EXHIBIT 2.1
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
IN RE: ) CHAPTER 11
)
ASSISTED LIVING CONCEPTS, INC. and ) CASE NOS. 01-10670 AND 01-10674
CARRIAGE HOUSE ASSISTED LIVING, INC. )
) (JOINTLY ADMINISTERED)
DEBTORS. )
AMENDED FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER
UNDER 11 U.S.C. SECTION 1129 AND RULE 3020 OF THE FEDERAL
RULES OF BANKRUPTCY PROCEDURE CONFIRMING
THE FIRST AMENDED JOINT PLAN OF REORGANIZATION OF
ASSISTED LIVING CONCEPTS, INC. AND CARRIAGE HOUSE ASSISTED
LIVING, INC., DATED AS OF OCTOBER 30, 2001
Upon the First Amended Joint Plan of Reorganization of Assisted Living
Concepts, Inc. ("ALC") and Carriage House Assisted Living, Inc. ("Carriage
House") dated as of October 30, 2001 (the "Plan") and the First Amended
Disclosure Statement Accompanying the Plan for Assisted Living Concepts, Inc.
and Carriage House Assisted Living, Inc. Under Chapter 11 of the United States
Bankruptcy Code Dated as of October 30, 2001 (the "Disclosure Statement"),
filed with the Court by ALC and Carriage House, debtors in possession herein
(the "Debtors"); and upon (a) the hearing before this Court on October 30,
2000, to consider approval of the Disclosure Statement and (b) the Order
Approving Disclosure Statement, Fixing Time for Filing Acceptances or
Rejections of Plan, Establishing Procedure for Counting Votes, and Approving
Form and Manner of Notice and Solicitation, dated October 30, 2000 (the
"Disclosure Statement Order"); and upon the affidavit of Bridget Gallerie of
Bankruptcy Services L.L.C. the voting agent appointed in the Debtors'
bankruptcy cases, sworn to on December 3, 2001 (the "Voting Declaration"); and
it appearing from the affidavits of mailing and publication filed with this
Court and the Voting Declaration that copies of the Disclosure Statement
(including the
Plan as annexed thereto as Exhibit A), notice of the Confirmation Hearing (the
"Confirmation Hearing Notice"), the Disclosure Statement Order and ballots for
acceptances or rejections of the Plan were transmitted to the holders of Claims
and equity interests of the Debtors, including all rights (including unpaid
dividends) arising from any Old Equity Security including, without limitation,
the Old ALC Common Stock ("Equity Interests" or "Interests"), entitled to vote
on the Plan as required by the Disclosure Statement Order, and such
transmissions at such time being due and adequate notice under the
circumstances, and that notice of the Confirmation Hearing was provided in the
manner and at the time required by the Disclosure Statement Order; and the
Disclosure Statement Order fixing November 30, 2001, at 4:00 p.m. (prevailing
Eastern time) as the deadline for filing of objections to confirmation of the
Plan; and a hearing to consider confirmation of the Plan having been held
before this Court commencing on December 5, 2001 (the "Confirmation Hearing");
and upon the full and complete record of the Confirmation Hearing and all
matters and proceedings heretofore part of the record in these cases; and after
due deliberation and sufficient cause appearing therefore;
FINDINGS OF FACT AND CONCLUSIONS OF LAW
IT IS HEREBY FOUND AND DETERMINED THAT:
A. All capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Plan, unless context requires otherwise.
B. This Court has jurisdiction over the Chapter 11 Cases pursuant
to 28 U.S.C. Sections 157 and 1334. Venue is proper before this Court pursuant
to 28 U.S.C. Sections 1408 and 1409. Confirmation of the Plan is a core
proceeding under 28 U.S.C. Section 157(b)(2), and this Court has exclusive
jurisdiction to determine whether the Plan complies with the applicable
provisions of the Bankruptcy Code and should be confirmed.
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C. This Court takes judicial notice of the docket of the Chapter 11 Cases
maintained by the Clerk of the Court and/or its duly appointed agent, including,
without limitation, all pleadings and other documents filed, all orders entered,
and all evidence and arguments made, proffered or adduced at, the hearings held
before the Court during the pendency of the Chapter 11 Cases, including, without
limitation, the hearing to consider the adequacy of the Disclosure Statement.
D. The Debtors, as the proponents of the Plan, have the burden of
proving the elements of Section 1129 by a preponderance of the evidence.
E. Notice of the Confirmation Hearing, the treatment of any remaining
unexpired leases and executory contracts under the Plan and the relevant
deadlines for submission of objections and ballots, as prescribed by this Court
in the Disclosure Statement Order, has been provided and is adequate and
sufficient pursuant to Section 1128 of the Bankruptcy Code, Rules 2002(b) and
3020 of the Bankruptcy Rules and other applicable law and rules.
F. Ballots were transmitted to holders of Claims and Equity interests in
classes eligible to vote on the Plan (the "Voting Classes") in accordance with
the Disclosure Statement Order.
G. The Debtors solicited votes for the Plan from the Voting Classes in
good faith and in a manner consistent with the Bankruptcy Code.
H. The Voting Declaration is consistent with Bankruptcy Rule 3018.
I. The classification scheme of Claims and Equity Interests under the
Plan is reasonable. Claims or Equity Interests in each Class are substantially
similar to other Claims or Equity Interests in each such Class, and the Plan
therefore satisfies the requirements of Section 1122(a) of the Bankruptcy Code.
