liquidation Trustee under the Plan have been made, but in no event shall the
Liquidation Trust be dissolved later than five years from the Effective Date
unless the Bankruptcy Court, upon motion within the six month period prior to
the fifth anniversary (or the end of any extension period approved by the
Bankruptcy Court), determines that a fixed period extension (not to exceed three
years, together with any prior extensions, without a favorable letter ruling
from the Internal Revenue Service that any further extension would not adversely
affect the status of the trust as a liquidating trust for federal income tax
purposes) is necessary to facilitate or complete the recovery and liquidation of
the assets of the Liquidation Trust.
(d) APPOINTMENT OF LIQUIDATION TRUSTEE
The Liquidation Trustee for the Liquidation Trust
shall be an independent and disinterested Person designated by the Creditors'
Committee with the consent of the Debtors and Berkshire, whose approval shall
not be unreasonably withheld, and identified in the Plan Supplement; provided,
however, that an outstanding Fee Claim shall not render a Person ineligible to
serve as the Liquidation Trustee.
(e) THE LIQUIDATION TRUST ADVISORY COMMITTEE.
On the Effective Date, the Liquidation Trust Advisory
Committee shall be formed pursuant to the Liquidation Trust Agreement. The
Liquidation Trust Advisory Committee shall be comprised of five (5) members,
consisting of WL Ross & Co. LLC, Aegon USA Investment Management, LLC, and three
(3) independent and disinterested members to be appointed by the Creditors'
Committee with the consent of the Debtors and Berkshire, whose approval shall
not be unreasonably withheld; provided, however, that an outstanding Fee Claim
shall not render a Person ineligible to serve on the Liquidation Trust Advisory
Committee. The three (3) independent and disinterested members shall be
identified in the Plan Supplement. If WL Ross & Co. LLC or Aegon USA Investment
Management, LLC subsequently determine that they are no longer interested in
serving as members of the Liquidation Trust Advisory Committee, the Creditors'
Committee will select replacement members, to be identified in the Plan
Supplement, with the consent of the Debtors and Berkshire, whose approval shall
not be unreasonably withheld (reasonableness shall be determined in light of the
balance between Holders of REMIC Guarantee Claims and Holders of other Claims in
connection with the ongoing litigation concerning the Class 4C Claims). If, as
of the Confirmation Date, the
54
Creditors' Committee has not appointed the three (3) independent and
disinterested members of the Trust Advisory Committee, until at least three (3)
members are so appointed, the Debtors, before the Confirmation Hearing, shall so
designate those remaining undesignated members of the Trust Advisory Committee.
The Liquidation Trustee shall make such reports to and seek such advice from, if
any, the Liquidation Trust Advisory Committee as required under the Liquidation
Trust Agreement. The Liquidation Trust Advisory Committee may, by majority vote,
authorize the Liquidation Trustee to invest the corpus of the Liquidation Trust
in prudent investments other than those described in section 345 of the
Bankruptcy Code.
The Liquidation Trust Advisory Committee's role with
respect to issues involving Claims and Interests pursuant to Article X of the
Plan will be handled only by the three (3) independent and disinterested members
of the five (5) member Board. The Liquidation Trust Advisory Committee shall
have only consultation rights with respect to the decisions of the Liquidation
Trustee in managing the Liquidation Trust. In the event that the Liquidation
Trust Advisory Committee disagrees with any intended actions or inaction of the
Trustee, it shall have (a) the right to seek an order from the Bankruptcy Court
compelling the Liquidation Trustee to act or cease acting in accordance with the
order and (b) the right to remove the Liquidation Trustee if the Liquidation
Trust Advisory Committee believes that the intended actions or inaction rise to
the level of gross negligence or willful misconduct. In the event of the
resignation or removal of the Liquidation Trustee, the Liquidation Trust
Advisory Committee shall, by majority vote or order of the Bankruptcy Court,
designate a person to serve as successor Liquidation Trustee.
The Liquidation Trust Advisory Committee shall be
entitled to retain and compensate, without further order of the Bankruptcy
Court, the services of employees, professionals and consultants (including
without limitation claims, noticing and disbursing agents) to advise and assist
the Liquidation Trust Advisory Committee in the furtherance of its duties,
including those Persons that have served as employees, professionals,
consultants or agents during the Chapter 11 Cases.
The Liquidation Trust Advisory Committee may, at its
discretion, require a fidelity bond from the Liquidation Trustee in such
reasonable amount as may be agreed to by majority vote of the Liquidation Trust
Advisory Committee.
(f) CAUSES OF ACTIONS AND DEFENSES.
Prosecution and settlement of all Causes of Action,
including Avoidance Actions, shall be the sole responsibility of the Liquidation
Trust, pursuant to this Plan, and the Confirmation Order; provided, however,
that, under the Stand Alone Option, Avoidance Actions pertaining to the secured
status of any Disputed Secured Claim shall be vested in the Reorganized Stand
Alone Debtors. The Liquidation Trust shall have all rights, powers, and
interests of the Debtors, as debtors in possession, to pursue, settle or abandon
such Causes of Action as a representative of the Estates pursuant to section
1123(b)(3) of the Bankruptcy Code. All Causes of Action, including Avoidance
Actions, are reserved and preserved to the extent set forth in Section 7.2 of
the Plan and shall not be impacted or affected in any way by the substantive
consolidation of the Estates.
55
(g) TERMINATION OF THE FINAL DIP AGREEMENT.
Subject to the payment in full of all amounts owed
under the Final DIP Agreement or other such treatment as agreed to by the
Debtors and the DIP Lenders, on the Effective Date, the obligations arising
under the Final DIP Agreement shall be deemed to have terminated. All amounts
due and owing, if any, under the Final DIP Agreement shall be paid in full on
the Effective Date as Allowed Administrative Claims, and all liens, mortgages
and security interests granted under the Final DIP Agreement shall automatically
be extinguished without the need for any filings or further actions under the
state or federal laws, and all authorities shall be authorized to accept the
Confirmation Order and notice of Effective Date as a release or satisfaction of
all such liens, mortgages and security interests.
(h) DISSOLUTION OF THE CREDITORS' COMMITTEE.
The Creditors' Committee shall continue in existence until the
Effective Date to exercise those powers and perform those duties specified in
section 1103 of the Bankruptcy Code and shall perform such other duties as it
may have been assigned by the Bankruptcy Court prior to the Effective Date. On
the Effective Date, the Creditors' Committee shall be dissolved and its members
shall be deemed released of any continuing duties, responsibilities and
obligations in connection with the Chapter 11 Cases or the Plan and its
implementation, and the retention and employment of the Creditors' Committee's
attorneys, accountants and other agents shall terminate, except with respect to
(i) all Fee Claims, (ii) any appeals of the Confirmation Order, and (iii) any
estate litigation commenced by the Creditors' Committee pending on the Effective
Date not resolved by the Plan.
ARTICLE VII.
EFFECTS OF PLAN CONFIRMATION
7.1 DISCHARGE.
Except as otherwise provided in the Plan or the Confirmation
Order, as of the Effective Date, the Debtors and all successors in interest,
including, without limitation, the Liquidation Trust, the Reorganized Sale
Debtors, the Reorganized Stand Alone Debtors and the Buyer, shall be discharged
from, and the Confirmation Order shall operate as a permanent injunction
against, the commencement or continuation of any action, the employment of any
process, or any act to collect, recover, offset or recoup, right to sue, on
account of any Claim or Interest, from or against the Debtors, their Estates and
any and all successors in interest (including, without limitation, the
Liquidation Trust, the Reorganized Sale Debtors, the Reorganized Stand Alone
Debtors and the Buyer), and the Debtors', their Estates', and all successors'
liability in respect thereof shall be extinguished completely, and the Debtors
and all successors in interest (including, without limitation, the Liquidation
Trust, the Reorganized Sale Debtors, the Reorganized Stand Alone Debtors and the
Buyer) shall be released and discharged from any Claim or Interest of a kind
specified in section 502(g), 502(h) and 502(i) of the Bankruptcy Code, whether
or not a Proof of Claim is filed or deemed filed under section 501 of the
Bankruptcy Code, such Claim is allowed under section 502 of the Bankruptcy Code,
or the Holder of such Claim or Interest has accepted the Plan.
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In accordance with the foregoing, except as provided in the
Plan or the Confirmation Order, as of the Effective Date, the Confirmation Order
will be a judicial determination of a discharge of all Claims or Interests
against the Debtors and a termination of all Interests and other rights of
equity security holders in the Debtors, pursuant to sections 524 and 1141 of the
Bankruptcy Code, and such discharge will void any judgment obtained against a
Debtor or its successors at any time and shall act as res judicata or collateral
estoppel as against third parties, but not as to the Debtors, their Estates or
any and all successors in interest.
7.2 RETENTION OF CAUSES OF ACTION/RESERVATION OF RIGHTS.
Except as expressly provided for in the Plan or the
Confirmation Order, any and all Causes of Action of any kind or nature
whatsoever, against third parties arising before the Effective Date, whether
known or unknown and regardless of whether the existence of same has been
disclosed, including, without limitation, Avoidance Actions and the right to
enforce the terms and conditions of the Purchase Agreement, the Final DIP
Agreement and the Exit Facility Agreement, that the Debtors may have on or
before the Effective Date shall survive confirmation of the Plan and shall be
reserved and preserved.
Except as expressly provided for in the Plan or the
Confirmation Order, nothing contained in the Plan or the Confirmation Order
shall be deemed to (i) be res judicata or the basis for estoppel of, (ii) create
any other defense to the prosecution to judgment on the merits of, (iii) be a
waiver of or (iv) be a relinquishment of any Causes of Action, including
Avoidance Actions and the right to enforce the terms and conditions of the
Purchase Agreement, Exit Facility Agreement or Final DIP Agreement, which the
Debtors had on or before the Effective Date, against or with respect to any
Causes of Action left unaltered or unimpaired by the Plan. On and after the
Effective Date, the Liquidation Trust shall have, retain, reserve and be
entitled to assert, prosecute, settle or abandon all such Causes of Action which
the Debtors had on or before the Effective Date; and all of the Liquidation
Trust's legal and equitable rights respecting any Causes of Action, including
Avoidance Actions and the right to enforce the terms and conditions of the
Purchase Agreement, Exit Facility Agreement or Final DIP Agreement after the
Effective Date. For the avoidance of doubt, under the Stand Alone Option,
nothing in this Section 7.2 shall be interpreted as empowering the Liquidation
Trust with respect to Claims resolution responsibilities reserved for the
Reorganized Stand Alone Debtors in Article X of the Plan.
