IN THE UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
WEST PALM BEACH DIVISION
In re:
eCOM eCOM.COM, INC.,
Debtor.
Chapter 11
Case No. 04-35435-BKC-SHF
FIRST AMENDED DISCLOSURE STATEMENT FOR
FIRST AMENDED JOINT PLAN OF REORGANIZATION OF
DEBTOR AND AMERICAN CAPITAL HOLDINGS, INC.
KLUGER, PERETZ, KAPLAN & BERLIN, P.L.
Michael D. Seese
201 South Biscayne Boulevard
17th Floor
Miami, Florida 33131
Telephone: (305) 379-9000
Facsimile: (305) 379-3428
Counsel for Debtor
- and -
SCHIFF HARDIN LLP
Michael Yetnikoff
6600 Sears Tower
Chicago, Illinois 60606
Telephone: (312) 258-5500
Facsimile: (312) 258-5600
Counsel for American Capital Holdings, Inc.
Dated: January 3, 2007
DISCLAIMER:
THE INFORMATION CONTAINED IN THIS FIRST AMENDED DISCLOSURE STATEMENT (THE
"DISCLOSURE STATEMENT") AND EXHIBITS HERETO RELATES TO THE DEBTOR'S FIRST
AMENDED PLAN OF REORGANIZATION (AS IT MAY BE AMENDED, SUPPLEMENTED OR OTHERWISE
MODIFIED, THE "PLAN"), AND MAY NOT BE RELIED UPON FOR ANY PURPOSE OTHER THAN TO
DETERMINE HOW TO VOTE ON SUCH PLAN. NO PERSON MAY GIVE ANY INFORMATION OR MAKE
ANY REPRESENTATIONS, OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN
THIS DISCLOSURE STATEMENT, REGARDING THE PLAN OR THE SOLICITATION OF ACCEPTANCES
OF THE PLAN.
ALL CREDITORS ARE ADVISED AND ENCOURAGED TO READ THIS DISCLOSURE STATEMENT
AND THE PLAN IN THEIR ENTIRETY BEFORE VOTING TO ACCEPT OR REJECT THE PLAN.
SUMMARIES OF THE PLAN AND STATEMENTS MADE IN THIS DISCLOSURE STATEMENT ARE
QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE PLAN, OTHER EXHIBITS ANNEXED OR
REFERRED TO HEREIN AND IN THE PLAN.
THIS DISCLOSURE STATEMENT HAS BEEN PREPARED IN ACCORDANCE WITH 11 U.S.C.
1125 AND RULE 3016(c) OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE (THE
"BANKRUPTCY RULES") AND NOT NECESSARILY IN ACCORDANCE WITH FEDERAL OR STATE
SECURITIES LAWS OR OTHER LAWS GOVERNING DISCLOSURE OUTSIDE THE CONTEXT OF THE
BANKRUPTCY CODE. NEITHER THE SECURITIES TO BE DISTRIBUTED NOR THIS DISCLOSURE
STATEMENT HAS BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION (THE "SEC") OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SEC
APPROVED OR DISAPPROVED OF THE ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED
HEREIN.
AS TO CONTESTED MATTERS, ADVERSARY PROCEEDINGS, AND OTHER ACTIONS OR
THREATENED ACTIONS, THIS DISCLOSURE STATEMENT AND APPENDICES HERETO WILL NOT
CONSTITUTE OR BE CONSTRUED AS AN ADMISSION OF ANY FACT OR LIABILITY,
STIPULATION, OR WAIVER, BUT RATHER AS A STATEMENT MADE IN SETTLEMENT
NEGOTIATIONS. THIS DISCLOSURE STATEMENT WILL NOT BE ADMISSIBLE IN ANY
NONBANKRUPTCY PROCEEDING NOR WILL IT BE CONSTRUED TO BE CONCLUSIVE ADVICE ON THE
TAX, SECURITIES, OR OTHER LEGAL EFFECTS OF THE REORGANIZATION AS TO HOLDERS OF
CLAIMS AGAINST OR EQUITY INTERESTS IN THE DEBTOR.
NO PARTY IS AUTHORIZED TO PROVIDE TO ANY OTHER PARTY ANY INFORMATION
CONCERNING THE PLAN OTHER THAN THE CONTENTS OF THIS DISCLOSURE STATEMENT. THE
DEBTOR HAS NOT AUTHORIZED ANY REPRESENTATIONS CONCERNING THE DEBTOR'S OR THE
VALUE OF ITS PROPERTY OTHER THAN THOSE SET FORTH IN THIS DISCLOSURE STATEMENT.
HOLDERS OF CLAIMS AND EQUITY INTERESTS SHOULD NOT RELY ON ANY INFORMATION,
REPRESENTATIONS OR INDUCEMENTS MADE TO OBTAIN YOUR ACCEPTANCE OF THE PLAN THAT
ARE OTHER THAN, OR INCONSISTENT WITH, THE INFORMATION CONTAINED HEREIN AND IN
THE PLAN.
CERTAIN OF THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE
FORWARD-LOOKING PROJECTIONS AND FORECASTS BASED UPON CERTAIN ESTIMATES AND
ASSUMPTIONS. THERE CAN BE NO ASSURANCE THAT SUCH STATEMENTS WILL BE REFLECTIVE
OF ACTUAL OUTCOMES, AND ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE
PROJECTIONS AND FORECASTS SET FORTH HEREIN. NOTHING CONTAINED IN THIS
DISCLOSURE STATEMENT, EXPRESS OR IMPLIED, IS INTENDED TO GIVE RISE TO ANY
COMMITMENT OR OBLIGATION OF THE DEBTOR OR WILL CONFER UPON ANY PERSON ANY
RIGHTS, BENEFITS OR REMEDIES OF ANY NATURE WHATSOEVER.
THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE ONLY AS OF
THE DATE HEREOF, AND THERE CAN BE NO ASSURANCE THAT THE STATEMENTS CONTAINED
HEREIN WILL BE CORRECT AT ANY TIME AFTER THE DATE HEREOF. NEITHER THE DELIVERY
OF THIS DISCLOSURE STATEMENT NOR THE CONFIRMATION OF THE PLAN WILL CREATE ANY
IMPLICATION, UNDER ANY CIRCUMSTANCES, THAT THE INFORMATION CONTAINED IN THIS
DISCLOSURE STATEMENT IS CORRECT AT ANY TIME AFTER THE DATE HEREOF OR THAT THE
DEBTOR WILL BE UNDER ANY OBLIGATION TO UPDATE SUCH INFORMATION IN THE FUTURE.
ANY PROJECTIONS PROVIDED IN THIS DISCLOSURE STATEMENT HAVE BEEN PREPARED
BY THE DEBTOR'S MANAGEMENT. ANY PROJECTIONS, WHILE PRESENTED WITH NUMERICAL
SPECIFICITY, ARE NECESSARILY BASED ON A VARIETY OF ESTIMATES AND ASSUMPTIONS
WHICH, THOUGH CONSIDERED REASONABLE AT THE TIME THEY WERE MADE, MAY NOT BE
ACHIEVED AND ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC,
COMPETITIVE, INDUSTRY, REGULATORY, MARKET AND FINANCIAL UNCERTAINTIES AND
CONTINGENCIES, MANY OF WHICH ARE BEYOND THE DEBTOR'S CONTROL. THE DEBTOR
CAUTIONS THAT NO REPRESENTATIONS CAN BE MADE AS TO THE ACCURACY OF THESE
PROJECTIONS OR TO THE DEBTOR'S ABILITY TO ACHIEVE THE PROJECTED RESULTS. SOME
ASSUMPTIONS INEVITABLY WILL NOT MATERIALIZE. FURTHER, EVENTS AND CIRCUMSTANCES
OCCURRING SUBSEQUENT TO THE DATE ON WHICH THESE PROJECTIONS WERE PREPARED MAY BE
DIFFERENT FROM THOSE ASSUMED OR, ALTERNATIVELY, MAY HAVE BEEN UNANTICIPATED, AND
THUS THE OCCURRENCE OF THESE EVENTS MAY AFFECT FINANCIAL RESULTS IN A MATERIALLY
ADVERSE OR MATERIALLY BENEFICIAL MANNER. THE PROJECTIONS, THEREFORE, MAY NOT BE
RELIED UPON AS A GUARANTY OR OTHER ASSURANC E OF THE ACTUAL RESULTS THAT WILL
OCCUR.
THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE U.S.
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED HEREIN. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
ARTICLE I.
INTRODUCTION
eCom eCom.com, Inc. ("eCom" or the "Debtor"), debtor in possession in this
Chapter 11 Case, and American Capital Holdings, Inc. ("ACH") submit this
Disclosure Statement pursuant to section 1125 of the Code to holders of Claims
against and Equity Interests in the Debtor in connection with (i) the
solicitation of acceptances of the First Amended Joint Plan of Reorganization of
Debtor and ACH (as amended, supplemented or otherwise modified, the "Plan"),
filed by the Debtor and ACH with the United States Bankruptcy Court for the
Southern District of Florida, West Palm Beach Division (the "Court") and (ii)
the hearing to consider confirmation of the Plan (the "Confirmation Hearing")
scheduled for March 12, 2007 at 1:30 p.m. (Eastern Time). Unless otherwise
defined herein, all capitalized terms contained herein have the meanings
ascribed to them in the Plan.
A. General
On November 29, 2004, an involuntary petition was filed against eCom under
Chapter 11 of the Code (the "Petition Date"). On May 16, 2005, the Court
entered an order for relief under Chapter 11. Since that time, the Debtor has
continued in the possession of its assets and in the management of its business
as a debtor in possession pursuant to sections 1107 and 1108 of the Code.
Chapter 11 is the principal business reorganization chapter of the Code.
Under Chapter 11, a debtor is authorized to reorganize its business for the
benefit of itself, its creditors and equity interest holders. In addition to
permitting rehabilitation of a debtor, another goal of chapter 11 is to promote
equality of treatment for similarly situated creditors and similarly situated
equity interest holders with respect to the distribution of a debtor's assets.
The commencement of a chapter 11 case creates an estate that is comprised
of all of the legal and equitable interests of the debtor as of the filing date.
The Code provides that the debtor may continue to operate its business and
remain in possession of its property as a "debtor in possession".
The consummation of a plan of reorganization is the principal objective of
a chapter 11 reorganization case. A plan of reorganization sets forth the terms
for satisfying claims against and equity interests in a debtor. Upon
confirmation of a plan of reorganization, the plan is binding upon a debtor, any
issuer of securities under the plan, any person acquiring property under the
plan and any creditor or equity interest holder of a debtor. Subject to certain
limited exceptions, the confirmation order discharges a debtor from any debts
that arose prior to the date of confirmation of the plan and substitutes the
obligations specified under the confirmed plan.
After a plan of reorganization has been filed, holders of certain claims
against or equity interests in a debtor are permitted to vote to accept or
reject the plan. Before soliciting acceptances of the proposed plan, however,
section 1125 of the Code requires a debtor to prepare a disclosure statement in
accordance with, and containing adequate information as defined in, section 1125
of the Code.
The Plan will be funded entirely by New Funding consisting of a loan to
the Reorganized Debtor by ACH, which will be used to fund all obligations under
the Plan. The projected sources and uses of the New Funding are set forth in
Exhibit B to the Plan. New Common Stock shall be issued as set forth in Exhibit
A to the Plan to certain holders of Allowed Unsecured Claims and to ACH in full
satisfaction of the DIP Financing.
Except as otherwise provided in the Plan, on the Effective Date of the
Plan, all Assets of the Debtor shall vest in the Reorganized Debtor. The
Reorganized Debtor shall assume all of the Debtor's rights, obligations and
liabilities under the Plan.
B. Disclosure Statement Overview
Attached as exhibits to this Disclosure Statement are copies of the
following:
* Exhibit A - Disclosure Statement Order
* Exhibit B - Three-Year Trading Price of eCom Common Stock
In addition, a Ballot for the acceptance or rejection of the Plan is
enclosed with the Disclosure Statement submitted to the holders of Claims and
Equity Interests that the Debtor believes are entitled to vote to accept or
reject the Plan.
On December 26, 2006, after notice and a hearing, the Court entered an
order approving this Disclosure Statement as containing adequate information of
a kind and in sufficient detail to enable hypothetical, reasonable investors
typical of the Debtor's creditors and holders of equity interests to make an
informed judgment whether to accept or reject the Plan, and establishing certain
procedures with respect to the solicitation of votes to accept or reject the
Plan (the "Disclosure Statement Order"). A copy of the Disclosure Statement
Order is being delivered with this Disclosure Statement. APPROVAL OF THIS
DISCLOSURE STATEMENT DOES NOT, HOWEVER, CONSTITUTE A DETERMINATION BY THE
BANKRUPTCY COURT AS TO THE FAIRNESS OR MERITS OF THE PLAN.
