Exhibit 2.1
Plan of Reorganization of SGD Holdings, Ltd.
================================================================================
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION
In re: ss.
ss. Case No. 05-42392-RFN-1 1
SGD HOLDINGS, LTD., ss. Chapter 11
a Delaware corporation ss.
ss.Debtor. ss.
- --------------------------------------------------------------------------------
SECOND AMENDED PLAN OF REORGANIZATION
PROPOSED BY TERRY WASHBURN AND JULES SLIM
Dated: July 6, 2006
Fort Worth, Texas
- --------------------------------------------------------------------------------
Richard G. Grant
Keith R. Pearson
ROBERTS & GRANT, P.C.
The Centrum, Suite 700
3102 Oak Lawn Ave.
Dallas, Texas 75219
Telephone: 214-210-2929
Facsimile: 214-210-2949
ATTORNEYS FOR PROPONENTS
================================================================================
TABLE OF CONTENTS
TABLE OF CONTENTS.......................................................................................I
ARTICLE 1 CLASSIFICATION OF CLAIMS.................................................................... 1
1.1 CLAIMS CLASSIFIED.......................................................................... 1
1.2 ADMINISTRATIVE CLAIMS AND PRIORITY TAX CLAIMS NOT CLASSIFIED............................... 1
1.3 CLASSIFICATION OF CLAIMS................................................................... 1
ARTICLE 2 IDENTIFICATION OF IMPAIRED CLASSES OF CLAIMS................................................ 1
ARTICLE 3 PROVISIONS FOR TREATMENT OF CLAIMS UNDER THE PLAN........................................... 2
3.1 CLASS 1 -- ANY ALLOWED SECURED CLAIMS OF AD VALOREM TAXING AUTHORITIES..................... 2
3.2 OTHER SECURED CLAIMS....................................................................... 2
A. CLASS 2A -- ANY ALLOWED SECURED CLAIMS NOT OTHERWISE CLASSIFIED......................... 2
3.3 CLASS 3 -- ANY ALLOWED PRIORITY NON-TAX CLAIMS............................................. 2
3.4 UNSECURED CLAIMS: ......................................................................... 3
A. CLASS 4A -- ANY ALLOWED CONVENIENCE CLAIMS.............................................. 3
B. CLASS 4B -ANY ALLOWED TRADE VENDOR CLAIMS NOT CLASSIFIED IN CLASSES 3 OR 4A............. 3
3.5 CLASS 5 - ALLOWED INTERESTS................................................................ 3
3.6 CLASS 6 -- DISALLOWED CLAIMS, SECURITIES LAWS CLAIMS, SUBORDINATED CLAIMS AND PENALTY
CLAIMS..................................................................................... 3
ARTICLE 4 PROVISIONS FOR TREATMENT OF UNCLASSIFIED CLAIMS UNDER THE PLAN.............................. 3
4.1 TREATMENT OF ADMINISTRATIVE CLAIMS......................................................... 3
4.2 TREATMENT OF PRIORITY TAX CLAIMS........................................................... 4
ARTICLE 5 ACCEPTANCE OR REJECTION OF THE PLAN; EFFECT OF REJECTION BY ONE OR MORE CLASSES OF CLAIMS... 4
ARTICLE 6 MEANS FOR IMPLEMENTATION OF THE PLAN........................................................ 5
6.1 MERGER WITH CHASSEUR DE VIN, INC. ......................................................... 5
A. ACQUISITION OF CHASSEUR DE VIN, INC..................................................... 5
B. ISSUANCE OF NEW COMMON STOCK IN EXCHANGE FOR CDV........................................ 5
6.2 OTHER PROVISIONS FOR IMPLEMENTATION........................................................ 6
A. SURRENDER OF EXISTING SECURITIES........................................................ 6
B. PAYMENT OF DIP CREDIT FACILITY. ........................................................ 6
C. SECURITIES ACT COMPLIANCE. ................................................................ 6
6.3 OFFICERS................................................................................... 6
6.4 ORGANIZATIONAL DOCUMENTS................................................................... 6
6.5 VESTING OF ASSETS.......................................................................... 7
6.6 ORGANIZATIONAL AUTHORITY................................................................... 7
6.7 ASSUMPTION OF LIABILITIES.................................................................. 7
6.8 CLAIMS ON FILE; NO ALLOWANCE OF UNTIMELY CLAIMS............................................ 8
6.9 INTEGRATION CLAUSE......................................................................... 8
ARTICLE 7 PROVISIONS GOVERNING DISTRIBUTIONS.......................................................... 8
7.1 DATE OF DISTRIBUTIONS...................................................................... 8
7.2 DISBURSING AGENT........................................................................... 8
7.3 MEANS OF CASH PAYMENT...................................................................... 8
7.4 DELIVERY OF DISTRIBUTIONS.................................................................. 8
7.5 TIME BAR TO CASH PAYMENTS.................................................................. 9
ARTICLE 8 PROCEDURES FOR RESOLVING AND TREATING CONTESTED AND DISPUTED CLAIMS UNDER THE PLAN.......... 9
8.1 OBJECTION DEADLINE......................................................................... 9
i
8.2 PROSECUTION OF OBJECTIONS.................................................................. 9
8.3 NO DISTRIBUTIONS PENDING ALLOWANCE......................................................... 9
8.4 WITHHOLDING OF DISTRIBUTIONS ON ACCOUNT OF CONTESTED CLAIMS................................ 9
8.5 DISTRIBUTIONS AFTER ALLOWANCE.............................................................. 10
8.6 DISTRIBUTIONS AFTER DISALLOWANCE........................................................... 10
ARTICLE 9 RIGHTS AND OBLIGATIONS OF THE DISBURSING AGENT.............................................. 10
9.1 EXCULPATION................................................................................ 10
9.2 POWERS OF THE DISBURSING AGENT............................................................. 10
9.3 DUTIES OF THE DISBURSING AGENT............................................................. 11
ARTICLE 10 PROVISIONS GOVERNING EXECUTORY CONTRACTS AND UNEXPIRED LEASES UNDER THE PLAN............... 11
10.1 REJECTION OF CERTAIN CONTRACTS AND LEASES.................................................. 11
10.2 ASSUMED IF NOT REJECTED.................................................................... 11
10.3 BAR TO REJECTION DAMAGES................................................................... 11
10.4 INSURANCE POLICIES......................................................................... 11
ARTICLE 11 RETENTION OF JURISDICTION.................................................................. 12
11.1 SCOPE OF JURISDICTION...................................................................... 12
11.2 FAILURE OF THE BANKRUPTCY COURT TO EXERCISE JURISDICTION................................... 12
ARTICLE 12 MISCELLANEOUS PROVISIONS................................................................... 12
12.1 SETOFF RIGHTS.............................................................................. 12
12.2 DISCHARGE.................................................................................. 13
12.3 INJUNCTIONS................................................................................ 13
12.4 PRE-PETITION DATE LAWSUITS/INSURANCE....................................................... 13
12.5 EXCULPATIONS............................................................................... 14
12.6 DE MINIMIS DISTRIBUTIONS................................................................... 14
12.7 PAYMENT OF STATUTORY FEES.................................................................. 14
12.8 POST-EFFECTIVE DATE FEES AND EXPENSES OF PROFESSIONAL PERSONS.............................. 14
12.9 BANKRUPTCY RESTRICTIONS.................................................................... 15
12.10 DISALLOWANCE AND SUBORDINATION OF SUBORDINATED CLAIMS AND PENALTY CLAIMS................... 15
12.11 BINDING EFFECT............................................................................. 15
12.12 GOVERNING LAW.............................................................................. 15
12.13 MODIFICATION OF PLAN....................................................................... 15
12.14 CREDITOR DEFAULTS.......................................................................... 16
12.15 DEFINITIONS AND INTERPRETATION............................................................. 16
12.16 HEADINGS AND TABLE OF CONTENTS............................................................. 17
12.17 SEVERABILITY............................................................................... 17
12.18 SUBSTANTIAL CONSUMMATION/CLOSING THE CASE.................................................. 17
ii
PLAN OF REORGANIZATION
----------------------
Terry Washburn and Jules Slim (collectively, "Plan Proponents")
creditors in the above-referenced Chapter 11 Case, propose the following Plan of
Reorganization for the Debtor under chapter 11 of the Bankruptcy Code.
ARTICLE 1
---------
CLASSIFICATION OF CLAIMS
------------------------
1.1 CLAIMS CLASSIFIED
For purposes of organization, voting and all confirmation matters,
except as otherwise provided herein, all Claims (except for Administrative
Claims and Priority Tax Claims) shall be classified as set forth in this Article
1 of the Plan.
1.2 ADMINISTRATIVE CLAIMS AND PRIORITY TAX CLAIMS NOT CLASSIFIED
As provided in section 1123(a)(1) of the Bankruptcy Code,
Administrative Claims and Priority Tax Claims against the Debtor shall not be
classified for purposes of voting or receiving distributions under the Plan.
Rather, all such Claims shall be treated separately as unclassified Claims on
the terms set forth in Article 4 of the Plan.
1.3 CLASSIFICATION OF CLAIMS
The Plan classifies the Claims against the Debtor as follows:
SECURED CLAIMS
Class 1: Any Allowed Secured Claims of Ad Valorem Taxing Authorities.
