<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT - - MAY 27, 1999
(DATE OF EARLIEST EVENT REPORTED)
BRUNO'S, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
COMMISSION FILE NUMBER 0-6544
<TABLE>
<CAPTION>
ALABAMA 63-0411801
- ---------------------------------- ----------------------------
<S> <C>
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NO.)
800 LAKESHORE PARKWAY
BIRMINGHAM, ALABAMA 35211
- ---------------------------------- ----------------------------
(ADDRESS OF PRINCIPAL (ZIP CODE)
EXECUTIVE OFFICES)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE: 205-940-9400
<PAGE> 2
ITEM 5. OTHER EVENTS
As previously reported, on February 2, 1998, Bruno's, Inc. and its 11
subsidiaries (collectively referred to as the "Debtors") each filed a petition
for reorganization under chapter 11 of title 11 of the United States Code (the
"Bankruptcy Code"). The petitions were filed in the United States Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court") under case numbers
98-212(SLR) through 98-223(SLR)(the "Chapter 11 Cases"). The Chapter 11 Cases
have been procedurally consolidated for administrative purposes. Since the
commencement of the Chapter 11 Cases, the Debtors have been operating their
businesses and managing their properties as debtors-in-possession pursuant to
the Bankruptcy Code.
On May 27, 1999, the Debtors filed with the Bankruptcy Court (i) the
Debtors' Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code
(the "Proposed Plan of Reorganization") and (iii) the Debtors' Joint Disclosure
Statement Pursuant to Section 1125 of the Bankruptcy Code (the "Disclosure
Statement"). A copy of the Proposed Plan of Reorganization is attached to this
Current Report on Form 8-K as Exhibit 2.3 and is incorporated herein by
reference. A copy of the Disclosure Statement may be obtained from the
Bankruptcy Court.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
<TABLE>
<CAPTION>
DESIGNATION
OF EXHIBIT DESCRIPTION OF EXHIBIT
----------- ----------------------
<S> <C>
2.3 Debtors' Joint Plan of Reorganization under Chapter 11 of
the Bankruptcy Code
</TABLE>
ii
<PAGE> 3
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, thereunto duly authorized.
BRUNO'S, INC.
By /s/ Walter M. Grant
-------------------------------------------
Walter M. Grant
Senior Vice President and General Counsel
June 4, 1999
iii
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BRUNO'S, INC.
CURRENT REPORT ON FORM 8-K
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
-------------- ----------------------
<S> <C>
2.3 Debtors' Joint Plan of Reorganization under Chapter 11 of
the Bankruptcy Code
</TABLE>
iv
<PAGE> 1
EXHIBIT 2.3
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
- -----------------------------------------------x
:
In re : Chapter 11 Case Nos.
:
PWS HOLDING CORPORATION, : 98-212 (SLR) through
BRUNO'S, INC., et al., : 98-223 (SLR)
:
Debtors. : (Jointly Administered)
:
- -----------------------------------------------x
DEBTORS' JOINT PLAN OF REORGANIZATION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
PWS Holding Corporation, Bruno's, Inc., Food Max of Mississippi, Inc.,
A.F. Stores, Inc., BR Air, Inc., Food Max of Georgia, Inc., Food Max of
Tennessee, Inc., Food Max, Inc., Lakeshore Foods, Inc., Bruno's Food Stores,
Inc., Georgia Sales Company and SSS Enterprises, Inc. propose the following
joint plan of reorganization under section 1121(a) of title 11 of the United
States Code:
ARTICLE I
DEFINITIONS AND CONSTRUCTION OF TERMS
Definitions. As used herein, the following terms have the respective
meanings specified below:
1.1 Administrative Expense Claim means any right to payment
constituting a cost or expense of administration of any of the Chapter 11 Cases
under sections 503(b) and 507(a)(1) of the Bankruptcy Code, including, without
limitation, any actual and necessary costs and expenses of preserving the
estates of the Debtors, any actual and necessary costs and expenses of operating
the business of the Debtors, any indebtedness or obligations incurred or assumed
by the Debtors in Possession in connection with the conduct of their business,
including, without limitation, for the acquisition or lease of property or an
interest in property or the rendition of services, all compensation and
reimbursement of expenses to the extent Allowed by the Bankruptcy Court under
section 330 or 503 of the Bankruptcy Code and any fees or charges assessed
against the estates of the Debtors under section 1930 of chapter 123 of title 28
of the United States Code.
1.2 Agent means The Chase Manhattan Bank, as administrative agent for
the Banks.
1.3 Allowed means, with reference to any Claim, (a) any Claim against
the Debtors which has been listed by the Debtors in their Schedules, as such
Schedules may be amended by
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the Debtors from time to time in accordance with Bankruptcy Rule 1009, as
liquidated in amount and not disputed or contingent and for which no contrary
proof of claim has been filed, (b) any Claim allowed hereunder, (c) any Claim
which is not Disputed, (d) any Claim that is compromised, settled or otherwise
resolved pursuant to the authority granted to New Bruno's pursuant to a Final
Order of the Bankruptcy Court or under Section 5.6 of the Plan or (e) any Claim
which, if Disputed, has been Allowed by Final Order; provided, however, that
Claims allowed solely for the purpose of voting to accept or reject the Plan
pursuant to an order of the Bankruptcy Court shall not be considered "Allowed
Claims" hereunder. Unless otherwise specified herein or by order of the
Bankruptcy Court, "Allowed Administrative Expense Claim" or "Allowed Claim"
shall not, for any purpose under the Plan, include interest on such
Administrative Expense Claim or Claim from and after the Commencement Date.
1.4 Ballot means the form distributed to each holder of an impaired
Claim on which is to be indicated acceptance or rejection of the Plan.
1.5 Bank Claims means all Claims of the Banks arising under the Bank
Credit Agreement.
1.6 Bank Credit Agreement means that certain Credit Agreement among
Bruno's, the Agent and certain Banks, dated as of August 18, 1995, and any of
the documents and instruments relating thereto, as amended, supplemented,
modified or restated as of the Commencement Date, including, without limitation,
the December 1997 Amendment.
1.7 Bank Preference Action means the Adversary Proceeding styled PWS
Holding Corp., Bruno's, Inc. et al. v. AmSouth Bank of Alabama et al., Adv.
Proc. No. A98-145, currently pending before the Bankruptcy Court.
1.8 Bank Release means that certain Release, dated as of February 13,
1998, pursuant to which the Agent on behalf of the Banks, released and
relinquished any and all Liens against Bruno's created pursuant to and in
connection with the December 1997 Amendment.
1.9 Banks means, collectively, the banks and financial institutions
that are parties to the Bank Credit Agreement and their successors and assigns.
1.10 Bankruptcy Code means title 11 of the United States Code, as
amended from time to time, as applicable to the Chapter 11 Cases.
1.11 Bankruptcy Court means the United States District Court for the
District of Delaware having jurisdiction over the Chapter 11 Cases and, to the
extent of any reference under section 157 of title 28 of the United States Code,
the unit of such District Court under section 151 of title 28 of the United
States Code.
1.12 Bankruptcy Rules means the Federal Rules of Bankruptcy Procedure
as promulgated by the United States Supreme Court under section 2075 of title 28
of the United States Code, and any Local Rules of the Bankruptcy Court.
1.13 Business Day means any day other than a Saturday, Sunday or any
other day on which commercial banks in New York, New York are required or
authorized to close by law or executive order.
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<PAGE> 3
1.14 Bruno's means Bruno's, Inc., an Alabama corporation.
1.15 Cash means legal tender of the United States of America.
1.16 Causes of Action means, without limitation, any and all actions,
causes of action, liabilities, obligations, rights, suits, damages, judgments,
claims and demands whatsoever, whether known or unknown, existing of hereafter
arising, in law, equity or otherwise, based in whole or in part upon any act or
omission or other event occurring prior to the Commencement Date or during the
course of the Chapter 11 Cases, including through the Effective Date.
1.17 Chapter 11 Cases means the cases under chapter 11 of the
Bankruptcy Code commenced by the Debtors, styled In re PWS Holding Corp.,
Bruno's, Inc. et al., Chapter 11 Case Nos. 98-212 through 98-223 (SLR)
inclusive, Jointly Administered, currently pending before the Bankruptcy Court.
1.18 Claim has the meaning set forth in section 101 of the Bankruptcy
Code.
1.19 Class means a category of holders of Claims or Equity Interests as
set forth in Article III of the Plan.
1.20 Collateral means any property or interest in property of the
estates of the Debtors subject to a Lien to secure the payment or performance of
a Claim, which Lien is not subject to avoidance or otherwise invalid under the
Bankruptcy Code or applicable state law.
1.21 Commencement Date means February 2, 1998, the date on which the
Debtors commenced the Chapter 11 Cases.
1.22 Committee means the statutory committee of unsecured creditors
appointed in the Chapter 11 Cases pursuant to section 1102 of the Bankruptcy
Code.
1.23 Confirmation Date means the date on which the Clerk of the
Bankruptcy Court enters the Confirmation Order on the docket.
1.24 Confirmation Hearing means the hearing held by the Bankruptcy
Court to consider confirmation of the Plan pursuant to section 1129 of the
Bankruptcy Code, as such hearing may be adjourned or continued from time to
time.
1.25 Confirmation Order means the order of the Bankruptcy Court
confirming the Plan pursuant to section 1129 of the Bankruptcy Code.
1.26 Creditor Representative means the individual or entity designated
by the Banks to effectuate the Restructuring Transactions described in Section
7.1 of the Plan on behalf of the holders of Bank Claims.
1.27 Debtors means, collectively, PWS Holding Corporation, Bruno's,
Inc., Food Max of Mississippi, Inc., A.F. Stores, Inc., BR Air, Inc., Food Max
of Georgia, Inc., Food Max of Tennessee, Inc., Food Max, Inc., Lakeshore Foods,
Inc., Bruno's Food Stores, Inc., Georgia Sales Company and SSS Enterprises, Inc.
3
<PAGE> 4
1.28 Debtors in Possession means the Debtors in their capacity as
debtors in possession in the Chapter 11 Cases pursuant to sections 1101, 1107(a)
and 1108 of the Bankruptcy Code.
1.29 December 1997 Amendment means that certain Amendment, Waiver and
Agreement, dated as of December 1, 1997, among the Agent, certain of the Banks
and the Debtors, and any of the documents and instruments relating thereto, as
amended, supplemented, modified or restated as of the Commencement Date.
1.30 Director Options shall have the meaning set forth in Section 8.6
of the Plan.
1.31 Disbursing Agent means New Bruno's, in its capacity as Disbursing
Agent for the New Bruno's Common Stock and the Reorganized Bruno's Common Stock
pursuant to Section 5.4(a) of the Plan.
1.32 Disclosure Statement means the disclosure statement relating to
the Plan, including, without limitation, all exhibits and schedules thereto, as
approved by the Bankruptcy Court pursuant to section 1125 of the Bankruptcy
Code.