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J. The Plan provides for the treatment of Allowed Administrative Claims
and Allowed Tax Claims. In addition, the Plan establishes the following Classes
of Claims and Equity Interests: (A) with respect to ALC: Class 1A (OHCS Claim);
Class 1B (NHP Claim); Class 1C (U.S. Bank Idaho Claim); Class 1D (U.S. Bank Ohio
Claim); Class 1E (U.S. Bank Washington Claim); Class 2A et seq. (Other Secured
Claims); Class 3 (Priority Claims); Class 4 (General Unsecured Claims); Class 5
(Trade Claims); Class 6 (Resident Deposit Account Claims); Class 7 (Guaranty
Claims); Class 8 (Intercompany Claims); Class 9 (Old ALC Common Stock and
Securities Claims); and Class 10 (Old Stock Rights); and (B) with respect to
Carriage House: Class 1 (other Secured Claims); Class 2 (Priority Claims); Class
3 (General Unsecured Claims); Class 4 (Trade Claims); Class 5 (Intercompany
Claims); Class 6 (Old Common Stock and Securities Claims); and Class 7 (Old
Stock Rights). The Plan satisfies the requirements of Section 1123(a)(1) of the
Bankruptcy Code.
K. The following Classes of Claims and Equity Interests are impaired and
comprise the Voting Classes entitled to vote under the Plan: ALC Class 1B (NHP
Claim), ALC Class 4 (General Unsecured Claims), and ALC Class 9 (Old ALC Common
Stock and Securities Claims). All other Classes of Claims or Equity Interests
are either unimpaired under the Plan or, in the case of ALC Class 10, deemed to
reject the Plan by virtue of receiving no Distributions thereunder. The
treatment of all Claims and Equity Interests in impaired Classes is specified
in Section 3.02 and Section 3.03 of the Plan, and the Plan satisfies the
requirements of Sections 1123(a)(2) and 1123(a)(3) of the Bankruptcy Code.
L. The Plan provides for the same treatment of each Claim or Equity
Interest of a particular Class, and the Plan satisfies the requirements of
Section 1123(a)(4) of the Bankruptcy Code.
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M. The Plan provides for adequate means for its implementation, and
therefore satisfies the requirements of Section 1123(a)(5) of the Bankruptcy
Code.
N. The Plan provides for the amendment of the articles of incorporation
of ALC in substantially the form of the Amended ALC Articles, which prohibit the
issuance of nonvoting equity securities. The Plan also provides for the
amendment of the certificate of incorporation of Carriage House in substantially
the form of the Amended Carriage House Certificate, which prohibits the issuance
of nonvoting equity securities. Accordingly, the Plan complies with Section
1123(a)(6) of the Bankruptcy Code.
O. The provisions of the Plan relating to the manner of selecting the
officers and directors of Reorganized Debtors are consistent with the interests
of creditors and equity security holders and with public policy, and the
requirements of Section 1123(a)(7) of the Bankruptcy Code are satisfied.
P. The Plan impairs or leaves unimpaired, as the case may be, each Class
of Claims or Equity Interests, and the Plan therefore complies with the
provisions of Section 1123(b)(1) of the Bankruptcy Code.
Q. The Plan provides for the assumption or rejection, pursuant to
Section 365 of the Bankruptcy Code, of all executory contracts and unexpired
leases not previously assumed or rejected pursuant to such section, and the Plan
therefore complies with the provisions of Section 1123(b)(2) of the Bankruptcy
Code.
R. Furthermore, pursuant to Bankruptcy Rule 9019, and in consideration
of the classification, distribution and other treatment provided under the Plan,
the provisions of the Plan constitute a good faith compromise and settlement of
all the Claims, Equity Interests and controversies. This Confirmation Order
constitutes the Court's approval of all such
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compromises and settlements which, based upon the representations and informed
views of counsel to the Debtors, the Informal Bondholder Committee and the
Creditors' Committee, all other testimony proffered and evidence introduced at
the Confirmation Hearing and the full record of the Chapter 11 Cases, the Court
finds to be fair, equitable, within the range of reasonableness and in the best
interests of the Debtors, Reorganized Debtors, the Estates, creditors and other
parties in interest. Accordingly, the Plan satisfies Section 1123(b)(3) of the
Bankruptcy Code.
S. The Plan complies with the applicable provisions of the Bankruptcy
Code including, without limitation, Sections 1122 and 1123 of the Bankruptcy
Code. Therefore, the Plan satisfies the requirements of Section 1129(a)(1) of
the Bankruptcy Code. In addition, in accordance with Bankruptcy Rule 3016(a),
the Plan is dated and identified with the name of the Debtors.
T. The Debtors, as proponents of the Plan, have complied with the
applicable provisions of the Bankruptcy Code including, without limitation,
Sections 1125 and 1126 of the Bankruptcy Code, and therefore have satisfied the
requirements of Section 1129(a)(2) of the Bankruptcy Code, as follows: (a) the
Debtors are proper debtors under Section 109 of the Bankruptcy Code and a proper
proponent of the Plan under Section 1121(a) of the Bankruptcy Code; (b) the
Debtors have complied with applicable provisions of the Bankruptcy Code, except
as otherwise provided or permitted by orders of the Court; and (c) the Debtors
have complied with the applicable provisions of the Bankruptcy Code, the
Bankruptcy Rules and the Disclosure Statement Order in transmitting notices and
solicitation materials and in soliciting and tabulating votes on the Plan.