7.3 POST-CONSUMMATION EFFECT OF EVIDENCE OF CLAIMS OR INTERESTS.
Outstanding notes and other instruments, including, but not
limited to, all Junior Notes, Senior Notes, B-2 REMIC Guarantees, and the
Resecuritization Note Put Option, and all related documentation, evidencing a
Claim against any of the Debtors and all obligations of the Debtors under or in
respect of any of the foregoing shall be cancelled and any rights thereunder
terminated. Effective upon the Effective Date, such notes and other instruments
represent only the right to participate in the distributions, if any,
contemplated by the Plan to the extent that such Claim is an Allowed Claim under
the Plan. Under the Stand Alone Option, the outstanding Old Common Stock and
other instruments evidencing Interests in the Debtors shall, effective upon the
Effective Date, represent only the right to participate in the distributions, if
any, contemplated by the Plan to the extent that such Interest is an Allowed
Interest under the Plan.
57
Under the Stand Alone Option, the outstanding Old Common Stock and other
instruments evidencing Interests in the Debtors shall be deemed cancelled
without any further action of the Debtors.
Notwithstanding the previous paragraph, (i) except to the
extent the Plan affects the B-2 REMIC Guarantees and the Resecuritization Note
Put Option, nothing contained in this Plan shall affect the rights and
obligations of the REMIC Trusts and the Resecuritization Trust under the
applicable REMIC Trust and the Resecuritization Trust transaction documents or
impair, amend or adversely affect the REMIC Trusts and the Resecuritization
Trust and the rights of each REMIC Trustee and the Resecuritization Trustee
thereunder relating to the B-Piece REMIC Certificates or the X REMIC
Certificates, and (ii) the Senior Notes Indenture and Junior Notes Indenture
shall continue in effect for purposes of permitting the Senior Notes Indenture
Trustee and the Junior Notes Indenture Trustee to make distributions pursuant to
the Plan and to perform such necessary functions with respect thereto. No party,
including but not limited to the Debtors, the Liquidation Trust, the Reorganized
Sale Debtors or the Reorganized Stand Alone Debtors, shall have any obligation
to recognize any transfer of the B-2 REMIC Guarantees, the Resecuritization
Note, the Junior Notes, the Senior Notes or the Interests occurring after the
Confirmation Date. This provision shall not prohibit the surrender of REMIC
Certificates or interests therein to the Liquidation Trust (under the Sale
Option) or the Reorganized Sale Debtors (under the Stand Alone Option) in
connection with the resolution of Disputed Class 4C Claims. Termination of the
Junior Notes Indenture and the Senior Notes Indenture shall not impair the
rights of the Junior Notes Indenture Trustee and the Senior Notes Indenture
Trustee, as the case may be, to enforce their charging liens, established in law
or pursuant to the Junior Notes Indenture and the Senior Notes Indenture,
against property that would otherwise be distributed pursuant to this Plan to
Holders of the Junior Notes or the Senior Notes.
7.4 TREATMENT OF FUTURE CLAIMS.
Unless otherwise explicitly provided for under the Plan, all
Future Claims shall be solely the responsibility and liability of the
Reorganized Sale Debtors (under the Sale Option) or the Reorganized Stand Alone
Debtors (under the Stand Alone Option) and shall not be the responsibility or
liability of the Liquidation Trust or the Buyer.
7.5 LIMITED RELEASES BY DEBTORS.
As of the Effective Date, the Debtors shall be deemed to have
waived and released the Debtors, the Creditors' Committee, Berkshire and the
Buyer, and each of those parties' officers, directors, members, ex officio
members, and the Interested Party Professionals, from any and all Causes of
Action of the Debtors (including claims which the Debtors otherwise have legal
power to assert, compromise or settle in connection their Chapter 11 Cases)
arising on or before the Effective Date; provided, however, that this provision
shall not operate as a waiver or release of any Causes of Action (a) in respect
to any loan, advance or similar payment by the Debtors to such parties, (b) in
respect of any contractual obligation owed to any of the Debtors by such
parties, including, without limitation, the obligations arising under the
Purchase Agreement, the Final DIP Agreement and the Exit Facility Agreement, (c)
in respect to any
58
Causes of Action based upon the willful misconduct or gross negligence of such
parties, (d) to the extent based upon or attributable to such parties gaining in
fact a personal profit to which such parties were not legally entitled,
including, without limitation, profits made from the purchase or sale of equity
securities of Oakwood which are recoverable by Oakwood or its successors
pursuant to section 16(b) of the Securities Exchange Act of 1934, as amended and
(e) that is an Avoidance Action; provided further, however, that this provision
shall not operate as a waiver or release of any right that any party in interest
may have to object to any Claim, including Fee Claims, or any Interest and shall
not otherwise operate as a waiver or release of any objection to Claims or
Interests pending as of the Effective Date, regardless of whether such objection
was brought by the Debtors or any other party in interest.
7.6 TERM OF INJUNCTIONS OR STAYS.
Unless otherwise provided, all injunctions or stays provided
for in the Chapter 11 Cases pursuant to sections 105 or 362 of the Bankruptcy
Code or otherwise in effect on the Confirmation Date shall remain in full force
and effect until the Effective Date after which the discharge provisions and
permanent injunctions of the Plan and the Bankruptcy Code will be given full
force and effect.
7.7 EXCULPATION.
The Debtors, the Creditors' Committee, Berkshire and the
Buyer, and each of those parties' officers, directors, members, ex officio
members, and the Interested Party Professionals shall neither have nor incur any
liability, in any form, to any Holder of a Claim or Interest, or a governmental
entity on behalf of a Holder of a Claim or Interest, for any act or omission in
connection with or arising out of their involvement in the filing and conduct of
the Chapter 11 Cases, including the type or value of distributions, if any,
reserved under the Plan for Holders of Interest, the solicitation of votes for
acceptance or rejection of the Plan, the pursuit of confirmation and
consummation of the Plan, the administration of the Plan or the property to be
distributed under the Plan, except for any liabilities which may arise under the
statutes or regulations administered by the Securities and Exchange Commission
or from any willful misconduct or gross negligence, and, in all respects, shall
be entitled to rely upon the advice of counsel with respect to their duties and
responsibilities under the Plan and applicable law.
7.8 INJUNCTION.
CONFIRMATION OF THIS PLAN SHALL HAVE THE EFFECT OF, AMONG
OTHER THINGS, PERMANENTLY ENJOINING ALL PERSONS WHO HAVE HELD, HOLD OR MAY HOLD
OR HAVE ASSERTED, ASSERT OR MAY ASSERT CLAIMS AGAINST OR INTERESTS IN ANY OF THE
DEBTORS AGAINST ANY OF THE DEBTORS, WITH RESPECT TO ANY SUCH CLAIM OR INTEREST
FROM AND AFTER THE EFFECTIVE DATE, FROM TAKING ANY OF THE FOLLOWING ACTIONS
(OTHER THAN ACTIONS TO ENFORCE ANY RIGHTS OR OBLIGATIONS UNDER THE PLAN): (a)
COMMENCING, CONDUCTING OR CONTINUING IN ANY MANNER, DIRECTLY OR INDIRECTLY, ANY
SUIT, ACTION OR OTHER PROCEEDING OF ANY KIND (INCLUDING, WITHOUT LIMITATION, ANY
PROCEEDING IN A JUDICIAL, ARBITRAL, ADMINISTRATIVE OR OTHER FORUM) AGAINST OR
AFFECTING THE ESTATES, THE LIQUIDATION TRUST, THE REORGANIZED SALE DEBTORS, THE
REORGANIZED STAND ALONE DEBTORS, THE BUYER OR ANY OF THEIR PROPERTY; (b)
ENFORCING, LEVYING, ATTACHING (INCLUDING, WITHOUT LIMITATION, ANY PRE-JUDGMENT
59
ATTACHMENT), COLLECTING OR OTHERWISE RECOVERING BY ANY MANNER OR MEANS, WHETHER
DIRECTLY OR INDIRECTLY, ANY JUDGMENT, AWARD, DECREE OR ORDER AGAINST THE
ESTATES, THE LIQUIDATION TRUST, THE REORGANIZED SALE DEBTORS, THE REORGANIZED
STAND ALONE DEBTORS, THE BUYER OR ANY OF THEIR PROPERTY; (c) CREATING,
PERFECTING OR OTHERWISE ENFORCING IN ANY MANNER, DIRECTLY OR INDIRECTLY, ANY
ENCUMBRANCE OF ANY KIND AGAINST THE ESTATES, THE LIQUIDATION TRUST, THE
REORGANIZED SALE DEBTORS, THE REORGANIZED STAND ALONE DEBTORS, THE BUYER OR ANY
OF THEIR PROPERTY; (d) ASSERTING ANY RIGHT OF SETOFF, DIRECTLY OR INDIRECTLY,
AGAINST ANY OBLIGATION DUE THE ESTATES, THE LIQUIDATION TRUST, THE REORGANIZED
SALE DEBTORS, THE REORGANIZED STAND ALONE DEBTORS, THE BUYER OR ANY OF THEIR
PROPERTY, EXCEPT AS CONTEMPLATED OR ALLOWED BY THE PLAN; (e) ACTING OR
PROCEEDING IN ANY MANNER, IN ANY PLACE WHATSOEVER, THAT DOES NOT CONFORM TO OR
COMPLY WITH THE PROVISIONS OF THE PLAN; AND (f) PROSECUTING OR OTHERWISE
ASSERTING ANY CLAIM OR INTEREST, INCLUDING ANY RIGHT, CLAIM OR CAUSE OF ACTION,
RELEASED PURSUANT TO THE PLAN. ADDITIONALLY, UNLESS OTHERWISE EXPLICITLY STATED
IN THE PLAN, THE INJUNCTION CONTEMPLATED BY THIS SECTION SHALL PROHIBIT THE
ASSERTION AGAINST THE LIQUIDATION TRUST OF ALL CLAIMS OR INTERESTS, IF ANY,
RELATED TO THE DEBTORS, THAT ARE NOT OTHERWISE DISCHARGED OR RELEASED BY THE
PLAN OR THE CONFIRMATION ORDER.