1.33 Disputed means, with reference to any Claim, any Claim proof of
which was timely and properly filed, and in such case or in the case of an
Administrative Expense Claim, any Administrative Expense Claim or Claim which is
disputed under the Plan or as to which the Debtors have interposed a timely
objection and/or request for estimation in accordance with section 502(c) of the
Bankruptcy Code and Bankruptcy Rule 3018, which objection and/or request for
estimation has not been withdrawn or determined by a Final Order, and any Claim
proof of which was required to be filed by order of the Bankruptcy Court but as
to which a proof of claim was not timely or properly filed. A Claim that is
Disputed by the Debtors as to its amount only, shall be deemed Allowed in the
amount the Debtors admit owing, if any, and Disputed as to the excess.
1.34 Disputed Claim Amount means the amount set forth in the proof of
claim relating to a Disputed Claim or, if an amount is estimated in respect of a
Disputed Claim in accordance with section 502(c) of the Bankruptcy Code and
Bankruptcy Rule 3018, the amount so estimated pursuant to an order of the
Bankruptcy Court.
1.35 Effective Date means the first Business Day on which the
conditions specified in Section 10.1 of the Plan have been satisfied or waived.
1.36 Equity Interest means any share of common stock or other
instrument evidencing an ownership interest in any of the Debtors, whether or
not transferable, and any option, warrant or right, contractual or otherwise, to
acquire any such interest.
1.37 Final Order means an order of the Bankruptcy Court or any other
court of competent jurisdiction 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 as to which any right to appeal, petition for
certiorari, reargue, or rehear shall have been waived in writing in form and
substance satisfactory to the Debtors or, on and after the Effective Date, New
Bruno's, or, in the event that an appeal, writ of certiorari, or reargument or
rehearing thereof has been sought, such order of the
4
<PAGE> 5
Bankruptcy Court or other court of competent jurisdiction shall have been
determined by the highest court to which such order was appealed, or certiorari,
reargument or rehearing shall have been denied and the time to take any further
appeal, petition for certiorari or move for reargument or rehearing shall have
expired; provided, however, that the possibility that a motion under Rule 59 or
Rule 60 of the Federal Rules of Civil Procedure, or any analogous rule under the
Bankruptcy Rules or applicable state court rules of civil procedure, may be
filed with respect to such order shall not cause such order not to be a Final
Order.
1.38 General Unsecured Claim means any Claim other than a Secured
Claim, Administrative Expense Claim, Priority Tax Claim, Other Priority Claim,
Bank Claim or Subordinated Note Claim.
1.39 Grant Stock Investment Payment shall have the meaning set forth in
Section 8.9 of the Plan.
1.40 Indenture Trustee means HSBC Bank USA, as indenture trustee under
the Subordinated Notes Indentures.
1.41 Insured Claim means any Claim arising from an incident or
occurrence that is covered under the Debtors' insurance policies.
1.42 Lien has the meaning set forth in section 101 of the Bankruptcy
Code.
1.43 Management Options shall have the meaning set forth in Section 8.5
of the Plan.
1.44 New Bruno's means Bruno's Supermarkets, Inc., a Delaware
corporation to be organized on or before the Effective Date.
1.45 New Bruno's By-laws means the By-laws of New Bruno's, which shall
be in substantially the form contained in the Plan Supplement.
1.46 New Bruno's Certificate of Incorporation means the Certificate of
Incorporation of New Bruno's, which shall be in substantially the form contained
in the Plan Supplement.
1.47 New Bruno's Common Stock means the common stock of New Bruno's
authorized and to be issued pursuant to the Plan. The New Bruno's Common Stock
shall have a par value of $.01 per share and such rights with respect to
dividends, liquidation, voting and other matters as are provided for by
applicable nonbankruptcy law or in the New Bruno's Certificate of Incorporation
and the New Bruno's By-laws.
1.48 New Bruno's Employment Contracts means the employment contracts
between New Bruno's and James A. Demme, President and Chief Executive Officer of
Bruno's and New Bruno's, Bruce A. Efird, Senior Vice President - Merchandising
of Bruno's and New Bruno's, Walter M. Grant, Senior Vice President, General
Counsel and Secretary of Bruno's and New Bruno's, Laura Hayden, Senior Vice
President - Human Resources of Bruno's and New Bruno's, Arthur B. McCarter,
Senior Vice President and Chief Financial Officer of Bruno's and New Bruno's,
William D. Shoemaker, Senior Vice President - Operations of Bruno's and New
Bruno's and Steve Slade, Senior Vice President - Marketing, which shall be in
substantially the form contained in the Plan Supplement.
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1.49 New Bruno's Severance Plan means the Severance Plan to be adopted
by New Bruno's, which shall be in substantially the form contained in the Plan
Supplement.
1.50 New Bruno's Director Stock Option Plan means the Director Stock
Option Plan to be adopted by New Bruno's, which shall be in substantially the
form contained in the Plan Supplement
1.51 New Bruno's Stock Option Plan means the Stock Option Plan to be
adopted by New Bruno's, which shall be in substantially the form contained in
the Plan Supplement.
1.52 Other Priority Claim means any Claim, other than an Administrative
Expense Claim or a Priority Tax Claim, entitled to priority in right of payment
under section 507(a) of the Bankruptcy Code.
1.53 Other Secured Claim means any Secured Claim, other than a Secured
Tax Claim.
1.54 Plan means this chapter 11 plan of reorganization, including,
without limitation, the Plan Supplement and all exhibits, supplements,
appendices and schedules hereto, either in its present form or as the same may
be altered, amended or modified from time to time.
1.55 Plan Supplement means the forms of documents specified in Section
12.18 of the Plan.
1.56 Priority Tax Claim means any Claim of a governmental unit of the
kind specified in sections 502(i) and 507(a)(8) of the Bankruptcy Code.
1.57 Pro Rata Share means a proportionate share, so that the ratio of
the consideration distributed on account of an Allowed Claim in a Class to the
amount of such Allowed Claim is the same as the ratio of the amount of the
consideration distributed on account of all Allowed Claims in such Class to the
amount of all Allowed Claims in such Class.
1.58 Record Date means the day that is five Business Days from and
after the Confirmation Date.
1.59 Registration Rights Agreement means a registration rights
agreement to be entered into pursuant to Section 5.9 of the Plan between New
Bruno's and all holders of Allowed Bank Claims, Management Options and Director
Options, which shall be in substantially the form contained in the Plan
Supplement.
1.60 Releasees means all present and former officers and directors of
the Debtors who were directors, officers or employees, respectively, on or after
the Commencement Date, and any other persons who serve or served as members of
management of the Debtors on or after the Commencement Date, all present and
former members of the Committee, all present and former officers and directors
and other persons who serve or served as members of the management of any member
of the Committee, and all advisors, consultants or professionals of or to the
Debtors, the Committee or members of the Committee.
1.61 Reorganized Bruno's means Bruno's on and after the Effective Date
after giving effect to the Restructuring Transactions.
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1.62 Reorganized Bruno's By-laws means the amended and restated By-laws
of Reorganized Bruno's, which shall be in substantially the form contained in
the Plan Supplement.
1.63 Reorganized Bruno's Certificate of Incorporation means the amended
and restated Certificate of Incorporation of Reorganized Bruno's, which shall be
in substantially the form contained in the Plan Supplement.
1.64 Reorganized Bruno's Common Stock means the common stock of
Reorganized Bruno's authorized and to be issued pursuant to the Plan. The
Reorganized Bruno's Common Stock shall have a par value of $.01 per share and
such rights with respect to dividends, liquidation, voting and other matters as
are provided for by applicable nonbankruptcy law or in the Reorganized Bruno's
Certificate of Incorporation and the Reorganized Bruno's By-laws.
1.65 Reorganized Debtors means Reorganized Bruno's and each of the
Reorganized Subsidiaries.
1.66 Reorganized Subsidiaries means each of the Subsidiaries on and
after the Effective Date after giving effect to the Restructuring Transactions.
1.67 Required Banks means Banks holding a majority in amount of Allowed
Bank Claims.
1.68 Restructuring Transactions means those transactions described in
Section 7.1 of the Plan.
1.69 Retained Assets means certain assets of the Debtors, consisting
principally of real property, which assets shall be specifically set forth in
the Plan Supplement and are intended to have a net fair market value of
approximately $20,000,000.
1.70 Schedules means the schedules of assets and liabilities, the list
of holders of Equity Interests and the statements of financial affairs filed by
the Debtors on May 15, 1998 under section 521 of the Bankruptcy Code and
Bankruptcy Rule 1007, and all amendments and modifications thereto through and
including the Confirmation Date.
1.71 Secured Claim means any Claim, to the extent reflected in the
Schedules or a proof of claim as a Secured Claim, which is secured by a Lien on
Collateral to the extent of the value of such Collateral, as determined in
accordance with section 506(a) of the Bankruptcy Code, or, in the event that
such Claim is subject to a permissible setoff under section 553 of the
Bankruptcy Code, to the extent of such permissible setoff.
1.72 Secured Tax Claim means any Secured Claim which, absent its
secured status, would be entitled to priority in right of payment under section
507(a)(8) of the Bankruptcy Code.
1.73 Shareholders Agreement means a shareholders agreement to be
entered into pursuant to Section 5.10 of the Plan between New Bruno's and all
holders of Allowed Bank Claims, Management Options and Director Options, which
shall be in substantially the form contained in the Plan Supplement.
1.74 Stock Purchase Loans shall have the meaning set forth in Section
8.9 of the Plan.
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1.75 Subordinated Note Claims means all Claims arising under the
Subordinated Notes Indentures.
1.76 Subordinated Notes means all notes issued and outstanding under
the Subordinated Notes Indentures as of the Commencement Date.
1.77 Subordinated Notes Indentures means the trust indenture, dated
August 18, 1995, and the first supplemental trust indenture, dated August 18,
1995, between Bruno's, as issuer of the Subordinated Notes, and the Indenture
Trustee, and all of the documents and instruments relating thereto, as amended,
supplemented, modified or restated as of the Commencement Date.
1.78 Subsequent Distribution Date means the twentieth day after the end
of the month following the month in which the Effective Date occurs and the
twentieth day after the end of each subsequent month.
1.79 Subsidiary means any Debtor other than Bruno's.
1.80 Subsidiary Equity Interest means any share of common stock or
other instrument evidencing a present ownership interest in any of the
Subsidiaries, whether or not transferable, and any option, warrant or right,
contractual or otherwise, to acquire any such interest.
1.81 Tort Claim means any Claim relating to personal injury, property
damage, products liability, discrimination, employment or any other similar
litigation Claim asserted against any of the Debtors. A Tort Claim may also be
an Insured Claim.
Interpretation; Application of Definitions and Rules of Construction.