The Disclosure Statement Order sets forth in detail the deadlines,
procedures and instructions for voting to accept or reject the Plan and for
filing objections to confirmation of the Plan, the record date for voting
purposes, and the applicable standards for tabulating Ballots. In addition,
detailed voting instructions accompany each Ballot. Each holder of a Claim or
Equity Interest entitled to vote on the Plan should read the Disclosure
Statement, the Plan, the Disclosure Statement Order and the instructions
accompanying the Ballots in their entirety before voting on the Plan. These
documents contain, among other things, important information concerning the
classification of Claims and Equity Interests for voting purposes and the
tabulation of votes. No solicitation of votes to accept the Plan may be made
except pursuant to section 1125 of the Code.
C. Holders of Claims and Equity Interests Entitled to Vote
Pursuant to the Code, only holders of Allowed Claims or Equity Interests
in Classes of Claims or Equity Interests that are Impaired within the meaning of
section 1124 of the Code ("Impaired") that are entitled to receive Distributions
under the Plan, are entitled to vote to accept or reject such Plan. Classes of
Claims or Equity Interests in which the holders of such Claims or Equity
Interests are not Impaired under the Plan are deemed to have accepted the Plan
and are not entitled to vote to accept or reject the Plan.
Under the Plan, holders of holders of Class 1 Claims and Class 2 Claims
are not Impaired and are not entitled to vote on the Plan. Holders of Claims in
Classes 3A and 3B are Impaired and are entitled to vote on the Plan. Holders of
Class 4 Equity Interests are Impaired and are entitled to vote on the Plan.
D. Voting Procedures
If you are entitled to vote to accept or reject the Plan, a Ballot is
enclosed for the purpose of voting on the Plan. If you hold Claims in more than
one Class and you are entitled to vote Claims in more than one Class, you may
receive separate Ballots which must be used for each separate Class of Claims.
By order dated December 28, 2006 the Bankruptcy Court established January 4,
2007 as the Shareholder Record Date, which is the date on which the registered
and beneficial owners of shares of common stock in the Debtor shall be
identified for purposes of voting on the Plan. Please vote and return your
Ballot(s) to (unless otherwise provided in the Disclosure Statement Order or if
you are a beneficial owner of common stock in the Debtor (in which case, you
should return your Ballot to the Beneficial Agent from whom you received the
Ballot):
IF BY MAIL OR
HAND OR OVERNIGHT DELIVERY:
Office of the Clerk of the Court
United States Bankruptcy Court
51 S.W. First Avenue, Room 1517
Miami, Florida 33131
DO NOT RETURN YOUR NOTES OR SECURITIES WITH YOUR BALLOT.
TO BE COUNTED, YOUR BALLOT INDICATING ACCEPTANCE OR REJECTION OF THE PLAN
MUST BE RECEIVED NO LATER THAN 5:00 P.M., EASTERN TIME, ON THE BALLOT DEADLINE.
ANY EXECUTED BALLOT RECEIVED THAT DOES NOT INDICATE EITHER AN ACCEPTANCE OR
REJECTION OF THE PLAN SHALL BE DEEMED TO CONSTITUTE AN ACCEPTANCE OF THE PLAN.
Any Claim in an Impaired Class as to which an objection or request for
estimation is pending or which is scheduled by the Debtor as unliquidated,
disputed or contingent is not entitled to vote unless the holder of such Claim
has obtained an order of the Court temporarily allowing such Claim for the
purpose of voting on the Plan.
The Court entered an order setting the Ballot Deadline as the deadline for
voting on the Plan. Accordingly, only holders of record as of the Ballot
Deadline that are otherwise entitled to vote under the Plan will receive a
Ballot and may vote on the Plan.
If you are a holder of a Claim entitled to vote on the Plan and did not
receive a Ballot, received a damaged Ballot or lost your Ballot, or if you have
any questions concerning the Disclosure Statement, the Plan or the procedures
for voting on the Plan, please contact counsel for the Proponents at the
addresses or phone numbers listed in Article V.
E. Vote Required for Acceptance; Best Interests; Binding Effect
The Code defines acceptance of a plan by an impaired class of claims as
acceptance by holders of at least two-thirds in dollar amount, and more than
one-half in number, of the claims of that class which actually cast ballots.
The Code defines acceptance of a plan by an impaired class of equity interests
as acceptance by holders of at least two-thirds in amount of the equity
interests of that class that actually cast ballots. The vote of a holder of a
claim or equity interest may be disregarded if the bankruptcy court determines,
after notice and a hearing, that the acceptance or rejection was not solicited
or procured in good faith.
In addition, section 1129 of the Code requires that a plan of
reorganization be accepted by each holder of a claim or equity interest in an
Impaired class or that the plan be found by the court to provide the holder with
at least as much value on account of the claim or interest as it would receive
if the debtor were liquidated under chapter 7 of the Code.
Confirmation of the Plan will make the Plan binding upon the Debtor,
holders of Claims against and Equity Interests in the Debtor, and other parties
in interest regardless of whether they have accepted the Plan, and such holders
of Claims and/or Equity Interests will be prohibited from receiving payment
from, or seeking recourse against, the Reorganized Debtor or any assets that are
distributed to other holders of Claims and/or Equity Interests under the Plan.
In addition, confirmation of the Plan will enjoin creditors and equity interest
holders from taking a wide variety of actions on account of a debt, claim,
liability, interest or right that arose prior to the Confirmation Date. As of
the Effective Date of the Plan, confirmation will also operate as a discharge of
all Claims against, and Equity Interests in, the Debtor, to the fullest extent
authorized by section 1141(d) of the Code.
F. Confirmation Hearing
Pursuant to section 1128 of the Code, the Confirmation Hearing will be
held on March 12, 2007 at 1:30 p.m. (Eastern Time), before The Honorable Steven
H. Friedman, United States Bankruptcy Judge, United States Bankruptcy Court,
Southern District of Florida, West Palm Beach Division, 1515 North Flagler
Drive, Room 801, Courtroom B, West Palm Beach, Florida 33401. The Court has
directed that objections, if any, to confirmation of the Plan be served and
filed so that they are received on or before March 2, 2007 in accordance with
the Disclosure Statement Order. The Confirmation Hearing may be adjourned from
time to time by the Court without further notice except for the announcement of
the adjournment date made at the Confirmation Hearing or any adjourned
Confirmation Hearing.
G. Effective Date
The Plan may not be consummated immediately upon confirmation, but only
upon the Effective Date. The Effective Date will not occur unless various
conditions to confirmation and consummation are satisfied (or waived pursuant
to, and in accordance with, the terms of the Plan). The Confirmation Order may
be vacated if the conditions to the Effective Date are not timely met or waived.
Because of the conditions to the Effective Date provided in the Plan, a
delay may occur between confirmation of the Plan and the Effective Date. There
is no assurance that the conditions to the Effective Date will be fulfilled, or
that any condition that is not fulfilled will be waived.
ARTICLE II.
OVERVIEW OF DISTRIBUTIONS UNDER THE PLAN
The following briefly summarizes the classification and treatment of
Claims and Equity Interests under the Plan. This table is only a summary of the
classification and treatment of Claims and Equity Interests under the Plan.
Reference should be made to the entire Disclosure Statement and the Plan for a
complete description of the classification and treatment of Claims and Equity
Interests.
Type of Claim
or Equity Estimated Estimated
Class Interest Amounts Treatment Recovery
- ----- ------------- ---------- -------------------------------------- ----------
1 Allowed Other See Plan Not Impaired. Each holder of an 100%
Priority Claims Exhibit A Allowed Other Priority Claim shall
receive, in full satisfaction, release
and exchange for such Claim, Cash in an
amount equal to the Allowed Amount of
such Class 1 Claim in accordance with
section 1129(a)(9) of the Code
commencing on the later of the Effective
Date and the date such Claim becomes an
Allowed Claim, or as soon thereafter as
is reasonably practicable.
2 Allowed None Not Impaired. Each holder of an 100%
Secured Claims Allowed Secured Claim shall receive, in
full satisfaction, release and exchange
for such Claim, (i)_Cash in the Allowed
Amount of such Class 2 Claim, or (ii)
the Debtor shall abandon the Collateral
securing such Allowed Secured Claim, on
the later of the Effective Date, or the
date such Claim becomes an Allowed Claim,
or as soon thereafter as is reasonably
practicable. To the extent that any
holder of such Secured Claim believes it
possesses an unsecured deficiency claim
within the meaning of section 506 of the
Code, such holder must request a
determination as to the amount of such
deficiency claim prior to the commencement
of the first scheduled Confirmation
Hearing, or such claim will be extinguished
and forever barred. The Debtor is not aware
of any Secured Claims.
3A Allowed See Plan Impaired. Subject to the terms of 100% in
Unsecured Exhibit A Section 5.04(a) of the Plan, each Cash or
Claims holder of an Allowed Unsecured Claim New
shall receive, pursuant to the Class Common
3A Election, in full satisfaction, Stock
release and exchange for such Claim,
either (a) Cash in an amount equal to
the Allowed Amount of such Unsecured
Claim, or (b) New Common Stock of the
Reorganized Debtor valued at $0.026
per share, of a value equal to the
Allowed Amount of such Unsecured Claim,
on the later of (i) the Effective Date,
or (ii) the date such Claim becomes an
Allowed Claim, or as soon thereafter as
is reasonably practicable. Exhibit A to
the Plan sets forth the number of shares
of New Common Stock expected to be issued
under the Plan to holders of Claims in
Classes 3A and 3B, and in repayment of
the DIP Financing. The Class 3A Election
shall be made on the Ballot. Holders of
Class 3 Claims which do not indicate an
election on the Ballot shall be deemed to
have chosen to receive New Common Stock
and not Cash.
3B Allowed Insider See Plan Impaired. Following full satisfaction 100%
Unsecured Exhibit A of the Allowed Class 3A Claims in New
Claims (either in Cash or New Common Stock, Common
pursuant to the Class 3A Election), each Stock
holder of an Allowed Insider Unsecured
Claim shall receive, in full satisfaction,
release and exchange of such Claim, shares
of New Common Stock of the Reorganized
Debtor, valued at $0.026 per share, of a
value equal to the Allowed Amount of such
Claim, on the later of (i) the Effective
Date, and (ii) the date such Claim becomes
an Allowed Insider Unsecured Claim, or as
soon thereafter as is reasonably practicable
thereafter. Exhibit A to the Plan sets
forth the number of shares of New Common
Stock expected to be issued to holders of
Claims in Classes 3A and 3B, and in
repayment of the DIP Financing.
4 Allowed Equity See Plan Impaired. The holders of Allowed Retention
Interests Exhibit A Equity Interests shall be entitled to of Equity
retain their Equity Interests in the Interests
Reorganized Debtor, subject to the
issuance of the New Common Stock of the
Reorganized Debtor pursuant to section
8.03 of the Plan. Other than retaining
their Equity Interests in the Debtor,
the holders of Allowed Class 4 Equity
Interests shall not be entitled to
receive any Distribution under the Plan
on account of such Equity Interests.
Exhibit A to the Plan sets forth the
number of shares of New Common Stock to
be issued under the Plan to holders of
Claims in Classes 3A and 3B, and in
repayment of the DIP Financing. To the
extent Class 4 Interests reject the Plan,
the Plan may be confirmed under section 1129(b)
of the Code pursuant to section 5.02 of
the Plan.
ARTICLE III.
GENERAL INFORMATION
A. Description and History Of The Debtor
1. Organizational Structure and Background of the Debtor
The Debtor is a Florida corporation with its principal place of business
located in Palm Beach Gardens, Florida. The Debtor has one class of stock which
is Common stock with a par value of $0.0001. There are 300,000,000 shares
authorized and 49,955,112 shares outstanding. The shareholders of the Debtor
who own more than five (5) percent or more of the voting securities and the
percentage of stock owned by each are as follows:
Name and Address Number of Shares Owned % of Shares Outstanding
- -------------------- ------------------------ --------------------------
David J. Panaia Family 8,187,459 16.39%
(1)Palm Beach Gardens, FL
(1) David J. Panaia, a former officer and director of the Debtor (now deceased),
was the beneficial owner of 400,000 shares held in the name of the Panaia Family
Trust and 41,500 shares held in the name of Barbara Panaia, wife of decedent
Richard C. Turner 4,617,400 9.24%
Palm Beach Gardens, FL
2. History of eCom
The Debtor's business was incorporated in the State of Florida on June 14,
1994. Since the Debtor's inception, its business operations include research,
feasibility studies, development of business plans and operating procedures,
acquisition analysis, raising of capital, promotion, identification of key
executives and administrative functions.
