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Exhibit 1
STEPHEN R. HARRIS, ESQ.
BELDING & HARRIS
Nevada Bar No. 001463
417 West Plumb Lane
Reno, Nevada 89509
Telephone- (702) 786-7600
Facsimile: (702) 786-7764
UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEVADA
IN RE:
POWERTEL USA, INC.,
formerly known as Case No. BK-97-30265-BMG
NEVADA ENERGY COMPANY, INC., (Chapter 11)
also formerly known as
MUNSON GEOTHERMAL, INC.,
Debtor. Hrg. DATE: June 29, 1998
and TIME: 2:00 p.m.
_____________________________________/
DEBTOR'S SECOND AMENDED DISCLOSURE STATEMENT PURSUANT TO
11 U.S.C. SECTION 1125
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IMPORTANT INFORMATION FOR CREDITORS AND SHAREHOLDERS
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of
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POWERTEL USA, INC.
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(formerly known as
Munson Geothermal, Inc. and
Nevada Energy Company, Inc.)
[MATERIAL HAS BEEN DELETED]
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6. WHAT IS THE NATURE OF THE PLAN?
Debtor has proposed a Plan which has four main components-
a. Creditors
Each Creditor will be assigned to one of eight classes of Creditors.
There is a ninth class for Disputed Claims of Creditors and a tenth class for
Equity Interest holders.
With the exception of four classes, all Creditors will be paid in full
in Cash on the Effective Date, which is one hundred twenty (120) days after the
Plan has been approved by the Court.
Four classes of Creditors (CLASS 4, Allowed Priority Tax Claims, CLASS
5, Allowed Claims of Secured Creditors, CLASS 7, Allowed Claims of general
Unsecured Creditors of Claims in Excess of $1,200, and CLASS 8, Claims of Nevada
Energy Partners, Ltd. and others) will be paid a percentage of their Claim based
upon the dollar amount of their Claim or will otherwise receive on the Payment
Date less than 100.0% of the amount of each Claim. Because Creditors in Classes
4, 5, 7 and 8 will not receive 100.0% of their Claims in Cash, the Creditors in
these Classes are considered to be "Impaired" and, therefore, Creditors in
Classes 4, 5, 7 and 8 are the only Creditors who will be allowed to vote on
acceptance or rejection of the proposed Plan.
As to the Creditors in CLASS 4, the Plan provides that these Claims
will be paid in Cash in sixteen (16) equal quarterly installments over a four
(4) year term with the first payment being made on the Payment Date.
As to Creditors in CLASS 5, the Plan provides that these Claims will be
paid in full in Cash on the Effective Date or, alternatively, at the Debtor's
sole option, in equal monthly installments, the first installment to be made on
the Payment Date and continuing over a term consisting of
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thirty (30) months, or upon such other terms as may be agreed upon between the
Creditor and Debtor.
As to the Creditors in CLASS 7, the Plan provides that the Creditor may
elect to receive either (1) a lump sum payment of $1,200 on the Effective Date,
(2) a combination of Cash and Class A Common Stock, or (3) all stock.
As to CLASS 8, which has multiple parties-in-interest, Debtor is
proposing the Court ratify its settlement of litigation and a compromise of
claims involving the Class 8 claimants.
As to CLASS 9, that class has been reserved for disputed claims.
b. EQUITY INTEREST HOLDERS
As to the Equity Interest Holders in CLASS 10, most shareholders owning
Class A Common Stock are also entitled to vote on acceptance of the Plan. These
shareholders entitled to vote are any shareholder of record holding Class A
Common Stock on May 21, 1998 except any shareholder who acquired Class A Common
Stock subsequent to May 3, 1996 and (a) who failed to file a Proof of Interest
or (b) filed a Proof of Interest which Proof of Interest has been disputed by
Debtor. The capitalization of Debtor will be significantly effected as follows:
i. Class B Common Stock will be converted to Class A
Common Stock, and there will be a reverse stock split to reduce the number of
shares to no less than 500,000 and no more than 20,000,000. Thereafter, the
Series A and Series C Preferred Shares and the Class 6 Common Stock shall be
deemed to be extinguished by Amendment to the Articles of Incorporation;
ii. The Series B Preferred Shares shall be repurchased
by Debtor. The Articles of Incorporation will be amended to extinguish Series B
Preferred Shares and to
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establish a new class of preferred shares called "Special Stock."
iii. All Class A Common Stock issued after May 3, 1996
will be rescinded and deemed to be null and void ab initio. except as to
shareholders who are (i) bona fide purchasers for value, and (ii) filed a Proof
of Interest on or before November 10, 1997, which Proof of Interest was not
disputed by the Debtor.
iv. The reverse stock split effect by NEC in January
1997 will be deemed null and void ab initio.
v. By virtue of the conversion of the Class B Common
Stock to Class A Common Stock and the issuance of Class A Common Stock in
conjunction with the acquisition of Diego Tel, there will be substantial
dilution of the equity interest of the Class A Common Stock shareholders of
record as of May 3, 1996, whose interest will be diluted from 100% of the issued
and outstanding Class A Common Stock to 15.0%.
c. JUDICIAL ACTIONS
Promptly after the Confirmation Date, the Bankruptcy Court shall enter,
an Order to the effect that:
i. All Common and Preferred Stock issued by Debtor
subsequent to May 3, 1996 is null and void ab initio, except as to shareholders
who (i) are bona fide purchasers for value, and (ii) have filed a Proof of
Interest on or before November 10, 1997, which Proof of Interest was not
contested by the Debtor;
ii. The election of Michael Kassouff as a Director is
hereby ratified and all subsequent elections of officers are also ratified.
iii. The 1:6 reverse stock split effected by Debtor
in January 1997 is null
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and void ab initio;
iv. The amendments to Debtors Articles of Incorporation
filed with the Secretary of State for the State of Delaware in January 1997 are
null and void ab initio;
v. Any claimed security interest of Brady Geothermal
Park Power Partners against any asset of Debtor is null and void.
vi. The following actions taken by the Debtor's Board of
Directors are null and void ab initio:
(a.) Proposal to Amend Corporate Name and Symbol
(b.) Proposal to Increase Authorized Shares
(c.) Proposal to Increase Authorized Class B
Shares
(d.) Proposal to Authorize Class C Stock
(e.) Proposal to Authorize Lease Guaranty for
Santa Barbara Property
(f.) Debtor reserves the right to amend,
supplement or modify this listing upon
further investigation of the corporate
records.
vii. The Debtor is authorized to retain and to enforce
any claims or interests which the Debtor has or may have pursuant to the
Bankruptcy Code, whether or not such claims or interests have, been lodged in
an adversary proceeding commenced prior to the Confirmation of the Plan.
viii. Debtor is granted 120 days from the confirmation
Date to cure all defaults, if any, to National Union Fire Insurance Company,
pursuant to policy number 445-5300, renewal of policy number 443-38-50, and is
authorized to reserve all rights to pursue any and all
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remedies covered by said policy.
ix. Debtor shall be authorized to take all necessary
steps to effect the above.
d. LITIGATION AND CLAIMS.
Debtor has entered into settlements with various creditors, litigants
and other parties, the most significant of which is the settlement with NEP. The
Court will (1) ratify those Settlements and (2) authorize the Debtor to retain
and to enforce any claims or interests which the Debtor has or may have pursuant
to the Bankruptcy Code.