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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 10, 2000.
TV FILME, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 0-28670 98-0160214
(State or Other (Commission File Number) (I.R.S. Employee
Jurisdiction of Incorporation) Identification Number)
C/o ITSA-Intercontinental Telecomunicacoes Ltda.
SCS, Quadre 07-B1.A
Ed. Executive Tower, Sala 601
70.300-911 Brasilia-DF
Brazil
(Address of Principal Executive Offices, Including Zip Code)
(011) 55-61-314-9908
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
(a) Not applicable.
(b) On April 10, 2000 the United States Bankruptcy Court for
the District of Delaware confirmed TV Filme, Inc.'s First Amended Plan of
Reorganization (the "Plan"), dated February 29, 2000, filed in TV Filme's
pending Chapter 11 bankruptcy case. Overwhelming majorities of holders of TV
Filme, Inc.'s outstanding 12-7/8% senior notes due 2004 (the "Senior Notes") and
holders of TV Filme, Inc.'s common stock voted in favor of the restructuring set
forth in the Plan.
The Company's restructuring represents a consensual arrangement,
pursuant to a Restructuring Agreement dated January 24, 2000, with holders of
more than 65% of the Company's outstanding Senior Notes. TV Filme, Inc. expects
that this restructuring will significantly reduce the Company's existing
long-term debt, and enable the Company to continue the build-out of its recently
acquired multi-point, multi-channel distribution systems ("MMDS") licenses. The
restructuring of the Company's indebtedness provides, among other things, as
follows:
Once the "Effective Date" of the Plan occurs, the holders of Senior
Notes will receive a $25 million cash payment and their existing notes will be
converted into (i) New Senior Secured Notes in the aggregate principal amount of
at least $35 million, subject to adjustment, with a five year maturity and
interest of 12% per annum (interest payable-in-kind at the option of the
reorganized company through the first 24 months), and (ii) 80% of the new common
equity of the reorganized company. Current management will receive 15% of the
new common equity, and existing common stockholders of TV Filme, Inc. will
receive 5% of the new common equity of the reorganized company in exchange for
their current stake. The Plan provides that the reorganized company will be a
newly-formed Cayman Islands holding company, and that the Senior Secured Notes
will be issued by ITSA - Intercontinental Telecomunicacoes Ltda., an existing
Brazilian subsidiary of TV Filme.
The Effective Date of the Plan is contingent upon obtaining approval of
the restructuring contemplated by the Plan from Agencia Nacional de
Telecomunicacoes, the Brazilian government agency that regulates
telecommunications services in Brazil, and the Central Bank of Brazil.
(The information required by Item 3(b)(4) is inapplicable with respect
to the Plan.)
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired
Not applicable.
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(b) Pro Forma Financial Information
Not applicable
(c) Exhibits
The following exhibits are included as part of this
report:
2.1 First Amended Plan of Reorganization, dated February 29,
2000
99.1 Press Release of the Company, dated April 17, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
TV FILME, INC.
(Registrant)
Date: April 25, 2000 By: /s/ Hermano S. Lins Albuquerque
------------------------------------
Name: Hermano S. Lins Albuquerque
Title: Chief Executive Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
2.1 First Amended Plan of Reorganization, dated February 29, 2000
99.1 Press Release of the Company, dated April 17, 2000
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UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
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In re: Chapter 11
TV FILME, INC., Case No. 00-342 (PJW)
Debtor.
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FIRST AMENDED
PLAN OF REORGANIZATION
February 29, 2000
KELLEY DRYE & WARREN LLP
Mark I. Bane (MB 4883)
Karen Ostad (KO 5596)
101 Park Avenue
New York, New York 10178
(212) 808-7800
SAUL, EWING, REMICK & SAUL LLP
Norman L. Pernick ( DE#2290)
222 Delaware Avenue, Suite 1200
Wilmington, Delaware 19899
(302) 421-6824
COUNSEL TO THE DEBTOR AND DEBTOR
IN POSSESSION
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PLAN OF REORGANIZATION
TV Filme, Inc. (the "Debtor") proposes the following Plan of Reorganization:
SECTION 1. DEFINITIONS AND INTERPRETATION
A. DEFINITIONS.
The following terms used herein shall have the respective meanings defined
below:
1.1. AD HOC NOTEHOLDERS' COMMITTEE means an unofficial committee consisting
of certain unaffiliated holders of the Secured Notes.
1.2. AFFILIATE RELEASEES means, collectively, (a) the Debtor, (b) the
Subsidiaries, (c) the respective successors, predecessors, assignors or
assignees of any of the foregoing, (d) all current or former partners, members
or owners of any of the foregoing (including current or former partners, members
or owners of any direct or indirect interest in any of the foregoing) and (e)
all current and former affiliates, officers, directors, trustees, employees,
agents, attorneys, counsel, accountants, financial advisors, investment bankers,
appraisers and engineers of any of the foregoing.
1.3. ADMINISTRATIVE EXPENSE CLAIM means any right to payment constituting a
cost or expense of administration of the Reorganization Case allowed under
sections 503(b) and 507 (a) (1), or 507(b) of the Bankruptcy Code, including (a)
any actual and necessary costs and expenses of preserving the estate of the
Debtor, (b) any actual and necessary costs and expenses of operating the
business of the Debtor, (c) any indebtedness or obligations incurred or assumed
by the Debtor in connection with the conduct of its business, the rendition of
services or the transfer of the Assets, (d) any allowances of compensation and
reimbursement of expenses to the extent allowed by Final Order under sections
330 or 503 of the Bankruptcy Code, whether arising before or after the Effective
Date, (e) any fees or charges assessed against the estate of the Debtor under
section 1930, chapter 123, title 28, United States Code and (f) the fees and
expenses payable to the Indenture Trustee under the Indenture for the period
from and after the Petition Date through and including the Effective Date to the
extent that such amounts have not been paid to the Indenture Trustee during the
Reorganization Case.
1.4. ALLOWED means, with reference to any Claim or Equity Interest, (a) any
Claim against or Equity Interest in the Debtor, proof of which was filed within
the applicable period of limitation fixed by the Bankruptcy Court in accordance
with Rule 3003(c) (3) of the Bankruptcy Rules (i) as to which no objection to
the allowance thereof has been interposed within the applicable period of
limitation fixed by this Plan, the Bankruptcy Code, the Bankruptcy Rules or a
Final Order or (ii) as to which an objection has been interposed, to the extent
such Claim or Equity Interest has been allowed by a Final Order, (b) if no proof
of claim or interest was so filed, (i) any Claim against the Debtor which has
been listed by the Debtor in its Schedules, as such Schedules may be amended
from time to time in accordance with Rule 1009 of the Bankruptcy Rules, as
liquidated in amount and not disputed or contingent, and (ii) any Equity
Interest that is registered in the official records of the Debtor's stock
transfer agent, (c) any Claim arising from the recovery of property under
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section 550 or 553 of the Bankruptcy Code and allowed in accordance with section
502(h) of the Bankruptcy Code and (d) any Claim expressly allowed hereunder.
1.5. ASSETS means all assets of the Debtor, including, without limitation,
any stock of or membership interest in the Subsidiaries, the ITSA Note and all
Causes of Action of the Debtor.
1.6. BALLOT means the form or forms distributed to each holder of an
impaired Claim or Equity Interest on which is to be indicated acceptance or
rejection of this Plan.
1.7. BALLOT DATE means the date by which all Ballots for acceptance or
rejection of this Plan must be received.
1.8. BANKRUPTCY CODE means the Bankruptcy Reform Act of 1978, as amended
and as codified at Title 11, United States Code.
1.9. BANKRUPTCY COURT means the United States District Court for the
District of Delaware and, to the extent of any reference under section 157,
title 28, United States Code, the unit of such District Court constituted under
section 151, title 28, United States Code having jurisdiction over the
Reorganization Case.
1.10. BANKRUPTCY RULES means the Federal Rules of Bankruptcy Procedure as
promulgated by the United States Supreme Court under section 2075, title 28,
United States Code, and any Local Rules of the Bankruptcy Court.
1.11. BUSINESS DAY means any day other than a Saturday, a Sunday, any other
day on which banking institutions in New York, New York are required or
authorized to close by law or executive order or Rosh Hashanah (both days), Yom
Kippur and the Friday after Thanksgiving.
1.12. CASH means legal tender of the United States of America.
1.13. CAUSES OF ACTION means any and all actions, causes of action,
liabilities, obligations, rights, suits, debts, sums of money, damages,
judgments, claims and demands whatsoever, whether known or unknown, in law,
equity or otherwise, including, without limitation, any avoidance or recovery
actions under sections 544, 545, 547, 548, 549, 550, 551 and 553 of the
Bankruptcy Code or any other causes of action, or rights to payments of claims,
that belong to the Debtor.