On January 5, 1996, the Debtor expanded by acquiring the assets of
Performance Paintball Products, Inc. of Riviera Beach, Florida in exchange for a
note in the amount of $101,295.00. The assets consisted of inventory, property
and equipment necessary to conduct the business of producing the Viper M1
paintball marker and related accessories. Included in the purchase were
exclusive rights to use of the Viper name and related technology.
The Viper marketing program, including use of internet web sites,
publication of articles in leading paint ball industry magazines, demonstrations
at trade shows, distribution of manuals, brochures and other marketing materials
to dealers and establishment of a telemarketing department, created a demand for
the Viper M1 marker that resulted in a backlog of orders. Expansion of the
Internet web site for the USA SportsNet business unit and testing of the Saf-T-
Net software bundle continued.
On November 21, 1996, the Debtor's initial public offering of common stock
for up to $9,000,000 became effective. The offering consisted of 30,000 units
of common stock at $300 per unit, each unit consisting of 50 shares.
In 1999, eCom reached record trading volume and a historical high share
price of $21.50, with a resulting market capitalization of around $250 million.
However, since it peak in 1999, eCom has been in a state of steady decline.
When eCom was unable to pay its auditors, eCom was unable to keep its Securities
and Exchange Commission ("SEC") filings current. Presently, eCom is thinly
traded on the Pink Sheets, with a 52-week high of $0.23, and an ask price of
0.015 cents per share as of July 24, 2006. eCom's market capitalization has
shrunk to less than $500,000, which, without a qualified reorganization plan,
could easily shrink further, as eCom has a negative net worth.
A chart of the three-year trading prices of eCom's common stock is
attached hereto as Exhibit B.
3. Debtor's Effort to Refocus and Redirect its Assets
The Debtor's Annual Report on Form 10-K for the period ending May 31, 2003
disclosed the Debtor's redirection of its business assets to focus on only three
of its current business segments. Management opined that the businesses that
would realize the greatest yield for the Debtor were:
* USA SportsNet Company, Palm Beach Gardens, Florida Product Line: e-
Commerce business through Internet auction, sale and swapping of sports
memorabilia.
* USA Performance Products, Inc., Riviera Beach, Florida Product Line:
Manufactures and distribution of the Viper M1 paintball gun line. An M16 look
alike gun which fires in all weather and is made entirely in the USA.
* MyZipSoft, Inc., Palm Beach Gardens, Florida Product Line: Development
and distribution of software. Its first product is a high-compression software
called MyPhotoZip (TM).
The Debtor's strategy was refocused to provide an affordable, user-
friendly technological platform and professional resources to facilitate web
business development. All other operations of the Debtor were placed on hold
indefinitely.
The Debtor also announced its intent to spin-off all ten (10) of its
subsidiaries: USA SportsNet, Inc., USA Performance Products, Inc., eSecureSoft
Corp., USAS Digital, Inc., Pro Card Corporation, AAB National Company, A
Classified Ad, Inc., Swap and Shop.net Corp., A Super Deal.com, Inc. and
MyZipSoft, Inc., since the Debtor did not have the financial resources necessary
to develop all of its ten (10) business units collectively.
On December 18, 2003, USA SportsNet, Inc. entered into a definitive Asset
Acquisition Agreement with American Capital Holdings, Inc. The record date for
the spin-off of USA SportsNet, Inc. (later renamed American Capital Holdings,
Inc.) from the Debtor was January 5, 2004. The record date for the second
spinoff, MyZipSoft, Inc. was February 23, 2004. On March 2, 2004, the Board of
Directors of eCom eCom.com, Inc. approved the spinoff of USA Performance
Products, Inc. and the remaining seven (7) spinoff companies in which the Board
of Directors voted to issue to their shareholders one (1) share of the company
for every one (1) share of eCom eCom.com, Inc. owned with a record date to be
announced.
B. The Events Precipitating the Bankruptcy
In a press release published by the Chairman of eCom eCom.com, Inc., David
J. Panaia, on March 29, 2004, the Debtor announced Barney A. Richmond had been
appointed President of eCom for the purpose of spinning off ten (10) of the
Debtor's wholly owned subsidiaries.
On May 24, 2004, ACH (f/k/a USA SportsNet, Inc.) filed a Form 10-SB with
the SEC. On July 27, 2004 American Capital's Form 10SB became effective by the
SEC.
On June 4, 2004, the Board of Directors of the Debtor passed a corporate
resolution to spinoff the remaining subsidiaries of eCom eCom.com, Inc. and
authorized whatever action necessary to complete this process including
acquisitions and mergers. The corporate resolution was signed by David J.
Panaia (Chairman, CEO and Secretary), Richard C. Turner (Director and Treasurer)
and Barney A. Richmond (Director and President).
The motion in the above described June 4, 2004 board resolution included
the instructions for the distribution of stock by its Transfer Agent, Florida
Atlantic Stock Transfer (FAST) to the proper entities when the share
certificates were properly exercised and costs relating to the issuance of these
shares were paid in full. However, eCom was not able to pay FAST the amounts
required to send out the stock certificates to the shareholders, and
accordingly, the shares were not issued as stated.
ACH was inundated with hundreds and hundreds of telephone calls from eCom
shareholders, requesting delivery of their promised spin-off shares. Numerous
shareholders demanded delivery of their promised share certificates and others
threatened legal action against eCom.
In order to comply with General Accepted Accounting Principles with
respect to ACH's audits, Mr. Panaia had previously agreed to sign promissory
notes for the loans provided by American Capital as soon as all parties could
determine the exact amounts of the then forthcoming invoices (whose amounts were
unknown until received) by the SEC qualified accounting firm, Wieseneck &
Andres, P.A. When these accounting invoices and other expense invoices were
received in early August 2004, Mr. Panaia refused to return telephone calls,
sign accounting confirmation requests from ACH accountants, or sign the
necessary promissory notes.
ACH's numerous attempts to have Mr. Pania execute the aforementioned
promissory notes proved unsuccessful. On November 16, 2004, an additional
letter was sent to Mr. Panaia, requesting the execution of the promissory notes
and the additional information needed for the completion of the ACH audits for
the SEC filings. These confirmation letters and further information needed to
complete the financial audits went unanswered by Mr. Panaia. eCom failed to
file a current report on Form 8-K disclosing eCom's de-listing from the OTCBB.
Due to the above described dilemma resulting from Mr. Panaia's refusal to
address the monies advanced by ACH to eCom, on November 22, 2004, Barney A.
Richmond resigned as an Officer and Director of eCom. Mr. Panaia failed to file
a current report on Form 8-K disclosing Mr. Richmond's resignation. Being there
were no other options available to eCom's creditors and its shareholders, on
November 29, 2004, an involuntary bankruptcy petition was filed against eCom.
C. The Involuntary Petition
On November 29, 2004, an involuntary petition was filed against eCom under
Chapter 11 of Title 11 of the United States Code. Thereafter, eCom requested
three (3) extensions to reply to the involuntary petition due to Mr. Panaia's
health-related issues. With consideration to Mr. Panaia's declining health, all
of the petitioning creditors voluntarily consented to these extensions.
ARTICLE IV.
EVENTS DURING THE CHAPTER 11 CASE
A. Bankruptcy Events
At a status conference conducted by the Court on or about May 16, 2005,
the Court, for the first time, learned that eCom was not represented by
bankruptcy counsel. Consequently, the Court entered the Order for Relief and
issued an order to show cause as to why the Case should not be dismissed. The
Court scheduled a status conference for June 6, 2005 and directed the Debtor to
obtain counsel.
On June 3, 2005, eCom retained the legal services of Kluger, Peretz,
Kaplan & Berlin, P.L. ("KPKB") as bankruptcy counsel. In this regard, eCom
filed (i) an application to retain KPKB, and (ii) requests to (x) borrow debtor-
in-possession financing from ACH in the amount of $100,000.00, (y) appoint
Barney A. Richmond as acting chief executive officer, and (z) provide electronic
service to shareholders vie eCom's web site and to use Executive Mail Service to
afford notice of the Case, the Bar Date, and the order authorizing the debtor to
provide electronic service on shareholders. All of the foregoing requests were
granted by the Court at hearing on June 6, 2005.
B. Other Post-Petition Events
On January 24, 2005, the Debtor was delisted from trading on the OTC
Bulletin Board and began trading on the pink sheets for failing to file the
Debtor's November 30, 2004 quarterly report. This delisting occurred because
the Debtor's auditors had not been paid. Therefore, in accordance with the
auditor independence provision in Sarbanes-Oxley Act of 2002 and AICPA Code of
Professional Conduct, the auditors could not be deemed independent.
Additionally, ACH has been forced to continue financial assistance steps
on behalf of the Debtor to bring the Debtor and the spun-off subsidiaries
current with their SEC qualified accountants, other creditors and to pay a
certain portion of credit card debts loaned to the Debtor by its former
employee, Richard Turner.
In order to protect its investment in eCom, ACH and current management of
eCom proceeded with a plan to recapture the lost shareholder value of eCom.
Undertaking this endeavor, the management of ACH and eCom's directors, Barney A.
Richmond and Richard Turner, realized that the CEO of eCom, David J. Panaia, had
not abided by what he originally set forth in the press releases regarding the
previously announced spin-off plan. It was then determined by many of the
shareholders that eCom was more than in financial turmoil and that Mr. Panaia
did not have the resources to complete which he had publicly stated.
During the period from late December 2004 thru mid-March 2005, ACH and the
petitioning creditors sympathized with the declining health of eCom's CEO, David
J. Panaia. The petitioning creditors were forced to incur considerable
additional costs to honor what was promised to eCom's shareholders by the former
management. These costs included expenses to bring all of the spin-off
companies current with their SEC filings, federal tax returns, state income tax
returns, state filing fees, accounting expenses, SEC auditing expenses, legal,
administrative and other business related expenses.
This endeavor included the preparation of (a) thirty (30) Form 10-QSBs;
(b); ten (10) Form 10-Ks; ten (10) Form 10-SB Registration Statements; (d)
twenty six (26) total State and Federal Tax Returns; (e) ten (10) applications
for the required SEC EDGAR CIK Numbers; and (f) ten (10) Transfer Agent-
required Standard & Poor's Cusip Numbers.
Additionally, there has been a tremendous administrative effort in
bringing all the spin-off companies current with respect to public company
reporting requirements, including the Sarbanes-Oxley Act. On March 20, 2005,
the Chairman/CEO and majority shareholder of eCom, David J. Panaia, died from
health complications. The former president and director of eCom, Richard C.
Turner, is acting as treasurer for eCom, without compensation. By order of the
Court, Barney A. Richmond, was appointed as the Debtor's acting chief executive
officer without compensation. It is expected that both Mr. Richmond and Mr.
Turner will remain with the Debtor, without compensation, until the proposed
reorganization plans are confirmed.
The issuance of share certificates of the spun off Subsidiaries were sent
via certified mail on June 2, 2005 to the shareholders of record as of May 31,
2005. eCom filed current reports on Form 8-K on May 31, 2005 and disclosing
same on June 2, 2005.
On behalf of eCom, ACH filed the requisite filings ACH believed were
necessary to bring eCom within SEC compliance. At the request of the SEC, the
Forms 10-SB filed for the spun-off Subsidiaries were subsequently withdrawn.
On August 4, 2005, the Court entered the Notification Order providing,
among other things, for service of notice of the hearing on this Disclosure
Statement to all shareholders.
This Plan provides a mechanism through which Claims may be classified and
treated and which will enable eCom to emerge from these Chapter 11 proceedings,
with shareholders retaining their equity interests in the Debtor, subject to the
issuance of New Common Stock as set forth in Exhibit A to the Plan.
Public reports filed with the SEC on behalf of the Debtor may be found at
www.sec.gov, and may be obtained for free at that website. Information about
the common stock of the Debtor, including trading prices of eCom's common stock,
may be obtained at the Debtor's website, ecomecom.net, also at no charge.
Attached hereto as Exhibit B is a chart showing the three-year trading
prices of the Debtor's common stock.