Wherever from the context it appears appropriate, each term stated in either the
singular or the plural shall include both the singular and the plural and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter. Unless otherwise specified, all section,
article, schedule or exhibit references in the Plan are to the respective
Section in, Article of, Schedule to, or Exhibit to, the Plan. The words
"herein," "hereof," "hereto," "hereunder" and other words of similar import
refer to the Plan as a whole and not to any particular section, subsection or
clause contained in the Plan. The rules of construction contained in section 102
of the Bankruptcy Code shall apply to the construction of the Plan. A term used
herein that is not defined herein, but that is used in the Bankruptcy Code,
shall have the meaning ascribed to that term in the Bankruptcy Code. The
headings in the Plan are for convenience of reference only and shall not limit
or otherwise affect the provisions of the Plan.
ARTICLE II
TREATMENT OF ADMINISTRATIVE
EXPENSE CLAIMS AND PRIORITY TAX CLAIMS
2.1 Administrative Expense Claims. Except to the extent that any entity
entitled to payment of any Allowed Administrative Expense Claim agrees to a less
favorable treatment, each holder of an Allowed Administrative Expense Claim
shall receive Cash in an amount equal to such Allowed Administrative Expense
Claim on the later of the Effective Date and the date such
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<PAGE> 9
Administrative Expense Claim becomes an Allowed Administrative Expense Claim, or
as soon thereafter as is practicable; provided, however, that Allowed
Administrative Expense Claims representing liabilities incurred in the ordinary
course of business by the Debtors in Possession or liabilities arising under
loans or advances to or other obligations incurred by the Debtors in Possession
shall be paid in full and performed by New Bruno's in the ordinary course of
business in accordance with the terms and subject to the conditions of any
agreements governing, instruments evidencing or other documents relating to such
transactions.
2.2 Professional Compensation and Reimbursement Claims. All entities
seeking an award by the Bankruptcy Court of compensation for services rendered
or reimbursement of expenses incurred through and including the Effective Date
under sections 503(b)(2), 503(b)(3), 503(b)(4) or 503(b)(5) of the Bankruptcy
Code shall (a) file their respective final applications for allowances of
compensation for services rendered and reimbursement of expenses incurred
through the Effective Date by no later than the date that is 60 days after the
Effective Date or such other date as may be fixed by the Bankruptcy Court and
(b) if granted such an award by the Bankruptcy Court, be paid in full in such
amounts as are Allowed by the Bankruptcy Court (i) on the date such
Administrative Expense Claim becomes an Allowed Administrative Expense Claim, or
as soon thereafter as is practicable or (ii) upon such other terms as may be
mutually agreed upon between such holder of an Administrative Expense Claim and
New Bruno's.
2.3 Priority Tax Claims. Except to the extent that a holder of an
Allowed Priority Tax Claim has been paid by the Debtors prior to the Effective
Date or agrees to a different treatment, each holder of an Allowed Priority Tax
Claim shall receive, at the sole option of New Bruno's, (a) Cash in an amount
equal to such Allowed Priority Tax Claim on the later of the Effective Date and
the date such Priority Tax Claim becomes an Allowed Priority Tax Claim, or as
soon thereafter as is practicable or (b) equal annual Cash payments in an
aggregate amount equal to such Allowed Priority Tax Claim, together with
interest at a fixed annual rate equal to 8.0%, over a period through the sixth
anniversary of the date of assessment of such Allowed Priority Tax Claim, or
upon such other terms determined by the Bankruptcy Court to provide the holder
of such Allowed Priority Tax Claim deferred Cash payments having a value, as of
the Effective Date, equal to such Allowed Priority Tax Claim.
ARTICLE III
CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS
Claims, other than Administrative Expense Claims and Priority Tax
Claims, and Bruno's Equity Interests, are classified for all purposes, including
voting, confirmation and distribution pursuant to the Plan, as follows:
<TABLE>
<CAPTION>
Class Status
- ----- ------
<S> <C>
Class 1 -- Other Priority Claims Unimpaired
Class 2 -- Secured Tax Claims Impaired
Class 3 -- Other Secured Claims Unimpaired
</TABLE>
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<TABLE>
<S> <C>
Class 4 -- Bank Claims Impaired
Class 5 -- General Unsecured Claims Impaired
Class 6 -- Subordinated Note Claims Impaired
Class 7 -- Bruno's Equity Interests Impaired
</TABLE>
ARTICLE IV
TREATMENT OF CLAIMS AND EQUITY INTERESTS
4.1 CLASS 1 -- OTHER PRIORITY CLAIMS.
(a) Impairment and Voting. Class 1 is unimpaired by the Plan. Each
holder of an Allowed Other Priority Claim is conclusively presumed to have
accepted the Plan and is not entitled to vote to accept or reject the Plan.
(b) Distributions. Each holder of an Allowed Other Priority Claim shall
receive Cash in an amount equal to such Allowed Other Priority Claim on the
later of the Effective Date and the date such Allowed Other Priority Claim
becomes an Allowed Other Priority Claim, or as soon thereafter as is
practicable.
4.2 CLASS 2 -- SECURED TAX CLAIMS.
(a) Impairment and Voting. Class 2 is impaired by the Plan. Each holder
of an Allowed Secured Tax Claim is entitled to vote to accept or reject the
Plan.
(b) Distributions. Except to the extent that a holder of an Allowed
Secured Tax Claim has been paid by the Debtors prior to the Effective Date or
agrees to a different treatment, each holder of an Allowed Secured Tax Claim
shall receive, at the sole option of New Bruno's, (i) Cash in an amount equal to
such Allowed Secured Tax Claim, including any interest on such Allowed Secured
Tax Claim required to be paid pursuant to section 506(b) of the Bankruptcy Code,
on the later of the Effective Date and the date such Allowed Secured Tax Claim
becomes an Allowed Secured Tax Claim, or as soon thereafter as is practicable or
(ii) equal annual Cash payments in an aggregate amount equal to such Allowed
Secured Tax Claim, together with interest at a fixed annual rate equal to 8.0%,
over a period through the sixth anniversary of the date of assessment of such
Allowed Secured Tax Claim, or upon such other terms determined by the Bankruptcy
Court to provide the holder of such Allowed Secured Tax Claim deferred Cash
payments having a value, as of the Effective Date, equal to such Allowed Secured
Tax Claim.
(c) Retention of Liens. Each holder of an Allowed Secured Tax Claim
shall retain the Liens (or replacement Liens as may be contemplated under
nonbankruptcy law) securing its Allowed Secured Tax Claim as of the Effective
Date until full and final payment of such Allowed Secured Tax Claim is made as
provided herein, and upon such full and final payment, such Liens shall be
deemed null and void and shall be unenforceable for all purposes.
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4.3 CLASS 3 -- OTHER SECURED CLAIMS.
(a) Impairment and Voting. Class 3 is unimpaired by the Plan. Each
holder of an Allowed Other Secured Claim is conclusively presumed to have
accepted the Plan and is not entitled to vote to accept or reject the Plan.
(b) Distributions/Reinstatement of Claims. Except to the extent that a
holder of an Allowed Other Secured Claim agrees to a different treatment, at the
sole option of New Bruno's, (i) each Allowed Other Secured Claim shall be
reinstated and rendered unimpaired in accordance with section 1124(2) of the
Bankruptcy Code, notwithstanding any contractual provision or applicable
nonbankruptcy law that entitles the holder of an Allowed Other Secured Claim to
demand or receive payment of such Allowed Other Secured Claim prior to the
stated maturity of such Allowed Other Secured Claim from and after the
occurrence of a default, (ii) each holder of an Allowed Other Secured Claim
shall receive Cash in an amount equal to such Allowed Other Secured Claim,
including any interest on such Allowed Other Secured Claim required to be paid
pursuant to section 506(b) of the Bankruptcy Code, on the later of the Effective
Date and the date such Allowed Other Secured Claim becomes an Allowed Other
Secured Claim, or as soon thereafter as is practicable or (iii) each holder of
an Allowed Other Secured Claim shall receive the Collateral securing its Allowed
Other Secured Claim and any interest on such Allowed Other Secured Claim
required to be paid pursuant to section 506(b) of the Bankruptcy Code, in full
and complete satisfaction of such Allowed Other Secured Claim on the later of
the Effective Date and the date such Allowed Other Secured Claim becomes an
Allowed Other Secured Claim, or as soon thereafter as is practicable.
4.4 CLASS 4 -- BANK CLAIMS.
(a) Allowance. The Bank Claims shall be deemed Allowed Claims solely
for purposes of this Plan in the aggregate amount of $462,164,419.
(b) Impairment and Voting. Class 4 is impaired by the Plan. Each holder
of an Allowed Bank Claim is entitled to vote to accept or reject the Plan.
(c) Distributions. On the Effective Date, or as soon thereafter as is
practicable, each holder of an Allowed Bank Claim as of the Record Date shall
receive, in accordance with the Restructuring Transactions, a Pro Rata Share of
(i) 25,000,000 shares of New Bruno's Common Stock and (ii) 25,000,000 shares of
Reorganized Bruno's Common Stock, which shares, respectively, shall constitute
all of the shares of New Bruno's Common Stock and Reorganized Bruno's Common
Stock issued pursuant to the Plan.
(d) Release of Liens/Dismissal of Bank Preference Action/Payment of
Fees. As of the Effective Date, (i) to the extent not previously relinquished
and released by the Banks pursuant to the Bank Release, the Banks shall be
deemed to have relinquished and released all of the Liens securing the Bank
Claims, including, without limitation, Liens granted in connection with the
December 1997 Amendment, Liens, if any, arising under section 506(a) of the
Bankruptcy Code in the event that the Bank Claims would be subject to a
permissible setoff under section 553 of the Bankruptcy Code and Liens granted to
the Banks as adequate protection pursuant to orders of the Bankruptcy Court,
(ii) such relinquished and released Liens shall be preserved for the benefit of
the Debtors' estates pursuant to section 551 of the Bankruptcy Code, (iii)
Bruno's shall pay the reasonable fees and expenses of the Banks' financial
advisors or reimburse the Banks for their payment of same, (iv) Bruno's shall
pay the reasonable fees and expenses of the Agent (including, without
limitation, amounts owing under the interest rate floor agreement between
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The Chase Manhattan Bank and Bruno's), (v) the Banks shall be entitled to retain
all adequate protection payments made to or for the benefit of the Banks by the
Debtors during the Chapter 11 Cases and (vi) the Bank Preference Action shall be
deemed dismissed with prejudice. The release and relinquishment of the Liens
securing the Bank Claims, together with Bruno's payment of the reasonable fees
and expenses of the Banks' financial advisors or reimbursement to the Banks for
their payment of same, Bruno's payment of the reasonable fees and expenses of
the Agent and the Banks' retention of all adequate protection payments made to
or for the benefit of the Banks by the Debtors during the Chapter 11 Cases,
shall, upon entry of the Confirmation Order, pursuant to Bankruptcy Rule
9019(a), constitute a valid, binding and enforceable compromise and settlement
of the Bank Preference Action and the adequate protection rights of the Banks as
of the Effective Date.