7.9 WAIVER OF CERTAIN CLAIMS.
Subject to the occurrence of the Initial Distribution Date,
and except as otherwise expressly provided in the Plan or Confirmation Order,
all Holders of Junior Notes Claims, Senior Notes Claims and REMIC Guarantee
Claims and Junior Notes Indenture Trustees, the Senior Notes Indenture Trustees,
the REMIC Trustees and the Resecuritization Trustee shall all be deemed, by
virtue of their receipt of distributions and/or other treatment contemplated
under the Plan, to have forever covenanted with each other to waive, release and
not to assert, sue, or otherwise seek any recovery from each other or the
Debtors, the Creditors' Committee, and each of those parties' officers,
directors, members, ex officio members and the Interested Party Professionals,
whether for tort, contract, violations of federal or state securities laws, or
otherwise, based upon any claim, right or cause of action related to the
construction and enforcement of the Junior Notes Indenture, the Senior Notes
Indenture or any obligations under the B-2 REMIC Guarantees and the
Resecuritization Note Put Option or any alleged priority or subordination in
respect of distributions received on account of Junior Notes Claims, Senior
Notes Claims or REMIC Guarantee Claims; provided further, however, that this
provision shall not operate as a waiver or release of any right that any party
in interest may have to object to any Claim, including Fee Claims, or any
Interest and shall not otherwise operate as a waiver or release of any objection
to Claims or Interests pending as of the Effective Date, regardless of whether
such objection was brought by the Debtors or any other party in interest.
7.10 INTENTIONALLY OMITTED.
7.11 RELEASE OF LIENS AND PERFECTION OF LIENS.
Except as otherwise specifically provided in the Plan or in
any agreement, instrument or document created in connection with the Plan: (a)
each Holder of (i) a Secured Claim, (ii) a Claim that is purportedly secured
and/or (iii) a judgment, personal property or ad valorem tax, mechanics' or
similar Secured Claim, in each case regardless of whether such
60
Claim is an Allowed Claim, shall, on or immediately before the Effective Date
and regardless of whether such Claim has been scheduled or proof of such Claim
has been filed: (1) turn over and release to the Estates, the Liquidation Trust,
the Reorganized Sale Debtors, the Reorganized Stand Alone Debtors or the Buyer,
as the case may be, any and all property of the Debtors or the Estates that
secures or purportedly secures such Claim, or such Lien and/or Claim which shall
automatically, and without further action by the Estates, the Liquidation Trust,
the Reorganized Sale Debtors, the Reorganized Stand Alone Debtors or the Buyer,
be deemed released; and (2) execute such documents and instruments as the
Liquidation Trust, the Reorganized Sale Debtors, the Reorganized Stand Alone
Debtors or the Buyer require(s) to evidence such Claim Holder's release of such
property or Lien, and if such Holder violates the Confirmation Order and this
Plan by refusing to execute appropriate documents or instruments, the
Liquidation Trust, the Reorganized Sale Debtors, the Reorganized Stand Alone
Debtors or the Buyer may, in its or their discretion, file a copy of the
Confirmation Order which shall serve to release any Claim Holder's rights in
such property; and (b) on the Effective Date, all right, title and interest in
such property shall revert, vest or revest in accordance with this Plan, free
and clear of all Claims and Interests, including, without limitation, Liens,
escrows, charges, pledges, encumbrances and/or security interests of any kind.
Without limiting the automatic release provisions of the
immediately preceding paragraph: (a) no distribution hereunder shall be made to
or on behalf of any Claim Holder unless and until such Holder executes and
delivers to the Estates, the Liquidation Trust, the Reorganized Sale Debtors,
the Reorganized Stand Alone Debtors or the Buyer (respecting property to be
Transferred to the Buyer under the Sale Option) such release of Liens or
otherwise turns over and releases such Cash, pledge or other possessory Liens;
(b) such Holder that fails to execute and deliver such release of Liens within
ninety (90) days after the Effective Date shall be deemed to have no Claim
against the Debtors, the Estates, the Liquidation Trust, the Reorganized Sale
Debtors, the Reorganized Stand Alone Debtors or the Buyer or their assets or
property in respect of such Claim and shall not participate in any distribution
hereunder; and (c) the Estates, the Liquidation Trust, the Reorganized Sale
Debtors, the Reorganized Stand Alone Debtors or the Buyer (respecting property
to be Transferred to the Buyer under the Sale Option), who shall be deemed to be
appointed as attorney-in-fact for all such Holders of Lien Claims for the
purpose of releasing such Liens, shall be authorized to use, and all authorities
shall be required to accept, the Confirmation Order and the notice of Effective
Date as satisfaction of all Liens.
7.12 INSURANCE PRESERVATION.
Nothing in the Plan, including any releases, shall diminish or
impair the Debtors' ability to enforce any insurance policies or other policies
of insurance that may cover insurance Claims or other Claims against the
Debtors, the Reorganized Sale Debtors, the Reorganized Stand Alone Debtors or
any other Person. All such insurance policies or other policies of insurance
that may cover Future Claims or other Claims against the Debtors, the
Liquidation Trust, the Reorganized Sale Debtors, the Reorganized Stand Alone
Debtors or any other Person shall remain in full force and effect. Under the
Sale Option, to the extent requested by the Liquidation Trust, and otherwise
appropriate under the circumstances, all policies of insurance
61
vest in or otherwise purchased by the Reorganized Sale Debtors shall list the
Liquidation Trust as co-insured.
ARTICLE VIII.
GENERAL PROVISIONS REGARDING TREATMENT OF CLAIMS AND
INTERESTS AND DISTRIBUTIONS UNDER THE PLAN
8.1 SPECIAL CONSIDERATIONS FOR DISTRIBUTIONS TO CLASSES 4A, 4B AND
4C.
Distributions for the benefit of beneficial holders of Senior
Notes, Junior Notes, B-2 REMIC Guarantees and the Resecuritization Note shall be
made to the Senior Notes Indenture Trustee, the Junior Notes Indenture Trustee,
the individual REMIC Trustees and the Resecuritization Trustee, as applicable.
The Senior Notes Indenture Trustee, the Junior Notes Indenture Trustee, the
individual REMIC Trustees and the Resecuritization Trustee shall, in turn,
promptly administer the distributions to the beneficial Holders of Allowed
Claims in Classes 4A, 4B and 4C, as applicable, in accordance with the Plan and
applicable transaction documents. None of the Senior Notes Indenture Trustee,
the Junior Notes Indenture Trustee, the individual REMIC Trustees and the
Resecuritization Trustee shall be required to give any bond or surety or other
security for the performance of their duties unless otherwise ordered by the
Bankruptcy Court; and in the event that such parties are so otherwise ordered,
all costs and expenses of procuring any such bond or surety shall be paid from
the distributions to the beneficial Holders of Senior Notes Claims, Junior Notes
Claims and REMIC Guarantee Claims. Additionally, to the extent necessary to
satisfy the charging liens of the Senior Notes Indenture Trustee, the Junior
Notes Indenture Trustee, the REMIC Trustee and the Resecuritization Trustee and
satisfy the fees and expenses of the Senior Notes Indenture Trustee, the Junior
Notes Indenture Trustee, the REMIC Trustee and the Resecuritization Trustee,
under the Stand Alone Option, at the request of the Senior Notes Indenture
Trustee, the Junior Notes Indenture Trustee, the REMIC Trustee or the
Resecuritization Trustee, up to $750,000.00 in Cash will be paid to the Holders
of Senior Notes Claims and Junior Notes Claims and up to $750,000.00 in Cash
will be paid to the Holders of REMIC Guarantee Claims, in lieu of an identical
value of New Common Stock (maintaining a Pro Rata distribution to all Allowed
Claims), in order to pay the fees and expenses of such trustees.
8.2 DISPUTED CLAIM RESERVES AND STAND ALONE VOTING TRUST.
(a) ESTABLISHMENT OF DISPUTED CLAIM RESERVES FOR
CASH DISTRIBUTIONS.
On the Initial Distribution Date (or on any other
date on which distributions for any particular Class (or group of Classes in the
case of Class 4) of Claims are made pursuant to the Plan by the Liquidation
Trust), and in connection with making all distributions required to be made on
any such date under the Plan, the Liquidation Trust (under the Sale Option) or
the Reorganized Stand Alone Debtors (under the Stand Alone Option) shall
establish, for record keeping purposes only, a separate Disputed Claim reserve
on account of
62
distributions of Cash for each of the relevant Classes (or group of Classes in
the case of Class 4), as necessary pursuant to the Plan.
(b) ESTABLISHMENT OF THE STAND ALONE VOTING
TRUST FOR NEW COMMON STOCK AND NEW WARRANT
DISTRIBUTION.
Under the Stand Alone Option, on the Effective Date,
there shall be established the Stand Alone Voting Trust pursuant to the Stand
Alone Voting Trust Agreement. The purpose of the Stand Alone Voting Trust shall
be to hold the New Common Stock and New Warrants, if applicable, in reserve for
Disputed Claims or Interests for each of the relevant Classes (or group of
Classes in the case of Class 4), as necessary pursuant to the Plan. Pursuant to
the Stand Alone Voting Trust Agreement, there will be three (3) independent and
disinterested Persons designated as the Stand Alone Voting Trustees by the
Creditors' Committee with the consent of the Debtors and Berkshire, whose
approval shall not be unreasonably withheld, and identified in the Plan
Supplement; provided, however, that an outstanding Fee Claim shall not render a
Person ineligible to serve as a Stand Alone Voting Trustee. The Reorganized
Stand Alone Debtors shall be responsible for and shall indemnify the Stand Alone
Voting Trust for any reasonable costs of administration, including, without
limitation, the payment of fees earned by the Stand Alone Voting Trustees under
the Stand Alone Voting Trust Agreement and reasonable professional costs. Upon
allowance of any Disputed Claim or Interest for which New Common Stock or New
Warrants is held in the Stand Alone Voting Trust, an appropriate amount of such
New Common Stock or New Warrants shall promptly be released to the Reorganized
Stand Alone Debtors for distribution to the Holder of the Allowed Claim or
Interest pursuant to the terms of the Plan.