1.14. CENTRAL BANK means the Central Bank of Brazil.
1.15. CENTRAL BANK Fee means the fee, if any, imposed by the Central Bank
in connection with the Central Bank's approval of the debt restructuring
contemplated by the Plan.
1.16. CLAIM means (a) 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 or (b) 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
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such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured, or unsecured.
1.17. CLAIMS RESERVE means one or more segregated accounts in which
Distributable Cash shall be held in accordance with Section 9 hereof.
1.18. COLLATERAL means any property or interest in property of the estate
of the Debtor subject to a Lien to secure the payment or performance of a Claim,
which Lien is not subject to avoidance under the Bankruptcy Code.
1.19. CONFIRMATION DATE means the date on which the Clerk of the Bankruptcy
Court enters the Confirmation Order.
1.20. CONFIRMATION HEARING means the hearing held by the Bankruptcy Court
on confirmation of this Plan, as such hearing may be adjourned or continued from
time to time.
1.21. CONFIRMATION ORDER means an order of the Bankruptcy Court confirming
this Plan.
1.22. CREDITORS' COMMITTEE means the statutory creditors' committee, if
any, appointed in the Reorganization Case under section 1102 of the Bankruptcy
Code.
1.23. DEBTOR means TV Filme, Inc., as debtor and debtor in possession under
the Bankruptcy Code.
1.24. DEFICIENCY CLAIM means, with reference to a Claim secured by a Lien
against Collateral, an amount equal to the difference between (a) the aggregate
amount of such Claim and (b) the value of the Collateral securing such Claim.
1.25. DISBURSING AGENT means the Reorganized Debtor or such Entity subject
to the jurisdiction of the Bankruptcy Court as is designated by the Debtor prior
to the Confirmation Hearing and approved in the Confirmation Order, in its
capacity as a disbursing agent under Section 7.2 hereof.
1.26. DISCLOSURE STATEMENT means the First Amended Disclosure Statement
relating to this Plan, dated as of the date hereof, including the exhibits
thereto, as the same may be amended, modified or supplemented from time to time.
1.27. DISPUTED CLAIM means a Claim or Equity Interest against the Debtor to
the extent that the allowance of such Claim or Equity Interest is the subject of
a notice of dispute issued by, or a timely objection to such Claim or Equity
Interest, interposed by the Debtor in accordance with Section 9.1 hereof.
1.28. DISTRIBUTABLE CASH means, as of the applicable date of determination,
(i) the $25 million of Cash to be distributed to holders of Senior Secured
Claims, (ii) the estimated amount for the payment of Administrative Expense
Claims which are projected to be allowed subsequent to the Effective Date, and
(iii) such other sums as may be needed to pay Allowed Claims pursuant to this
Plan.
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1.29. EFFECTIVE DATE means the later to occur of (a) the eleventh day
(calculated under Bankruptcy Rule 9006) after the Confirmation Date if no stay
of the Confirmation Order is then in effect or (b) such other date as is fixed
from time to time after the Confirmation Date by the Debtor by filing a notice
thereof with the Bankruptcy Court, but in no event shall the Effective Date
occur earlier than the date of the satisfaction of each of the conditions
precedent to the occurrence of the Effective Date of this Plan in Section 11.2
hereof unless waived as provided in Section 11.3 hereof.
1.30. ENTITY has the meaning assigned to such term in section 101(15) of
the Bankruptcy Code.
1.31. EQUITY INTEREST means any shares of common stock or other instrument
evidencing an ownership interest in the Debtor, whether or not transferable, and
any warrant, option or right to purchase, sell or subscribe for an interest or
security in the Debtor.
1.32. EXIT FINANCIERS means each holder of in excess of $1 million in
principal amount of Secured Notes which (i) commits in writing at least five (5)
business days prior to the Confirmation Hearing to participate, on a PRO RATA
basis, as a lender in the Exit Financing, and (ii) actually participates on a
PRO RATA basis in the Exit Financing.
1.33. EXIT FINANCING means the $10 million secured line of credit to be
provided by the Exit Financiers in accordance with Section 6.2 of this Plan.
1.34. FINAL ORDER means (a) an order or judgment of the Bankruptcy Court,
or other court of competent jurisdiction, which has not been reversed, vacated
or stayed and as to which the time to appeal, petition for certiorari or move
for a new trial, reargument or rehearing has expired and as to which no appeal,
petition for certiorari or other proceedings for a new trial, reargument or
rehearing shall then be pending or (b) if an appeal, writ of certiorari, new
trial, 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 shall have been denied or a new trial, reargument or rehearing shall
have been denied or resulted in no modification of such order, and the time to
take any further appeal, petition for certiorari or move for a new trial,
reargument or rehearing shall have expired; provided, that the possibility that
a motion under Rule 60 of the Federal Rules of Civil Procedure, or any analogous
rule under the Bankruptcy Rules, may be filed, relating to such order shall not
cause such order not to be a Final Order.
1.35. GENERAL UNSECURED CLAIM means any Unsecured Claim (including any
Deficiency Claim) that is not an Administrative Expense Claim, a Priority
Non-Tax Claim, or a Priority Tax Claim.
1.36. IMPLEMENTATION DOCUMENTS means the Restructuring Agreement, the New
Secured Notes, the New Indenture, certificates evidencing the New Equity
Interests, documents evidencing the Exit Financing and such agreements,
instruments or documents as the Debtor may reasonably request to implement this
Plan and the transactions contemplated hereby and by the Restructuring
Agreement.
1.37. INDENTURE means the Indenture, dated as of December 20, 1996, between
TV Filme, Inc. and IBJ Schroeder Bank and Trust Company, as indenture trustee.
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1.38. INDENTURE TRUSTEE means The Bank of New York as successor to IBJ
Schroeder Bank and Trust Company, (later known as IBJ Whitehall Bank and Trust
Company), in its capacity as indenture trustee under the Indenture, or any
successor indenture trustee appointed in accordance with the terms of the
Indenture.
1.39. ITSA means ITSA-Intercontinental Telecomuncacoes Ltda., a
Brazilian limited liability company.
1.40. ITSA NOTE means that certain promissory Note in the principal amount
of $140 million from ITSA as payor to the Debtor as payee, and all documents
executed in connection therewith.
1.41. LIABILITIES means any and all costs, expenses, actions, causes of
action, suits, controversies, damages, claims, liabilities or demands of any
nature, whether known or unknown, foreseen or unforeseen, existing or
hereinafter arising, liquidated or unliquidated, matured or not matured,
contingent or direct, whether arising at common law, in equity, or under any
statute, based in whole or in part upon any act or omission or other occurrence
taking place on or prior to the Effective Date.
1.42. LIEN has the meaning assigned to such term in section 101(37) of the
Bankruptcy Code.
1.43. NEW EQUITY INTEREST means any shares of stock to be issued by the
Reorganized Debtor pursuant to this Plan and the Restructuring Agreement.
1.44. NEW INDENTURE means the Indenture to be entered into as of the
Effective Date between the Reorganized Debtor and an indenture trustee with
respect to the New Secured Notes, pursuant to the terms of the Restructuring
Agreement, substantially in the form annexed to this Plan as EXHIBIT A.
1.45. NEW INDENTURE TRUSTEE means the entity appointed as indenture trustee
under the New Indenture, or any successor indenture trustee appointed in
accordance with the terms of the New Indenture.
1.46. NEW NOTE AMOUNT means an amount equal to the sum of $35 million plus
an amount equal to the amount of the Central Bank Fee.
1.47. NEW SECURED NOTES means the new secured note or notes, substantially
in the form annexed to the New Indenture as Exhibit A, to be issued by ITSA to
the Reorganized Debtor in the aggregate principal amount of the New Note Amount,
which will then be assigned to the holders of the Secured Notes pursuant to
Section 4.2 of this Plan and the terms of the New Indenture.
1.48. PETITION DATE means January 26, 2000, the date on which the Debtor
filed with the Bankruptcy Court its voluntary petition for relief under the
Bankruptcy Code.
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1.49. PLAN means this First Amended Plan of Reorganization, including the
schedules and exhibits hereto, as the same may be amended, modified or
supplemented from time to time in accordance with the terms hereof.
1.50. PLAN RELEASEES means, collectively, (a) the Indenture Trustee, the
Specified Holders who are signatories to the Restructuring Agreement and the
members of the Creditors' Committee, if any, (b) the respective successors,
predecessors, assignors or assignees of any of the foregoing, (c) all current or
former partners, members or owners of any of the foregoing (including current or
former partners, members or owners of any direct or indirect interest in any of
the foregoing) and (d) all current and former officers, directors, trustees,
employees, agents, counsel, attorneys, accountants, financial advisors,
investment bankers, appraisers and engineers of any of the foregoing.
1.51. PLAN RELEASES means the releases granted under Sections 13.1 and 13.2
hereof.