Finally, David Panaia's surviving spouse, Barbara Panaia, filed a Motion
for Leave to Allow a Late Filed Claim, Enlargement of Time to Object to Plan
and/or File Ballot and Objection to Confirmation (the "Motion"). The Motion was
filed primarily to allow a late-filed claim in the amount of $395,640.00 (the
"Panaia Claim"). The Plan Proponents objected to the Motion. If allowed, the
Reorganized Debtor would be obligated to issue approximately 15.2 Million shares
of New Common Stock on account of the Panaia Claim. However, the Plan Proponents
and Barbara Panaia have negotiated an agreement pursuant to which 7.5 Million
shares of New Common Stock (a conversion based on 50% of the claim) shall be
distributed to the holder of the Panaia Claim and the remaining portion of the
Panaia Claim shall be subordinated to Allowed Class 3 and Class 4 Claims and no
further distributions shall be made on account of the Panaia Claim under the
Plan. The Plan Proponents intend to seek approval of the proposed forgeoing
compromise at the Confirmation Hearing. The Debtor shall be filing a motion to
approve the compromise pursuant to Rule 9019 of the Bankruptcy Rules.
ARTICLE V.
THE PLAN OF REORGANIZATION
Upon confirmation of the Plan, and in accordance with the Confirmation
Order, the Debtor or Reorganized Debtor, as the case may be, will be authorized
to take all necessary steps, and perform all necessary acts, to consummate the
terms and conditions of the Plan. In addition to the provisions set forth
elsewhere in the Plan, the following shall constitute the means for
implementation of the Plan.
THE PLAN IS AN INTEGRAL PART OF THIS DISCLOSURE STATEMENT. THE SUMMARY OF
THE PLAN SET FORTH BELOW IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL
TEXT OF THE PLAN. IN THE EVENT OF ANY INCONSISTENCY BETWEEN THE PROVISIONS OF
THE PLAN AND THE SUMMARY CONTAINED HEREIN, THE TERMS OF THE PLAN WILL GOVERN.
C. Summary of the Plan
1. Treatment of Claims and Equity Interests
See Article II hereof for a summary of the treatment of Claims and Equity
Interests under the Plan.
2. Voting of Claims and Equity Interests
Each holder of an Allowed Claim in an Impaired Class of Claims or an
Allowed Equity Interest that is entitled to vote on the Plan pursuant to the
Code shall be entitled to vote separately to accept or reject the Plan as
provided in such order as may be entered by the Court establishing certain
procedures with respect to the solicitation and tabulation of votes to accept or
reject the Plan, or any other order or orders of the Court. Classes 3A, 3B and
4 are Impaired under the Plan.
3. Nonconsensual Confirmation ("Cram down")
To the extent any Impaired Class of Claims or Equity Interests entitled to
vote does not accept the Plan by the statutory majorities required by section
1126(c) of the Code, the Debtor is requesting confirmation of the Plan under the
cram down provisions of section 1129(b) of the Code.
4. The Reorganized Debtor
Except as otherwise provided in the Plan, on the Effective Date of the
Plan, all Assets of the Debtor shall be vested in the Reorganized Debtor. The
Reorganized Debtor shall assume all of the Debtor's rights, obligations and
liabilities under the Plan.
Following the Effective Date, eCom may take steps to acquire one or more
operating businesses for itself and the Subsidiaries and seek to bring the
Subsidiaries into compliance with SEC requirements.
(a) Management and Officers of the Reorganized Debtor
Initially, Barney A. Richmond will continue to serve as eCom's chief
executive officer, and Mr. Richard Turner will continue to serve as eCom's
treasurer and chief financial officer. Messrs. Richmond and Turner will devote
sufficient time to eCom in order to pursue its objectives. Messrs. Richmond and
Turner will, for the foreseeable future, provide their services to eCom at no
cost.
Mr. Richmond is Chairman of ACH. He has been an independent advisor and
investor in assisting companies, as well as individuals, regarding public
offerings, mergers, reverse mergers and a variety of corporate financing issues.
Mr. Turner was employed as an accountant responsible for corporate and
individual tax returns, business write-up services, and business consulting
services, including computer and database management. He was also formerly
responsible for financial reporting, budgeting and cost accounting on behalf of
a bank.
A schedule setting forth the identities of the initial officers of the
Reorganized Debtor shall be filed with the Clerk of the Court no later than ten
(10) days prior to the Ballot Deadline.
(b) Issuance of New Common Stock
Upon the effective date of the Plan, eCom shall emerge from bankruptcy as
a public company. Under the Plan, all holders of Allowed Equity Interests shall
retain their Equity Interests in eCom, subject to the New Common Stock to be
issued pursuant to the Plan. There are 49,955,112 shares of eCom common stock
currently outstanding. eCom projects that approximately 39,000,000 shares will
be issued under the Plan to creditors, for a total of approximately 89,000,000
shares outstanding as of the Effective Date. Although eCom believes it has over
5,000 shareholders, a portion of the shares are held in street name and,
therefore, eCom is not able to determine the precise number of actual
shareholders.
The New Common Stock to be issued on the Effective Date will be issued
pursuant to the exemption from the registration requirements of the Securities
Act of 1933 (and of equivalent state securities or "blue sky" laws) provided by
section 1145(a) of the Code, 11 U.S.C. section 1145. Generally, section 1145(a)
of the Code exempts from the registration requirements of the Securities Act and
equivalent state securities and "blue sky" laws the issuance of securities
directly or through a warrant to purchase such securities if the following
conditions are satisfied: (a) the securities are issued by a debtor, an
affiliate participating in a joint plan with the debtor, or a successor to the
debtor under a chapter 11 plan; (b) the recipients of the securities hold a
claim against, an interest in, or a claim for an administrative expense against,
the debtor and (c) the securities are issued entirely in exchange for the
recipient's claim against or interest in the debtor or are issued "principally"
in such exchange and "partly" for cash or property. The Debtor believes that
the issuance of the New Common Stock will satisfy the aforementioned
requirements.
Except as otherwise provided herein, the holders thereof without
registration may resell the New Common Stock unless, as more fully described
below, any such holder is deemed to be an "underwriter" with respect to such
securities, as defined in section 1145(b)(1) of the Code. Generally, section
1145(b)(1) of the Code defines an "underwriter" as any person who (a) purchases
a claim against, or equity interest in, a bankruptcy case, with a view towards
the distribution of any security to be received in exchange for such claim or
equity interest, (b) offers to sell securities issued under a bankruptcy plan on
behalf of the holders of such securities, (c) offers to buy securities issued
under a bankruptcy plan from persons receiving such securities, if the offer to
buy is made with a view towards distribution of such securities and under an
agreement made in connection with the plan, with the consummation of the plan,
or with the offer of sale of securities under the plan, or (d) is an issuer
within the meaning of Section 2(11) of the Securities Act. Although the
definition of the term "issuer" appears in Section 2(4) of the Securities Act,
the reference (contained in section 1145(b)(1)(D) of the Code) to Section 2(11)
of the Securities Act purports to include as "underwriters" all persons who,
directly or indirectly, through one or more intermediaries, control, are
controlled by, or are under common control with, an issuer of securities.
"Control" (as such term is defined in Rule 405 of Regulation C under the
Securities Act) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a person, whether
through the ownership of voting securities, by contract, or otherwise.
Notwithstanding anything herein to the contrary, it is possible that the
Reorganized Debtor may qualify as a "blank check company." The SEC has taken
the position that promoters or affiliates of blank check companies, as well as
their transferees, are underwriters of the securities issued. In accordance
with the SEC's position, any securities held by shareholders, including those
issued under the Plan, prior to a business combination, such as a merger, may be
resold only after the filing of a registration statement under the Securities
Act of 1933, and Rule 144 may not be a safe harbor for resale of those
securities regardless of technical compliance with Rule 144. While the
foregoing does not affect the issuance of shares of common stock under the Plan,
i.e., the shares will be issued free from registration requirements in
accordance with section 1145 of the Code, the resale or exchange of such
securities may be affected following confirmation of the Plan, such as in
connection with any resale of such securities or any proposed merger.
THE FOREGOING SUMMARY DISCUSSION IS GENERAL IN NATURE AND HAS BEEN
INCLUDED IN THIS DISCLOSURE STATEMENT SOLELY FOR INFORMATIONAL PURPOSES. THE
DEBTOR MAKES NO REPRESENTATIONS CONCERNING, AND DOES NOT HEREBY PROVIDE ANY
OPINION OR ADVICE WITH RESPECT TO, THE SECURITIES LAW AND BANKRUPTCY LAW MATTERS
DESCRIBED ABOVE. IN LIGHT OF THE COMPLEX AND SUBJECTIVE INTERPRETIVE NATURE OF
WHETHER A PARTICULAR RECIPIENT OF NEW COMMON STOCK MAY BE DEEMED TO BE AN
"UNDERWRITER" WITHIN THE MEANING OF SECTION 1145(B)(1) OF THE CODE UNDER
APPLICABLE FEDERAL AND STATE SECURITIES LAWS AND, CONSEQUENTLY, THE UNCERTAINTY
CONCERNING THE AVAILABILITY OF EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND EQUIVALENT STATE SECURITIES AND "BLUE SKY" LAWS, THE
DEBTORS ENCOURAGE EACH HOLDER OF A CLAIM OR EQUITY INTEREST POTENTIALLY ENTITLED
TO RECEIVE A REORGANIZATION SECURITY UNDER THE PLAN TO CONSIDER CAREFULLY AND
CONSULT WITH ITS OWN LEGAL ADVISOR(S) WITH RESPECT TO SUCH (AND ANY RELATED)
MATTERS.
(c) New Funding
On the Effective Date of the Plan, ACH will advance funds to the
Reorganized Debtor in order to fund obligations under the Plan. Additionally,
ACH shall advance to eCom funds sufficient to comply with reporting requirements
under any applicable federal and state securities laws, as well as the
reasonable fees and costs in connection with any registration statement which
may be required under the Securities Act of 1933, and to file all required
federal, state and local tax returns. The amount of New Funding is estimated to
be $129,000, as set forth in the projections and pro forma balance sheet
provided in Plan Exhibit B. ACH has placed this amount in escrow. The New
Funding shall be in the form of a loan. The New Funding shall be loaned to the
Reorganized Debtor on the following terms: (x) the New Funding shall be loaned
on an unsecured basis, (y) the New Funding shall accrue interest at the rate of
8% per annum, and (z) the New Funding, plus accrued interest, shall be due and
payable in full on the third (3rd) anniversary of the Effective Date by either
(i) converting such amount into common shares of the Reorganized Debtor's stock
at a conversion rate equal to the average trading price of common shares over
the five (5) business days preceding the third (3rd) anniversary of the
Effective Date, (ii) paying such amount in Cash, or (iii) a combination of
(z)(i) and (z)(ii); provided, however, that the Reorganized Debtor may, in its
sole discretion, prepay (without penalty) all or any portion of the New Funding,
plus accrued interest, at any time prior to the third (3rd) anniversary of the
Effective Date by means provided in (z)(i), (ii) or (iii) above.
(d) Effectiveness of Securities, Instruments and Agreements
On the Effective Date, agreements entered into or documents issued
pursuant to the Plan and/or any agreement entered into or instrument or document
issued in connection with any of the foregoing, as applicable, shall become
effective and binding upon the parties thereto in accordance with their
respective terms and conditions and shall be deemed to become effective
simultaneously.
(e) Corporate Action
On the Effective Date, all matters provided for under the Plan that would
otherwise require approval of the stockholders, directors or members of one or
more of the Debtor or Reorganized Debtor or their successors in interest under
the Plan shall be deemed to have occurred and shall be in full force and effect
from and after the Effective Date pursuant to the General Corporation Law of the
State of Florida, without any requirement of further action by the stockholders
or directors of the Debtor or Reorganized Debtor.
(f) No Change of Control
Any acceleration, vesting or similar change of control rights of any
Person under employment, benefit or other arrangements with the Debtor that
could otherwise be triggered by the entry of the Confirmation Order or the
consummation of the Plan or any of the transactions contemplated thereby shall
be deemed to be waived and of no force or effect.