(c) AMOUNTS TO BE RESERVED.
The Liquidation Trust and/or the Stand Alone Voting
Trust shall reserve the Ratable proportion of all Cash, New Common Stock, New
Warrants or other property allocated for distribution on account of each
Disputed Claim based upon the asserted amount of each such Disputed Claim, or
such lesser amount as may be agreed to by the Holder of the Claim on one hand
and the Liquidation Trust or the Stand Alone Voting Trust on the other hand, as
applicable, or as may otherwise be determined by order of the Bankruptcy Court.
All Cash or other property allocable to the relevant Class (or group of Classes
in the case of Class 4) hereunder shall be distributed by the Liquidation Trust
to the relevant Disputed Claim reserve on the Initial Distribution Date (or such
other date on which distributions for any particular Class of Claims are made
pursuant to the Plan). All New Common Stock or New Warrants allocable to the
relevant Class (or group of Classes in the case of Class 4) hereunder shall be
distributed by the Stand Alone Voting Trustees to the Stand Alone Voting Trust
on the Initial Distribution Date (or such other date on which distributions for
any particular Class of Claims are made pursuant to the Plan). To the extent
that the property placed in a Disputed Claim reserve consists of Cash, that Cash
shall be deposited in an interest-bearing account at a qualified institution,
consistent with the Liquidation Trust Agreement.
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(d) DISTRIBUTION.
Payments on any Disputed Claim that becomes an
Allowed Claim shall be distributed on the first Quarterly Distribution Date
after the Claim is Allowed. Distributions shall be made only to the extent of
the aggregate distributions that the Holder of any such Allowed Claim would have
received had such Claim been Allowed as of the Effective Date (less any taxes
paid with respect to amounts held in the Disputed Reserves). No interest shall
accrue or be paid on the unpaid amount of any distribution paid on a Quarterly
Distribution Date. Distributions to each Holder of a Disputed Claim that has
become an Allowed Claim (and to the extent that the holder of the Disputed Claim
has not received prior distributions on account of that Claim) shall be made in
accordance with the provisions of the Plan governing the Class (or group of
Classes in the case of Class 4) of Claims in which the Claim is classified.
(e) TERMINATION OF DISPUTED CLAIM RESERVE OR
STAND ALONE VOTING TRUST.
Each Disputed Claim reserve shall be closed and
extinguished by the Liquidation Trustee when all distributions and other
dispositions of Cash or other property required to be made under the Plan have
been made. Upon closure of a Disputed Claim reserve, all Cash or other property
held in that Disputed Claim Reserve shall revest in and become the property of
the Liquidation Trust. The Stand Alone Voting Trust shall be closed and
extinguished by the Stand Alone Voting Trustees when all distributions of New
Common Stock and New Warrants required to be made under the Plan have been made.
(f) LIMITATION OF LIABILITY FOR FUNDING THE
DISPUTED CLAIM RESERVE.
Except as expressly set forth in the Plan, the
Liquidation Trust shall have no duty to fund the Disputed Reserves.
8.3 TRANSMITTAL OF DISTRIBUTIONS AND NOTICES.
Any property or notice which a Person is or becomes entitled
to receive pursuant to the Plan may be delivered by regular mail, postage
prepaid, in an envelope addressed to that Person's Distribution Address.
Property distributed in accordance with this Section shall be deemed delivered
to such Person regardless of whether such property is actually received by that
Person.
A Holder of a Claim or Interest may designate a different
Distribution Address by notifying, after the Effective Date, the Liquidation
Trustee and prior to the Effective Date, the Debtors, of that address in
writing. Any change of Distribution Address must be provided to the Liquidation
Trustee or Debtors, as applicable, by registered mail in order to be effective.
Such notification shall be effective only upon receipt.
Distributions and Notices to the Holders of REMIC Guarantee
Claims shall be delivered by regular mail, postage prepaid, in an envelope
addressed to JPMorgan Chase Bank, 4
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New York Plaza, 15th Floor, New York, NY 10004, Attention: James R. Lewis, Esq.,
Tel: (212) 623-6759, Fax: (212) 623-6165.
8.4 UNCLAIMED DISTRIBUTIONS.
Unclaimed Property shall be forfeited by the Holder entitled
thereto, whereupon all rights, titles and interests in and to the Unclaimed
Property shall immediately and irrevocably revest in the Estate of the
Reorganized Debtors or the Liquidation Trust, as appropriate, the Holder of the
Allowed Claim previously entitled to such Unclaimed Property shall cease to be
entitled thereto, and such Unclaimed Property shall be Ratably distributed to
the other Holders of Allowed Claims in the same Class (or group of Classes). A
Claim and the Unclaimed Property distributed on account of such Claim shall not
escheat to any federal, state or local government or other entity by reason of
the failure of its Holder to claim a distribution in respect of such Claim.
8.5 SETOFFS.
The Liquidation Trust (under the Sale Option) or the
Reorganized Stand Alone Debtors (under the Stand Alone Option) may, but shall
not be required to, setoff against any Claim (for purposes of determining the
allowed amount of such Claim on which distribution shall be made), any claims of
any nature whatsoever that the Debtors may have against the claimant, but
neither the failure to do so nor the allowance of any Claim hereunder shall
constitute a waiver or release by the Debtors of any such claim the Debtors may
have against such claimant.
8.6 WITHHOLDING TAXES AND EXPENSES OF DISTRIBUTION.
Any federal, state or local withholding taxes or other amounts
required to be withheld under applicable law shall be deducted from
distributions hereunder. All Holders of Claims or Interests shall be required to
provide any information necessary to effect the withholding of such taxes. In
addition, all distributions under the Plan shall be net of the actual and
reasonable costs of making such distributions.
8.7 ALLOCATION OF PLAN DISTRIBUTIONS BETWEEN PRINCIPAL AND
INTEREST.
To the extent that any Allowed Claim entitled to a
distribution under the Plan is comprised of indebtedness and accrued but unpaid
interest thereon, such distribution shall, for federal income tax purposes, be
allocated to the principal amount of the Claim first and then, to the extent the
consideration exceeds the principal amount of the Claim, to the portion of such
Claim representing accrued but unpaid interest.
8.8 DISPUTED IDENTITY OF HOLDER.
If any dispute arises as to the identity of a Holder of an
Allowed Claim who is to receive any distribution, the Liquidation Trustee may,
in lieu of making such distribution to such Person, make such distribution into
an escrow account until the disposition thereof shall be
65
determined by the Bankruptcy Court order or by written agreement among the
interested parties to such dispute; provided, however, that if the dispute
remains unresolved by Final Order for more than ninety (90) days after the
relevant Distribution Date, the property which is the subject of the dispute
shall irrevocably become Unclaimed Property.
8.9 TRANSFERS OF CLAIMS.
As of the close of business on the Record Date, the various
transfer registers for each of the Classes of Claims or Interests as maintained
by the Debtors, or their respective agents, shall be deemed closed, and there
shall be no further changes in the Holders of record of any of the Claims or
Interests. No party, including but not limited to the Debtors, the Liquidation
Trust (under the Sale Option) and the Reorganized Stand Alone Debtors (under the
Stand Alone Option), shall have any obligation to recognize any transfer of the
Claims or Interests occurring after the Record Date unless notice of the
transfer of such Claim or Interest, in form and substance satisfactory to the
Debtors, the Liquidation Trust (under the Sale Option) or the Reorganized Stand
Alone Debtors (under the Stand Alone Option), as appropriate, shall have been
received by the Debtors or the Liquidation Trustee, as appropriate, prior to the
Record Date. Only those Holders of record stated on the transfer ledgers as of
the close of business on the Record Date, to the extent applicable, shall be
entitled to be recognized for all purposes hereunder.
8.10 METHOD OF CASH DISTRIBUTIONS.
Any Cash payment to be made by the Liquidation Trust (under
the Sale Option) or the Reorganized Stand Alone Debtors (under the Stand Alone
Option) pursuant to the Plan may be made, at the sole discretion of the
Liquidation Trust (under the Sale Option) or the Reorganized Stand Alone Debtors
(under the Stand Alone Option), by draft, check, wire transfer, or as otherwise
required or provided in any relevant agreement or applicable law. Any payment or
distribution due on a day other than a Business Day shall be made, without
interest, on the next Business Day.
8.11 DE MINIMIS DISTRIBUTIONS.
No Cash payment in an amount less than fifty dollars ($50.00)
shall be made by the Liquidation Trust (under the Sale Option) or the
Reorganized Stand Alone Debtors (under the Stand Alone Option) to any Holder of
a Claim or Interest unless a request therefor is made in writing to the
Liquidation Trust (under the Sale Option) or the Reorganized Stand Alone Debtors
(under the Stand Alone Option) prior to one (1) year after the Effective Date.
Cash that otherwise would be payable under the Plan but for this Section 8.11
shall be reserved and distributed with future distributions, if any, that,
collectively, exceed fifty dollars ($50.00).
8.12 NO DISTRIBUTION IN EXCESS OF ALLOWED AMOUNT OF CLAIM.
Notwithstanding anything to the contrary herein, no Holder of
an Allowed Claim shall receive in respect of such Claim any distribution in
excess of the allowed amount of such Claim.
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8.13 EXEMPTION FROM CERTAIN TRANSFER TAXES.
Pursuant to section 1146(c) of the Bankruptcy Code: (a) the
issuance, transfer or exchange of any securities, instruments or documents; (b)
the creation or release of any other Lien, mortgage, deed of trust or other
security interest; or (c) the making or assignment of any lease or sublease or
the making or delivery of any deed or other instrument of transfer under,
pursuant to, in furtherance of or in connection with the Plan or the sale of any
assets of the Debtors or the Estates, including the Purchase Agreement, any
deeds, releases, bills of sale or assignments executed in connection with the
Plan or the Confirmation Order, shall not be subject to any stamp tax, transfer
tax, intangible tax, recording fee, or similar tax, charge or expense to the
fullest extent provided for under section 1146(c) of the Bankruptcy Code.
ARTICLE IX.
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
9.1 ASSUMPTION OR REJECTION OF EXECUTORY CONTRACTS AND UNEXPIRED
LEASES.
