SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) September 17, 1998
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PORTACOM WIRELESS, INC.
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(Exact name of registrant as specified in charter)
Delaware 0-23228 33-0650673
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(State or Other Juris- (Commission File Number) (IRS Employer Identi-
diction of Incorporation) fication No.)
10061 Talbert Avenue, Suite 200, Fountain Valley, California 92708
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(Address of principle executive offices) (Zip Code)
Registrant's telephone number, including area code 714-593-3234
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N/A
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(Former name or former address, if changed since last report.)
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Item 3. Bankruptcy or Receivership.
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On September 17, 1998, the United States Bankruptcy Court for the
District of Delaware (the "Court") entered an order confirming the Amended Plan
of Reorganization Proposed by PortaCom Wireless, Inc. (alternatively, the
"Company," the "Debtor," or the "Registrant"), as Debtor and Debtor-In-
Possession, as Modified (the "Plan"). A copy of the Plan is attached as an
exhibit hereto.
The Plan divides claims against, and interests in, the Debtor into
classes and sets forth the treatment afforded to each such class. A claim or
interest was deemed to be allowed if it was timely filed with the Court and no
timely objection was made to such claim or interest. A claim or interest was
deemed to be filed if it was scheduled by the Debtor under the Plan or if a
proof of claim was filed with the Court by the holder of the claim or interest.
The Court made all determinations regarding objections to any claim or interest.
The Plan calls for the liquidation of the Debtor's assets to satisfy
claims and interests and, ultimately, for the dissolution of the Debtor. The
principal assets of the Debtor are 5,300,000 shares of common stock of VDC
Corporation (the "VDC Shares") and a reserved pool of up to $2,682,000 in cash,
both of which are subject to adjustment as provided in the Plan. The VDC Shares
and cash will be distributed to holders of claims or interests in full or
partial satisfaction of such claims and interests. The Plan also allows, under
certain circumstances, for the liquidation of VDC Shares by the Debtor to
generate additional cash to satisfy certain claims and interests.
Class 1 consists of all administrative claims entitled to priority
under section 507(a)(1) of the United States Bankruptcy Code, as amended, 11
U.S.C. (S)101, et seq. (the "Code"). Class 1 includes holders of claims for
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compensation or reimbursement of professional fees and unpaid post-petition
obligations of the Debtor. Class 1 is unimpaired under the Plan, and each
holder of a Class 1 claim will be paid in full in cash.
Class 2 consists of claims entitled to priority pursuant to sections
507(a)(2) through (9) of the Code and includes certain tax and wage claims.
Class 2 is unimpaired under the Plan, and each holder of a Class 2 claim will be
paid in full in cash.
Class 3 consists of a secured claim of VDC Corporation in an amount
equal to the sum of certain secured loans made by VDC Corporation to the Debtor
prior to the Debtor's bankruptcy filing and certain debtor-in-possession loan
advances made by VDC Corporation to the Debtor after the Debtor's bankruptcy
filing. This claim also includes accrued and unpaid interest on the advances
made by VDC Corporation to the Debtor. VDC Corporation, as the only member of
Class 3, is impaired under the Plan. VDC Corporation and the Debtor are parties
to a certain transaction consummated in June 1998 whereby VDC Corporation issued
the VDC Shares to the Debtor in exchange for 2,000,000 shares of common stock of
Metromedia China Corporation (the "MCC Shares") and 4,000,000 warrants to
purchase shares of common stock of Metromedia China Corporation (the "MCC
Warrants") (the "Transaction"). Pursuant to the Transaction, VDC Corporation
retained a lien on and a security interest in the MCC Shares and the MCC
Warrants. This Claim was essentially satisfied upon the consummation of the
Transaction and will be deemed to be satisfied, for purposes of the bankruptcy
proceeding, on the date on which the order entered by the Court confirming the
Plan becomes a final order.