1.52. PRIORITY NON-TAX CLAIM means any Claim of a kind specified in section
507(a) (3), (4), (5), (6), (7) or (9) of the Bankruptcy Code.
1.53. PRIORITY TAX CLAIM means any Claim of a governmental unit of the kind
specified in section 507(a) (8) of the Bankruptcy Code.
1.54. RATABLE PORTION means, with reference to any distribution on account
of any Allowed Claim or Allowed Equity Interest in any class, a distribution
equal in amount to the ratio (expressed as a percentage) that the amount of such
Allowed Claim or Allowed Equity Interest bears to the aggregate amount of Claims
or Equity Interests in the same class.
1.55. REORGANIZATION CASE means the case commenced under chapter 11 of the
Bankruptcy Code by the Debtor on the Petition Date.
1.56. REORGANIZED DEBTOR means a new Cayman Islands entity which will be
the successor in interest to the Debtor as of the Effective Date.
1.57. RESTRUCTURING AGREEMENT means that certain agreement dated January
24, 2000, among the Debtor and the holders of Secured Notes which are
signatories thereto, a copy of which is annexed to this Plan as EXHIBIT B.
1.58. SCHEDULES means the schedules of assets and liabilities and the
statements of financial affairs filed or to be filed by the Debtor under section
521 of the Bankruptcy Code and the Official Bankruptcy Forms of the Bankruptcy
Rules, as such schedules and statements have been or may be supplemented or
amended.
1.59. SECURED CLAIM means a Claim secured by a Lien on Collateral to the
extent of the value of the Collateral, as determined in accordance with section
506(a) of the Bankruptcy Code.
1.60. SECURED NOTES means the "12-7/8% Senior Notes Due 2004" issued and
outstanding under the Indenture.
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1.61. SECURITIES ACT means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
1.62. SEC means the United States Securities and Exchange Commission.
1.63. SENIOR SECURED CLAIM means any Secured Claim governed by, arising
under or related to the Indenture or evidenced by any of the Secured Notes.
1.64. SPECIFIED HOLDERS means the holders of Secured Notes who are
signatories to the Restructuring Agreement.
1.65. SUBSIDIARIES means the Entities which are identified on Schedule 1
hereto and all direct and indirect subsidiaries of the Debtor and ITSA.
1.66. UNSECURED CLAIM means any Claim against the Debtor that is not a
Secured Claim.
1.67. VOTING AGENT means such Entity as is designated by the Debtor in the
Disclosure Statement in its capacity as Voting Agent to distribute Ballots and
tabulate votes with respect to the Plan.
B. INTERPRETATION; APPLICATION OF DEFINITIONS AND RULES OF CONSTRUCTION.
Unless otherwise specified, all section, article, schedule or exhibit
references in this Plan are to the respective section in, article of, or
schedule or exhibit to, this Plan, as the same may be amended, waived, or
modified from time to time. The words "herein," "hereof," "hereto," "hereunder,"
and other words of similar import refer to this Plan as a whole and not to any
particular section, article, subsection, or clause contained in this Plan. Any
defined term used herein that is not otherwise defined shall have the meaning
assigned to that term in the Bankruptcy Code. The rules of construction
contained in section 102 of the Bankruptcy Code shall apply to the construction
of this Plan. The headings in this Plan are for convenience of reference only
and shall not limit or otherwise affect the provisions of this Plan.
SECTION 2. PROVISIONS FOR PAYMENT OF ADMINISTRATIVE EXPENSE CLAIMS AND PRIORITY
TAX CLAIMS
2.1 ADMINISTRATIVE EXPENSE CLAIMS.
Except as provided herein, on the Effective Date, each holder of an
Administrative Expense Claim shall receive on account of such Administrative
Expense Claim an amount in Cash equal to the amount of such Administrative
Expense Claim allowed by the Bankruptcy Court, except to the extent that any
Entity entitled to payment of any Administrative Expense Claim agrees to a
different treatment of such Administrative Expense Claim. All Entities that are
awarded allowance of compensation or reimbursement of expenses by the Bankruptcy
Court under sections 503(b) (2), 503(b) (3), 503(b) (4) or 503(b) (5) of the
Bankruptcy Code shall be paid in full in such amounts as are allowed by the
Bankruptcy Court (a) upon the later of (i) the Effective Date and (ii) the date
upon which an order of the Bankruptcy Court with respect to any such
Administrative Expense Claim becomes a Final Order or (b) upon such other terms
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as may be mutually agreed upon between such holder of an Administrative Expense
Claim and the Debtor. The post-Petition Date reasonable fees and expenses of
professionals retained by the Ad Hoc Noteholders' Committee will be paid on the
Effective Date.
2.2 PRIORITY TAX CLAIMS.
On the Effective Date, each holder of an Allowed Priority Tax Claim shall
receive on account of such Allowed Priority Tax Claim a payment in Cash equal to
the amount of its Allowed Priority Tax Claim, unless the holder of such Claim
has agreed to a different treatment.
SECTION 3. CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS
Claims against and Equity Interests in the Debtor are divided into the
following classes:
Class 1 -- Priority Non-Tax Claims
Class 2 -- Senior Secured Claims
Class 3 -- Unsecured Claims
Class 4 -- Equity Interests
SECTION 4. PROVISIONS FOR TREATMENT OF CLAIMS AND EQUITY INTERESTS UNDER THIS
PLAN
4.1 PRIORITY NON-TAX CLAIMS (CLASS 1).
On the Effective Date, each holder of an Allowed Priority Non-Tax Claim
shall receive on account of such Allowed Priority Non-Tax Claim a payment in
Cash equal to the amount of its Allowed Priority Non-Tax Claim unless the holder
of such Claim has agreed to a different treatment.
4.2 SENIOR SECURED CLAIMS (CLASS 2).
(a) ALLOWANCE OF SENIOR SECURED CLAIMS. By virtue of an affirmative vote in
favor of the Plan, holders of Senior Secured Claims will be making an election
pursuant to section 1111(b)(2) of the Bankruptcy Code to treat their entire
claim as a Senior Secured Claim. The Senior Secured Claims against the Debtor
shall be deemed to be Allowed Claims as of the Petition Date in an amount equal
to $140,000,000, plus all interest accrued under the Indenture from and after
December 15, 1998 through the Petition Date. By operation of section 1111(b) (1)
(A) (i) of the Bankruptcy Code, any Deficiency Claim relating to the Senior
Secured Claims shall be extinguished.
(b) TREATMENT OF SENIOR SECURED CLAIMS. On the Effective Date, or as soon
as practicable thereafter, in exchange for the Secured Notes, each holder of a
Secured Note shall receive its Ratable Portion of (i) $25 million in Cash, (ii)
New Secured Notes in the aggregate principal amount of the New Note Amount; and
(iii) eighty percent (80%) of the New Equity Interests in the Reorganized
Debtor. Distributions to holders of Secured Notes shall be made by the
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Disbursing Agent to the Indenture Trustee for the benefit of the holders of
Secured Notes. The Indenture Trustee shall in turn make distributions under the
Plan to holders of the Secured Notes. Subsequent distributions to holders of the
New Secured Notes will be made in accordance with the New Indenture.
4.3 GENERAL UNSECURED CLAIMS (CLASS 3).
To the extent unpaid prior to the Effective Date and except to the extent
a holder of an Allowed General Unsecured Claim agrees to a different treatment,
Allowed General Unsecured Claims shall be unimpaired in accordance with section
1124(2) of the Bankruptcy Code.
4.4 EQUITY INTERESTS IN THE DEBTOR (CLASS 4).
On the Effective Date, all Equity Interests in the Debtor shall be
extinguished. On the Effective Date or as soon as practicable thereafter,
holders of Allowed Equity Interests shall receive a Ratable Portion of five
percent (5%) of the New Equity Interests in the Reorganized Debtor.
SECTION 5. IDENTIFICATION OF CLASSES OF CLAIMS AND INTERESTS IMPAIRED AND NOT
IMPAIRED UNDER THIS PLAN; ACCEPTANCE OR REJECTION OF THIS PLAN
5.1 HOLDERS OF CLAIMS AND EQUITY INTERESTS ENTITLED TO VOTE.
Each holder of an Allowed Claim or an Allowed Equity Interest in an
impaired class of Claims against or Equity Interests in the Debtor shall be
entitled to vote separately to accept or reject this Plan as provided in the
Disclosure Statement.
Each of Classes 2 and 4 is impaired hereunder and the holders of Claims or
Equity Interests in such Classes are entitled to vote on this Plan.
5.2 ACCEPTANCE BY UNIMPAIRED CLASSES.
Classes 1 and 3 are unimpaired under this Plan and holders of Claims in
such classes are conclusively presumed to have accepted this Plan.