Under the Sale Option, on the Effective Date, and to the
extent permitted by applicable law, (a) any and all executory contracts and
unexpired leases of any Debtor that are listed on Sections 1.09(a) or 1.09(b) of
Sellers' Disclosure Schedule as being assumed and assigned to the Buyer pursuant
to the Purchase Agreement shall be deemed assumed and assigned to the Buyer
pursuant to the Plan in accordance with the Purchase Agreement and (b) (i) any
and all executory contracts or unexpired leases which are the subject of
separate motions filed pursuant to section 365 of the Bankruptcy Code by the
Debtors prior to the commencement of the Confirmation Hearing, (ii) such
contracts or leases as are listed on the Executory Contract Schedule filed by
the Debtors (which may be modified by the Debtors, the Reorganized Sale Debtors,
the Reorganized Stand Alone Debtors or Liquidation Trust up to sixty (60) days
after the Effective Date), (iii) the Servicing Agreements, and (iv) any and all
executory contracts or unexpired leases assumed prior to entry of the
Confirmation Order shall be deemed assumed pursuant to the provisions of section
365 and section 1123 of the Bankruptcy Code as of the Effective Date. All other
executory contracts and unexpired leases of each of the Debtors shall be deemed
rejected in accordance with the provisions of section 365 and section 1123 of
the Bankruptcy Code. The Confirmation Order shall constitute an order of the
Court approving all such assumption and assignments and rejections pursuant to
section 365 of the Bankruptcy Code.
Under the Stand Alone Option, on the Effective Date, and to
the extent permitted by applicable law, (a) any and all executory contracts or
unexpired leases which are the subject of separate motions filed pursuant to
section 365 of the Bankruptcy Code by the Debtors prior to the commencement of
the Confirmation Hearing, (b) such contracts or leases as are listed on the
Executory Contract Schedule filed by the Debtors, which may be modified by the
Debtors, the Reorganized Sale Debtors, the Reorganized Stand Alone Debtors or
Liquidation Trust up to sixty (60) days after the Effective Date, and (c) any
and all executory contracts or unexpired leases rejected prior to entry of the
Confirmation Order shall be rejected pursuant to the provisions of
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section 365 and section 1123 of the Bankruptcy Code as of the Effective Date, if
not already rejected as of a prior date. All other executory contracts and
unexpired leases of each of the Debtors shall be deemed assumed in accordance
with the provisions of section 365 and section 1123 of the Bankruptcy Code as of
the Effective Date. Contracts or leases entered into after the Petition Date
will be performed by the Reorganized Debtors in the ordinary course of their
businesses. The Confirmation Order shall constitute an order of the Court
approving all such assumption and assignments and rejections pursuant to section
365 of the Bankruptcy Code.
9.2 BAR DATE FOR REJECTION DAMAGES.
If the rejection of any executory contract or unexpired lease
under the Plan gives rise to a Claim by the non-Debtor party or parties to such
contract or lease, such Claim, to the extent that it is timely filed and is an
Allowed Claim, shall be classified in Class 4E; provided, however, that the
Unsecured Claim arising from such rejection shall be forever barred and shall
not be enforceable against the Debtors, the Reorganized Sale Debtors, the
Reorganized Stand Alone Debtors, the Liquidation Trust, their successors or
properties, unless a proof of such Claim is filed and served on the Liquidation
Trust (under the Sale Option) or the Reorganized Stand Alone Debtors (under the
Stand Alone Option) and the Claims Agent within thirty (30) days after the date
of notice of the entry of the order of the Bankruptcy Court rejecting the
executory contract or unexpired lease which may include, if applicable, the
Confirmation Order.
9.3 PROCEDURES FOR THE DETERMINATION OF CURE AMOUNTS.
Unless otherwise noted in the Executory Contract Schedule or
the Purchase Agreement, or any schedule thereto, the cure amount pursuant to
section 365(b)(1) of the Bankruptcy Code for any executory contracts or
unexpired leases shall be $0.00. Any dispute regarding (i) the nature or amount
of any payment necessary to satisfy the listed cure amount under the contract or
lease to be assumed or assumed and assigned, (ii) the ability of the Debtors,
the Buyer or any other assignee, as the case may be, to provide "adequate
assurance of future performance," within the meaning of section 365 of the
Bankruptcy Code, under the contract or lease to be assumed or assumed and
assigned or (iii) any other matter pertaining to assumption or assumption and
assignment under section 365 of the Bankruptcy Code shall be forever barred and
shall not be enforceable against the Debtors, the Liquidation Trust, the
Reorganized Sale Debtor, the Reorganized Stand Alone Debtors, their successors
or properties, unless a motion or objection, as appropriate, is filed and served
on the Debtors (prior to the Effective Date), the Liquidation Trust and the
Buyer (under the Sale Option) or the Reorganized Stand Alone Debtors (under the
Stand Alone Option) within thirty (30) days after the date of notice of proposed
assumption or assumption and assignment, or such later date as allowed by the
Bankruptcy Court. The Liquidation Trust (under the Sale Option) or the
Reorganized Stand Alone Debtors (under the Stand Alone Option), and not the
Buyer, shall be responsible for paying any cure costs associated with the
assumption and assignment of any executory contract or unexpired lease assumed
and assigned to the Buyer, whether pursuant to the Plan or pursuant to any other
order of the Bankruptcy Court. The Liquidation Trust (under the Sale Option) and
the Reorganized Stand Alone Debtors (under the Stand Alone Option) shall have
the right to dispute any asserted cure amounts, including any amounts noted in
the Executory Contract Schedule or the Purchase Agreement.
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ARTICLE X.
DISPUTED, CONTINGENT AND UNLIQUIDATED CLAIMS AND INTERESTS
10.1 OBJECTIONS TO CLAIMS AND INTERESTS.
The Claims/Interests Objection Deadline shall be six (6)
months after the Effective Date; provided, however, that the last day for filing
Avoidance Actions against a Holder of a Claim or Interest shall be November 15,
2004. Notwithstanding any of the foregoing, the Reorganized Stand Alone Debtors
or the Liquidation Trustee, as appropriate, may request from the Bankruptcy
Court an extension of the Claims/Interests Objection Deadline, which such
extended date shall become the new Claims/Interests Objection Deadline.
The Liquidation Trust (under the Sale Option) or the
Reorganized Stand Alone Debtors (under the Stand Alone Option) have the
exclusive responsibility for reviewing and objecting to the allowance of any
Claim or Interest filed in the Chapter 11 Cases. The Liquidation Trust or the
Reorganized Stand Alone Debtors, as appropriate, shall have until the
Claims/Interests Objection Deadline to file objections to the Claims and
Interest in the Chapter 11 Cases. All objections shall be litigated to a Final
Order; provided, however, that the Liquidation Trust or the Reorganized Stand
Alone Debtors, as the case may be, may compromise and settle any objections to
Claims or Interests, subject to the provisions of this Article X without further
order of the Bankruptcy Court; and further provided, however, that distributions
may be made to a Holder of a Claim or Interest prior to the expiration of the
Claims/Interests Objection Deadline if the Liquidation Trustee or the
Reorganized Stand Alone Debtors, as appropriate, reasonably believes that no
basis exists for objection to such Holder's Claim or Interest. Notwithstanding
the foregoing, nothing in this Plan shall be interpreted to operate as a waiver
or release of (x) any right that any party in interest may have to object to (a)
any Claim or Interest through the Effective Date or (b) any Fee Claim after the
Effective Date; or (y) any objection to Claims or Interests pending as of the
Effective Date, regardless of whether such objection was brought by the Debtors
or any other party in interest.
Objections to Claims or Interests shall not be subject to any
defense, including, without limitation, res judicata, estoppel or any other
defense because of the confirmation of the Plan and all such rights are
expressly preserved and reserved by the Plan for the Debtors, their Estates, the
Liquidation Trust (under the Sale Option) and the Reorganized Stand Alone
Debtors (under the Stand Alone Option). Additionally, the rights of the
Liquidation Trust (under the Sale Option) or the Reorganized Stand Alone Debtors
(under the Stand Alone Option) to amend, modify or supplement any objection to a
particular Claim or Interest to include relief pursuant to section 502(d) of the
Bankruptcy Code are hereby preserved until sixty (60) days after the entry of a
Final Order against a Holder of such Claim.
10.2 ESTIMATION OF CLAIMS OR INTERESTS.
Through the Claims/Interests Objection Deadline, the
Liquidation Trust (under the Sale Option) or the Reorganized Stand Alone Debtors
(under the Stand Alone Option) may request that the Bankruptcy Court enter an
Estimation Order fixing the value of, pursuant to
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section 502(c) of the Bankruptcy Code, any Disputed Claim or Interest,
regardless of whether a Debtor has previously objected to such Claim or Interest
or whether the Bankruptcy Court has ruled on any such objection, and the
Bankruptcy Court will retain jurisdiction to estimate any Disputed Claim or
Interest at any time during litigation concerning any objection to any Disputed
Claim or Interest, including during the pendency of any appeal relating to any
such objection. In the event that the Bankruptcy Court enters an Estimation
Order estimating any Disputed Claim or Interest, the amount of such estimation
will constitute either the allowed amount of such Claim or Interest or a maximum
limitation on such Claim or Interest, as determined by the Bankruptcy Court. If
the estimated amount constitutes a maximum limitation on such Claim or Interest,
the Liquidation Trust or the Reorganized Stand Alone Debtors (as appropriate)
may elect to pursue any supplemental proceedings to object to any ultimate
payment on such Claim or Interest. All of the aforementioned Claims and
Interests objection, estimation and resolution procedures are cumulative and are
not necessarily exclusive of one another. Claims or Interests may be estimated
and thereafter resolved by any mechanism permitted under the Bankruptcy Code or
the Plan.
10.3 AMENDMENTS TO CLAIMS OR INTERESTS.
After the Confirmation Date, a Claim or Interest may not be
filed or amended without the authorization of the Bankruptcy Court and, even
with such Bankruptcy Court authorization, may be amended by the Holder of such
Claim or Interest solely to decrease, but not to increase, unless otherwise
provided by the Bankruptcy Court, the amount or priority.