Class 2A: Any Allowed Secured Claims not classified in Class 1.
UNSECURED CLAIMS
Class 3: Any Allowed Priority Non-tax Claims.
Class 4A: Any Allowed Convenience Claims.
Class 4B: Any Allowed Unsecured Claims not classified in Classes 3 or 4A.
INTERESTS
Class 5: Any Allowed Equity Interests.
OTHERS
Class 6: Subordinated Claims, Penalty Claims and Disallowed Claims.
ARTICLE 2
---------
IDENTIFICATION OF IMPAIRED CLASSES OF CLAIMS
--------------------------------------------
There are no unimpaired Classes under the Plan. If a controversy arises
as to whether any Claim or any class of Claims is impaired under the Plan, the
Bankruptcy Court shall, upon notice and a hearing, determine such controversy.
Page 1
ARTICLE 3
---------
PROVISIONS FOR TREATMENT OF CLAIMS UNDER THE PLAN
-------------------------------------------------
The classes of Claims against the Debtor shall be treated under the
Plan as follows:
3.1 CLASS 1 -- ANY ALLOWED SECURED CLAIMS OF AD VALOREM TAXING AUTHORITIES.
On the Effective Date, each holder of an Allowed Claim in Class 1 shall
receive a Plan Secured Note and shall retain its Tax Liens securing its Allowed
Secured Claim as security for the Plan Secured Note until such Plan Secured Note
is paid in full. At the sole discretion of the Debtor, the Debtor may at any
time after the Effective Date prepay any or all Allowed Claims in Class 1
without penalty or interest.
3.2 OTHER SECURED CLAIMS
A. CLASS 2A -- ANY ALLOWED SECURED CLAIMS NOT OTHERWISE
CLASSIFIED.
Each holder of an Allowed Secured Claim against the Debtor which is not
otherwise classified in Class 1 will be treated as though in a separate class
(with the designation 2A1, 2A2, etc.) as follows:
(i) GENERAL TREATMENT. Each holder of an Allowed Secured Claim
against the Debtor shall, at the sole option of the Reorganized Debtor,
receive on the Distribution Date on account of its Allowed Secured
Claim: (a) a Plan Secured Note; (b) treatment as provided under section
1124(2) of the Bankruptcy Code, with the Cash payments required by
section 1 124(2)(A) and (C) of the Bankruptcy Code being made on the
Distribution Date; or (c) such holder's Collateral. If the holder of an
Allowed Secured Claim against the Debtor receives treatment as provided
in (a) or (b) above, such holder shall retain any Liens securing the
Allowed Secured Claim until paid in full. Any Deficiency Amount related
to a Secured Claim shall be treated as a Class 4B Trade Vendor Claim.
(ii) NEGOTIATED TREATMENT. Notwithstanding the immediately
preceding paragraph, the Debtor and any holder of a Class 2A Allowed
Secured Claim may agree to any alternate treatment of such Secured
Claim, which treatment shall include preservation of such holder's
Lien; provided, however, that such treatment shall not provide a return
to such holder of an amount having a present value in excess of the
amount of such holder's Allowed Secured Claim. Each such agreement
shall be presented to the Bankruptcy Court before or within 30 days
after the Effective Date and shall not materially and adversely impact
the treatment of any other creditor under the Plan.
3.3 CLASS 3 -- ANY ALLOWED PRIORITY NON-TAX CLAIMS.
Each holder of an Allowed Priority Non-tax Claim against the Debtor
shall receive on the Distribution Date the right to payment or refund in
accordance with the policies of the Debtor then in effect. Allowed Priority
Non-tax Claims held by employees of the Debtor shall be paid by the Debtor in
the ordinary course of business of the Debtor pursuant to the terms of the
employee policies of the Debtor as may be changed from time to time.
Page 2
3.4 UNSECURED CLAIMS:
A. CLASS 4A -- ANY ALLOWED CONVENIENCE CLAIMS.
In lieu of treatment as any other class of claimant under the Plan, and
in full satisfaction of any and all Claims against the Debtor, a holder of an
Allowed Convenience Claim against the Debtor shall receive on the Distribution
Date, Cash equal to the amount of 100% of such Allowed Convenience Claim without
interest from the inception of the Claim or attorneys fees and collection costs.
B. CLASS 4B -ANY ALLOWED TRADE VENDOR CLAIMS NOT CLASSIFIED IN
CLASSES 3 OR 4A.
On the Distribution Date, each holders of an Allowed General Unsecured
Claims in Class 4B shall receive on account of such Claims and in full
satisfaction of such Claims, a pro rata share of 3,000,000 shares of New Common
Stock.
3.5 CLASS 5 - ALLOWED INTERESTS.
On the Distribution Date, each holder of an Allowed Interest evidenced
by Common Stock shall receive, in full and final satisfaction of its Allowed
Interest, a prorata share of 250,000 New Common Shares in Reorganized Debtor
determined as of the Voting Record Date.
3.6 CLASS 6 -- DISALLOWED CLAIMS, SECURITIES LAWS CLAIMS, SUBORDINATED
CLAIMS AND PENALTY CLAIMS.
The holders of Disallowed Claims, Securities Laws Claims, Subordinated
Claims, Penalty Claims and any other Claims against the Debtor not otherwise
expressly provided for in this Plan shall receive no distributions under the
Plan on account of such Claims. This Plan shall constitute a action seeking
subordination of all claims in Class 6 pursuant to Bankruptcy Code section 510
and any other relevant provisions of the Bankruptcy Code, Rules and applicable
state or federal law.
ARTICLE 4
---------
PROVISIONS FOR TREATMENT OF UNCLASSIFIED CLAIMS UNDER THE PLAN
--------------------------------------------------------------
4.1 TREATMENT OF ADMINISTRATIVE CLAIMS
All Administrative Claims against the Debtor shall be treated as
follows:
(a) TIME FOR FILING ADMINISTRATIVE CLAIMS. The holder of an
Administrative Claim, other than (1) a Fee Claim, and (2) a liability incurred
and paid in the ordinary course of business by the Debtor after the Petition
Date, must file with the Bankruptcy Court and serve on the Debtor, the Committee
(if any) and their counsel notice of such Administrative Claim within 30 days
after the Confirmation Date. Such notice must include at a minimum: (1) the name
of the holder of the Claim; (2) the amount of the Claim; and (3) the basis of
the Claim. Failure to file and serve this notice timely and properly shall
result in the Administrative Claim being forever barred and discharged.
(b) TIME FOR FILING FEE CLAIMS. Each Professional Person or other
entity that holds or asserts an Administrative Claim that is a Fee Claim
incurred before the Effective Date shall be required to file with the Bankruptcy
Court, and serve on all parties required to receive notice, a Fee Application
within 60 days after the Effective Date. The failure to file the Fee Application
timely shall result in the Fee Claim being forever barred and discharged. To the
extent necessary, entry of the Confirmation Order shall amend and supersede any
previously entered order of the Bankruptcy Court regarding procedures for the
payment of Fee Claims.
Page 3
(c) ALLOWANCE OF ADMINISTRATIVE CLAIMS. An Administrative Claim with
respect to which notice has been properly filed pursuant to Section 4.1(a) of
the Plan shall become an Allowed Administrative Claim if no objection is filed
within 20 days after the filing and service of notice of such Administrative
Claim. If an objection is filed within such twenty-day period, the
Administrative Claim shall become an Allowed Administrative Claim only to the
extent allowed by Final Order. An Administrative Claim that is a Fee Claim, and
with respect to which a Fee Application has been properly filed pursuant to
Section 4.1(b) of the Plan, shall become an Allowed Administrative Claim only to
the extent allowed by Final Order.
(d) PAYMENT OF ALLOWED ADMINISTRATIVE CLAIMS. Each holder of an Allowed
Administrative Claim against the Debtor shall receive on the Distribution Date
(1) the amount of such holder's Allowed Claim in one Cash payment or (2) such
other treatment as may be agreed upon in writing by the Debtor and such holder;
provided, however, that an Administrative Claim representing a liability
incurred in the ordinary course of business of the Debtor may be paid in the
ordinary course of business by the Debtor; and provided further that the payment
of an Allowed Administrative Claim which is a Cure Payment shall be paid in six
equal monthly installments without interest, due on the tenth day of the month,
with the first such installment being due and payable on the first tenth day of
the month to occur after the later of the Effective Date or the date of
allowance of such Claim by Final Order.
4.2 TREATMENT OF PRIORITY TAX CLAIMS
Each holder of an Allowed Priority Tax Claim shall receive in full
satisfaction of such holder's Allowed Priority Tax Claim (1) the amount of such
holder's Allowed Claim, with interest accruing after the Effective Date at the
Post-confirmation Interest Rate, in equal annual Cash payments on each
anniversary of the Distribution Date until the sixth such anniversary of the
date of assessment of such Claim; (2) a lesser amount in one Cash payment as may
be agreed upon in writing; or (3) such other treatment as may be agreed upon in
writing. The Debtor may prepay all or any part of an Allowed Priority Tax Claim
on or after the Effective Date without penalty or interest accruing after the
payment date on such prepaid amount.