4.5 CLASS 5 -- GENERAL UNSECURED CLAIMS
(a) Impairment and Voting. Class 5 is impaired by the Plan. Each holder
of an Allowed General Unsecured Claim is entitled to vote to accept or reject
the Plan.
(b) Distributions. On the Effective Date, or as soon thereafter as is
practicable, each holder of an Allowed General Unsecured Claim as of the Record
Date shall receive, in full and complete satisfaction of such Allowed Claim, an
amount, in Cash, equal to .26 multiplied by the amount of such Allowed General
Unsecured Claim.
4.6 CLASS 6 -- SUBORDINATED NOTE CLAIMS
(a) Allowance. The Subordinated Note Claims shall be deemed Allowed
Claims solely for purposes of this Plan in the aggregate amount of
$421,121,589.77.
(b) Impairment and Voting. Class 6 is impaired by the Plan. Each holder
of a Subordinated Note Claim is conclusively presumed to have rejected the Plan
as a holder of Subordinated Note Claims and is not entitled to vote to accept or
reject the Plan.
(c) Distributions. In accordance with Section 5.2 of the Plan, the
holders of Subordinated Note Claims shall not receive any distributions on
account of such Claims as a result of the enforcement of the subordination
provisions in the Subordinated Notes Indentures.
4.7 CLASS 7 -- BRUNO'S EQUITY INTERESTS
(a) Impairment and Voting. Class 7 is impaired by the Plan. Each holder
of a Bruno's Equity Interest is conclusively presumed to have rejected the Plan
as a holder of Bruno's Equity Interests and is not entitled to vote to accept or
reject the Plan.
(b) Distributions. The holders of Bruno's Equity Interests shall not
receive any distributions on account of such Equity Interests. On the Effective
Date, all Bruno's Equity Interests shall be extinguished.
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ARTICLE V
PROVISIONS REGARDING VOTING AND
DISTRIBUTIONS UNDER THE PLAN AND TREATMENT,
OF DISPUTED, CONTINGENT AND UNLIQUIDATED
ADMINISTRATIVE EXPENSE CLAIMS AND CLAIMS
5.1 Voting of Claims. Each holder of an Allowed Claim in an impaired
Class of Claims that is entitled to vote on the Plan pursuant to Article IV of
the Plan shall be entitled to vote separately to accept or reject the Plan as
provided in such order as is entered by the Bankruptcy Court establishing
procedures with respect to the solicitation and tabulation of votes to accept or
reject the Plan, or any other order or orders of the Bankruptcy Court.
5.2 Enforcement of Subordination. In accordance with section 510(a) of
the Bankruptcy Code, the distributions to holders of Allowed Bank Claims and
Allowed Subordinated Note Claims enforce and give effect to the subordination
provisions contained in the Subordinated Notes Indentures.
5.3 Nonconsensual Confirmation. If any impaired Class of Claims
entitled to vote shall not accept the Plan by the requisite statutory majority
provided in section 1126(c) of the Bankruptcy Code, the Debtors reserve the
right to amend the Plan in accordance with Section 12.11 hereof or undertake to
have the Bankruptcy Court confirm the Plan under section 1129(b) of the
Bankruptcy Code or both. With respect to impaired Classes of Claims that are
deemed to reject the Plan, the Debtors shall request the Bankruptcy Court to
confirm the Plan under section 1129(b) of the Bankruptcy Code.
5.4 Method of Distributions Under the Plan.
(a) Disbursing Agent. All distributions of New Bruno's Common Stock and
Reorganized Bruno's Common Stock shall be made by the Disbursing Agent.
(b) Distributions by New Bruno's. Except as provided in Section 5.4(a)
of the Plan, all distributions under the Plan shall be made by New Bruno's.
(c) Delivery of Distributions. Subject to Bankruptcy Rule 9010, all
distributions under the Plan shall be made to the holder of each Allowed Claim
at the address of such holder as listed on the Schedules as of the Record Date,
unless the Debtors or, on and after the Effective Date, New Bruno's, have been
notified in writing of a change of address, including, without limitation, by
the filing of a timely proof of Claim by such holder that provides an address
for such holder different from the address reflected on the Schedules.
(d) Distributions of Cash. Other than payments of Cash required to be
made by New Bruno's to the Agent, which payments shall be made by wire transfer,
any payment of Cash made by New Bruno's pursuant to the Plan shall, at New
Bruno's option, be made by check drawn on a domestic bank or wire transfer.
(e) Timing of Distributions. Any payment or distribution required to be
made under the Plan on a day other than a Business Day shall be made on the next
succeeding Business Day.
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(f) Hart-Scott-Rodino Compliance. Any shares of New Bruno's Common
Stock and Reorganized Bruno's Common Stock to be distributed under the Plan to
any entity required to file a Premerger Notification and Report Form under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall not be
distributed until the notification and waiting periods applicable under such Act
to such entity shall have expired or been terminated.
(g) Minimum Distributions. No payment of Cash less than forty dollars
shall be made by New Bruno's to any holder of a Claim unless a request therefor
is made in writing to New Bruno's.
(h) Fractional Shares. No fractional shares of New Bruno's Common Stock
or Reorganized Bruno's Common Stock, or Cash in lieu thereof, shall be
distributed under the Plan. When any distribution pursuant to the Plan on
account of an Allowed Bank Claim would otherwise result in the issuance of a
number of shares of New Bruno's Common Stock or Reorganized Bruno's Common Stock
that is not a whole number, the actual distribution of shares of New Bruno's
Common Stock and Reorganized Bruno's Common Stock shall be rounded as follows:
(i) fractions of 1/2 or greater shall be rounded to the next higher whole
number; and (ii) fractions of less than 1/2 shall be rounded to the next lower
whole number. The total number of shares of New Bruno's Common Stock and
Reorganized Bruno's Common Stock to be distributed to holders of Allowed Bank
Claims shall be adjusted as necessary to account for the rounding provided in
this Section 5.4(h).
(i) Unclaimed Distributions. All distributions under the Plan that are
unclaimed for a period of one year after distribution thereof shall be deemed
unclaimed property under section 347(b) of the Bankruptcy Code and revested in
New Bruno's and any entitlement of any holder of any Claim to such distributions
shall be extinguished and forever barred.
(j) Distributions to Holders as of the Record Date. As at the close of
business on the Record Date, the claims register shall be closed, and there
shall be no further changes in the record holder of any Claim. Bruno's and New
Bruno's shall have no obligation to recognize any transfer of any Claim
occurring after the Record Date. Bruno's and New Bruno's shall instead be
authorized and entitled to recognize and deal for all purposes under the Plan
with only those record holders stated on the claims register as of the close of
business on the Record Date.
5.5 General Unsecured Claims.
(a) Distributions as to Allowed Portion of General Unsecured Claims The
holder of a General Unsecured Claim that is or becomes, in part, an Allowed
General Unsecured Claim, shall receive a distribution in respect of the Allowed
portion of such General Unsecured Claim, in accordance with Section 4.5(b) of
the Plan (for General Unsecured Claims partially Allowed on or prior to the
Effective Date) or Section 5.5(b) of the Plan (for General Unsecured Claims
partially Allowed subsequent to the Effective Date).
(b) Distributions Upon Allowance of Disputed General Unsecured Claims.
The holder of a Disputed General Unsecured Claim that becomes an Allowed Claim
subsequent to the Effective Date shall receive the distribution of Cash that
would have been made to such holder under Section 4.5(b) of the Plan if the
Disputed General Unsecured Claim had been an Allowed Claim on or prior to the
Effective Date, without any post-Effective Date interest thereon, on the
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next Subsequent Distribution Date that follows the month during which such
Disputed General Unsecured Claim becomes an Allowed Claim.
(c) Tort Claims. All Tort Claims are Disputed Claims. Any Tort Claim as
to which a proof of claim was timely filed in the Chapter 11 Cases shall be
determined and liquidated in the administrative or judicial tribunal(s) in which
it is pending on the Effective Date or, if no action was pending on the
Effective Date, in any administrative or judicial tribunal of appropriate
jurisdiction, or in accordance with any alternative dispute resolution or
similar proceeding as same may be approved by order of a court of competent
jurisdiction. Any Tort Claim determined and liquidated (i) pursuant to a
judgment obtained in accordance with this Section 5.5(c) and applicable
nonbankruptcy law that has become a Final Order or (ii) in any alternative
dispute resolution or similar proceeding as same may be approved by order of a
court of competent jurisdiction, shall be deemed an Allowed General Unsecured
Claim in such liquidated amount and satisfied in accordance with the Plan;
provided, however, that the Allowed amount of any Tort Claim that also is an
Insured Claim shall be limited as provided in Section 5.7 hereof. Nothing
contained in this Section 5.5(c) shall impair the Debtors' right to seek
estimation of any and all Tort Claims in a court or courts of competent
jurisdiction or constitute or be deemed a waiver of any Cause of Action that the
Debtors may hold against any entity, including, without limitation, in
connection with or arising out of any Tort Claim.
5.6 Objections to and Resolution of Administrative Expense Claims and
Claims. Except as to applications for allowance of compensation and
reimbursement of expenses under sections 330 and 503 of the Bankruptcy Code, New
Bruno's shall, on and after the Effective Date, have the exclusive right to make
and file objections to Administrative Expense Claims and Claims. On and after
the Effective Date, New Bruno's shall have the authority to compromise, settle,
otherwise resolve or withdraw any objections to Administrative Expense Claims
and Claims and compromise, settle or otherwise resolve Disputed Administrative
Expense Claims and Disputed Claims without approval of the Bankruptcy Court.
Unless otherwise ordered by the Bankruptcy Court, the Debtors and, on and after
the Effective Date, New Bruno's, shall file all objections to Administrative
Expense Claims that are the subject of proofs of claim or requests for payment
filed with the Bankruptcy Court (other than applications for allowances of
compensation and reimbursement of expenses) and Claims and serve such objections
upon the holder of the Administrative Expense Claim or Claim as to which the
objection is made as soon as is practicable, but in no event later than 90 days
after the Effective Date or such later date as may be approved by the Bankruptcy
Court.
5.7 Distributions Relating to Allowed Insured Claims. Distributions
under the Plan to each holder of an Allowed Insured Claim shall be in accordance
with the treatment provided under the Plan for the Class in which such Allowed
Insured Claim is classified; provided, however, that in no event shall the
Allowed amount of an Insured Claim exceed the maximum amount that the Debtors
are required to pay in respect of such Insured Claim pursuant to any pertinent
insurance policies and applicable law. Nothing contained in this Section 5.7
shall constitute or be deemed a waiver of any Cause of Action that the Debtors
or any entity may hold against any other entity, including, without limitation,
insurers under any policies of insurance.