10.4 AUTHORITY TO SETTLE DISPUTED CLAIMS OR INTERESTS.
From and after the Effective Date, the Liquidation Trust
(under the Sale Option) or the Reorganized Stand Alone Debtors (under the Stand
Alone Option) shall be authorized with respect to those Claims or Interests
which are not allowed by Final Order of the Bankruptcy Court, pursuant to
Bankruptcy Rule 9019 and section 105(a) of the Bankruptcy Code, to compromise
and settle Disputed Claims with a Disputed Amount in excess of $25,000.00, upon
Bankruptcy Court approval of such settlement. Notwithstanding any prior order of
the Bankruptcy Court or the provisions of Bankruptcy Rule 9019, the Liquidation
Trust or the Reorganized Stand Alone Debtors, as appropriate, may settle or
compromise any Disputed Claim with a Disputed Amount of $25,000.00 or less
without approval of the Bankruptcy Court. This provision shall not prohibit the
surrender of REMIC Certificates or interests therein to the Liquidation Trust
(under the Sale Option) or the Reorganized Sale Debtors (under the Stand Alone
Option) in connection with the resolution of Disputed Class 4C Claims.
10.5 NO RECOURSE.
Notwithstanding that the allowed amount of any particular
Disputed Claim is reconsidered under the applicable provisions of the Bankruptcy
Code and Bankruptcy Rules or is allowed in an amount for which there is
insufficient value in the relevant fund or reserve to provide a recovery equal
to that received by other Holders of Allowed Claims in the relevant Class, no
Claim or Interest Holder shall have recourse to the Debtors, the Liquidation
Trust, the Reorganized Sale Debtors, the Reorganized Stand Alone Debtors, the
Creditors' Committee or
70
any member or ex officio member thereof, any of the Interested Party
Professionals, the Holder of any other Claim or Interest, or any of their
respective property. However, nothing in the Plan shall modify any right of a
Holder of a Claim or Interest under section 502(j) of the Bankruptcy Code. THUS,
THE BANKRUPTCY COURT'S ENTRY OF AN ESTIMATION ORDER MAY LIMIT THE DISTRIBUTION
TO BE MADE ON INDIVIDUAL DISPUTED CLAIMS OR INTERESTS, REGARDLESS OF THE AMOUNT
FINALLY ALLOWED ON ACCOUNT OF SUCH DISPUTED CLAIMS OR INTERESTS.
ARTICLE XI.
ADMINISTRATIVE PROVISIONS
11.1 RETENTION OF JURISDICTION.
Notwithstanding confirmation of the Plan or occurrence of the
Effective Date, the Bankruptcy Court shall retain exclusive jurisdiction over
all matters arising out of or related to the Chapter 11 Cases and the Plan to
the fullest extent legally permissible, including, without limitation, for the
following purposes:
(a) to determine the allowance, classification, or
priority of Claims upon objection by the Debtors, the
Creditors' Committee, the Liquidation Trust or the
Liquidation Trustee, or any other party in interest
entitled to file an objection, and the validity,
extent, priority and nonavoidability of consensual
and nonconsensual Liens and other encumbrances;
(b) to issue injunctions or take such other actions or
make such other orders as may be necessary or
appropriate to restrain interference with the Plan or
its execution or implementation by any Person, to
construe and to take any other action to enforce and
execute the Plan, the Confirmation Order, or any
other order of the Bankruptcy Court, to issue such
orders as may be necessary for the implementation,
execution, performance and consummation of the Plan
and all matters referred to herein, and to determine
all matters that may be pending before the Bankruptcy
Court in the Chapter 11 Cases on or before the
Effective Date with respect to any Person;
(c) to protect the property of the Estates, the
Reorganized Sale Debtors, the Reorganized Stand Alone
Debtors, Liquidation Trust or the Buyer as the case
may be, including Litigation Claims, from claims
against, or interference with, such property,
including actions to quiet or otherwise clear title
to such property or to resolve any dispute concerning
Liens, security interests or encumbrances on any
property of The Debtors, the Estates, the Liquidation
Trust, the Reorganized Sale Debtors or the
Reorganized Stand Alone Debtors;
(d) to determine any and all applications for allowance
of Fee Claims;
71
(e) to determine any Priority Tax Claims, Priority
Non-Tax Claims, Administrative Claims or any other
request for payment of Claims, including both fees
and expenses, entitled to priority under section
507(a) of the Bankruptcy Code;
(f) to resolve any dispute arising under or related to
the implementation, execution, consummation or
interpretation of the Plan and the making of
distributions hereunder, including any and all
disputes regarding the Purchase Agreement, as
provided in section 10.13 of the Purchase Agreement;
(g) to determine any and all motions related to the
rejection, assumption or assignment of executory
contracts or unexpired leases, or to determine any
motion to reject an executory contract or unexpired
lease pursuant to Article IX of the Plan;
(h) except as otherwise provided herein, to determine all
applications, motions, adversary proceedings,
contested matters, actions, and any other litigated
matters instituted in and prior to the closing of the
Chapter 11 Cases, including any remands;
(i) to enter a Final Order closing the Chapter 11 Cases;
(j) to modify the Plan under section 1127 of the
Bankruptcy Code, remedy any defect, cure any
omission, or reconcile any inconsistency in the Plan
or the Confirmation Order so as to carry out its
intent and purposes;
(k) to issue such orders in aid of consummation of the
Plan and the Confirmation Order notwithstanding any
otherwise applicable non-bankruptcy law, with respect
to any Person, to the full extent authorized by the
Bankruptcy Code;
(l) to determine any tax liability pursuant to section
505 of the Bankruptcy Code;
(m) to enter and implement such orders as may be
appropriate in the event the Confirmation Order is
for any reason stayed, revoked, modified or vacated;
(n) to resolve any disputes concerning whether a Person
had sufficient notice of the Chapter 11 Cases, the
applicable Claims bar date, the hearing to consider
approval of the Disclosure Statement or the
Confirmation Hearing or for any other purpose;
(o) to resolve any dispute or matter arising under or in
connection with any order of the Bankruptcy Court
entered in the Chapter 11 Cases;
72
(p) to authorize sales of assets as necessary or
desirable and resolve objections, if any, to such
sales;
(q) to hear and resolve Litigation Claims;
(r) to resolve any disputes concerning any release,
discharge, injunction, exculpation or other waivers
and protections provided in the Plan;
(s) to approve, if necessary, any distributions, or
objections thereto, under the Plan;
(t) to approve any Claims settlement entered into or
offset exercised by the Liquidation Trust and the
Liquidation Trustee;
(u) to resolve any dispute or matter arising under or in
connection with the Liquidation Trust;
(v) to oversee any dispute concerning improper or
excessive draws under letters of credit issued for
the account of the Debtors; and
(w) to determine such other matters, and for such other
purposes, as may be provided in the Confirmation
Order or as may be authorized under provisions of the
Bankruptcy Code.
If the Bankruptcy Court abstains from exercising or declines
to exercise jurisdiction, or is otherwise without jurisdiction over any matter
arising out of the Chapter 11 Cases, including the matters set forth in this
Article XI, this Article shall not prohibit or limit the exercise of
jurisdiction by any other court having competent jurisdiction with respect to
such matter. Notwithstanding any provisions of the Plan, the Bankruptcy Court
shall have concurrent but not exclusive jurisdiction over the prosecution of
Causes of Actions, including but not limited to Avoidance Actions.
11.2 INTENTIONALLY OMITTED.
11.3 AMENDMENTS.
(a) PRECONFIRMATION AMENDMENT.
The Debtors may modify the Plan at any time prior to the entry
of the Confirmation Order, provided that (i) the Plan, as modified, and the
Disclosure Statement pertaining thereto meet applicable Bankruptcy Code
requirements and (ii) the Creditors' Committee, Berkshire and the Buyer (under
the Sale Option) consent to such modifications, such consent not being
unreasonably withheld.
73
(b) POSTCONFIRMATION/PRECONSUMMATION AMENDMENT NOT
REQUIRING RESOLICITATION.
After the entry of the Confirmation Order and before
substantial consummation of the Plan, the Debtors may modify the Plan to remedy
any defect or omission 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; (ii) the Creditors'
Committee, Berkshire and the Buyer (under the Sale Option) consent, such consent
not being unreasonably withheld; and (iii) such modification shall not
materially and adversely affect the interests, rights, treatment or
distributions of any Class of Allowed Claims or Interests under the Plan. Any
waiver under Section 5.3 hereof shall not be considered to be a modification of
the Plan.
(c) POSTCONFIRMATION/PRECONSUMMATION AMENDMENT REQUIRING
RESOLICITATION.
After the Confirmation Date and before substantial
consummation of the Plan, the Debtors may modify the 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) the Plan as modified complies with the Bankruptcy Code and Bankruptcy
Rules; (iv) the Debtors comply with section 1125 of the Bankruptcy Code with
respect to the Plan as modified; and (v) the Creditors' Committee, Berkshire and
the Buyer (under the Sale Option), such consent not being unreasonably withheld.
11.4 SEVERABILITY OF PLAN PROVISIONS.
If, prior to the Confirmation Date, any term or provision of
the Plan is determined by the Bankruptcy Court to be invalid, void or
unenforceable, the Bankruptcy Court will have the power to alter and interpret
such term or provision and make it valid or enforceable to the maximum extent
practicable, consistent with the original purpose of the term or provision held
to be invalid, void or unenforceable, and such term or provision will then be
applicable as altered or interpreted. Notwithstanding any such holding,
alteration or interpretation, the remainder of the terms and provisions of the
Plan will remain in full force and effect and will in no way be affected,
impaired or invalidated by such holding, alteration or interpretation. The
Confirmation Order will constitute a judicial determination and will provide
that each term and provision of the Plan, as it may have been altered or
interpreted in accordance with the foregoing, is valid and enforceable pursuant
to its terms.
11.5 SUCCESSORS AND ASSIGNS.
The rights, benefits and obligations of any Person named or
referred to in the Plan shall be binding on, and shall inure to the benefit of,
the heirs, executors, administrators, successors and/or assigns of such Person.
74
11.6 EFFECTUATING DOCUMENTS AND FURTHER TRANSACTIONS.
Each Debtor, each Reorganized Sale Debtor, each Reorganized
Stand Alone Debtor, and the Liquidation Trust shall be authorized to execute,
deliver, file, or record such documents, contracts, instruments, and other
agreements and take such other actions as may be reasonably necessary to
effectuate and further evidence the terms and conditions of the Plan.