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U. The Plan has been proposed in good faith and not by any means forbidden
by law, and the Plan satisfies the requirements of Section 1129(a)(3) of the
Bankruptcy Code. In determining that the Plan has been proposed in good faith,
the Court has examined the totality of the circumstances surrounding the filing
of the Chapter 11 Cases, the negotiation and formulation of the Plan between the
Debtors and the Informal Bondholder Committee, their counsel and financial
advisors. The Chapter 11 Cases were filed, the Plan was pre-negotiated and
proposed with the proper purpose of reorganizing the Debtors and expeditiously
making distributions to the Debtors' creditors. The Plan is the product of
extensive, arm's length negotiations among the Debtors, the Informal Bondholder
Committee, and their respective counsel and financial advisors. The Plan
reflects the results of these negotiations and is reflective of the interests of
all the Estates' constituencies.
V. Any payments made or to be made by the Debtors or Reorganized Debtors
for services or for costs and expenses in, or in connection with, the Chapter 11
Cases have, to the extent required by the Bankruptcy Code, the Bankruptcy Rules
and the Orders of this Court, been approved by, or are subject to the approval
of, this Court as reasonable. Accordingly, the Plan satisfies the requirements
of Section 1129(a)(4) of the Bankruptcy Code.
W. The Debtors have complied with Section 1129(a)(5) of the Bankruptcy
Code. The Amended ALC Articles provide that Reorganized ALC shall have a board
of directors consisting of seven members, and such members will select the board
of directors and senior management of Carriage House.
X. Section 1129(a)(6) of the Bankruptcy Code is satisfied because the Plan
does not provide for any change in rates over which a governmental regulatory
commission has jurisdiction.
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Y. With respect to each impaired Class of Claims against or Equity
Interests in ALC, each holder of a Claim or Equity Interest in such Class: (a)
has accepted the Plan; or (b) will receive or retain under the Plan, on account
of such Claim or Equity Interest, property of a value, as of the Effective Date
of the Plan, that is not less than the amount that such holder would so receive
or retain if such Debtor were to be liquidated under chapter 7 of the
Bankruptcy Code on such date. Accordingly, the Plan satisfies the requirements
of Section 1129(a)(7) of the Bankruptcy Code.
Z. As evidenced by the Voting Declaration, the Plan has been accepted by
ALC Class 1B (NHP Claim), ALC Class 4 (General Unsecured Claims) and ALC Class
9 (Old ALC Common Stock and Securities Claims) in accordance with Section 1126
of the Bankruptcy Code and consistent with Bankruptcy Rule 3018 and the
Disclosure Statement Order.
AA. The Plan is deemed rejected, pursuant to Section 1126(g) of the
Bankruptcy Code, by the members of ALC Class 10 (Old Stock Rights), who will
receive no Distribution and retain no interest on account of their respective
Claims and Equity Interests.
BB. With respect to each Class of Claims or Equity Interests designated by
the Plan, other than ALC Class 10, either: (a) such Class has accepted the
Plan; or (b) such Class is not impaired under the Plan. Accordingly, the
requirements of Section 1129(a)(8) of the Bankruptcy Code have been satisfied
with respect to all Claims and Equity Interests other than those in ALC Class
10. The Plan nevertheless may be confirmed with respect to ALC Class 10
because, as demonstrated below, the requirements of Section 1129(b) of the
Bankruptcy Code are satisfied with respect to ALC Class 10.
CC. The treatment of Allowed Administrative Claims, Allowed Priority Tax
Claims and Allowed Priority Claims under Section 3.01, 3.02 and 3.03 of the
Plan satisfies the applicable requirements of Section 1129(a)(9)(A), (B) and
(C) of the Bankruptcy Code.
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DD. The Plan has been accepted by ALC Class 1B and ALC Class 4 and,
therefore, has been accepted by at least one impaired Class of Claims, which
acceptance has been determined without including any acceptances of the Plan by
any insider holding a Claim in such Class. Accordingly, the requirements of
Section 1129(a)(10) of the Bankruptcy Code are satisfied with respect to the
Plan.
EE. The Plan satisfies Section 1129(a)(11) of the Bankruptcy Code because
confirmation of the Plan is not likely to be followed by liquidation or the
need for further financial reorganization of Reorganized Debtors. Essentially,
the Plan provides for the financial restructuring of the Debtors. Based on the
discussions set forth in the Disclosure Statement including the projections set
forth in Exhibit "G" thereto, the Plan is feasible. Upon and after entry of the
Confirmation Order, the Plan will become effective provided the following
conditions are met: (1) the Effective Date shall have occurred as set forth in
the Plan, (2) all authorizations, consents and regulatory approvals (including,
without limitation, any approvals required under regulations relating to the
change in ownership of the Debtors upon the Effective Date) required (if any)
for the Plan's effectiveness shall have been obtained, (3) each of the New
Junior Note Indenture and the New Senior Note Indenture has been qualified
under the Trust Indenture Act of 1939, as amended, and (4) all other actions
and documents necessary to implement the treatment of creditor Claims shall
have been effected or executed or, if waivable, waived by the Person or Persons
entitled to the benefit thereof. Assuming the Plan does go effective, the
Distributions are to be made to each holder of an Allowed Claim or Allowed
Equity Interest upon: (i) the Effective Date, to each holder of a Claim or an
Equity Interest in that Class that is an Allowed Claim or an Allowed Interest
as of the Effective Date, and (ii) the date the Order of the Court allowing
such Claim or Equity Interest becomes a Final Order, to each holder of an
Allowed
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Claim or an Allowed Equity Interest that is Allowed after the Effective Date,
to the extent allowed.