(g) Restructuring Transactions
On and after the Effective Date, the Reorganized Debtor or any of the
Subsidiaries may enter into such transactions and may take such actions as may
be necessary or appropriate to effect a corporate restructuring of its
respective business, subject to the terms, conditions and restrictions set forth
in the Bylaws of, or otherwise applicable to, the Reorganized or the
Subsidiaries. Such restructuring may include one or more mergers,
consolidations, restructures, dispositions, liquidations, or dissolutions, as
may be determined by the Reorganized Debtor or the Subsidiaries to be necessary
or appropriate (collectively, the "Restructuring Transactions"). The actions to
effect the Restructuring Transactions may include: (i) the execution and
delivery of appropriate agreements or other documents of merger, consolidation,
restructuring, disposition, liquidation, or dissolution containing terms that
are consistent with the terms of the Plan and that satisfy the applicable
requirements of applicable state law and such other terms to which the
applicable entities may agree; (ii) the execution and delivery of appropriate
instruments of transfer, assignment, assumption, or delegation of any asset,
property, right, liability, duty, or obligation on terms consistent with the
terms of the Plan and having such other terms to which the applicable entities
may agree; (iii) the filing of appropriate certificates or articles of merger,
consolidation, or dissolution pursuant to applicable state law; and (iv) all
other actions that the applicable entities determine to be necessary or
appropriate, including making filings or recordings that may be required by
applicable state law in connection with such transactions. The Restructuring
Transactions may include one or more mergers, consolidations, restructures,
dispositions, liquidations, or dissolutions, as may be determined by the
Reorganized Debtor or the Subsidiaries to be necessary or appropriate to result
in substantially all of the respective assets, properties, rights, liabilities,
duties, and obligations of the Reorganized Debtor or the Subsidiaries vesting in
one or more surviving, resulting or acquiring corporations. In each case in
which the surviving, resulting, or acquiring corporation in any such transaction
is a successor to the Reorganized Debtor, such surviving, resulting, or
acquiring corporation will perform the obligations of the Reorganized Debtor
pursuant to the Plan to pay or otherwise satisfy the Allowed Claims against the
Reorganized Debtor, as applicable and to the extent necessary.
Because the Restructuring Transactions have not yet occurred, there are no
projections presented for future operations of the Debtor.
Notwithstanding anything herein to the contrary, it is possible that the
Reorganized Debtor may qualify as a "blank check company." The SEC has taken
the position that promoters or affiliates of blank check companies, as well as
their transferees, are underwriters of the securities issued. In accordance
with the SEC's position, any securities held by shareholders, including those
issued under the Plan, prior to a business combination, such as a merger, may be
resold only through a registration statement under the Securities Act of 1933
and Rule 144 may not be a safe harbor for resale of those securities regardless
of technical compliance with Rule 144. While the foregoing does not affect the
issuance of shares of common stock under the Plan, i.e., the shares will be
issued free from registration requirements in accordance with section 1145 of
the Code, the resale or exchange of such securities may be affected following
confirmation of the Plan, such as in connection with any resale of such
securities or any proposed Restructuring Transaction.
(h) Operation of the Debtor in Possession Between the Confirmation Date and the
Effective Date
The Debtor shall continue to operate as a debtor in possession in the
ordinary course, subject to the supervision of the Court and pursuant to the
Code and the Rules during the period from the Confirmation Date through and
until the Effective Date, and any obligation incurred by the Debtor during that
period shall constitute an Administrative Claim.
(i) Spin-Off of Subsidiaries
On December 1, 2003, the board of directors of eCom approved the spinoff
of the Subsidiaries. On June 4, 2004, the board of directors of eCom readopted
a resolution to spinoff the Subsidiaries and authorized whatever action
necessary to complete this process including acquisitions and mergers. In this
regard, the board included instructions for the distribution of stock by its
transfer agent to the proper entities when the share certificates were properly
exercised and costs relating to the issuance of these shares were paid in full.
Notwithstanding the foregoing, eCom was not able to pay its transfer agent the
amounts required to send out the stock certificates to the shareholders and,
therefore, the shares were not issued. Due to eCom's financial condition, eCom
was unable to effectuate the spinoffs. In connection with the spinoffs, eCom
owned all outstanding and issued shares of common stock in the Subsidiaries. By
spinning off the Subsidiaries, eCom proposed to distribute shares in the
Subsidiaries to eCom's shareholders in proportion to the shares held in eCom as
of the relevant record date.
On November 29, 2004, an involuntary petition was filed against eCom under
Chapter 11 of Title 11 of the United States Code. Thereafter, an order for
relief was entered by the United States Bankruptcy Court on May 16, 2005. On
June 2, 2005, the shares of the Subsidiaries were distributed to eCom
shareholders of record, as of May 27, 2005. Subsequent thereto, eCom caused a
registration statement on Form 10-SB to be filed for each of the Subsidiaries.
eCom believed that it could effectuate the spinoffs pursuant to the
criteria and procedures set forth in the September 16, 1997 Securities and
Exchange Commission Staff Legal Bulletin No. 4 issued regarding the
applicability of Section 5 of the Securities Act of 1933 (the "Bulletin"). eCom
was subsequently advised by the Staff of the Securities and Exchange Commission
("SEC") that the Subsidiaries may not qualify for the spinoff procedures set
forth in the Bulletin for a number of reasons, including the facts that (i)
there may not have been a valid "business purpose" as defined in the Bulletin,
and (ii) the certificates evidencing the shares were distributed prior to having
an effective Form 10-SB registration statement available for distribution to
shareholders. At the request of the SEC staff, eCom voluntarily withdrew the
Form 10-SB registration statements. After the Effective Date, the Subsidiaries
may, when and if appropriate transactions may be finalized, make necessary
filings to bring them into compliance with SEC regulations.
(j) Administration After the Effective Date
After the Effective Date, the Reorganized Debtor may operate its business,
and may use, acquire, and dispose of its property, free of any restrictions of
the Code and Rules.
On the Effective Date, the management, control and operation of the
Reorganized Debtor shall become the general responsibility of the board of
directors of the Reorganized Debtor, which shall, thereafter, have the
responsibility for the management, control and operation of the Reorganized
Debtor.
(k) Meetings of Stockholders
In accordance with the Reorganized Debtor's Certificate of Incorporation
and the Reorganized Debtor's Bylaws, as the same may be amended from time to
time, the first annual meeting of the stockholders of Reorganized Debtor shall
be held on a date selected by its board of directors.
(l) Bylaws and Certificates of Incorporation
On the Effective Date, the adoption of the Reorganized Debtor's
Certificate of Incorporation and the Reorganized Debtor's Bylaws shall be
authorized and approved in all respects to be effective as of the Effective
Date, in each case without further action under applicable law, regulation,
order, or rule, and including without any further action by the stockholders or
directors of the Debtor, the Debtor in Possession or the Reorganized Debtor.
The Reorganized Debtor's Certificate of Incorporation shall (i) prohibit the
issuance of nonvoting equity securities as required by section 1123(a)(6) of the
Code, (ii) authorize the reincorporation under the laws of the State of Florida,
(iii) authorize the issuance of New Common Stock under the Plan, and (iv)
authorize any other actions necessary to implementing the Plan, subject to
further amendment of such certificates of incorporation as permitted by
applicable law and the applicable organizational documents.
(m) Selection of Board Members
Members of the board of directors shall be selected in accordance with the
Reorganized Debtor's Certificate of Incorporation. As of the Effective Date of
the Plan, the members of the initial board of directors shall in each case serve
until their respective resignations or removal in accordance with applicable
law, or the applicable organizational documents. A schedule setting forth the
identities of the initial members of the board of directors shall be filed
within ten (10) days prior to the Ballot Deadline. Elections, removal and terms
of directors will be in accordance with Florida General Corporate Law.
(n) Corporate Governance
The business and affairs of the Reorganized Debtor shall be managed by its
board of directors in accordance with the Reorganized Debtor's Bylaws, the
Reorganized Debtor's Charter and applicable nonbankruptcy law.
5. Discharge of Debtor
The rights afforded herein and the treatment of all Claims and Equity
Interests herein shall be in exchange for and in complete satisfaction,
discharge and release of Claims and Equity Interests of any nature whatsoever,
including any interest accrued on such Claims from and after the Commencement
Date, against the Debtor and the Debtor in Possession, the Estate, or any of the
assets or properties under the Plan. Except as otherwise provided herein, (i)
on the Effective Date, all such Claims against and Equity Interest in the Debtor
shall be satisfied, discharged and released in full, and (ii) all Persons shall
be precluded and enjoined from asserting against the Reorganized Debtor, its
successors, or its assets or properties any other or further Claims or Equity
Interests based upon any act or omission, transaction or other activity of any
kind or nature that occurred prior to the Confirmation Date, whether or not such
holder has filed a proof of claim or proof of equity interest and whether or not
such holder has voted to accept or reject the Plan.
Again, eCom shall emerge from bankruptcy with a principal purpose of
entering into one or more acquisitions, including, without limitation,
acquisitions or mergers, with which to engage in a profitable business or
businesses. Notwithstanding that eCom currently has no operating business, the
Debtor believes that it is an appropriate candidate for a discharge under
section 1141. Specifically, section 1141(d)(3) of the Bankruptcy Code provides,
in part, that a debtor is not entitled to a discharge if, (i) the plan provides
for liquidation of all or substantially all of the Debtor's assets, (ii) the
debtor does not engage in business following consummation of the plan, and (iii)
the debtor would be denied a discharge under section 727(a) of Title 11 of the
United States Code if the case were pending under Chapter 7 of Title 11 of the
United States Code. In this case, eCom believes that the plan does not provide
for liquidation of all or substantially all of the Debtor's assets and the
Debtor intends to engage in business following confirmation. Moreover, the Plan
provides for full payment of Allowed Unsecured Claims (excluding such Claims of
Insiders) and holders of Allowed Equity Interests shall retain such Equity
Interests. Consequently, eCom believes it is an appropriate candidate for
discharge under section 1141 of the Code.
(a) Injunction Related to Discharge
Except as otherwise expressly provided in the Plan, the Confirmation Order
or a separate order of the Court, all Persons who have held, hold or may hold
Claims against or Equity Interests in the Debtor, are permanently enjoined, on
and after the Effective Date, from (i) commencing or continuing in any manner
any action or other proceeding of any kind with respect to any such Claim or
Equity Interest, (ii) enforcing, attaching, collecting or recovering by any
manner or means of any judgment, award, decree or order against the Debtor on
account of any such Claim or Equity Interest, (iii) creating, perfecting or
enforcing any Lien or asserting control of any kind against the Debtor or
against the property or interests in property of the Debtor on account of any
such Claim or Equity Interest and (iv) asserting any right of setoff,
subrogation or recoupment of any kind against any obligation due from the Debtor
or against the property or interests in property of the Debtor on account of any
such Claim or Equity Interest. Such injunctions shall extend to the Debtor, its
successors, subsidiaries and affiliates and their respective properties and
interests in property.
(b) Injunction Against Interference with the Plan
Upon the entry of a Confirmation Order with respect to the Plan, all
holders of Claims and Equity Interests and other parties in interest, along with
their respective present or former employees, agents, officers, directors, or
principals, shall be enjoined from taking any actions to interfere with the
implementation or consummation of the Plan, except with respect to actions any
such entity may take in connection with the pursuit of appellate rights.
6. Confirmation and Effectiveness of the Plan
(a) Conditions Precedent to Confirmation
The Plan shall not be confirmed by the Bankruptcy Court unless and until
the following conditions shall have been satisfied or waived pursuant to Section
9.04 of the Plan:
(i) The Confirmation Order shall be in form and substance reasonably
acceptable to the Debtor and include, among other things, a finding of fact that
the Debtor, the Reorganized Debtor, and their respective present and former
members, officers, directors, employees, advisors, attorneys, and agents acted
in good faith within the meaning of and with respect to all of the actions
described in section 1125(e) of the Bankruptcy Code and are therefore not liable
for the violation of any applicable law, rule or regulation governing such
actions.
(b) Conditions Precedent to Effectiveness
The Plan shall not become effective unless and until the following
conditions have been satisfied or waived pursuant to Section 9.04 of the Plan:
(i) The Confirmation Order shall have been entered and shall be a Final
Order (with no modification or amendment thereof), and there shall be no stay or
injunction that would prevent the occurrence of the Effective Date; and
(ii) The statutory fees owing to the United States Trustee shall have been
paid in full.
(c) Effect of Failure of Conditions
If each condition to the Effective Date specified in the Plan has not been
satisfied or duly waived within twenty (20) days after the Confirmation Date,
the Plan Proponents or any other party in interest may file a motion with the
Court in an effort to vacate the Confirmation Order; provided, however, if each
of the conditions to the Effective Date is either satisfied or duly waived
before the Court enters an order granting the relief requested in such motion,
then the motion may be wthdrawn. If the Confirmation Order is vacated, the Plan
shall be deemed null and void in all respects, including without limitation the
discharge of Claims pursuant to section 1141 of the Code and the assumptions or
rejections of executory contracts and unexpired leases as provided by the Plan,
and nothing contained herein shall (1) constitute a waiver or release of any
Causes of Action by, or Claims against, the Debtor or (2) prejudice in any
manner the rights of the Debtor.
(d) Waiver of Conditions
The Debtor may waive one or more of the conditions precedent to
confirmation of the Plan, or the condition precedent to effectiveness of the
Plan set forth in Section 9.02 of the Plan. The Debtor may waive in writing one
or more of the other conditions precedent to confirmation and effectiveness of
the Plan, without further notice to parties in interest or the Bankruptcy Court
without a prior hearing.