ARTICLE 5
---------
ACCEPTANCE OR REJECTION OF THE PLAN;
------------------------------------
EFFECT OF REJECTION BY ONE OR MORE CLASSES OF CLAIMS
----------------------------------------------------
Each impaired class of Claims shall be entitled to vote separately to
accept or reject the Plan as provided in the order entered by the Bankruptcy
Court governing the voting and balloting procedures applicable to the Plan. Any
unimpaired class of Claims shall be deemed to have accepted the Plan. Any class
of Claims that will not receive or retain any property on account of such Claims
shall be deemed to have rejected the Plan. A class of Claims shall have accepted
the Plan if it is accepted by at least two-thirds in dollar amount and more than
one-half in number of the Allowed Claims in such class that have voted on the
Plan. If any class of Claims shall fail to accept the Plan in accordance with
section 1126(c) of the Bankruptcy Code, the Bankruptcy Court may still confirm
the Plan in accordance with section 1129(b) of the Bankruptcy Code. In the event
that confirmation is requested under section 1129(b) of the Bankruptcy Code, the
Debtor reserves the right to amend or otherwise modify the Plan to eliminate
distributions to holders of any Claims junior to any class of Claims that is
impaired under and has not accepted the Plan in accordance with section 11
29(b)(2) of the Bankruptcy Code. The Debtor shall be entitled to withdraw this
Plan at any time prior to entry of a Final Order confirming this Plan, as
modified or amended.
Page 4
ARTICLE 6
---------
MEANS FOR IMPLEMENTATION OF THE PLAN
------------------------------------
6.1 MERGER WITH CHASSEUR DE VIN, INC.
A. ACQUISITION OF CHASSEUR DE VIN, INC.
On the Effective Date, Lindberg, or his respective successors or
assigns, which are hereby permitted, shall contribute to the Reorganized Debtor
one hundred percent (100%) of the issued and outstanding stock of CDV in
exchange for an aggregate of 12,000,000 shares of New Common Stock, which shall
constitute not less than 56.5% of the New Common Stock of Reorganized Debtor
issued or subject to issuance pursuant to any outstanding warrant or option to
purchase Common Stock of Reorganized Debtor.
B. ISSUANCE OF NEW COMMON STOCK IN EXCHANGE FOR CDV
1. ISSUANCE OF NEW COMMON STOCK TO LINDBERG:.
On the Effective Date, the Reorganized Debtor shall issue to
Lindberg 12,000,000 shares of New Common Stock. In consideration
thereof, on the Effective Date, Lindberg shall transfer 100% of the
issued and outstanding stock of CDV to the Reorganized Debtor, without
recourse or warranty, and subject to all liens and security interests
thereon. The Reorganized Debtor shall assume all liabilities and
obligations relating to CDV arising prior to, on or after the Effective
Date and shall indemnify and hold harmless Lindberg from all such
obligations. The obligations of Lindberg under the Plan shall be
contingent upon (i) Lindberg holding, as of the Effective Date, at
least 56.5% of the New Common Stock of Reorganized Debtor issued or
subject to issuance pursuant to any outstanding warrant or option to
purchase Common Stock of Reorganized Debtor and (ii) Lindberg's
approval, in its reasonable discretion of all documents of conveyance
of CDV and of assumption and indemnity of the liabilities described
herein. The New Common Stock issued to Lindberg is not to be issued in
reliance upon the exemption provided under Section 1145 of the
Bankruptcy Code. The certificates representing the New Common Stock to
be issued to Lindberg shall be appropriately legended as to its resale
restrictions.
2. ISSUANCE OF NEW COMMON STOCK TO CONVERTIBLE NOTE
HOLDERS OF CDV
On the Effective Date, the Reorganized Debtor shall issue to
the holders of convertible debt of CDV (the "Convertible Debt Holders")
6,000,000 shares of New Common Stock. In consideration thereof, on the
Effective Date, the Convertible Debt Holders shall transfer their
interest in CDV to the Reorganized Debtor, without recourse or
warranty, and subject to all liens and security interests thereon. The
Reorganized Debtor shall assume all liabilities and obligations
relating to CDV arising prior to, on or after the Effective Date and
shall indemnify and hold harmless Convertible Debt Holders from all
such obligations. The obligations of Convertible Debt Holders under the
Plan shall be contingent upon (i) Convertible Debt Holders holding, as
of the Effective Date, at least 28% of the New Common Stock of
Reorganized Debtor issued or subject to issuance pursuant to any
outstanding warrant or option to purchase Common Stock of Reorganized
Debtor and (ii) Convertible Debt Holders's approval, in its reasonable
discretion of all documents of conveyance of CDV and of assumption and
indemnity of the liabilities described herein. The New Common Stock
issued to the Convertible Debt Holders is not to be issued in reliance
upon the exemption provided under Section 1145 of the Bankruptcy Code.
The certificates representing the New Common Stock to be issued to the
Convertible Debt Holders shall be appropriately legended as to its
resale restrictions.
Page 5
6.2 OTHER PROVISIONS FOR IMPLEMENTATION
A. SURRENDER OF EXISTING SECURITIES.
As a condition to receiving any distribution under the Plan, each
Holder of a promissory note or other instrument evidencing a Claim or Interest
must surrender its promissory note, stock or instrument to the Reorganized
Debtor. Any Holder of a Claim that fails to (a) surrender such promissory note
or instrument or (b) execute and deliver an affidavit of loss and/or indemnity
reasonably satisfactory to the Reorganized Debtor and furnish a bond in form,
substance and amount reasonably satisfactory to the Reorganized Debtor before
the later of (1) the first anniversary of the Effective Date and (2) six months
following the date such Holder's Claim becomes an Allowed Claim, shall be deemed
to have forfeited all rights and Claims and may not participate in any
distribution under the Plan. A holder of an Allowed Claim or Interest shall not
receive its prorata share of the New Common Stock until the documents
representing its Allowed Claim or Interest have been surrendered to the
Reorganized Debtor, unless the Reorganized Debtor, in its sole and absolute
discretion, deems that such surrender is not necessary under the circumstances.
B. PAYMENT OF DIP CREDIT FACILITY.
Upon the Effective Date, the Reorganized Debtor will pay $21,000 to
Avenel in full payment of the DIP Credit Facility, if such liability has not
been previously paid by the Trustee.
C. SECURITIES ACT COMPLIANCE.
Within 4 business days following the Effective Date, the Reorganized
Debtor shall comply with the SEC Rule "Use of Form S-8, Form 8-K, and Form 20-F
by Shell Companies," 17 CFR ss. 230, 239, 240 and 249, Release Nos 33-8587;
34-52038, effective August 22, 2005 to the extent required by applicable law.
6.3 OFFICERS
Mark Lindberg shall serve as the initial President of the Reorganized
Debtor as of the Effective Date. The Confirmation Order shall authorize the
President of the Reorganized Debtor to take such actions as may be necessary to
fully consummate the Plan. Mr. Lindberg shall be compensated as deemed
appropriate by the board of directors of the Reorganized Debtor; provided,
however, such compensation shall not exceed $50,000 during the first year
following the Effective Date.
6.4 ORGANIZATIONAL DOCUMENTS
The charter and bylaws of the Reorganized Debtor shall be amended as
soon as practicable after the Effective Date to contain such provisions as are
necessary to satisfy the provisions of the Plan and shall contain
indemnification and limitation of liability provisions applicable to the
officers and employees of the Reorganized Debtor and such other Persons as may,
in the discretion of the President of the Debtor be appropriate. In addition,
the Debtors' Organizational Documents shall be amended and all necessary
corporate action shall be taken as soon as practicable after the Effective Date
to prohibit the issuance of non-voting equity securities and providing, as to
the several classes of securities possessing voting power, an appropriate
distribution of such power among such classes, including, in the case of any
class of equity securities having a preference over another class of equity
securities with respect to dividends, adequate provisions for the election of
Presidents representing such preferred class in the event of default in the
payment of such dividends.
Page 6
Without limitation, the Reorganized Debtor's Articles of Incorporation
and Bylaws shall be amended and deemed amended to cancel the current equities
securities of the Debtor; to change the name of the Reorganized Debtor; to
authorize the issuance of 250,000,000 shares of Reorganized Debtor's Common
Stock, par value $.000 1, as of the Effective Date; and to prohibit the issuance
of non-voting equity securities to the extent required by Section 1 123(a)(6) of
the Bankruptcy Code. Except as amended consistent with the Plan, the Reorganized
Debtors' organizational documents shall remain in force subject to amendment in
accord with their terms and with otherwise applicable law.
6.5 VESTING OF ASSETS
On the Effective Date, the property of the estate of the Debtor,
including but not limited to any rights or causes of action, whether under the
Bankruptcy Code or other applicable law and including, without limitation,
preference claims, fraudulent transfer claims and any other claims under chapter
5 of the Bankruptcy Code, shall vest in the Reorganized Debtor. The Reorganized
Debtor shall have the exclusive right to prosecute and settle and actions under
chapter 5 of the Bankruptcy Code as it deems to be in the best interests of the
estate. Upon any subsequent conversion to a case under chapter 7, all assets
vesting in the Reorganized Debtor shall pass to the chapter 7 trustee as
property of the chapter 7 estate; provided, however, such property and other
assets shall remain subject to those Claims, Liens, and encumbrances as Allowed
and restructured in this Plan and as specified herein. The power and
responsibilities of the Chris Moser, Chapter 11 Trustee, shall terminate upon
the Effective Date. Subject to the provisions of Section 8.4 hereof, the Chapter
11 Trustee shall convey and deliver, or cause to be conveyed and delivered, all
assets of the bankruptcy estate to the Reorganized Debtor upon the Effective
Date.
