SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
January 11, 2002
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Date of Report
(Date of earliest event reported)
TREESOURCE INDUSTRIES, INC.
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(Exact Name of Registrant as Specified in Charter)
Oregon 0-16158 93-0832150
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(State or Other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
595 S.E. Grand Ave., Suite 300, Portland, OR 97214
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(Address of principal executive offices, including Zip Code)
(503) 246-3440
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(Registrant's telephone number, including area code)
Item 1. Change of Control of Registrant
In connection with the reorganization of TreeSource Industries, Inc.
and certain of its wholly-owned subsidiaries (the "Company" or "TreeSource")
described under Item 3 below, the Company experienced a change in its equity
ownership on the effective date of the reorganization that may constitute a
change of control. See Item 3 for a discussion of the relevant cancellations and
issuances of equity interests of the Company in the reorganization.
Item 3. Bankruptcy or Receivership
As previously reported, on September 27, 1999, the Company filed
voluntary petitions for relief under chapter 11 of the U.S. Bankruptcy Code (the
"Code") in the U.S. Bankruptcy Court for the Western District of Washington (the
"Court"). Since that date, the Company has continued to operate as a
debtor-in-possession under the Code. On January 11, 2002, the Court entered an
order confirming the Company's Second Amended Joint Plan of Reorganization (the
"Plan"). The following summary of the material terms of the Plan is qualified in
its entirety by reference to the full text of the Plan, a copy of which is filed
as an exhibit to this Current Report on Form 8-K and incorporated by reference.
SUMMARY OF THE PLAN
Distributions With Respect to Lender's Claims
The holder of the Company's pre-petition senior secured debt
securities, TreeSource Acquisition Company LLC (the "Lender"), in full
settlement, release and discharge of and in exchange for its claims, will
receive the following consideration: (a) $2 million in cash; (b) a new loan
agreement with the Company pursuant to which the Company will pay Lender a total
of $14 million, secured by liens on substantially all of the Company's assets;
and (c) 9,000,000 shares of the common stock of the reorganized Company,
representing all of the issued and outstanding shares of the reorganized Company
as of January 31, 2002, the effective date of the Plan (the "Effective Date").
Distributions With Respect to General Unsecured Claims
Each holder of an unsecured claim, in full settlement, release and
discharge of its claim, will receive (a) its pro rata share of $1,100,000 in
cash, which amount represents approximately 30% of the Company's estimate of its
general unsecured trade claims, plus (b) its pro rata share of any recovery from
a lawsuit that was filed to recover certain pre-petition preferential transfers.
Form 8-K PAGE 1
TreeSource Industries, Inc. Equity Interests
The holders of equity securities of the pre-petition Company, including
any warrants, rights, options or other convertible securities, will not receive
or retain any property under the Plan, or receive or retain any distributions or
interest under the Plan, on account of those interests or claims. On the
Effective Date, all of the outstanding equity securities of the pre-petition
Company will be deemed cancelled and become null and void.
All Other Claims
Each holder of certain secured claims under the Plan may, at the
reorganized Company's option, either receive a cash payment from the reorganized
Company of the value of its collateral or continue to hold its lien and security
interest on such collateral. Priority tax claims will be paid in full after the
Effective Date. Other priority claims and statutory lien claims under the Plan
were paid as a matter of course by the Company as debtor-in-possession and none
remained unpaid as of the Effective Date, except for certain administrative
claims, which will be paid in full when the exact amounts are ultimately
approved by the Court. Except as otherwise described above, holders of other
claims under the Plan received no distribution under the Plan on account of
their claims.
New Term Loans
On the Effective Date the reorganized Company entered into a new loan
agreement (the "Loan Agreement") with the Lender. Under the Loan Agreement, the
Company agreed to repay $6 million pursuant to a short-term loan and $8 million
pursuant to a long-term loan. Both loans will accrue simple interest at 11% per
annum. The maturity date of the short-term loan will be July 31, 2004. The
maturity date of the long-term loan will be October 31, 2008. These loans are
secured by liens and security interests in all of the property, both real and
personal, of the reorganized Company, which liens and security interests are
subordinate only to the liens and security interests of the Company's working
capital lender and such other liens as were prior and perfected on the date the
Company filed its petition for reorganization.
Working Capital Loan
On October 4, 1999, following court approval, the Company entered into
a revolving credit facility with the debtor-in-possession lender to provide a
line of credit to be used to fund post-petition operations. This credit facility
has been extended and amended pursuant to subsequent court orders. Pursuant to
its terms, the revolving
Form 8-K PAGE 2
credit facility was due and payable on the Effective Date. On such date the
reorganized Company entered into a new $10 million working capital loan on
similar terms.