11.7 PLAN SUPPLEMENT.
The Plan Supplement comprised of, among other things, the
forms of the documents related to the Amended Certificates of Incorporation,
Amended Bylaws, the Liquidation Trust Agreement, the Stand Alone Voting Trust
Agreement, the Executory Contract Schedule, the Exit Facility Agreement and, to
the extent necessary to implement the Plan, proposed amendments to the
Reorganized Sale Debtors' organizational documents, to the extent not filed
simultaneously with the Plan and Disclosure Statement, shall be filed with the
Bankruptcy Court at least five (5) Business Days prior to the deadline
established for voting on this Plan. Upon its filing, the Plan Supplement may be
inspected in the offices of the Clerk of the Bankruptcy Court during normal
business hours. A copy of the Plan Supplement shall be mailed to the Creditors'
Committee, and any Holder of a Claim or Interest that makes a specific written
request for such Plan Supplement to the Debtors. The documents contained in the
Plan Supplement shall be approved by the Bankruptcy Court pursuant to the
Confirmation Order.
11.8 CONFIRMATION ORDER AND PLAN CONTROL.
To the extent the Confirmation Order and/or this Plan is
inconsistent with the Disclosure Statement, any other agreement entered into
between or among any Debtors, or any of them and any third party, the Plan
controls the Disclosure Statement and any such agreements, and the Confirmation
Order controls the Plan, the Disclosure Statement and any such agreements;
provided, however, that the Purchase Agreement is not controlled by the Plan,
the Disclosure Statement or anything contained in the Plan Supplement.
11.9 PAYMENT OF STATUTORY FEES.
All fees payable pursuant to section 1930 of title 28 of the
United States Code as Administrative Fees under the Plan, as determined by the
Bankruptcy Court at the Confirmation Hearing, shall be paid in Cash on the
Effective Date, or as soon as reasonably practicable thereafter, and neither the
Debtors, their Estates, the Reorganized Sale Debtors, the Reorganized Stand
Alone Debtors nor the Liquidation Trust shall thereafter be liable for the
payment of additional fees under section 1930 of title 28 of the United States
Code other than with respect to the consolidated Chapter 11 Case which will
continue after the Effective Date.
11.10 WITHDRAWAL OF PLAN.
The Debtors reserve the right, subject to the Purchase
Agreement, in the exercise of their reasonable discretion, to revoke and
withdraw or to modify the Plan at any time prior to
75
the Confirmation Date or, if the Debtors are for any reason unable to consummate
the Plan after the Confirmation Date, at any time up to the Effective Date. If
the Debtors revoke or withdraw the Plan, (a) nothing contained in the Plan shall
be deemed to constitute a waiver or release of any claims by or against the
Debtors or the Creditors' Committee or to prejudice in any manner the rights of
the Debtors, the Creditors' Committee or any Person in any further proceeding
involving the Debtors or the Creditors' Committee and (b) the result shall be
the same as if the Confirmation Order were not entered, the Plan was not filed
and the Effective Date did not occur.
11.11 PAYMENT DATES.
Whenever any payment to be made under the Plan is due on a day
other than a Business Day, such payment will instead be made, without interest,
on the next Business Day or as soon thereafter as practicable.
11.12 NOTICES.
Any notice, request or demand given or made under this Plan or
under the Bankruptcy Code or the Bankruptcy Rules shall be in writing and shall
be hand delivered or sent by a reputable overnight courier service, and shall be
deemed given when received at the following addresses whether hand delivered or
sent by overnight courier service:
IF TO THE DEBTORS: IF TO THE CREDITORS' COMMITTEE:
MORRIS, NICHOLS, ARSHT & TUNNELL MCCARTER & ENGLISH, LLP
Robert J. Dehney, Esq. William F. Taylor, Jr. , Esq.
Derek C. Abbott, Esq. 919 Market Street, Suite 1800
Daniel B. Butz, Esq. Wilmington, Delaware 19801
1201 North Market Street Facsimile: (302) 984-6399
P.O. Box 1347
Wilmington, Delaware 19899-1347
Facsimile: (302) 658-3989
- and -
- and -
RAYBURN COOPER & DURHAM, P.A.
C. Richard Rayburn, Jr. , Esq. KING & SPALDING LLP
Albert F. Durham, Esq. Robert J. Stark, Esq.
Patricia B. Edmondson, Esq. 1185 Avenue of the Americas
1200 Carillon, 227 West Trade Street New York, New York 10036
Charlotte, North Carolina 28202-1675 Facsimile: (212) 556-2222
Facsimile: (704) 377-1897
76
IF TO THE BUYER OR BERKSHIRE:
CLAYTON HOMES, INC.
Kevin Clayton
500 Alcoa Trail
P.O. Box 9790
Maryville, TN 37804
Facsimile:(865) 380-3750
-and-
MUNGER, TOLLES & YOUNG CONAWAY
OLSON LLP STARGATT & TAYLOR, LLP
Thomas Walper, Esq. Michael R. Nestor, Esq.
355 S. Grand Avenue The Brandywine Building
Los Angeles, CA 90071 1000 West Street, 17th Floor
Facsimile: (213) 687-3702 Wilmington, DE 19801
Facsimile: (302) 571-1253
Notwithstanding anything to the contrary provided herein, all
notices concerning this Plan shall be served upon the entities prescribed and in
the manner prescribed under the Bankruptcy Code and the Bankruptcy Rules.
11.13 NO ADMISSIONS.
Notwithstanding anything herein to the contrary, nothing
contained in the Plan shall be deemed as an admission by the Debtors with
respect to any matter set forth herein including, without limitation, liability
on any Claim or the propriety of any Claims classification.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
77
ARTICLE XII.
CONFIRMATION REQUEST
The Debtors request confirmation of the Plan under section
1129(b) of the Bankruptcy Code.
Dated: February 6, 2004
NEW DIMENSION HOMES, INC.
By: /s/ Robert A. Smith
---------------------------------------
Name: Robert A. Smith
Title: Vice President
DREAM STREET COMPANY, LLC
By: /s/ Robert A. Smith
---------------------------------------
Name: Robert A. Smith
Title: Vice President
OAKWOOD SHARED SERVICES, LLC
By: /s/ Robert A. Smith
---------------------------------------
Name: Robert A. Smith
Title: Vice President
HBOS MANUFACTURING, LP
By: Oakwood Mobile Homes, Inc., General
Partner
By: /s/ Robert A. Smith
---------------------------------------
Name: Robert A. Smith
Title: Vice President
78
OAKWOOD MHD4, LLC
By: /s/ Robert A. Smith
---------------------------------------
Name: Robert A. Smith
Title: Vice President
OAKWOOD ACCEPTANCE
CORPORATION, LLC
By: /s/ Robert A. Smith
---------------------------------------
Name: Robert A. Smith
Title: Vice President
OAKWOOD HOMES CORPORATION
By: /s/ Robert A. Smith
---------------------------------------
Name: Robert A. Smith
Title: Executive Vice President
OAKWOOD MOBILE HOMES, INC.
By: /s/ Robert A. Smith
---------------------------------------
Name: Robert A. Smith
Title: Vice President
SUBURBAN HOME SALES, INC.
By: /s/ Robert A. Smith
---------------------------------------
Name: Robert A. Smith
Title: Vice President
79
FSI FINANCIAL SERVICES, INC.
By: /s/ Robert A. Smith
---------------------------------------
Name: Robert A. Smith
Title: Vice President
HOME SERVICE CONTRACT, INC.
By: /s/ Robert A. Smith
---------------------------------------
Name: Robert A. Smith
Title: Vice President
TRI-STATE INSURANCE AGENCY, INC.
By: /s/ Robert A. Smith
---------------------------------------
Name: Robert A. Smith
Title: Vice President
GOLDEN WEST LEASING, LLC
By: /s/ Randelle R.. Smith
---------------------------------------
Name: Randelle R. Smith
Title: Vice President
CREST CAPITAL, LLC
By: /s/ Randelle R. Smith
---------------------------------------
Name: Randelle R. Smith
Title: Vice President
80
PREFERRED HOUSING SERVICES, LP
By: Oakwood Mobile Homes, Inc., General
Partner
By: /s/ Robert A. Smith
---------------------------------------
Name: Robert A. Smith
Title: Vice President
- and -
MORRIS, NICHOLS, ARSHT & TUNNELL
/s/ Daniel B. Butz
------------------------------------------
Robert J. Dehney (No. 3578)
Derek C. Abbott (No. 3376)
Daniel B. Butz (No. 4227)
1201 North Market Street
P.O. Box 1347
Wilmington, Delaware 19899-1347
(302) 658-9200
- and -
RAYBURN COOPER & DURHAM, P.A.
C. Richard Rayburn, Jr.
Albert F. Durham
Patricia B. Edmondson
1200 Carillon, 227 West Trade Street
Charlotte, North Carolina 28202-1675
(704) 334-0891
81
EXHIBIT C
PROJECTED DISTRIBUTION ANALYSIS FOR A SALE TRANSACTION
OAKWOOD HOMES CORPORATION CREDITOR RECOVERY ANALYSIS
INTRODUCTION
The Recovery Analysis (the "Analysis") presents estimated recoveries to
claimants and equity interest holders following a confirmation of the Plan of
Reorganization (the "Plan") for Oakwood Homes Corporation and affiliated debtors
on a substantively consolidated basis ("Oakwood"). The Plan contemplates
consummation of either a sale of substantially all of Oakwood's assets to
Clayton Homes, Inc. ("Clayton") (the "Sale Transaction") pursuant to an Asset
Purchase Agreement or a stand-alone plan under which all pre-petition claims are
equitized. Because the closing date is uncertain and the Asset Purchase
Agreement contains provisions for purchase price adjustments, there is inherent
uncertainty in the sales proceeds assumption which is necessarily based on a
forecast of operating results. It should be recognized that cash has been
estimated as of March 31, 2004 and may vary due to 1) cash used or generated by
Oakwood through March 31, 2004 and 2) purchase price adjustments in accordance
with the Asset Purchase Agreement. The sales proceeds assumptions and other
estimates utilized in the Analysis are considered reasonable by management of
the Debtor, were reviewed by the committee and its professionals, and are
described below and in the attached Analysis.