5.8 Cancellation of Existing Securities and Agreements. On the
Effective Date, the promissory notes, share certificates, bonds and other
instruments evidencing any Claim or Bruno's Equity Interest, other than an
Allowed Other Secured Claim that is reinstated and rendered unimpaired pursuant
to Section 4.3(b) of the Plan, shall be deemed cancelled without
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further act or action under any applicable agreement, law, regulation, order or
rule and the obligations of the Debtors under the agreements, indentures and
certificates of designations governing such Claims and Bruno's Equity Interests,
as the case may be, shall be discharged.
5.9 Registration of New Common Stock. Each holder of Allowed Bank
Claims receiving a distribution of New Bruno's Common Stock pursuant to the Plan
and each holder of Management Options and Director Options shall automatically
become a party to the Registration Rights Agreement.
5.10 Shareholders Agreement. Each holder of Allowed Bank Claims
receiving a distribution of New Bruno's Common Stock pursuant to the Plan and
each holder of Management Options and Director Options shall automatically
become a party to the Shareholders Agreement.
ARTICLE VI
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
6.1 Assumption or Rejection of Executory Contracts and Unexpired
Leases.
(a) Executory Contracts and Unexpired Leases. Pursuant to sections
365(a) and 1123(b)(2) of the Bankruptcy Code, all executory contracts and
unexpired leases that exist between the Debtors and any person shall be deemed
assumed by the Debtors and assigned to New Bruno's pursuant to the
Restructuring Transactions, as of the Effective Date, except for any executory
contract or unexpired lease (i) that has been rejected pursuant to an order of
the Bankruptcy Court entered prior to the Confirmation Date, (ii) as to which a
motion for approval of the rejection of such executory contract or unexpired
lease has been filed and served prior to the Confirmation Date or (iii) that is
set forth in Schedule 6.1(a)(x) (executory contracts) or Schedule 6.1(a)(y)
(unexpired leases), which Schedules shall be included in the Plan Supplement;
provided, however, that the Debtors reserve the right, on or prior to the
Confirmation Date, to amend Schedules 6.1(a)(x) or 6.1(a)(y) to delete any
executory contract or unexpired lease therefrom or add any executory contract
or unexpired lease thereto, in which event such executory contract(s) or
unexpired lease(s) shall be deemed to be, respectively, assumed by the Debtors
and assigned to New Bruno's or rejected. The Debtors shall provide notice of
any amendments to Schedules 6.1(a)(x) or 6.1(a)(y) to the parties to the
executory contracts and unexpired leases affected thereby. The listing of a
document on Schedules 6.1(a)(x) and 6.1(a)(y) shall not constitute an admission
by the Debtors that such document is an executory contract or an unexpired
lease or that the Debtors have any liability thereunder.
(b) Schedules of Rejected Executory Contracts and Unexpired Leases;
Inclusiveness. Each executory contract and unexpired lease listed or to be
listed on Schedules 6.1(a)(x) or 6.1(a)(y) that relates to the use or occupancy
of real property shall include (i) modifications, amendments, supplements,
restatements, or other agreements made directly or indirectly by any agreement,
instrument, or other document that in any manner affects such executory contract
or unexpired lease, without regard to whether such agreement, instrument or
other document is listed on Schedules 6.1(a)(x) or 6.1(a)(y) and (ii) executory
contracts or unexpired leases appurtenant to the premises listed on Schedules
6.1(a)(x) or 6.1(a)(y), including, without limitation, all easements, licenses,
permits, rights, privileges, immunities, options, rights of first refusal,
powers, uses, usufructs, reciprocal easement agreements, vault, tunnel or bridge
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agreements or franchises, and any other interests in real estate or rights in
rem relating to such premises to the extent any of the foregoing are executory
contracts or unexpired leases, unless any of the foregoing agreements previously
has been assumed or assumed and assigned by the Debtors.
(c) Insurance Policies. All of the Debtors' insurance policies and any
agreements, documents or instruments relating thereto, are treated as executory
contracts under the Plan. Notwithstanding the foregoing, distributions under the
Plan to any holder of an Insured Claim shall be in accordance with the treatment
provided under Article IV and Section 5.7 of the Plan. Nothing contained in this
Section 6.1(c) shall constitute or be deemed a waiver of any Cause of Action
that the Debtors may hold against any entity, including, without limitation, the
insurer under any of the Debtors' policies of insurance.
(d) Approval of Assumption, Assumption and Assignment or Rejection of
Executory Contracts and Unexpired Leases. Entry of the Confirmation Order shall,
subject to and upon the occurrence of the Effective Date, constitute (i) the
approval, pursuant to sections 365(a) and 1123(b)(2) of the Bankruptcy Code, of
the assumption and assignment of the executory contracts and unexpired leases
assumed and assigned pursuant to Section 6.1(a) hereof, (ii) the extension of
time, pursuant to section 365(d)(4) of the Bankruptcy Code, within which the
Debtors may assume, assume and assign or reject the unexpired leases specified
in Section 6.1(a) hereof through the date of entry of an order approving the
assumption, assumption and assignment or rejection of such unexpired leases and
(iii) the approval, pursuant to sections 365(a) and 1123(b)(2) of the Bankruptcy
Code, of the rejection of the executory contracts and unexpired leases rejected
pursuant to Section 6.1(a) hereof.
(e) Cure of Defaults. Except as may otherwise be agreed to by the
parties, within 30 days after the Effective Date, New Bruno's shall cure any and
all undisputed defaults under any executory contract or unexpired lease assumed
by the Debtors and assigned to New Bruno's pursuant to Section 6.1(a) hereof, in
accordance with section 365(b)(1) of the Bankruptcy Code. All disputed defaults
that are required to be cured shall be cured either within 30 days of the entry
of a Final Order determining the amount, if any, of New Bruno's liability with
respect thereto, or as may otherwise be agreed to by the parties.
(f) Bar Date for Filing Proofs of Claim Relating to Executory Contracts
and Unexpired Leases Rejected Pursuant to the Plan. Claims arising out of the
rejection of an executory contract or unexpired lease pursuant to Section 6.1 of
the Plan must be filed with the Bankruptcy Court and served upon the Debtors or,
on and after the Effective Date, New Bruno's, no later than 30 days after the
later of (i) notice of entry of an order approving the rejection of such
executory contract or unexpired lease, (ii) notice of entry of the Confirmation
Order and (iii) notice of an amendment to Schedule 6.1(a)(x) or 6.1(a)(y). All
such Claims not filed within such time will be forever barred from assertion
against the Debtors, their estates, the Reorganized Debtors, New Bruno's and
their property.
6.2 Indemnification Obligations.
(a) Continuation of Officer, Director and Employee Indemnification. The
obligations of the Debtors to defend, indemnify, reimburse or limit the
liability of their present and any former directors, officers or employees who
were directors, officers or employees, respectively, on or after the
Commencement Date, solely in their capacity as directors, officers or employees,
against
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any claims or obligations pursuant to the Debtors' certificates of incorporation
or by-laws, applicable state law or specific agreement, or any combination of
the foregoing, shall survive confirmation of the Plan, remain unaffected
thereby, and not be discharged irrespective of whether indemnification, defense,
reimbursement or limitation is owed in connection with an event occurring
before, on or after the Commencement Date. Pursuant to the Restructuring
Transactions, the obligations described in the preceding sentence shall, on the
Effective Date, become obligations of New Bruno's.
(b) Certain Pre-Commencement Date Contractual Indemnification
Obligations. To the extent that any Claim (a "Prepetition Indemnity Claim")
against a Debtor for reimbursement or contribution of a non-Debtor that is
liable with such Debtor on or has secured the Claim of a creditor (including,
without limitation, any such Claim of a non-Debtor arising under a
pre-Commencement Date indemnity or indemnification agreement) remains contingent
as of the Confirmation Date, such Prepetition Indemnity Claim, to the extent it
is contingent, shall be deemed disallowed pursuant to section 502(e)(1)(B) of
the Bankruptcy Code. In the event that a judgment is entered or a settlement is
agreed upon after the Confirmation Date that gives rise to an Allowed General
Unsecured Claim that jointly holds liable a Debtor and a non-Debtor that holds a
Prepetition Indemnity Claim arising from a valid pre-Commencement Date indemnity
or indemnification agreement that was disallowed pursuant to the immediately
preceding sentence, then the holder of such Allowed General Unsecured Claim
shall first be required to seek satisfaction of such Allowed General Unsecured
Claim from the Debtor and, after payment of such Claim by the Debtor in
accordance with Section 5.5(b) of the Plan, shall have the right to seek
satisfaction of the balance of such Claim from the non-Debtor. Upon payment by
the non-Debtor of any such amounts, (i) the Prepetition Indemnity Claim of the
non-Debtor previously disallowed shall be deemed reconsidered by the Bankruptcy
Court pursuant to section 502(j) of the Bankruptcy Code and shall be deemed
timely filed, (ii) such non-Debtor shall have all of its rights otherwise
available under applicable law to seek allowance of such reconsidered
Prepetition Indemnity Claim, (iii) New Bruno's shall have all of its rights
otherwise available under applicable law to object to allowance of such
reconsidered Prepetition Indemnity Claim and (iv) if and to the extent that such
reconsidered Prepetition Indemnity Claim is Allowed, it shall be paid in
accordance with the applicable provisions of the Plan.
6.3 Compensation and Benefit Programs. Except as provided in Section
6.1(a) of the Plan, all savings plans, retirement plans, health care plans,
performance-based incentive plans, retention plans, workers' compensation
programs and life, disability, directors and officers liability and other
insurance plans are treated as executory contracts under the Plan and shall, on
the Effective Date, be deemed assumed by the Debtors and assigned to New
Bruno's, in accordance with sections 365(a) and 1123(b)(2) of the Bankruptcy
Code.
6.4 Retiree Benefits. Payments, if any, due to any person for the
purpose of providing or reimbursing payments for retired employees and their
spouses and dependents for medical, surgical, or hospital care benefits, or
benefits in the event of sickness, accident, disability, or death under any
plan, fund, or program (through the purchase of insurance or otherwise)
maintained or established in whole or in part by the Debtors prior to the
Commencement Date shall be continued for the duration of the period the Debtors
have obligated themselves to provide such benefits. Pursuant to the
Restructuring Transactions, the obligations, if any, described in the preceding
sentence shall, on the Effective Date, be assumed by and become obligations of
New Bruno's.
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ARTICLE VII
IMPLEMENTATION OF THE PLAN
7.1 Restructuring Transactions.
(a) Principal Transactions. On or as of the Effective Date, the
distributions provided for under the Plan shall be effectuated pursuant to the
following Restructuring Transactions, in seriatim, pursuant to documentation
satisfactory to the Debtors and the Required Banks:
(i) Intercompany Claims. All intercompany claims between and
among the Debtors shall be cancelled through contribution or distribution of
such intercompany claims, as appropriate.