6.6 ORGANIZATIONAL AUTHORITY
(a) All actions and transactions contemplated under the Plan,
including, but not limited to, the issuance of debt instruments, promissory
notes and related securitization documents, shall be authorized upon
Confirmation of the Plan without the need of further Shareholder resolutions,
approval, notice or meetings, other than the notice provided by serving this
Plan on all known creditors and parties in interest of the Debtor, and all
current officers of the Debtor. The Confirmation Order shall include provisions
dispensing with the need of further board or Shareholder resolutions, approval,
notice or meetings and authorizing and directing the President, Chief Executive
Officer, Chief Financial Officer and/or Secretary of the Debtor to execute such
documents as may be necessary to effectuate the Plan, which documents shall be
binding on the Debtor and the Debtor's creditors and Shareholders.
(b) The Reorganized Debtor shall also have authority, subject to
approval of its President and the applicable Bankruptcy Code provision, before
and after Confirmation of the Plan, to sell, lease, license or otherwise dispose
of its assets. After confirmation of the Plan, the Debtor may sell, lease,
license or otherwise dispose of its assets in a manner not inconsistent with its
obligations hereunder.
6.7 ASSUMPTION OF LIABILITIES
The liability for and obligations under the Plan shall be assumed by
and become obligations of the Reorganized Debtor.
Page 7
6.8 CLAIMS ON FILE; NO ALLOWANCE OF UNTIMELY CLAIMS
The Debtor is relying on the formal proofs of Claims on file and the
Debtor's Schedules currently on file in seeking confirmation of the Plan. No
informal proof of Claim shall be deemed to have been filed in this Chapter 11
Case; no informal amendment, modification, or supplementation shall be deemed
filed in this Chapter 11 Case. No proof of Claim may be filed, amended,
modified, or supplemented after the Confirmation Date without the consent of the
Debtor. Any filing prohibited by this paragraph shall be void.
6.9 INTEGRATION CLAUSE
This Plan is a complete, whole, and integrated statement of the binding
agreement between the Debtor, creditors, and the parties-in-interest upon the
matters herein. Parol evidence, including previously proposed but unconfirmed
plans or drafts thereof, shall not be admissible in an action regarding this
Plan or any of its provisions.
ARTICLE 7
---------
PROVISIONS GOVERNING DISTRIBUTIONS
----------------------------------
7.1 DATE OF DISTRIBUTIONS
Any distributions and deliveries to be made under the Plan shall be
made on the Distribution Dates, as otherwise provided for herein, or as the
Bankruptcy Court may order.
7.2 DISBURSING AGENT
The Disbursing Agent shall make all distributions required under the
Plan.
7.3 MEANS OF CASH PAYMENT
Cash payments made pursuant to the Plan shall be in U.S. funds, by
check drawn on a domestic bank, or, at Reorganized Debtor's option, by wire
transfer from a domestic bank, except that payments made to foreign creditors
holding Allowed Claims may at the Debtors election, be in such funds and paid by
such means as are customary or as may be necessary in a particular foreign
jurisdiction.
7.4 DELIVERY OF DISTRIBUTIONS
Subject to Bankruptcy Rule 9010, distributions to holders of Allowed
Claims shall be made at the address of each such holder as set forth on the
proofs of Claim filed by such holders (or at the last known address of such a
holder if no proof of Claim is filed or if the Debtor has been notified in
writing of a change of address). If any holder's distribution is returned as
undeliverable, no further distributions to such holder shall be made unless and
until the Disbursing Agent is notified in writing of such holder's then current
address, at which time all missed distributions shall be made to such holder
without interest. Amounts in respect of undeliverable distributions made through
the Disbursing Agent shall be returned to the Disbursing Agent until such
distributions are claimed. All claims for undeliverable distributions shall be
made on or before the first anniversary of the Effective Date. After such date,
all unclaimed property shall revert to the Reorganized Debtor or any successor
thereto, and the claim of any holder with respect to such property shall be
discharged and forever barred.
Page 8
7.5 TIME BAR TO CASH PAYMENTS
Checks issued by Reorganized Debtor in respect of Allowed Claims shall
be null and void if not negotiated within six months after the date of issuance
thereof. Requests for reissuance of any check shall be made directly to the
Reorganized Debtor by the holder of the Allowed Claim with respect to which such
check originally was issued. Any claim in respect of such a voided check shall
be made on or before the later of (1) the first anniversary of the Effective
Date or (2) 90 days after the date of reissuance of such check. After such date,
all claims in respect of voided checks shall be discharged and forever barred.
ARTICLE 8
---------
PROCEDURES FOR RESOLVING AND TREATING
-------------------------------------
CONTESTED AND DISPUTED CLAIMS UNDER THE PLAN
--------------------------------------------
8.1 OBJECTION DEADLINE
As soon as practicable, unless otherwise ordered by the Bankruptcy
Court, objections to Claims shall be filed with the Bankruptcy Court and served
upon the holders of each of the Claims to which objections are made.
8.2 PROSECUTION OF OBJECTIONS
On and after the Effective Date, except as the Bankruptcy Court may
otherwise order, the filing, litigation, settlement or withdrawal of all
objections may be made by the Reorganized Debtor. The Bankruptcy Court shall
determine the amount and legality (including, without limitation, the allowance,
disallowance or extent) of any Priority Tax Claim pursuant to Bankruptcy Code
section 5 05(a).
8.3 NO DISTRIBUTIONS PENDING ALLOWANCE
Notwithstanding any other provision of the Plan, no payment or
distribution shall be made with respect to any Claim to the extent it is a
Contested Claim unless and until such Contested Claim becomes an Allowed Claim.
8.4 WITHHOLDING OF DISTRIBUTIONS ON ACCOUNT OF CONTESTED CLAIMS
The Disbursing Agent shall withhold from the consideration to be
distributed on the Distribution Date or thereafter under the Plan the Withheld
Distribution Amount, which shall be in an amount sufficient to be distributed on
account of Claims that are not Allowed Claims. Upon or contemporaneously with
the receipt of the transfer of sufficient funds from the Chapter 11 Trustee, the
Reorganized Debtor shall cause funds in the amount of $85,000 to be placed in
escrow with Chris Moser, attorney at law, as the Withheld Distribution Amount
for Professional Fees. Chris Moser agrees to hold such funds in trust pursuant
to the terms of this paragraph. Any surplus in such escrow shall be remitted to
the Reorganized Debtor immediately after the deadline for filing applications
for Professional Fees (60 days after the Effective Date) and upon the entry of a
Final Order disapproving any such applications or upon such other time as it
become reasonably apparent that the Withheld Distribution Amount is more than
the amount of unresolved Professional Fee Claims. Mr. Moser shall be responsible
for the remittance of funds from the Withheld Distribution Amount to holders of
Allowed Professional Fee Claims.
Page 9
8.5 DISTRIBUTIONS AFTER ALLOWANCE
Payments and distributions to each holder of a Contested Claim, to the
extent that such Claim ultimately becomes an Allowed Claim, shall be made in
accordance with the provisions of the Plan governing the class of Claims to
which the respective holder belongs. With respect to any Claim that is a
Contested Claim on the Effective Date, as soon as practicable after the date
that the order or judgment of the Bankruptcy Court allowing any Contested Claim
becomes a Final Order or a Contested Claim otherwise becomes an Allowed Claim,
(i) the Disbursing Agent shall distribute to the holders of such Claim from the
Contested Claims Escrow any payment, any Plan Secured Notes, Plan Unsecured
Notes or other distribution that would have been distributed to such holder if
the Claim had been Allowed on the Effective Date, without interest on such
Claim; and, (ii) the Reorganized Debtor shall distribute to the holders of such
Claim from the Contested Claims Escrow any payment, without interest, that would
have been distributed to such holder if the Claim had been Allowed on the
Effective Date.
8.6 DISTRIBUTIONS AFTER DISALLOWANCE
If any Withheld Distribution Amount remains in the Contested Claims
Escrow after all objections to Contested Claims of all classes have been
resolved, any remainder of the Withheld Distribution Amount attributable to the
Disallowed Claims shall be distributed as soon as practicable, without interest,
in accordance with the provisions of the Plan. Notwithstanding the foregoing,
neither the Reorganized Debtor nor the Disbursing Agent shall be required to
distribute any remainder of the Withheld Distribution Amount that would result
in a de minimis dividend to Allowed Claims, as provided in Section 12.6, and
such undistributed remainder shall revest in the Reorganized Debtor.
ARTICLE 9
---------
RIGHTS AND OBLIGATIONS OF THE DISBURSING AGENT
----------------------------------------------
9.1 EXCULPATION
The Reorganized Debtor, from and after the Effective Date, is hereby
exculpated by all Persons, holders of Claims, entities and parties in interest
receiving distributions under the Plan from any and all claims, causes of action
and other assertions of liability arising out of the Reorganized Debtor's
discharge of the powers and duties conferred upon it by the Plan or any order of
the Bankruptcy Court entered pursuant to or in furtherance of the Plan or
applicable law, except solely for actions or omissions arising out of the
Reorganized Debtor's gross negligence or willful misconduct. No current holder
of a Claim, or representative thereof, shall have or pursue any claim or cause
of action (1) against the Reorganized Debtor for making payments or taking
actions in accordance with the Plan or for implementing the provisions of the
Plan or (2) against any holder of a Claim for receiving or retaining payments or
other distributions as provided for by the Plan.