(e) Exculpation and Releases
Subject to the occurrence of the Effective Date, neither the Debtor nor
the Reorganized Debtor, or any of their respective members, officers, directors,
agents, financial advisors, attorneys, employees, equity holders, partners,
affiliates and representatives (the "Exculpated Parties") shall have or incur
any liability to any holder of a Claim or Equity Interest for any act or
omission in connection with, related to, or arising out of, the case and the
Plan, the pursuit of confirmation of the Plan, the consummation of the Plan or
the administration of the Plan or the property to be distributed under the Plan;
provided, that the foregoing shall not operate as a waiver or release for (i)
any express contractual obligation owing by any such Person or (ii) willful
misconduct or gross negligence, and, in all respects, the Exculpated Parties
shall be entitled to rely upon the advice of counsel with respect to their
duties and responsibilities under the Plan; provided further that nothing in the
Plan shall, or shall be deemed to, release the Exculpated Parties, or exculpate
the Exculpated Parties with respect to, their respective obligations or
covenants arising pursuant to the Plan.
(f) Releases
On the Effective Date, the Debtor, the Reorganized Debtor, and any and all
Holders of Claims and Equity Interests shall release unconditionally and are
hereby deemed to release unconditionally each of the Debtor, ACH and their post-
petition directors and officers, and Professionals (collectively, the "Released
Parties") from any and all claims, obligations, suits, judgments, damages,
losses, rights, remedies, causes of action, charges, costs, debts, indebtedness,
or liabilities whatsoever, whether known or unknown, foreseen or unforeseen,
existing or hereafter arising, in law, equity or otherwise, based in whole or in
part upon any act or omission, transaction, event or other occurrence taking
place between the Petition Date and the Effective Date, which is in any way
relating to the Debtor, this Case, any assets or Property of the Estate, the
business or operations of the Debtor, the DIP Financing, any Plan Documents, the
Plan, or any of the transactions contemplated thereby; provided, however, that
this release provision shall not be applicable to any liability found by a court
of competent jurisdiction to have resulted from fraud or the willful misconduct
or gross negligence of any such party. With respect to professionals, the
foregoing exclusion from this release provision shall also include claims of
professional negligence arising from the services provided by such Professionals
during the Case. Any such claims shall be governed by the standard of care
otherwise applicable to the standard negligence claims outside of bankruptcy.
The Confirmation Order shall enjoin the prosecution by any Person or entity,
whether directly, derivatively or otherwise, of any such claim, obligation,
suit, judgment, damage, loss, right, remedy, cause of action, charge, cost,
debt, indebtedness, or liability which arose or accrued during such period or
was or could have been asserted against any of the Released Parties, except as
otherwise provided in the Plan or in the Confirmation Order. Each of the
Released Parties shall have the right to independently seek enforcement of this
release provision. This release provision is an integral part of the Plan and
is essential to its implementation.
(g) Injunction Relating to Exculpation and Release
The Confirmation Order will contain an injunction, effective on the
Effective Date, permanently enjoining the commencement or prosecution by the
Debtor, the Reorganized Debtor and any other Person, whether derivatively or
otherwise, of any Cause of Action exculpated, released or discharged pursuant to
this Plan against the released and Exculpated Parties.
ARTICLE V.
CERTAIN RISK FACTORS TO BE CONSIDERED
HOLDERS OF CLAIMS AGAINST AND EQUITY INTERESTS IN THE DEBTOR SHOULD READ
AND CONSIDER CAREFULLY THE FACTORS SET FORTH BELOW, AS WELL AS THE OTHER
INFORMATION SET FORTH IN THIS DISCLOSURE STATEMENT (AND THE DOCUMENTS DELIVERED
TOGETHER HEREWITH AND/OR INCORPORATED BY REFERENCE), PRIOR TO VOTING TO ACCEPT
OR REJECT THE PLAN. THESE RISK FACTORS SHOULD NOT, HOWEVER, BE REGARDED AS
CONSTITUTING THE ONLY RISKS INVOLVED IN CONNECTION WITH THE PLAN AND ITS
IMPLEMENTATION.
A. Risk that Distributions Will be Less than Estimated by the Debtor
The factors specified below assume that the Plan is approved by the Court
and that the conditions precedent to the Effective Date of the Plan are
satisfied or otherwise waived.
The Debtor reserves the right to object to the amount or classification of
any Claim or Equity Interest. Thus, the estimates set forth in this Disclosure
Statement cannot be relied upon by any creditor whose Claim or Equity Interest
is subject to a successful objection. Any holder of such Claim or Equity
Interest may not receive the estimated Distributions set forth herein.
B. Industry Conditions and Financial Condition of Reorganized Debtor
At the outset, the Reorganized Debtor is essentially a start-up company.
While the Reorganized Debtor's initial board of directors and initial officers
have proven track records in connection with start-up entities and various types
of business acquisitions, the Reorganized Debtor is a new business. As such,
there are various risks associated with the Reorganized Debtor's business plan
and operations.
1. Indebtedness
The degree to which the Reorganized Debtor is leveraged could have
important consequences, including the following:
* the Reorganized Debtor's ability to obtain additional financing in the
future for working capital, capital expenditures, general corporate purposes or
other purposes may be impaired or such financing may not be available on
favorable terms
2. Limited Net Operating Loss Carry-Forwards
The Debtor currently has significant net operating loss tax carry-
forwards. As a consequence of a successful consummation of the Plan, the
Reorganized Debtor may utilize net operating loss tax carry-forwards to offset
any income generated in the future. The amount of the Debtor's losses and NOL
carryforwards remains subject to adjustment by the IRS, if appropriate.
C. Risk of Nonconfirmation of the Plan
Even if all Voting Classes accept the Plan, the Plan might not be
confirmed by the Court. Section 1129 of the Code sets forth the requirements
for the confirmation and requires, among other things, that the confirmation of
a plan of reorganization is not likely to be followed by the liquidation or the
need for further financial reorganization of the debtor, and that the value of
distributions to dissenting creditors and equity security holders not be less
than the value of distributions such creditors and equity holders would receive
if the debtor were liquidated under chapter 7 of the Code. There can be no
assurance, however, that the Court would also conclude that the requirements for
confirmation of the Plan have been satisfied.
If no plan can be confirmed, the Chapter 11 Case may be converted to a
case under Chapter 7 of the Code, pursuant to which a trustee would be appointed
or elected to liquidate the Debtor's assets for distribution in accordance with
the priorities established by the Code. The Debtor believes that liquidation
under Chapter 7 would not result in any distributions being made to creditors
than those provided for in the Plan, inasmuch as Distributions to holders of
Allowed Unsecured Claims will be funded from a contribution by ACH on the
Effective Date of the Plan, which would not otherwise occur, and because the
only value to be realized by holders of Allowed Equity Interests may be derived
from transactions that may occur following the Effective Date of the Plan.
D. Limited Funds for Pursuit of Business Objectives
Following the Effective Date, the Reorganized Debtor will have no assets,
other than shares in one or more of the Subsidiaries in the event the Debtor
cannot effectuate one or more valid spin-offs. Initially, the Reorganized
Debtor's only source of financing will be the New Funding to be provided by ACH.
After the Effective Date, ACH intends, for the foreseeable future, to advance to
the Reorganized Debtor such funds as are necessary for the Reorganized Debtor to
comply with its reporting requirements under any applicable federal and state
securities laws, and to file all required federal, state and local tax returns.
There can be no assurance that the Reorganized Debtor will be able to raise
acquisition financing if needed to complete a possible transaction or provide
capital to an acquired business.
E. Unspecified Industry and Target Company; Competition for Business
Combinations
The Reorganized Debtor has not selected any particular industry in which
to concentrate its efforts to effect a Restructuring Transaction; however, the
Debtor has been in negotiations with IS Direct.
F. Opportunity for Shareholder Evaluation or Approval of Restructuring
Transactions
The shareholders of the Reorganized Debtor will, in all likelihood,
neither receive nor otherwise have the opportunity to evaluate any financial or
other information which will be made available to the Reorganized Debtor in
connection with selecting a potential acquisition or merger target until after a
Restructuring Transaction is consummated. As a result, shareholders of the
Reorganized Debtor will be almost entirely dependent on the judgment of
management in connection with the selection of an acquisition or merger target
and the terms of any Restructuring Transaction.
G. Conflicts of Interest
The Reorganized Debtor's initial officers and directors are engaged in
business activities outside of the Reorganized Debtor, and the amount of time
devoted to the Reorganized Debtor's activities may be limited. There may exist
potential conflicts of interest including, among other things, time, effort and
Restructuring Transactions with such other business entities. To aid the
resolution of such conflicts, the Reorganized Debtor will adopt a procedure
whereby a special meeting of the Reorganized Debtor's shareholders will be
called to vote upon a Restructuring Transaction with any affiliated entity, and
shareholders who also hold securities of such affiliated entity will be required
to vote their shares of the Reorganized Debtor's stock in the same proportion as
the Restructuring Debtor's publicly held shares are voted. Such procedure shall
be in the form of an informal agreement.
H. Authorization of Additional Securities
The Reorganized Debtor's board of directors has the power to issue any or
all of such authorized but unissued shares without shareholder approval.
Although the Reorganized Debtor has no commitments as of the date hereof to
issue any shares of new common stock (aside from the New Common Stock to be
issued pursuant to the Plan), the Reorganized Debtor will, in all likelihood,
issue a substantial number of additional shares in connection with a
Restructuring Transaction. To the extent that additional shares of new common
stock are issued, dilution to the interests of the Reorganized Debtor's
shareholders will occur.
I. Possible Future Change in Control and Management
Upon the successful completion of a Restructuring Transaction, new common
stock in the Reorganized Debtor may be issued, which when issued may comprise a
majority of the then issued and outstanding shares of new common stock of the
Reorganized Debtor. In such event, there may be a change of control in the
Reorganized Debtor which would most likely result in the resignation or removal
of the Reorganized Debtor's present officers and/or directors. If there is a
change in management, no assurance can be given as to the experience or
qualification of such persons either in the operation of the Reorganized
Debtor's activities or in the operation of the business, assets or property
being acquired.
J. Unforeseeable Risks Associated with Restructuring Transactions
The Reorganized Debtor may be dependent upon existing or new management of
an acquisition or merger target with which it may engage in a Restructuring
Transaction, and may thus lack the control necessary to adjust the direction of
the business in the event such operating management is unable to cope with
business problems that may arise. Because the Reorganized Debtor may
participate in a Restructuring Transaction with newly-organized firms or with
firms which are attempting to expand through new products, markets or methods of
distribution, the Reorganized Debtor may face additional special risks
associated with development stage operations or operating management lacking in
specific experience pertinent to the business involved. Regardless of the type
of business with which the Reorganized Debtor may become involved through a
Restructuring Transaction, it will be subject to all of the risk factors, which
are presently undeterminable, relating to such business and its industry.
K. Possible Use of Debt Financing; Debt of an Acquisition or Merger Company
There currently are no limitations on the Reorganized Debtor's ability to
borrow or otherwise raise funds to increase the amount of capital available to
effect a Restructuring Transaction. However, the Reorganized Debtor's limited
resources and lack of operating history will make it difficult to borrow funds.
The amount and nature of any borrowings will depend on numerous considerations,
including capital requirements, perceived ability to meet debt service on any
such borrowings and the than prevailing conditions in the financial markets, as
well as general economic conditions. There can be no assurance that debt
financing, if required or sought, would be available on terms deemed to be
commercially acceptable by and in the best interests of the Reorganized Debtor.
The inability to borrow funds required to effect or facilitate a Restructuring
Transaction or to provide funds for an additional infusion of capital into an
acquisition or merger candidate and may have a material adverse effect on the
Reorganized Debtor's financial condition, future prospects and ability to
complete a Restructuring Transaction. Additionally, to the extent that debt
financing ultimately proves to be available, any borrowings may subject the
Reorganized Debtor to various risks traditionally associated with indebtedness,
including the risks of interest rate fluctuations and insufficiency of cash flow
to pay principal and interest. Furthermore, an acquisition or merger candidate
may have already incurred borrowings and, therefore, all the risks inherent
thereto.
L. The Investment Company Act of 1940
The Investment Company Act defines an "investment company" as an issuer
which is or holds itself out as being engaged primarily in the business of
investing, reinvesting or trading of securities. While the Reorganized Debtor
does not intend to engage in such activities, the Reorganized Debtor could
become subject to regulations under the Investment Company Act in the event the
Reorganized Debtor obtains or continues to hold a minority interest in a number
of enterprises. The Reorganized Debtor could be expected to incur significant
registration and compliance costs if required to register under the Investment
Company Act. Accordingly, management will continue to review the Reorganized
Debtor's activities from time to time with a view toward reducing the likelihood
the Reorganized Debtor could be classified as an "investment company."