(ii) Transfer to Creditor Representative. Bruno's shall sell
and transfer, without recourse, to the Creditor Representative, on behalf of the
holders of Bank Claims, substantially all of the assets of Bruno's used in
connection with the Debtors' business and operations (which may include stock of
the Subsidiaries), other than the Retained Assets, in partial satisfaction of
the Bank Claims in an amount equal to the fair market value of such transferred
assets. The assets sold and transferred to the Creditor Representative pursuant
to the preceding sentence shall be subject to all claims, liabilities and
obligations of the Debtors incurred after the Commencement Date (including,
without limitation, claims, liabilities and obligations incurred pursuant to the
Plan and in connection with the transfer of assets), other than claims,
liabilities and obligations discharged, released or extinguished pursuant to the
Plan and/or the Confirmation Order or relating directly to the Retained Assets
(including, without limitation, any liabilities, other than tax liabilities,
directly relating to the assets of any Subsidiaries the stock of which is a
Retained Asset).
(iii) Transfer to New Bruno's; Issuance of New Bruno's Common
Stock to Creditor Representative. The Creditor Representative, on behalf of the
holders of Bank Claims, shall contribute, without recourse, to New Bruno's, all
of the assets transferred to the Creditor Representative pursuant to Section
7.1(a)(i) hereof, in exchange for 25,000,000 shares of New Bruno's Common Stock.
The assets contributed to New Bruno's pursuant to the preceding sentence shall
be subject to, and New Bruno's shall assume sole and exclusive responsibility
for, all claims, liabilities and obligations of the Debtors to which such assets
were subject pursuant to Section 7.1(a)(i) hereof.
(iv) Transfer of New Bruno's Common Stock to Disbursing Agent
for Distribution. The Creditor Representative shall transfer, without recourse,
to the Disbursing Agent, all of the shares of New Bruno's Common Stock received
pursuant to Section 7.1(a)(ii) hereof, which shares shall be distributed by the
Disbursing Agent to holders of Allowed Bank Claims pursuant to Section 4.4(c) of
the Plan.
(v) Issuance of Reorganized Bruno's Common Stock.
Reorganized Bruno's shall deliver to the Disbursing Agent 25,000,000 shares of
Reorganized Bruno's Common Stock, which shares shall be distributed by the
Disbursing Agent to holders of Allowed Bank Claims, in partial and final
satisfaction of such claims, pursuant to Section 4.4(c) of the Plan.
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(b) Net Leases. On the Effective Date, the Reorganized Debtors shall
enter into triple net real property leases with New Bruno's, on market terms and
subject to conditions that shall be satisfactory to the Reorganized Debtors and
New Bruno's, pursuant to which New Bruno's shall lease from the Reorganized
Debtors the owned real property and buildings included in the Retained Assets.
(c) Additional Restructuring Transactions. On or as of the Effective
Date, if deemed necessary by the Debtors to effectuate the Restructuring
Transactions, the Debtors may, subject to the approval of the Required Banks,
cause any or all of the Debtors to be merged into one or more of the Debtors or
dissolved, cause the transfer of assets between and among Debtors, or engage in
any other transactions in furtherance of the Plan. On the Effective Date, the
Reorganized Debtors shall enter into subleases with New Bruno's pursuant to
which New Bruno's shall sublease from the Reorganized Debtors any property and
buildings leased by the Reorganized Debtors under real property leases included
in the Retained Assets. Such subleases shall be on terms and subject to
conditions identical to the existing leases under which the Reorganized Debtors
are the lessee, such that New Bruno's will be required to satisfy all of the
Reorganized Debtors' rental and other obligations to the landlords under the
leases.
7.2 Substantive Consolidation. Entry of the Confirmation Order shall
constitute the approval, pursuant to section 105(a) of the Bankruptcy Code,
effective as of the Effective Date, of the substantive consolidation of the
Chapter 11 Cases for all purposes related to the Plan, including, without
limitation, for purposes of voting, confirmation and distribution. On and after
the Effective Date, (i) all assets and liabilities of the Subsidiaries shall be
deemed merged or treated as though they were merged into and with the assets and
liabilities of Bruno's, (ii) no distributions shall be made under the Plan on
account of intercompany claims among the Debtors, (iii) no distributions shall
be made under the Plan on account of Subsidiary Equity Interests, (iv) all
guarantees of the Debtors of the obligations of any other Debtor shall be deemed
eliminated so that any claim against any Debtor and any guarantee thereof
executed by any other Debtor and any joint or several liability of any of the
Debtors shall be deemed to be one obligation of the consolidated Debtors and (v)
each and every Claim filed or to be filed in the Chapter 11 Case of any of the
Debtors shall be deemed filed against the consolidated Debtors, and shall be
deemed one Claim against and obligation of the consolidated Debtors.
ARTICLE VIII
PROVISIONS REGARDING CORPORATE GOVERNANCE AND
MANAGEMENT OF NEW BRUNO's AND REORGANIZED DEBTORS
8.1 General. On the Effective Date, the management, control and
operation of New Bruno's and the Reorganized Debtors shall become the general
responsibility of the Boards of Directors of New Bruno's and the Reorganized
Debtors, respectively.
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8.2 Directors and Officers of New Bruno's and Reorganized Debtors.
(a) New Bruno's.
(i) Board of Directors The initial Board of Directors of New
Bruno's shall consist of seven individuals, five of whom shall be selected by
the Required Banks, one of whom shall be the Chief Executive Officer of New
Bruno's and one of whom shall be (a) selected by the Chief Executive Officer of
New Bruno's and (b) either an officer of New Bruno's or a current member of the
Board of Directors of Bruno's, or, if not an officer of New Bruno's or a current
member of the Board of Directors of Bruno's, a person acceptable to the Required
Banks. The names of the members of the initial Board of Directors of New Bruno's
shall be disclosed prior to the date of the Confirmation Hearing. Each of the
members of such initial Board of Directors shall serve in accordance with the
New Bruno's Certificate of Incorporation or New Bruno's By-laws, as the same may
be amended from time to time.
(ii) Officers. The officers of Bruno's immediately prior to
the Effective Date shall serve as the initial officers of New Bruno's on and
after the Effective Date. Such officers shall serve in accordance with any
employment agreement with New Bruno's and applicable nonbankruptcy law.
(b) Reorganized Debtors.
(i) Boards of Directors. The initial Boards of Directors of
each of the Reorganized Debtors shall consist of three individuals, all of whom
shall be selected the Required Banks. The names of the members of the initial
Boards of Directors of each of the Reorganized Debtors shall be disclosed prior
to the date of the Confirmation Hearing. Each of the members of such initial
Boards of Directors shall serve in accordance with its certificate of
incorporation or by-laws, as the same may be amended from time to time.
(ii) Officers. The initial officers of the Reorganized Debtors
shall consist of individuals, satisfactory to the Required Banks, whose names
shall be disclosed prior to the date of the Confirmation Hearing.
8.3 By-laws and Certificates of Incorporation. The Reorganized Bruno's
By-laws, the Reorganized Bruno's Certificate of Incorporation, the by-laws and
certificates of incorporation of each of the Reorganized Subsidiaries, the New
Bruno's Certificate of Incorporation and the New Bruno's By-laws shall contain
provisions necessary (a) to prohibit the issuance of nonvoting equity securities
as required by section 1123(a)(6) of the Bankruptcy Code, subject to further
amendment of such certificates of incorporation and by-laws as permitted by
applicable law and (b) to effectuate the provisions of the Plan.
8.4 Issuance of New Securities. The issuance of the following
securities by Reorganized Bruno's and New Bruno's, as applicable, is hereby
authorized without further act or action under applicable law, regulation, order
or rule:
(a) 25,000,000 shares of New Bruno's Common Stock;
(b) 25,000,000 shares of Reorganized Bruno's Common Stock;
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(c) the Management Options; and
(d) the Director Options.
8.5 New Bruno's Stock Option Plan. Prior to the Effective Date, New
Bruno's shall adopt the New Bruno's Stock Option Plan. Pursuant to the terms and
subject to the conditions of the New Bruno's Stock Option Plan, New Bruno's
shall, on the Effective Date, issue to certain of its senior executives options
to purchase in the aggregate approximately 3.0% of the outstanding shares of New
Bruno's Common Stock on a fully diluted basis (the "Management Options").
Pursuant and subject to the terms and subject to the conditions of the New
Bruno's Stock Option Plan, the Management Options shall vest over a three year
period, 25% on the Effective Date and 25% on each of the three succeeding one
year anniversaries thereof. The Management Options shall have an exercise price
equal to the fair market value of the New Bruno's Common Stock on the Effective
Date. Management Options to purchase up to an additional 5.5% of the outstanding
shares of New Bruno's Common Stock on a fully diluted basis shall be reserved
for issuance by the Board of Directors of New Bruno's to New Bruno's employees
pursuant to the terms and subject to the conditions of the New Bruno's Stock
Option Plan.
8.6 New Bruno's Director Stock Option Plan. Prior to the Effective
Date, New Bruno's shall adopt the New Bruno's Director Stock Option Plan.
Pursuant to the terms and subject to the conditions of the New Bruno's Director
Stock Option Plan, New Bruno's shall, on the Effective Date, issue to its
non-employee directors, in the aggregate, options to purchase up to 1.0% of the
outstanding shares of New Bruno's Common Stock on a fully diluted basis (the
"Director Options").
8.7 New Bruno's Employment Contracts. As of the Effective Date, New
Bruno's shall enter into the New Bruno's Employment Contracts.
8.8 New Bruno's Severance Plan. On the Effective Date, New Bruno's
shall adopt the New Bruno's Severance Plan. Pursuant to the terms and subject to
the conditions of the New Bruno's Severance Plan, all corporate office salaried
employees of New Bruno's, other than employees with employment contracts, shall
be entitled to certain benefits upon the termination of their employment or a
material change in their professional responsibilities, if such termination of
employment or material change in professional responsibilities occurs in
connection with a change of control.
8.9 Stock Purchase Loans; Stock Investments. In recognition of the
services provided by James A. Demme, Laura Hayden, R. Michael Conley, Russell M.