9.2 POWERS OF THE DISBURSING AGENT
The Reorganized Debtor shall be empowered to: (a) take all steps and
execute all instruments and documents necessary to effectuate the Plan; (b) make
distributions contemplated by the Plan; (c) comply with the Plan and its
obligations thereunder; (d) employ, retain or replace Professional Persons to
represent it with respect to its responsibilities; and (e) exercise such other
powers as may be vested in the Reorganized Debtor pursuant to order of the Court
or pursuant to the Plan or as the Reorganized Debtor deems to be necessary and
proper to carry out the provisions of the Plan.
Page 10
9.3 DUTIES OF THE DISBURSING AGENT
The Reorganized Debtor shall have the duties of carrying out the
provisions of the Plan, which shall include taking or not taking any action
which the Reorganized Debtor deems to be in furtherance of the Plan, including,
from the date of the Reorganized Debtor's appointment, making payments and
conveyances and effecting other transfers necessary in furtherance of the Plan.
ARTICLE 10
----------
PROVISIONS GOVERNING EXECUTORY CONTRACTS AND
--------------------------------------------
UNEXPIRED LEASES UNDER THE PLAN
-------------------------------
10.1 REJECTION OF CERTAIN CONTRACTS AND LEASES
The Plan constitutes and incorporates a motion by the Debtor to reject,
as of the Confirmation Date, the Contracts listed in Exhibit "B" attached hereto
(to be provided by the time of hearing on the Disclosure Statement), which list
may be amended from time to time by the Debtor until the commencement of the
Confirmation Hearing. No cure of such Contracts pursuant to Bankruptcy Code
section 365(b)(1)(A) is necessary other than the Cure Payments; and no
Bankruptcy Code section 365(b)(1)(B) compensation is owing or shall be owing
upon the assumption of such Contracts. Confirmation of this Plan shall be deemed
(i) adequate assurance of prompt cure of any default under such Contracts solely
based upon the Debtor's obligations in the Plan to make the Cure Payments and
(ii) adequate assurance of future performance under such Contracts.
10.2 ASSUMED IF NOT REJECTED
All pre-Petition Date Contracts to which the Debtor is a party
(including, without limitation, all oil and gas leases) are assumed, except for
any Contract that has been assumed or rejected pursuant to order of the
Bankruptcy Court prior to the Confirmation Date or which rejected pursuant to
Section 10.1 hereof.
10.3 BAR TO REJECTION DAMAGES
If the rejection of a Contract by the Debtor results in damages to the
other party or parties to such Contract, a Claim for such damages, if not
heretofore evidenced by a filed proof of Claim, shall be forever barred and
shall not be enforceable against the Debtor, the Reorganized Debtor or its
respective properties or its agents, successors or assigns, unless a proof of
Claim is filed with the Bankruptcy Court and served upon counsel for the Debtor
on or before 30 days after the Confirmation Date.
10.4 INSURANCE POLICIES
Notwithstanding anything in the Plan or Sections 10.1 and 10.2 of the
Plan, and except for any "key-man" life insurance policies, all insurance
policies under which the Debtor is the insured party shall be deemed assumed as
of the Confirmation Date. All payments upon such policies are current; no Cure
Payments are necessary.
Page 11
ARTICLE 11
----------
RETENTION OF JURISDICTION
-------------------------
11.1 SCOPE OF JURISDICTION
Pursuant to sections 1334 and 157 of title 28 of the United States
Code, the Bankruptcy Court shall retain and have jurisdiction over all matters
arising in, arising under and related to the Chapter 11 Case and the Plan
pursuant to, and for the purposes of sections 105(a) and 1142 of the Bankruptcy
Code and for, among other things, the following purposes: (a) to hear and
determine pending applications for the assumption or rejection of Contracts and
the allowance of Claims resulting therefrom; (b) to hear and determine any and
all adversary proceedings, applications and contested matters, including any
remands of appeals; (c) to ensure that distributions to holders of Allowed
Claims are accomplished as provided herein; (d) to hear and determine any timely
objections to or applications concerning Claims or the allowance,
classification, priority, compromise, estimation or payment of any Claim; (e) to
enter and implement such orders as may be appropriate in the event the
Confirmation Order is for any reason stayed, revoked, modified, reversed or
vacated; (f) to enter and implement such orders as may be necessary or
appropriate to execute, interpret, implement, consummate or enforce the Plan and
the transactions contemplated thereunder; (g) to consider any modification of
the Plan pursuant to section 1127 of the Bankruptcy Code, to cure any defect or
omission or to reconcile any inconsistency in any order of the Bankruptcy Court,
including, without limitation, the Confirmation Order; (h) to hear and determine
all Fee Applications and Fee Claims; (i) to hear and determine disputes arising
in connection with the execution, interpretation, implementation, consummation
or enforcement of the Plan; (j) to enter and implement orders or take such other
actions as may be necessary or appropriate to restrain interference by any
entity with the consummation or implementation of the Plan, including, without
limitation, to issue, administer and enforce injunctions provided for in the
Plan and the Confirmation Order; (k) to hear and determine motions seeking a
compromise and settlement of any Contested Claim; (l) to recover all assets of
the Debtor and property of the estates, wherever located; (m) to hear and
determine matters concerning state, local and federal taxes in accordance with
sections 346, 505 and 1146 of the Bankruptcy Code; (n) to enforce the releases
described, set forth, and granted in this Plan; (o) to hear and determine any
other matter not inconsistent with the Bankruptcy Code and title 28 of the
United States Code that may arise in connection with or related to the Plan; and
(p) to enter a final decree closing the Chapter 11 Case.
11.2 FAILURE OF THE BANKRUPTCY COURT TO EXERCISE JURISDICTION
If the Bankruptcy Court abstains from exercising, or declines to
exercise, jurisdiction or is otherwise without jurisdiction over any matter
arising in, arising under or related to this Case, including the matters set
forth in Section 11.1 of the Plan, this Article shall have no effect upon and
shall not control, prohibit or limit the exercise of jurisdiction by any other
court having jurisdiction with respect to such matter.
ARTICLE 12
----------
MISCELLANEOUS PROVISIONS
------------------------
12.1 SETOFF RIGHTS
In the event that the Debtor has a claim of any nature whatsoever
against the holder of a Claim, the Debtor may, but is not required to, setoff
against the Claim (and any payments or other distributions to be made in respect
of such Claim hereunder), subject to the provisions of section 553 of the
Bankruptcy Code. Neither the failure to setoff nor the allowance of any Claim
under the Plan shall constitute a waiver or release by the Debtor of any claim
that the Debtor may have against the holder of a Claim.
Page 12
12.2 DISCHARGE
The rights afforded in the Plan and the payments and distributions to
be made hereunder shall discharge all existing debts and Claims of any kind,
nature or description whatsoever against the Debtor or any of its assets or
properties to the fullest extent permitted by section 1141 of the Bankruptcy
Code; upon the Effective Date, all existing Claims against the Debtor shall be,
and shall be deemed to be, discharged; and all holders of Claims shall be
precluded from asserting against the Debtor, or any of its assets or properties,
any other or further Claim based upon any act or omission, transaction or other
activity of any kind or nature that occurred prior to the Effective Date,
whether or not such holder filed a Proof of Claim. Confirmation of the Plan and
the obligations imposed on the Debtor therein shall be in complete satisfaction,
discharge and release of all Claims of any nature whatsoever against the Debtor
or any of its assets or properties; and, upon the Effective Date, the Debtor
shall be deemed discharged and released from any and all Claims, including but
not limited to demands and liabilities that arose before the Effective Date, and
all debts of the kind specified in sections 502(g), 502(h) or 502(i) of the
Bankruptcy Code, whether or not (a) a Proof of Claim based upon such debt is
filed or deemed filed under section 501 of the Bankruptcy Code; (b) a Claim
based upon such debt is allowed under section 502 of the Bankruptcy Code; or (c)
the holder of a Claim based upon such debt has accepted the Plan. Except as
provided herein, the Confirmation Order shall be a judicial determination of
discharge of all liabilities of the Debtor. As provided in section 524 of the
Bankruptcy Code, such discharge shall void any judgment against the Debtor at
any time obtained to the extent it relates to a Claim discharged and operates as
an injunction against the prosecution of any action against the Debtor or any of
its assets or property, to the extent it relates to a Claim discharged.
12.3 INJUNCTIONS
The Confirmation Order shall contain such injunctions as may be
necessary and helpful to effectuate the discharge of the Debtor provided herein.
Without limiting the generality of the foregoing, such injunction shall include
an absolute prohibition from collecting Claims in any manner other than as
provided for in the Plan.