FF. The fees payable by the Debtors to the United States Trustee or the
Clerk of this Court, as provided under 28 U.S.C. Section 1930(a)(6), constitute
administrative expenses entitled to priority under Section 507(a)(1) of the
Bankruptcy Code and the treatment of such fees in the Plan satisfies the
requirements of Section 1129(a)(12) of the Bankruptcy Code.
GG. The Plan provides that on and after the Effective Date, to the extent
required by Section 1129(a)(13) of the Bankruptcy Code, Reorganized ALC shall
continue to pay all retiree benefits (if any), as the term "retiree benefits"
is defined in Section 1114(a) of the Bankruptcy Code, maintained or established
by the Debtors prior to the Confirmation Date, and, therefore, the Plan
satisfies the requirements of Section 1129(a)(13) of the Bankruptcy Code.
HH. The requirements of Section 1129(b) of the Bankruptcy Code are
satisfied as to ALC Class 10 because (a) no Class of Claims or Equity Interests
junior to such Class is retaining or receiving any property under the Plan and
(b) the Plan is fair and equitable and does not discriminate unfairly with
respect to such Class.
II. Other than the Plan (including previous versions thereof), there were
no other plans of reorganization filed in these cases. Accordingly, to the
extent applicable, the requirements of Section 1129(c) of the Bankruptcy Code
have been satisfied.
JJ. No party in interest that is a governmental unit has requested that
the Court not confirm the Plan on the grounds that the principal purpose of the
Plan is the avoidance of taxes or the avoidance of the application of Section 5
of the Securities Act of 1933, 15 U.S.C. Section 77c, and the principal purpose
of the Plan is not such avoidance. Accordingly, the Plan satisfies the
requirements of Section 1129(d) of the Bankruptcy Code.
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KK. The modifications of the Plan set forth in paragraph 4 hereof (the
"Plan Modifications") do not materially or adversely affect or change the
treatment of any Claim against or Equity Interest in any Debtor. Accordingly,
pursuant to Bankruptcy Rule 3019, the Plan Modifications do not require
additional disclosure under Section 1125 of the Bankruptcy Code or the
resolicitation of acceptances or rejections under Section 1126 of the Bankruptcy
Code, nor do they require that holders of Claims against or Equity Interests in
any Debtor be afforded an opportunity to change previously cast acceptances or
rejections of the Plan as filed with the Bankruptcy Court. Disclosure of the
Plan Modifications prior to or on the record at the Confirmation Hearing
constitutes due and sufficient notice thereof under the circumstances of these
cases.
LL. All conditions to confirmation set forth in Section 6.01 of the Plan
have been satisfied.
MM. Based upon the record before the Court, the Debtors, the Reorganized
Debtors, the Informal Bondholder Committee and the Creditors' Committee and each
of their respective officers, directors, partners, employees, members, agents,
attorneys, accountants or other professionals, have acted in good faith and in
compliance with the applicable provisions of the Bankruptcy Code pursuant to
Section 1125(e) of the Bankruptcy Code and 1129(a)(3) of the Bankruptcy Code,
with respect to the administration of the Plan, the solicitation of acceptances
with regard thereto and the property to be distributed thereunder and,
therefore, are entitled to the protections afforded by Section 1125(e) of the
Bankruptcy Code and the exculpatory and injunctive provisions set forth in
Sections 5.10, 5.11 and 5.12 of the Plan.
NN. Pursuant to Section 1146(c) of the Bankruptcy Code, the issuance,
transfer or exchange of notes or equity securities under the Plan, the creation
of any mortgage, deed of trust
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or other security interest, the making or assignment or any lease or sublease,
or the making or delivery of any deed or other instrument of transfer under, in
furtherance of, or in connection with the Plan and any of the transactions
contemplated under the Plan, shall not be subject to any stamp, real estate
transfer, mortgage recording or other similar tax.
OO. Good cause has been shown to extend the time period within which
Reorganized Debtors or the Debtors may file notices of removal of related
proceedings under Bankruptcy Rule 9027 through and including sixty (60) days
after the Confirmation Date.
PP. Rule 62(a) of the Federal Rules of Civil Procedure does not apply to
this Confirmation Order.
QQ. The Court may properly retain jurisdiction over the matters set
forth in Article X of the Plan and paragraph 23 of this Confirmation Order.
DECREES
NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, DECREED AND DETERMINED
THAT:
1. To the extent that any objections have not been withdrawn prior to
the entry of this Confirmation Order or are not resolved by the relief granted
herein or as stated on the record of the Confirmation Hearing, all such
objections are hereby overruled.
2. The findings of this Court set forth above and the conclusions of law
stated herein shall constitute findings of fact and conclusions of law pursuant
to Bankruptcy Rule 7052, made applicable to this proceeding by Bankruptcy Rule
9014. To the extent any findings of fact shall be determined to be a conclusion
of law, it shall be so deemed, and vice versa.