Dodd, Donald A. Long, Richard H. Marty, William D. Shoemaker and Marvin Young,
Jr. during the pendency of the Chapter 11 Cases, and subject to such officers'
continued employment by Reorganized Bruno's on the Effective Date, any and all
outstanding loans made by Bruno's to such officers for the purpose of funding
such officers' purchase of shares of common stock of Bruno's prior to the
Commencement Date, which loans aggregate approximately $1,073,795 plus accrued
interest since January 1, 1999 (the "Stock Purchase Loans"), shall be forgiven
by Bruno's as of the Effective Date. In addition, on the Effective Date, New
Bruno's shall pay to each such officer Cash in an amount sufficient to
compensate such officer for any and all taxes payable by such officers as a
result of Bruno's forgiveness of the Stock Purchase Loans and any and all taxes
payable pursuant to this Section 8.9. On the Effective Date, New Bruno's shall
pay to Walter M. Grant, Senior Vice President and General Counsel of Bruno's and
New Bruno's, Cash in an
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amount equal to the sum of (i) $150,000 and (ii) an amount sufficient to
compensate him for any and all taxes payable by him in respect of such payment
and any and all taxes payable pursuant to this Section 8.9 (the "Grant Stock
Investment Payment"). The Grant Stock Investment Payment is designed to
compensate Walter M. Grant for one-half of the loss resulting from his purchase
of $300,000 worth of common stock of Bruno's prior to the Commencement Date.
ARTICLE IX
EFFECT OF CONFIRMATION OF PLAN
9.1 Term of Bankruptcy Injunction or Stays. Unless otherwise provided,
all injunctions or stays provided for in the Chapter 11 Cases under section 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.
9.2 Revesting of Assets.
(a) On the Effective Date, pursuant to the Restructuring Transactions
and except as otherwise provided for in the Plan, (i) the property of the estate
of Bruno's, other than the Retained Assets, shall vest in New Bruno's, (ii) the
assets of any Subsidiary shall vest in the corresponding Reorganized Subsidiary
and (iii) the Retained Assets shall vest in Reorganized Bruno's.
(b) From and after the Effective Date, the Reorganized Debtors and New
Bruno's may operate their businesses, and may use, acquire and dispose of
property free of any restrictions imposed under the Bankruptcy Code.
(c) As of the Effective Date, all property of the Reorganized Debtors
and New Bruno's shall be free and clear of all liens, claims and interests of
holders of Claims and Equity Interests, except as otherwise provided in the
Plan.
9.3 Claims Extinguished.
(a) As of the Effective Date, any and all avoidance claims accruing to
the Debtors and Debtors in Possession under sections 502(d), 544, 545, 547, 548,
549, 550 and 551 of the Bankruptcy Code shall be extinguished whether or not
then pending.
(b) As of the Effective Date, any and all alter-ego or derivative
claims against present or former stockholders of the Debtors accruing to the
Debtors and Debtors in Possession shall be extinguished whether or not then
pending.
9.4 Discharge of Debtors. The rights afforded herein and the treatment
of all Claims and Equity Interests herein shall be in exchange for and in
complete satisfaction, discharge and release of Claims and Equity Interests of
any nature whatsoever, including any interest accrued on such Claims from and
after the Commencement Date, against the Debtors and the Debtors in Possession,
or any of their assets or properties. Except as otherwise provided herein, (a)
on the
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Effective Date, all such Claims against and Equity Interests in the Debtors
shall be satisfied, discharged and released in full and (b) all persons shall be
precluded from asserting against the Reorganized Debtors and New Bruno's, their
successors, or their assets or properties any other or further Claims or Equity
Interests based upon any act or omission, transaction or other activity of any
kind or nature that occurred prior to the Confirmation Date.
9.5 Injunction. Except as otherwise expressly provided in the Plan, the
Confirmation Order or a separate order of the Bankruptcy Court, all entities who
have held, hold or may hold Claims against or Equity Interests in any or all of
the Debtors, are permanently enjoined, on and after the Effective Date, from (a)
commencing or continuing in any manner any action or other proceeding of any
kind with respect to any such Claim or Equity Interest, (b) the enforcement,
attachment, collection or recovery by any manner or means of any judgment,
award, decree or order against the Debtors on account of any such Claim or
Equity Interest, (c) creating, perfecting or enforcing any encumbrance of any
kind against the Debtors or against the property or interests in property of the
Debtors on account of any such Claim or Equity Interest and (d) asserting any
right of setoff, subrogation or recoupment of any kind against any obligation
due from the Debtors or against the property or interests in property of the
Debtors on account of any such Claim or Equity Interest. Such injunction shall
extend to successors of the Debtors, including, without limitation, the
Reorganized Debtors and New Bruno's, and their respective properties and
interests in property.
ARTICLE X
EFFECTIVENESS OF THE PLAN
10.1 Conditions Precedent to Effectiveness. The Plan shall not become
effective unless and until the following conditions shall have been satisfied or
waived pursuant to Section 10.3 of the Plan:
(a) the Confirmation Order, in form and substance acceptable to the
Debtors, the Committee and the Required Banks, shall have been signed by the
judge presiding over the Chapter 11 Cases, and there shall not be a stay or
injunction in effect with respect thereto;
(b) the Debtors shall have at least $20,000,000 in Cash as of the
Effective Date, after giving effect to the distributions of Cash projected to be
made under the Plan;
(c) New Bruno's shall have credit availability under a working capital
credit facility, in form and substance acceptable to the Debtors, to provide New
Bruno's with working capital sufficient to meet its ordinary and peak
requirements;
(d) all actions, documents and agreements necessary to implement the
Plan, including, without limitation, all actions, documents and agreements
necessary to implement the Restructuring Transactions, shall have been effected
or executed;
(e) the Debtors shall have received all authorizations, consents,
regulatory approvals, rulings, letters, no-action letters, opinions or documents
that are determined by the Debtors to be necessary to implement the Plan;
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(f) New Bruno's shall have been incorporated pursuant to the New
Bruno's Certificate of Incorporation; and
(g) each of the Reorganized Bruno's Certificate of Incorporation, the
Reorganized Bruno's By-laws, the amended certificates of incorporation and
by-laws of the Reorganized Subsidiaries, the New Bruno's Certificate of
Incorporation, the New Bruno's By-laws, the New Bruno's Stock Option Plan, the
New Bruno's Director Stock Option Plan, the New Bruno's Severance Plan, the New
Bruno's Employment Contracts, the Registration Rights Agreement and the
Shareholders Agreement, in form and substance acceptable to the Debtors and the
Required Banks, shall have been effected or executed.
10.2 Effect of Failure of Conditions. In the event that one or more of
the conditions specified in Section 10.1 of the Plan have not occurred on or
before 60 days after the Confirmation Date, (a) the Confirmation Order shall be
vacated, (b) no distributions under the Plan shall be made, (c) the Debtors and
all holders of Claims and Equity Interests shall be restored to the status quo
ante as of the day immediately preceding the Confirmation Date as though the
Confirmation Date never occurred and (d) the Debtors' obligations with respect
to Claims and Equity Interests shall remain unchanged and nothing contained
herein shall constitute or be deemed a waiver or release of any Claims or Equity
Interests by or against the Debtors or any other person or to prejudice in any
manner the rights of the Debtors or any person in any further proceedings
involving the Debtors.
10.3 Waiver of Conditions. The Debtors may waive, with the consent of
the Required Banks, by a writing signed by an authorized representative of the
Debtors and subsequently filed with the Bankruptcy Court, one or more of the
conditions precedent to effectiveness of the Plan set forth in Section 10.1 of
the Plan.
ARTICLE XI
RETENTION OF JURISDICTION
The Bankruptcy Court shall have exclusive jurisdiction of all matters
arising out of, and related to, the Chapter 11 Cases 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 executory contracts or unexpired leases, if any are pending, and
the allowance of cure amounts and Claims resulting therefrom;
(b) To hear and determine any and all adversary proceedings,
applications and contested matters;
(c) To hear and determine any objection to Administrative Expense
Claims or Claims;
(d) 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;
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(e) To issue such orders in aid of execution and consummation of the
Plan, to the extent authorized by section 1142 of the Bankruptcy Code;
(f) To consider any amendments to or modifications of the Plan, to cure
any defect or omission, or reconcile any inconsistency in any order of the
Bankruptcy Court, including, without limitation, the Confirmation Order;
(g) To hear and determine all applications for compensation and
reimbursement of expenses of professionals under sections 330, 331 and 503(b) of
the Bankruptcy Code;
(h) To hear and determine disputes arising in connection with the
interpretation, implementation or enforcement of the Plan;
(i) To recover all assets of the Debtors and property of the Debtors'
estates, wherever located;
(j) To hear and determine matters concerning state, local and federal
taxes in accordance with sections 346, 505 and 1146 of the Bankruptcy Code;
(k) To hear any other matter not inconsistent with the Bankruptcy Code;
and
(l) To enter a final decree closing the Chapter 11 Cases.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Effectuating Documents and Further Transactions. Each of the
Debtors, Reorganized Debtors and New Bruno's is authorized to execute, deliver,
file or record such contracts, instruments, releases, indentures and other
agreements or documents and take such actions as may be necessary or appropriate
to effectuate and further evidence the terms and conditions of the Plan and any
securities issued pursuant to the Plan.
12.2 Corporate Action. On the Effective Date, all matters provided for
under the Plan that would otherwise require approval of the stockholders or
directors of one or more of the Debtors or Reorganized Debtors or New Bruno's,
including, without limitation, the authorization to issue or cause to be issued
New Bruno's preferred stock, the issuance of New Bruno's Common Stock,
Reorganized Bruno's Common Stock and Management Options, the effectiveness of
the Reorganized Bruno's Certificate of Incorporation, the Reorganized Bruno's
By-laws, the New Bruno's Certificate of Incorporation, the New Bruno's By-laws,
the Registration Rights Agreement, the Shareholders Agreement, the amended
certificates of incorporation and by-laws of the Reorganized Subsidiaries, all
Restructuring Transactions effectuated pursuant to the Plan, the election or
appointment, as the case may be, of directors and officers of the Reorganized
Debtors and New Bruno's pursuant to the Plan and the authorization and approval
of the New Bruno's Employment Contracts, the New Bruno's Stock Option Plan, the
New Bruno's Director Stock Option Plan, the New Bruno's Severance Plan, the
forgiveness of the Stock Purchase Loans, the payment of the Grant Stock
Investment Payment and the
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qualification of New Bruno's as a foreign corporation wherever the conduct of
business by New Bruno's requires such qualification shall be deemed to have
occurred and shall be in effect from and after the Effective Date pursuant to
the applicable general corporation law of the states in which the Debtors, the
Reorganized Debtors and New Bruno's are incorporated, without any requirement of
further action by the stockholders or directors of the Debtors, Reorganized
Debtors or New Bruno's. On the Effective Date, or as soon thereafter as is
practicable, the Reorganized Debtors and New Bruno's shall, if required, file
their amended certificates of incorporation with the Secretary of State of the
state in which each such entity is (or will be) incorporated, in accordance with
the applicable general corporation law of each such state.