5.3 ELIMINATION OF CLASSES.
Any class of Claims that is not occupied as of the date of the
commencement of the Confirmation Hearing by an Allowed Claim or by a Claim
temporarily allowed under Rule 3018 of the Bankruptcy Rules shall be deemed
deleted from this Plan for purposes of determining acceptance or rejection of
this Plan by such class under section 1129(a) (8) of the Bankruptcy Code.
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5.4 REVOCATION OF PLAN.
The Debtor reserves the right to revoke and withdraw this Plan at any time
prior to entry of the Confirmation Order. If this Plan is so revoked or
withdrawn, then this Plan shall be deemed null and void.
SECTION 6. MEANS OF IMPLEMENTATION
6.1 MEANS OF IMPLEMENTING THE PLAN.
To implement the Plan, the Debtor will form the Reorganized Debtor. On the
Effective Date, the Cash to fund the Claims Reserve will be transferred to the
Disbursing Agent. On the Effective Date, the Assets of the Debtor (other than
the Cash to be transferred to the Disbursing Agent as set forth in the preceding
sentence) will be transferred to the Reorganized Debtor and the Reorganized
Debtor will be the successor in interest to the Debtor. On the Effective Date,
the Reorganized Debtor will contribute as equity to its subsidiary, ITSA, $105
million of the ITSA Note less an amount equal to the amount of any Central Bank
Fee. The terms of the remaining amount due on the ITSA Note, which amount shall
equal $35 million plus an amount equal to the amount of the Central Bank Fee,
will be amended and restated. In addition, New Secured Notes in the aggregate
principal amount of the New Note Amount will be issued to the Reorganized
Debtor, which will then assign the New Secured Notes to holders of the Secured
Notes, together with (i) $25 million in Cash and (ii) 80% of the New Equity
Interests. On or as soon as practicable after the Effective Date, holders of
Allowed Equity Interests and certain members of management of the Reorganized
Debtor, or their designee, will receive the allocations of the New Equity
Interests, as provided in this Plan and in the Restructuring Agreement.
On or prior to the Effective Date, each party to the Implementation
Documents, including, without limitation, the Indenture Trustee, the New
Indenture Trustee and the Disbursing Agent, shall execute and deliver the
Implementation Documents to which it is a party.
6.2 EXIT FINANCING.
On the Effective Date, the Reorganized Debtor will obtain a $10 million
secured line of credit from the Exit Financiers on the following terms:
o Maturity: twelve months from the Effective Date of the Plan.
o Interest: 15% annual interest rate, payable monthly, in cash.
o Fees:
(i) $400,000 (U.S.) upfront underwriting fee to be paid on the
Effective Date of the Plan PRO RATA to the Specified
Holders, who have agreed in the Restructuring Agreement to
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underwrite and ensure the availability of the Exit Financing
to the Reorganized Debtor;
(ii) $100,000 (U.S.) upfront administration fee to be paid on the
Effective Date of the Plan to Resurgence Asset Management
LLC, as administrator of the Exit Financing; and
(iii) $300,000 (U.S.) facility fee to be paid only upon the
initial draw down under the Exit Financing, payable to the
Exit Financiers on a PRO RATA basis.
o Each draw down under the Exit Financing will require the prior
approval of the board of directors of the Reorganized Debtor.
o Security: The Exit Financing will be secured on a PARI PASSU basis
with the New Secured Notes.
o Participation: Each holder of in excess of $1 million in principal
amount of Secured Notes may participate on a PRO RATA basis in the Exit
Financing if such party commits to do so in writing at least five (5)
business days prior to the Confirmation Hearing.
6.3 DISTRIBUTIONS UNDER THIS PLAN.
On the Effective Date, the Disbursing Agent shall make, or shall make
adequate reserve for, the distributions required to be made under this Plan from
the sources of Cash described in Section 7.3 hereof.
6.4 SECURED NOTES AND INDENTURE.
As of the Effective Date, the Secured Notes, the Indenture and all
guarantees and other documents executed or delivered in connection therewith
shall be of no further force or effect other than, with respect to the Secured
Notes, to entitle the holders thereof to the distributions described in this
Plan. On the Effective Date, the Debtor and the Indenture Trustee shall be
discharged from all further responsibilities under the Indenture.
SECTION 7. PROVISIONS GOVERNING DISTRIBUTIONS
7.1 DATE OF DISTRIBUTIONS.
Any distributions and deliveries to be made hereunder shall be made on the
Effective Date or as soon as practicable thereafter. If any payment or act under
this Plan is required to be made or performed on a date that is not a Business
Day, then the making of such payment or the performance of such act may be
completed on the next succeeding Business Day, but shall be deemed to have been
completed as of the required date.
7.2 DISBURSING AGENT.
All distributions under this Plan shall be made by the Disbursing Agent,
except as otherwise provided herein. The Disbursing Agent shall not be required
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to give any bond or surety or other security for the performance of its duties
unless otherwise ordered by the Bankruptcy Court.
7.3 SOURCE OF DISTRIBUTIONS.
All Cash distributions required to be made under this Plan on the
Effective Date on account of Allowed Claims required under this Plan to be made
on the Effective Date, shall be made from Distributable Cash.
7.4 DELIVERY OF DISTRIBUTIONS.
Subject to Rule 9010 of the Bankruptcy Rules, all distributions to holders
of Allowed Claims and Allowed Equity Interests shall be made at the address of
each such holder as set forth on the Schedules filed with the Bankruptcy Court
unless superseded by the address set forth on proofs of claim or proofs of
equity interest filed by such holders (or at the last known address of such a
holder if no proof of claim or proof of equity interest is filed or if the
Debtor or the Disbursing Agent has been notified in writing of a change of
address). For holders of Secured Notes, the Disbursing Agent shall make
distributions to the Indenture Trustee for the benefit of the holders of Secured
Notes who surrender their Secured Notes for cancellation to the Disbursing Agent
or its designee. Any holder of a Secured Note who fails to surrender its Secured
Note(s) within one (1) year from the Effective Date shall be deemed to have
forfeited all rights and Claims and will not participate in any distribution
under the Plan. If any distribution to any holder of a Claim or Equity Interest
is returned as undeliverable, the Disbursing Agent shall use reasonable efforts
to determine the current address of such holder, but no distribution to such
holder shall be made unless and until the Disbursing Agent has determined the
then current address of such holder, at which time such distribution shall be
made to such holder without interest. Amounts in respect of any undeliverable
distributions shall be returned to the Disbursing Agent until such distribution
is claimed. Any such distribution or the proceeds thereof shall be set aside,
and in the case of Cash, held in a segregated interest bearing account to be
maintained by the Disbursing Agent. If no proofs of claim or interest are filed
and the Schedules filed with the Bankruptcy Court fail to state addresses for
holders of Allowed Claims or Allowed Equity Interests, such distributions in
respect of such Allowed Claims or Allowed Equity Interests shall be deemed
unclaimed property under section 347(b) of the Bankruptcy Code at the expiration
of one year from the Effective Date. After such date, all unclaimed property
shall revert to and be property of the Reorganized Debtor and the Claim or
Equity Interest of any holder to such property shall be discharged and forever
barred.
7.5 MANNER OF PAYMENT UNDER THIS PLAN.
At the option of the Disbursing Agent, any Cash payment to be made
pursuant to this Plan may be made by a check or wire transfer or as otherwise
required or provided in any applicable Implementation Document.
7.6 DISTRIBUTIONS AFTER EFFECTIVE DATE.
Distributions made after the Effective Date to holders of Claims or Equity
Interests that are not Allowed as of the Effective Date but which later become
Allowed shall be deemed to have been made on the Effective Date, provided that,
the Allowed Claim, if any, of Globecast North America Incorporated, shall accrue
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interest at the rate of 8% per annum from the Effective Date through the date of
payment.
SECTION 8. RIGHTS AND POWERS OF DISBURSING AGENT
8.1 EXCULPATION.
The Disbursing Agent, from and after the Effective Date, is hereby
exculpated by all Entities, including all holders of Claims and Equity Interests
and other parties in interest, from any and all claims, causes of action and
other assertions of liability (including breach of fiduciary duty) arising out
of the discharge by the Disbursing Agent of the powers and duties conferred upon
it by this Plan or any order of the Bankruptcy Court entered pursuant to or in
furtherance of this Plan, or applicable law, except solely for actions or
omissions arising out of the gross negligence or willful misconduct of the
Disbursing Agent. No holder of a Claim or an Equity Interest or other party in
interest shall have or pursue any claim or cause of action against the
Disbursing Agent for making payments in accordance with this Plan or for
implementing the provisions of this Plan.