3. The Plan complies with the requirements of Sections 1122 and 1123 of
the Bankruptcy Code.
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4. The Plan is hereby deemed modified pursuant to Section 1127(a) of the
Bankruptcy Code and Section 11.03 of the Plan to reflect Plan modifications
disclosed by the Debtors to the Court at the Confirmation Hearing or filed by
the Debtors prior to the Confirmation Hearing. Attached hereto as Exhibit 1 is a
stipulation executed by and between the Debtors and Bank One, N.A. reflecting
one such technical modification.
5. The Plan (as modified by the modifications set forth in paragraph 4
of this Confirmation Order) is confirmed under Section 1129 of the Bankruptcy
Code. The Debtors are hereby authorized to take all steps and do all things
necessary to implement the Plan.
6. The provisions of the Plan and this Confirmation Order, including the
findings of fact and conclusions of law set forth herein, are nonseverable
and mutually dependent.
7. Plan Classification Controlling. The classification of Claims and
Equity Interests for purposes of the Distributions to be made under the Plan
shall be governed solely by the terms of the Plan. The classifications and
amounts of Claims and Equity Interests, if any, set forth in the Ballots
tendered or returned by the Debtors' creditors in connection with voting on the
Plan (i) were set forth on the Ballots solely for purposes of voting to accept
or reject the Plan, (ii) do not necessarily represent, and in no event shall be
deemed to modify or otherwise affect, the actual classification of such Claims
and Equity Interests under the Plan for Distribution Purposes, and (iii) shall
not be binding on the Debtors, the Estates, or the Reorganized Debtors.
8. Certain Effects of Confirmation; Discharge; Injunction.
(a) Incorporation of Section 5.10 of the Plan. All of the provisions of
Section 5.10 of the Plan are incorporated herein by reference as if set
forth herein in extenso.
(b) Except as otherwise provided in the Plan or the Confirmation Order
(and except with respect to any claims of Heller against any Debtor,
including, without limitation, the Heller Claim): (i) on the Effective Date,
each Debtor shall be deemed discharged and released to the fullest extent
permitted by Section 1141 of the Bankruptcy Code from all Claims and
Interests, including, but not limited to, demands, liabilities,
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Claims and Interests that arose before the Confirmation Date and all debts
of the kind specified in Sections 502(g), 502(h) or 502(i) of the Bankruptcy
Code, whether or not: (A) a proof of Claim or proof of Interest based on such
debt or Interest is Filed or deemed Filed pursuant to Section 501 of the
Bankruptcy Code, (B) a Claim or Interest based on such debt or Interest is
allowed pursuant to Section 502 of the Bankruptcy Code or (C) the holder of
a Claim or Interest based on such debt or Interest has accepted the Plan; and
(ii) all Persons shall be precluded from asserting against each Reorganized
Debtor, its successors, or its assets or properties any other or further
Claims or Interests based upon any act or omission, transaction, or other
activity of any kind or nature that occurred prior to the Confirmation Date.
Except as otherwise provided in the Plan or the Confirmation Order (and
except with respect to any claims of Heller against any Debtor, including,
without limitation, the Heller Claim), the Confirmation Order shall act as a
discharge of any and all Claims against and all debts and liabilities of the
Debtor, as provided in Sections 524 and 1141 of the Bankruptcy Code, and such
discharge shall void any judgment against each Debtor at any time obtained
to the extent that it relates to a Claim discharged.
(c) All Persons that have held, currently hold or may hold a Claim or
other debt or liability or an Equity Interest or other right of an equity
security holder, are permanently enjoined from taking any of the following
actions on account of any such Claims, debts or liabilities or terminated
Interests or rights: (a) commencing or continuing in any manner any action
or other proceeding against any of the Debtors, the Informal Bondholder
Committee, the Creditors' Committee, and professional persons retained by
the Debtors, the Informal Bondholder Committee, Creditors' Committee, and
each of their respective affiliates, current or former officers, directors,
agents, employees and representatives; (b) enforcing, attaching, collecting
or recovering in any manner any judgment, award, decree or order against any
of the Debtors, the Informal Bondholder Committee, the Creditors' Committee
and professional persons retained by any of the Debtors, the Informal
Bondholder Committee and Creditors Committee and each of their respective
affiliates, current or former officers, directors, agents, employees and
representatives; (c) creating, perfecting or enforcing any lien or
encumbrance against any of the Debtors, the Informal Bondholder Committee
(including present and former members), the Creditors' Committee (including
present and former members), and professional persons retained by any of the
Debtors, the Informal Bondholder Committee and the Creditors' Committee and
each of their respective affiliates, current or former officers, directors,
agents, employees and representatives; (d) asserting a setoff, right of
subrogation or recoupment of any kind against any obligation due to any of
the Debtors, the Informal Bondholder Committee, the Creditors' Committee and
professional persons retained by any of the Debtors, the Informal Bondholder
Committee and the Creditors' Committee and each of their respective
affiliates, current or former officer, directors, agents, employees and
representatives; and (e) commencing or continuing any action, in any manner,
in any place, that does not comply with or is inconsistent with the
provisions of the Plan.
(d) Nothing contained in the Disclosure Statement or the Plan shall (i)
be deemed to cause the release of any claims that individual holders of
Claims or Interests may have
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against any person other than the Debtors or (ii) apply to Heller or in any
way prevent or limit Heller's exercise of its rights and remedies against
any Debtor under the Final Financing Order, the Postpetition Documents, or
otherwise, either before, on or after the Effective Date.