12.4 PRE-PETITION DATE LAWSUITS/INSURANCE
On the Effective Date, all pre-Petition Date lawsuits, litigations,
administrative actions or other proceedings, judicial or administrative, in
connection with the assertion of a Claim shall be dismissed as to the
Reorganized Debtor. Such dismissal shall be with prejudice to the assertion of
such Claim in any manner other than as prescribed by the Plan. All parties to
any such action shall be enjoined by the Bankruptcy Court in the Confirmation
Order from taking any action to impede the immediate and unconditional dismissal
of such actions. Confirmation and consummation of the Plan shall have no effect
on insurance policies of the Debtor in which the Debtor is or was the insured
party; the Reorganized Debtor shall become the insured party under any such
policies. Each insurance company is prohibited from, and the Confirmation Order
shall include an injunction against, denying, refusing, altering or delaying
coverage on any basis regarding or related to the Debtor's bankruptcy, the Plan
or any provision within the Plan.
Page 13
12.5 EXCULPATIONS
(a) Except for the responsibilities of the Reorganized Debtor
hereunder, the Debtor, Reorganized Debtor and their officers, agents, employees,
Presidents, attorneys, financial advisors, personal representatives or
successors, from and after the Effective Date, are hereby exculpated by all
Persons, holders of Claims, entities and parties-in-interest from any and all
claims, causes of action and other assertions of liability.
(b) Except for the responsibilities of the Reorganized Debtor
hereunder, the Debtor, Reorganized Debtor and their officers, agents, employees,
Presidents, attorneys, financial advisors, personal representatives, or
successors shall not have, nor shall they incur, any liability to any Person,
holders of claims, holders of equity interests, entities and parties-in-interest
for any act or omission in connection with or arising out of the Chapter 11 case
or out of their administration of the Plan or the amounts to be distributed
under the Plan except for their own willful misconduct.
(c) Except as otherwise provided herein (with respect to the
Reorganized Debtor only), pursuant to Sections 105 and 1141 of the Bankruptcy
Code, all Persons, holders of all Claims, holders of equity interests, entities
and parties-in-interest are permanently stayed, restrained, and enjoined from
taking one or more of the following actions for the purpose of, directly or
indirectly, collecting or receiving payment on or with respect to any Claim or
equity interest or from seeking contribution, indemnity, or any recovery or
remedy (whether relating to any Claim or equity interest or not) from or against
the Debtors or any property of the Debtors, Reorganized Debtor, their officers,
agents, employees, Presidents, attorneys, financial advisors, personal
representatives or successors of any of the foregoing or any property of the
foregoing, including without limitation: (i) the commencement or continuation in
any manner, directly or indirectly, of any suit, action or other proceeding
(including, without limitation, any and all proceedings in a judicial, arbitral,
administrative, or other forum) against or affecting any of the above persons or
entities; (ii) the enforcement, levy, or attachment (including, without
limitation, any prejudgment attachment), collection or other recovery by any
means or in any manner, whether directly or indirectly on any judgment, award,
decree, or other order against any of the above persons or entities; and (iii)
the set-off, right to seek reimbursement, indemnification, contribution from or
subrogation against or otherwise recouping in any manner, directly or
indirectly, any amount against any of the above persons or entities.
12.6 DE MINIMIS DISTRIBUTIONS
No distribution of less than $25.00 shall be made to any holder of an
Allowed Claim. Such undistributed amount will be retained by Reorganized Debtor.
12.7 PAYMENT OF STATUTORY FEES
All fees payable pursuant to section 1930 of title 28 of the United
States Code shall be paid through the entry of a final decree in the Chapter 11
Case.
12.8 POST-EFFECTIVE DATE FEES AND EXPENSES OF PROFESSIONAL PERSONS
After the Effective Date, the Reorganized Debtor shall, in the ordinary
course of business and without the necessity for any approval by the Bankruptcy
Court, pay the reasonable fees and expenses of the Professional Persons employed
by the Committee (if any) or the Reorganized Debtor, related to the
implementation and consummation of the Plan, provided, however, that no such
fees and expenses shall be paid except upon receipt by Reorganized Debtor of a
written invoice, which invoice shall also be served upon counsel for the Debtor
and the United States Trustee, by the Professional Person seeking fees and
expense reimbursement and provided, further, however, that the Reorganized
Debtor may, within 10 days after receipt of an invoice for fees and expenses,
request the Bankruptcy Court to determine any such request and the Bankruptcy
Court shall have jurisdiction to do so.
Page 14
12.9 BANKRUPTCY RESTRICTIONS
From and after the Effective Date, the Reorganized Debtor shall no
longer be subject to the restrictions and controls provided by the Bankruptcy
Code (e.g., section 363 or 364). The Reorganized Debtor may operate its business
in such manner as is consistent with companies not in bankruptcy without the
need of seeking Bankruptcy Court approval with regard to any aspect of the
Reorganized Debtor's business. The Reorganized Debtor shall provide such
financial reports as required by local rule until the entry of a final decree.
12.10 DISALLOWANCE AND SUBORDINATION OF SUBORDINATED CLAIMS AND PENALTY
CLAIMS
The filing of this Plan and its submission to the holders of
Subordinated Claims and Penalty Claims shall constitute an action seeking to
subordinate all Subordinated Claims and Penalty Claims pursuant to section 510
of the Bankruptcy Code. The Confirmation Order, except as otherwise provided
herein, shall constitute an order subordinating such Claims to all other Claims
pursuant to section 510 of the Bankruptcy Code.
12.11 BINDING EFFECT
The Plan shall be binding upon and inure to the benefit of the Debtor,
any co-Proponents, the holders of Claims and their respective successors and
assigns; provided, however, that if the Plan is not confirmed, the Plan shall be
deemed null and void and nothing contained herein shall be deemed (i) to
constitute a waiver or release of any Claims by the Debtor, the Committee (if
any) or any other Person, (ii) to prejudice in any manner the rights of the
Debtor, the Committee (if any) or any other Person or (iii) to constitute any
admission by the Debtor, the Committee (if any) or any other Person; until
confirmation, neither the Debtor nor any co-Proponents are bound hereby.
12.12 GOVERNING LAW
Unless a rule of law or procedure is supplied by federal law (including
the Bankruptcy Code and Bankruptcy Rules), the internal laws of the State of
Texas shall govern the construction and implementation of the Plan and any
agreements, documents and instruments executed in connection with the Plan or
the Chapter 11 Case, except as may otherwise be provided in such agreements,
documents and instruments.
12.13 MODIFICATION OF PLAN
Modifications of the Plan may be proposed in writing by the Proponents
at any time before the Confirmation Date, provided that (a) the Plan, as
modified, meets the requirements of sections 1122 and 1123 of the Bankruptcy
Code and (b) the Proponent shall have complied with section 1125 of the
Bankruptcy Code. The Plan may be modified at any time after the Confirmation
Date and before substantial consummation by the Proponent, provided that (i) the
Plan, as modified, meets the requirements of sections 1122 and 1123 of the
Bankruptcy Code, (ii) the Bankruptcy Court, after notice and a hearing, confirms
the Plan as modified, under section 1129 of the Bankruptcy Code and (iii) the
Page 15
circumstances warrant such modifications. A holder of a Claim that has accepted
or rejected the Plan shall be deemed to have accepted or rejected, as the case
may be, such Plan as modified, unless, within the time fixed by the Bankruptcy
Court, such holder changes its previous acceptance or rejection. Any Proponent
may withdraw this Plan at any time prior to its Confirmation by the Bankruptcy
Court.
Any of the Proponents may withdraw this Plan at any time prior to its
Confirmation by the Bankruptcy Court. The Co-Proponents may withdraw this Plan
at or after Confirmation, but prior to the Confirmation Order becoming a Final
Order in the event that the Confirmation Order does not (a) authorize the board
of directors of the Reorganized Debtor to take such actions as may be necessary
to fully consummate the Plan; (b) include a finding and conclusion, binding upon
all parties to the Chapter 11 Case, any subsequent trustee, the Securities and
Exchange Commission and all state regulatory or enforcement agencies, to the
effect that all offerings and issuances of securities under the Plan (including,
without limitation, New Common Stock, fall within the section 1145 exemption,
other than New Common Stock issued to Lindberg and the Convertible Debt Holders
under the Plan; (c) provide for a discharge of the Debtor under 1141 and include
an injunction which contains an absolute prohibition from collecting Claims in
any manner other than as provided for in the Plan; or (d) include provisions
dispensing with the need of further board or Shareholder resolutions, approval,
notice or meetings and authorizing and directing the Chief Executive Officer,
Chief Financial Officer and/or Secretary of the Debtor to execute such documents
as may be necessary to effectuate the Plan, which documents shall be binding on
the Debtor and the Debtor's creditors and shareholders
12.14 CREDITOR DEFAULTS
Any act or omission by a creditor in contravention of a provision
within this Plan shall be deemed an event of default under this Plan. Upon an
event of default, the Reorganized Debtor may seek to hold the defaulting party
in contempt of the Confirmation Order. If such creditor is found to be in
default under the Plan, such party shall pay the reasonable attorneys' fees and
costs of the Reorganized Debtor in pursuing such matter. Furthermore, upon the
finding of such a default by a creditor, the Bankruptcy Court may (a) designate
a party to appear, sign and/or accept the documents required under the Plan on
behalf of the defaulting party, in accordance with Federal Rule of Civil
Procedure 70 or (b) make such other order as may be equitable which does not
materially alter the terms of the Plan as confirmed. Upon the payment in full of
an Allowed Secured Claim, the Claimant shall execute, deliver and file a release
of all liens and security interests securing its Allowed Secured Claim within
twenty (20) days of such payment and in the event it fails to do so, shall, as
liquidated damages, pay to the Debtor a sum in cash equal to the greater of
$3,000 or the Debtor's actual costs of enforcing this provision.