Survival of Certain Corporate Obligations
Pursuant to the Plan, the Company has entered into indemnification
agreements with its pre-petition Chief Executive Officer and directors, and the
Company's obligations under these indemnification agreements survive unaffected
by the reorganization and other actions contemplated by the Plan.
Dissolution of Creditors' Committee
Pursuant to the Plan, on its effective date, the Creditors' Committee
was reappointed as the Post-Confirmation Committee, which will remain in effect
until certain outstanding litigation and all objections to claims have been
finally resolved, at which time the Post-Confirmation Committee will dissolve
and the members of and professionals engaged by the Creditors' Committee will be
released from and discharged of all authority due to responsibilities,
obligations and liability, if any, arising from and in connection with the
Company's reorganization.
Officers and Directors of the Reorganized Company
As of the Effective Date the Company's Board of Directors consists of
the following five new directors: James Schueler, R. Gregory Service, Harold
Mildenberger, David Cotner and Craig Rostead. Pursuant to the Plan, effective
the day after of the Effective Date, the Company's prior President and Chief
Executive Officer, Jess R. Drake, ceased to hold such offices. New officers will
be appointed by the new Board of Directors of the reorganized Company.
CAPITALIZATION
Effective January 31, 2002, all previously outstanding equity
securities of the Company have been cancelled for no value and 9,000,000 shares
of the reorganized Company's common stock have been issued to the Lender, which
shares represent 100% of the reorganized Company's outstanding equity
securities. No additional shares are served for future issuance in respect of
claims and interests filed and allowed under the Plan. An additional 1,000,000
shares of the reorganized Company's common stock have been reserved for issuance
pursuant to an equity incentive compensation plan.
Form 8-K PAGE 3
ASSETS AND LIABILITIES
The following table sets forth information about the Company's assets
and liabilities as of December 31, 2001, in the form in which it was furnished
to the Count in the Company's most recent report furnished to the Court.
Form 8-K PAGE 4
TREESOURCE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited, in thousands)
DECEMBER 31, 2001
ASSETS
CURRENT ASSETS
Cash $1,187
Restricted cash 1,778
Short term investments -
Accounts receivable, net 5,441
Inventories 8,318
Prepaid expenses 3,758
Income tax refund receivable -
Deferred tax asset -
Assets held for sale 5,085
Timber, timberland, and timber-related assets 2,405
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TOTAL CURRENT ASSETS 27,972
NOTES AND OTHER RECEIVABLES 84
TIMBER AND TIMBERLANDS -
PROPERTY PLANT AND EQUIPMENT
Land 510
Buildings and improvements 4,579
Machinery and equipment 26,842
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31,932
Less reserve for impairment -
Less accumulated depreciation 27,160
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4,772
Construction in progress 588
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5,360
DEFERRED TAX ASSET -
OTHER ASSETS 1,794
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$35,210
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Form 8-K PAGE 5
TREESOURCE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited, in thousands)
DECEMBER 31, 2001
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $3,210
Accrued expenses 4,787
Income taxes payable -
Timber contracts payable -
Current debt 2,705
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Total current liabilities 10,701
DEFERRED INCOME TAXES PAYABLE -
LIABILITIES SUBJECT TO COMPROMISE
Accounts payable 2,936
Accrued expenses 3,198
Timber contracts payable -
Long-term debt 42,979
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Total liabilities subject to compromise 49,113
LONG-TERM DEBT, less current maturities 76
COMMITMENTS AND CONTINGENCIES 40
STOCKHOLDERS' EQUITY (DEFICIT)
Series A preferred stock 20,688
Series B preferred stock 333
Common stock, no par value 28,761
Additional paid-in capital 15
Retained deficit - beg. yr. (74,667)
Dividends paid -
Current year earnings 149
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(24,721)
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$35,210
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Form 8-K PAGE 6
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Second Amended Joint Plan of Reorganization
Form 8-K PAGE 7
SIGNATURE
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.
TREESOURCE INDUSTRIES, INC.
Dated: February 4, 2002 By: /s/GALEN L. BLAND
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Galen L. Bland
Secretary
Form 8-K PAGE 8
EXHIBIT INDEX
Exhibit Number Description
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99.1 Second Amended Joint Plan of Reorganization
Form 8-K PAGE 9