The Reorganized Debtor has not engaged, does not intend to engage, nor
does it have the authority to engage in the business of advising others, either
directly or through publications or writings, as to the value of securities or
as to the advisability of investing in, purchasing or selling securities for
compensation. In addition, the Reorganized Debtor does not intend as part of
its regular business to issue or promulgate analyses or reports concerning
securities. The Reorganized Debtor does not intend to pursue any course of
business which would render it an "investment advisor" as that term is defined
in the Investment Advisor's Act of 1940.
M. No Dividends Anticipated
In view of the Reorganized Debtor's present financial status and
contemplated financial requirements, the payment of dividends in the foreseeable
future is highly unlikely.
N. "Blank Check" Designation
It is possible that the Reorganized Debtor may qualify as a "blank check
company." The SEC has taken the position that promoters or affiliates of blank
check companies, as well as their transferees, are underwriters of the
securities issued. In accordance with the SEC's position, any securities held
by shareholders, including those issued under the Plan, prior to a business
combination, such as a merger, may be resold only through a registration
statement under the Securities Act of 1933 and Rule 144 may not be a safe harbor
for resale of those securities regardless of technical compliance with Rule 144.
While the foregoing does not affect the issuance of shares of common stock under
the Plan, i.e., the shares will be issued free from registration requirements in
accordance with section 1145 of the Code, the resale or exchange of such
securities may be affected following confirmation of the Plan, such as in
connection with any resale of such securities or any proposed merger.
Therefore, there is a risk that the Reorganized Debtor's business
activities may meet the criteria of a "blank check" and, therefore, the
Reorganized Debtor may be classified as a "blank check" company. If so,
shareholders may not be able to trade their shares until a registration
statement is filed under the Securities Act of 1933.
ARTICLE VI.
CONFIRMATION OF THE PLAN
Under the Code, the following steps must be taken to confirm the Plan.
A. The Confirmation Hearing
The Code requires the Court, after notice, to hold a confirmation hearing
before a plan of reorganization may be confirmed. The Confirmation Hearing in
respect of the Plan has been scheduled for March 12, 2007 at 1:30 p.m. (Eastern
Time), before the Honorable Steven H. Friedman, United States Bankruptcy Judge,
at the United States Bankruptcy Court, Southern District of Florida, West Palm
Beach Division, 1515 North Flagler Drive, Room 801, Courtroom B, West Palm
Beach, Florida 33401. The Confirmation Hearing may be adjourned from time to
time by the Bankruptcy Court without further notice except for an announcement
of the adjourned date made at the Confirmation Hearing. Any objection to
confirmation must be made in writing and specify in detail the name and address
of the objector, all grounds for the objection and the amount of the Claim or
number and type of shares of Equity Interest held by the objector. The Court
has directed that objections, if any, to confirmation of the Plan be served and
filed so that they are received on or before March 2, 2007 in accordance with
the Disclosure Statement Order. The Confirmation Hearing may be adjourned from
time to time by the Court without further notice except for the announcement of
the adjournment date made at the Confirmation Hearing or any adjourned
Confirmation Hearing.
Objections to confirmation of the Plan are governed by Rule 9014.
B. Requirements for Confirmation of the Plan
At the Confirmation Hearing, the Court will confirm the Plan only if all
of the requirements of section 1129 of the Code are met. Among the requirements
for confirmation of a plan are that the plan is (i) accepted by all impaired
classes of claims and equity interests or, if rejected by an impaired class,
that the plan "does not discriminate unfairly" and is "fair and equitable" as to
such class, (ii) feasible and (iii) in the "best interests" of creditors and
stockholders that are impaired under the plan.
1. Unfair Discrimination and Fair and Equitable Tests
To obtain nonconsensual confirmation of the Plan, the Court must determine
that the Plan "does not discriminate unfairly" and is "fair and equitable" with
respect to each impaired, non-accepting Class. The Code provides a non-
exclusive definition of the phrase "fair and equitable." The Code establishes
"cram down" tests for secured creditors, unsecured creditors and equity holders,
as follows:
(x) Secured Creditors. Either (i) each impaired secured creditor retains its
liens securing its secured claim and receives on account of its secured claim
deferred cash payments having a present value equal to the amount of its allowed
secured claim, (ii) each impaired secured creditor realizes the "indubitable
equivalent" of its allowed secured claim or (iii) the property securing the
claim is sold free and clear of liens with such liens to attach to the proceeds
of the sale and the treatment of such liens on proceeds to be as provided in
clause (i) or (ii) of this subparagraph.
(y) Unsecured Creditors. Either (i) each non-accepting impaired unsecured
creditor class receives or retains under the plan property of a value equal to
the amount of its allowed claim or (ii) the holders of claims and interests that
are junior to the claims of the dissenting class will not receive any property
under the plan.
(z) Equity Interests. Either (i) each holder of an equity interest will
receive or retain under the plan property of a value equal to the greatest of
the fixed liquidation preference to which such holder is entitled, the fixed
redemption price to which such holder is entitled or the value of the interest
or (ii) the holder of an interest that is junior to the non-accepting class will
not receive or retain any property under the plan.
2. Feasibility
The Code permits a plan to be confirmed if it is not likely to be followed
by liquidation or the need for further financial reorganization. The Debtor
believes that it will be able to make all payments required pursuant to the Plan
and, therefore, that confirmation of the Plan is not likely to be followed by
liquidation or the need for further financial reorganization. The Debtor
further believes that it will be able to repay or refinance all of the then-
outstanding indebtedness under the Plan at or prior to the maturity of such
indebtedness. As set forth in Plan Exhibit B, ACH has placed the New Funding
amount of $129,000 in escrow to meet projected obligations of the Reorganized
Debtor.
3. Best Interests Test
With respect to each impaired class of Claims and Equity Interests,
confirmation of a plan requires that each holder of a Claim or Equity Interest
either (i) accept the plan or (ii) receive or retain under the plan property of
a value, as of the effective date, that is not less than the value such holder
would receive or retain if the debtor were liquidated under chapter 7 of the
Code. To determine what holders of Claims and Equity Interests of each impaired
class would receive if the Debtor was liquidated under chapter 7, the Court must
determine the dollar amount that would be generated from the liquidation of the
Debtor's assets and properties in the context of a hypothetical chapter 7
liquidation case. The cash amount which would be available for satisfaction of
Claims and Equity Interests would consist of the proceeds resulting from the
disposition of the unencumbered assets and properties of the Debtor, augmented
by the unencumbered cash held by the Debtor at the time of the commencement of
the hypothetical liquidation case. Such cash amount would be reduced by the
amount of the costs and expenses of the liquidation and by such additional
administrative and priority claims that might result from the termination of the
Debtor's business and the use of chapter 7 for the purposes of liquidation.
The Debtor's costs of liquidation under chapter 7 would include the fees
payable to a trustee in bankruptcy, as well as those that might be payable to
attorneys and other professionals that such a trustee might engage. In
addition, Claims would arise by reason of the breach or rejection of obligations
incurred and leases and executory contracts assumed or entered into by the
Debtor during the pendency of the chapter 11 case. The foregoing types of
Claims and other Claims which might arise in a liquidation case or result from
the pending chapter 11 case, including any unpaid expenses incurred by the
Debtor during the chapter 11 case such as compensation for attorneys, financial
advisors and accountants, would be paid in full from the liquidation proceeds
before the balance of those proceeds would be made available to pay General
Unsecured Claims.
To determine if the Plan is in the best interests of each impaired class,
the present value of the distributions from the proceeds of a liquidation of the
Debtor's unencumbered assets and properties, after subtracting the amount
attributable to the foregoing Claims, are then compared with the value of the
property offered to such classes of Claims and Equity Interests under the Plan.
In light of the fact that the Debtor has no assets (other than possibly
the shares of stock in the Subsidiaries), the Debtor has determined that
confirmation of the Plan will provide each holder of an Allowed Claim or Equity
Interest with a recovery that is not less than such holder would receive
pursuant to liquidation of the Debtor under chapter 7, inasmuch as holders of
Allowed Unsecured Claims will receive full payment and holders of Allowed Equity
Interests shall retain their Equity Interests, subject to dilution on account of
issuance of the New Common Stock.
ARTICLE VII.
ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN
The Debtor has evaluated alternatives to the Plan, including the
liquidation of the Debtor. After studying these alternatives, the Debtor has
concluded that the Plan is the best alternative and will maximize recoveries by
parties in interest, assuming confirmation of the Plan. The following
discussion provides a summary of the Debtor's analysis leading to its conclusion
that a liquidation or alternative plan of reorganization would not provide the
highest value to parties in interest.
If the Plan cannot be confirmed, the Case may be converted to Chapter 7.
If converted to Chapter 7, it is highly likely that there would be no
Distributions for holders of Allowed Unsecured Claims and holders of Allowed
Equity Interests would not be able to retain such Equity Interests. The Debtor
believes that liquidation under chapter 7 would result in no distributions to
holders of Claims or Equity Interests.
ARTICLE VIII.
FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
A. Introduction
The following discussion summarizes certain federal income tax
consequences of the implementation of the Plan to the Debtor and certain holders
of Claims. The following summary does not address the federal income tax
consequences to holders whose Claims are entitled to reinstatement or payment in
full in cash under the Plan (e.g., holders of Administrative Expense Claims,
Other Priority Claims, and Secured Claims) or holders of Equity Interests.
The following summary is based on the Internal Revenue Code of 1986, as
amended (the "Tax Code"), Treasury Regulations promulgated thereunder, judicial
decisions, and published administrative rules and pronouncements of the Internal
Revenue Service (the "IRS") as in effect on the date hereof. Changes in such
rules or new interpretations thereof may have retroactive effect and could
significantly affect the federal income tax consequences described below.
The federal income tax consequences of the Plan are complex and are
subject to significant uncertainties. The Debtor has not requested a ruling
from the IRS or an opinion of counsel with respect to any of the tax aspects of
the Plan. Thus, no assurance can be given as to the interpretation that the IRS
will adopt. In addition, this summary does not address foreign, state or local
tax consequences of the Plan, nor does it purport to address the federal income
tax consequences of the Plan 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 pass-through entities).
This discussion assumes that the various debt and other arrangements to
which the Debtor is a party will be respected for federal income tax purposes in
accordance with their form.
ACCORDINGLY, THE FOLLOWING SUMMARY OF CERTAIN 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, STATE, LOCAL AND OTHER TAX CONSEQUENCES
APPLICABLE UNDER THE PLAN.
B. Consequences to the Debtor
1. Cancellation of Debt
The Tax Code provides that a debtor in a bankruptcy case must reduce
certain of its tax attributes - such as net operating loss ("NOL")
carryforwards, current year NOLs, tax credits and tax basis in assets - by the
amount of any cancellation-of-indebtedness income ("COD") realized by such debt
in connection with the bankruptcy case. COD is the amount by which the
indebtedness discharged (reduced by any unamortized discount) exceeds the fair
market value of any consideration given in exchange therefore, subject to
certain statutory or judicial exceptions that can apply to limit the amount of
COD (such as where the payment of the cancelled debt would have given rise to a
tax deduction). On August 29, 2003, the IRS issued proposed and temporary
regulations addressing the method for applying the attribute reduction described
above to an affiliated group filing a consolidated federal income tax return.
The regulations are effective with respect to COD occurring after August 29,
2003. Under these regulations, the attributes of the debtor member are first
subject to reduction. These attributes include: (1) consolidated attributes of
the debtor member; (2) attributes that arose in separate return limitation years
of the debtor member; and (3) the basis of property of the debtor member. To
the extent that the excluded COD exceeds the attributes of the debtor member,
the regulations generally require the reduction of attributes of other members.
If the attributes of the debtor member reduced under the above rules is the
basis of stock of another member of the group, a "look-through rule" applies
requiring that corresponding adjustments be made to the attributes of the lower-
tier member.
2. Limitation on NOL Carryforwards and Other Tax Attributes
The Debtor expects to report consolidated NOL carryforwards for federal
income tax purposes. In addition, the Debtor expects to incur additional losses
in the foreseeable future. The amount of the Debtor's losses and NOL
carryforwards remains subject to adjustment by the IRS.
3. Alternative Minimum Tax
In general, a federal alternative minimum tax ("AMT") is imposed on a
corporation's alternative minimum taxable income at a 20% rate to the extent
that such tax exceeds the corporation's regular federal income tax. For
purposes of computing taxable income for AMT purposes, certain tax deductions
and other beneficial allowances are modified or eliminated. In particular, even
though a corporation otherwise might be able to offset all of its taxable income
for regular tax purposes by available NOL carryforwards, only 90% of a
corporation's taxable income for AMT purposes may be offset by available NOL
carryforwards (as computed for AMT purposes). However, recent legislation
provides for a temporary waiver of this limitation for AMT NOL carrybacks or
carryforwards.