Class 4 consists of a contingent secured claim of Metromedia China
Corporation ("MCC") under a certain agreement of indemnification between the
Debtor and MCC. This claim will be extinguished if no claim for indemnification
is made by MCC on or before January 1, 1999.
Class 5 consists of all unsecured claims that are not entitled to
priority under the Code. Class 5 consists of two subclasses. Class 5A consists
of liquidated unsecured claims which are unsecured claims over which there is no
dispute as to the amount of the claim. Class 5A is impaired under the Plan, and
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holders of Class 5A claims shall receive, to the extent available for payment of
such claims, cash and/or VDC Shares. Class 5B consists of disputed unsecured
claims. The Debtor has established a reserve for the disputed portion of such
claims.
Class 6 consists of holders of common stock of the Debtor or the
holders of rights to receive common stock or warrants and/or options to purchase
common stock of the Debtor. Class 6 is impaired under the Plan, and the holders
of Class 6 interests shall receive the assets of the Debtor, including but not
limited to cash and VDC Shares, remaining after all distributions to Classes 1
through 5 under the Plan. The Record Date for determining membership in Class 6
was set by the Court as September 10, 1998.
The issuance or distribution of securities under the Plan is not
subject to the registration requirements of section 5 of the Securities Act of
1933, as amended (the "Securities Act") or any state or local law requiring
registration for offer or sale of a security or registration or licensing of an
issuer, underwriter, broker or dealer, as the transactions contemplated by the
Plan are entitled to the exemptions provided by section 1145 of the Code.
Pursuant to the Plan, all unexpired leases of non-residential real
property and executory contracts which have not been assumed by the Debtor or
which are not the subject of a motion to assume have been rejected pursuant to
sections 1123(b)(2) and 365 of the Code.
As of September 17, 1998, the Debtor had 13,576,970 shares of common
stock issued and outstanding. The Debtor has not reserved any shares of its
common stock for future issuance in respect of claims and interests filed and
allowed under the Plan. A schedule of the Debtor's assets and liabilities as of
August 31, 1998, as filed with the Court on September 15, 1998, is attached as
an exhibit hereto.
On September 28, 1998, VDC Corporation filed a motion with the Court
seeking an opportunity to conduct examinations of representatives of the Debtor
and, potentially, revocation of the Court's order confirming the Plan. The basis
of the motion by VDC Corporation is a newspaper article that appeared in the
Wall Street Journal on September 23, 1998, stating that the Chinese government
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has decided to ban foreign companies from participating in joint ventures in the
Chinese telecommunications industry. The motion cites this article as possible
evidence that misrepresentations were made regarding the business prospects of
MCC. The Debtor believes the motion filed by VDC Corporation is without merit
and intends to oppose the motion.
Item 7. Financial Statement and Exhibits.
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(c) Exhibits
2 Amended Plan of Reorganization Proposed by PortaCom Wireless,
Inc., as Debtor and Debtor-In-Possession, as Modified, and as
Confirmed by the United States Bankruptcy Court for the District
of Delaware on September 17, 1998 (without exhibits).
99 Schedule of Debtor's Assets and Liabilities, as of August 31,
1998, as filed with the United States Bankruptcy Court for the
District of Delaware on September 15, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PORTACOM WIRELESS, INC.
(Registrant)
Date: October 2, 1998 By: /s/ Michael Richard
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Name: Michael Richard
Title: Acting Chief Executive Officer
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EXHIBIT INDEX
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Exhibit No.
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2 Amended Plan of Reorganization Proposed by PortaCom Wireless, Inc., as
Debtor and as Debtor-In-Possession, as Modified, and as Confirmed by
the United States Bankruptcy Court for the District of Delaware on
September 17, 1998 (without exhibits).
99 Schedule of Debtor's Assets and Liabilities, as of August 31, 1998, as
filed with the United States Bankruptcy Court for the District of
Delaware on September 15, 1998.
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