(e) Any Person injured by any willful violation of such injunction
shall recover actual damages, including costs and attorney's fees, and, in
appropriate circumstances, may recover punitive damages, from the willful
violator.
9. Binding Effect. Pursuant to Section 1141 of the Bankruptcy Code,
effective as of the Confirmation Date, but subject to the occurrence of the
Effective Date, and except as expressly provided in the Plan or this
Confirmation Order, the provisions of the Plan (including the exhibits to, and
all documents and agreements executed pursuant to, the Plan) and this
Confirmation Order shall be binding on (i) the Debtors, (ii) Reorganized
Debtors, (iii) all holders of Claims against and Equity Interests in the
Debtors, whether or not impaired under the Plan and whether or not, if impaired,
such holder accepts the Plan, and (iv) each person acquiring property under the
Plan.
10. Vesting of Assets. Except as otherwise provided in the Plan, on
the Effective Date all property of the Estates shall vest in Reorganized ALC and
Reorganized Carriage House, as applicable, free and clear of all Claims, Liens,
encumbrances and interests; provided, however that any and all liens and
security interests arising pre-petition or post-petition in favor of U.S. Bank
in the U.S. Bank Collateral shall not be impaired or affected in any manner and
shall remain valid and fully enforceable against Reorganized ALC in accordance
with the agreements between ALC and U.S. Bank and applicable law. From and after
the Effective Date, each Reorganized Debtor may operate its business and use,
acquire, and dispose of property and settle and compromise Claims or Equity
Interests arising post-Confirmation without supervision by the Court and free of
any restrictions of the Bankruptcy Code, the Bankruptcy Rules or the Local
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Bankruptcy Rules, other than those restrictions expressly imposed by the Plan
and this Confirmation Order.
11. Directors and Officers. The directors and officers of each of the
Debtors will continue to serve in such capacities until and through the
Effective Date. As of the Effective Date, the directors of each of the Debtors
will be deemed to have resigned. Immediately thereafter, the new board of
directors of Reorganized ALC shall consist of Andre Dimitriadis, Andy Adams,
Leonard Tannenbaum, Matthew Patrick, Mark Holiday, Richard Ladd and the CEO of
Reorganized ALC (the "New Board"). The Board of Directors of Reorganized ALC
shall select the Board of Directors and senior management of Reorganized
Carriage House. Reorganized ALC, acting through the New Board, may authorize an
appropriate compensation and bonus plan for permanent senior management employed
by Reorganized ALC post-Confirmation. After the Effective Date, Reorganized ALC
may adopt a new incentive plan for the grant to officers, employees and
directors of the Reorganized ALC of options to acquire shares of New Common
Stock. The options will be based upon performance criteria and a vesting
schedule to be structured by the Board of Directors of Reorganized ALC after
consummation of the Plan. Reorganized ALC shall reserve 325,000 shares of its
common stock for issuance to employees, officers and directors pursuant to any
incentive plan adopted by Reorganized ALC, 12,000 shares of which shall be
reserved exclusively for any incentive or similar plan adopted for the members
of the New Board.
12. Rejection of Contracts and Leases. On the Effective Date, all
executory contracts and unexpired leases of the Estates shall be assumed by the
Debtors pursuant to the provisions of Sections 365 and 1123 of the Bankruptcy
Code, except for those executory contracts and nonresidential real property
leases that have already been assumed or rejected
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pursuant to an earlier Order of the Court or that are the subject of a motion
for such an Order pending as of the Confirmation Hearing. Each Reorganized
Debtor, except as otherwise agreed by the parties, will cure any and all
undisputed defaults within 30 days of the Effective Date under any executory
contract or unexpired lease assumed pursuant to the Plan, in accordance with
section 365 of the Bankruptcy Code. All disputed defaults that are required to
be cured shall be cured either within 30 days of the entry of a Final Order
determining the amount, if any, of the Debtors' or the Reorganized Debtors'
liability with respect thereto, or as may be agreed otherwise by the parties.
All pre-petition contracts and unexpired leases that are set forth on Exhibit
"J" of the Disclosure Statement (as amended through the date of the Confirmation
Hearing) are deemed rejected under the Plan. Any Claim for damages arising from
the rejection of an executory contract or unexpired lease must be Filed and
served on counsel for the Debtors, the Informal Bondholder Committee and
Creditors' Committee within thirty (30) days after the order of the Court
approving such rejection becomes a Final Order or be (i) forever barred and
unenforceable against any Debtor, its Estate, the Reorganized Debtors and their
respective property, and (ii) barred from receiving any distribution under the
Plan. All Allowed Claims arising from the rejection of executory contracts or
unexpired leases shall be treated as either an ALC Class 4 Claim (if it results
in an Allowed Claim against ALC) and Carriage House Class 3 Claim (if it results
in an Allowed Claim Against Carriage House).
13. General Authorizations; Plan Modifications. Pursuant to Section
1142(b) of the Bankruptcy Code, the Debtors and the Reorganized Debtors and all
other necessary parties are authorized and empowered to (a) execute and deliver
any instrument, agreement or document and (b) perform any act that is
necessary, desirable or required to effectuate or comply with the terms and
conditions of the Plan and consummation of the Plan and the transactions
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contemplated therein, and are authorized and empowered, without limitation, to
take all actions necessary or appropriate to enter into, implement, and
consummate the contracts, instruments and other agreements or documents created
in connection with the Plan.