12.3 Exemption from Transfer Taxes. Pursuant to section 1146(c) of the
Bankruptcy Code, the issuance, transfer or exchange of notes or equity
securities under the Plan, the creation of any mortgage, deed of trust or other
security interest, the making or assignment of any lease or sublease, or the
making or delivery of any deed or other instrument of transfer under, in
furtherance of, or in connection with the Plan, including, without limitation,
any merger agreements or agreements of consolidation, deeds, bills of sale or
assignments executed in connection with any of the transactions contemplated
under the Plan, shall not be subject to any stamp, real estate transfer,
mortgage recording or other similar tax. All sale transactions consummated by
the Debtors and approved by the Bankruptcy Court on and after the Commencement
Date through and including the Effective Date, including, without limitation,
the transfers effectuated under the Plan pursuant to the Restructuring
Transactions, the sale by the Debtors of owned property pursuant to section
363(b) of the Bankruptcy Code and the assumption, assignment and sale by the
Debtors of unexpired leases of non-residential real property pursuant to section
365(a) of the Bankruptcy Code, shall be deemed to have been made under, in
furtherance of, or in connection with the Plan and, thus, shall not be subject
to any stamp, real estate transfer, mortgage recording or other similar tax.
12.4 Injunction Regarding Worthless Stock Deduction. At the
Confirmation Hearing, Bruno's may request that the Bankruptcy Court include in
the Confirmation Order a provision enjoining any "50-percent shareholder" of
Bruno's within the meaning of section 382(g)(4)(D) of the Internal Revenue Code
of 1986, as amended, from claiming a worthless stock deduction with respect to
its Bruno's Equity Interest for any taxable year of such shareholder ending
prior to the Effective Date.
12.5 Limited Releases of Releasees. As of the Effective Date, each of
the Debtors, the Debtors in Possession and each holder of a Claim against and
Equity Interest in the Debtors or Debtors in Possession releases all of the
Releasees from any and all Causes of Action held by, assertable on behalf of or
derivative from the Debtors, the Debtors in Possession or such holder, in any
way relating to the Debtors, the Debtors in Possession, the Chapter 11 Cases,
the Plan and the ownership, management and operation of the Debtors; provided,
however, that the foregoing shall not operate as a waiver of or release from any
Causes of Action (i) arising out of any express contractual obligation owing by
any former director, officer or employee to the Debtors or any reimbursement
obligation of any former director, officer or employee with respect to a loan or
advance made by the Debtors to such former director, officer or employee, or
(ii) relating to professional malpractice that arose or existed prior to the
Commencement Date.
12.6 Limited Release by Releasees. Except as otherwise provided under
the Plan, as of the Effective Date, each of the Releasees, in any capacity,
generally releases each of the Debtors, the Debtors in Possession and each
holder of a Claim against or Equity Interest in the
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Debtors or Debtors in Possession, in each case in any capacity, from any and all
Causes of Action held by, assertable on behalf of or derivative from such
Releasee, in any way relating to the Debtors, the Debtors in Possession, the
Chapter 11 Cases, the Plan and the ownership, management and operation of the
Debtors.
12.7 Exculpation. None of the Debtors, the Reorganized Debtors, New
Bruno's, the Creditor Representative, the Committee, the Banks, the Agent or any
of their respective members, officers, directors, employees, advisors,
professionals or agents shall have or incur any liability to any holder of a
Claim or Equity Interest for any act or omission in connection with, related to,
or arising out of, the Chapter 11 Cases, the pursuit of confirmation of the
Plan, the consummation of the Plan or the administration of the Plan or the
property to be distributed under the Plan, except for willful misconduct or
gross negligence, and, in all respects, the Debtors, the Reorganized Debtors,
New Bruno's, the Creditor Representative, the Committee, the Banks or the Agent
and each of their respective members, officers, directors, employees, advisors,
professionals and agents shall be entitled to rely upon the advice of counsel
with respect to their duties and responsibilities under the Plan.
12.8 Termination of Committee. The appointment of the Committee shall
terminate on the Effective Date, except that the Committee may appear at the
hearing to consider applications for final allowances of compensation and
reimbursement of expenses and prosecute any objections to such applications, if
appropriate.
12.9 Post-Effective Date Fees and Expenses. From and after the
Effective Date, the Reorganized Debtors and New Bruno's 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 professional persons thereafter
incurred by the Reorganized Debtors and New Bruno's, including, without
limitation, those fees and expenses incurred in connection with the
implementation and consummation of the Plan, including fees and expenses payable
to the Creditor Representative, the Agent and the Banks..
12.10 Payment of Statutory Fees. All fees payable pursuant to section
1930 of title 28 of the United States Code, as determined by the Bankruptcy
Court at the Confirmation Hearing, shall be paid on the Effective Date.
12.11 Amendment or Modification of the Plan. Alterations, amendments or
modifications of or to the Plan may be proposed in writing by the Debtors at any
time prior to the Confirmation Date, provided that the Plan, as altered, amended
or modified, satisfies the conditions of sections 1122 and 1123 of the
Bankruptcy Code, and the Debtors shall have complied with section 1125 of the
Bankruptcy Code. The Plan may be altered, amended or modified at any time after
the Confirmation Date and before substantial consummation, provided that the
Plan, as altered, amended or modified, satisfies the requirements of sections
1122 and 1123 of the Bankruptcy Code and the Bankruptcy Court, after notice and
a hearing, confirms the Plan, as altered, amended or modified, under section
1129 of the Bankruptcy Code and the circumstances warrant such alterations,
amendments or modifications. A holder of a Claim that has accepted the Plan
shall be deemed to have accepted the Plan, as altered, amended or modified, if
the proposed alteration, amendment or modification does not materially and
adversely change the treatment of the Claim of such holder.
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12.12 Severability. In the event that the Bankruptcy Court determines,
prior to the Confirmation Date, that any provision in the Plan is invalid, void
or unenforceable, such provision shall be invalid, void or unenforceable with
respect to the holder or holders of such Claims or Equity Interests as to which
the provision is determined to be invalid, void or unenforceable. The
invalidity, voidness or unenforceability of any such provision shall in no way
limit or affect the enforceability and operative effect of any other provision
of the Plan.
12.13 Revocation or Withdrawal of the Plan. The Debtors reserve the
right to revoke or withdraw the Plan prior to the Confirmation Date. If the
Debtors revoke or withdraw the Plan prior to the Confirmation Date, then the
Plan shall be deemed null and void. In such event, nothing contained herein
shall constitute or be deemed a waiver or release of any claims by or against
the Debtors or any other person or to prejudice in any manner the rights of the
Debtors or any person in any further proceedings involving the Debtors.
12.14 Binding Effect. The Plan shall be binding upon and inure to the
benefit of the Debtors, the holders of Claims and Equity Interests, and their
respective successors and assigns, including, without limitation, the
Reorganized Debtors and New Bruno's.
12.15 Notices. All notices, requests and demands to or upon the Debtors
or, on and after the Effective Date, the Reorganized Debtors and New Bruno's, to
be effective shall be in writing and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when actually delivered
or, in the case of notice by facsimile transmission, when received and
telephonically confirmed, addressed as follows:
If to the Debtors or New Bruno's:
Bruno's, Inc.
800 Lakeshore Parkway
Birmingham, Alabama 35211
Attn: Walter M. Grant, Esq.
Telephone: (205) 912-4385
Facsimile: (205) 912-4382
with a copy to:
Weil, Gotshal & Manges LLP Richards, Layton & Finger P.A.
767 Fifth Avenue One Rodney Square
New York, New York 10153 P.O. Box 551
Attn: Lori R. Fife, Esq. Wilmington, Delaware 19899
Telephone: (212) 310-8000 Attn: Thomas L. Ambro, Esq.
Facsimile: (212) 310-8007 Telephone: (302) 658-6541
Facsimile: (302) 658-6548
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If to the Committee:
Pepper Hamilton LLP
100 Renaissance Center
Detroit, Michigan 48243
Attn: Stuart E. Hertzberg, Esq.
Telephone: (313) 259-7110
Facsimile: (313) 259-7926
If to the Banks:
Wachtell, Lipton, Rosen & Katz The Chase Manhattan Bank
51 West 52nd Street 380 Madison Avenue, 9th Floor
New York, New York 10019 New York, New York 10017
Attn: Harold Novikoff, Esq. Attn: Ms. Ann Kurinskas
12.16 Governing Law. Except to the extent the Bankruptcy Code,
Bankruptcy Rules or other federal law is applicable, or to the extent an exhibit
to the Plan provides otherwise, the rights 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, without giving effect to the principles of
conflicts of law of such jurisdiction.
12.17 Withholding and Reporting Requirements. In connection with the
consummation of the Plan, the Debtors, the Reorganized Debtors or New Bruno's,
as the case may be, shall comply with all withholding and reporting requirements
imposed by any federal, state, local or foreign taxing authority and all
distributions hereunder shall be subject to any such withholding and reporting
requirements.
12.18 Plan Supplement. The Reorganized Bruno's Certificate of
Incorporation, the Reorganized Bruno's By-laws, the New Bruno's Certificate of
Incorporation, the New Bruno's By-laws, Schedules 6.1(a)(x) and 6.1(a)(y)
referred to in Section 6.1 of the Plan, the Registration Rights Agreement, the
Shareholders Agreement, the New Bruno's Stock Option Plan, the New Bruno's
Director Stock Option Plan, the New Bruno's Employment Contracts, the New
Bruno's Severance Plan and the listing of Retained Assets referred to in Section
1.69 of the Plan shall be contained in the Plan Supplement and filed with the
Clerk of the Bankruptcy Court at least 10 days prior to the last day upon which
holders of Claims may vote to accept or reject the Plan. Upon its filing with
the Bankruptcy Court, the Plan Supplement may be inspected in the office of the
Clerk of the Bankruptcy Court during normal court hours. Holders of Claims or
Equity Interests may obtain a copy of the Plan Supplement upon written request
to Bruno's in accordance with Section 12.15 of the Plan.
12.19 Allocation of Plan Distributions Between Principal and Interest.
To the extent that any Allowed Claim entitled to a distribution under the Plan
is comprised of indebtedness and accrued but unpaid interest thereon, such
distribution shall, for federal income tax purposes, be allocated to the
principal amount of the Claim first and then, to the extent the consideration
exceeds the principal amount of the Claim, to accrued but unpaid interest.
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12.20 Headings. Headings are used in the Plan for convenience and
reference only, and shall not constitute a part of the Plan for any other
purpose.
12.21 Exhibits/Schedules. All exhibits and schedules to the Plan,
including the Plan Supplement, are incorporated into and are a part of the Plan
as if set forth in full herein.
12.22 Filing of Additional Documents. On or before substantial
consummation of the Plan, the Debtors shall file with the Bankruptcy Court such
agreements and other documents as may be necessary or appropriate to effectuate
and further evidence the terms and conditions of the Plan.
Dated: Wilmington, Delaware
May 27, 1999
BRUNO'S, INC., an Alabama corporation
(for itself and on behalf of each of the Subsidiaries)
By: /s/ James A. Demme
--------------------------------------------------
Name: James A. Demme
Title: Chairman and Chief Executive
31