8.2 POWERS OF THE DISBURSING AGENT.
The Disbursing Agent shall be empowered to (a) effect all actions and
execute all instruments and documents necessary to implement this Plan, (b) make
all distributions contemplated by this Plan, (c) liquidate property as required
to make distributions contemplated by this Plan, (d) comply with this Plan and
the obligations thereunder, (e) employ professionals to represent it with
respect to its responsibilities and (f) exercise such other powers as may be
vested in the Disbursing Agent pursuant to an order of the Bankruptcy Court,
pursuant to this Plan, or as deemed by the Disbursing Agent to be necessary and
proper to implement the provisions of this Plan.
8.3 EXPENSES INCURRED ON OR AFTER THE EFFECTIVE DATE.
Except as otherwise ordered by the Bankruptcy Court, the amount of any
reasonable fees and expenses incurred by the Disbursing Agent on or after the
Effective Date (including reasonable fees and expenses of counsel) shall be paid
in Cash by the Reorganized Debtor.
8.4 SUCCESSOR DISBURSING AGENT.
Upon thirty (30) days prior written notice to the Debtor or, after the
Effective Date, the Reorganized Debtor, the Disbursing Agent may resign its
position as the Disbursing Agent. The Debtor or the Reorganized Debtor, as the
case may be, shall designate a successor Disbursing Agent to replace the
existing Disbursing Agent and shall provide written notice of such designation
to the resigning Disbursing Agent and the Indenture Trustee. Any successor
Disbursing Agent shall perform all the duties and obligations, and shall be
entitled to all of the rights and remedies of the Disbursing Agent hereunder.
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SECTION 9. PROCEDURES FOR RESOLVING AND TREATING DISPUTED CLAIMS AND EQUITY
INTERESTS UNDER THIS PLAN
9.1 PROSECUTION OF OBJECTIONS.
Unless otherwise provided herein or by order of the Bankruptcy Court, all
objections to Claims or Equity Interests shall be filed and served on or before
the Confirmation Date (except with respect to any claim filed by a governmental
unit which deadline for the filing of any objections thereto shall be two
hundred ten (210) days after the Effective Date). All objections may be
litigated to Final Order. The Debtor or, after the Effective Date, the
Reorganized Debtor, may compromise and settle any objections to Claims or Equity
Interests. In addition, the Debtor or, after the Effective Date, the Reorganized
Debtor, may file a request that the Bankruptcy Court estimate for purposes of
distribution the amount of any contingent or unliquidated Claim or Equity
Interest, if liquidation of the Claim or Equity Interest would unduly delay the
administration of the Reorganization Case.
9.2 NO DISTRIBUTIONS PENDING ALLOWANCE.
Notwithstanding any other provision hereof, if any portion of a Claim or
Equity Interest is a Disputed Claim, no payment or distribution provided
hereunder shall be made on account of such Claim or Equity Interest unless and
until such Disputed Claim becomes Allowed.
9.3 CLAIMS RESERVE.
On the Effective Date, the Disbursing Agent shall transfer to one or more
segregated accounts, which accounts shall be interest-bearing and shall be
subject to the jurisdiction of the Bankruptcy Court, constituting the Claims
Reserve an amount of Distributable Cash equal to (i) the $25 million of Cash to
be distributed to holders of Senior Secured Claims, (ii) the estimated amount
for the payment of Administrative Expense Claims which are projected to be
allowed subsequent to the Effective Date, and (iii) such other sums as may be
needed to pay Allowed Claims pursuant to this Plan, including a sufficient
amount to pay the full amount reflected in the proof of claim filed by Globecast
North America Incorporated plus interest in accordance with section 7.6 hereof
to the extent such Claim becomes an Allowed Claim. The Distributable Cash held
in the Claims Reserve shall be held in trust for the benefit of holders of such
Claims pending determination of their entitlement thereto.
9.4 DISTRIBUTIONS AFTER ALLOWANCE.
Payments and distributions to each holder of a Disputed Claim or any other
Claim that is not Allowed, to the extent that such Claim or Equity Interest
ultimately becomes Allowed, shall be made in accordance with the provisions of
this Plan governing the Class of Claims in which such Claim or Equity Interest
is classified. Within ten (10) Business Days after the date that the order or
judgment of the Bankruptcy Court allowing any Disputed Claim or any other Claim
that is not Allowed becomes a Final Order, the Disbursing Agent shall distribute
to the holder of such Claim or Equity Interest any payment or property that
would have been distributed to such holder if the Claim or Equity Interest had
been allowed on the Effective Date, without any interest thereon, except as set
forth in section 7.6 hereof, which in the case of Cash distributions shall be
made from Distributable Cash held in the Claims Reserve.
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9.5 DISTRIBUTIONS AFTER DISALLOWANCE.
Cash held in the Claims Reserve after all Claims have been allowed or
disallowed shall be distributed to the Reorganized Debtor.
SECTION 10. PROVISIONS GOVERNING EXECUTORY CONTRACTS AND UNEXPIRED LEASES UNDER
THIS PLAN
10.1 GENERAL TREATMENT.
This Plan constitutes a motion by the Debtor to reject, as of the
Effective Date, all executory contracts and unexpired leases to which the Debtor
is a party, except for an executory contract or unexpired lease that (a) has
been assumed pursuant to Final Order of the Bankruptcy Court prior to the
Effective Date, (b) is specifically listed on Schedule 2 hereto or (c) is the
subject of a separate motion filed under section 365 of the Bankruptcy Code by
the Debtor and pending on the Effective Date.
10.2 AMENDMENTS TO SCHEDULE OF ASSUMED EXECUTORY CONTACTS; EFFECTS OF
AMENDMENTS.
The Debtor shall assume and assign each of the executory contracts and
unexpired leases listed on Schedule 2 hereto; provided that, the Debtor may at
any time on or before the Confirmation Date amend Schedule 2 hereto to delete
therefrom or add any executory contract or unexpired lease thereto, in which
event such executory contract or unexpired lease shall be deemed to be rejected
or assumed, respectively, as of the Effective Date. The Debtor shall provide
notice of any amendments to Schedule 2 hereto to the parties to the executory
contracts or unexpired leases affected thereby. The fact that any contract or
lease is scheduled on Schedule 2 hereto shall not constitute or be construed to
constitute an admission by the Debtor that such contract or lease (including
related agreements and rights) is an executory contract or unexpired lease
within the meaning of section 365 of the Bankruptcy Code or that the Debtor has
any liability thereunder.
10.3 BAR TO REJECTION DAMAGES.
If the rejection of an executory contract or unexpired lease by the Debtor
results in damages to the other party or parties to such contract or lease, a
Claim for such damages, if not theretofore evidenced by a filed proof of claim,
shall be forever barred and shall not be enforceable against the Debtor, or its
properties or its interests in property or its agents, successors, or assigns,
unless a proof of claim is filed with the Bankruptcy Court and served upon the
Disbursing Agent with a copy to the Debtor on or before thirty (30) days after
the later to occur of (a) the entry of the Confirmation Order and (b) the entry
of an order by the Bankruptcy Court authorizing rejection of a particular
executory contract or lease.
SECTION 11. CONDITIONS PRECEDENT TO CONFIRMATION AND EFFECTIVE DATE
11.1 CONDITIONS PRECEDENT TO CONFIRMATION OF THIS PLAN.
The confirmation of this Plan is subject to:
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(a) ENTRY OF CONFIRMATION ORDER. The Clerk of the Bankruptcy Court shall
have entered the Confirmation Order of the Bankruptcy Court, which shall:
(i) decree that the transfers contemplated to be made
shall be free and clear of all Claims, Liens and encumbrances, except
as expressly provided herein or in the Implementation Documents;
(ii) approve the terms of the Restructuring Agreement and the
exhibits thereto, including the New Indenture and the employment
agreements with key management personnel of the Reorganized Debtor,
approve the terms of the Exit Financing, and authorize and direct the
Debtor, the Indenture Trustee, the New Indenture Trustee and the
Disbursing Agent to execute and deliver the Implementation Documents,
and decree that each of the Implementation Documents shall constitute
a legal, valid and binding agreement, instrument or document, as
applicable;
(iii) decree that the Confirmation Order shall supersede any
Bankruptcy Court orders issued prior to the Confirmation Date that may
be inconsistent with the Confirmation Order;
(iv) authorize the implementation of this Plan in accordance
with its terms;
(v) provide that any transfers to be effected under this Plan
shall be and are exempt from transfer taxes, and any applicable stamp
or similar tax under section 1146 (c) of the Bankruptcy Code;
(vi) authorize the formation of the Reorganized Debtor and the
issuance of the New Secured Notes and New Equity Interests;
(vii) decree that the New Secured Notes and New Equity
Interests are exempt from registration under the Securities Act
pursuant to sections 1125(e), 1126(b) and 1145 of the Bankruptcy Code
and other applicable law; and
(viii) confirm this Plan.
(b) FORM OF CONFIRMATION ORDER. The Clerk of the Bankruptcy Court shall have
entered the Confirmation Order in form and substance satisfactory to the Debtor,
the Specified Holders and the Creditors' Committee, if one is appointed.