12.15 DEFINITIONS AND INTERPRETATION
The capitalized terms used herein shall have the respective meanings
set forth in Exhibit "A" attached hereto and incorporated herein by reference.
Other capitalized terms not defined herein shall have the same meaning as set
forth in the Bankruptcy Code. Other capitalized terms not defined herein or in
the Bankruptcy Code shall have the same meaning as set forth in the Disclosure
Statement. Unless otherwise specified, all section, article and exhibit
references in the Plan are to the respective section in, article of or exhibit
to the Plan, as the same may be amended, waived or modified from time to time.
The headings in the Plan are for convenience of reference only and shall not
limit or otherwise affect the provisions of the Plan. Words denoting the
singular number shall include the plural number and vice versa, and words
denoting one gender shall include the other gender. All exhibits and schedules
attached to the Plan are incorporated herein by such attachment. The Plan shall
be liberally construed for the benefit of the Debtor and Reorganized Debtor
regarding the interchangeableness of the term "Debtor" with the term
Page 16
"Reorganized Debtor" and other instances of the use "Reorganized." Words and
terms defined in section 101 of the Bankruptcy Code shall have the same meaning
when used in the Plan, unless a different definition is given in the Plan. The
rules of construction contained in section 102 of the Bankruptcy Code shall
apply to the construction of the Plan. The words "herein," "hereof," "hereto,"
"hereunder" and others of similar import refer to the Plan as a whole and not to
any particular section, subsection or clause contained in the Plan. A term used
herein that is not defined herein shall have the meaning ascribed to that term,
if any, in the Bankruptcy Code.
12.16 HEADINGS AND TABLE OF CONTENTS
The Table of Contents and headings herein are for ease of reference
only, and are not intended to modify in any way the provisions of this Plan.
Moreover, the Table of Contents is included herein as a finding aid only and is
not intended to limit the effectiveness of this Plan. Claimants must review each
and all of the provisions of the entire Plan and are not entitled to rely upon
the Table of Contents as summarizing the contents of the Plan.
12.17 SEVERABILITY
Should the Bankruptcy Court determine that any provision of the Plan is
unenforceable either on its face or as applied to any Claim or transaction, the
Proponent may modify the Plan in accordance with Section 12.13 of the Plan so
that such provision shall not be applicable to the holder of any Claim. Such a
determination of unenforceability shall not (1) limit or affect the
enforceability and operative effect of any other provision of the Plan or (2)
require the resolicitation of any acceptance or rejection of the Plan.
12.18 SUBSTANTIAL CONSUMMATION/CLOSING THE CASE
Upon the Effective Date, the Plan shall be deemed substantially
consummated and, upon motion by the Reorganized Debtor, this case may be closed
and a final decree may be entered by the Court. Upon such motion of the Debtor,
the Bankruptcy Court shall issue a final decree containing such provisions as
may be equitable.
/s/ JULES SLIM
------------------------
JULES SLIM, individually
/s/ TERRY WASHBURN
------------------------
TERRY WASHBURN, individually
DATED: July 6, 2006
Fort Worth, Texas
Page 17
SCHEDULE OF EXHIBITS
--------------------
Exhibit "A": Definitions
Exhibit "B": Executory Contracts and Unexpired Leases to be rejected
EXHIBIT "A"
-----------
DEFINITIONS OF CERTAIN TERMS
----------------------------
"Ad Valorem Taxing Authority" shall mean any governmental entity
entitled by law to assess taxes on property based upon the value of such
property and to take a statutory Lien senior to Liens filed of record to secure
the payment of such taxes and interest accruing thereon.
"Administrative Claim" shall mean a Claim entitled to priority under
sections 5 03(b) and 507(a)(1) of the Bankruptcy Code in the Chapter 11 Case of
the Debtor, including, without limitation, Fee Claims, Cure Payments, any actual
and necessary expenses of preserving the Debtor's estate, any fees or charges
assessed against the Debtor's estate under section 1930, chapter 123 of title 28
of the United States Code and such other Claims as ordered by the Bankruptcy
Court.
"Affiliate" shall have the meaning assigned to such term in section
101(2) of the Bankruptcy Code.
"Allowed Administrative Claim" shall mean an Administrative Claim that
has become "Allowed" pursuant to the procedures set forth in Article 5 of the
Plan.
"Allowed Interest" shall mean an ownership interest (as defined in the
Bankruptcy Code) in the Debtor held by shareholders of the Debtor.
"Allowed," when used with respect to any Claim, except for a Claim that
is an Administrative Claim, shall mean (1) such Claim to the extent it is not a
Contested Claim; (2) such Claim to the extent it may be set forth pursuant to
any stipulation or agreement that has been approved by Final Order; or (3) a
Contested Claim, proof of which was filed timely with the Bankruptcy Court and
(A) as to which no objection was filed by the Objection Deadline, unless such
Claim is to be determined in a forum other than the Bankruptcy Court, in which
case such Claim shall not become Allowed until determined by Final Order of such
other forum and Allowed by Final Order of the Bankruptcy Court; or (B) as to
which an objection was filed by the Objection Deadline, to the extent Allowed by
Final Order.
"Assumed Contracts" shall mean those Contracts identified in Section
10.2 hereof.
"Ballot" shall mean the Ballot to be used by creditors to cast their
votes to accept or reject the Plan.
"Balloting Agent" shall mean the Debtor.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978, as
amended, and codified at title 11 of the United States Code.
"Bankruptcy Court" shall mean the United States Bankruptcy Court for the
Northern District of Texas, Fort Worth Division or such other court having
jurisdiction over the Chapter 11 Case.
"Bankruptcy Rules" shall mean the Federal Rules of Bankruptcy Procedure,
as prescribed by the United States Supreme Court pursuant to section 2075 of
title 28 of the United States Code.
"Bar Date" shall mean the final date for the filing of proofs of Claims
set by the Bankruptcy Court or such other date as may apply to a particular
Claim pursuant to a duly entered order of the Bankruptcy Court.
Page A-1
"Business Day" shall mean any day on which commercial banks are open for
business in Fort Worth, Texas.
"Cash Equivalents" shall mean short-term liquid investments that are
readily convertible to known amounts of legal tender of the United States of
America and which present an insignificant risk of changes in value.
"Cash" shall mean legal tender of the United States of America or Cash
Equivalents.
"Chapter 11 Case" shall mean the case commenced under chapter 11 of the
Bankruptcy Code by the Debtor on the Petition Date.
"CDV" shall mean Chasseur De Vin, Inc., a Texas corporation.
"Claim" shall mean (1) any right to payment from the Debtor, whether or
not such right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured; (2) any right to an equitable remedy for breach of performance if
such breach gives rise to a right of payment from the Debtor, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured or unsecured; or (3) any right
under section 502(h) of the Bankruptcy Code.
"Collateral" shall mean any property of the Debtor subject to a valid,
enforceable and non-avoidable Lien to secure the payment of a Claim.
"Committee" shall mean any Official Committee of Unsecured Creditors
appointed in the Chapter 11 Case.
"Confirmation Date" shall mean the date on which the Clerk of the
Bankruptcy Court enters the Confirmation Order.
"Confirmation Hearing" shall mean the hearing held by the Bankruptcy
Court pursuant to Bankruptcy Code section 1128.
"Confirmation Order" shall mean the order of the Bankruptcy Court
confirming the Plan.
"Contested Claims Escrow" shall mean the escrow for the segregation,
safekeeping and ultimate disposition of the Withheld Distribution Amount on
account of Contested Claims.
"Contested," when used with respect to a Claim, shall mean a Claim
against any of the Debtor (1) that is listed in the Debtor's Schedules as
disputed, contingent or unliquidated; (2) that is listed in the Debtor's
Schedules as undisputed, liquidated and not contingent and as to which a proof
of Claim has been filed with the Bankruptcy Court, to the extent the proof of
Claim amount exceeds the scheduled amount; (3) that is not listed in the
Debtor's Schedules, but as to which a proof of Claim has been filed with the
Bankruptcy Court; or (4) as to which an objection has been filed.
Notwithstanding the foregoing, after the Objection Deadline, only Claims to
which an Objection has been filed shall be deemed Contested Claims.
"Contracts" shall mean all executory contracts and unexpired leases as
such terms are used within Bankruptcy Code section 365 to which the Debtor was a
party as of the Petition Date.
Page A-2
"Convenience Claim" shall mean any Trade Vendor Claim of $500 or less,
and any such Claim in excess of $500 that, by written election of the holder
made on the Ballot prior to the Voting Deadline, is reduced to $500.
"Court" shall mean the Bankruptcy Court.
"Cure Payment" shall mean the monetary payments required pursuant to
Bankruptcy Code section 365(b)(1)(A) to cure defaults under Contracts to which
the Debtor is a party and which will be assumed pursuant to the Plan. Such Cure
Payment shall be conclusively determined and set for each such Contract in the
amounts reflected in Exhibit "B" attached hereto.
"Debtor" shall mean SGD Holdings, Ltd., a Delaware corporation. In the
case of actions and obligations required of or to be performed on or after the
Effective Date, the term "Debtor" shall also include the Reorganized Debtor,
unless otherwise required by context.