14. Authorizations Under Applicable Non-Bankruptcy Law. The Debtors and
Reorganized Debtors are authorized and empowered pursuant to Section 105 of the
Bankruptcy Code to take any and all actions reasonably necessary to implement
the transactions contemplated by the Plan and this Confirmation Order, all
without further corporate action or action of the directors or stockholders of
the Debtors or Reorganized Debtors, including, without limitation, the issuance
of the New Common Stock, the New Senior Notes, the New Junior Notes, the
adoption of the Amended ALC Articles, the adoption of the Amended Carriage House
Certificate and the selection of the Persons who will serve as the initial
directors and officers of Reorganized ALC and Reorganized Carriage House as of
the Effective Date, and other matters under the Plan involving the corporate
structure of each Debtor or corporate action by each Debtor. Without limiting
the foregoing, upon entry of this Confirmation Order, the filing by Reorganized
ALC of the Amended ALC Articles and the filing by Reorganized Carriage House of
the Amended Carriage House Certificate shall be authorized and approved in all
respects. On the Effective Date or as soon thereafter as is practicable,
pursuant to applicable law, the bylaws of Reorganized ALC and the bylaws of
Reorganized Carriage House shall be substantially the form attached to the Plan
Supplement. The Board of Directors of Reorganized ALC is hereby authorized to
select and appoint members of senior management of each of the Debtors as of the
Confirmation Date.
15. Exemption from Transfer Taxes. Pursuant to Section 1146(c) of the
Bankruptcy Code, the issuance, transfer, or exchange of notes or equity
securities under the Plan,
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the creation of any mortgage, deed of trust, or other security interest, the
making or assignment of any lease or sublease, or the making or delivery of any
deed or other instrument of transfer under, in furtherance of, or in connection
with the Plan, including, without limitation, any agreements of consolidation,
deeds, bills of sale or assignments executed in connection with any of the
transactions contemplated under the Plan shall not be subject to any stamp,
real estate transfer, mortgage recording or other similar tax.
16. Professional Compensation and Reimbursement Claims. All professionals
or other Persons requesting compensation or reimbursement of expenses pursuant
to any of Sections 327, 328, 330, 331, 503(b) and 1103 of the Bankruptcy Code
for services rendered on or before the Effective Date (including, inter alia,
any compensation requested by any professional or any other Person for making a
substantial contribution in the Reorganization Case) shall File and serve on
Reorganized Debtors, the Informal Bondholder Committee, and the Creditors'
Committee an application for final allowance of compensation and reimbursement
of expenses no later than (i) sixty (60) days after the Effective Date, or (ii)
such later date as this Court shall order upon application made prior to the
end of such 60-day period. Objections to applications of professionals for
compensation or reimbursement of expenses must be Filed and served on
Reorganized ALC, the Informal Bondholder Committee, the Creditors' Committee
and the professionals to whose application the objections are addressed on or
before (i) twenty (20) days after such application is Filed and served or (ii)
such later date as the Court shall order upon application made prior to the end
of such 20-day period or upon agreement between the Reorganized Debtors and the
affected professional. If no objection is timely made, the affected
professional can file a certificate of no objection; thereafter, the
Reorganized Debtors shall pay the requested and unobjected to fees and expenses
to such professional. Any professional fees
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and reimbursements or expenses incurred by the Reorganized Debtors subsequent
to the Effective Date may be paid by the Reorganized Debtors without
application to or Order of the Court.
17. Cancellation and Surrender of Instruments, Securities and Other
Documentation. The provisions of Sections 8.02(b), 8.03 and 8.04 of the Plan
are incorporated herein by reference as if set forth herein in extenso. The
Disbursing Agent is authorized and empowered to withhold Distributions that
would otherwise be made on account of an Allowed Claim or Equity Interest in
respect of which the holder has not surrendered an Instrument or otherwise
complied with the provisions of Section 8.03 of the Plan.
18. No Recourse. No Claim or Equity Interest Holder shall have recourse
to the Debtors or Reorganized Debtors or any of their respective professionals,
or their successors or assigns, or any of their respective property on account
of a Claim for which there is insufficient Cash to provide a Distribution equal
to that received by Holders of Allowed Claims of that type.
19. No Post-Confirmation Amendment or Filing of Claims. After the
Confirmation Date, only the Debtors, Reorganized ALC and Reorganized Carriage
House, as applicable, will have the authority to File objections, settle,
compromise, withdraw or litigate to judgment objections to Claims and Equity
Interests. From and after the Confirmation Date, the Debtors, Reorganized ALC
and Reorganized Carriage House, as applicable, may settle or compromise any
Disputed Claim or Disputed interest without the approval of the Court.
20. Payment of Fees. All fees payable by the Debtors on or before the
Effective Date pursuant to 28 U.S.C. Section 1930, as determined by this Court
at the Confirmation Hearing, shall be paid by the Debtors on or before the
Effective Date.
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21. Retention of Jurisdiction. Notwithstanding confirmation of the Plan or
occurrence of the Effective Date, this Court shall retain such jurisdiction as
is legally permissible, including, without limitation, for the purposes set
forth in Article X of the Plan.