11.2 CONDITIONS PRECEDENT TO EFFECTIVE DATE OF THIS PLAN.
The occurrence of the Effective Date of this Plan is subject to
satisfaction of the following conditions precedent:
(a) FINALITY OF THE CONFIRMATION ORDER. The Clerk of the Bankruptcy Court
shall have entered the Confirmation Order and the Confirmation Order shall have
become a Final Order.
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(b) GOVERNMENTAL APPROVALS. The Subsidiaries shall have received all
necessary approvals to implement the structure contemplated by the Plan from
Brazilian government regulatory agencies having jurisdiction with respect to the
licenses held by the Subsidiaries.
(c) APPROVAL OF THE CENTRAL BANK. All required approvals of the Central
Bank shall have been received in form and substance satisfactory to the Debtor,
the Specified Holders and the Creditors' Committee, if one is appointed.
(d) DISTRIBUTIONS. The Disbursing Agent shall have fully funded the Claims
Reserve. The Disbursing Agent shall have received the Distributable Cash in
existence on the Effective Date.
(e) EXECUTION OF DOCUMENTS. All other actions and documents, including the
Implementation Documents, necessary to implement the provisions of this Plan
shall have been respectively, effected or executed and delivered.
11.3 WAIVER OF CONDITIONS PRECEDENT.
Each of the conditions precedent in Sections 11.1 and 11.2 hereof may be
waived, in whole or in part, by the Debtor with the consent of the Indenture
Trustee, which consent shall not be unreasonably withheld. Any such waiver of a
condition precedent in Section 11.1 or 11.2 hereof may be effected at any time,
on two (2) Business Days' notice to the Entities that are party to the
Restructuring Agreement, without leave or order of the Bankruptcy Court and
without any formal action other than proceeding to confirm or consummate this
Plan.
SECTION 12. EFFECT OF CONFIRMATION
12.1 CUSTODY.
Until the Effective Date, the Bankruptcy Court shall retain custody and
jurisdiction of the Debtor, its properties and interests in property and their
operations. On the Effective Date, the Debtor, its properties and interests in
property and its operations shall be released from the custody and jurisdiction
of the Bankruptcy Court, except as provided in Section 14.1 hereof.
12.2 LIENS.
On the Effective Date, all Liens against any properties and interests in
property of the Debtor, except to the extent provided herein, shall be deemed
extinguished and discharged, provided that, on the Effective Date, the Indenture
Trustee shall have and shall retain all rights granted under and pursuant to
this Plan.
12.3 TERM OF INJUNCTIONS OR STAYS.
Unless otherwise provided, all injunctions or stays provided for in the
Reorganization Case pursuant to sections 105 or 362 of the Bankruptcy Code, or
otherwise, and in existence on the Confirmation Date, shall remain in full force
and effect until the Effective Date.
SECTION 13. RELEASES, INJUNCTION AND WAIVER OF CLAIMS
Nothing in this Section 13 shall be construed to operate to release any
Entity from the obligations expressly contemplated by this Plan.
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13.1 RELEASES OF THE AFFILIATE RELEASEES.
(a) RELEASE OF THE DEBTOR. The Debtor's estate shall be released from all
Liabilities except those expressly preserved under this Plan.
(b) RELEASE OF THE AFFILIATE RELEASEES. Without limiting the release
provided in Section 13.1(a) and except as provided in the last sentence of this
Section 13.1(b), the Affiliate Releasees are released from all Liabilities in
any way relating to (a) the Debtor, the Reorganization Case, or this Plan, and
(b) the Secured Notes or the Indenture. Subject to the limitations provided in
the last sentence of this Section 13.1(b), the release of the Affiliate
Releasees provided in this Section 13.1(b) includes a release from Liabilities
relating to:
(i) the offer, sale, purchase, resale or ownership of the
Secured Notes or the Equity Interests, any sales brochure,
registration statement, preliminary prospectus, prospectus, offering
memorandum or circular, appraisal, report or inspection, or any
disclosure or omission related to any of the foregoing, and any
engagement, underwriting, placement agency or other role of, or
services rendered by, any Entity in connection with any of the
foregoing;
(ii) the involvement of any of the Affiliate Releasees in or
with the sale of the Secured Notes;
(iii) the ownership, management and operation of any property
by any of the Affiliate Releasees;
(iv) the preparation by any of the Affiliate Releasees of
financial statements, appraisals, or other reports or certificates in
respect of the Debtor or the other Subsidiaries;
(v) the actions, payments and obligations required of any of
the Affiliate Releasees under, among other things, the Indenture, the
Secured Notes and all agreements, instruments and documents executed
and delivered pursuant to or in connection with any of the foregoing;
(vi) the use of proceeds by any of the Affiliate Releasees
from the Secured Notes or revenues of the property of the Affiliate
Releasees; and
(vii) the undertaking by any of the Affiliate Releasees to
restructure the obligations governed by the Indenture and evidenced
by the Secured Notes, including any actions taken or not taken in
respect of formulating, negotiating, soliciting acceptances to and
implementing this Plan.
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The release provided in this Section 13.1 shall not release (a) any
defenses of the Debtor or the other Affiliate Releasees to any Liability, (b)
any obligations of the Reorganized Debtor arising under this Plan or the
Implementation Documents, or (c) subsequent to the resolution of the Debtor's
objection to the Claim of Globecast North America Incorporated by the Bankruptcy
Court, any Affiliate Releasee other than the Debtor who is obligated to
Globecast North America Incorporated pursuant to that certain agreement dated
April 13, 1997 between Hero Productions, Inc. and ITSA of Cayman Ltd.
13.2 RELEASE OF THE PLAN RELEASEES.
Except as provided in the last sentence of this Section 13.2, the Plan
Releasees are released from all Liabilities in any way relating to (a) the
Debtor, the Reorganization Case, or this Plan, and (b) the Secured Notes or the
Indenture. Subject to the limitations provided in the last sentence of this
Section 13.2, the release of the Plan Releasees provided in this Section 13.2
includes a release from Liabilities relating to:
(i) the undertaking by the Plan Releasees to restructure
the obligations governed by the Indenture and evidenced by the
Secured Notes, including any actions taken or not taken in
respect of formulating, negotiating and implementing this Plan;
(ii) all actions effected or not effected by the Indenture
Trustee or the Specified Holders, or their respective advisors, under
the Indenture or under any other agreements, instruments or documents
relating to the Debtor;
(iii) the preparation by any of the Plan Releasees of financial
statements, appraisals, or other reports or certificates in respect of
the Debtor or the Subsidiaries or their properties;
(iv) the actions, payments, and obligations required of any
of the Plan Releasees under, among other things, the Indenture, the
Secured Notes, and all agreements, instruments and documents executed
and delivered pursuant to or in connection with any of the foregoing;
and
(v) the use of proceeds by any of the Plan Releasees from
the Secured Notes or the revenues of property of the Subsidiaries.
The release provided in this Section 13.2 shall not release (a) any
defenses of the Plan Releasees to any Liability or (b) any obligations of the
Plan Releasees arising under this Plan or the Implementation Documents.
13.3 INJUNCTION.
The Confirmation Order shall be an injunction to permanently enjoin and
restrain all Entities from asserting against the Affiliate Releasees or the Plan
Releasees, or their respective properties or interests in property, any
Liabilities that are released by the Plan Releases or any Claims based upon any
act or omission, transaction or other activity of any kind or nature that
occurred prior to the Effective Date (other than actions provided for by the
Plan). The Confirmation Order shall also be an injunction to enjoin permanently
and restrain all Entities from taking any of the following actions (other than
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actions brought to enforce any right or obligation provided for by the Plan)
against the Affiliate Releasees or the Plan Releasees or their respective
properties or interests in property:
(i) the commencement or continuation of any action or
proceeding;
(ii) the enforcement, attachment, collection or recovery by
any manner or means of any judgment, award, decree or order;
(iii) creating, perfecting, or enforcing any encumbrance of any
kind; and
(iv) asserting any right of setoff, subrogation, or recoupment
of any kind against any obligation due from any such party.
13.4 VESTING OF PROPERTY IN REORGANIZED DEBTOR.
Effective as of the Effective Date all Assets of the Debtor shall be
transferred to and shall vest in the Reorganized Debtor.