"Deficiency Amount" shall mean, with respect to a Secured Claim, the
amount by which the Allowed Claim exceeds the sum of (1) any set-off rights of
the holder of such Claim against the Debtor under sections 506 and 553 of the
Bankruptcy Code and (2) the net proceeds realized from the disposition of the
Collateral securing such Claim or, if such Collateral is not liquidated to Cash,
the value of the interest of the holder of the Claim in the Debtor's interest in
the Collateral securing such Claim, as determined by the Bankruptcy Court under
section 506 of the Bankruptcy Code; provided, however, that if the holder of
such Claim makes the Election, there shall be no Deficiency Amount in respect of
such Claim.
"Disallowed," when used with respect to a Claim, shall mean a Claim that
has been disallowed by Final Order.
"Disbursing Agent" shall mean the Reorganized Debtor.
"Disclosure Statement" shall mean the Disclosure Statement that has been
approved by order of the Bankruptcy Court in connection with this Plan pursuant
to section 1125 of the Bankruptcy Code.
"Distribution Date" shall mean, for any Claim that is an Allowed Claim
on the Effective Date, as soon as practicable after the Effective Date, but no
later than 60 days after the Effective Date, and, for any Contested Claim, shall
mean the date as soon as practicable, but within 60 days, after the date upon
which such Claim becomes an Allowed Claim.
"Effective Date" shall mean the first Business Day after the
Confirmation Order becomes a Final Order and is not stayed.
"Election" shall mean the election available to certain secured
creditors, under certain circumstances, to have their Claims treated as fully
secured, as provided in Bankruptcy Code section 1111(b), but only if such
Election is timely made pursuant to the Bankruptcy Rules.
"Fee Application" shall mean an application of a Professional Person
under section 330 or 503 of the Bankruptcy Code for allowance of compensation
and reimbursement of expenses in the Chapter 11 Case.
"Fee Claim" shall mean a Claim under section 330 or 503 of the
Bankruptcy Code for allowance of compensation and reimbursement of expenses in
the Chapter 11 Case.
Page A-3
"Final Order" shall mean (1) an order which has been entered and as to
which the time to appeal, petition for certiorari or move for reargument or
rehearing has expired and as to which no appeal, petition for certiorari or
other proceedings for reargument or rehearing shall then be pending or (2) in
the event that an appeal, writ of certiorari, reargument or rehearing thereof
has been sought, such order shall have been affirmed by the highest court to
which such order was appealed, or certiorari has been denied or from which
reargument or rehearing was sought, and the time to take any further appeal,
petition for certiorari or move for reargument or rehearing shall have expired;
provided, however, that no order shall fail to be a Final Order solely because
of the possibility that a motion pursuant to Rule 60 of the Federal Rules of
Civil Procedure may be filed with respect to such order.
"IRS" shall mean the Department of the Treasury Internal Revenue Service
and its successors and assigns.
"Lien" shall have the meaning set forth in section 101(37) of the
Bankruptcy Code.
"Lienholder" shall mean the holder of a Lien.
"Loan Documents" shall mean, with respect to the Debtor and any creditor
of the Debtor, such documents as may evidence the claim made by the creditor,
including, without limitation, any promissory notes, loan agreements, deeds of
trust, security agreements, financing statements, and other collateral
documents.
"New Common Stock" or "New Common Shares" shall mean common stock of the
Reorganized Debtor which shall have the respective rights and obligations set
forth in the Amendment to the Articles of Incorporation of the Reorganized
Debtor.
"Operating Expenses" shall mean expenses incurred in the day-to-day
operations or in the ordinary course of business of the Reorganized Debtor.
"Penalty Claims" shall mean Claims for penalties or punitive damages,
including Claims denominated as "interest" which the Bankruptcy Court determines
to be punitive in nature.
"Person" shall mean an individual, corporation, partnership, joint
venture, trust, estate, unincorporated association, unincorporated organization,
governmental entity or political subdivision thereof or any other entity.
"Petition Date" shall mean January 20, 2005, the date the Debtor filed
its petition under Chapter 11 of the Bankruptcy Code.
"Plan Secured Note" shall mean a promissory note made payable by the
Reorganized Debtor to holders of certain Allowed Secured Claims in certain
Classes of the Plan in form and substance as may be reasonably satisfactory to
the Debtor. Each such Plan Secured Note shall be in an amount equal to the
amount of such Allowed Secured Claim, bear simple interest at five percent (5%)
per annum and provide for full amortization of all principal and interest in
equal annual payments over seven years from the Distribution Date; provided,
however, that if the Allowed Secured Claim is held by an Ad Valorem Taxing
Authority, then the full amortization of all principal and interest shall be in
equal quarterly payments over six years from the Assessment Date.
"Plan" or "Plan of Reorganization" shall mean this Plan of
Reorganization, either in its present form or as it may hereafter be altered,
amended or modified from time to time.
Page A-4
"Post-confirmation Interest Rate" shall mean simple interest at the
rate equal to the yield upon United States Treasury Bonds having a maturity as
near to, but greater than, seven years after the date that the Confirmation
Hearing commences, as such yield is published in the WALL STREET JOURNAL on the
day that the Confirmation Hearing commences, or such other rate as the
Bankruptcy Court may determine at the Confirmation Hearing is appropriate.
"Priority Non-tax Claim" shall mean any Claim accorded priority in
right of payment under section 507(a)(3), (4), (5), (6), (7) or (9) of the
Bankruptcy Code.
"Priority Tax Claim" shall mean a Claim of a governmental unit of the
kind specified in section 507(a)(8) of the Bankruptcy Code.
"Professional Person" shall mean a person retained or to be compensated
pursuant to section 327, 328, 330, 503(b) or 1103 of the Bankruptcy Code.
"Proponent" or "Proponents" shall mean the Debtor.
"ProRata Share" shall mean a percentage equal to the interest
percentage held by the holder of an Allowed Working/Royalty Interest Owner Claim
divided by the total interest percentage held by all Royalty/Working Interest
Owners.
"Reorganization Expenses" shall mean, collectively, all fees and
expenses incurred by the Debtor in preparing for, commencing, continuing,
litigating, consummating, and emerging from this Chapter 11 Case, including,
without limitation, all counsel fees and expenses of the Debtor, the Committee
(if any), and all other professionals of the Debtor retained during the pendency
of the Chapter 11 Case.
"Reorganized Debtor" shall mean the Debtor, as reorganized, on and
after the Effective Date.
"Schedules" shall mean the Schedules of assets and liabilities and the
statements of financial affairs filed by the Debtor as required by section 521
of the Bankruptcy Code and Bankruptcy Rule 1007, as such Schedules and
statements have been or may be supplemented or amended.
"Secured Claim" shall mean a Claim secured by a Lien on property of the
Debtor, which Lien is valid, perfected and enforceable under applicable law, is
not subject to avoidance under the Bankruptcy Code or other applicable
non-bankruptcy law and which is duly established in the Chapter 11 Case, but
only to the extent of the value of the Collateral that secures payment of such
Claim.
"Secured Claims of Ad Valorem Taxing Authorities" shall mean all
Secured Claims held by an Ad Valorem Taxing Authority, including, without
limitation, Claims for 2002 taxes.
"Securities Laws Claim" shall mean a Claim against the Debtor (1)
arising from rescission of a purchase or sale of a security of the Debtor; (2)
for damages arising from the purchase or sale (or offer for purchase or sale) of
such a security; or (3) for reimbursement, indemnification or contribution
allowed under section 502 of the Bankruptcy Code on account of a Claim for
damages or rescission arising out of a purchase or sale of a security of the
Debtor.
"Subordinated Claim" shall mean any Claim (1) subordinated by contract
or by order of the Bankruptcy Court to the right of payment of Trade Vendor
Claims or (2) which would be paid pursuant to Bankruptcy Code section
726(a)(2)(c), (a)(3), (a)(4) or (a)(5) if this Chapter 11 Case had originally
been filed as a case under chapter 7 of the Bankruptcy Code.
Page A-5
"Tax Liens" shall mean any statutory Liens securing any Allowed Secured
Claims of any Ad Valorem Taxing Authority, which, upon confirmation of the Plan,
shall be junior in priority to Allowed Claims which would be paid pursuant to
Bankruptcy Code section 724(b)(1) and (b)(2) if the Chapter 11 Case converted to
chapter 7 on the day prior to the Confirmation Date.
"Trade Vendor Claim" shall mean any Claim against the Debtor that is
not a Secured Claim, an Administrative Claim, a Priority Tax Claim, a Priority
Non-tax Claim, or a Subordinated Claim.
"Utilities" shall have the same meaning as when such term is used in Bankruptcy
Code section 366.
"Voting Deadline" shall mean the date set by the Bankruptcy Court by
which Ballots for accepting or rejecting the Plan must be received by the
Balloting Agent.
"Voting Record Date" shall mean the date set by the Bankruptcy Court
for determining the holders of the Claims and interests entitled to vote to
accept or reject the Plan.
"Withheld Distribution Amount" shall mean plan distributions that the
Reorganized Debtor may withhold and place in the Contested Claims Escrow
pursuant to Section 8.4 of the Plan on account of a Contested Claim pending
allowance or disallowance of such Claim.
Page A-6
EXHIBIT "B"
-----------
EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE REJECTED
-------------------------------------------------------
All executory contracts and unexpired leases
Page B-1