BASIS OF PRESENTATION
The Analysis has been prepared on a consolidated basis estimated as of March 31,
2004 reflecting value of both the bankrupt and non-bankrupt entities. The March
31, 2004 date is assumed to be the closing date of the Sale Transaction. Many
factors, including a change in the closing date could have a substantial effect
on the sales proceeds assumption. Upon the closing, substantially all net
proceeds and unsold assets, administrative claims, pre-petition claims,
avoidance actions and remaining employees would be transferred to the
Liquidating Trust.
POST CLOSING OPERATIONS
There are significant assumptions in the estimated costs of post-closing wind
down operations. In accordance with the Asset Purchase Agreement, the
Liquidating Trust employees are forecast to remain in the old Oakwood Homes
headquarters for a six-month period with free rent and complete access to
records and computer systems.
Following the six-month period the Liquidating Trust is forecast to acquire its
own space and equipment to continue functioning through the distribution period.
It is assumed the Liquidating Trust would expend approximately $10,000 per month
for systems and $10,000 per month rent after relocating to its new location for
that period of time necessary to administer the Liquidating Trust. The Trust
will also incur moving expenses and other operating expenses such as utilities,
storage, telephone and insurance.
WIND DOWN TEAM
It is assumed that the wind down team will be led by a Liquidating Trustee who,
as necessary and appropriate, will consult with an advisory board. The advisory
board would serve the
function similar to a board of directors and will be compensated accordingly.
The wind down team is assumed to employ fewer employees each month based on the
decline of activity required to realize on any remaining assets, resolve claims,
issue recoveries to creditors, dissolve inactive companies and complete various
filings such as tax returns and other tax reporting requirements. The ultimate
size and activity of the wind down team may vary depending on, among other
things, the extent, nature and magnitude of litigation and claims
reconciliation.
THE WIND DOWN
The forecast assumes that the majority of the Liquidating Trust's activity to
wind down will occur within the six month period following confirmation.
However, it should be recognized that claims resolution, particularly with
respect to litigation claims, as well as the realization of some of the assets
held by the Liquidating Trust, could continue for a number of years. The wind
down costs have been estimated accordingly and will vary because actual events
and the timing thereof will be different from those estimated.
The Analysis includes estimates of proceeds for assets not yet sold as well as
estimates of allowed claim amounts, some of which are currently in dispute and
may be resolved in an amount different from the estimated claims in the
Analysis. Any variation in amounts from the attached Analysis for the proceeds
of assets, resolution of claims, and costs of the wind down, including the costs
of the Liquidating Trustee and its professionals, will impact the recoveries.
The estimates of proceeds for assets not yet sold as well as estimates of
allowed claim amounts should not be construed as an admission, limitation or
waiver of rights, claims, remedies, or recoveries.
FREQUENCY OF PAYMENTS
The Analysis assumes that the Liquidating Trustee will be making quarterly
distributions to unsecured claimants based on the realization of assets
remaining in the Liquidating Trust and the resolution of claims for the first
two years. To the extent the claims are disputed, the Liquidating Trustee will
reserve the full amount of the claim or the court estimate until such time as
the claim is resolved. Resolved claims will be included in the next distribution
calculation following the allowance of the claim. Claims that have been filed
without a numerical value will be estimated by the court prior to the first
distribution to establish a reserve.
AVOIDANCE ACTIONS
The estimated recoveries do not reflect any avoidance action recoveries or
related litigation costs which may impact individual creditors overall
recoveries.
PROFESSIONAL FEES
The Liquidating Trust will retain professionals for at least the tasks
identified below:
- Trade claims objections and preference litigation;
- Investigation and prosecution of avoidance actions;
- Defense of litigation claims;
- Tax Claims.
The Liquidating Trustee may hire professionals presently serving in the case or
other professionals deemed necessary.
Oakwood Homes Corporation
Disclosure Statement - Creditor Recovery Exhibit
($ in 000's)
ESTIMATED ASSETS/ VALUE FOR DISTRIBUTION AMOUNT % RECOVERY
- ---------------------------------------- ------ ----------
Estimated bank cash at closing date (1) $ 30,000
Initial purchase price with adjustments (2) 375,139
Cash left behind (3) 65,000
Net proceeds of assets remaining in estate (4) 11,100
Net preference recovery estimate (5) TBD
Net Trust interest income (6) 3,000
---------
ESTIMATED ASSETS/ VALUE FOR DISTRIBUTION $ 484,239
FUNDS/ DISTRIBUTIONS
ADMINISTRATIVE CLAIMS PRE - 3/31/04
Non-Wind down Administrative Claims
Post-petition liabilities (7) 76,226
Repayment of Tranche A of DIP 20,298
Repayment of Tranche B of DIP 51,500
Repayment of Warehouse Facility 47,600
Employee Severance 3,000
Priority Tax 4,500
--------- -----
Total Administrative Claims 203,124 100.0%
CAPITALIZATION OF REORGANIZED DEBTOR (8) 6,000
ESTIMATED WIND DOWN COSTS POST - 3/31/04 (9)
Payroll, Benefits, Severance and Stay Bonus 4,735
Operational Expenses 1,875
Professional Fees/ Outsourcing (10) 5,567
---------
Estimated Wind down Costs 12,177
---------
REMAINING ASSETS/ VALUE FOR DISTRIBUTION $ 262,938
---------
CLAIM AMOUNT $ PAID % RECOVERY
------------ ------ ----------
Class 1 Debt -Priority Non-Tax
Prepetition WARN Act Claims (11) $ 500 $ 500 100.0%
Class 2 Debt - Secured Debt
Secured Debt 6,858 6,858 100.0%
--------- ---------
Total Priority Non-Tax and Secured Debt 7,358 7,358 100.0%
--------- ---------
Class 3 Debt - Convenience Class
Convenience Class (12) 9,000 2,250 25.0%
Class 4 Debt - Non-Priority Unsecured
Senior Notes Payable 304,647
Junior Notes Payable 2,701
REMIC Guarantee (13) 275,809
Litigation 35,000
Other General Unsecured 59,730
--------- ---------
Total Non-Priority Unsecured Claims $ 677,887 $ 253,330 37.4%
--------- ---------
Total Convenience Class and Non-Priority Unsecured Claims $ 686,887 $ 255,580 37.2%
---------
TOTAL ASSETS/ VALUE DISTRIBUTED $ 262,938
---------
Class 6A Non-Debtor-Held Interest Existing shareholders in the reorganized debtor will retain their
ownership interest in the Company and the right to receive any
cash remaining in the reorganized debtor after its liabilities,
including any future claims, are satisfied.
Footnotes
- ---------
(1) Based on Company estimate of roll-forward bank cash balance at closing date.
(2) Total purchase price reflects adjustments provided in the Asset Purchase
Agreement.
(3) Includes released cash collateral, restricted cash and other cash deposits.
Excludes workers comp insurance deposits assumed to be utilized to satisfy
workers comp obligations.
(4) Net proceeds from sale of assets remaining in the estate.
(5) For purposes of this recovery analysis, preference recoveries are to be
determined (TBD).
(6) Assumes interest income derived from investment of remaining assets/ value
of Trust.
(7) Includes estimated roll-forward of post-petition liabilities to closing
date. Excludes workers comp liabilities assumed to be satisfied by workers
compensation insurance deposits.
(8) Capitalization of reorganized Debtor is assumed to be $6 million retained
for liabilities of the reorganized Debtors, including future claims. The actual
amount of the liabilities and future claims could vary significantly from this
estimate.
(9) Assumes post plan confirmation wind down costs for reorganized Oakwood and
the Trust.
(10) Professional fees relate to claims resolution, including defense of
litigation claims, avoidance actions as well as claims agent and disbursing
agent costs. No estimates have been made for auditing fees and other compliance
requirements if the reorganized Debtor is a publicly traded company.
(11) For purposes of this recovery analysis the debtor has estimated $500K for
potential unsettled WARN Act and other employee related priority claims. The
Debtors believe this estimate is overstated as they dispute any WARN Act
allegations and will assert certain affirmative defenses and intend to
vigorously defend against alleged WARN Act claims.
(12) The plan provides for creditors with claims up to $5,000 to receive one
distribution in the interest of minimizing multiple distribution costs over a
several year wind down period. The debtors estimates approximately 13,144 claims
of $5,000 or less fall into this class for claims aggregating approximately $7.7
million. The plan also provides that creditors with claims in excess of $5,000
can opt into this class.
(13) For purposes of this consolidated recovery analysis, the REMIC Guarantee
claims have been estimated in the aggregate amount of $275.8 million, which is
the aggregate principal balance of the B-Piece REMIC Certificates and unpaid
guarantee payments attributable to interest on the B-Piece REMIC Certificates as
of November 15, 2002. The REMIC Guarantee claims were filed in an aggregate
amount in excess of $1 billion, which represents the aggregate principal and
interest payable by the applicable non-debtor REMIC Trusts to the holders of the
B-Piece REMIC Certificates. The chart showing the aggregate amount of each of
the individual REMIC Guarantee claims is found in Section III.A.6, of the
Disclosure Statement. The allowed amount of the REMIC Guarantee claims will vary
depending on various factors, including the extent of payments of principal and
interest received by holders of B-Piece REMIC Certificates from the non-debtor
REMIC Trusts, and the resolution of the Bankruptcy Court of any objections to
the allowance of the REMIC Guarantee claims.
Distribution to the beneficial holders of allowed REMIC Guarantee claims will be
made on a trust basis in accordance with the allowed amount of the REMIC
Guarantee claim for that trust. In as much as holders of the allowed claims in
Classes 4A, 4B, 4C, 4D and 4E are entitled to pro-rata distributions from the
Debtors, the estimated percentage recovery of each of these subclasses will have
to be adjusted if the aggregate allowed amounts of the REMIC Guarantee claims
are greater than or less than the $275.8 million estimate used in this recovery
analysis.
EXHIBIT D
ASSET PURCHASE AGREEMENT
[Exhibit intentionally omitted - Exhibit is filed as an attachment to a Form 8-K
filed by the Company on November 26, 2003]