SECTION 14. RETENTION OF JURISDICTION
14.1 RETENTION OF JURISDICTION.
The Bankruptcy Court may retain jurisdiction, and if the Bankruptcy Court
exercises its retained jurisdiction, shall have exclusive jurisdiction, of all
matters arising out of, and related to, the Reorganization Case and this 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 executory contracts or unexpired leases, if any are pending, and
the allowance of Claims resulting therefrom;
(b) To determine any and all adversary proceedings, applications and
contested matters;
(c) To ensure that distributions to holders of Allowed Claims are
accomplished as provided herein;
(d) To hear and determine any timely objections to Administrative Expense
Claims or to proofs of claim and equity interests filed, both before and after
the Confirmation Date, including any objections to the classification of any
Claim or Equity Interest, and to allow or disallow any Disputed Claim, in whole
or in part;
(e) To enter and implement such orders as may be appropriate in the event
the Confirmation Order is for any reason stayed, revoked, modified, or vacated;
(f) To issue such orders in aid of execution of this Plan, to the extent
authorized by section 1142 of the Bankruptcy Code;
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(g) To consider any modifications of this Plan, to cure any defect or
omission, or reconcile any inconsistency in any order of the Bankruptcy Court,
including the Confirmation Order;
(h) To hear and determine all applications for awards of compensation for
services rendered and reimbursement of expenses related to implementation and
consummation of this Plan;
(i) To hear and determine any disputes regarding the fees and expenses
incurred by the Disbursing Agent;
(j) To hear and determine disputes arising in connection with the
interpretation, implementation, or enforcement of this Plan;
(k) To hear and determine matters concerning state, local and federal taxes
in accordance with sections 346, 505 and 1146 of the Bankruptcy Code; and
(l) To enter a final decree closing the Reorganization Case.
14.2 MODIFICATION OF PLAN.
Modifications of this Plan may be proposed in writing by the Debtor at any
time before confirmation, provided that this Plan, as modified, satisfies the
requirements of sections 1122 and 1123 of the Bankruptcy Code and the Debtor
shall have complied with section 1125 of the Bankruptcy Code. This Plan may be
modified by the Debtor at any time after confirmation hereof and before
substantial consummation hereof, provided that this Plan, as modified, satisfies
the requirements of sections 1122 and 1123 of the Bankruptcy Code and the
Bankruptcy Court, after notice and a hearing, confirms this Plan as modified
under section 1129 of the Bankruptcy Code and the circumstances warrant such
modifications. A holder of a Claim or Equity Interest that has accepted this
Plan shall be deemed to have accepted this Plan as modified if the proposed
modification does not materially and adversely change the treatment of the Claim
or Equity Interest of such holder.
SECTION 15. MISCELLANEOUS PROVISIONS
15.1 PAYMENT OF STATUTORY FEES.
All fees payable pursuant to section 1930, title 28, United States Code
shall be paid on the Effective Date.
15.2 DISSOLUTION OF CREDITORS' COMMITTEE.
If a Creditors' Committee has been appointed, it shall automatically be
dissolved on the Effective Date.
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15.3 FEES AND EXPENSES OF PROFESSIONAL PERSONS.
Except as may otherwise be or have been ordered by the Bankruptcy Court,
all professionals seeking payment of reasonable fees and expenses incurred after
the Effective Date in connection with the implementation of this Plan shall
transmit a written invoice of such request to the Disbursing Agent with a copy
to the Reorganized Debtor. If no written objection to the payment of such fees
and expenses is received by the Disbursing Agent within thirty (30) days of the
receipt by the Disbursing Agent of such request, the Disbursing Agent shall pay
from the Distributable Cash held in the Claims Reserve such fees and expenses.
If an objection to the payment of such fees and expenses is received by the
Disbursing Agent within such 30-day period, the Disbursing Agent shall pay such
fees and expenses only upon order of the Bankruptcy Court or the withdrawal of
such objection.
15.4 SEVERABILITY OF PLAN PROVISIONS.
If, prior to the Confirmation Date, any term or provision of this Plan is
held by the Bankruptcy Court to be invalid, void or unenforceable, the
Bankruptcy Court shall, with the consent of the Debtor, have the power to alter
and interpret such term or provision to make it valid or enforceable to the
maximum extent practicable, consistent with the original purpose of the term or
provision held to be invalid, void or unenforceable, and such term or provision
shall then be applicable as altered or interpreted. Notwithstanding any such
holding, alteration or interpretation, the remainder of the terms and provisions
of this Plan shall remain in full force and effect and shall in no way be
affected, impaired or invalidated by such holding, alteration or interpretation.
The Confirmation Order shall constitute a judicial determination and shall
provide that each term and provision of this Plan, as it may have been altered
or interpreted in accordance with the foregoing, is valid and enforceable
pursuant to its terms.
15.5 GOVERNING LAW.
Except to the extent that the Bankruptcy Code or other federal law is
applicable, or to the extent an Exhibit hereto provides otherwise, the rights,
duties and obligations arising under this Plan shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York.
15.6 PAYMENT OF WITHHOLDING OF TAXES; ALLOCATION OF PAYMENTS.
Except as otherwise specifically provided in the Plan, all distributions
made pursuant to the Plan shall, where applicable, be subject to information
reporting to appropriate governmental authorities and to withholding of taxes.
Except as otherwise prohibited by applicable tax law, the consideration received
by Class 2 Creditors shall, for all income tax purposes, be allocated and
applied first to the unpaid principal amount of the Secured Notes and thereafter
to the unpaid accrued interest on the Secured Notes.
15.7 NOTICES.
All notices, requests, and demands to be effective shall be in writing
(including by facsimile transmission) and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when actually delivered
22
<PAGE>
or, in the case of notice by facsimile transmission, when received and
telephonically confirmed, addressed as follows:
If to the Debtor:
TV Filme, Inc.
SCS, Quadra 07-Bloco A
Ed. Executive Tower, Sala 601
70.300-911 Brasilia-DF
Brazil
with a copy to:
Kelley Drye and Warren, LLP
101 Park Avenue
New York, New York 10178
Attn: Mark I. Bane, Esq.
Telephone: (212) 808-7800
Telecopier: (212) 808-7897
If to the Indenture Trustee:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attn: Ms. Loretta Lundberg
Telephone: (212) 815-5080
Telecopier: (212) 815-5915
with a copy to:
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attn: Douglas L. Furth, Esq.
Telephone: (212) 856-6978
Telecopier: (212) 230-7639
23
<PAGE>
Ad Hoc Noteholders' Committee:
Resurgence Asset Management, LLC
10 New King Street
White Plains, New York
Attn: Steven Audi
with a copy to:
Jones Day Reavis & Pogue LLP
599 Lexington Avenue
New York, New York 10022
Attn: Marc S. Kirschner, Esq.
Telephone: (212) 326-3939
Telecopier: (212) 755-7306
24
<PAGE>
Dated: February 29, 2000
Respectfully submitted,
TV FILME, INC.
By: S/ HERMANO ALBUQUERQUE
----------------------
Name: Hermano Albuquerque
Title: President and CEO
25
<PAGE>
SCHEDULE 1 TO PLAN OF REORGANIZATION
LIST OF SUBSIDIARIES
ITSA-INTERCONTINENTAL TELECOMUNICACOES
TV FILME BRASILIA SERVICOS DE TELECOMUNICACOES
TV FILME GOIANIA SERVICOS DE TELECOMUNICACOES
TV FILME BELEM SERVICOS DE TELECOMUNICACOES
TV FILME CAMPINA GRANDE SERVICOS DE TELECOMUNICACOES LTDA.
TV FILME PROGRAMADORA LTDA.
TV FILME SISTEMAS LTDA.
TV FILME ITSA OF CAYMAN, LTD.
TV FILME SERVICOS DE TELECOMUNICACOES LTDA.
TV FILME OPERACOES LTDA.
TV FILME OF CAYMAN, LTD.
<PAGE>
SCHEDULE 2 TO PLAN OF REORGANIZATION
LIST OF ASSUMED EXECUTORY CONTRACTS
1. Agreement dated May 11, 1999, between TV Filme, Inc. and Chanin Capital
Partners relating to the retention of Chanin Capital Partners by the Ad Hoc
Noteholders' Committee.
2. Agreement dated as of April 22, 1999 between BT Alex. Brown (now known as
Deutche Banc Alex. Brown) and TV Filme, Inc., as amended by Agreement dated
September 15, 1999 among TV Filme, Inc., Lazard Freres & Co. LLC and
Deutche Banc Alex. Brown.