22. Post-Confirmation Plan Amendments. The Debtors shall have the right, in
the exercise of reasonable discretion, to revoke and withdraw or modify the Plan
as the plan of reorganization in the Chapter 11 Cases (in the case of a
modification of the Plan subject to Section 11.03 of the Plan) if the Debtors
are unable to consummate the Plan after the Confirmation Date, at any time up to
the Effective Date. The Debtors' revocation and withdrawal of the Plan may be
effected upon notification submitted by the Debtors, the Informal Bondholder
Committee and the Creditors' Committee to the Court, whereupon: (i) this
Confirmation Order shall be vacated, (ii) no Distribution under the Plan shall
be made, (iii) the Debtors and all Holders of Claims and Equity Interests shall
be restored to the status quo ante as of the day immediately preceding the
Confirmation Date as though the Confirmation Date had never occurred, and (iv)
the Debtors' obligations with respect to the Claims and Equity Interests shall
remain unchanged and nothing contained in the Plan shall constitute or be deemed
a waiver or release of any Claims or Equity Interests by or against the Debtors
or any Person in any further proceedings involving Debtors.
23. Removal. The time period within which the Debtors may file notices of
removal of related proceedings under Bankruptcy Rule 9027 is extended through
and including sixty (60) days after the Confirmation Date, without prejudice to
the right of the Debtors or Reorganized Debtors to seek further extensions.
24. Exemption from Securities Laws. The exemption from the requirements of
Section 5 of the Securities Act of 1933, 15 U.S.C. Section 77c, and any state
and local law requiring
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registration for the offer or sale of a security provided for in Section 1145 of
the Bankruptcy Code shall apply to all securities issued pursuant to the Plan.
25. Post-Confirmation Notices. On or before the tenth (10th) Business Day
following the date of the entry of this Confirmation Order, the Debtors shall
serve notice of entry of this Confirmation Order pursuant to Bankruptcy Rules
2002(f)(7), 2002(k) and 3020(c) to all creditors, indenture trustees and equity
security holders of the Debtors as of the Record Date. Except as otherwise
provided in the Plan and this Confirmation Order, notice of all subsequent
pleadings in these Chapter 11 Cases shall be limited to counsel for the Debtors,
counsel for the Creditors' Committee and the United States Trustee, unless
otherwise specified in an Order by this Court.
26. References to Plan Provisions. The failure to include or reference any
particular provision of the Plan in this Confirmation Order shall not diminish
or impair the effectiveness of such provision, it being the intent of the Court
that the Plan be confirmed in its entirety.
27. Confirmation Order Controlling. If there is any direct conflict between
the Plan and this Confirmation Order, the terms of this Confirmation Order shall
control.
28. Applicable Non-Bankruptcy Law. Pursuant to Section 1123(a) and 1142(a)
of the Bankruptcy Code, the provisions of this Confirmation Order, the Plan or
any amendments or modifications thereto shall apply and be enforceable
notwithstanding any otherwise applicable nonbankruptcy law.
29. Record Date for Distributions. The record date for determining the
Holders of Debentures and Old ALC Common Stock entitled to receive Distributions
under the Plan shall be December 20, 2001.
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30. No Stay of Confirmation Order. Bankruptcy Rule 3020(e) is not
applicable to this Confirmation Order. The Plan may be consummated immediately,
subject to the occurrence of the Effective Date. Exception of this Confirmation
Order from the ten (10) stay imposed under Bankruptcy Rule 3020(e) is warranted
because the prompt consummation of the Plan is in the best interests of the
Debtors, the Estates, creditors and other parties in interest. Furthermore, the
provisions of Federal Rule of Civil Procedure 62(a) and Bankruptcy Rule 7062
shall not apply to this Confirmation Order, and the Debtors are authorized to
consummate the Plan immediately upon entry of this Confirmation Order.
31. THE EXECUTION AND DELIVERY BY THE DEBTORS OR THE REORGANIZED DEBTORS
OF, AND THE PERFORMANCE BY THE DEBTORS OR THE REORGANIZED DEBTORS OF THEIR
OBLIGATIONS UNDER, THOSE DOCUMENTS NECESSARY TO PERFECT THE SECURITY INTERESTS
IN AND LIENS AGAINST THE NEW SENIOR NOTES COLLATERAL AND NEW JUNIOR NOTES
COLLATERAL (THE "SECURITY DOCUMENTS") DO NOT AND WILL NOT RESULT IN A BREACH
OF, CONSTITUTE A DEFAULT UNDER, REQUIRE CONSENT UNDER, RESULT IN OR REQUIRE THE
CREATION OF ANY LIEN, OTHER THAN THOSE LIENS CREATED BY THE SECURITY DOCUMENTS,
ON ANY PROPERTY OF THE DEBTORS OR REORGANIZED DEBTORS, OR RESULT IN THE
ACCELERATION OR REQUIRED PREPAYMENT OF ANY INDEBTEDNESS PURSUANT TO THE TERMS
OF, ANY AGREEMENT, INSTRUMENT OR ORDER (INCLUDING ANY ARBITRAL AWARD) PURSUANT
TO WHICH ONE OR BOTH OF THE REORGANIZED DEBTORS ARE PARTIES.
Dated: Wilmington, Delaware
12 28, 2001
/s/ SUE L. ROBINSON
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The Honorable Sue L. Robinson
UNITED STATES DISTRICT JUDGE
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