In addition, if a corporation (or consolidated group) undergoes an
"ownership change" within the meaning of section 382 of the Tax Code and is in a
net unrealized built-in loss position on the date of the ownership change, the
corporation's (or group's) aggregate tax basis in its assets would be reduced
for certain AMT purposes to reflect the fair market value of such assets as of
the change date.
Any AMT that a corporation pays generally will be allowed as a
nonrefundable credit against its regular federal income tax liability in future
taxable years when the corporation is no longer subject to the AMT.
4. Information Reporting and Withholding
All distributions to holders of Claims under the Plan are subject to any
applicable 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" (currently, at the
rate of 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 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.
The foregoing summary has been provided for informational purposes only.
All holders of Claims are urged to consult their tax advisors concerning the
federal, state, local, and other tax consequences applicable under the Plan.
ARTICLE IX.
CONCLUSIONS AND RECOMMENDATIONS
Based upon the foregoing, the Debtor believes that confirmation of the
Plan will provide the greatest recovery for all holders of Allowed Claims and
Equity Interests against the Debtor, and recommend that all holders of Allowed
Claims and Equity Interests in Classes that are Impaired and entitled to vote on
the Plan vote to accept the Plan.
[signatures on next page]
DATED: January 3, 2007
eCom eCom.com, Inc. American Capital Holdings, Inc.
By: By:
Barney A. Richmond Its:
Acting CEO
I HEREBY CERTIFY that I am admitted to the Bar of the United States
District Court for the Southern District of Florida and I am in compliance with
the additional qualifications to practice in this Court set forth in Local Rule
2090-1(A)
_____________________________________
Michael D. Seese, Esq.
FBN 997323
KLUGER PERETZ KAPLAN & BERLIN, P.L.
201 South Biscayne Boulevard
1700 Miami Center
Miami, Florida 33131
Telephone: (305) 379-9000
Facsimile: (305) 379-3428
Counsel for Debtor
I HEREBY CERTIFY that I am appearing pro hac vice in this matter pursuant
to order of this Court dated August 21, 2006.
_____________________________________
Michael Yetnikoff, Esq.
________________________
SCHIFF HARDIN LLP
6600 Sears Tower
Chicago, Illinois 60606
Telephone: (312) 258-5500
Facsimile: (312) 258-5600
Counsel for American Capital Holdings, Inc
EXHIBIT "A"
ORDERED in the Southern District of Florida on December 28,2006.
Steven H. Friedman, Judge United States Bankruptcy Court
UNITED STATES BANKRUTPCY COURT
SOUTHERN DISTRICT OF FLORIDA
WEST PALM BEACH DIVISION
www.flsb.uscourts.gov
IN RE:
eCom eCom.com, Inc. Debtor.
CASE NO. 04-35435-BKC-SHF CHAPTER 11
ORDER (I) APPROVING DISCLOSURE STATEMENT1;
(II) SETTING HEARING ON CONFIRMATION OF PLAN;
(III) SETTING HEARING ON FEE APPLICATIONS;
(IV) SETTING VARIOUS DEADLINES; AND (V) DESCRIBING PLAN PROPONENTS' OBLIGATIONS
1 The Disclosure Statement for Joint Plan of Reorganization of Debtor and
American Capital Holdings, Inc. was scheduled for hearing on October 30, 2006.
The only substantive objection filed was by the United States Trustee. Counsel
for the joint proponents and the United States Trustee met and conferred and
were able to resolve the objections to Disclosure Statement. By agreement of the
parties, the joint proponents have filed their First Amended Plan of
Reorganization and First Amended Disclosure Statement. This Order approves the
First Amended Disclosure Statement (the "Disclosure Statement").
CONFIRMATION HEARING. AND HEARING ON FEE APPLICATIONS
3/12/07 at l:30 p.m.
LOCATION:
United States Bankruptcy Court
Southern District of Florida
1515 North Flagler Drive
Room 801
Courtroom B
West Palm Beach, Florida 33401
PLAN PROPONENTS' DEADLINE FOR SERVING THIS ORDER, DISCLOSURE STATEMENT, PLAN,
AND BALLOT:
1/17/07 (54 days before Confirmation Hearing)
DEADLINE FOR OBJECTIONS TO CLAIMS:
1/31/07 (40 days before Confirmation Hearing)
DEADLINE FOR FEE APPLICATIONS:
2/20/07 (20 days before Confirmation Hearing)
PLAN PROPONENTS' DEADLINE FOR SERVING NOTICE OF FEE APPLICATIONS:
2/26/07 (15 days before Confirmation Hearing)
DEADLINE FOR OBJECTIONS TO CONFIRMATION:
3/02/07 (10 days before Confirmation Hearing)
DEADLINE FOR FILING BALLOTS ACCEPTING OR REJECTING PLAN:
3/02/07 (10 days before Confirmation Hearing)
PLAN PROPONENTS' DEADLINE FOR FILING PROPONENTS' REPORT AND CONFIRMATION
AFFIDAVIT:
(3/07/07) (3 business days before Confirmation Hearing)
The Court conducted a hearing on October 30, 2006 at 2:00PM to consider
approval of the Disclosure Statement (C.P. #137) filed by eComeCom.com, Inc.
("Debtor") and American Capital Holdings, Inc. ("ACH" and, collectively, with
the Debtor, "the Plan Proponents"). The Court finds that the Disclosure
Statement contains "adequate information" regarding the plan in accordance with
11 U.S.C. section 1125(a). Therefore, pursuant to 11 U.S.C. section 1125(b) and
Bankruptcy Rule 3017(b), the Disclosure Statement is approved.
This Order sets a hearing to consider confirmation of the plan (the
"Confirmation Hearing"), a hearing on fee applications and sets forth the
deadlines and requirements relating to confirmation provided in the Bankruptcy
Code, Federal Rul,es of Bankruptcy Procedure and local rules of this Court.
1. HEARING TO CONSIDER CONFIRMATION OF PLAN
The court has set a hearing to consider confirmation of the plan for the
date and time indicated above as "CONFIRMATION HEARING". The Confirmation
Hearing may be continued to a future date by notice given in open court at the
Confirmation Hearing.
2. DEADLINE FOR FILING AND HEARING ON FEE APPLICATIONS
The last day for filing and serving fee applications is indicated above
as "DEADLINE FOR FEE APPLICATIONS". All prospective applicants for compensation,
including attorneys, accountants and other professionals, shall file
applications which include actual time and costs, plus an estimate of additional
time and costs to be incurred through confirmation. At or prior to confirmation,
applicants must file a supplement with documentation supporting the estimated
time and costs. Fee applications shall be timely filed with the Court and served
(with all exhibits, including documentation of estimated time) on (i) the
Debtor; (ii) all committees that have been appointed; (iii) any Chapter 11
Trustee or Examiner that has been appointed; and (iv) the U.S. Trustee.
Fee applications will be set for hearing together with the Confirmation
Hearing. The Plan Proponents shall serve notice of all fee applications pursuant
to paragraph 6 below.
3. DEADLINE FOR OBJECTIONS TO CONFIRMATION
The last day for filing and serving objections to confirmation of the plan
is indicated above as "DEADLINE FOR OBJECTIONS TO CONFIRMATION". Objections to
confirmation shall be filed with the Court and served on (i) the Plan
Proponents; (ii) all committees that have been appointed; (iii) any Chapter 11
Trustee or examiner that has been appointed; and (iv) the U.S. Trustee.
4. DEADLINE FOR FILING BALLOTS ACCEPTING OR REJECTING PLAN
The last day for filing a ballot accepting or rejecting the plan is
indicated above as "DEADLINE FOR FILING BALLOTS ACCEPTING OR REJECTING PLAN".
All parties entitled to vote should receive a ballot from the Plan Proponents by
mail pursuant to paragraph 6(A) of this order. If you receive a ballot but your
entire claim has been objected to, you will not have the right to vote until the
objection is resolved, unless you request an order under Bankruptcy Rule 3018(a)
temporarily allowing your claim for voting purposes.
5. DEADLINE FOR OBJECTIONS TO CLAIMS
Pursuant to Local Rule 3007-1(B), the last day for filing and serving
objections to claims is indicated above as "DEADLINE FOR OBJECTIONS TO CLAIMS".
All objections to claims must be filed before this date unless the deadline is
extended by further order.
6. PLAN PROPONENTS' OBLIGATIONS
(A) On or before the date indicated above as "PROPONENTS' DEADLINE FOR
SERVING THIS ORDER, DISCLOSURE STATEMENT, PLAN, AND BALLOT" the Plan
Proponents shall serve a copy of this Order, the approved Disclosure Statement,
and the plan on
all creditors, all equity security holders, and all other parties in interest,
as required by the
Bankruptcy Rules (including those entities as described in Bankruptcy Rule
3017(f)) and the
Local Rules, including those listed on a "Master Service List" required to be
filed pursuant to
Local Rules 2002-l(K). At the time of serving this Order, the Local Form
"Ballot", customized
as required by Local Rule 3018-1 shall be served on all creditors and equity
security holders
entitled to vote on the plan, as of the PROPONENTS' DEADLINE FOR SERVING THIS
ORDER, DISCLOSURE STATEMENT, PLAN, AND BALLOT, as shown by the records of the
Debtor's stock transfer agent.
(B) On or before the date indicated above as "PROPONENTS' DEADLINE FOR
SERVING NOTICE OF FEE APPLICATIONS", the Plan Proponents shall serve a notice of
hearing of all fee applications, identifying each applicant and the amounts
requested. The notice
shall be served on all creditors, all equity security holders (as of the
PROPONENTS'
DEADLINE FOR SERVING THIS ORDER, DISCLOSURE STATEMENT, PLAN, AND
BALLOT, as shown by the records of the Debtor's stock transfer agent), and all
other parties in
interest as required by the Bankruptcy and Local Rules, including those listed
on a "Master
Service List" required to be filed pursuant to Local Rules 2002-1 (K).
(C) On or before 5:00 p.m. on the date indicated above as "PROPONENTS'
DEADLINE FOR FILING PROPONENTS' REPORT AND CONFIRMATION AFFIDAVIT",
the Plan Proponents shall file with the Court and deliver a copy to the U.S.
Trustee the Local Form "Certificate of Proponent of Plan on Acceptance of Plan,
Report on Amount to be Deposited, Certificate of Amount Deposited and Payment of
Fees," and the Local Form "Confirmation Affidavit". The "Confirmation Affidavit"
shall set forth the facts upon which the Plan Proponents rely to establish that
each of the requirements of 11 U.S.C. 1129 are satisfied. The Confirmation
Affidavit should be prepared so that by reading it, the Court can easily
understand the significant terms of the plan and other material facts relating
to confirmation of the plan. The individual executing the "Confirmation
Affidavit" shall be present at the Confirmation Hearing.
If the Plan Proponents do not timely comply with any of the requirements
of this Order, the Court may impose sanctions at the Confirmation Hearing
without further notice including dismissal, conversion of the case to Chapter 7,
or the striking of the plan. The Court will also consider dismissal or
conversion at the Confirmation Hearing at the request of any party, or on the
Court's own motion.
Submitted by:
MICHAEL D. SEESE, ESQ.
Fla. Bar No. 997323
Kluger, Peretz, Kaplan & Berlin, P.L.
201 South Biscayne Boulevard, 8th Floor
Miami, Florida 33131
Telephone No. (305) 379-9000
Facsimile No. (305) 379-3428
Copies furnished to Michael D. Seese, Esq. [Attorney Seese is directed to serve
a confirming copy of this Order upon counsel for the Debtor and the United
States Trustee.]
EXHIBIT "B"
Chart reflecting Three-Year Trading Price Of eCom Common Stock
ECEC Ecom Ecom Com Inc
8/25/2006 9:45 AM
Last .019 Volume 30,000
Company Data
Company Name: Ecom Ecom Com Inc
Dow Jones Industry: Recreational Products
Exchange: OTHER OTC
Shares Outstanding: 49,955,000
Market Cap: 949,145
Short Interest: Exchange provides no short interest data.
52-Week EPS: -0.01
52-Week High: 0.05 on Wednesday, September 07, 2005
52-Week Low: 0.0038 on Thursday, January 05, 2006
P/E Ratio: n/a
Yield: n/a
Average Price: 0.0152 (50-day) 0.0144 (200-day)
http://bigcharts.marketwatch.com/print/print.asp?frames=0&symb=ecec 8/25/2006