<PAGE>
EXHIBIT A TO PLAN OF REORGANIZATION
FORM OF NEW INDENTURE
<PAGE>
EXHIBIT B TO PLAN OF REORGANIZATION
RESTRUCTURING AGREEMENT
<PAGE>
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS AND INTERPRETATION...................................1
A. Definitions......................................................1
B. Interpretation; Application of Definitions and Rules of
Construction.....................................................7
SECTION 2. PROVISIONS FOR PAYMENT OF ADMINISTRATIVE EXPENSE CLAIMS AND
PRIORITY TAX CLAIMS..............................................7
2.1 Administrative Expense Claims....................................7
2.2 Priority Tax Claims..............................................8
SECTION 3. CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS....................8
SECTION 4. PROVISIONS FOR TREATMENT OF CLAIMS AND EQUITY INTERESTS UNDER
THIS PLAN........................................................8
4.1 Priority Non-Tax Claims (Class 1)................................8
4.2 Senior Secured Claims (Class 2)..................................8
(a) Allowance of Senior Secured Claims.........................8
(b) Treatment of Senior Secured Claims.........................8
4.3 General Unsecured Claims (Class 3)...............................9
4.4 Equity Interests in the Debtor (Class 4).........................9
SECTION 5. IDENTIFICATION OF CLASSES OF CLAIMS AND INTERESTS IMPAIRED AND
NOT IMPAIRED UNDER THIS PLAN; ACCEPTANCE OR REJECTION OF THIS
PLAN.............................................................9
5.1 Holders of Claims and Equity Interests Entitled to Vote..........9
5.2 Acceptance by Unimpaired Classes.................................9
5.3 Elimination of Classes...........................................9
5.4 Revocation of Plan..............................................10
SECTION 6. MEANS OF IMPLEMENTATION.........................................10
6.1 Means of Implementing the Plan..................................10
6.2 Exit Financing..................................................10
6.3 Distributions under this Plan...................................11
6.4 Secured Notes and Indenture.....................................11
SECTION 7. PROVISIONS GOVERNING DISTRIBUTIONS..............................11
7.1 Date of Distributions...........................................11
7.2 Disbursing Agent................................................11
-i-
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
PAGE
7.3 Source of Distributions.........................................12
7.4 Delivery of Distributions.......................................12
7.5 Manner of Payment Under this Plan...............................12
7.6 Distributions After Effective Date..............................12
SECTION 8. RIGHTS AND POWERS OF DISBURSING AGENT...........................13
8.1 Exculpation.....................................................13
8.2 Powers of the Disbursing Agent..................................13
8.3 Expenses Incurred on or After the Effective Date................13
8.4 Successor Disbursing Agent......................................13
SECTION 9. PROCEDURES FOR RESOLVING AND TREATING DISPUTED CLAIMS AND
EQUITY INTERESTS UNDER THIS PLAN................................14
9.1 Prosecution of Objections.......................................14
9.2 No Distributions Pending Allowance..............................14
9.3 Claims Reserve..................................................14
9.4 Distributions After Allowance...................................14
9.5 Distributions After Disallowance................................15
SECTION 10. PROVISIONS GOVERNING EXECUTORY CONTRACTS AND UNEXPIRED LEASES
UNDER THIS PLAN.................................................15
10.1 General Treatment...............................................15
10.2 Amendments to Schedule of Assumed Executory Contacts; Effects
of Amendments...................................................15
10.3 Bar to Rejection Damages........................................15
SECTION 11. CONDITIONS PRECEDENT TO CONFIRMATION AND EFFECTIVE DATE.........15
11.1 Conditions Precedent to Confirmation of this Plan...............15
(a) Entry of Confirmation Order...............................16
(b) Form of Confirmation Order................................16
11.2 Conditions Precedent to Effective Date of this Plan.............16
(a) Finality of the Confirmation Order........................16
(b) Governmental Approvals....................................17
(c) Approval of the Central Bank..............................17
-ii-
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
PAGE
(d) Distributions.............................................17
(e) Execution of Documents....................................17
11.3 Waiver of Conditions Precedent..................................17
SECTION 12. EFFECT OF CONFIRMATION..........................................17
12.1 Custody.........................................................17
12.2 Liens...........................................................17
12.3 Term of Injunctions or Stays....................................17
SECTION 13. RELEASES, INJUNCTION AND WAIVER OF CLAIMS.......................18
13.1 Releases of the Affiliate Releasees.............................18
(a) Release of the Debtor.....................................18
(b) Release of the Affiliate Releasees........................18
13.2 Release of the Plan Releasees...................................19
13.3 Injunction......................................................19
13.4 Vesting of Property in Reorganized Debtor.......................20
SECTION 14. RETENTION OF JURISDICTION.......................................20
14.1 Retention of Jurisdiction.......................................20
14.2 Modification of Plan............................................21
SECTION 15. MISCELLANEOUS PROVISIONS........................................21
15.1 Payment of Statutory Fees.......................................21
15.2 Dissolution of Creditors' Committee.............................21
15.3 Fees and Expenses of Professional Persons.......................21
15.4 Severability of Plan Provisions.................................22
15.5 Governing Law...................................................22
15.6 Payment of Withholding of Taxes; Allocation of Payments.........22
15.7 Notices.........................................................22
SCHEDULE 1 List of Subsidiaries
SCHEDULE 2 List of Assumed Executory Contracts
EXHIBIT A Form of New Indenture
EXHIBIT B Restructuring Agreement
-iii-
<PAGE>
CONTACTS: HERMANO ALBUQUERQUE
Chief Executive Officer
Phone: 011-55-61-314-9904
E-mail: [email protected]
MORGEN-WALKE ASSOCIATES
Katherine Mittelbusher
Press: Brian Maddox
Phone: (212) 850-5600
E-mail: [email protected]
FOR IMMEDIATE RELEASE
TV FILME, INC. REPORTS CONFIRMATION OF PLAN OF REORGANIZATION
BRASILIA, Brazil, (April 17, 2000) -- TV Filme, Inc. (OTC Bulletin Board:
PYTV) reported today that on April 10, 2000 the United States Bankruptcy Court
for the District of Delaware confirmed TV Filme, Inc.'s First Amended Plan of
Reorganization (the "Plan"), dated February 29, 2000, filed in TV Filme's
pending Chapter 11 bankruptcy case. Overwhelming majorities of holders of TV
Filme, Inc.'s outstanding 12-7/8% senior notes due 2004 (the "Senior Notes") and
holders of TV Filme, Inc.'s common stock voted in favor of the restructuring set
forth in the Plan.
The Company's restructuring represents a consensual arrangement, pursuant
to a Restructuring Agreement dated January 24, 2000, with holders of more than
65% of the Company's outstanding Senior Notes. TV Filme, Inc. expects that this
restructuring will significantly reduce the Company's existing long-term debt,
and enable the Company to continue the build-out of its recently acquired
multi-point, multi-channel distribution systems ("MMDS") licenses. The
restructuring of the Company's indebtedness provides, among other things, as
follows:
Once the "Effective Date" of the Plan occurs, the holders of Senior Notes
will receive a $25 million cash payment and their existing notes will be
converted into (i) New Senior Secured Notes in the aggregate principal amount of
at least $35 million, subject to adjustment, with a five year maturity and
interest of 12% per annum (interest payable-in-kind at the option of the
reorganized company through the first 24 months), and (ii) 80% of the new common
equity of the reorganized company. Current management will receive 15% of the
new common equity, and existing common stockholders of TV Filme, Inc. will
receive 5% of the new common equity of the reorganized company in exchange for
their current stake. The Plan provides that the reorganized company will be a
newly-formed Cayman Islands holding company, and that the Senior Secured Notes
will be issued by ITSA - Intercontinental Telecomunicacoes Ltda., an existing
Brazilian subsidiary of TV Filme.
<PAGE>
The Effective Date of the Plan is contingent upon obtaining approval of
the restructuring contemplated by the Plan from Agencia Nacional de
Telecomunicacoes, the Brazilian government agency that regulates
telecommunications services in Brazil, and the Central Bank of Brazil.
Hermano Studart Lins de Albuquerque, Chief Executive Officer of TV Filme,
Inc. said, "We are pleased to announce confirmation of the Plan. We believe the
Brazilian government agency approvals needed to consummate the Plan will be
obtained in the foreseeable future and, once implemented, the restructuring will
place TV Filme's business in a much stronger position."
Mr. Albuquerque emphasized that the restructuring is being implemented
at the U.S. holding company level and will not affect the Company's
operations in Brazil. "We will continue to provide our customers with the
highest quality of programming, service, and reliability."
Headquartered in Brasilia, Brazil, TV Filme, Inc. is a leading provider of
subscription television, data and internet services in mid-sized markets in
Brazil. The Company has established wireless cable operating systems in
Brasilia, Goiania, Belem and Campina Grande, which together comprise over 1.4
million households. Also, the Company holds wireless cable licenses in the
cities of Bauru, Caruaru, Franca, Porto Velho, Presidente Prudente, Uberaba and
Belo Horizonte, which together comprise nearly 1.2 million households. TV Filme,
Inc. reports all results in U.S. dollars and prepares its financial statements
in accordance with U.S. generally accepted accounting principles.
The matters discussed in this release include forward-looking statements
that involve risks and uncertainties, including the implementation of the
proposed restructuring and the risks detailed from time to time in TV Filme,
Inc.'s reports filed with the Securities and Exchange Commission. TV Filme, Inc.
undertakes no duty to update such forward-looking statements.
